Sales

Haystacks
Sales
Michael Vernon Guerrero Mendiola 2003 Shared under Creative Commons AttributionNonCommercial-ShareAlike 3 0 !hili""ines license
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%able o& Contents

Aca" vs CA 'G# (()((*+ , -ecember (../0 1 ( Adalin vs CA 'G# (20(.(+ (0 2ctober (..,0 1 3 Addison vs 3eli4 'G# (23*2+ 3 Au$ust (.()0 1 5 Adel&a !ro"erties vs CA 'G# (((23)+ 2/ 6anuary (../0 1 . A$ricultural and Home 74tension -evelo"ment Grou" vs CA 'G# .23(0+ 3 Se"tember (..20 1 Almendra vs 8AC 'G# ,/(((+ 2( November (..(0 1 (, An$ 9u Asuncion+ et al+ vs CA 'G# (0.(2/+ 2 -ecember (..*0 1 20 An$eles vs Calasan: 'G# ;-*22)3+ () March (.)/0 1 2* A:cona vs #eyes 'G# 3./.0+ 5 3ebruary (.3*0 1 2, A:nar vs 9a"dian$co 'G# ;-()/35+ 3( March (.5/0 1 2. <abasa vs CA 'G# (2*0*/+ 2( May (..)0 1 3( <a$nas vs CA 'G# 3)*.)+ (0 Au$ust (.).0 1 3* <alatbat vs CA 'G# (0.*(0+ 2) Au$ust (..50 1 3, Calimlim-Canullas vs 3ortun 'G# /,*..+ 22 6une (.)*0 1 *0 Carbonell vs CA 'G# ;-2..,2+ 25 6anuary (.,50 1 *2 Carumba vs CA 'G# ;-2,/),+ () 3ebruary (.,00 1 *. Celestino Co vs Collector o& 8nternal #evenue 'G# ;-)/05+ 3( Au$ust (./50 1 Chen$ vs Genato 'G# (2.,50+ 2. -ecember (..)0 1 /2 C8# vs 7n$ineerin$ 7=ui"ment and Su""ly 'G# ;-2,0**+ 30 6une (.,/0 1 Coronel vs CA 'G# (03/,,+ , 2ctober (..50 1 52 Coronel vs 2na 'G# (02)0+ , 3ebruary (.(50 1 5) Cru: vs Cabana 'G# /5232+ 22 6une (.)*0 1 ,( Cru: vs 3ili"inas 8nvestment 'G# ;-2*,,2+ 2, May (.5)0 1 ,3 Cuyugan vs. Santos ......... [unavailable] -a$u"an %radin$ vs Macam 'G# ;-()*.,+ 3( May (.5/0 1 ,5 -alion vs CA 'G# ,).03+ 2) 3ebruary (..00 1 ,, -a$uilan vs 8AC 'G# ;-5..,0+ 2) November (.))0 1 ,. -e la Cavada vs -ia: 'G# ;-((55)+ ( A"ril (.()0 1 )2 -elta Motors Sales vs Niu >im -uan 'G# 5(0*3+ 2 Se"tember (..20 1 -i$nos vs ;umun$sod 'G# ;-/.255+ 2. 3ebruary (.))0 1 ),
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Dizon vs. CA, 302 SCRA 288 ......... [unavailable] -oromal vs CA 'G# ;-350)3+ / Se"tember (.,/0 1 .0 -y vs CA 'G# .2.).+ ) 6uly (..(0 1 .3 7-CA !ublishin$ vs Santos 'G# )02.)+ 25 A"ril (..00 1 .5 Elisco ool !anu"actu#ing vs. CA, 308 SCRA $3% &%'''( ......... [unavailable] 7n$ineerin$ and Machinery Cor" vs CA 'G# /225,+ 2* 6anuary (..50 1 .. 7=uatorial #ealty vs May&air %heater 'G# (05053+ 2( November (..50 1 (02 8ntestate 7state o& 7milio Camon? 7reneta vs <e:ore 'G# ;-2.,*5+ 25 November (.,30 1 Heirs o& 7scanlar+ et al+ vs CA 'G# ((.,,,+ 23 2ctober (..,0 1 ((0 7s"iritu vs Valerio 'G# ;-()0()+ 25 -ecember (.530 1 ((5 7sto=ue vs !a@imula 'G# ;-2**(.+ (/ 6uly (.5)0 1 ((, 3ilinvest Credit vs CA 'G# )2/0)+ 2. Se"tember (.).0 1 (() 3ili"inas 8nvestment vs #idad 'G# ;-2,5*/+ 2) November (.5.0 1 (2( )i#st *+ili,,ine -nte#national .an/ vs. CA, 202 SCRA &%''1( ......... [unavailable] )#oilan vs. *an23#iental S+i,,ing Co., %2 SCRA 2$1 &%'14( ......... [unavailable] 3ule vs CA 'G# ((22(2+ 2 March (..)0 1 (2* Gaite vs 3onacier 'G# ;-(()2,+ 3( 6uly (.5(0 1 (2) Goldenrod 8nc+ vs CA 'G# (25)(2+ 2* November (..)0 1 (3( Guian$ vs CA 'G# (2/(,2+ 25 6une (..)0 1 (33 6+ Schuback A Sons vs CA 'G# (0/3),+ (( November (..30 1 (3/
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S"ouses ;adan$a vs CA 'G# ;-//...+ 2* Au$ust (.)*0 1 (3, ;e$arda Hermanos vs Saldana 'G# ;-25/,)+ 2) 6anuary (.,*0 1 (3) ;evy Hermanos vs Gervacio 'G# *5305+ 2, 2ctober (.3.0 1 (*0 5i6 vs. CA, 213 SCRA 01' &%''1( ......... [unavailable] ;imketkai Sons Millin$ vs CA 'G# (()/0.+ ( -ecember (../0 1 (*( ;oyola vs CA 'G# ((/,3*+ 23 3ebruary 20000 1 (*, 5uzon .#o/e#age vs. !a#iti6e, 81 SCRA 300 &%'$8( ......... [unavailable] Macondray vs 7usta=uio 'G# *35)3+ (5 6uly (.3,0 1 (/0 Manila #acin$ Club vs Manila 6ockey Club 'G# ;-*5/33+ 2) 2ctober (.3.0 1 Ma"alo vs Ma"alo 'G# ;-2(*). and ;-2(52)+ (. May (.550 1 (//
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Mate vs CA 'G #+ Nos+ (20,2*-2/+ 2( May (..)0 1 (/) !claug+in vs. CA, %44 SCRA 1'3 &%'81( ......... [unavailable] Medina vs Collector o& 8nternal #evenue 'G# ;-(/((3+ 2) 6anuary (.5(0 1 (50 Melli:a vs 8loilo City 'G# ;-2*,32+ 30 A"ril (.5)0 1 (5( Mendo:a vs >alaB 'G# (5*20+ (2 2ctober (.2(0 1 (53 Mindanao Academy vs 9a" 'G# ;-(,5)(+ 25 3ebruary (.5/0 1 (5/ Montilla vs CA 'G# ;-*,.5)+ . May (.))0 1 (5) National Grains Authority vs 8AC 'G# ,**,0+ ) March (.).0 1 (,0 Navera vs CA 'G# ;-/5)3)+ 25 A"ril (..00 1 (,( 7ietes vs. CA, 41 SCRA 104 ......... [unavailable] Noel vs CA 'G# /.//0+ (( 6anuary (../0 1 (,5 S"ouses Nonato vs 8AC 'G# ;-5,()(+ 22 November (.)/0 1 (,. Nool vs CA 'G# ((553/+ 2* 6uly (..,0 1 ()0 Northern Motors vs Sa"inoso 'G# ;-2)0,*+ 2. May (.,00 1 ()* 38yssey *a#/ -nc, vs. CA, 280 SCRA 203 &%''$( ......... [unavailable] 2n$ vs CA 'G# .,3*,+ 5 6uly (...0 1 ()5 2n$ vs 2n$ 'G# ;-5,)))+ ) 2ctober (.)/0 1 (). *angilinan vs. CA, 2$' SCRA 0'0 &%''$( ......... [unavailable] !asa$ui vs Villablanca 'G# ;-2(..)+ (0 November (.,/0 1 (.0 !aulmitan vs CA 'G# 5(/)*+ 2/ November (..20 1 (.( !hili""ine %rust Com"any vs !N< 'G# (5*)3+ , -ecember (.2(0 1 !hili""ine %rust Co vs #oldan 'G# ;-)*,,+ 3( May (./50 1 !ichel vs Alon:o 'G# ;-35.02+ 30 6anuary (.)20 1 (.. *7. vs. CA, 212 SCRA 414 &%''0( ......... [unavailable] !oBer Commercial and 8ndustrial Cor" vs CA 'G# ((.,*/+ 20 6une (..,0 !uyat A Sons vs Arco Amusement 'G# *,/3)+ 20 6une (.*(0 1 Cui@ada vs CA 'G# (25***+ * -ecember (..)0 1 20) Cuimson vs #osete 'G# ;-23.,+ . Au$ust (./00 1 2(( Cuiro$a vs !arsons HardBare 'G# ((*.(+ 23 Au$ust (.()0 1 #adioBealth 3inance vs !alileo 'G# )3*32+ 20 May (..(0 1 (.* (.) 1 205 2(3 2(/ 203
#e"ublic vs !hili""ine -evelo"ment Cor" 'G# ;-(0(*(+ 3( 6anuary (./)0 1 2(5 #idad vs 3ili"inas 8nvestment 'G# ;-3.)05+ 2, 6anuary (.)30 1 2(. #illo vs CA 'G# (2/3*,+ (. 6une (..,0 1 22( #omero vs CA 'G# (03/,,+ , 2ctober (..50 1 223 Ro9ue vs. 5a,uz, '1 SCRA $4% &%'80( ......... [unavailable] #ubias vs <atiller 'G# ;-3/,02+ 2. May (.,30 1 225 Sanche: vs #i$os 'G# ;-2/*.*+ (* 6une (.,20 1 22. Siy Con$ <ien$ and Co vs Hon$kon$ and Shan$hai <ankin$ Cor" 'G# 3*5//+ / March (.320 1 Soriano+ et al vs <autista+ et al 'G# ;-(/,/2+ 2. -ecember (.520 1 23* Sta Ana vs Hernande: 'G# ;-(53.*+ (, -ecember (.550 1 235
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Su#ia vs. -AC, %0% SCRA 11%&%'8$( ......... [unavailable] agatac vs. :i6enez, 03 3; 3$'2 &%'0$( ......... [unavailable] %a@anlan$it vs Southern Motors 'G# ;-(0,).+ 2) May (./,0 1 23. %anedo vs CA 'G# (0**)2+ 22 6anuary (..50 1 2*( %orres vs CA 'G# (3*//.+ . -ecember (...0 1 2*3 %oyota ShaB vs CA 'G# ((55/0+ 23 May (../0 1 2*5 <nive#sal )oo8 Co#,. vs. CA, 33 SCRA % &%'$0( ......... [unavailable] Dy vs CA 'G# (20*5/+ . Se"tember (...0 1 2*. Vallarta vs CA 'G# ;-*0(./+ 2. May (.),0 1 2/3 Vas=ue: vs CA 'G# )3,/.+ (2 6uly (..(0 1 2/5 Vda+ -e Gordon vs CA 'G# ;-3,)3(+ 23 November (.)(0 1 2/) Vda+ -e 6omoc vs CA 'G# .2),(+ 2 Au$ust (..(0 1 250 Vda+ -e Cuiambao vs Manila Motor Com"any 'G# ;-(,3)*+ 3( 2ctober (.5(0 1 Velasco vs CA 'G# ;-3(0()+ 2. 6une (.,30 1 25* Villa&lor vs CA 'G# ./5.*+ . 2ctober (..,0 1 25) Villamor vs CA 'G# .,332+ (0 2ctober (..(0 1 2,* Villonco #ealty vs <ormaheco 8nc+ 'G# ;-25),2+ 2/ 6uly (.,/0 1 2,, =ao >a Sin #a8ing vs. CA, 20' SCRA $13 ......... [unavailable] 9u %ek vs Gon:ales 'G# ..3/+ ( 3ebruary (.(/0 1 2)3 =uviengco vs. Dacuycuy, %04 SCRA 118 &%'8%( ......... [unavailable] Eayas vs ;uneta Motor Com"any 'G# ;-30/)3+ 23 2ctober (.)20 1 2)/
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This collection contains one hundred three (103) out of one hundred twenty one (121) assigned cases summarized in this format by Michael Vernon M. uerrero (as a so!homore law student) during the "irst #emester$ school year 2003%200& in the #ales class under 'tty. 'mado (aolo )imayuga at the 'rellano *ni+ersity #chool of ,aw ('*#,). -om!iled as ()"$ .uly 2011. /erne uerrero entered '*#, in .une 2002 and e+entually graduated from '*#, in 2000. 1e !assed the (hili!!ine bar e2aminations immediately after ('!ril 2003).
BBB berne$uerrero com
Haystacks (Berne Guerrero)
[1] Acap v. CA [G.R. No. 118114. Decem er !" 1##$.] First Division, Padilla (J): 4 concurring %acts& The title to Lot 1130 of the adastral !urve" of #inigaran, $egros %ccidental &as evidenced '" % T ()1*1+,- The lot has an area of 13,+*0 s.- /- The title &as issued and is registered in the na/e of s0ouses !antiago 1as.ue2 and Loren2a %ru/a- 3fter 'oth s0ouses died, their onl" son Feli4'erto inherited the lot- 5n 1,+6, Feli4'erto e4ecuted a dul" notari2ed docu/ent entitled 7Declaration of #eirshi0 and Deed of 3'solute !ale8 in favor of os/e Pido- !ince 1,90, Teodoro 3ca0 had 'een the tenant of a 0ortion of the said land, covering an area of ,,600 s.- /- :hen o&nershi0 &as transferred in 1,+6 '" Feli4'erto to os/e Pido, 3ca0 continued to 'e the registered tenant thereof and religiousl" 0aid his leasehold rentals to Pido and thereafter, u0on Pido;s death, to his &ido& Laurenciana- The controvers" 'egan &hen Pido died interstate and on *+ $ove/'er 1,<1, his surviving heirs e4ecuted a notari2ed docu/ent deno/inated as 7Declaration of #eirshi0 and :aiver of (ights of Lot 1130 #inigaran adastre,8 &herein the" declared to have ad=udicated u0on the/selves the 0arcel of land in e.ual share, and that the" &aive, .uitclai/ all right, interests and 0artici0ation over the 0arcel of land in favor of >d" de los (e"es- The docu/ent &as signed '" all of Pido;s heirs- >d" de los (e"es did not sign said docu/ent- 5t &ill 'e noted that at the ti/e of os/e Pido;s death, title to the 0ro0ert" continued to 'e registered in the na/e of the 1as.ue2 s0ouses- ?0on o'taining the Declaration of #eirshi0 &ith :aiver of (ights in his favor, de los (e"es filed the sa/e &ith the (egistr" of Deeds as 0art of a notice of an adverse clai/ against the original certificate of titleThereafter, delos (e"es sought for 3ca0 to 0ersonall" infor/ hi/ that he had 'eco/e the ne& o&ner of the land and that the lease rentals thereon should 'e 0aid to hi/- Delos (e"es alleged that he and 3ca0 entered into an oral lease agree/ent &herein 3ca0 agreed to 0a" 10 cavans of 0ala" 0er annu/ as lease rental- 5n 1,<*, 3ca0 allegedl" co/0lied &ith said o'ligation- 5n 1,<3, ho&ever, 3ca0 refused to 0a" an" further lease rentals on the land, 0ro/0ting delos (e"es to see@ the assistance of the then Ainistr" of 3grarian (efor/ (A3() in #inigaran, $egros %ccidental- The A3( invited 3ca0, &ho sent his &ife, to a conference scheduled on 13 %cto'er 1,<3- The &ife stated that the she and her hus'and did not recogni2e delos (e"es;s clai/ of o&nershi0 over the land- %n *< 30ril 1,<<, after the la0se of four (4) "ears, delos (e"s field a co/0laint for recover" of 0ossession and da/ages against 3ca0, alleging that as his leasehold tenant, 3ca0 refused and failed to 0a" the agreed annual rental of 10 cavans of 0ala" des0ite re0eated de/ands- %n *0 3ugust 1,,1, the lo&er court rendered a decision in favor of delos (e"es, ordering the forfeiture of 3ca0;s 0referred right of a ertificae of Land Transfer under PD *+ and his far/holdings, the return of the far/land in 3ca0;s 0ossession to delos (e"es, and 3ca0 to 0a" P6,000-00 as attorne";s fees, the su/ of P1,000-00 as e40enses of litigation and the a/ount of P10,000-00 as actual da/ages3ggrieved, 0etitioner a00ealed to the ourt of 300eals- !u'se.uentl", the 3 affir/ed the lo&er court;s decision, holding that de los (e"es had ac.uired o&nershi0 of Lot $o- 1130 of the adastral !urve" of #inigaran, $egros %ccidental 'ased on a docu/ent entitled 7Declaration of #eirshi0 and :aiver of (ights8, and ordering the dis0ossession of 3ca0 as leasehold tenant of the land for failure to 0a" rentals- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt granted the 0etition, set aside the decision of the (T $egros %ccidental, dis/issed the co/0laint for recover" of 0ossession and da/ages against 3ca0 for failure to 0ro0erl" state a cause of action, &ithout 0re=udice to 0rivate res0ondent ta@ing the 0ro0er legal ste0s to esta'lish the legal /ode '" &hich he clai/s to have ac.uired o&nershi0 of the land in .uestion1. Asserte' r()*t or c+a(m to o,ners*(p not su--(c(ent per se to )(ve r(se to o,ners*(p over t*e res 3n asserted right or clai/ to o&nershi0 or a real right over a thing arising fro/ a =uridical act, ho&ever =ustified, is not 0er se sufficient to give rise to o&nershi0 over the res- That right or title /ust 'e
.a+es" /001 ( 1 )
co/0leted '" fulfilling certain conditions i/0osed '" la&- #ence, o&nershi0 and real rights are ac.uired onl" 0ursuant to a legal /ode or 0rocess- :hile title is the =uridical =ustification, /ode is the actual 0rocess of ac.uisition transfer of o&nershi0 over a thing in .uestion/. C+asses o- mo'es o- ac2u(r(n) o,ners*(p ?nder 3rticle +1* of the ivil ode, the /odes of ac.uiring o&nershi0 are generall" classified into t&o (*) classes, na/el", the original /ode (i-e, through occu0ation, ac.uisitive 0rescri0tion, la& or intellectual creation) and the derivative /ode (i-e-, through succession /ortis causa or tradition as a result of certain contracts, such as sale, 'arter, donation, assign/ent or /utuu/)1. Contract o- .a+e3 4Dec+arat(on o- He(rs*(p an' 5a(ver o- R()*ts6 an e7tra8u'(c(a+ sett+ement et,een *e(rs un'er Ru+e !4 o- t*e Ru+es o- Court 5n a ontract of !ale, one of the contracting 0arties o'ligates hi/self to transfer the o&nershi0 of and to deliver a deter/inate thing, and the other 0art" to 0a" a 0rice certain in /one" or its e.uivalent- %n the other hand, a declaration of heirshi0 and &aiver of rights o0erates as a 0u'lic instru/ent &hen filed &ith the (egistr" of Deeds &here'" the intestate heirs ad=udicate and divide the estate left '" the decedent a/ong the/selves as the" see fit- 5t is in effect an e4tra=udicial settle/ent 'et&een the heirs under (ule +4 of the (ules of ourt- 5n the 0resent case, the trial court erred in e.uating the nature and effect of the Declaration of #eirshi0 and :aiver of (ights the sa/e &ith a contract (deed) of sale4. .a+e o- *ere'(tary r()*ts an' ,a(ver o- *ere'(tary r()*ts '(st(n)u(s*e' There is a /ar@ed difference 'et&een a sale of hereditar" rights and a &aiver of hereditar" rights- The first 0resu/es the e4istence of a contract or deed of sale 'et&een the 0arties- The second is, technicall" s0ea@ing, a /ode of e4tinction of o&nershi0 &here there is an a'dication or intentional relin.uish/ent of a @no&n right &ith @no&ledge of its e4istence and intention to relin.uish it, in favor of other 0ersons &ho are co)heirs in the succession- 5n the 0resent case, de los (e"es, 'eing then a stranger to the succession of os/e Pido, cannot conclusivel" clai/ o&nershi0 over the su'=ect lot on the sole 'asis of the &aiver docu/ent &hich neither recites the ele/ents of either a sale, or a donation, or an" other derivative /ode of ac.uiring o&nershi0$. sa+e .ummon o- 9(n(stry o- A)rar(an Re-orm 'oes not conc+u'e actua+(ty o- sa+e nor not(ce o- suc*
The conclusion, /ade '" the trial and a00ellate courts, that a 7sale8 trans0ired 'et&een os/e Pido;s heirs and de los (e"es and that 3ca0 ac.uired actual @no&ledge of said sale &hen he &as su//oned '" the Ainistr" of 3grarian (efor/ to discuss de los (e"es; clai/ over the lot in .uestion, has no 'asis 'oth in fact and in la&:. A not(ce o- a'verse c+a(m 'oes not prove o,ners*(p over t*e +ot3 A'verse c+a(m not su--(c(ent to cance+ t*e cert(-(cate o- t(+e an' -or anot*er to e (ssue' (n *(s name 3 notice of adverse clai/, '" its nature, does not ho&ever 0rove 0rivate res0ondent;s o&nershi0 over the tenanted lot- 73 notice of adverse clai/ is nothing 'ut a notice of a clai/ adverse to the registered o&ner, the validit" of &hich is "et to 'e esta'lished in court at so/e future date, and is no 'etter than a notice of lis 0endens &hich is a notice of a case alread" 0ending in court-8 5n the 0resent case, &hile the e4istence of said adverse clai/ &as dul" 0roven (thus 'eing filed &ith the (egistr" of Deeds &hich contained the Declaration of #eirshi0 &ith :aiver of rights an &as annotated at the 'ac@ of the %riginal ertificate of Title to the land in .uestion), there is no evidence &hatsoever that a deed of sale &as e4ecuted 'et&een os/e Pido;s heirs and de los (e"es transferring the rights of the heirs to the land in favor of de los (e"es- De los (e"es; right or interest therefore in the tenanted lot re/ains an adverse clai/ &hich cannot '" itself 'e sufficient to cancel the % T to the land and title to 'e issued in de los (e"es; na/e!. ;ransact(on et,een *e(rs an' 'e +os Reyes (n'(n) et,een part(es" ut cannot a--ect r()*t o.a+es" /001 ( / )
Acap to tenante' +an' ,(t*out correspon'(n) proo- t*ereo:hile the transaction 'et&een Pido;s heirs and de los (e"es /a" 'e 'inding on 'oth 0arties, the right of 3ca0 as a registered tenant to the land cannot 'e 0erfunctoril" forfeited on a /ere allegation of de los (e"es; o&nershi0 &ithout the corres0onding 0roof thereof- 3ca0 had 'een a registered tenant in the su'=ect land since 1,90 and religiousl" 0aid lease rentals thereon- 5n his /ind, he continued to 'e the registered tenant of os/e Pido and his fa/il" (after Pido;s death), even if in 1,<*, de los (e"es allegedl" infor/ed 3ca0 that he had 'eco/e the ne& o&ner of the land8. No un8ust(-(e' or 'e+( erate re-usa+ to pay t*e +ease renta+s to t*e +an'o,ner < a)r(cu+tura+ +essor De los (e"es never registered the Declaration of #eirshi0 &ith :aiver of (ights &ith the (egistr" of Deeds or &ith the A3(, 'ut instead, he filed a notice of adverse clai/ on the said lot to esta'lish o&nershi0 thereof (&hich cannot 'e done)- 5t stands to reason, therefore, to hold that there &as no un=ustified or deli'erate refusal '" 3ca0 to 0a" the lease rentals or a/orti2ations to the lando&nerBagricultural lessor &hich, in this case, de los (e"es failed to esta'lished in his favor '" clear and convincing evidence- This not&ithstanding the fact that initiall", 3ca0 /a" have, in good faith, assu/ed such state/ent of de los (e"es to 'e true and /a" have in fact delivered 10 cavans of 0ala" as annual rental for 1,<* to latter- For in 1,<3, it is clear that 3ca0 had /isgivings over de los (e"es; clai/ of o&nershi0 over the said land 'ecause in the %cto'er 1,<3 A3( conference, his &ife Laurenciana categoricall" denied all of de los (e"es; allegations- 5n fact, 3ca0 even secured a certificate fro/ the A3( dated , Aa" 1,<< to the effect that he continued to 'e the registered tenant of os/e Pido and not of delos (e"es#. .anct(on o- -or-e(ture o- tenant=s pre-erre' r()*t an' possess(on o- -arm*o+'(n)s s*ou+' not e app+(e' The sanction of forfeiture of his 0referred right to 'e issued a ertificate of Land Transfer under PD *+ and to the 0ossession of his far/holdings should not 'e a00lied against 3ca0, since de los (e"es has not esta'lished a cause of action for recover" of 0ossession against 3ca0[/] A'a+(n vs. CA [G.R. No. 1/01#1. >cto er 10" 1##!.] First Division, #er/osisi/a Jr- (J): 3 concurring, 1 too@ no 0art %acts& 5n 3ugust 1,<+, >lena C- Palanca, in 'ehalf of the Cado si'lings, co//issioned >ster Dautista to loo@ for 'u"ers for their 0ro0ert" fronting the 5/0erial #otel in ota'ato it"- Dautista logicall" offered said 0ro0ert" to the o&ners of the 5/0erial #otel &hich /a" 'e e40ected to gra' the offer and ta@e advantage of the 0ro4i/it" of the 0ro0ert" to the hotel site- True enough, Faustino Eu, the President)Feneral Aanager of 5/0erial #otel, agreed to 'u" said 0ro0ert"- Thus during that sa/e /onth of 3ugust 1,<+, a conference &as held in Eu;s office at the 5/0erial #otel- Present there &ere Eu, Loreto 3dalin &ho &as one of the tenants of the 6)door, 1)store" 'uilding standing on the su'=ect 0ro0ert", and >lena Palanca and Teofilo Cado in their o&n 'ehalf as sellers and in 'ehalf of the other tenants of said 'uilding- During the conference, Eu and Li/ categoricall" as@ed Palanca &hether the other tenants &ere interested to 'u" the 0ro0ert", 'ut Palanca also categoricall" ans&ered that the other tenants &ere not interested to 'u" the sa/e- onse.uentl", the" agreed to /eet at the house of Palanca on * !e0te/'er 1,<+ to finali2e the sale- %n said date, Loreto 3dalinG Eu and Li/ and their legal counselG Palanca and Cado and their legal counselG and one other tenant, Aagno 3dalin, /et at Palanca;s house- Aagno 3dalin &as there in his o&n 'ehalf as tenant of t&o of the five doors of the one)store" 'uilding standing on the su'=ect 0ro0ert" and in 'ehalf of the tenants of the t&o other doors, na/el"- arlos alingasan and De/etrio 3da"a- 3gain, Eu and Li/ as@ed Palanca and Aagno 3dalin &hether the other tenants &ere interested to 'u" the su'=ect 0ro0ert", and Aagno 3dalin une.uivocall" ans&ered that he and the other tenants &ere not so interested /ainl" 'ecause the" could not afford it#o&ever, Aagno 3dalin asserted that he and the other tenants &ere each entitled to a distur'ance fee of
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P60,000-00 as consideration for their vacating the su'=ect 0ro0ert"- During said /eeting, Palanca and Cado, as sellers, and Loreto 3dalin and Eu and Li/, as 'u"ers, agreed that the latter &ill 0a" P300,000 as do&n0a"/ent for the 0ro0ert" and that as soon as the for/er secures the eviction of the tenants, the" &ill 'e 0aid the 'alance of P*,300,000- Pursuant to the a'ove ter/s and conditions, a Deed of onditional !ale &as drafted '" the counsel of Eu and Li/- %n < !e0te/'er 1,<+, at Eu;s 5/0erial #otel office, Palanca and >duarda 1argas, re0resenting the sellers, and Loreto 3dalin and Eu and Li/ signed the Deed of onditional !ale- The" also agreed to defer the registration of the deed until after the sellers have secured the eviction of the tenants fro/ the su'=ect 0ro0ert"- The tenants, ho&ever, refused to vacate the su'=ect 0ro0ert"Deing under o'ligation to secure the eviction of the tenants, in accordance &ith the ter/s and conditions of the Deed of onditional !ale, >lena Palanca filed &ith the Daranga" a0tain a letter co/0laint for unla&ful detainer against the said tenants- T&o da"s after Palanca filed an e=ect/ent case 'efore the Daranga" a0tain against the tenants of the su'=ect 0ro0ert", Aagno 3dalin, De/etrio 3da"a and arlos alingasan &rote letters to Palanca infor/ing the Cado si'lings that the" have decided to 0urchase the doors that the" &ere leasing for the 0urchase 0rice of P900,000 0er door- 3l/ost instantl", Palanca, in 'ehalf of the Cado si'lings, acce0ted the offer of the said tenants and returned the do&n0a"/ents of Eu and Li/- %f course, the latter refused to acce0t the rei/'urse/entsEu and Li/ filed a co/0laint &itht the Daranga" a0tain for Dreach of ontract against >lena PalancaDuring the conference, Eu and Li/, if onl" to acco//odate Aagno 3dalin and settle the case a/ica'l", agreed to 'u" onl" 1 door each so that the latter could 0urchase the t&o doors he &as occu0"ing- #o&ever, Aagno 3dalin ada/antl" refused, clai/ing that he &as alread" the o&ner of the * doors- :hen Li/ as@ed Aagno 3dalin to sho& the Deed of !ale for the t&o doors, the latter insouciantl" &al@ed out- There 'eing no settle/ent forged, on 19 Aa" 1,<<, the Daranga" a0tain issued the ertification to File 3ction%n 6 Aa" 1,<<, Eu and Li/ filed their co/0laint for H!0ecific Perfor/ance; against the Palanca, et- al- and 3dalin in the (T - %n 14 June 1,<<, Eu and Li/ caused the annotation of a 7$otice of Lis Pendens8 at the dorsal 0ortion of T T 1*,93- %n *6 %cto'er 1,<<, alingasan, 3dalin, et-al- filed a HAotion for 5ntervention as Plaintiffs)5ntervenors; a00ending thereto a co0" of the HDeed of !ale of (egistered Land; signed '" Palanca, et-al- %n *+ %cto'er 1,<<, alingasan et-al- filed the 7Deed of !ale of (egistered Land8 &ith the (egister of Deeds on the 'asis of &hich T T *4+,1 over the 0ro0ert" &as issued under their na/es- %n the sa/e da", alingasan, et-al- filed in the ourt a .uo a 7Aotion To 3d/it o/0laint)5n)5ntervention83ttached to the o/0laint)5n)5ntervention &as the 7Deed of !ale of (egistered Land-8 Eu and Li/ &ere shoc@ed to learn that Palanca, et- al- had signed the said deed- 3s a counter)/ove, Eu and Li/ filed a /otion for leave to a/end o/0laint and, on 11$ove/'er1,<<, filed their 3/ended o/0laint i/0leading alingasan, et- al- as additional Defendants- Palanca, et-al- suffered a re'uff &hen, on 10 Januar" 1,<,, the (T Feneral !antos it" issued an %rder dis/issing the Petition of alingasan, et- al- for consignation- 5n the /eanti/e, on 30 $ove/'er 1,<,, Loreto 3dalin died and &as su'stituted, 0er order of the ourt a .uo, on 6 Januar" 1,,0, '" his heirs, na/el", 3nita, 3nelita, Loreto, Jr-, Teresita, :ilfredo, Lili'eth, $elson, #elen and Jocel, all surna/ed 3dalin- 3fter trial, the ourt a .uo rendered =udg/ent in favor of alingasan, 3dalin, et-al- The ourt order Palanca, et-al- in solidu/ to 0a" /oral da/ages of P600,000-00, P100,000-00 e4e/0lar" da/ages each to 'oth Eu and Li/ and P60,000-00 as and for attorne";s fees- The" &ere ordered to return the P*00,000-00 initial 0a"/ent received '" the/ &ith legal interest fro/ date of recei0t thereof u0 to 3 $ove/'er 1,<+Eu and Li/ &asted no ti/e in a00ealing fro/ the decision of the trial court- The" &ere vindicated &hen the ourt of 300eals rendered its decision in their favor- 3ccordingl", the ourt of 300eals rendered another =udg/ent in the case and ordered that the 7Deed of onditional !ale8 &as declared validG that the 7Deeds of !ale of (egistered Land8 and T T *4+,1 &ere here'" declared null and voidG that alingasan, et-al- e4ce0t the heirs of Loreto 3dalin &ere ordered to vacate the 0ro0ert" &ithin 30 da"s fro/ the finalit" of the DecisionG that Palanca, et-al &ere ordered to e4ecute, in favor of Eu and Li/, a 7Deed of 3'solute !ale8
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covering 4 doors of the 0ro0ert" (&hich includes the area of the 0ro0ert" on &hich said four doors &ere constructed) e4ce0t the door 0urchased '" Loreto 3dalin, free of an" liens or encu/'rancesG that Eu a/d Li/ &ere ordered to re/it to Palanca, et-al- the 'alance of the 0urchase 0rice of the 4 doors in the a/ount of P1,<<0,000G that Palanca, et-al- &ere ordered to refund to alingasan, et-al- the a/ount of P<40,000 &hich the" 0aid for the 0ro0ert" under the 7Deed of onditional !ale of (egistered Land8 &ithout interest considering that the" also acted in 'ad faithG that Aagno 3dalin &as ordered to 0a" the a/ount of P3,000 a /onth, and each of other tenants, e4ce0t Loreto 3dalin, the a/ount of P1,600 to Eu and Li/, fro/ $ove/'er 1,<+, u0 to the ti/e the 0ro0ert" &as vacated and delivered to the latter, as reasona'le co/0ensation for the occu0anc" of the 0ro0ert", &ith interest thereon at the rate of 9I 0er annu/G and that Palanca, et-al- &ere ordered to 0a", =ointl" and severall", to Eu and Li/, individuall", the a/ount of P100,000-00 '" &a" of /oral da/ages, P*0,000-00 '" &a" of e4e/0lar" da/ages and P*0,000-00 '" &a" of attorne";s fees- #ence, the 0etition for revie&The !u0re/e ourt dis/issed the 0etitionG &ith costs against alingasan, 3dalin, et-al1. Groun's mere+y sp+(ts aspects o- t*e (ssue" (.e. t*e true nature o- transact(on entere' y ?u an' @(m ,(t* t*e Aa'o s( +(n)s The grounds relied u0on '" alingasan, 3dalin, et-al- are essentiall" a s0litting of the various as0ects of the one 0ivotal issue that holds the @e" to the resolution of this controvers": the true nature of the sale transaction entered into '" the Cado si'lings &ith Faustino Eu and 3ntonio Li/- The ourts tas@ a/ounts to a declaration of &hat @ind of contract had 'een entered into '" said 0arties and of &hat their res0ective rights and o'ligations are thereunder/. Dee' o- Con'(t(ona+ .a+e3 > +()at(on o- t*e se++er to e8ect t*e tenants an' t*e o +()at(on o- t*e uyer to pay t*e a+ance o- t*e purc*ase pr(ce3 C*o(ce as to ,*om to se++ (s 'eterm(ne' Palanca, in 'ehalf of the Cado si'lings &ho had alread" co//itted to sell the 0ro0ert" to Eu and Li/ and Loreto 3dalin, understood her o'ligation to e=ect the tenants on the su'=ect 0ro0ert"- #aving gone to the e4tent of filing an e=ect/ent case 'efore the Daranga" a0tain, Palanca clearl" sho&ed an intelligent a00reciation of the nature of the transaction that she had entered into: that she, in 'ehalf of the Cado si'lings, had alread" sold the su'=ect 0ro0ert" to Eu and Li/ and Loreto 3dalin, and that onl" the 0a"/ent of the 'alance of the 0urchase 0rice &as su'=ect to the condition that she &ould successfull" secure the eviction of their tenants- 5n the sense that the 0a"/ent of the 'alance of the 0urchase 0rice &as su'=ect to a condition, the sale transaction &as not "et co/0leted, and 'oth sellers and 'u"ers have their res0ective o'ligations "et to 'e fulfilled: the for/er, the e=ect/ent of their tenantsG and the latter, the 0a"/ent of the 'alance of the 0urchase 0rice- 5n this sense, the Deed of onditional !ale /a" 'e an accurate deno/ination of the transaction- Dut the sale &as conditional onl" inas/uch as there re/ained "et to 'e fulfilled, the o'ligation of the sellers to e=ect their tenants and the o'ligation of the 'u"ers to 0a" the 'alance of the 0urchase 0rice- The choice of &ho to sell the 0ro0ert" to, ho&ever, had alread" 'een /ade '" the sellers and is thus no longer su'=ect to an" condition nor o0en to an" change- 5n that sense, therefore, the sale /ade '" Palanca to Eu, Li/, and 3dalin &as definitive and a'solute1. No acts o- part(es 8ust(-(es ra'(ca+ c*an)e o- Ba+anca=s posture3 No +e)a+ as(s -or t*e acceptance o- tenant=s o--er to uy $othing in the acts of the sellers and 'u"ers 'efore, during or after the said transaction =ustifies the radical change of 0osture of Palanca &ho, in order to 0rovide a legal 'asis for her later acce0tance of the tenants; offer to 'u" the sa/e 0ro0ert", in effect clai/ed that the sale, 'eing conditional, &as de0endent on the sellers not changing their /inds a'out selling the 0ro0ert" to Eu and Li/- The tenants, for their 0art, defended Palanca;s su'se.uent dealing &ith the/ '" asserting their o0tion rights under Palanca;s letter of * !e0te/'er 1,<+ and har@ing on the non)fulfill/ent of the condition that their e=ect/ent 'e secured first4. No +e)a+ rat(ona+(C(n) can sanct(on Ba+anca=s ar (trary reac* o- contract
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The ourt cannot countenance the dou'le dealing 0er0etrated '" Palanca in 'ehalf of the Cado si'lings- $o a/ount of legal rationali2ing can sanction the ar'itrar" 'reach of contract that Palanca co//itted in acce0ting the offer of Aagno 3dalin, 3da"a and alingasan to 0urchase a 0ro0ert" alread" earlier sold to Eu and Li/$. A++e)e' 10D'ay opt(on -or tenant to purc*ase vo(' -or +ack o- cons('erat(on The 30)da" o0tion to 0urchase the su'=ect 0ro0ert" allegedl" given to the tenants as contained in the * !e0te/'er 1,<+ letter of Palanca, is not valid for utter lac@ of consideration:. Ba+anca an' tenants estoppe' Eu and Li/ t&ice as@ed Palanca and the tenants concerned as to &hether or not the latter &ere interested to 'u" the su'=ect 0ro0ert", and t&ice, too, the ans&er given &as that the said tenants &ere not interested to 'u" the su'=ect 0ro0ert" 'ecause the" could not afford it- learl", said tenants and Palanca, &ho re0resented the for/er in the initial negotiations &ith Eu and Li/, are esto00ed fro/ den"ing their earlier state/ent to the effect that the said tenants Aagno 3dalin, 3da"a and alingasan had no intention of 'u"ing the four doors that the" &ere leasing fro/ the Cado si'lings!. .u se2uent sa+e c+ear+y ma'e (n a' -a(t* The su'se.uent sale of the su'=ect 0ro0ert" '" Palanca to the tenants, s/ac@s of gross 'ad faith, considering that Palanca and the said tenants &ere in full a&areness of the 3ugust and !e0te/'er negotiations 'et&een Dautista and Palanca, on the one hand, and Loreto 3dalin, Faustino Eu and 3ntonio Li/, on the other, for the sale of the one)store" 'uilding- 5t cannot 'e denied, thus, that Palanca and the said tenants entered into the su'se.uent or second sale not&ithstanding their full @no&ledge of the su'sistence of the earlier sale over the sa/e 0ro0ert" to Eu and Li/8. Br(or re)(strat(on cannot erase )ross a' -a(t* c*aracter(C(n) secon' sa+e Though the second sale to the said tenants &as registered, such 0rior registration cannot erase the gross 'ad faith that characteri2ed such second sale, and conse.uentl", there is no legal 'asis to rule that such second sale 0revails over the first sale of the said 0ro0ert" to Eu and Li/#. Re-usa+ o- tenants -rom vacat(n) property not a va+(' 8ust(-(cat(on to rene)e on o +()at(on to se++ Palanca, et-al- cannot invo@e the refusal of the tenants to vacate the 0ro0ert" and the latter;s decision to the/selves 0urchase the 0ro0ert" as a valid =ustification to renege on and turn their 'ac@s against their o'ligation to deliver or cause the eviction of the tenants fro/ and deliver 0h"sical 0ossession o the 0ro0ert" to Eu and Li/- 5t &ould 'e the 2enith of ine.uit" for Palanca, et- al- to invo@e the occu0ation '" the tenants, as of the 0ro0ert", as a =ustification to ignore their o'ligation to have the tenants evicted fro/ the 0ro0ert" and for the/ to give P60,000-00 distur'ance fee for each of the tenants and a =ustification for the latter to hold on to the 0ossession of the 0ro0ert"10. .econ' sa+e cannot e pre-erre' even (- t*e pr(or con'(t(ona+ sa+e ,as not consummate' 3ssu/ing, gratia arguendi, for the nonce, that there had 'een no consu//ation of the 7Deed of onditional !ale8 '" reason of the non)deliver" to Eu and Li/ of the 0ro0ert", it does not there'" /ean that the 7Deed of !ale of (egistered Land8 e4ecuted '" Palanca, et-al and the tenants should 'e given 0reference[1] A''(son vs. %e+(7 [G.R. No. 1/14/. Au)ust 1" 1#18.] >n Danc, Fisher (J): 6 concurring %acts& D" a 0u'lic instru/ent dated 11 June 1,14, 3- 3- 3ddison sold to Aarciana Feli4, &ith the consent of her hus'and, Dal'ino Tioco, 4 0arcels of land- Feli4 0aid, at the ti/e of the e4ecution of the deed, the su/ of
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P3,000 on account of the 0urchase 0rice, and 'ound herself to 0a" the re/ainder in install/ents, the first of P*,000 on 16 Jul" 1,14, the second of P6,000 30 da"s after the issuance to her of a certificate of title under the Land (egistration 3ct, and further, &ithin 10 "ears fro/ the date of such title, P10 for each coconut tree in 'earing and P6 for each such tree not in 'earing, that /ight 'e gro&ing on said 4 0arcels of land on the date of the issuance of title to her, &ith the condition that the total 0rice should not e4ceed P<6,000- 5t &as further sti0ulated that the 0urchaser &as to deliver to the vendor *6I of the value of the 0roducts that she /ight o'tain fro/ the 4 0arcels fro/ the /o/ent she ta@es 0ossession of the/ until the Torrens certificate of title 'e issued in her favor- 5t &as also covenanted that &ithin 1 "ear fro/ the date of the certificate of title in favor of Aarciana Feli4, this latter /a" rescind the 0resent contract of 0urchase and sale, in &hich case Feli4 shall 'e o'liged to return to 3ddison the net value of all the 0roducts of the 4 0arcels sold, and shall 'e o'liged to return to her all the su/s that &as 0aid, together &ith interest at the rate of 10I 0er annu/- 3fter the e4ecution of the deed of sale, at the re.uest of Feli4- 3ddison &ent to Lucena, acco/0anied '" the for/er;s re0resentative, for the 0ur0ose of designating and delivering the lands sold- #e &as a'le to designate onl" * of the 4 0arcels, and /ore than *B3s of these &ere found to 'e in the 0ossession of one Juan 1illafuerte, &ho clai/ed to 'e the o&ner of the 0arts so occu0ied '" hi/- 3ddison ad/itted that Feli4 &ould have to 'ring suit to o'tain 0ossession of the land- 5n June 1,14, Feli4 filed an a00lication &ith the Land ourt for the registration in her na/e of 4 0arcels of land descri'ed in the deed of sale e4ecuted in her favor, to o'tain fro/ the Land ourt a &rit of in=unction against the occu0ants, and for the 0ur0ose of the issuance of this &rit- The 0roceedings in the /atter of this a00lication &ere su'se.uentl" dis/issed, for failure to 0resent the re.uired 0lans &ithin the 0eriod of the ti/e allo&ed for the 0ur0ose5n Januar" 1,16, 3ddison filed suit in the F5 Aanila to co/0el Feli4 to /a@e 0a"/ent of the first install/ent of P*,000, de/anda'le on 16 Jul" 1,14, and of the interest in arrears, at the sti0ulated rate of <I 0er annu/- Feli4 and Tioco ans&ered the co/0laint and alleged '" &a" of s0ecial defense that 3ddison had a'solutel" failed to deliver the lands that &ere the su'=ect /atter of the sale, not&ithstanding the de/ands /ade u0on hi/ for this 0ur0ose- !he therefore as@ed that she 'e a'solved fro/ the co/0laint, and that, after a declaration of the rescission of the contract of the 0urchase and sale of said lands, 3ddison 'e ordered to refund the P3,000 that had 'een 0aid to hi/ on account, together &ith the interest agreed u0on, and to 0a" an inde/nit" for the losses and da/ages &hich the defendant alleged she had suffered through 3ddison;s nonfulfil/ent of the contract- The trial court rendered =udg/ent in favor of Feli4, holding the contract of sale to 'e rescinded and ordering the return the P3,000 0aid on account of the 0rice, together &ith interest thereon at the rate of 10I 0er annu/- Fro/ this =udg/ent 3ddison a00ealedThe !u0re/e ourt held that the contract of 0urchase and sale entered into '" and 'et&een the Parties on 11 June 1,14 is rescinded, and ordered 3ddison to /a@e restitution of the su/ of P3,000 received '" hi/ on account of the 0rice of the sale, together &ith interest thereon at the legal rate of 9I 0er annu/ fro/ the date of the filing of the co/0laint until 0a"/ent, &ith the costs of 'oth instances against 3ddison1. so+' Cross Comp+a(nt not -oun'e' on convent(ona+ resc(ss(on ut on t*e -a(+ure to 'e+(ver t*e +an'
The ross co/0laint is not founded on the h"0othesis of the conventional rescission relied u0on '" the court, 'ut on the failure to deliver the land sold- The right to rescind the contract '" virtue of the s0ecial agree/ent not onl" did not e4ist fro/ the /o/ent of the e4ecution of the contract u0 to one "ear after the registration of the land, 'ut does not accrue until the land is registered- The &ording of the clause su'stantiates the contention- The one "ear;s deli'eration granted to the 0urchaser &as to 'e counted 7fro/ the date of the certificate of title - - --8 Therefore the right to elect to rescind the contract &as su'=ect to a condition, na/el", the issuance of the title- The record sho&s that u0 to the 0resent ti/e that condition has not 'een fulfilledG conse.uentl" Feli4 cannot 'e heard to invo@e a right &hich de0ends on the e4istence of that condition/. 4%u+-(++ment o- con'(t(on (mposs( +e -or reason (mputa +e to party6 not presente'
.a+es" /001 ( ! )
5f in)the cross)co/0laint it had 'een alleged that the fulfill/ent of the condition &as i/0ossi'le for reasons i/0uta'le to 3ddison, and if this allegation had 'een 0roven, 0erha0s the condition &ould have 'een considered as fulfilled (arts- 111+, 111<, and 111,, iv- ode)- This issue, ho&ever, &as not 0resented in Feli4;s ans&er1. ;ra'(t(on < De+(very y t*e ven'or o- t*e t*(n) so+' The ode i/0oses u0on the vendor the o'ligation to deliver the thing sold- The thing is considered to 'e delivered &hen it is 0laced 7in the hands and 0ossession of the vendee-8 ( iv- ode, art- 149*-) 5t is true that the sa/e article declares that the e4ecution of a 0u'lic instru/ent is e.uivalent to the deliver" of the thing &hich is the o'=ect of the contract, 'ut, in order that this s"/'olic deliver" /a" 0roduce the effect of tradition, it is necessar" that the vendor shall have had such control over the thing sold that, at the /o/ent of the sale, its /aterial deliver" could have 'een /ade- 5t is not enough to confer u0on the 0urchaser the o&nershi0 and the right of 0ossession- The thing sold /ust 'e 0laced in his control- :hen there is no i/0edi/ent &hatever to 0revent the thing sold 0assing into the tenanc" of the 0urchaser '" the sole &ill of the vendor, s"/'olic deliver" through the e4ecution of a 0u'lic instru/ent is sufficient- Dut if, not&ithstanding the e4ecution of the instru/ent, the 0urchaser cannot have the en=o"/ent and /aterial tenanc" of the thing and /a@e use of it hi/self or through another in his na/e, 'ecause such tenanc" and en=o"/ent are o00osed '" the inter0osition of another &ill, then fiction "ields to realit" J the deliver" has not 'een effected4. De+(very" accor'(n) to Da++oC The &ord Hdeliver"; e40resses a co/0le4 idea, the a'andon/ent of the thing '" the 0erson &ho /a@es the deliver" and the ta@ing control of it '" the 0erson to &ho/ the deliver" is /ade (Dallo2GFen- (e0-, vol- 43, 0- 1+4 in his co//entaries on article 1904 of the French ivil ode)$. E7ecut(on o- a pu +(c (nstrument" ,*en su--(c(ent The e4ecution of a 0u'lic instru/ent is sufficient for the 0ur0oses of the a'andon/ent /ade '" the vendor, 'ut it is not al&a"s sufficient to 0er/it of the a00rehension of the thing '" the 0urchaser:. %(ct(t(ous tra'(t(on not necessar(+y (mp+(es rea+ tra'(t(on o- t*e t*(n) so+' :hen the sale is /ade through the /eans of a 0u'lic instru/ent, the e4ecution of this latter is e.uivalent to the deliver" of the thing sold: &hich does not and cannot /ean that this fictitious tradition necessaril" i/0lies the real tradition of the thing sold, for it is incontroverti'le that, &hile its o&nershi0 still 0ertains to the vendor (and &ith greater reason if it does not), a third 0erson /a" 'e in 0ossession of the sa/e thingG &herefore, though, as a general rule, he &ho 0urchases '" /eans of a 0u'lic instru/ent should 'e dee/ed to 'e the 0ossessor in fact, "et this 0resu/0tion gives &a" 'efore 0roof to the contrar" (!u0re/e court of !0ain, decision of $ove/'er 10, 1,03, K iv- (e0-, vol- ,9, 0- 690L inter0reting article 149* of the ivil ode)!. Resc(ss(on o- sa+e an' return o- pr(ce 'ue to nonD'e+(very o- t*(n) so+' 5n the 0resent case, the /ere e4ecution of the instru/ent &as not a fulfill/ent of the vendor;s o'ligation to deliver the thing sold, and that fro/ such nonfulfill/ent arises the 0urchaser;s right to de/and, as she has de/anded, the rescission of the sale and the return of the 0rice- ( iv- ode, arts- 1609 and 11*4-) 8. No a)reement -or ven'ee to take steps to o ta(n mater(a+ possess(on o- t*(n) so+' 5f the sale had 'een /ade under the e40ress agree/ent of i/0osing u0on the 0urchaser the o'ligation to ta@e the necessar" ste0s to o'tain the /aterial 0ossession of the thing sold, and it &ere 0roven that she @ne& that the thing &as in the 0ossession of a third 0erson clai/ing to have 0ro0ert" rights therein, such agree/ent &ould 'e 0erfectl" valid- Dut there is nothing in the instru/ent &hich &ould indicate, even i/0licitl", that such &as the agree/ent-
.a+es" /001 ( 8 )
8.
Bossess(on ,*(+e +an' (s e(n) re)(stere' contemp+ate' (n contract The o'ligation &as incu/'ent u0on Feli4 to a00l" for and o'tain the registration of the land in the ne& registr" of 0ro0ert"G 'ut fro/ this it cannot 'e concluded that she had to a&ait the final decision of the ourt of Land (egistration, in order to 'e a'le to en=o" the 0ro0ert" sold- %n the contrar", it &as e40ressl" sti0ulated in the contract that the 0urchaser should deliver to the vendor 1B4 7of the 0roducts of the 4 0arcels fro/ the /o/ent &hen she ta@es 0ossession of the/ until the Torrens certificate of title 'e issued in her favor-8 This o'viousl" sho&s that it &as not foreseen that the 0urchaser /ight 'e de0rived of her 0ossession during the course of the registration 0roceedings, 'ut that the transaction rested on the assu/0tion that she &as to have, during said 0eriod, the /aterial 0ossession and en=o"/ent of the 4 0arcels of land#. @e)a+ (nterest 'ue as resc(ss(on (s ma'e y v(rtue o- prov(s(ons o- +a, 3s the rescission is /ade '" virtue of the 0rovisions of la& and not '" contractual agree/ent, it is not the conventional 'ut the legal interest that is de/anda'le[4] A'e+-a Bropert(es vs. CA [G.R. No. 111/18. Fanuary /$" 1##$.] !econd Division, (egalado (J): 3 concurring %acts& (osario Ji/ene2) astaneda, !alud Ji/ene2 and their 'rothers, Jose and Do/inador Ji/ene2, &ere the registered co)o&ners of a 0arcel of land consisting of 1+,+10 s.- /s (T T 30,++3) situated in Darrio ulasi, Las PiMas, Aetro Aanila- %n *< Jul" 1,<<, Jose and Do/inador Ji/ene2 sold their share consisting of 1B* of said 0arcel of land, s0ecificall" the eastern 0ortion thereof, to 3delfa Pro0erties 0ursuant to a 7Casulatan sa Dilihan ng Lu0a-8 !u'se.uentl", a 7 onfir/ator" >4tra=udicial Partition 3gree/ent8 &as e4ecuted '" the Ji/ene2es, &herein the eastern 0ortion of the su'=ect lot, &ith an area of <,<66 s.- /s- &as ad=udicated to Jose and Do/inador Ji/ene2, &hile the &estern 0ortion &as allocated to (osario and !alud Ji/ene2- Thereafter, 3delfa Pro0erties e40ressed interest in 'u"ing the &estern 0ortion of the 0ro0ert" fro/ (osario and !alud3ccordingl", on *6 $ove/'er 1,<,, an 7>4clusive %0tion to Purchase8 &as e4ecuted 'et&een the 0arties, &ith the condition that the selling 0rice shall 'e P*,<69,160, that the o0tion /one" of P60,000 shall 'e credited as 0artial 0a"/ent u0on the consu//ation of sale, that the 'alance is to 'e 0aid on or 'efore 30 $ove/'er 1,<,, and that in case of default '" 3delfa Pro0erties to 0a" the 'alance, the o0tion is cancelled and 60I of the o0tion /one" shall 'e forfeited and the other 60I refunded u0on the sale of the 0ro0ert" to a third 0art", and that all e40enses including ca0ital gains ta4, cost of docu/entar" sta/0s are for the account of the vendors and the e40enses for the registration of the deed of sale for the account of 3delfa 0ro0ertiesonsidering, ho&ever, that the o&ner;s co0" of the certificate of title issued to !alud Ji/ene2 had 'een lost, a 0etition for the re)issuance of a ne& o&ner;s co0" of said certificate of title &as filed in court through 3tt"Da"ani L- Dernardo- >ventuall", a ne& o&ner;s co0" of the certificate of title &as issued 'ut it re/ained in the 0ossession of 3tt"- Dernardo until he turned it over to 3delfa Pro0erties, 5ncDefore 3delfa Pro0erties could /a@e 0a"/ent, it received su//ons on *, $ove/'er 1,<,, together &ith a co0" of a co/0laint filed '" the ne0he&s and nieces of (osario and !alud against the latter, Jose and Do/inador Ji/ene2, and 3delfa Pro0erties in the (T Aa@ati ( ivil ase <,)6641), for annul/ent of the deed of sale in favor of #ousehold or0oration and recover" of o&nershi0 of the 0ro0ert" covered '" T T 30,++3- 3s a conse.uence, in a letter dated *, $ove/'er 1,<,, 3delfa Pro0erties infor/ed (osario and !alud that it &ould hold 0a"/ent of the full 0urchase 0rice and suggested that the latter settle the case &ith their ne0he&s and nieces, adding that 7if 0ossi'le, although 30 $ove/'er 1,<, is a holida", &e &ill 'e &aiting for "ou and said 0laintiffs at our office u0 to +:00 0-/-8 3nother letter of the sa/e tenor and of even date &as sent '" 3delfa Pro0erties to Jose and Do/inador Ji/ene2- !alud Ji/ene2 refused to heed the suggestion of 3delfa Pro0erties and attri'uted the sus0ension of 0a"/ent of the 0urchase 0rice to 7lac@ of &ord of honor-8 %n + Dece/'er 1,<,, 3delfa Pro0erties caused to 'e annotated on the title of the lot its o0tion contract &ith !alud and (osario, and its contract of sale &ith Jose and Do/inador Ji/ene2, as >ntr"
.a+es" /001 ( # )
$o- 143+)4 and entr" $o- 143<)4, res0ectivel"- %n 14 Dece/'er 1,<,, (osario and !alud sent Francisca Ji/ene2 to see 3tt"- Dernardo, in his ca0acit" as 3delfa Pro0erties; counsel, and to infor/ the latter that the" &ere cancelling the transaction- 5n turn, 3tt"- Dernardo offered to 0a" the 0urchase 0rice 0rovided that P600,000-00 'e deducted therefro/ for the settle/ent of the civil case- This &as re=ected '" (osario and !alud- %n ** Dece/'er 1,<,, 3tt"- Dernardo &rote (osario and !alud on the sa/e /atter 'ut this ti/e reducing the a/ount fro/ P600,000-00 to P300,000-00, and this &as also re=ected '" the latter- %n *3 Fe'ruar" 1,,0, the (T dis/issed ivil ase <,)6641%n *< Fe'ruar" 1,,0, 3delfa Pro0erties caused to 'e annotated ane& on T T 30,++3 the e4clusive o0tion to 0urchase as >ntr" 444*)4-%n the sa/e da", *< Fe'ruar" 1,,0, (osario and !alud e4ecuted a Deed of onditional !ale in favor of >/"lene hua over the sa/e 0arcel of land for P3,0*,,*60-00, of &hich P1,600,000-00 &as 0aid to the for/er on said date, &ith the 'alance to 'e 0aid u0on the transfer of title to the s0ecified 1B* 0ortion- %n 19 30ril 1,,0, 3tt"- Dernardo &rote (osario and !alud infor/ing the latter that in vie& of the dis/issal of the case against the/, 3delfa Pro0erties &as &illing to 0a" the 0urchase 0rice, and he re.uested that the corres0onding deed of a'solute sale 'e e4ecuted- This &as ignored '" (osario and !alud%n *+ Jul" 1,,0, Ji/ene2; counsel sent a letter to 3delfa Pro0erties enclosing therein a chec@ for P*6,000-00 re0resenting the refund of 60I of the o0tion /one" 0aid under the e4clusive o0tion to 0urchase- (osario and !alud then re.uested 3delfa Pro0erties to return the o&ner;s du0licate co0" of the certificate of title of !alud Ji/ene2- 3delfa Pro0erties failed to surrender the certificate of title(osario and !alud Ji/ene2 filed ivil ase +63* in the (T Pasa" it" (Dranch 113) for annul/ent of contract &ith da/ages, 0ra"ing, a/ong others, that the e4clusive o0tion to 0urchase 'e declared null and voidG that 3delfa Pro0erties 'e ordered to return the o&ner;s du0licate certificate of titleG and that the annotation of the o0tion contract on T T 30,++3 'e cancelled- >/"lene hua, the su'se.uent 0urchaser of the lot, filed a co/0laint in intervention- %n 6 !e0te/'er 1,,1, the trial court rendered =udg/ent holding that the agree/ent entered into '" the 0arties &as /erel" an o0tion contract, and declaring that the sus0ension of 0a"/ent '" 3delfa Pro0erties constituted a counter)offer &hich, therefore, &as tanta/ount to a re=ection of the o0tion- 5t li@e&ise ruled that 3delfa Pro0erties could not validl" sus0end 0a"/ent in favor of (osario and !alud on the ground that the vindicator" action filed '" the latter;s @in did not involve the &estern 0ortion of the land covered '" the contract 'et&een the 0arties, 'ut the eastern 0ortion thereof &hich &as the su'=ect of the sale 'et&een 3delfa Pro0erties and the 'rothers Jose and Do/inador Ji/ene2- The trial court then directed the cancellation of the e4clusive o0tion to 0urchase, declared the sale to intervenor >/"lene hua as valid and 'inding, and ordered 3delfa Pro0erties to 0a" da/ages and attorne";s fees to (osario and !alud, &ith costs%n a00eal, the ourt of a00eals affir/ed in toto the decision of the court a .uo ( 3)F( 34+9+) and held that the failure of 0etitioner to 0a" the 0urchase 0rice &ithin the 0eriod agreed u0on &as tanta/ount to an election '" 0etitioner not to 'u" the 0ro0ert"G that the sus0ension of 0a"/ent constituted an i/0osition of a condition &hich &as actuall" a counter)offer a/ounting to a re=ection of the o0tionG and that 3rticle 16,0 of the ivil ode on sus0ension of 0a"/ents a00lies onl" to a contract of sale or a contract to sell, 'ut not to an o0tion contract &hich it o0ined &as the nature of the docu/ent su'=ect of the case at 'ar- !aid a00ellate court si/ilarl" u0held the validit" of the deed of conditional sale e4ecuted '" (osario and !alud in favor of intervenor >/"lene hua- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt affir/ed the assailed =udg/ent of the /odificator" 0re/ises1. ourt of 300eals in 3)F( 1 34+9+, &ith
A)reement et,een part(es a contract to se++ an' not an opt(on contract or a contract o- sa+e The alleged o0tion contract is a contract to sell, rather than a contract of sale- The distinction 'et&een the t&o is i/0ortant for in contract of sale, the title 0asses to the vendee u0on the deliver" of the thing soldG &hereas in a contract to sell, '" agree/ent the o&nershi0 is reserved in the vendor and is not to 0ass until the
.a+es" /001 ( 10 )
full 0a"/ent of the 0rice- 5n a contract of sale, the vendor has lost and cannot recover o&nershi0 until and unless the contract is resolved or rescindedG &hereas in a contract to sell, title is retained '" the vendor until the full 0a"/ent of the 0rice, such 0a"/ent 'eing a 0ositive sus0ensive condition and failure of &hich is not a 'reach 'ut an event that 0revents the o'ligation of the vendor to conve" title fro/ 'eco/ing effective- Thus, a deed of sale is considered a'solute in nature &here there is neither a sti0ulation in the deed that title to the 0ro0ert" sold is reserved in the seller until the full 0a"/ent of the 0rice, nor one giving the vendor the right to unilaterall" resolve the contract the /o/ent the 'u"er fails to 0a" &ithin a fi4ed 0eriod/. Gntent not to trans-er o,ners*(p nee' not e e7presse' The 0arties never intended to transfer o&nershi0 to 3delfa Pro0erties to co/0letion of 0a"/ent of the 0urchase 0rice, this is inferred '" the fact that the e4clusive o0tion to 0urchase, although it 0rovided for auto/atic rescission of the contract and 0artial forfeiture of the a/ount alread" 0aid in case of default, does not /ention that 3delfa Pro0erties is o'liged to return 0ossession or o&nershi0 of the 0ro0ert" as a conse.uence of non)0a"/ent- There is no sti0ulation anent reversion or reconve"ance of the 0ro0ert" in the event that 0etitioner does not co/0l" &ith its o'ligation- :ith the a'sence of such a sti0ulation, it /a" legall" 'e inferred that there &as an i/0lied agree/ent that o&nershi0 shall not 0ass to the 0urchaser until he had full" 0aid the 0rice- 3rticle 14+< of the ivil ode does not re.uire that such a sti0ulation 'e e40ressl" /adeonse.uentl", an i/0lied sti0ulation to that effect is considered valid and 'inding and enforcea'le 'et&een the 0arties- 3 contract &hich contains this @ind of sti0ulation is considered a contract to sell- Aoreover, that the 0arties reall" intended to e4ecute a contract to sell is 'olstered '" the fact that the deed of a'solute sale &ould have 'een issued onl" u0on the 0a"/ent of the 'alance of the 0urchase 0rice, as /a" 'e gleaned fro/ 3delfa Pro0erties; letter dated 19 30ril 1,,0 &herein it infor/ed the vendors that it 7is no& read" and &illing to 0a" "ou si/ultaneousl" &ith the e4ecution of the corres0onding deed of a'solute sale-8 1. No actua+ or construct(ve 'e+(very o- property to (n'(cate contract o- sa+e3 C(rcumstances ne)ate presumpt(on o- possess(on o- t(t+e (s to e un'erstoo' as 'e+(very 5t has not 'een sho&n that there &as deliver" of the 0ro0ert", actual or constructive, /ade- The e4clusive o0tion to 0urchase is not contained in a 0u'lic instru/ent the e4ecution of &hich &ould have 'een considered e.uivalent to deliver"- $either did 3delfa Pro0erties ta@e actual, 0h"sical 0ossession of the 0ro0ert" at an" given ti/e- 5t is true that after the reconstitution of the certificate of title, it re/ained in the 0ossession of 3tt"- Da"ani L- Dernardo, 3delfa;s counsel- $or/all", under the la&, such 0ossession '" the vendee is to 'e understood as a deliver"- #o&ever, (osario and !alud e40lained that there &as reall" no intention on their 0art to deliver the title to 3delfa Pro0erties &ith the 0ur0ose of transferring o&nershi0 to itThe" clai/ that 3tt"- Dernardo had 0ossession of the title onl" 'ecause he &as their counsel in the 0etition for reconstitution- The court found no reason not to 'elieve said e40lanation, aside fro/ the fact that such contention &as never refuted or contradicted '" 3delfa Pro0erties4. Ber-ecte' contract to se++ The controverted docu/ent should legall" 'e considered as a 0erfected contract to sell, and not 7strictl" an o0tion contract-8 $. Contract (nterprete' to ascerta(n (ntent o- part(es3 ;(t+e not contro++(n) (- te7t s*o,s ot*er,(se The i/0ortant tas@ in contract inter0retation is al&a"s the ascertain/ent of the intention of the contracting 0arties and that tas@ is to 'e discharged '" loo@ing to the &ords the" used to 0ro=ect that intention in their contract, all the &ords not =ust a 0articular &ord or t&o, and &ords in conte4t not &ords standing alone- Aoreover, =udging fro/ the su'se.uent acts of the 0arties &hich &ill hereinafter 'e discussed, it is undenia'le that the intention of the 0arties &as to enter into a contract to sell- 5n addition, the title of a contract does not necessaril" deter/ine its true nature- #ence, the fact that the docu/ent under discussion is entitled 7>4clusive %0tion to Purchase8 is not controlling &here the te4t thereof sho&s that it is a contract to sell-
.a+es" /001 ( 11 )
:.
>pt(on 'e-(ne' 3s used in the la& on sales, an o0tion is a continuing offer or contract '" &hich the o&ner sti0ulates &ith another that the latter shall have the right to 'u" the 0ro0ert" at a fi4ed 0rice &ithin a certain ti/e, or under, or in co/0liance &ith, certain ter/s and conditions, or &hich gives to the o&ner of the 0ro0ert" the right to sell or de/and a sale- 5t is also so/eti/es called an 7unacce0ted offer-8 3n o0tion is not of itself a 0urchase, 'ut /erel" secures the 0rivilege to 'u"- 5t is not a sale of 0ro0ert" 'ut a sale of the right to 0urchase5t is si/0l" a contract '" &hich the o&ner of 0ro0ert" agrees &ith another 0erson that he shall have the right to 'u" his 0ro0ert" at a fi4ed 0rice &ithin a certain ti/e- #e does not sell his landG he does not then agree to sell itG 'ut he does sell so/ething, that is, the right or 0rivilege to 'u" at the election or o0tion of the other 0art"- 5ts distinguishing characteristic is that it i/0oses no 'inding o'ligation on the 0erson holding the o0tion, aside fro/ the consideration for the offer- ?ntil acce0tance, it is not, 0ro0erl" s0ea@ing, a contract, and does not vest, transfer, or agree to transfer, an" title to, or an" interest or right in the su'=ect /atter, 'ut is /erel" a contract '" &hich the o&ner of 0ro0ert" gives the o0tionee the right or 0rivilege of acce0ting the offer and 'u"ing the 0ro0ert" on certain ter/s!. Contract 'e-(ne' 3 contract, li@e a contract to sell, involves a /eeting of /inds 'et&een t&o 0ersons &here'" one 'inds hi/self, &ith res0ect to the other, to give so/ething or to render so/e service- ontracts, in general, are 0erfected '" /ere consent, &hich is /anifested '" the /eeting of the offer and the acce0tance u0on the thing and the cause &hich are to constitute the contract- The offer /ust 'e certain and the acce0tance a'solute8. D(st(nct(on et,een an opt(on an' a contract o- sa+e The distinction 'et&een an 7o0tion8 and a contract of sale is that an o0tion is an unacce0ted offer- 5t states the ter/s and conditions on &hich the o&ner is &illing to sell his land, if the holder elects to acce0t the/ &ithin the ti/e li/ited- 5f the holder does so elect, he /ust give notice to the other 0art", and the acce0ted offer thereu0on 'eco/es a valid and 'inding contract- 5f an acce0tance is not /ade &ithin the ti/e fi4ed, the o&ner is no longer 'ound '" his offer, and the o0tion is at an end- 3 contract of sale, on the other hand, fi4es definitel" the relative rights and o'ligations of 'oth 0arties at the ti/e of its e4ecution- The offer and the acce0tance are concurrent, since the /inds of the contracting 0arties /eet in the ter/s of the agree/ent#. Acceptance3 -orma+ or (n-orma+ >4ce0t &here a for/al acce0tance is so re.uired, although the acce0tance /ust 'e affir/ativel" and clearl" /ade and /ust 'e evidenced '" so/e acts or conduct co//unicated to the offeror, it /a" 'e /ade either in a for/al or an infor/al /anner, and /a" 'e sho&n '" acts, conduct, or &ords of the acce0ting 0art" that clearl" /anifest a 0resent intention or deter/ination to acce0t the offer to 'u" or sell- Thus, acce0tance /a" 'e sho&n '" the acts, conduct, or &ords of a 0art" recogni2ing the e4istence of the contract of sale- 5n the 0resent case, a 0erusal of the contract involved, as &ell as the oral and docu/entar" evidence 0resented '" the 0arties, readil" sho&s that there is indeed a concurrence of 3delfa;s offer to 'u" and the Ji/ene2es; acce0tance thereof10. Contract c+ear" on+y per-ormance o- o +()at(ons re2u(re' o- part(es The offer to 'u" a s0ecific 0iece of land &as definite and certain, &hile the acce0tance thereof &as a'solute and &ithout an" condition or .ualification- The agree/ent as to the o'=ect, the 0rice of the 0ro0ert", and the ter/s of 0a"/ent &as clear and &ell)defined- $o other significance could 'e given to such acts that than that the" &ere /eant to finali2e and 0erfect the transaction- The 0arties even &ent 'e"ond the 'asic re.uire/ents of the la& '" sti0ulating that 7all e40enses including the corres0onding ca0ital gains ta4, cost of docu/entar" sta/0s are for the account of the vendors, and e40enses for the registration of the deed of sale in the (egistr" of Deeds are for the account of 3delfa Pro0erties, 5nc-8 #ence, there &as nothing left to 'e done e4ce0t the 0erfor/ance of the res0ective o'ligations of the 0arties-
.a+es" /001 ( 1/ )
11.
No counterDo--er The offer of 3delfa Pro0erties to deduct P600,000-00, (later reduced to P300,000-00) fro/ the 0urchase 0rice for the settle/ent of the civil case &as not a counter)offer- There alread" e4isted a 0erfected contract 'et&een the 0arties at the ti/e the alleged counter)offer &as /ade- Thus, an" ne& offer '" a 0art" 'eco/es 'inding onl" &hen it is acce0ted '" the other- 5n the case of the Ji/ene2es, the" actuall" refused to concur in said offer of 0etitioner, '" reason of &hich the original ter/s of the contract continued to 'e enforcea'le- 3t an" rate, the sa/e cannot 'e considered a counter)offer for the si/0le reason that 3delfa Pro0erties; sole 0ur0ose &as to settle the civil case in order that it could alread" co/0l" &ith its o'ligation- 5n fact, it &as even indicative of a desire '" 3delfa Pro0erties to i//ediatel" co/0l" there&ith, e4ce0t that it &as 'eing 0revented fro/ doing so 'ecause of the filing of the civil case &hich, it 'elieved in good faith, rendered co/0liance i/0ro'a'le at that ti/e- 5n addition, no inference can 'e dra&n fro/ that suggestion given '" 3delfa Pro0erties that it &as totall" a'andoning the original contract1/. ;est to 'eterm(ne contract as a 4contract o- sa+e or purc*ase6 or mere 4opt(on6 The test in deter/ining &hether a contract is a 7contract of sale or 0urchase8 or a /ere 7o0tion8 is &hether or not the agree/ent could 'e s0ecificall" enforced- There is no dou't that 3delfa;s o'ligation to 0a" the 0urchase 0rice is s0ecific, definite and certain, and conse.uentl" 'inding and enforcea'le- #ad the Ji/ene2es chosen to enforce the contract, the" could have s0ecificall" co/0elled 3delfa to 0a" the 'alance of P*,<09,160-00- This is distinctl" /ade /anifest in the contract itself as an integral sti0ulation, co/0liance &ith &hich could legall" and definitel" 'e de/anded fro/ 0etitioner as a conse.uence11. >pt(on a)reement 3n agree/ent is onl" an 7o0tion8 &hen no o'ligation rests on the 0art" to /a@e an" 0a"/ent e4ce0t such as /a" 'e agreed on 'et&een the 0arties as consideration to su00ort the o0tion until he has /ade u0 his /ind &ithin the ti/e s0ecified- 3n o0tion, and not a contract to 0urchase, is effected '" an agree/ent to sell real estate for 0a"/ents to 'e /ade &ithin s0ecified ti/e and 0roviding for forfeiture of /one" 0aid u0on failure to /a@e 0a"/ent, &here the 0urchaser does not agree to 0urchase, to /a@e 0a"/ent, or to 'ind hi/self in an" &a" other than the forfeiture of the 0a"/ents /ade- This is not a case &here no right is as "et created nor an o'ligation declared, as &here so/ething further re/ains to 'e done 'efore the 'u"er and seller o'ligate the/selves14. Contract not an opt(on contract3 4Ba+ance6 :hile there is =uris0rudence to the effect that a contract &hich 0rovides that the initial 0a"/ent shall 'e totall" forfeited in case of default in 0a"/ent is to 'e considered as an o0tion contract, the contract e4ecuted 'et&een the 0arties is an o0tion contract, for the reason that the 0arties &ere alread" conte/0lating the 0a"/ent of the 'alance of the 0urchase 0rice, and &ere not /erel" .uoting an agreed value for the 0ro0ert"- The ter/ 7'alance,8 connotes a re/ainder or so/ething re/aining fro/ the original total su/ alread" agreed u0on1$. 5*en earnest money )(ven (n a contract o- sa+e :henever earnest /one" is given in a contract of sale, it shall 'e considered as 0art of the 0rice and as 0roof of the 0erfection of the contract- 5t constitutes an advance 0a"/ent and /ust, therefore, 'e deducted fro/ the total 0rice- 3lso, earnest /one" is given '" the 'u"er to the seller to 'ind the 'argain1:. D(st(nct(ons et,een earnest an' opt(on money There are clear distinctions 'et&een earnest /one" and o0tion /one", vi2-: (a) earnest /one" is 0art of the 0urchase 0rice, &hile o0tion /one" is the /one" given as a distinct consideration for an o0tion contractG (') earnest /one" is given onl" &here there is alread" a sale, &hile o0tion /one" a00lies to a sale not "et 0erfectedG and (c) &hen earnest /one" is given, the 'u"er is 'ound to 0a" the 'alance, &hile &hen the &ould)'e 'u"er gives o0tion /one", he is not re.uired to 'u"-
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1!.
Art(c+e 1$#0" Ne, C(v(+ Co'e 3rticle 16,0 of the ivil ode 0rovides 7!hould the vendee 'e distur'ed in the 0ossession or o&nershi0 of the thing ac.uired, or should he have reasona'le grounds to fear such distur'ance, '" a vindicator" action or a foreclosure of /ortgage, he /a" sus0end the 0a"/ent of the 0rice until the vendor has caused the distur'ance or danger to cease, unless the latter gives securit" for the return of the 0rice in a 0ro0er case, or it has 'een sti0ulated that, not&ithstanding an" such contingenc", the vendee shall 'e 'ound to /a@e the 0a"/ent- 3 /ere act of tres0ass shall not authori2e the sus0ension of the 0a"/ent of the 0rice-8 3s the agree/ent 'et&een the 0arties &as not an o0tion contract 'ut a 0erfected contract to sellG and therefore, 3rticle 16,0 &ould 0ro0erl" a00l"18. A'e+-a Bropert(es 8ust(-(e' (n suspen'(n) payment o- a+ance y reason o- v(n'(catory act(on -(+e' a)a(nst (t 5n ivil ase <,)6641, it is easil" discerni'le that, although the co/0laint 0ra"ed for the annul/ent onl" of the contract of sale e4ecuted 'et&een 3delfa Pro0erties and the Ji/ene2 'rothers, the sa/e li@e&ise 0ra"ed for the recover" of therein Ji/ene2; share in that 0arcel of land s0ecificall" covered '" T T 30,++35n other &ords, the Ji/ene2es &ere clai/ing to 'e co)o&ners of the entire 0arcel of land descri'ed in T T 30,++3, and not onl" of a 0ortion thereof nor did their clai/ 0ertain e4clusivel" to the eastern half ad=udicated to the Ji/ene2 'rothers- Therefore, 3delfa Pro0erties &as =ustified in sus0ending 0a"/ent of the 'alance of the 0urchase 0rice '" reason of the aforesaid vindicator" action filed against it- The assurance /ade '" the Ji/ene2es that 3delfa Pro0erties did not have to &orr" a'out the case 'ecause it &as 0ure and si/0le harass/ent is not the @ind of guarant" conte/0lated under the e4ce0tive clause in 3rticle 16,0 &herein the vendor is 'ound to /a@e 0a"/ent even &ith the e4istence of a vindicator" action if the vendee should give a securit" for the return of the 0rice1#. F(meneCes may no +on)er e compe++e' to se++ an' 'e+(ver su 8ect property De that as it /a", and the validit" of the sus0ension of 0a"/ent not&ithstanding, the Ji/ene2es /a" no longer 'e co/0elled to sell and deliver the su'=ect 0ro0ert" to 3delfa Pro0erties for t&o reasons, that is, 3delfa;s failure to dul" effect the consignation of the 0urchase 0rice after the distur'ance had ceasedG and, secondaril", the fact that the contract to sell had 'een validl" rescinded '" the Ji/ene2es/0. ;en'er an' cons()nat(on re2u(re' (n '(sc*ar)e o- o +()at(on (e). Contract to se++)3 D(--erent (n cases (nvo+v(n) e7erc(se o- r()*t or pr(v(+e)e The /ere sending of a letter '" the vendee e40ressing the intention to 0a", &ithout the acco/0an"ing 0a"/ent, is not considered a valid tender of 0a"/ent- Desides, a /ere tender of 0a"/ent is not sufficient to co/0el the Ji/ene2es to deliver the 0ro0ert" and e4ecute the deed of a'solute sale- 5t is consignation &hich is essential in order to e4tinguish 3delfa Pro0erties; o'ligation to 0a" the 'alance of the 0urchase 0rice- The rule is different in case of an o0tion contract or in legal rede/0tion or in a sale &ith right to re0urchase, &herein consignation is not necessar" 'ecause these cases involve an e4ercise of a right or 0rivilege (to 'u", redee/ or re0urchase) rather than the discharge of an o'ligation, hence tender of 0a"/ent &ould 'e sufficient to 0reserve the right or 0rivilege- This is 'ecause the 0rovisions on consignation are not a00lica'le &hen there is no o'ligation to 0a"- 3 contract to sell involves the 0erfor/ance of an o'ligation, not /erel" the e4ercise of a 0rivilege or a right- onse.uentl", 0erfor/ance or 0a"/ent /a" 'e effected not '" tender of 0a"/ent alone 'ut '" 'oth tender and consignation/1. A'e+-a no +on)er *a' r()*t to suspen' payment a-ter '(sm(ssa+ o- c(v(+ case a)a(nst (t 3delfa Pro0erties no longer had the right to sus0end 0a"/ent after the distur'ance ceased &ith the dis/issal of the civil case filed against it- $ecessaril", therefore, its o'ligation to 0a" the 'alance again arose and resu/ed after it received notice of such dis/issal- ?nfortunatel", 3delfa failed to seasona'l" /a@e 0a"/ent, as in fact it has failed to do so u0 to the 0resent ti/e, or even to de0osit the /one" &ith the trial court &hen this case &as originall" filed therein-
.a+es" /001 ( 14 )
//.
Resc(ss(on (n a contract to se++ 3rticle 16,* of the ivil ode &hich re.uires rescission either '" =udicial action or notarial act is not a00lica'le to a contract to sell- Further/ore, =udicial action for rescission of a contract is not necessar" &here the contract 0rovides for auto/atic rescission in case of 'reach, as in the contract involved in the 0resent controvers"- D" 3delfa;s failure to co/0l" &ith its o'ligation, the Ji/ene2es elected to resort to and did announce the rescission of the contract through its letter to 3delfa dated *+ Jul" 1,,0- That &ritten notice of rescission is dee/ed sufficient under the circu/stances/1. Reso+ut(on o- rec(proca+ contracts may e ma'e e7tra8u'(c(a++y" un+ess (mpu)ne' (n court 5t &as held in ?niversit" of the Phili00ines vs- De los 3ngeles, etc- that the right to rescind is not a'solute, 'eing ever su'=ect to scrutin" and revie& '" the 0ro0er court- #o&ever, this rule a00lies to a situation &here the e4tra=udicial rescission is contested '" the defaulting 0art"- 5n other &ords, resolution of reci0rocal contracts /a" 'e /ade e4tra=udiciall" unless successfull" i/0ugned in court- 5f the de'tor i/0ugns the declaration, it shall 'e su'=ect to =udicial deter/ination- %ther&ise, if said 0art" does not o00ose it, the e4tra=udicial rescission shall have legal effect- 5n the 0resent case, although 3delfa Pro0erties &as dul" furnished and did receive a &ritten notice of rescission &hich s0ecified the grounds therefore, it failed to re0l" thereto or 0rotest against it- 5ts silence thereon suggests an ad/ission of the veracit" and validit" of Ji/ene2es; clai//4. A'e+-a estoppe' Further/ore, the initiative of instituting suit &as transferred fro/ the rescinder to the defaulter '" virtue of the auto/atic rescission clause in the contract- Dut then, aside fro/ the lac@adaisical /anner &ith &hich 3delfa Pro0erties treated the Ji/ene2es; letter of cancellation, it utterl" failed to seriousl" see@ redress fro/ the court for the enforce/ent of its alleged rights under the contract- 5f the Ji/ene2es had not ta@en the initiative of filing ivil ase +63*, evidentl" 3delfa had no intention to ta@e an" legal action to co/0el s0ecific 0erfor/ance fro/ the for/er- D" such cavalier disregard, it has 'een effectivel" esto00ed fro/ see@ing the affir/ative relief it desires 'ut &hich it had theretofore disdained[$] A)r(cu+tura+ an' Home E7tens(on Deve+opment Group vs. CA [G.R. No. #/110. .eptem er 1" 1##/.] First Division, ru2 (J): 3 concurring %acts& %n *, Aarch 1,+*, the s0ouses 3ndres Dia2 and Josefa Aia sold to Druno Fundran a 1,)hectare 0arcel of land in Las PiMas, (i2al, covered '" T T *<+419- The o&ner;s du0licate co0" of the title &as turned over to Fundran- #o&ever, he did not register the Deed of 3'solute !ale 'ecause he said he &as advised in the %ffice of the (egister of Deeds of Pasig of the e4istence of notices of lis 0endens on the title- %n *0 $ove/'er 1,+*, Fundran and 3gricultural and #o/e Develo0/ent Frou0 (3#DF) entered into a Joint 1enture 3gree/ent for the i/0rove/ent and su'division of the land- This agree/ent &as also not annotated on the title- %n 30 3ugust 1,+9, the s0ouses 3ndres Dia2 and Josefa Aia again entered into another contract of sale of the sa/e 0ro0ert" &ith Li'rado a'autan- %n 3 !e0te/'er 1,+9, '" virtue of an order of the F5 (i2al, a ne& o&ner;s co0" of the certificate of title &as issued to the Dia2 s0ouses, &ho had alleged the loss of their co0"- %n that sa/e date, the notices of lis 0endens annotated on T T *<+419 &ere canceled and the Deed of !ale in favor of a'autan &as recorded- 3 ne& T T !)33<60BT)1+* &as thereu0on issued in his na/e in lieu of the canceled T T *<+419%n 14 Aarch 1,++, Fundran instituted an action for reconve"ance 'efore the F5 Pasa" it" N against Li'rado a'autan and Josefa Aia see@ing, a/ong others, the cancellation of T T 33<60BT)1+* and the issuance of a ne& certificate of title in his na/e- %n 31 3ugust 1,++, 3#DF, re0resented '" $icasio D!anche2, !r- (later su'stituted '" Ailagros !- Ducu), filed a co/0laint in intervention &ith su'stantiall" the sa/e allegations and 0ra"ers as that in Fundran;s co/0laint- 5n a decision dated 1* Januar" 1,<+, Fundran;s
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co/0laint and 0etitioner;s co/0laint in intervention &ere dis/issed for lac@ of /erit- !o &as counterclai/s, for insufficienc" of evidence-
a'autan;s
?0on a00eal, this decision &as affir/ed '" the ourt of 300eals, &ith the /odification that Josefa Aia &as ordered to 0a" Fundran the su/ of P,0,000-00, &ith legal interest fro/ 3 !e0te/'er 1,+9, 0lus the costs of suitThe !u0re/e 3#DF1. ourt denied the 0etition and affir/ed in toto the .uestioned decisionG &ith costs against
Art(c+e 1$44 ?nder 3rticle 1644 of the ivil ode of the Phili00ines, it is 0rovided that 75f the sa/e thing should have 'een sold to different vendees, the o&nershi0 shall 'e transferred to the 0erson &ho /a" have first ta@en 0ossession thereof in good faith, if it should 'e /ova'le 0ro0ert"- !hould it 'e i//ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"- !hould there 'e no inscri0tion, the o&nershi0 shall 0ertain to the 0erson &ho in good faith &as first in the 0ossessionG and, in the a'sence thereof, to the 0erson &ho 0resents the oldest title, 0rovided there is good faith/. Bre-erent(a+ r()*t o- -(rst to re)(ster The first sale to Fundran &as not registered &hile the second sale to a'autan &as registeredPreferential rights are accorded to a'autan, &ho had registered the sale in his favor, as against 3#DF;s co) venturer &hose right to the sa/e 0ro0ert" had not 'een recorded1. Burc*aser (n )oo' -a(t* 3 0urchaser in good faith is defined as 7one &ho 'u"s the 0ro0ert" of another &ithout notice that so/e other 0erson has a right to or interest in such 0ro0ert" and 0a"s a full and fair 0rice for the sa/e at the ti/e of such 0urchase or 'efore he has notice of the clai/ or interest of so/e other 0erson in the 0ro0ert"-8 5n the 0resent case, an e4a/ination of T T *<+419 discloses no annotation of an" sale, lien, encu/'rance or adverse clai/ in favor of Fundran or 3#D 4. Re)(stere' property un'er ;orrens system3 Berson c*ar)e ,(t* not(ce o- ur'ens note' on t*e re)(ster o- t(t+e :hen the 0ro0ert" sold is registered under the Torrens s"ste/, registration is the o0erative act to conve" or affect the land insofar as third 0ersons are concerned- Thus, a 0erson dealing &ith registered land is onl" charged &ith notice of the 'urdens on the 0ro0ert" &hich are noted on the register or certificate of title$. Not(ces o- +(s pen'es not a +(en or encum rance" mere+y not(ce o- +(t()at(on o- property su 8ect to t*e resu+t o- t*e su(t $otices of lis 0endens in favor of other 0ersons &ere earlier inscri'ed on the title did not have the effect of esta'lishing a lien or encu/'rance on the 0ro0ert" affected- Their onl" 0ur0ose &as to give notice to third 0ersons and to the &hole &orld that an" interest the" /ight ac.uire in the 0ro0ert" 0ending litigation &ould 'e su'=ect to the result of the suit:. Ca autan a purc*aser (n )oo' -a(t* an' -or va+ue a'autan too@ the ris@ of ac.uiring the 0ro0ert" even in the light of notice of lis 0endens inscri'ed in the title- !ignificantl", three da"s after the e4ecution of the deed of sale in his favor, the notices of lis 0endens &ere canceled '" virtue of the orders of the F5 (i2al, Dranch *3, dated 1 and 4 30ril 1,+4- a'autan therefore ac.uired the land free of an" liens or encu/'rances and so could clai/ to 'e a 0urchaser in good faith and for value-
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!.
No ev('ence o- a++e)e' possess(on y AHDG 3#DF insists that it &as alread" in 0ossession of the dis0uted 0ro0ert" &hen a'autan 0urchased it and that he could not have not @no&n of that 0ossession- !uch @no&ledge should 'elie his clai/ that he &as an innocent 0urchaser for value- #o&ever, the courts 'elo& found no evidence of the alleged 0ossession, &hich the !u0re/e ourt /ust also re=ect in deference to this factual finding8. Cas(s vs. CA not app+(ca +e3 D(--erent (ssues The issue in the 0resent case is &hether a'autan is an innocent 0urchaser for value and so entitled to the 0riorit" granted under 3rticle 1644 of the ivil ode- The asis case, on the other hand, involved the issues of &hether or not: 1) certiorari &as the 0ro0er re/ed" of the 0etitioner: *) the 0revious 0etition for certiorari &hich originated fro/ the .uieting of title case &as si/ilar to and, hence, a 'ar to the 0etition for certiorari arising fro/ the forci'le entr" caseG and 3) the court a .uo co//itted grave a'use of discretion a/ounting to lac@ or e4cess of =urisdiction in issuing the order &hich dissolved the restraining order issued in connection &ith the e=ect/ent case- The ourt &as not called u0on in that case to deter/ine &ho as 'et&een the t&o 0urchasers of the su'=ect 0ro0ert" should 'e 0referred#. E7cerpt use' y AHDG a narrat(on o- ack)roun' -acts an' not a'opte' as a 'octr(ne y t*e .upreme Court 3#DF invo@es the ruling of the lo&er court in that case to the effect that the registration of the sale in favor of the second 0urchaser and the issuance of a ne& certificate of title in his favor did not in an" /anner vest in hi/ an" right of 0ossession and o&nershi0 over the su'=ect 0ro0ert" 'ecause the seller, '" reason of their 0rior sale, had alread" lost &hatever right or interest she /ight have had in the 0ro0ert" at the ti/e the second sale &as /ade- The e4cer0t &as included in the 0onencia onl" as 0art of the narration of the 'ac@ground facts and &as not there'" ado0ted as a doctrine of the ourt- 5t &as considered onl" for the 0ur0ose of ascertaining if the court 'elo& had deter/ined the issue of the 0ossession of the su'=ect 0ro0ert" 0ending resolution of the .uestion of o&nershi0- %'viousl", the ourt could not have ado0ted that .uestiona'le ruling as it &ould clearl" /ilitate against the 0rovision of 3rticle 164410. No one can se++ ,*at *e 'oes not o,n3 Art(c+e 1$44 e(t*er an e7cept(on to t*e )enera+ ru+e or a re(terat(on o- t*e )enera+ ru+e (nso-ar as (nnocent t*(r' part(es are concerne' Justice >dgardo L- Paras o'served that 7$o one can sell &hat he does not o&n, 'ut this is /erel" the general rule- 5s 3rt- 1644 then an e4ce0tion to the general ruleO 5n a sense, "es, '" reason of 0u'lic convenience (!ee 3it@en v- Lao, 39 Phil- 610)G in still another sense, it reall" reiterates the general rule in that insofar as innocent third 0ersons are concerned, the registered o&ner (in the case of real 0ro0ert") is still the o&ner, &ith 0o&er of dis0osition11. @an)ua)e o- Art(c+e 1$44 c+ear3 Ca autan 'eeme' o,ner The language of 3rticle 1644 is clear and une.uivocal- 5n light of its /andate and of the facts esta'lished in the 0resent case, %&nershi0 /ust 'e recogni2ed in the 0rivate res0ondent, &ho 'ought the 0ro0ert" in good faith and, as an innocent 0urchaser for value, dul" and 0ro/0tl" registered the sale in his favor[:] A+men'ra vs. GAC [G.R. No. !$111. Novem er /1" 1##1.] Third Division, Fernan ( J): 4 concurring %acts& The /other, 3le=a eno, &as first /arried to Juanso Eu Doo@ &ith &ho/ she had 3 children na/ed Aagdaleno, Aelecia and Dernardina, all surna/ed eno- !o/eti/e in the 1,*0;s, Juanso Eu Doo@ too@ his fa/il" to hina &here he eventuall" died- 3le=a and her daughter Dernardina later returned to the Phili00inesDuring said /arriage, 3le=a ac.uired a 0arcel of land &hich she declared in her na/e under Ta4 Declaration
.a+es" /001 ( 1! )
11600- 3fter Juanso Eu Doo@;s death, Dernardina filed against her /other a case for the 0artition of the said 0ro0ert" in the then F5 Le"te- %n 1+ 3ugust 1,+0, the lo&er court rendered a 7su00le/ental decision8 finding that the said 0ro0ert" had 'een su'divided into Lots 9364 (13,+3< s.-/s-), 9363 (19,904 s.-/s-), 936* (*3,<9< s.-/s-) and 9399 (+1,969 s.-/s-)- The ourt declared Dernardina %=eda o&ner of and entitled to 0ossession of Lot 9364G %=eda as o&ner of and entitled to 0ossession of Lot 9363 &ithout 0re=udice to &hatever rights her sister Aelecia eno (0resentl" in hina) /a" have over the 0ro0ert"G 3le=a 3l/endra as o&ner of and entitled to 0ossession of Lot 9399G and 3le=a 3l/endra as o&ner of and entitled to 0ossession of Lot 936*, su'=ect to &hatever /a" 'e the rights thereto of her son Aagdaleno eno (0resentl" in hina)- The ourt ordered the 0arties to 'ear the fees of the co//issioner- Aean&hile, 3le=a /arried !antiago 3l/endra &ith &ho/ she had 4 children na/ed Aargarito, 3ngeles, (o/an and Delia- During said /arriage 3le=a and !antiago ac.uired a 6,,1,9)s.-/s- 0arcel of land in ag'olo, 3'u"og, Le"te- % T 100,4 &as issued therefor in the na/e of !antiago 3l/endra /arried to 3le=a eno and it &as declared for ta4 0ur0oses in his na/e- 5n addition to said 0ro0erties, 3le=a inherited fro/ her father, Juan Feno, a 19,000)s.-/s- 0arcel of land also in ag'olo- For his 0art, her hus'and !antiago inherited fro/ his /other, $icolasa 3lvero, a 19)s.- /s- 0arcel of residential land located in $ali'unan, 3'u"og, Le"te- :hile !antiago &as alive, he a00ortioned these 0ro0erties a/ong 3le=a;s children in the Phili00ines, including Dernardina, &ho, in turn, shared the 0roduce of the 0ro0erties &ith their 0arents- 3fter !antiago;s death, 3le=a sold to her daughter, 3ngeles 3l/endra, for P*,000 t&o 0arcels of land in the deed of sale dated 10 3ugust 1,+3 (P 0ortion or con=ugal share of land KTD ***34, % T 100,4L, and P 0ortion or con=ugal share of land KTD *+1,0L 'oth located in Do- ag'olo, 3'u"og, Le"te- %n *9 Dece/'er 1,+3, 3le=a sold to her son, (o/an 3l/endra, also for P*,000 a 0arcel of land descri'ed in the deed of sale as located in ag'olo, 3'u"og, Le"te 7under TBD 11600 &hich cancelled TBD ,936G having an area of 9-91<1 hec-, assessed at P1,6<0-00-8 %n the sa/e da", 3le=a sold to 3ngeles and (o/an again for P*,000 "et another 0arcel of land descri'ed in the deed of sale (Lot 936*)- 3le=a died on + Aa" 1,+6%n *1 Januar" 1,++ Aargarito, Delia and Dernardina (0laintiffs) filed a co/0laint against 3ngeles and (o/an for the annul/ent of the deeds of sale in their favor, 0artition of the 0ro0erties su'=ects therein and accounting of their 0roduce- Fro/ hina, their sister Aelecia signed a s0ecial 0o&er of attorne" in favor of Dernardina- Aagdaleno, &ho &as still in hina, &as i/0leaded as a defendant in the case and su//ons '" 0u'lication &as /ade on hi/- Later, the 0laintiffs infor/ed the court that the" had received a docu/ent in hinese characters &hich 0ur0ortedl" sho&ed that Aagdaleno had died- !aid docu/ent, ho&ever, &as not 0roduced in court- Thereafter, Aagdaleno &as considered as in default &ithout 0re=udice to the 0rovisions of !ection 4, (ule 1< of the (ules of ourt &hich allo&s the court to decide a case &herein there are several defendants u0on the evidence su'/itted onl" '" the ans&ering defendants- %n 30 30ril 1,<1, the lo&er court rendered a decision declaring the deeds of sale to 'e si/ulated and therefore null and voidG ordering the 0artition of the estate of the deceased 3le=a eno a/ong her heirs and assignsG a00ointing the 3cting ler@ of ourt, 3tt"- ristina T- Ponte=os, as co//issioner, for the 0ur0ose of said 0artition, &ho is e40ected to 0roceed accordingl" u0on recei0t of a co0" of this decisionG and to render her re0ort on or 'efore 30 da"s fro/ said recei0t- The e40enses of the co//issioner shall 'e 'orne 0ro0ortionatel" '" the 0artiesThe defendants a00ealed to the then 5nter/ediate 300ellate ourt &hich, on *0 Fe'ruar" 1,<9 rendered a decision u0holding the validit" of the deeds of sale and ordered the 0artition of the 7undis0osed8 0ro0erties left '" 3le=a and !antiago 3l/endra and, if an e4tra=udicial 0artition can 'e had, that it 'e /ade &ithin a reasona'le 0eriod of ti/e after recei0t of its decision- The 0laintiffs filed their /otion for reconsideration, &hich &as denied- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt affir/ed the decision of the then 5nter/ediate 300ellate ourt su'=ect to the /odifications stated in the 0resent decision- The ourt directed the lo&er court to facilitate &ith dis0atch the 0re0aration and a00roval of a 0ro=ect of 0artition of the 0ro0erties considered unsold under the 0resent decision-
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1.
No conv(nc(n) reason to nu++(-y 'ee's o- sa+e3 ;est(mony o- t*e notary )(ven more cre'ence There is no valid, legal and convincing reason for nullif"ing the .uestioned deeds of sale- Petitioner had not 0resented an" strong, co/0lete and conclusive 0roof to override the evidentiar" value of the dul" notari2ed deeds of sale- Aoreover, the testi/on" of the la&"er &ho notari2ed the deeds of sale that he sa& not onl" 3le=a signing and affi4ing her thu/'/ar@ on the .uestioned deeds 'ut also 3ngeles and 3le=a 7counting /one" 'et&een the/,8 deserves /ore credence than the self)serving allegations of the 0etitioners- !uch testi/on" is ad/issi'le as evidence &ithout further 0roof of the due e4ecution of the deeds in .uestion and is conclusive as to the truthfulness of their contents in the a'sence of clear and convincing evidence to the contrar"/. No proo- t*at pr(ce (B/"000) ,as )ross+y (na'e2uate The 0etitioners; allegations that the deeds of sale &ere 7o'tained through fraud, undue influence and /isre0resentation,8 and that there &as a defect in the consent of 3le=a in the e4ecution of the docu/ents 'ecause she &as then residing &ith 3ngeles, had not 'een full" su'stantiated- The" failed to sho& that the unifor/ 0rice of P*,000 in all the sales &as grossl" inade.uate- 5t should 'e e/0hasi2ed that the sales &ere effected 'et&een a /other and t&o of her children in &hich case filial love /ust 'e ta@en into account1. De-en'ants prove' t*ey *ave means to purc*ase t*e propert(es 3ngeles and (o/an a/0l" 0roved that the" had the /eans to 0urchase the 0ro0erties- Petitioner Aargarito 3l/endra hi/self ad/itted that 3ngeles had a sari)sari store and &as engaged in the 'usiness of 'u"ing and selling logs- *0 (o/an &as a 0olice/an 'efore he 'eca/e an auto /echanic and his &ife &as a school teacher4. Con8u)a+ property3 A+e8a cannot c+a(m t(t+e -or 'e-(n(te port(on o- t*e con8u)a+ property e-ore (ts part(t(on The 10 3ugust 1,+3 sale to 3ngeles of one)half 0ortion of the con=ugal 0ro0ert" covered '" % T P) 100,4 /a" onl" 'e considered valid as a sale of 3le=a;s one)half interest therein- 3le=a could not have sold the 0articular hill" 0ortion s0ecified in the deed of sale in the a'sence of 0roof that the con=ugal 0artnershi0 0ro0ert" had 'een 0artitioned after the death of !antiago- Defore such 0artition, 3le=a could not clai/ title to an" definite 0ortion of the 0ro0ert" for all she had &as an ideal or a'stract .uota or 0ro0ortionate share in the entire 0ro0ert"$. Barap*erna+ property3 .a+e va+(' The sale of the one)half 0ortion of the 0arcel of land covered '" Ta4 Declaration *+1,0 is valid 'ecause the said 0ro0ert" is 0ara0hernal 'eing 3le=a;s inheritance fro/ her o&n father:. @an' su 8ect to C(v(+ Case 418!3 A+e8a cou+' not *ave (nten'e' t*e sa+e o- ,*o+e property a+rea'y su '(v('e' 3s regards the sale of the 0ro0ert" covered '" Ta4 Declaration 11600, since the 0ro0ert" had 'een found in ivil ase 43<+ to have 'een su'divided, 3le=a could not have intended the sale of the &hole 0ro0ert" covered '" said ta4 declaration- !he could e4ercise her right of o&nershi0 onl" over Lot 9399 &hich &as unconditionall" ad=udicated to her in said case!. Caveat emptor on @ot :1$/3 @ot st(++ su 8ect to r()*ts o- 9a)'a+eno Ceno Lot 936* &as given to 3le=a in ivil ase 43<+ 7su'=ect to &hatever /a" 'e the rights thereto of her son Aagdaleno eno-8 3 reading of the deed of !ale covering this 0arcel of land &ould sho& that the sale is su'=ect to the condition stated a'oveG hence, the rights of Aagdaleno eno are a/0l" 0rotected- The role on caveat e/0tor a00lies[!]
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An) ?u Asunc(on" et.a+. vs. CA [G.R. No. 10#1/$. Decem er /" 1##4.] >n Danc, 1itug (J): 11 concurring, 1 too@ no 0art, 1 on leave %acts& %n *, Jul" 1,<+ a !econd 3/ended o/0laint for !0ecific Perfor/ance &as filed '" 3nn Eu 3suncion, 3rthur Fo, and Ceh Tiong against Do''" u ?n=ieng, (ose u ?n=ieng and Jose Tan 'efore the (T Aanila (Dranch 31, ivil ase <+)4106<) alleging, a/ong others, that the for/er are tenants or lessees of residential and co//ercial s0aces o&ned '" the latter descri'ed as 930)93< %ng0in !treet, Dinondo, AanilaG that the" have occu0ied said s0aces since 1,36 and have 'een religiousl" 0a"ing the rental and co/0l"ing &ith all the conditions of the lease contractG that on several occasions 'efore , %cto'er 1,<9, the latter infor/ed the for/er that the" are offering to sell the 0re/ises and are giving the/ 0riorit" to ac.uire the sa/eG that during the negotiations, Do''" u ?n=ieng offered a 0rice of P9)/illion &hile 3ng Eu 3suncion, et-al- (0laintiffs) /ade a counter offer of P6)/illionG that 0laintiffs thereafter as@ed Do''" u ?n=ieng, (ose u ?n=ueng and Jose Tan (defendants) to 0ut their offer in &riting to &hich re.uest defendants accededG that in re0l" to defendants; letter, 0laintiffs &rote the/ on *4 %cto'er 1,<9 as@ing that the" s0ecif" the ter/s and conditions of the offer to sellG that &hen 0laintiffs did not receive an" re0l", the" sent another letter dated *< Januar" 1,<+ &ith the sa/e re.uestG that since defendants failed to s0ecif" the ter/s and conditions of the offer to sell and 'ecause of infor/ation received that defendants &ere a'out to sell the 0ro0ert", 0laintiffs &ere co/0elled to file the co/0laint to co/0el defendants to sell the 0ro0ert" to the/- 3fter the issues &ere =oined, defendants filed a /otion for su//ar" =udg/ent &hich &as granted '" the lo&er court- The trial court found that defendants; offer to sell &as never acce0ted '" the 0laintiffs for the reason that the 0arties did not agree u0on the ter/s and conditions of the 0ro0osed sale, hence, there &as no contract of sale at all$onetheless, the lo&er court ruled that should the defendants su'se.uentl" offer their 0ro0ert" for sale at a 0rice of P11 /illion or 'elo&, 0laintiffs &ill have the right of first refusal3ggrieved '" the decision, 0laintiffs a00ealed to the ourt of 300eals ( 3)F( 1 *11*3)- 5n a decision 0ro/ulgated on *1 !e0te/'er 1,,0 (0enned '" Justice !egundino F- hua and concurred in '" Justices 1icente 1- Aendo2a and Fernando 3- !antiago), the a00ellate court affir/ed &ith /odification the lo&er court;s =udg/ent, holding that there &as no /eeting of the /inds 'et&een the 0arties concerning the sale of the 0ro0ert" and thus, the clai/ for s0ecific 0erfor/ance &ill not lie- The a00ellate did not grant the a00ellants the right of first refusal in the event the su'=ect 0ro0ert" is sold for a 0rice in e4cess of P11 /illionThe decision of the a00ellate court &as 'rought to the !u0re/e ourt '" 0etition for revie& on certiorari- The !u0re/e ourt denied the a00eal on 9 Aa" 1,,1 7for insufficienc" in for/ and su'stances-8 %n 16 $ove/'er 1,,0, &hile 3)F( 1 *11*3 &as 0ending consideration '" the a00ellate court, the u ?n=ieng s0ouses e4ecuted a Deed of !ale transferring the 0ro0ert" in .uestion to Duen (ealt" and Develo0/ent or0oration for P16 /illion- 3s a conse.uence of the sale, T T 106*64BT)<<1 in the na/e of the u ?n=ieng s0ouses &as cancelled and, in lieu thereof, T T 1,6<19 &as issued in the na/e of Duen (ealt" on 3 Dece/'er 1,,0- %n 1 Jul" 1,,1, Duen (ealt" as the ne& o&ner of the su'=ect 0ro0ert" &rote a letter to the lessees de/anding that the latter vacate the 0re/ises- %n 19 Jul" 1,,1, the lessees &rote a re0l" to Duen (ealt" stating that 0etitioner 'rought the 0ro0ert" su'=ect to the notice of lis 0endens regarding ivil ase <+)4106< annotated on T T 106*64BT)<<1 in the na/e of the u ?n=iengsThe lessees filed a Aotion for >4ecution dated *+ 3ugust 1,,1 of the Decision in ivil ase <+)4106< as /odified '" the ourt of 300eals in 3)F( 1 *11*3- %n 30 3ugust 1,,1, the Judge issued an order ordering u ?n@ieng to e4ecute the necessar" Deed of !ale of the 0ro0ert" in litigation in favor of 0laintiffs 3ng Eu 3suncion, Ceh Tiong and 3rthur Fo for the consideration of P16 Aillion 0esos in recognition of the latter;s right of first refusal and that a ne& T T 'e issued in favor of the 'u"er, and thus, setting aside all 0revious transactions involving the sa/e 0ro0ert" not&ithstanding the issuance of another title to Duen (ealt" or0oration, &hich &as said to have 'een e4ecuted in 'ad faith- %n ** !e0te/'er 1,,1, the Judge issue another order directing the De0ut" !heriff to i/0le/ent the :rit of >4ecution ordering the defendants a/ong
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others to co/0l" &ith the %rder of the ourt &ithin a 0eriod of 1 &ee@ fro/ recei0t of this %rder and for defendants to e4ecute the necessar" Deed of !ale of the 0ro0ert" in litigation in favor of the 0laintiffs 3ng Eu 3suncion, Ceh Tiong and 3rthur Fo for the consideration of P16,000,000-00 and ordering the (egister of Deeds of the it" of Aanila, to cancel and set aside the title alread" issued in favor of Duen (ealt" or0oration &hich &as 0reviousl" e4ecuted 'et&een the latter and defendants and to register the ne& title in favor of the aforesaid 0laintiffs 3ng Eu 3suncion, Ceh Tiong and 3rthur Fo- %n the sa/e da", the corres0onding &rit of e4ecution &as issued%n 4 Dece/'er 1,,1, the a00ellate court, on a00eal to it '" Duen (ealt" ( 3)F( !P *9346), set aside and declared &ithout force and effect the .uestioned orders of the court a .uo- #ence, the 0etition for certiorariThe !u0re/e ourt u0held the decision of the ourt of 300eals in ulti/atel" setting aside the .uestioned %rders, dated 30 3ugust 1,,1 and *+ !e0te/'er 1,,1, of the court a .uoG &ith costs against 3ng Eu 3suncion, et- al1. /. > +()at(on 'e-(ne' 3n o'ligation is a =uridical necessit" to give, to do or not to do (3rt- 1169, ivil ode)-
> +()at(on" e+ements The o'ligation is constituted u0on the concurrence of the essential ele/ents thereof, vi2: (a) The vinculu/ =uris or =uridical tie &hich is the efficient cause esta'lished '" the various sources of o'ligations (la&, contracts, .uasi)contracts, delicts and .uasi)delicts)G (') the o'=ect &hich is the 0restation or conductG re.uired to 'e o'served (to give, to do or not to do)G and (c) the su'=ect)0ersons &ho, vie&ed fro/ the de/anda'ilit" of the o'ligation, are the active (o'ligee) and the 0assive (o'ligor) su'=ects1. Contract as a source o- o +()at(on 3/ong the sources of an o'ligation is a contract (3rt- 116+, ivil ode), &hich is a /eeting of /inds 'et&een t&o 0ersons &here'" one 'inds hi/self, &ith res0ect to the other, to give so/ething or to render so/e service (3rt- 1306, ivil ode)- ?ntil the contract is 0erfected, it cannot, as an inde0endent source of o'ligation, serve as a 'inding =uridical relation4. Har(ous sta)es o- a contract& Ne)ot(at(on" preparat(on" an' consummat(on 3 contract undergoes various stages that include its negotiation or 0re0aration, its 0erfection and, finall", its consu//ation- $egotiation covers the 0eriod fro/ the ti/e the 0ros0ective contracting 0arties indicate interest in the contract to the ti/e the contract is concluded (0erfected)- The 0erfection of the contract ta@es 0lace u0on the concurrence of the essential ele/ents thereof- 3 contract &hich is consensual as to 0erfection is so esta'lished u0on a /ere /eeting of /inds, i-e-, the concurrence of offer and acce0tance, on the o'=ect and on the cause thereof- 3 contract &hich re.uires, in addition to the a'ove, the deliver" of the o'=ect of the agree/ent, as in a 0ledge or co//odatu/, is co//onl" referred to as a real contract- 5n a sole/n contract, co/0liance &ith certain for/alities 0rescri'ed '" la&, such as in a donation of real 0ro0ert", is essential in order to /a@e the act valid, the 0rescri'ed for/ 'eing there'" an essential ele/ent thereof- The stage of consu//ation 'egins &hen the 0arties 0erfor/ their res0ective underta@ings under the contract cul/inating in the e4tinguish/ent thereof$. Ber-ect(on o- a contract o- sa+e 5n sales, the contract is 0erfected &hen a 0erson, called the seller, o'ligates hi/self, for a 0rice certain, to deliver and to transfer o&nershi0 of a thing or right to another, called the 'u"er, over &hich the latter agrees- 3rticle 146< of the ivil ode 0rovides that 7D" the contract of sale one of the contracting 0arties o'ligates hi/self to transfer the o&nershi0 of and to deliver a deter/inate thing, and the other to 0a" therefor a 0rice certain in /one" or its e.uivalent- 3 contract of sale /a" 'e a'solute or conditional-8
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:.
Contract to se++ (s con'(t(ona+3 E--ect o- reac* o- con'(t(on :hen the sale is not a'solute 'ut conditional, such as in a 7 ontract to !ell8 &here invaria'l" the o&nershi0 of the thing sold is retained until the fulfill/ent of a 0ositive sus0ensive condition (nor/all", the full 0a"/ent of the 0urchase 0rice), the 'reach of the condition &ill 0revent the o'ligation to conve" title fro/ ac.uiring an o'ligator" force!. .t(pu+at(ons )overn over t(t+e (n 'eterm(n(n) contract to e a contract o- sa+e or contract to se++ 5n Dignos vs. Court of Appeals (16< ! (3 3+6), although deno/inated a 7Deed of onditional !ale,8 a sale is still a'solute &here the contract is devoid of an" 0roviso that title is reserved or the right to unilaterall" rescind is sti0ulated, e-g-, until or unless the 0rice is 0aid- %&nershi0 &ill then 'e transferred to the 'u"er u0on actual or constructive deliver" (e-g-, '" the e4ecution of a 0u'lic docu/ent) of the 0ro0ert" sold- :here the condition is i/0osed u0on the 0erfection of the contract itself, the failure of the condition &ould 0revent such 0erfection- 5f the condition is i/0osed on the o'ligation of a 0art" &hich is not fulfilled, the other 0art" /a" either &aive the condition or refuse to 0roceed &ith the sale (3rt- 1646, ivil ode)8. Incon'(t(ona+ mutua+ prom(se to uy an' se++ o +()atory on t*e part(es 3n unconditional /utual 0ro/ise to 'u" and sell, as long as the o'=ect is /ade deter/inate and the 0rice is fi4ed, can 'e o'ligator" on the 0arties, and co/0liance there&ith /a" accordingl" 'e e4acted#. Ber-ecte' contract o- opt(on 3n acce0ted unilateral 0ro/ise &hich s0ecifies the thing to 'e sold and the 0rice to 'e 0aid, &hen cou0led &ith a valua'le consideration distinct and se0arate fro/ the 0rice, is &hat /a" 0ro0erl" 'e ter/ed a 0erfected contract of o0tion- This contract is legall" 'inding, and in sales, it confor/s &ith the second 0aragra0h of 3rticle 14+, of the ivil ode, &hich 0rovides that 73n acce0ted unilateral 0ro/ise to 'u" or to sell a deter/inate thing for a 0rice certain is 'inding u0on the 0ro/issor if the 0ro/ise is su00orted '" a consideration distinct fro/ the 0rice- (1461a)8 10. >pt(on not t*e contract o- sa+e (tse+The o0tion is not the contract of sale itself- The o0tionee has the right, 'ut not the o'ligation, to 'u"%nce the o0tion is e4ercised ti/el", i-e-, the offer is acce0ted 'efore a 'reach of the o0tion, a 'ilateral 0ro/ise to sell and to 'u" ensues and 'oth 0arties are then reci0rocall" 'ound to co/0l" &ith their res0ective underta@ings11. >--er 3 negotiation is for/all" initiated '" an offer- 3n i/0erfect 0ro/ise (0olicitacion) is /erel" an offerPu'lic advertise/ents or solicitations and the li@e are ordinaril" construed as /ere invitations to /a@e offers or onl" as 0ro0osals- These relations, until a contract is 0erfected, are not considered 'inding co//it/entsThus, at an" ti/e 0rior to the 0erfection of the contract, either negotiating 0art" /a" sto0 the negotiation- The offer, at this stage, /a" 'e &ithdra&nG the &ithdra&al is effective i//ediatel" after its /anifestation, such as '" its /ailing and not necessaril" &hen the offeree learns of the &ithdra&al (Laudico vs- 3rias, 43 Phil- *+0)1/. >--er ,(t* a per(o'3 E--ects o- ,(t*'ra,a+ (1) 5f the 0eriod is not itself founded u0on or su00orted '" a consideration, the offeror is still free and has the right to &ithdra&al the offer 'efore its acce0tance, or, if an acce0tance has 'een /ade, 'efore the offeror;s co/ing to @no& of such fact, '" co//unicating that &ithdra&al to the offeree (see 3rt- 13*4, ivil odeG see also 3t@ins, Croll Q o- vs- ua, 10* Phil- ,4<, holding that this rule is a00lica'le to a unilateral 0ro/ise to sell under 3rt- 14+,, /odif"ing the 0revious decision in !outh :estern !ugar vs- 3tlantic Fulf, ,+ Phil- *4,G see also 3rt- 131,, ivil odeG (ural Dan@ of ParaMa.ue, 5nc-, vs- (e/olado, 136 ! (3 40,G !anche2 vs- (igos, 46 ! (3 39<)- The right to &ithdra&, ho&ever, /ust not 'e e4ercised &hi/sicall" or ar'itraril"G other&ise, it could give rise to a da/age clai/ under 3rticle 1, of the ivil ode &hich ordains that 7ever" 0erson /ust, in the e4ercise of his rights and in the 0erfor/ance of his duties, act &ith =ustice,
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give ever"one his due, and o'serve honest" and good faith-8 (*) 5f the 0eriod has a se0arate consideration, a contract of 7o0tion8 is dee/ed 0erfected, and it &ould 'e a 'reach of that contract to &ithdra& the offer during the agreed 0eriod- The o0tion, ho&ever, is an inde0endent contract '" itself, and it is to 'e distinguished fro/ the 0ro=ected /ain agree/ent (su'=ect /atter of the o0tion) &hich is o'viousl" "et to 'e concluded- 5f, in fact, the o0tioner)offeror &ithdra&s the offer 'efore its acce0tance (e4ercise of the o0tion) '" the o0tionee)offeree, the latter /a" not sue for s0ecific 0erfor/ance on the 0ro0osed contract (7o'=ect8 of the o0tion) since it has failed to reach its o&n stage of 0erfection- The o0tioner)offeror, ho&ever, renders hi/self lia'le for da/ages for 'reach of the o0tion- 5n these cases, care should 'e ta@en of the real nature of the consideration given, for if, in fact, it has 'een intended to 'e 0art of the consideration for the /ain contract &ith a right of &ithdra&al on the 0art of the o0tionee, the /ain contract could 'e dee/ed 0erfectedG a si/ilar instance &ould 'e an 7earnest /one"8 in a contract of sale that can evidence its 0erfection (3rt- 14<*, ivil ode)11. R()*t o- -(rst re-usa+ (nnovat(ve3 ne(t*er an opt(on nor an o--er 5n the la& on sales, the so)called 7right of first refusal8 is an innovative =uridical relation- 5t cannot 'e dee/ed a 0erfected contract of sale under 3rticle 146< of the ivil ode- $either can the right of first refusal, understood in its nor/al conce0t, 0er se 'e 'rought &ithin the 0urvie& of an o0tion under the second 0aragra0h of 3rticle 14+,, or 0ossi'l" of an offer under 3rticle 131, of the sa/e ode14. D(st(nct(on o- r()*t o- -(rst re-usa+ to an opt(on or to an o--er 3n o0tion or an offer &ould re.uire, a/ong other things, a clear certaint" on 'oth the o'=ect and the cause or consideration of the envisioned contract- 5n a right of first refusal, &hile the o'=ect /ight 'e /ade deter/inate, the e4ercise of the right, ho&ever, &ould 'e de0endent not onl" on the grantor;s eventual intention to enter into a 'inding =uridical relation &ith another 'ut also on ter/s, including the 0rice, that o'viousl" are "et to 'e later fir/ed u0- Prior thereto, it can at 'est 'e so descri'ed as /erel" 'elonging to a class of 0re0arator" =uridical relations governed not '" contracts (since the essential ele/ents to esta'lish the vinculu/ =uris &ould still 'e indefinite and inconclusive) 'ut '", a/ong other la&s of general a00lication, the 0ertinent scattered 0rovisions of the ivil ode on hu/an conduct1$. Breac* o- r()*t o- -(rst re-usa+ 'oes not ,arrant (ssuance o- a ,r(t o- e7ecut(on nor sanct(on an act(on -or spec(-(c per-ormance3 may on+y ,arrant recovery -or 'ama)es un'er Art(c+e 1# o- t*e C(v(+ Co'e >ven on the 0re/ise that such right of first refusal has 'een decreed under a final =udg/ent, its 'reach cannot =ustif" corres0ondingl" an issuance of a &rit of e4ecution under a =udg/ent that /erel" recogni2es its e4istence, nor &ould it sanction an action for s0ecific 0erfor/ance &ithout there'" negating the indis0ensa'le ele/ent of consensualit" in the 0erfection of contracts- 5t is not to sa", ho&ever, that the right of first refusal &ould 'e inconse.uential for an un=ustified disregard thereof, the circu/stances e40ressed in 3rticle 1, of the ivil ode, can &arrant a recover" for da/ages- 5n the 0resent case, 0etitioners are aggrieved '" the failure of 0rivate res0ondents to honor the right of first refusal, the re/ed" is not a &rit of e4ecution on the =udg/ent, since there is none to e4ecute, 'ut an action for da/ages in a 0ro0er foru/ for the 0ur0ose1:. Gssue on Buen Rea+ty=s )oo' -a(t* s*ou+' e a''resse' (n appropr(ate procee'(n)s" as Buen Rea+ty ,as not (mp+ea'e' (n C(v(+ Case 8!D410$8 :hether Duen (ealt" Develo0/ent or0oration, the alleged 0urchaser of the 0ro0ert", has acted in good faith or 'ad faith and &hether or not it should, in an" case, 'e considered 'ound to res0ect the registration of the lis 0endens in ivil ase <+)4106< are /atters that /ust 'e inde0endentl" addressed in a00ro0riate 0roceedings- Duen (ealt", not having 'een i/0leaded in ivil ase <+)4106<, cannot 'e held su'=ect to the &rit of e4ecution issued, let alone ousted fro/ the o&nershi0 and 0ossession of the 0ro0ert", &ithout first 'eing dul" afforded its da" in court1!. Dec(s(on (n C(v(+ Case 8!D410$8 cou+' *ave not een 'ecree'
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The decision in ivil ase <+)4106< could not have decreed at the ti/e the e4ecution of an" deed of sale 'et&een the u ?n=iengs and Duen (ealt"- There &as nothing in the decision, as /odified '" the a00ellate court, that decreed the e4ecution of a deed of sale 'et&een the u ?n=iengs and the lessees, or the fi4ing of the 0rice of the sale, or the cancellation of title in the na/e of Duen (ealt" (Li/0in vs- 53 , 14+ ! (3 619G Pa/antasan ng Lungsod ng Aa"nila vs- 53 , 143 ! (3 311G De Fu2/an vs- 3, 13+ ! (3 +30G Pastor vs- 3, 1** ! (3 <<6)-8 [8] An)e+es vs. Ca+asanC [G.R. No. @D4//81. 9arc* 18" 1#8$.] >n Danc, Futierre2 Jr- (J): 6 concurring, 1 too@ no 0art %acts& %n 1, Dece/'er 1,6+, ?rsula Torres alasan2 and To/as alasan2 and Duenaventura 3ngeles and Teofila Juani entered into a contract to sell a 0iece of land located in ainta, (i2al for the a/ount of P3,,*0-00 0lus +I interest 0er annu/- 3ngeles /ade a do&n0a"/ent of P3,*-00 u0on the e4ecution of the contract- The" 0ro/ised to 0a" the 'alance in /onthl" install/ents of P41-*0 until full" 0aid, the install/ents 'eing due and 0a"a'le on the 1,th da" of each /onth- The" 0aid the /onthl" install/ents until Jul" 1,99, &hen their aggregate 0a"/ent alread" a/ounted to P4,633-3<- %n nu/erous occasions, alasan2 acce0ted and received dela"ed install/ent 0a"/ents fro/ 3ngeles- %n + Dece/'er 1,99, alasan2 &rote 3ngeles a letter re.uesting the re/ittance of 0ast due accounts- %n *< Januar" 1,9+, alasan2 cancelled the said contract 'ecause 3ngeles failed to /eet su'se.uent 0a"/ents- 3ngeles; letter &ith their 0lea for reconsideration of the said cancellation &as denied '" alasan23ngeles filed ivil ase <,43 &ith the F5 (i2al, !eventh Judicial District, Dranch R to co/0el alasan2 to e4ecute in their favor the final deed of sale alleging inter alia that after co/0uting all su'se.uent 0a"/ents for the land in .uestion, the" found out that the" have alread" 0aid the total a/ount of P4,633-3< including interests, realt" ta4es and incidental e40enses for the registration and transfer of the land- alasan2, on the other hand, alleged that the co/0laint states no cause of action and that 3ngeles violated 0aragra0h 9 of the contract to sell &hen the" failed and refused to 0a" andBor offer to 0a" the /onthl" install/ents corres0onding to the /onth of 3ugust, 1,99 for /ore than 6 /onths, there'" constraining alasan2 to cancel the said contract- The lo&er court rendered =udg/ent in favor of 3ngeles, ordering that the contract &as not validl" cancelled '" alasan2, and ordered the latter to e4ecute a final Deed of !ale 5n favor of 3ngeles, and to 0a" the su/ of P600 '" &a" of attorne";s feesG &ith costs against alasan2- 3 /otion for reconsideration filed '" alasan2 &as denied%n 300eal, the then ourt of 300eals certified the case to the !u0re/e involves 0ure .uestions of la&ourt considering that the a00eal
The !u0re/e ourt denied the 0etition for lac@ of /erit, affir/ed the decision a00ealed fro/ is &ith the /odification that 3ngeles should 0a" the 'alance of P9+1-9+ &ithout an" interestsG &ith costs against alasan21. Contents o- Bara)rap* : o- t*e Contract Paragra0h si4 of the contract 0rovides 75n case the 0art" of the !> %$D P3(T fails to satisf" an" /onthl" install/ents, or an" other 0a"/ents herein agreed u0on, he is granted a /onth of grace &ithin &hich to /a@e the retarded 0a"/ent, together &ith the one corres0onding to the said /onth of graceG it is understood, ho&ever, that should the /onth of grace herein granted to the 0art" of the !> %$D P3(T e40iredG &ithout the 0a"/ents corres0onding to 'oth /onths having 'een satisfied, an interest of 10I 0er annu/ &ill 'e charged on the a/ounts he should have 0aidG it is understood further, that should a 0eriod of ,0 da"s ela0se, to 'egin fro/ the e40iration of the /onth of grace herein /entioned, and the 0art" of !> %$D P3(T has not 0aid all the a/ounts he should have 0aid &ith the corres0onding interest u0 to that date, the
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0art" of the F5(!T P3(T has the right to declare this contract cancelled and of no effect, and as conse.uence thereof, the 0art" of the F5(!T P3(T /a" dis0ose of the 0arcel of land covered '" this contract in favor of other 0ersons, as if this contract had never 'een entered into- 5n case of such cancellation of the contract, all the a/ounts 0aid in accordance &ith this agree/ent together &ith all the i/0rove/ents /ade on the 0re/ises, shall 'e considered as rents 0aid for the use and occu0ation of the a'ove /entioned 0re/ises, and as 0a"/ent for the da/ages suffered '" failure of the 0art" of the !> %$D P3(T to fulfill his 0art of the agree/ent, and the 0art" of the !> %$D P3(T here'" renounces all his right to de/and or reclai/ the return of the sa/e and o'liges hi/self to 0eacefull" vacate the 0re/ises and deliver the sa/e to the 0art" of the F5(!T P3(T-8 /. Art(c+e 11#1 o- t*e C(v(+ Co'e3 Resc(ss(on o- rec(proca+ o +()at(ons 3rticle 11,1 of the ivil ode on the rescission of reci0rocal o'ligations 0rovides:8The 0o&er to rescind o'ligations is i/0lied in reci0rocal ones, in case one of the o'ligors should not co/0l" &ith &hat is incu/'ent u0on hi/- The in=ured 0art" /a" choose 'et&een the fulfill/ent and the rescission of the o'ligation, &ith the 0a"/ent of da/ages in either case- #e /a" also see@ rescission, even after he has chosen fulfill/ent, if the later should 'eco/e i/0ossi'le-8 3rticle 11,1 is e40licit- 5n reci0rocal o'ligations, either 0art" has the right to rescind the contract u0on the failure of the other to 0erfor/ the o'ligation assu/ed thereunder1. Fu'(c(a+ act(on -or resc(ss(on not necessary ,*ere contract prov('es -or revocat(on -or reac*3 %ro(+an vs. Ban >r(enta+ .*(pp(n) There is nothing in the la& that 0rohi'its the 0arties fro/ entering into an agree/ent that violation of the ter/s of the contract &ould cause its cancellation even &ithout court intervention (Froilan v- Pan %riental !hi00ing, o-, et al-, 1* ! (3 *+9)- 3 =udicial action for the rescission of a contract is not necessar" &here the contract 0rovides that it /a" 'e revo@ed and cancelled for violation of an" of its ter/s and conditions; (Lo0e2 v- o//issioner of usto/s, 3+ ! (3 3*+, 334, and cases cited therein)- (esort to =udicial action for rescission is o'viousl" not conte/0lated - - - The validit" of the sti0ulation can not 'e seriousl" dis0uted- 5t is in the nature of a facultative resolutor" condition &hich in /an" cases has 'een u0held '" the !u0re/e ourt(Ponce >nrile v- ourt of 300eals, *, ! (3 604)-8 4. IB vs. 'e+os An)e+es& Jua+(-(cat(on to t*e %ro(+an ru+(n)3 Resc(ss(on must e 8ust(-(e' The rule that it is not al&a"s necessar" for the in=ured 0art" to resort to court for rescission of the contract &hen the contract itself 0rovides that it /a" 'e rescinded for violation of its ter/s and conditions, &as .ualified '" the ourt in ?niversit" of the Phili00ines v- De los 3ngeles, (36 ! (3 10*)- 5t &as held therein that 7the act of a 0art" in treating a contract as cancelled or resolved on account of infractions '" the other contracting 0art" /ust 'e /ade @no&n to the other and is al&a"s 0rovisional, 'eing ever su'=ect to scrutin" and revie& '" the 0ro0er court- 5f the other 0art" denies that rescission is =ustified, it is free to resort to =udicial action in its o&n 'ehalf, and 'ring the /atter to court- Then, should the court, after due hearing, decide that the resolution of the contract &as not &arranted, the res0onsi'le 0art" &ill 'e sentenced to da/agesG in the contrar" case, the resolution &ill 'e affir/ed, and the conse.uent inde/nit" a&arded to the 0art" 0re=udiced- Thus, the 0art" &ho dee/s the contract violated /an" consider it resolved or rescinded, and act accordingl", &ithout 0revious court action, 'ut it 0roceeds at its o&n ris@- For it is onl" the final =udg/ent of the corres0onding court that &ill conclusivel" and finall" settle &hether the action ta@en &as or &as not correct in la& - - -8 $. E7tra8u'(c(a+ reso+ut(on rema(ns contesta +e an' t*us su 8ect to 8u'(c(a+ (nva+('at(on" un+ess arre' y ac2u(escence" estoppe+ or prescr(pt(on There is no conflict 'et&een this ruling and the 0revious =uris0rudence of the ourt declaring that =udicial action is necessar" for the resolution of a reci0rocal o'ligationG (%ce=o, Pere2 Q o- v- 5nternational Dan@ing or0-, 3+ Phil- 931G (e0u'lic v- #os0ital de !an Juan de Dios, et al-, <4 Phil- <*0) since in ever" case &here the e4tra=udicial resolution is contested onl" the final a&ard of the court of co/0etent =urisdiction
.a+es" /001 ( /$ )
can conclusivel" settle &hether the resolution &as 0ro0er or not- 5t is in this sense that =udicial action &ill 'e necessar", as &ithout it, the e4tra=udicial resolution &ill re/ain contesta'le and su'=ect to =udicial invalidation, unless attac@ thereon should 'eco/e 'arred '" ac.uiescence, esto00el or 0rescri0tion:. R()*t to resc(n' contract -or nonDper-ormance o- st(pu+at(ons not a so+ute3 In(versa+ %oo' Corp. vs. CA The right to rescind the contract for non)0erfor/ance of one of its sti0ulations is not a'solute- 5n ?niversal Food or0- v- ourt of 300eals (33 ! (3 1) the ourt stated that 7the general rule is that rescission of a contract &ill not 'e 0er/itted for a slight or casual 'reach, 'ut onl" for such su'stantial and funda/ental 'reach as &ould defeat the ver" o'=ect of the 0arties in /a@ing the agree/ent- (!ong Fo Q o- v#a&aiian)Phili00ine o-, 4+ Phil- <*1, <*+) The .uestion of &hether a 'reach of a contract is su'stantial de0ends u0on the attendant circu/stances- ( or0us v- #on- 3li@0ala, et al-, L)*3+0+ Q L)*3+*0, Jan- 1+, 1,9<)-8 !. Breac* too s+()*t3 .anct(on(n) t*e resc(ss(on ,(++ 'o (n8ust(ce" +ea's to un8ust enr(c*ment The 'reach of the contract adverted to '" alasan2 is so slight and casual considering that a0art fro/ the initial do&n0a"/ent of P3,*-00 3ngeles had alread" 0aid the /onthl" install/ents for a 0eriod of al/ost , "ears- 5n other &ords, in onl" a short ti/e, the entire o'ligation &ould have 'een 0aid- Further/ore, although the 0rinci0al o'ligation &as onl" P3,,*0-00 e4cluding the +I interests, 3ngeles had alread" 0aid an aggregate a/ount of P4,633-3<- To sanction the rescission /ade '" alasan2 &ill &or@ in=ustice to 3ngeles(!ee J-A- Tua2on and o-, 5nc- v- Javier, 31 ! (3 <*,) 5t &ould un=ustl" enrich alasan28. Art(c+e 1/14 o- t*e C(v(+ Co'e3 .u stant(a+ per-ormance 3rticle 1*34 of the ivil ode &hich 0rovides that: 75f the o'ligation has 'een su'stantiall" 0erfor/ed in good faith, the o'ligor /a" recover as though there had 'een a strict and co/0lete fulfill/ent, less da/ages suffered '" the o'ligee-8 #. Burpose o- su '(v(s(ons 3lthough the 0ri/ar" o'=ect of selling su'divided lots is 'usiness, "et, it cannot 'e denied that this su'division is li@e&ise 0ur0osel" done to afford those landless, lo& inco/e grou0 0eo0le of reali2ing their drea/ of a little 0arcel of land &hich the" can reall" call their o&n10. Acceptance o- 'e+aye' payments o- (nsta++ments" a ,a(ver3 .e++ers estoppe' -rom e7erc(s(n) r()*t o- resc(ss(on :hen alasan2, instead of availing of their alleged right to rescind, have acce0ted and received dela"ed 0a"/ents of install/ents, though 3ngeles have 'een in arrears 'e"ond the grace 0eriod /entioned in 0aragra0h 9 of the contract, alasan2 has &aived and is no& esto00ed fro/ e4ercising her alleged right of rescission11. De GuCman vs. Gu(e (n po(nt 5n De Fu2/an v- Fuie' (4< ! (3 9<), the ourt held therein that 75n s0ite of the long arrearages, neither the" nor their 0redecessor, Teodoro de Fu2/an, even too@ ste0s to cancel the o0tion or to e=ect the a00ellees fro/ the ho/e)lot in .uestion- %n the contrar", it is ad/itted that the dela"ed 0a"/ents &ere received &ithout 0rotest or .ualification-8 ?nder these circu/stances, the ourt 7cannot 'ut agree &ith the lo&er court that at the ti/e a00ellees e4ercised their o0tion, a00ellants had alread" forfeited their right to invo@e the a'ove).uoted 0rovision regarding the nullif"ing effect of the non)0a"/ent of si4 /onths rentals '" a00ellees '" their having acce0ted &ithout .ualification on Jul" *1, 1,94 the full 0a"/ent '" a00ellees of all their arrearages-8 1/. Bresent contract to se++ *as c*aracter(st(cs o- contract o- a'*es(on The contract to sell entered into '" the 0arties has so/e characteristics of a contract of adhesion.a+es" /001 ( /: )
alasan2 drafted and 0re0ared the contractG &hile 3ngeles, eager to ac.uire a lot u0on &hich to 'uild a ho/e, affi4ed their signatures and assented to the ter/s and conditions of the contract- The" had no o00ortunit" to .uestion nor change an" of the ter/s of the agree/ent- 5t &as offered to the/ on a 7ta@e it or leave it8 'asis11. Contract o- a'*es(on3 .,eet @(nes vs. ;eves 5n !&eet Lines, 5nc- v- Teves (<3 ! (3 391), the ourt held that 7&hile generall", sti0ulations in a contract co/e a'out after deli'erate drafting '" the 0arties thereto, -- there are certain contracts al/ost all the 0rovisions of &hich have 'een drafted onl" '" one 0art", usuall" a cor0oration- !uch contracts are called contracts of adhesion, 'ecause the onl" 0artici0ation of the 0art" is the signing of his signature or his Sadhesion; thereto- 5nsurance contracts, 'ills of lading, contracts of sale of lots on the install/ent 0lan fall into this categor"-; (Paras, ivil ode of the Phili00ines, !eventh ed-, 1ol- 5, 0- <0-)8 14. Construct(on o- a contract o- a'*es(on The contract to sell, 'eing a contract of adhesion, /ust 'e construed against the 0art" causing it- The ter/s of a contract /ust 'e inter0reted against the 0art" &ho drafted the sa/e, es0eciall" &here such inter0retation &ill hel0 effect =ustice to 'u"ers &ho, after having invested a 'ig a/ount of /one", are no& sought to 'e de0rived of the sa/e thru the 0ra"ed a00lication of a contract clever in its 0hraseolog", conde/na'le in its lo0sidedness and in=urious in its effect &hich, in essence, and in its entiret" is /ost unfair to the 'u"ers[#] ACcona vs. Reyes [G.R. No. 1#$#0. %e ruary :" 1#14.] !econd Division, 1illa)(eal (J): 4 concurring %acts& %n 11 %cto'er 1,*0, Florentina ordero, no& deceased, e4ecuted a 0o&er of attorne" authori2ing her onl" daughter, 3l'erta L- (e"es, to /ortgage in her na/e and re0resentation all her land situated in the /unici0alit" of Pola, Aindoro- %n ** %cto'er 1,*0, (e"es, 0ersonall" and as attorne" in fact of her /other Florentina ordero, in consideration of the su/ of P9,600 received fro/ >nri.ue 32cona, no& deceased, sold to the latter, &ith the right of re0urchase &ithin the 0eriod of 4 "ears, 6 0arcels of land &ith certificates of title 'elonging to her and ordero- The vendors 'eca/e lessees of the 0ro0ert" sold, at a "earl" rental of P+<0- %n *3 %cto'er 1,*0, (e"es, as attorne" in fact of ordero, in consideration of the su/ of P6,000 received fro/ 32cona, sold to the latter, &ith the right of re0urchase &ithin the 0eriod of 4 "ears, a 0arcel of land &ith certificate of title 6< of the registr" of deeds of Aindoro, 'elonging to ordero- ordero 'eca/e the lessee of said 0ro0ert" at a "earl" rental of P900- %n 1 %cto'er 1,*6, (e"es and ordero =ointl" e4ecuted a 0o&er of attorne" authori2ing Fregorio 1enturan2a to sell and encu/'er all their real and 0ersonal including their cattle- 32cona died on 1* Aa" 1,*6, and &as succeeded in all his rights '" his onl" son, Jesus 32cona, to &ho/ the entire estate of his deceased father, together &ith the credits, &as =udiciall" ad=udicated5nas/uch as neither (e"es nor ordero, during her lifeti/e, had e4ercised her right of rede/0tion &ithin the 0eriod of4 "ears, and inas/uch as the" had as@ed for an e4tension of ti/e, on *, $ove/'er 1,*9, Fregorio 1enturan2a, as attorne" in fact of (e"es and ordero, on one side, and Jesus 32cona, on the other, e4ecuted a deed &here'" the deeds of sale &ith the right of re0urchase dated %cto'er ** and *3, 1,*0, res0ectivel", &ere cancelled and their res0ective a/ounts of P9,600 and P6,000, together &ith the su/ of P1,000 re0resenting the un0aid accrued interest thereon, or a total a/ount of P1*,600, &ere converted into a /ortgage credit- 5n order to secure the cancellation of the registration of the alleged sales &ith the right of re0urchase, the 0arcels of land descri'ed in the res0ective deeds &ere resold to the vendors and a /ortgage &as constituted thereon to secure the 0a"/ent of said /ortgage credit of P1*,600 &ithin the 0eriod of * "ears, e4tensi'le to another t&o "ears, &ith interest at 1*I 0er annu/- ?nder said contract the /ortgagors (e"es and ordero &ere 0er/itted to li.uidate said de't '" install/ents in the su/ of P*,600 &ith the interest due, to 'e 0aid on Dece/'er 1 of ever" "ear, 'eginning in 1,*+- (e"es and ordero, through 1enturan2a, 0aid '" &a" of a/orti2ation and
.a+es" /001 ( /! )
interest (P*,600 on 16 Fe'ruar" 1,*+, P*,*00 on 1+ %cto'er 1,*+, P1,*00 on , Fe'ruar" 1,*,, P360 on 30 June 1,*,, and P900 on *0 !e0te/'er 1,*,G leaving a 'alance of P<,,36-1*)- !ince the last /entioned date, the /ortgagors failed to 0a" a/orti2ation and interest so that on 30 June 1,3*, the un0aid 'alance thereof together &ith the un0aid accrued interest a/ounted to P11,,6<-06<The facts do not provide the manner on how the issue was raised in the CFI Mindoro>. The 0arties (Jesus 32cona, on one handG and 3l'erta (e"es and Fervasio Larracas as s0ecial ad/inistrator of the estate of Florentina ordero, on the other) ad/it and the trial court so found that, although the instru/ents are in the for/ of deeds of sale &ith 0acto de retro, in realit" the" re0resent /ortgage loans- The F5 ordered (e"es, as ad/inistrati4 of ordero;s estate, to 0a" 32cona the u/ of P11,,<6-06 &ith 1*I interest until full" 0aid, 10T of the su/ re0resenting e40enses and attorne";s fees, and P* as fees for the registration of the /ortgage deedThe court also ordered that in case (e"es fails to 0a" the su/s &ithin ,0 da"s fro/ final =udg/ent, the 0arcels of land shall 'e sold at 0u'lic auction and the 0roceeds thereof a00lied to the 0a"/ent of the su/ and the 'alance delivered to (e"es- (e"es and Larracas a00ealed se0aratel"The !u0re/e ourt found no error in the =udg/ent a00ealed fro/, and thus affir/ed it in toto, &ith the costs against (e"es and Larracas1. Dee's o- sa+e are not true 'ee's o- pacto 'e retro sa+e ut o- mort)a)e3 Resa+e mere -orma+(ty to cance++at(on o- re)(strat(on an' t*e notat(on o- t*e mort)a)e 'ee' The instru/ents are not true deeds of sale &ith 0acto de retro 'ut of /ortgage, the resale of the 0arcels of land, /ade '" Jesus 32cona in favor of (e"es and ordero, is null and void on the ground that, as /ere /ortgagors, the" never ceased to 'e the o&ners thereof and that >nri.ue 32cona, as a /ere /ortgagee, never ac.uired an" title of o&nershi0 thereto- 5n order for a sale to 'e valid, it is necessar" that the vendor 'e the o&ner of the thing sold, inas/uch as it is a 0rinci0le of la& that no'od" can dis0ose of that &hich does not 'elong to hi/- #o&ever, the sales &ith 0acto de retro &ere fictitious for the reason that the contracts entered into '" (e"es and the deceased >nri.ue 32cona &ere reall" /ortgage in their nature- Therefore, the resale &as a /ere for/alit" resorted to for the 0ur0ose of o'taining the la&ful cancellation of the registration thereof in the registr" of deeds and the notation of the /ortgage deed/. 9ort)a)e 'ee' not vo('" 'oes not +ack cons('erat(on or pr(nc(pa+ o +()at(on ,*(c* (t purports to secure (e"es received the su/ of P9,600 and another su/ of P6,000 fro/ the deceased >nri.ue 32cona, 'oth su/s re0resenting the 0urchase 0rice of certain 0arcels of land, &hich &ere sold &ith the right of re0urchase- The su/ of P1*,600 &hich constitutes the cause or consideration of the deed of resale and /ortgage >4hi'it 3 is the total of the su/s of P9,600 and P6,000 &hich (e"es, 0ersonall" and as attorne" in fact of ordero, received fro/ >nri.ue 32cona, together &ith the su/ of P1,000 re0resenting the un0aid credits 0assed '" inheritance to Jesus 32cona- 5t cannot 'e said that the /ortgage, e4ecuted '" 1enturan2a, as attorne" in fact of (e"es and ordero, in favor of Jesus 32cona, lac@s consideration or 0rinci0al o'ligation for the fulfill/ent of &hich said instru/ent &as e4ecuted as securit"1. Contracts o- mort)a)e +oans e7ecute' (n -orm (attac*ment o- .BA)" (n's Cor'ero ?0on e4a/ination of said docu/ents, (e"es /ade it a00ear that she acted as Florentina ordero;s attorne" in fact under a 0o&er of attorne" issued to her '" attaching a co0" of said 0o&er of attorne" to the deed in .uestion- 5n the case of %rden de Do/inicos vs- De oster (60 Phil-, 116), the ourt held that such for/ is valid and sufficient under the la&- onsidered as /ere contracts of /ortgage loans, the deeds dated **)*3 %cto'er 1,*0 are 'inding u0on ordero, and co/0liance &ith the o'ligations contracted thereunder /a" 'e de/anded in her intestate 0roceedings either as credit in favor of the intestate estate of >nri.ue 32cona or as credit in favor of Jesus 32cona against ordero under the /ortgage deed4. No statement o- -acts o- a++e)e' usury
.a+es" /001 ( /8 )
5n regard to the .uestion of usur" raised, although it is true that failure to file a s&orn ans&er to a cross)co/0laint for the recover" of usurious interest 0aid i/0lies an ad/ission of the e4istence of a usurious rate of interest (Lo Dun ha" vs- Paulino, 64 Phil-, 144, cited &ith a00roval in the case of (a/ire2 and Polido vs- Dergado, 69 Phil-, <10), ho&ever, the counterclai/ and cross)co/0laint filed in the 0resent case failed to state facts constituting the alleged usur" 'ut /erel" allege that in 0a"/ent of a de't of P,,600 32cona and his 0redecessor in interest received the a/ount of P*0,130- !uch state/ent does not in itself constitute an allegation of usur" and failure to file a re0l" thereto i/0lies denial of such allegation (!ec- 104, 3ct $o- 1,0)$. E7(stence o- usur(ous (nterest not proven3 1/K per annum st(pu+ate'" C*ar)(n) compoun' (nterest 'oes not make +oan usur(ous The e4istence of usurious interest has not 'een 0roven during the trial inas/uch as it is sti0ulated that the vendors, as lessees, &ould have to 0a" the su/ of P1,3<0 as "earl" rental- !uch su/, co/0uted on the 'asis of a ca0ital of P11,600 gives a rate of interest of onl" 1*I 0er annu/, &hich is allo&ed '" la& ((o'inson vs- !ac@er/ann and Postal !avings Dan@, 49 Phil-, 63,)- Further/ore, in the deed of resale and /ortgage loan, interest at the rate of onl" 1*I 0er annu/ is sti0ulated- The e4istence of a sti0ulation to the effect that accrued interest shall 'ear interest does not i/0l" that the loans in .uestion are usurious inas/uch as it is 0er/itted to charge co/0ound interest (sec- 6, 3ct $o- *966, as a/ended '" sec- 3 of 3ct $o- 3*,1G u ?n=ieng e #i=os vs- Aa'alacat !ugar o-, 64 Phil-, ,+9)[10] ACnar vs. ?ap'(an)co [G.R. No. @D18$1:. 9arc* 11" 1#:$.] >n Danc, (egala (J): 10 concurring %acts& 5n Aa" 1,6,, Teodoro !antos advertised in t&o /etro0olitan 0a0ers the sale of his Ford Fairlane 6005n the afternoon of *< Aa" 1,6,, a certain L- De Dios, clai/ing to 'e a ne0he& of 1icente Aarella, &ent to the !antos residence to ans&er the ad- #o&ever, Teodoro &as out during this call and onl" the latter;s son, 5rineo received and tal@ed &ith De Dios- The latter told the "oung !antos that he had co/e in 'ehalf of his uncle, Aarella, &ho &as interested to 'u" the advertised car- %n 'eing infor/ed of the a'ove, Teodoro instructed his son to see Aarella the follo&ing da" at his given address: 194* risosto/o !treet, !a/0aloc, Aanila- 3nd so, in the /orning of *, Aa" 1,6,, 5rineo &ent to said address- 3t this /eeting, Aarella agreed to 'u" the car for P14,+00-00 on the understanding that the 0rice &ould 'e 0aid onl" after the car had 'een registered in his na/e- 5rineo then fetched his father &ho, together &ith De Dios, &ent to the office of a certain 3tt"- Jose Padolina &here the deed of sale for the car &as e4ecuted in Aarella;s favor- The 0arties to the contract thereafter 0roceeded to the Aotor 1ehicles; %ffice in Uue2on it" &here the registration of the car in Aarella;s na/e &as effected- ?0 to that stage of the transaction, the 0urchase 0rice had not 'een 0aidFro/ the Aotor 1ehicles %ffice, Teodoro returned to his house- #e gave the registration 0a0ers and a co0" of the deed of sale to his son and instructed hi/ not to 0art &ith the/ until Aarella shall have given the full 0a"/ent for the car- 5rineo and De Dios then 0roceeded to 194* risosto/o !treet, !a/0aloc in Aanila &here the for/er de/anded for the 0a"/ent fro/ Aarella- Aarella said that the a/ount he had on hand then &as short '" so/e P*,000-00 and 'egged off to 'e allo&ed to secure the shortage fro/ a sister su00osedl" living so/e&here in 32carraga !treet, also in Aanila- Thereafter, he ordered De Dios to go to the said sister and suggested that 5rineo to go &ith hi/- 3t the sa/e ti/e, he re.uested for the registration 0a0ers and the deed of sale fro/ 5reneo on the 0rete4t that he &ould li@e to sho& the/ to his la&"ers- Trusting the good faith of Aarella, 5reneo handed over the sa/e to the latter and thereu0on, in the co/0an" of De Dios and another unidentified 0erson, 0roceeded to the alleged house of Aarella;s sister- 3t a 0lace in 32carraga, 5rineo and De Dios alighted fro/ the car and entered a house, &hile their unidentified co/0anion re/ained in the car- %nce inside, De Dios as@ed 5rineo to &ait at the sala &hile he &ent inside a roo/- That &as the last that 5reneo sa& of hi/- For, after a considera'le length of ti/e &aiting in vain for De Dios to return, 5reneo &ent do&n to discover that neither the car nor their unidentified co/0anion &as there an"/ore- Foing 'ac@ to the house, he in.uired fro/ a &o/an he sa& for De Dios and he &as told that no such na/e lived or &as even @no&n
.a+es" /001 ( /# )
therein- :hereu0on, 5reneo rushed to 194* risosto/o to see Aarella- #e found the house closed and Aarella gone- Finall", he re0orted the /atter to his father &ho 0ro/0tl" advised the 0olice authorities- That ver" sa/e da", Aarella &as a'le to sell the car in .uestion to Jose D- 32nar, for P16,000-00- 32nar ac.uired the said car fro/ Aarella in good faith, for a valua'le consideration and &ithout notice of the defect a00ertaining to the vendor;s title- :hile the car &as thus in the 0ossession of 32nar and &hile he &as attending to its registration in his na/e, agents of the Phili00ine onsta'ular" sei2ed and confiscated the sa/e in conse.uence of the re0ort to the/ '" Teodoro that the said car &as unla&full" ta@en fro/ hi/32nar filed a co/0laint for re0levin 'efore the F5 Uue2on it" (Dranch 51) against a0tain (afael Ea0diangco, the head of the Phili00ine onsta'ular" unit &hich sei2ed the car- lai/ing o&nershi0 of the vehicle, he 0ra"ed for its deliver" to hi/- 5n the course of the litigation, ho&ever, Teodoro !antos /oved and &as allo&ed to intervene '" the lo&er court- 3t the end of the trial, the lo&er court rendered a decision a&arding the dis0uted /otor vehicle to !antos- Fro/ the decision, 32nar a00ealedThe !u0re/e ourt dis/issed the a00eal and affir/ed the decision of the lo&er court in fullG &ith costs against 32nar1. Art(c+e $$# o- t*e C(v(+ Co'e3 .antos ent(t+e' to recovery o- persona+ property !antos had 'een unla&full" de0rived of his 0ersonal 0ro0ert" '" Aarella, fro/ &ho/ 32nar traces his right- onse.uentl", although 32nar ac.uired the car in good faith and for a valua'le consideration fro/ Aarella, the said decision concluded, still !antos &as entitled to its recover" on the /andate of 3rticle 66, of the $e& ivil ode &hich 0rovides: 7 The 0ossession of /ova'le 0ro0ert" ac.uired in good faith is e.uivalent to title- $evertheless, one &ho has lost an" /ova'le or has 'een unla&full" de0rived thereof, /a" recover it fro/ the 0erson in 0ossession of the sa/e- 5f the 0ossessor of a /ova'le lost or of &hich the o&ner has 'een unla&full" de0rived, has ac.uired it in good faith at a 0u'lic sale, the o&ner cannot o'tain its return &ithout rei/'ursing the 0rice 0aid therefor-8 ?nder 3rticle 66,, the rule is to the effect that if the o&ner has lost the thing, or if he has 'een unla&full" de0rived of it, he has a right to recover it, not onl" fro/ the finder, thief or ro''er, 'ut also fro/ the third 0erson &ho /a" have ac.uired it in good faith fro/ such finder, thief or ro''er/. .e++er=s t(t+e" vo('a +e at +east" essent(a+ (n Art(c+e 1$0:3 Art(c+e $$# app+(es 3rticle 1609 0rovides:8 :here the seller of goods has a voida'le title thereto, 'ut his title has not 'een voided at the ti/e of the sale, the 'u"er ac.uires a good title to the goods, 0rovided he 'u"s the/ in good faith, for value, and &ithout notice of the seller;s defect of title-8 ?nder the 0rovision, it is essential that the seller should have a voida'le title at least- 5t is ver" clearl" ina00lica'le &here the seller had no title at all1. >,ners*(p or t(t+e ac2u(re' on+y y tra'(t(on or 'e+(very3 Art(c+e !1/ o- t*e C(v(+ Co'e ?nder 3rticle +1* of the ivil ode, 7o&nershi0 and other real rights over 0ro0ert" are ac.uired and trans/itted '" la&, '" donation, '" testate and intestate succession, and in conse.uence of certain contracts, '" tradition-8 3s inter0reted '" this ourt in a host of cases, '" this 0rovision, o&nershi0 is not transferred '" contract /erel" 'ut '" tradition or deliver"- ontracts onl" constitute titles or rights to the transfer or ac.uisition of o&nershi0, &hile deliver" or tradition is the /ode of acco/0lishing the sa/e- (Fon2ales vs(o=as, 19 Phil- 61G %ce=o, Pere2 and o- vs- 5nternational Dan@, 3+ Phil- 931G Fidelit" and De0osit o- vs:ilson, < Phil- 61G Cuen2le Q !treiff vs- :ac@e Q handler, 14 Phil- 910G >aston vs- Dia2 Q o-, 3* Phil1<0)- For the legal ac.uisition and transfer of o&nershi0 and other 0ro0ert" rights, the thing transferred /ust 'e delivered, inas/uch as, according to settled =uris0rudence the tradition of the thing is a necessar" and indis0ensa'le re.uisite in the ac.uisition of said o&nershi0 '" virtue of a contract- (:alter >aston vs- >- Dia2 Q o- Q the Provincial !heriff of 3l'a", su0ra-) !o long as 0ro0ert" is not delivered, the o&nershi0 over it is not transferred '" contract /erel" 'ut '" deliver"- ontracts onl" constitute titles or rights to the transfer or ac.uisition of o&nershi0, &hile deliver" or tradition is the /ethod of acco/0lishing the sa/e, the title and the /ethod of ac.uiring it 'eing different in our la&-8 (Fon2ales vs- (o=as, 19 Phil- 61) 5n the 0resent case, the
.a+es" /001 ( 10 )
car &as never delivered to the vendee '" the vendor as to co/0lete or consu//ate the transfer of o&nershi0 '" virtue of the contract- 5t should 'e recalled that &hile there &as indeed a contract of sale 'et&een 1icente Aarella and Teodoro !antos, the for/er, as vendee, too@ 0ossession of the su'=ect /atter thereof '" stealing the sa/e &hile it &as in the custod" of the latter;s son4. De+(very o- key not 'e+(very contemp+ate' y Art(c+e !1/3 Gntent must e present There is no ade.uate evidence on record as to &hether 5rineo !antos voluntaril" delivered the @e" to the car to the unidentified 0erson &ho &ent &ith hi/ and L- De Dios to the 0lace in 32carraga &here a sister of Aarella allegedl" lived- Dut even if 5rineo !antos did, it &as not the deliver" conte/0lated '" 3rticle +1* of the ivil ode- For then, it &ould 'e indis0uta'le that he turned it over to the unidentified co/0anion onl" so that he /a" drive 5rineo !antos and De Dios to the said 0lace in 32carraga and not vest the title to the said vehicle to hi/ as agent of 1icente Aarella- 3rticle +1* a'ove conte/0lates that the act 'e cou0led &ith the intent of delivering the thing- (10 Aanresa 13*) $. Art(c+e $$# esta +(s*es e7cept(on to t*e )enera+ ru+e or (rrev(n'(ca (+(ty 3rticle 66, esta'lishes t&o e4ce0tions to the general rule of irrevindica'ilit" to &it: &hen the o&ner (1) has lost the thing, or (*) has 'een unla&full" de0rived thereof- 5n these cases, the 0ossessor cannot retain the thing as against the o&ner, &ho /a" recover it &ithout 0a"ing an" inde/nit", e4ce0t &hen the 0ossessor ac.uired it in a 0u'lic sale- (Del (osario vs- Lucena, < Phil- 636G 1arela vs- Finnic@, , Phil- 4<*G 1arela vsAatute, , Phil- 4+,G 3renas vs- (a"/undo, 1, Phil- 49- Tolentino, id-, 1ol 55, 0- *91-) :. CruC vs. Ba*at( on Art(c+e $$# 5n the case of ru2 vs- Pahati, et al-, 6* %F 3063, the ourt ruled that 7?nder 3rticle 66, of the ne& ivil ode, a Person illegall" de0rived of an" /ova'le /a" recover it fro/ the 0erson in 0ossession of the sa/e and the onl" defense the latter /a" have is if he has ac.uired it in good faith at a 0u'lic sale, in &hich case, the o&ner cannot o'tain its return &ithout rei/'ursing the 0rice 0aid therefor- 5n the 0resent case, 0laintiff has 'een illegall" de0rived of his car through the ingenious sche/e of defendant D to ena'le the latter to dis0ose of it as if he &ere the o&ner thereof- Plaintiff, therefore, can still recover 0ossession of the car even if it is in the 0ossession of a third 0art" &ho had ac.uired it in good faith fro/ defendant D- The /a4i/ that 7no /an can transfer to another a 'etter title than he has hi/self; o'tains in the civil as &ell as in the co//on la&-8 (?-!- vs- !ootelo, *< Phil- 14+) !. Common +a, pr(nc(p+e y(e+'s to statutory prov(s(on The right of the o&ner to recover 0ersonal 0ro0ert" ac.uired in good faith '" another, is 'ased on his 'eing dis0ossessed &ithout his consent- The co//on la& 0rinci0le that &here one of t&o innocent 0ersons /ust suffer '" a fraud 0er0etrated '" another, the la& i/0oses the loss u0on the 0art" &ho, '" his /is0laced confidence, has ena'led the fraud to 'e co//itted, cannot 'e a00lied in a case &hich is covered '" an e40ress 0rovision of the ne& ivil ode, s0ecificall" 3rticle 66,- Det&een a co//on la& 0rinci0le and a statutor" 0rovision, the latter /ust 0revail in this =urisdiction- ( ru2 vs- Pahati, su0ra)[11] Ba asa vs. CA [G.R. No. 1/404$. 9ay /1" 1##8.] First Division, Dellosillo (J): 4 concurring %acts& %n 11 30ril 1,<1 a contract of 7 onditional !ale of (egistered Lands8 &as e4ecuted 'et&een the s0ouses 1ivencio and >lena Da'asa as vendors and Ta'angao (ealt" 5nc- (Ta'angao) as vendee over 3 0arcels of land, Lots 1+<*+)3, 1+<*+)D and 1+<*+) , situated in Drg"- Li'=o, Datangas it"- !ince the certificates of title over the lots &ere in the na/e of third 0ersons &ho had alread" e4ecuted deeds of reconve"ance and disclai/er in favor of the Da'asas, it &as agreed that the total 0urchase 0rice of P*,1*1,,*0-00 &ould 'e 0aid in the follo&ing /anner: P300,000-00 u0on signing of the contract, and P1,<*1,,*0-00 u0on 0resentation '"
.a+es" /001 ( 11 )
the Da'asas of transfer certificates of titles in their na/e, free fro/ all liens and encu/'rances, and deliver" of registera'le docu/ents of sale in favor of Ta'angao &ithin *0 /onths fro/ the signing of the contract- 5n the /eanti/e, the retained 'alance of the 0urchase 0rice &ould earn interest at 1+I 0er annu/ or P*0,94<-43 /onthl" 0a"a'le to the Da'asas until 31 Dece/'er 1,<*- 5t &as e40ressl" sti0ulated that Ta'angao &ould have the a'solute and unconditional right to ta@e i//ediate 0ossession of the lots as &ell as introduce an" i/0rove/ents thereon- %n 1< Aa" 1,<1 Ta'angao leased the lots to !hell Fas Phili00ines, 5nc- (!#>LL), &hich i//ediatel" started the construction thereon of a Li.uefied Petroleu/ Fas Ter/inal Pro=ect, an a00roved 2one e40ort enter0rise of the >40ort Processing Vone- Ta'angao is the real estate ar/ of !#>LLThe 0arties su'stantiall" co/0lied &ith the ter/s of the contract- Ta'angao 0aid the first install/ent of P300,000-00 to the Da'asas &hile the latter delivered actual 0ossession of the lots to the for/er- 5n addition, Ta'angao 0aid P3+,,9*6-00 to the tenants of the lots as distur'ance co/0ensation and as 0a"/ent for e4isting cro0s as &ell as P334,+00-00 to the o&ners of the houses standing thereon in addition to granting the/ residential lots &ith the total area of *,<00 s.uare /eters- Ta'angao li@e&ise 0aid the sti0ulated /onthl" interest for the *0)/onth 0eriod a/ounting to P40<,6<0-<0- Aean&hile, the Da'asas filed ivil ase 61, and Petition 3+3 for the transfer of titles of the lots in their na/e- #o&ever, * da"s 0rior to the e40iration of the *0)/onth 0eriod, s0ecificall" on 31 Dece/'er 1,<*, the Da'asas as@ed Ta'angao for an indefinite e4tension &ithin &hich to deliver clean titles over the lots- The" as@ed that Ta'angao continue 0a"ing the /onthl" interest of P*0,94<-43 starting Januar" 1,<3 on the ground that ivil ase 61, and Petition 3+3 had not "et 'een resolved &ith finalit" in their favor- Ta'angao refused the re.uest- 5n retaliation the Da'asas e4ecuted a notari2ed unilateral rescission dated *< Fe'ruar" 1,<3 to &hich Ta'angao res0onded '" re/inding the Da'asas that the" &ere the ones &ho did not co/0l" &ith their contractual o'ligation to deliver clean titles &ithin the sti0ulated *0)/onth 0eriod, hence, had no right to rescind their contract- The Da'asas insisted on the unilateral rescission and de/anded that !#>LL vacate the lots%n 1, Jul" 1,<3 Ta'angao instituted an action for s0ecific 0erfor/ance &ith da/ages in the (T Datangas it" to co/0el the s0ouses to co/0l" &ith their o'ligation to deliver clean titles over the 0ro0erties- The Da'asas /oved to dis/iss the co/0laint on the ground that their contract &ith Ta'angao 'eca/e null and void &ith the e40iration of the *0)/onth 0eriod given the/ &ithin &hich to deliver clean certificates of title!#>LL entered the dis0ute as intervenor 0ra"ing that its lease over the 0re/ises 'e res0ected '" the Da'asas>ventuall", =udg/ent &as rendered in favor of Ta'angao and !#>LL, declaring that the notarial rescission e4ecuted '" the Da'asas void and of no legal effectG declaring that the lease contract 'et&een Ta'angao and !#>LL dee/ed legall" 'inding on the s0ousesG ordering the s0ouses to deliver to Ta'angao clean transfer certificates in their na/e and e4ecute all necessar" deeds and docu/ent necessar" for the (egister of Deeds to facilitate the issuance of T TsG directing Ta'angao to 0a" the s0ouses the re/aining 'alance of P1,<*1,,*0-00 out of the full 0urchase 0rice for these three lots enu/erated in the agree/ent 0lus interest thereon of 1+I 0er annu/ or P*0,94<-43 a /onth co/0ounded annuall" 'eginning Januar" 1,<3 until full" 0aidG /a@ing the restraining order against the s0ouses in 0utting u0 structures interfering &ith the activities of !#>LL, its e/0lo"ees and agents, and canceling the 'ond 0osted '" !hellG and ordering the s0ouses to 0a" the cost of the 0roceedings as &ell as the 0re/iu/ !#>LL 0aid in the 0osting of the P* /illion 'ond for the issuance of the restraining orderThe s0ouses a00ealed to the ourt of 300eals &hich on *, Fe'ruar" 1,,9 affir/ed the decision of the trial courtG 'ut ordered that the co/0ounded interest to 'e 0aid fro/ 1, Jul" 1,<3 onl" and not fro/ Januar" 1,<3 as decreed '" the trial court- #ence, the a00ealThe !u0re/e ourt denied the 0etition, and affir/ed the a00ealed decision of the ourt of 300eals in 3)F( 1 3,664G &ithout costs1. Contract o- sa+e an' not o- +ease The contract is re0lete &ith ter/s and sti0ulations clearl" indicative of a contract of sale- Thus, the o0ening &hereas clause states that the 0arties desire and /utuall" 7agreed on the sale and 0urchase of the - - .a+es" /001 ( 1/ )
three 0arcels of landG8 the Da'asas &ere descri'ed as the 7vendors8 &hile Ta'angao as the 7vendee8 fro/ the 'eginning of the contract to its endG the a/ount of P*,1*1,,*0-00 &as stated as the 0urchase 0rice of the lotsG Ta'angao, as vendee, &as granted a'solute and unconditional right to ta@e i//ediate 0ossession of the 0re/ises &hile the Da'asas, as vendors, &arranted such 0eaceful 0ossession foreverG Ta'angao &as to shoulder the ca0ital gains ta4, andG lastl", the Da'asas &ere e40ected to e4ecute a Final Deed of 3'solute !ale in favor of Ta'angao necessar" for the issuance of transfer certificates of title the /o/ent the" &ere a'le to secure clean certificates of title in their na/e- 5t cannot 'e said that the contract &as one of lease si/0l" 'ecause the &ord 7o&nershi08 &as never /entioned therein- Desides, the s0ouses did not o'=ect to the ter/s and sti0ulations e/0lo"ed in the contract at the ti/e of its e4ecution &hen the" could have easil" done so considering that the" &ere then a'l" assisted '" their counsel, 3tt"- >dgardo A- arreon, &hose legal training negates their 0retended ignorance on the /atter/. Contracts va+(' t*ou)*t part(es entere' (nto (t a)a(nst o,n ,(s* an' 'es(re" or even a)a(nst *(s etter 8u')ment 3lthough Ta'angao dangled the threat of e40ro0riation '" the govern/ent (through the >40ort Processing Vone 3uthorit") in the event voluntar" negotiations failed, a cause to co//iserate &ith the s0ouses /a" 'e 0erceived, it is not enough to 0rovide the/ &ith an avenue to esca0e contractual o'ligations validl" entered into- ontracts are valid even though one of the 0arties entered into it against his o&n &ish and desire, or even against his 'etter =udg/ent- Desides, a threat of e/inent do/ain 0roceedings '" the govern/ent cannot 'e legall" classified as the @ind of i//inent, serious and &rongful in=ur" to a contracting 0art" as to vitiate his consent- Private lando&ners ought to reali2e, and eventuall" acce0t, that 0ro0ert" rights /ust "ield to the valid e4ercise '" the state of its all)i/0ortant 0o&er of e/inent do/ain1. Contract (s a so+ute a+t*ou)* 'enom(nate' a con'(t(ona+ sa+e3 Actua+ an' construct(ve 'e+(very 3lthough deno/inated 7 onditional !ale of (egistered Lands,8 the contract of 11 30ril 1,<1 'et&een the s0ouses and Ta'angao is one of a'solute sale- 3side fro/ the ter/s and sti0ulations used therein indicating such @ind of sale, there is a'solutel" no 0roviso reserving title in the Da'asas until full 0a"/ent of the 0urchase 0rice, nor an" sti0ulation giving the/ the right to unilaterall" rescind the contract in case of non) 0a"/ent- 3 deed of sale is a'solute in nature although deno/inated a conditional sale8 a'sent such sti0ulations- 5n such cases, o&nershi0 of the thing sold 0asses to the vendee u0on the constructive or actual deliver" thereof- 5n the instant case, o&nershi0 over Lots 1+<*+)3, 1+<*+)D and 1+<*+) 0assed to Ta'angao 'oth '" constructive and actual deliver"- onstructive deliver" &as acco/0lished u0on the e4ecution of the contract of 11 30ril 1,<1 &ithout an" reservation of title on the 0art of the Da'asas &hile actual deliver" &as /ade &hen Ta'angao too@ unconditional 0ossession of the lots and leased the/ to its associate co/0an" !#>LL &hich constructed its /ulti)/illion 0eso LPF Pro=ect thereon4. D(st(nct(on et,een con'(t(ons (mpose' on t*e per-ect(on o- contract an' con'(t(on (mpose' on t*e per-ormance o- an o +()at(on 5n (o/ero v- ourt of 300eals and Li/ v- ourt of 300eals, the ourt distinguished 'et&een a condition i/0osed on the 0erfection of a contract and a condition i/0osed /erel" on the 0erfor/ance of an o'ligation- :hile failure to co/0l" &ith the first condition results in the failure of a contract, failure to co/0l" &ith the second /erel" gives the other 0art" the o0tion to either refuse to 0roceed &ith the sale or to &aive the condition- 5n the 0resent case, the s0ouses; contract &ith Ta'angao did not lose its efficac" &hen the *0)/onth 0eriod sti0ulated therein e40ired &ithout the s0ouses 'eing a'le to deliver clean certificates of title such that Ta'angao /a" no longer de/and 0erfor/ance of their o'ligation$. In(+atera+ resc(ss(on o- t*e contract y t*e spouses un,arrante' The s0ouses; act of unilaterall" rescinding their contract &ith Ta'angao is un&arranted- The failure of 0etitioners to deliver clean titles &ithin *0 /onths fro/ the signing of the contract /erel" gives Ta'angao the o0tion to either refuse to 0roceed &ith the sale or to &aive the condition in consonance &ith 3rticle 1646 of the $e& ivil ode- Desides, it &ould 'e the height of ine.uit" to allo& the Da'asas to rescind their contract
.a+es" /001 ( 11 )
of sale &ith Ta'angao '" invo@ing as a ground therefor their o&n failure to deliver the titles over the lots &ithin the sti0ulated 0eriod[1/] Ba)nas v. CA [G.R. No. 184#8. Au)ust 10" 1#8#.] First Division, $arvasa (J): 4 concurring %acts& #ilario Aateu/ of Ca&it, avite, died on 11 Aarch 1,94, single, &ithout ascendants or descendants, and survived onl" '" collateral relatives, of &ho/ 5saac, >ncarnacion, !ilvestre, Aa4i/ina, and !i4to Dagtas, and 3gatona >ncarnacion, his first cousins, &ere the nearest- Aateu/ left no &ill, no de'ts, and an estate consisting of *, 0arcels of land in Ca&it and 5/us, avite, 10 of &hich are involved in the case- %n 3 30ril 1,94, (osa L- (etonil, Teofilo >ncarnacion and Jose D- $a/'a"an, the/selves collateral relatives of Aateu/ though /ore re/ote in degree, registered &ith the (egistr" of Deeds for the Province of avite * deeds of sale 0ur0ortedl" e4ecuted '" Aateu/ in their favor covering 10 0arcels of land- Doth deeds &ere in Tagalog, save for the >nglish descri0tions of the lands conve"ed under one of the/G and each recited the reconsideration of the sale to 'e P1, services rendered and to 'e rendered for Aateu/;s 'enefit- %ne deed &as dated 9 Fe'ruar" 1,93 and covered 6 0arcels of land, and the other &as dated 4 Aarch 1,93, covering 6 other 0arcels, 'oth, therefore, antedating Aateu/;s death '" /ore than a "ear- 5t is asserted '" the Dagtas, et-al-, 'ut denied '" (etonil, et-al-, that said sales not&ithstanding, Aateu/ continued in the 0ossession of the lands 0ur0ortedl" conve"ed until his death, that he re/ained the declared o&ner thereof and that the ta4 0a"/ents thereon continued to 'e 0aid in his na/e- :hatever the truth, ho&ever, is not crucialG &hat is not dis0uted is that on the strength of the deeds of sale, (etonil, et-al- &ere a'le to secure title in their favor over 3 of the 10 0arcels of land conve"ed there'"%n ** Aa" 1,94, Dagtas et-al- co//enced suit against (etonil, et-al- in the F5 avite, see@ing annul/ent of the deeds of sale as fictitious, fraudulent or falsified, or, alternativel", as donations void for &ant of acce0tance e/'odied in a 0u'lic instru/ent- lai/ing o&nershi0 0ro indiviso of the lands su'=ect of the deeds '" virtue of 'eing intestate heirs of #ilario Aateu/, Dagtas, et- al- 0ra"ed for recover" of o&nershi0 and 0ossession of said lands, accounting of the fruits thereof and da/ages- 3lthough the co/0laint originall" sought recover" of all the *, 0arcels of land left '" Aateu/, at the 0re)trial the 0arties agreed that the controvers" 'e li/ited to the 10 0arcels su'=ect of the .uestioned sales, and the Trial ourt ordered the e4clusion of the 1, other 0arcels fro/ the action- %f the 10 0arcels &hich re/ained in litigation, , &ere assessed for 0ur0oses of ta4ation at values aggregating P10,600-00- The record does not disclose the assessed value of the tenth 0arcel, &hich has an area of 1,443 s.-/s- (etonil, et-al- denied the allegations- 3fter Dagtas, et-al- had 0resented their evidence, (etonil, et-al- filed a /otion for dis/issal J in effect, a de/urrer to the evidence J reasserting the defense set u0 in their ans&er that Dagtas, et-al-, as /ere collateral relatives of #ilario Aateu/ had no right to i/0ugn the latter;s dis0osition of his 0ro0erties '" /eans of the .uestioned conve"ances and su'/itting, additionall", that no evidence of fraud tainting said transfers had 'een 0resentedThe Trial ourt granted the /otion to dis/iss, holding on the authorit" of 3r/entia vs- Patriarca, that Dagtas, et-al-, as /ere collateral relatives, not forced heirs, of #ilario Aateu/, could not legall" .uestion the dis0osition /ade '" said deceased during his life ti/e, regardless of &hether, as a /atter of o'=ective realit", said dis0ositions &ere valid or notG and that Dagtas, et-al-;s evidence of alleged fraud &as insufficient, the fact that the deeds of sale each stated a consideration of onl" P1 not 'eing in itself evidence of fraud or si/ulation%n a00eal '" Dagtas, et- al- to the ourt of 300eals, that court affir/ed, adverting &ith a00roval to the Trial ourt;s reliance on the 3r/entia ruling &hich, it &ould a00ear, 'oth courts sa& as den"ing, &ithout e4ce0tion, to collaterals, of a decedent, not forced heirs, the right to i/0ugn the latter;s dis0ositions inter vivos of his 0ro0ert"The !u0re/e ourt reversed the a00ealed Decision of the
.a+es" /001 ( 14 )
ourt of 300eals, and declared the .uestioned
transfers void and of no force or effect- The ourt ordered the annul/ent of such certificates of title (etonil, et-al- /a" have o'tained over the 0ro0erties su'=ect of said transfers, and ordered the/ to return to Dagtas, et-al- 0ossession of all the 0ro0erties involved in the action, to account to the latter for the fruits thereof during the 0eriod of their 0ossession, and to 0a" the costs- $o da/ages, attorne";s fees or litigation e40enses &ere a&arded, there 'eing no evidence thereof 'efore the ourt1. Ho(' contracts& Cause not e7(st(n) at t(me o- transact(on an' contract ,(t*out or ,(t* -a+se cause (,*ere no *(''en cause (s prove') ?nder the ivil ode of the Phili00ines, 3rticle 140,, 0aragra0h 3, ontracts, &ith a cause that did not e4ist at the ti/e of the transaction are in e4istent and void fro/ the 'eginning- The sa/e is true of contracts stating a false cause (consideration) unless the 0ersons interested in u0holding the contract should 0rove that there is another true and la&ful consideration therefor- (3rticle 1363)/. Gntestate *e(rs *ave +e)a+ stan'(n)3 Broperty su 8ect o- vo(' contract 'oes not +eave patr(mony o- trans-eror an' recovera +e y t*e *e(rs or t*e estate a'm(n(strator The heirs intestate have legal standing to contest the conve"ance /ade '" the deceased if the sa/e &ere /ade &ithout an" consideration, or for a false and fictitious consideration- 5f therefore the contract has no causa or consideration, or the causa is false and fictitious (and no true hidden causa is 0roved) the 0ro0ert" allegedl" conve"ed never reall" leaves the 0atri/on" of the transferor, u0on the latter;s death &ithout a testa/ent, such 0ro0ert" &ould 0assed to the transferor;s hairs intestate and 'e, recovera'le '" the/ or '" the 3d/inistrator of the transferor;s estate1. Arment(a ru+(n) c+ar(-(e' Concepc(on an' .o+(s ru+(n)s3 %a+se cause ,(t*out *(''en cause no, not mere+y vo('a +e" ut vo(' a (n(t(o The 3r/entia ruling does not re=ect, and is not to 'e construed as re=ecting, the once0cion and !olis rulings (Concepcion vs. Sta. Ana, 8 !hi". 8 and So"is vs. Chua !ua #ermanos, $% !hi". $&'( as outrightl" erroneous- %n the contrar", those rulings undou'tedl" read and a00lied correctl" the la& e4tant in their ti/e: 3rticle 1*+9 of the ivil ode of 1<<, under &hich the state/ent of a false cause in a contract rendered it voida'le onl", not void a' initio- The fact that the la& as it is no& (during the ti/e of 3r/entia) no longer dee/s contracts &ith a false cause, or &hich are a'solutel" si/ulated or fictitious, /erel" voida'le, 'ut declares the/ void, i-e-, ine4istent (7nulo8) unless it is sho&n that the" are su00orted '" another true and la&ful cause or consideration4. Arment(a case3 E--ect o- t*e c*an)e (n t*e 8ur('(ca+ status o- contracts ase' on -a+se cause 3 logical conse.uence of that change is the =uridical status of contracts &ithout, or &ith a false, cause is that conve"ances of 0ro0ert" affected &ith such a vice cannot o0erate to divest and transfer o&nershi0, even if uni/0ugned- 5f after&ards the transferor dies the 0ro0ert" descends to his heirs, and &ithout regard to the /anner in &hich the" are called to the succession, said heirs /a" 'ring an action to recover the 0ro0ert" fro/ the 0ur0orted transferee- !uch an action is not founded on fraud, 'ut on the 0re/ise that the 0ro0ert" never leaves the estate of the transferor and is trans/itted u0on his death to heirs, &ho &ould la'or under no inca0acit" to /aintain the action fro/ the /ere fact that the" /a" 'e onl" collateral relatives and 'ound neither 0rinci0all" or su'sidiaril" under the deed B contract of conve"ance$. Arment(a case3 Conveyance mere+y annu++a +e as act(on ase' on -rau' v(t(at(n) conveyance 5n 3r/entia, the ourt deter/ined that the conve"ance .uestioned &as /erel" annulla'le, not void a' initio, and that the action &as 'ased on fraud vitiating said conve"ance- The court found that Aarta 3r/entia e4ecuted the docu/ent, a fact uncontroverted '" the case;s 0laintiff- 3lso, the vendees, 'eing /inors, /a@es the contract, at &orst, onl" annulla'le '" the/- Aoreover, inade.uac" of consideration does not i/0l" total &ant of consideration- Further, the 0ur0orted acts of Aarta 3r/entia after the sale did not indicate that the said sale &as void fro/ the 'eginning- Thus, in essence the 0laintiffs; case is 'otto/ed on fraud, &hich renders the contract /erel" voida'le.a+es" /001 ( 1$ )
:. Arment(a case app+(es to vo('a +e contracts o ta(ne' or ma'e -rau'u+ent+y3 'oes not app+y to trans-ers ,*(c* are vo(' -or +ack or -a+s(ty o- cons('erat(on 3s a 0recedent, 3r/entia onl" ruled that transfers /ade '" a decedent in his lifeti/e, &hich are voida'le for having 'een fraudulentl" /ade or o'tained, cannot 'e 0osthu/ousl" i/0ugned '" collateral relatives succeeding to his estate &ho are not 0rinci0all" or su'sidiaril" 'ound '" such transfers- That ruling is not e4tendi'le to transfers &hich, though /ade under closel" si/ilar circu/stances, are void a' initio for lac@ or falsit" of consideration!. %a+se an' -(ct(t(ous cons('erat(on" ,(t*out any a+ternat(ve true or +a,-u+ cause presente'" ren'ers contract vo(' ?0on the consideration alone that the a00arent gross, not to sa" enor/ous, dis0ro0ortion 'et&een the sti0ulated 0rice in each deed of P1 0lus uns0ecified and un.uantilled services and the undis0uta'l" valua'le real estate allegedl" sold (&orth at least P10,600-00 going onl" '" assess/ents for ta4 0ur0oses &hich, it is &ell)@no&n, are notoriousl" lo& indicators of actual value) 0lainl" and un.uestiona'l" de/onstrates that the" state a false and fictitious consideration, and no other true and la&ful cause having 'een sho&n, the ourt finds 'oth said deeds, insofar as the" 0ur0ort to 'e sales, not /erel" voida'le, 'ut void a' initio10. Donat(ons o- (mmova +e property must e ma'e an' accepte' (n a pu +(c 'ocument3 @( era+(ty as cause 'en(e' The validit" of the conve"ances cannot 'e defended on the theor" that their true causa is the li'eralit" of the transferor and the" /a" 'e considered in realit" donations, 'ecause the la& also 0rescri'es that donations of i//ova'le 0ro0ert", to 'e valid, /ust 'e /ade and acce0ted in a 0u'lic instru/ent, and it is not denied '" (etonil, et- al- that there has 'een no such acce0tance &hich the" clai/ is not re.uired11. Bropert(es rema(ne' as part o- estate o- 9ateum" an' t*us recovera +e The transfers in .uestion 'eing void, it follo&s as a necessar" conse.uence and confor/a'l" to the concurring o0inion in 3r/entia, &ith &hich the ourt full" agrees, that the 0ro0erties 0ur0ortedl" conve"ed re/ained 0art of the estate of #ilario Aateu/, said transfers not&ithstanding, recovera'le '" his intestate heirs, i-e- Dagtas, et-al-, &hose status as such is not challenged1/. @ack o- proo- t*at cou+' *ave save' trans-ers -rom ta(nt o- (nva+('(ty3 Bur'en o- proo- (n t*e e7(stence o- a va+(' an' +(c(t contract (etonil, et-al- have onl" the/selves to 'la/e for the lac@ of 0roof that /ight have saved the .uestioned transfers fro/ the taint of invalidit" as 'eing fictitious and &ithout licit causeG 0roof, to 'e 'rief, of the character and value of the services, 0ast, 0resent, and future, constituting J according to the ver" ter/s of said transfers the 0rinci0al consideration therefor- The onus of sho&ing the e4istence of valid and licit consideration for the .uestioned conve"ances rested on (etonil, et-al-- Dut even on a contrar" assu/0tion, and 0ositing that Dagnas, et-al- initiall" had the 'urden of sho&ing that the transfers lac@ed such consideration as the" alleged in their co/0laint, that 'urden &as shifted to (etonil, et-al- &hen Dagnas, et-al- 0resented the deeds &hich the" clai/ed sho&ed that defect on their face and it 'eca/e the dut" of (etonil, et-al- to offer evidence of e4istent, la&ful consideration11. Demurrer to ev('ence3 E--ect (etonil, et- al-, o0ting to rel" on a de/urrer to Dagtas, et- al-;s evidence and u0on the thesis that the latter, 'eing /ere collateral relatives of the deceased transferor, &ere &ithout right to the conve"ances in .uestion- 5n effect, the" ga/'led their right to adduce evidence on a dis/issal in the Trial ourt and lost, it 'eing the rule that &hen a dis/issal thus o'tained is reversed on a00eal, the /ovant loses the right to 0resent evidence in his 'ehalf[11]
.a+es" /001 ( 1: )
Ba+at at v. CA [G.R. No. 10#410. Au)ust /8" 1##:.] !econd division, Torres Jr (J): 4 concurring %acts& %n 16 June 1,++, 3urelio 3- (o.ue filed a co/0laint for 0artition against his children ora2on, Feliciano, !evera and %s/undo (o.ue, and 3l'erto de los !antos 'efore the F5 Aanila (Dranch 5R, ivil ase 10,03*)- The (o.ue children &ere declared in default and 3urelio 0resented evidence e4)0arte- %n *, Aarch 1,+,, the trial court rendered a decision in favor of 3urelioG holding that 3urelio and his &ife Aaria Aesina ac.uired the lot (T T 61330) during their con=ugal union, as &ell as the house that &as constructed thereonG that &hen Aaria Aesina died on *< 3ugust 1,99, leaving no de't, 3urelio (as surviving s0ouse) &as entitled to P share 0ro)indiviso of the con=ugal 0ro0ert" (i-e- house and lot) and that 3urelio and his 4 children &ere entitled to 1B6 share 0ro)indiviso each of the P share 0ro)indiviso for/ing the estate of Aaria AesinaG ordering the 0artition of the 0ro0ertiesG and dis/issing 3urelio;s clai/ for /oral, e4e/0lar" and actual da/ages and attorne";s feesG &ithout 0ronounce/ent as to costs- %n * June 1,+,, the decision 'eca/e final and e4ecutor"G &ith the corres0onding entr" of =udg/ent /ade *, Aarch 1,+,- %n 6 %cto'er 1,+,, the (egister of Deeds of Aanila issued T T 1369+1 (&ith 3urelio (o.ue having 9B10 shareG and the (o.ue children &ith 1B10 share each)%n 1 30ril 1,<0, 3urelio sold his 9B10 share in T T 1369+1 to s0ouses 3urora Tua2on)(e0u"an and Jose (e0u"an as evidenced '" a 7Deed of 3'solute !ale-8 %n *1 Jul" 1,<0, 3urora Tua2on (e0u"an caused the annotation of her affidavit of adverse clai/ on the T T 1369+1, 7clai/ing that she 'ought 9B10 0ortion of the 0ro0ert" fro/ 3urelio (o.ue for the a/ount of P60,000-00 &ith a do&n0a"/ent of P6,000-00 and the 'alance of P46,000-00 to 'e 0aid after the 0artition and su'division of the 0ro0ert"-8 %n *0 3ugust 1,<0, 3urelio (o.ue filed a co/0laint for 7(escission of ontract8 against s0ouses (e0u"an 'efore the then F5 Aanila (Dranch 51, ivil ase 134131)- The co/0laint is grounded on s0ouses (e0u"an;s failure to 0a" the 'alance of P46,000-00 of the 0urchase 0rice- %n 6 !e0te/'er 1,<0, s0ouses (e0u"an filed their ans&er &ith counterclai/5n the /eanti/e, the trial court issued an order in ivil ase 10,03* (Partition case) dated * Fe'ruar" 1,<*, ordering the De0ut" ler@ of the court to sign the deed of a'solute sale for and in 'ehalf of (o.ue children 0ursuant to !ection 10, (ule 3, of the (ules of ourt, in order to effect the 0artition of the 0ro0ert" involved in the case (P100,000 0urchase 0rice for the <4 s.- /s- 5n alle=on !ulu, !ta- ru2, Aanila is reasona'le and fairG and that o00ortunities have 'een given to the children to sign the deed voluntaril")- 3 deed of a'solute sale &as e4ecuted on 4 Fe'ruar" 1,<* 'et&een 3urelio, ora2on, Feliciano, !evera and %s/undo (o.ue and lara Dalat'at, /arried to 3le=andro Dalat'at- %n 14 30ril 1,<*, lara Dalat'at filed a /otion for the issuance of a &rit of 0ossession &hich &as granted '" the trial court on 14 !e0te/'er 1,<* 7su'=ect, ho&ever, to valid rights and interest of third 0ersons over the sa/e 0ortion thereof, other than vendor or an" other 0erson or 0ersons 0riv" to or clai/ing an" rights or interest under it-8 The corres0onding &rit of 0ossession &as issued on *0 !e0te/'er 1,<*%n *0 Aa" 1,<*, lara Dalat'at filed a /otion to intervene in ivil ase 134131 &hich &as granted as 0er court;s resolution of *1 %cto'er 1,<*- #o&ever, lara Dalat'at failed to file her co/0laint in intervention- %n 16 30ril 1,<9, the trial court rendered a decision dis/issing the co/0laint, and declaring the Deed of 3'solute !ale dated 1 30ril 1,<0 as valid and enforcea'le and 3urelio is, as he is here'" ordered, to 0artition and su'divide the land covered '" T T 1369+1, and to aggregate therefro/ a 0ortion e.uivalent to 9B10 thereof, and cause the sa/e to 'e titled in the na/e of s0ouses (e0u"an, and after &hich, the latter to 0a" 3urelio the su/ of P46,000-00- onsidering further that the s0ouses suffered da/ages since the" &ere forced to litigate unnecessaril", '" &a" of their counterclai/, 3urelio is here'" ordered to 0a" the s0ouses the su/ of P16,000-00 as /oral da/ages, attorne";s fees in the a/ount of P6,000-00G &ith costs against 3urelio%n 3 Aarch 1,<+, Dalat'at filed a notice of lis 0endens in ivil ase 10,03* 'efore the (egister of Deeds of
.a+es" /001 ( 1! )
Aanila%n , Dece/'er 1,<<, Dalat'at and her hus'and filed a co/0laint for deliver" of the o&ners du0licate co0" of T T 1369+1 'efore the (T Aanila (Dranch *4, ivil ase <<)4+1+9) against Jose and 3urora (e0u"an- %n *+ Januar" 1,<,, s0ouses (e0u"an filed their ans&er &ith affir/ative defenses and co/0ulsor" counterclai/The (e0u"ans and the Dalat'ats su'/itted their /e/oranda on 13 $ove/'er 1,<, and *3 $ove/'er 1,<,, res0ectivel"- %n * 3ugust 1,,0, the (T Aanila rendered a decision dis/issing the co/0laint, finding that the Dalat'ats &ere not a'le to esta'lish their cause of action against the (e0u"ans and have no right to the reliefs de/anded in the co/0laint, and ordering Dalat'at to 0a" the (e0u"ans the a/ount of P10,000 as attorne";s fees, P6,000 as costs of litigation, and to 0a" the costs of the suitDissatisfied, Dalat'at filed an a00eal 'efore the ourt of 300eals ( 3)F( 1 *,,,4) &hich rendered decision on 1* 3ugust 1,,*, affir/ing the =udg/ent a00ealed fro/ &ith /odification deleting the a&ards of P10,000 for atto/e";s fees and P6,000 as costs of litigation- %n ** Aarch 1,,3, the ourt of 300eals denied Dalat'at;s /otion for reconsideration- #ence, the 0etition for revie& 0ursuant to (ule 46 of the (evised (ules of ourtThe !u0re/e ourt dis/issed the 0etition for revie& for lac@ of /eritG &ithout 0ronounce/ent as to costs1. 1 Apr(+ 1#80 sa+e consummate'" va+(' an' en-orcea +e The sale dated 1 30ril 1,<0 in favor the (e0u"an s0ouses is consu//ated, hence, valid and enforcea'leG not /erel" e4ecutor" for the reason that there &as no deliver" of the su'=ect 0ro0ert" and that considerationB0rice &as not full" 0aid- 5n a decision dated 16 30ril 1,<9 of the (T Aanila (Dranch 51, ivil ase 134131), the ourt dis/issed 3urelio co/0laint for rescission of the deed of sale and declared that the sale dated 1 30ril 1,<0, as valid and enforcea'le- $o a00eal having 'een /ade, the decision 'eca/e final and e4ecutor"- 5t /ust 'e noted that Dalat'at filed a /otion for intervention in that case 'ut did not file her co/0laint in intervention/. 1 Apr(+ 1#80 Dee' o- .a+e 'evo(' o- st(pu+at(on ,(t**o+'(n) o,ners*(p o- t*(n) unt(+ -u++ payment3 >,ners*(p pass upon 'e+(very o- t*(n) so+' even (- purc*ase pr(ce not -u++y pa(' The ter/s and conditions of the 7Deed of !ale8 dated 1 30ril 1,<0, the P46,000-00 'alance is 0a"a'le onl" after the 0ro0ert" covered '" T T 1369+1 has 'een 0artitioned and su'divided, and title issued in the na/e of the 'u"er hence, the vendor cannot de/and 0a"/ent of the 'alance unless and until the 0ro0ert" has 'een su'divided and titled in the na/e of the (e0u"an s0ouses- Devoid of an" sti0ulation that 7o&nershi0 in the thing shall not 0ass to the 0urchaser until he has full" 0aid the 0rice8, o&nershi0 in the thing shall 0ass fro/ the vendor to the vendee u0on actual or constructive deliver" of the thing sold even if the 0urchase 0rice has not "et 'een full" 0aid1. NonDpayment (n a contract o- sa+e mere+y creates r()*t to 'eman' -u+-(++ment o- o +()at(on or resc(ss(on o- contract3 Art(c+e 11#1 The failure of the 'u"er to /a@e good the 0rice does not, in la&, cause the o&nershi0 to revest to the seller unless the 'ilateral contract of sale is first rescinded or resolved 0ursuant to 3rticle 11,1 of the $e& ivil ode- $on)0a"/ent onl" creates a right to de/and the fulfill/ent of the o'ligation or to rescind the contract:ith res0ect to the non)deliver" of the 0ossession of the su'=ect 0ro0ert" to the 0rivate res0ondent, suffice it to sa" that o&nershi0 of the thing sold is ac.uired onl" fro/ the ti/e of deliver" thereof, either actual or constructive- *< 4. >,ners*(p o- a t*(n) so+' ac2u(re' -rom t(me o- actua+ or construct(ve 'e+(very3 Bossess(on opu +(c (nstrument o- t*e +an' accor's uyer r()*ts o- o,ners*(p 3rticle 14,< of the ivil ode 0rovides that J &hen the sale is /ade through a 0u'lic instru/ent,
.a+es" /001 ( 18 )
the e4ecution thereof shall 'e e.uivalent to the deliver" of the thing &hich is the o'=ect of the contract, if fro/ the deed the contrar" does not a00ear or cannot 'e inferred- The e4ecution of the 0u'lic instru/ent, &ithout actual deliver" of the thing, transfers the o&nershi0 fro/ the vendor to the vendee, &ho /a" thereafter e4ercise the rights of an o&ner over the sa/e- 5t is not necessar" that vendee 'e 0h"sicall" 0resent at ever" s.uare inch of the land 'ought '" hi/, 0ossession of the 0u'lic instru/ent of the land is sufficient to accord hi/ the rights of o&nershi0- Thus, deliver" of a 0arcel of land /a" 'e done '" 0lacing the vendee in control and 0ossession of the land (real) or '" e/'od"ing the sale in a 0u'lic instru/ent (constructive)- 5n the 0resent case, vendor (o.ue delivered the o&ner;s certificate of title to the (e0u"an s0ouses$. Necess(ty o- pu +(c 'ocument mere+y -or conven(ence" an' not -or va+('(ty or en-orcea (+(ty o- a contract o- sa+e The 0rovision of 3rticle 136< on the necessit" of a 0u'lic docu/ent is onl" for convenience, not for validit" or enforcea'ilit"- 5t is not a re.uire/ent for the validit" of a contract of sale of a 0arcel of land that this 'e e/'odied in a 0u'lic instru/ent:. Contract o- sa+e consensua+" per-ecte' y mere consent o- t*e part(es3 NonDpayment 'oes not ren'er sa+e nu++ an' vo(' -or +ack o- cons('erat(on 3 contract of sale 'eing consensual, it is 0erfected '" the /ere consent of the 0arties- Deliver" of the thing 'ought or 0a"/ent of the 0rice is not necessar" for the 0erfection of the contractG and failure of the vendee to 0a" the 0rice after the e4ecution of the contract does not /a@e the sale null and void for lac@ of consideration 'ut results at /ost in default on the 0art of the vendee, for &hich the vendor /a" e4ercise his legal re/edies!. Bresent case (s a 'ou +e sa+e The 0resent case is a case of dou'le sale conte/0lated under 3rticle 1644 of the $e& ivil ode- 5n the 0resent case, 3urelio (o.ue sold 9B10 0ortion of his share in T T 1369+1 to the (e0u"an s0ouses on 1 30ril 1,<0- !u'se.uentl", the sa/e lot &as sold again '" vendor 3urelio (o.ue (9B10) and his children (4B10), re0resented '" the ler@ of ourt 0ursuant to !ection 10, (ule 3, of the (ules of ourt, on 4 Fe'ruar" 1,<*8. Art(c+e 1$443 Dou +e sa+e 3rticle 1644 of the $e& ivil ode 0rovides that 7if the sa/e thing should have 'een sold to different vendees, the o&nershi0 shall 'e transferred to the 0erson &ho /a" have first ta@en 0ossession thereof in good faith, if it should 'e /ova'le 0ro0ert"- !hould it 'e /ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"- !hould there 'e no inscri0tion, the o&nershi0 shall 0ertain to the 0erson &ho in good faith &as first in the 0ossession and in the a'sence thereof, to the 0erson &ho 0resent the oldest title, 0rovided there is good faith-8 3rticle 1644 of the ivil ode 0rovides that in case of dou'le sale of an i//ova'le 0ro0ert", o&nershi0 shall 'e transferred (1) to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"G (*) in default thereof, to the 0erson &ho in good faith &as first in 0ossessionG and (3) in default thereof, to the 0erson &ho 0resents the oldest title, 0rovided there is good faith#. >,ners*(p vests (n person ,*o ac2u(re' t*e (mmova +e property (n )oo' -a(t* an' ,*o -(rst recor'e' (t (n t*e Re)(stry o- Broperty3 Annotat(on o- a'verse c+a(m su--(c(ent 5n an instance of a dou'le sale of an i//ova'le 0ro0ert", the o&nershi0 shall vests in the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"- 5n the 0resent case, the (e0u"an s0ouses caused the annotation of an adverse clai/ on the title of the su'=ect 0ro0ert" deno/inated as >ntr" 69*+BT)1369+1 on *1 Jul" 1,<0- The annotation of the adverse clai/ on T T 1369+1 in the (egistr" of Pro0ert" is sufficient co/0liance as /andated '" la& and serves notice to the &hole &orld- Dalat'at, on the other hand, filed a notice of lis 0endens onl" on * Fe'ruar" 1,<*- 3ccordingl", the (e0u"an s0ouses &ho first caused the annotation of the adverse clai/ in good faith shall have a 'etter right over Dalat'at.a+es" /001 ( 1# )
10.
Bossess(on o- Ba+at at mere+y prov(s(onary The 0h"sical 0ossession of Dalat'at '" virtue of a &rit of 0ossession issued '" the trial court on *0 !e0te/'er 1,<* is 7su'=ect to the valid rights and interest of third 0ersons over the sa/e 0ortion thereof, other than vendor or an" other 0erson or 0ersons 0riv" to or clai/ing an" rights to interest under it-8 11. %(rst re)(strant" -(rst (n possess(on" e+se o+'est t(t+e 3s 'et&een t&o 0urchasers, the one &ho has registered the sale in his favor, has a 0referred right over the other &ho has not registered his title even if the latter is in actual 0ossession of the i//ova'le 0ro0ert">ven in default of the first registrant or first in 0ossession, the (e0u"an s0ouses have 0resented the oldest title- Thus, the s0ouses &ho ac.uired the su'=ect 0ro0ert" in good faith and for valua'le consideration esta'lished a su0erior right as against Dalat'at1/. Due '(+()ence (n t*e purc*ase o- rea+ estate re2u(re' to a++e)e )oo' -a(t* 5t is incu/'ent u0on the vendee of the 0ro0ert" to as@ for the deliver" of the o&ner;s du0licate co0" of the title fro/ the vendor- 3 0urchaser of a valued 0iece of 0ro0ert" cannot =ust close his e"es to facts &hich should 0ut a reasona'le /an u0on his guard and then clai/ that he acted in good faith and under the 'elief that there &ere no defect in the title of the vendor- %ne &ho 0urchases real estate &ith @no&ledge of a defect or lac@ of title in his vendor cannot clai/ that he has ac.uired title thereto in good faith as against the true o&ner of the land or of an interest thereinG and the sa/e rule /ust 'e a00lied to one &ho has @no&ledge of facts &hich should have 0ut hi/ u0on such in.uir" and investigation as /ight 'e necessar" to ac.uaint hi/ &ith the defects in the title of his vendor- Food faith, or the &ant of it is not a visi'le, tangi'le fact that can 'e seen or touched, 'ut rather a state or condition of /ind &hich can onl" 'e =udged of '" actual or fancied to@ens or signs11. Ba+at at not a uyer (n )oo' -a(t* Dalat'at cannot 'e considered as a 'u"er in good faith- 5n the co/0laint for rescission filed '" 3urelio (o.ue on *0 3ugust 1,<0, Dalat'at filed a /otion for intervention on *0 Aa" 1,<* 'ut did not file her co/0laint in intervention, hence, the decision &as rendered adversel" against her- 5f Dalat'at did investigate 'efore 'u"ing the land on 4 Fe'ruar" 1,<*, she should have @no&n that there &as a 0ending case and an annotation of adverse clai/ &as /ade in the title of the 0ro0ert" 'efore the (egister of Deeds and she could have discovered that the su'=ect 0ro0ert" &as alread" sold to the (e0u"an s0ouses14. Gross ne)+()ence e2uva+ent to (ntent(ona+ ,ron) Dalat'at had no'od" to 'la/e 'ut herself in dealing &ith the dis0uted 0ro0ert" for failure to in.uire or discover a fla& in the title to the 0ro0ert", thus, it is a4io/atic that J cul0a lata dolo ae.ui0aratur J gross negligence is e.uivalent to intentional &rong[14] Ca+(m+(mDCanu++as v. %ortun [G.R. No. $!4##. Fune //" 1#84.] First Division, Aelencio)#errera (J): 6 concurring %acts& Aercedes ali/li/) anullas and Fernando anullas &ere /arried on 1, Dece/'er 1,9*- The" 'egot five children- The" lived in a s/all house on the residential land in .uestion &ith an area of a00ro4i/atel" <,1 s.- /-, located at Daca'ac, Dugallon, Pangasinan- 3fter anullas; father died in 1,96, he inherited the land- 5n 1,+<, anullas a'andoned his fa/il" and lived &ith ora2on Daguines- %n 16 30ril 1,<0, anullas sold the su'=ect 0ro0ert" &ith the house thereon to Daguines for the su/ of P*,000-00- 5n the docu/ent of sale, anullas descri'ed the house as 7also inherited '" /e fro/ /" deceased 0arents-8 ?na'le to ta@e 0ossession of the lot and house, Daguines initiated a co/0laint 'eore the F5 Pangasinan (Dranch 1, ivil ase 169*0) on 1, June 1,<0 for .uieting of title and da/ages against ali/li/) anullas- ali/li/)
.a+es" /001 ( 40 )
anullas resisted and clai/ed that the house in dis0ute &here she and her children &ere residing, including the coconut trees on the land, &ere 'uilt and 0lanted &ith con=ugal funds and through her industr"G that the sale of the land together &ith the house and i/0rove/ents to Daguines &as null and void 'ecause the" are con=ugal 0ro0erties and she had not given her consent to the sale- %n 9 %cto'er 1,<0, the trial court ruled in favor of Daguines as the la&ful o&ner of the land as &ell as P of the house erected on the land- ?0on reconsideration and on *+ $ove/'er 1,<0, ho&ever, the lo&er court /odified the =udg/ent '" declaring Daguines as the la&ful o&ner of the land and 10 coconut trees thereon 'ut declaring the sale of the con=ugal house including 3 coconuts and other cro0s during the con=ugal relation of the s0ouses null and void- 3 0etition for revie& on certiorari &as filed &ith !u0re/e ourtDuring the 0endenc" of the a00eal, ho&ever, Fernando anullas and ora2on Daguines &ere convicted of concu'inage in a =udg/ent rendered on *+ %cto'er 1,<1 '" the then F5 Pangasinan, Dranch 55, &hich =udg/ent has 'eco/e finalThe !u0re/e ourt set aside the decision and resolution of the lo&er court, and declared the sale of the lot, house and i/0rove/ents null and voidG &ithout costs1. @an' an' u(+'(n) e+on)s to t*e con8u)a+ partners*(p" spouse o,n(n) t*e +an' ecomes t*e cre'(tor o- t*e con8u)a+ partners*(p Pursuant to the second 0aragra0h of 3rticle 16< of the ivil ode, &hich 0rovides that 7'uildings constructed at the e40ense of the 0artnershi0 during the /arriage on land 'elonging to one of the s0ouses also 0ertain to the 0artnershi0, 'ut the value of the land shall 'e rei/'ursed to the s0ouse &ho o&ns the sa/e,8 'oth the land and the 'uilding 'elong to the con=ugal 0artnershi0 'ut the con=ugal 0artnershi0 is inde'ted to the hus'and for the value of the land- The s0ouse o&ning the lot 'eco/es a creditor of the con=ugal 0artnershi0 for the value of the lot, &hich value &ould 'e rei/'ursed at the li.uidation of the con=ugal 0artnershi0/. Ba'(++a v. Baterno (s etter ru+e t*an 9aram a v. @oCano3 .pouse cannot a+(enate property ,(t*out t*e consent o- t*e ot*er 5n the case of Aara/'a vs- Lo2ano, it &as held that the land 'elonging to one of the s0ouses, u0on &hich the s0ouses have 'uilt a house, 'eco/es con=ugal 0ro0ert" onl" &hen the con=ugal 0artnershi0 is li.uidated and inde/nit" 0aid to the o&ner of the land- The 'etter rule, ho&ever, is that held in Padilla vsPaterno, &here the conversion of the 0ro0erties fro/ 0ara0hernal to con=ugal assets should 'e dee/ed to retroact to the ti/e the con=ugal 'uildings &ere first constructed thereon or at the ver" latest, to the ti/e i//ediatel" 'efore the death of one s0ouse that ended the con=ugal 0artnershi0- The" can not 'e considered to have 'eco/e con=ugal 0ro0ert" onl" as of the ti/e their values &ere 0aid to the estate of the &ido& 'ecause '" that ti/e the con=ugal 0artnershi0 no longer e4isted and it could not ac.uire the o&nershi0 of said 0ro0erties- The ac.uisition '" the 0artnershi0 of the 0ro0erties &as, under the 1,43 decision, su'=ect to the sus0ensive condition that their values &ould 'e rei/'ursed to the &ido& at the li.uidation of the con=ugal 0artnershi0G once 0aid, the effects of the fulfill/ent of the condition should 'e dee/ed to retroact to the date the o'ligation &as constituted (3rticle 11<+, $e& ivil ode)- Thus, in the 0resent case, considering the foregoing 0re/ises, anullas cannot have alienated the house and lot to Daguines since the &ife had not given her consent to the sale1. Contract o- sa+e nu++ an' vo(' -or e(n) contrary to mora+s an' pu +(c po+(cy 3rticle 140, of the ivil ode 0rovides 7contracts &hose cause, o'=ect, or 0ur0ose is contrar" to la&, /orals, good custo/s, 0u'lic order, or 0u'lic 0olic" are void and ine4istent fro/ the ver" 'eginning-8 3rticle 136* also 0rovides that 7contracts &ithout cause, or &ith unla&ful cause, 0roduce no effect &hatsoever- The cause is unla&ful if it is contrar" to la&, /orals, good custo/s, 0u'lic order, or 0u'lic 0olic"-8 5n the 0resent case, the contract of sale &as null and void for 'eing contrar" to /orals and 0u'lic 0olic"- The sale &as /ade '" a hus'and in favor of a concu'ine after he had a'andoned his fa/il" and left the con=ugal ho/e &here his
.a+es" /001 ( 41 )
&ife and children lived and fro/ &hence the" derived their su00ort- That sale &as su'versive of the sta'ilit" of the fa/il", a 'asic social institution &hich 0u'lic 0olic" cherishes and 0rotects4. @a, pro*( (ts sa+e an' 'onat(on et,een *us an' an' ,(-e" suc* app+(es even t*ose +(v(n) to)et*er ,(t*out ene-(t o- marr(a)e The la& 0rohi'its the s0ouses fro/ selling 0ro0ert" to each other su'=ect to certain e4ce0tions!i/ilarl", donations 'et&een s0ouses during /arriage are 0rohi'ited- 3nd this is so 'ecause if transfers or conve"ances 'et&een s0ouses &ere allo&ed during /arriage, that &ould destro" the s"ste/ of con=ugal 0artnershi0, a 'asic 0olic" in civil la&- 5t &as also designed to 0revent the e4ercise of undue influence '" one s0ouse over the other, as &ell as to 0rotect the institution of /arriage, &hich is the cornerstone of fa/il" la&The 0rohi'itions a00l" to a cou0le living as hus'and and &ife &ithout 'enefit of /arriage, other&ise, 7the condition of those &ho incurred guilt &ould turn out to 'e 'etter than those in legal union-8 Those 0rovisions are dictated '" 0u'lic interest and their criterion /ust 'e i/0osed u0on the &ill of the 0arties- ()uenaventura v. )autista *CA+( $. D(sa (+(t(es attac*e' to marr(a)e a+so app+(es to concu (na)e The ruling in Duenaventura vs- Dautista K 3L &as cited in Aata'uena vs- ervantes, reiterating that &hile 3rticle 133 of the ivil ode considers as void a donation 'et&een the s0ouses during the /arriage, 0olic" considerations of the /ost e4igent character as &ell as the dictates of /oralit" re.uire that the sa/e 0rohi'ition should a00l" to a co//on)la& relationshi0- 5f the 0olic" of the la& is to 0rohi'it donations in favor of the other consort and his descendants 'ecause of fear of undue influence and i/0ro0er 0ressure u0on the donor, a 0re=udice dee0l" rooted in our ancient la&, then there is ever" reason to a00l" the sa/e 0rohi'itive 0olic" to 0ersons living together as hus'and and &ife &ithout 'enefit of nu0tials- For it is not to 'e dou'ted that assent to such irregular connection for thirt" "ears 'es0ea@s greater influence of one 0art" over the other, so that the danger that the la& see@s to avoid is corres0ondingl" increased- Aoreover, as 0ointed out '" ?l0ian, it &ould not 'e =ust that such donations should su'sist, lest the conditions of those &ho incurred guilt should turn out to 'e 'etter- !o long as /arriage re/ains the cornerstone of our fa/il" la&, reason and /oralit" ali@e de/and that the disa'ilities attached to /arriage should li@e&ise attach to concu'inage[1$] Car one++ vs. CA [G.R. No. @D/##!/. Fanuary /:" 1#!:.] First Division, Aa@asiar (J): 3 concurring %acts& Prior to *+ Januar" 1,66, Jose Poncio, a native of the Datanes 5slands, &as the o&ner of the 0arcel of land &ith i/0rove/ents situated at 1+, 1- 3gan !t-, !an Juan, (i2al, having an area of so/e 1,6 s.uare /eters, /ore or less, covered '" T T 6040 and su'=ect to a /ortgage in favor of the (e0u'lic !avings Dan@ for the su/ of P1,600-00- (osario ar'onell, a cousin and ad=acent neigh'or of Poncio, and also fro/ the Datanes 5slands, lived in the ad=oining lot at 1++ 1- 3gan !treet- Doth (osario ar'onell and >//a 5nfante offered to 'u" the said lot fro/ Poncio- Poncio, una'le to @ee0 u0 &ith the install/ents due on the /ortgage, a00roached ar'onell one da" and offered to sell to the latter the said lot, e4cluding the house &herein he lived- ar'onell acce0ted the offer and 0ro0osed the 0rice of P,-60 0er s.uare /eter- Poncio, after having secured the consent of his &ife and 0arents, acce0ted the 0rice 0ro0osed '" ar'onell, on the condition that fro/ the 0urchase 0rice &ould co/e the /one" to 'e 0aid to the 'an@- ar'onell and Poncio &ent to the 'an@ and secured the consent of the President thereof for her to 0a" the arrears on the /ortgage and to continue the 0a"/ent of the install/ents as the" fall due- The a/ount in arrears reached a total su/ of P*4+-*9- Dut 'ecause Poncio had 0reviousl" told her that the /one" needed &as onl" P*00, onl" the latter a/ount &as 'rought '" ar'onell constraining res0ondent Poncio to &ithdra& the su/ of P4+ fro/ his 'an@ de0osit &ith (e0u'lic !avings Dan@- The ne4t da", ar'onell refunded to Poncio the su/ of P4+- %n *+ Januar" 1,66, ar'onell and Poncio, in the 0resence of a &itness, /ade and e4ecuted a docu/ent in the Datanes dialect, allo&ing Poncio to occu0" the land sold &ithin one "ear, and /a" continue occu0"ing the site &ith rent
.a+es" /001 ( 4/ )
thereafter if could not find an" 0lace to /ove his house- Thereafter, ar'onell as@ed 3tt"- !alvador (e"es, also fro/ the Datanes 5slands, to 0re0are the for/al deed of sale, &hich she 'rought to Poncio together &ith the a/ount of so/e P400, the 'alance she still had to 0a" in addition to her assu/ing the /ortgage o'ligation to (e0u'lic !avings Dan@- ?0on arriving at Poncio;s house, ho&ever, the latter told ar'onell that he could not 0roceed an" /ore &ith the sale, 'ecause he had alread" given the lot to >//a 5nfante (and (a/on 5nfante)G and that he could not &ithdra& fro/ his deal &ith 5nfante, even if he &ere to go to =ail- ar'onell then sought to contact 5nfante, 'ut the latter refused to see her- %n 6 Fe'ruar" 1,66, ar'onell sa& 5nfante erecting a &all around the lot &ith a gatear'onell then consulted 3tt"- Jose Farcia, &ho advised her to 0resent and adverse clai/ over the land in .uestion &ith the %ffice of the (egister of Deeds (i2al- 3tt"- Farcia actuall" sent a letter of in.uir" to the (egister of Deeds and de/and letters to Jose Poncio and >//a 5nfante- 5n his ans&er to the co/0laint, Poncio ad/itted 7that on 30 Januar" 1,66, 5nfante i/0roved her offer and he agreed to sell the land and its i/0rove/ents to her for P3,636-00- 5n a 0rivate /e/orandu/ agree/ent dated 31 Januar" 1,66, Poncio indeed 'ound hi/self to sell to 5nfante, the 0ro0ert" for the su/ of P*,36+-6*, &ith 5nfante still assu/ing the e4isting /ortgage de't in favor of (e0u'lic !avings Dan@ in the a/ount of P1,1++-4<- 5nfante lives =ust 'ehind the houses of Poncio and ar'onell- %n * Fe'ruar" 1,66, Poncio e4ecuted the for/al deed of sale in favor of 5nfante in the total su/ of P3,664-00 and on the sa/e date, the latter 0aid (e0u'lic !avings Dan@ the /ortgage inde'tedness of P1,600-00- The /ortgage on the lot &as eventuall" discharged- 5nfor/ed that the sale in favor of 5nfante had not "et 'een registered, 3tt"- Farcia 0re0ared an adverse clai/ for ar'onell, &ho signed and s&ore to and registered the sa/e on < Fe'ruar" 1,66- The deed of sale in favor of 5nfante &as registered onl" on 1* Fe'ruar" 1,66- 3s a conse.uence thereof, a T T &as issued to her 'ut &ith the annotation of the adverse clai/ of ar'onell- 5nfante too@ i//ediate 0ossession of the lot involved, covered the sa/e &ith 600 cu'ic /eters of garden soil and 'uilt therein a &all and gate, s0ending the su/ of P1,600!he further contracted the services of an architect to 'uild a houseG 'ut the construction of the sa/e started onl" in 1,6,, "ears after the litigation actuall" 'egan and during its 0endenc"- 5nfante s0ent for the house the total a/ount of P11,,*,%n 1 June 1,66, ar'onell, thru counsel, filed a second a/ended co/0laint against Poncio and 5nfante, 0ra"ing that she 'e declared the la&ful o&ner of the .uestioned 0arcel of landG that the su'se.uent sale to 5nfante 'e declared null and void, and that Poncio 'e ordered to e4ecute the corres0onding deed of conve"ance of said land in her favor and for da/ages and attorne";s fees- Poncio and 5nfante first /oved to dis/iss the co/0laint on the ground, a/ong others, that ar'onell;s clai/ is unenforcea'le under the !tatute of Frauds, the alleged sale in her favor not 'eing evidenced '" a &ritten docu/entG and &hen said /otion &as denied &ithout 0re=udice to 0assing on the .uestion raised therein &hen the case &ould 'e tried on the /erits, Poncio and 5nfante filed se0arate ans&ers, reiterating the grounds of their /otion to dis/iss- 5n its order of *9 30ril 1,99, the trial court sustained the o'=ection and dis/issed the co/0laint on the ground that the /e/orandu/ 0resented '" ar'onell to 0rove said sale does not satisf" the re.uire/ents of the la&Fro/ the a'ove order of dis/issal, ar'onnel a00ealed to the !u0re/e ourt (F( L)11*31) &hich ruled in a decision dated 1* Aa" 1,6<, that the !tatute of Frauds, 'eing a00lica'le onl" to e4ecutor" contracts, does not a00l" to the alleged sale 'et&een ar'onell and Poncio, &hich ar'onell clai/ed to have 'een 0artiall" 0erfor/ed, so that ar'onell is entitled to esta'lish '" 0arol evidence 7the truth of this allegation, as &ell as the contract itself-8 The order a00ealed fro/ &as thus reversed, and the case re/anded to the court a .uo for further 0roceedings3fter trial in the court a .uo, a decision &as rendered on 6 Dece/'er 1,9*, declaring the second sale '" Poncio to 5nfante of the land in .uestion null and void and ordering Poncio to e4ecute the 0ro0er deed of conve"ance of said land in favor of ar'onell after co/0liance '" the latter of her covenants under her agree/ent &ith Poncio- %n *3 Januar" 1,93, 5nfante, through another counsel, filed a /otion for re)trial to adduce evidence for the 0ro0er i/0le/entation of the court;s decision in case it &ould 'e affir/ed on a00eal,
.a+es" /001 ( 41 )
&hich /otion &as o00osed '" ar'onell for 'eing 0re/ature- Defore their /otion for re)trial could 'e resolved, 5nfante, this ti/e through their for/er counsel, filed another /otion for ne& trial, clai/ing that the decision of the trial court is contrar" to the evidence and the la&, &hich /otion &as also o00osed '" ar'onell- The trial court granted a ne& trial, at &hich re)hearing onl" 5nfante introduced additional evidence consisting 0rinci0all" of the cost of i/0rove/ents the" introduced on the land in .uestion- 3fter the re) hearing, the trial court rendered a decision, reversing its decision of 6 Dece/'er 1,9* on the ground that the clai/ of 5nfante &as su0erior to the clai/ of ar'onell, and dis/issing the co/0laintW- Fro/ this decision, ar'onell a00ealed to the ourt of 300eals%n * $ove/'er 1,9+, the ourt of 300eals (Fifth Division co/0osed of Justices Aagno Fat/aitan, !alvador 1- >sguerra and 3ngel #- Ao=ica, s0ea@ing through Justice Aagno Fat/aitan), rendered =udg/ent reversing the decision of the trial court, declaring ar'onell to have a su0erior right to the land in .uestion, and conde/ning 5nfante to reconve" to ar'onell, after her rei/'urse/ent to the/ of the su/ of P3,000 0lus legal interest, the land in .uestion and all its i/0rove/ents5nfante sought reconsideration of said decision and acting on the /otion for reconsideration, the 300ellate ourt, three Justices (1illa/or, >sguerra and $olasco), of !0ecial Division of Five, granted said /otion, annulled and set aside its decision of * $ove/'er 1,9+, and entered another =udg/ent affir/ing in toto the decision of the court a .uo, &ith Justices Fat/aitan and (odrigue2 dissenting- ar'onell /oved to reconsider the (esolution of the !0ecial Division of Five, &hich /otion &as denied '" Ainute (esolution of 9 Dece/'er 1,9< ('ut &ith Justices (odrigue2 and Fat/aitan voting for reconsideration)- #ence, this a00eal '" certiorariThe !u0re/e ourt reversed the decision of the s0ecial division of five of the court of a00eals of 30 %cto'er 1,9<G declared ar'onell to have the su0erior right to the land in .uestion and directed ar'onell to rei/'urse to 5nfante the su/ of P1,600 &ithin 3 /onths fro/ the finalit" of the decisionG directed the (egister of Deeds of (i2al to cancel T T 3+<4* issued in favor of 5nfante covering the dis0uted lot, &hich cancelled T T 6040 in the na/e of Poncio, and to issue a ne& T T in favor of ar'onell u0on 0resentation of 0roof of 0a"/ent '" her to 5nfante of the aforesaid a/ount- 5nfante /a" re/ove their useful i/0rove/ents fro/ the lot &ithin 3 /onths fro/ the finalit" of this decision, unless ar'onell elects to ac.uire the sa/e and 0a" 5nfante the a/ount of P13,4*, &ithin 3 /onths fro/ the finalit" of the decision- !hould ar'onell fail to 0a" the said a/ount &ithin the 0eriod of 3 /onths fro/ the finalit" of the decision, the 0eriod of 3 /onths &ithin &hich 5nfante /a" re/ove their useful i/0rove/ents shall co//ence fro/ the e40iration of the 3 /onths given ar'onell to 0a" for the said useful i/0rove/entsG &ith costs against Poncio and 5nfante1. Dou +e sa+e3 Art(c+e 1$44 3rticle 1644, $e& ivil ode, &hich is decisive of this case, recites 75f the sa/e thing should have 'een sold to different vendees, the o&nershi0 shall 'e transferred to the 0erson &ho /a" have first ta@en 0ossession thereof in good faith, if it should 'e /ova'le 0ro0ert"- !hould it 'e i//ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"- !hould there 'e no inscri0tion, the o&nershi0 shall 0ertain to the 0erson &ho in good faith &as first in the 0ossessionG and, in the a'sence thereof, to the 0erson &ho 0resents the oldest title, 0rovided there is good faith-8 /. Goo' -a(t* essent(a+ (n re)(ster(n) 'ee' o- sa+e 5t is essential that the 'u"er of realt" /ust act in good faith in registering his deed of sale to /erit the 0rotection of the second 0aragra0h of said 3rticle 1644- ?nli@e the first and third 0aragra0hs of said 3rticle 1644, &hich accord 0reference to the one &ho first ta@es 0ossession in good faith of 0ersonal or real 0ro0ert", the second 0aragra0h directs that o&nershi0 of i//ova'le 0ro0ert" should 'e recogni2ed in favor of one 7&ho in good faith first recorded8 his right- ?nder the first and third 0aragra0hs, good faith /ust characteri2e the 0rior 0ossession- ?nder the second 0aragra0h, good faith /ust characteri2e the act of anterior registration
.a+es" /001 ( 44 )
(DDP vs- Aanga&ang, et al-, 11 ! (3 406G !oriano, et al- vs- Aagale, et al-, < ! (3 4<,)1. Dec(s(ve -act (- t*ere (s no (nscr(pt(on" or (- t*ere (s (nscr(pt(on 5f there is no inscri0tion, &hat is decisive is 0rior 0ossession in good faith- 5f there is inscri0tion, as in the 0resent case, 0rior registration in good faith is a 0re)condition to su0erior title4. Car one++=s pr(or purc*ase an' re)(strat(on (n )oo' -a(t* :hen ar'onell 'ought the lot fro/ Poncio on *+ Januar" 1,66, she &as the onl" 'u"er thereof and the title of Poncio &as still in his na/e solel" encu/'ered '" 'an@ /ortgage dul" annotated thereonar'onell &as not a&are of an" sale to 5nfante as there &as no such sale to 5nfante then- #ence, ar'onell;s 0rior 0urchase of the land &as /ade in good faith- #er good faith su'sisted and continued to e4ist &hen she recorded her adverse clai/ 4 da"s 0rior to the registration of 5nfante;s deed of sale- ar'onell;s good faith did not cease after Poncio told her on 31 Januar" 1,66 of his second sale of the sa/e lot to 5nfante- Decause of that infor/ation, ar'onell &anted an audience &ith 5nfante, &hich desire underscores ar'onell;s good faith- 5nfante refused to see her- ar'onell did the ne4t 'est thing to 0rotect her right, she registered her adverse clai/ on < Fe'ruar" 1,66- ?nder the circu/stances, this recording of her adverse clai/ should 'e dee/ed to have 'een done in good faith and should e/0hasi2e 5nfante;s 'ad faith &hen she registered her deed of sale 4 da"s later on 1* Fe'ruar" 1,66$. Ba' -a(t* o- Gn-ante3 %acts s*o,(n) a' -a(t* Dad faith arising fro/ 0revious @no&ledge '" 5nfante of the 0rior sale to ar'onell is sho&n '" the follo&ing facts: (1) 5nfante refused to see ar'onell, &ho &anted to see 5nfante after she &as infor/ed '" Poncio that he sold the lot to 5nfante 'ut several da"s 'efore 5nfante registered her deed of sale- %rdinaril", one &ill not refuse to see a neigh'or- #er refusal to tal@ to ar'onell could onl" /ean that she did not &ant to listen to ar'onell;s stor" that the latter had 0reviousl" 'ought the lot fro/ Poncio- (*) ar'onell &as alread" in 0ossession of the /ortgage 0ass'oo@ Knot Poncio;s savings de0osit 0ass'oo@: 5nfantesL and Poncio;s co0" of the /ortgage contract, &hen Poncio sold the lot to 5nfante- This sho&s that the lot &as alread" sold to ar'onell &ho, after 0a"ing the arrearages of Poncio, assu/ed the 'alance of his /ortgage inde'tedness to the 'an@, &hich in the nor/al course of 'usiness /ust have necessaril" infor/ed 5nfante a'out the said assu/0tion '" ar'onell of the /ortgage inde'tedness of Poncio- Defore or u0on 0a"ing in full the /ortgage inde'tedness of Poncio to the 'an@, 5nfante naturall" /ust have de/anded fro/ Poncio the deliver" to her of his /ortgage 0ass'oo@ as &ell as Poncio;s /ortgage contract so that the fact of full 0a"/ent of his 'an@ /ortgage &ill 'e entered thereinG and Poncio, as &ell as the 'an@, /ust have inevita'l" infor/ed her that said /ortgage 0ass'oo@ could not 'e given to her 'ecause it &as alread" delivered to ar'onellG (3) The fact that Poncio &as no longer in 0ossession of his /ortgage 0ass'oo@ and that the said /ortgage 0ass'oo@ &as alread" in 0ossession of ar'onell, should have co/0elled 5nfante to in.uire fro/ Poncio &h" he &as no longer in 0ossession of the /ortgage 0ass'oo@ and fro/ ar'onell &h" she &as in 0ossession of the sa/e (Paglago, et al-, vs- Jara'e, et al-, ** ! (3 1*4+, 1*6*)1*63)G (4) ar'onell registered on < Fe'ruar" 1,66 her adverse clai/, &hich &as accordingl" annotated on Poncio;s title 4 da"s 'efore 5nfante registered on 1* Fe'ruar" 1,66 her deed of sale e4ecuted on * Fe'ruar" 1,66- 5nfante &as again on notice of the 0rior sale to ar'onell- !uch registration of adverse clai/ is valid and effective (Jovellanos vs- Di/alanta, L)11+39)3+, Januar" 30, 1,6,, 106 Phil- 1*60)61)G (6) 5n his ans&er to the co/0laint filed '" Poncio, as defendant in the F5, he alleged that 'oth 5nfante and ar'onell offered to 'u" the lot at P16 0er s.-/-, &hich offers he re=ected as he 'elieved that his lot is &orth at least P*0 0er s.-/- Cno&ledge of this should have 0ut 5nfante on her guard and should have co/0elled her to in.uire fro/ Poncio &hether or not he had alread" sold the 0ro0ert" to ar'onell (!ee ar'onell vs- Poncio, L)11*31, 1* Aa" 1,6<):. 4Contract -or L +otM6 not (n t*e purv(e, o- .tatute o- %rau's3 not a contract o- sa+e3 (n'(cates sa+e as an accomp+(s*e' act The 0rivate docu/ent e4ecuted '" Poncio and ar'onell and &itnessed '" onstancio Aeonada ca0tioned 7 ontract for %ne)half Lot &hich 5 Dought fro/ Jose Poncio,8 &as not such a /e/orandu/ in
.a+es" /001 ( 4$ )
&riting &ithin the 0urvie& of the !tatute of Frauds- The /e/orandu/ in .uestion /erel" states that Poncio is allo&ed to sta" in the 0ro0ert" &hich he had sold to ar'onell- There is no /ention of the consideration, a descri0tion of the 0ro0ert" and such other essential ele/ents of the contract of sale- There is nothing in the /e/orandu/ &hich &ould tend to sho& even in the slightest /anner that it &as intended to 'e an evidence of contract of sale- %n the contrar", fro/ the ter/s of the /e/orandu/, it tends to sho& that the sale of the 0ro0ert" in favor of ar'onell is alread" an acco/0lished act- D" the ver" contents of the /e/orandu/ itself, it cannot therefore, 'e considered to 'e the /e/orandu/ &hich &ould sho& that a sale has 'een /ade '" Poncio in favor of ar'onell-8 !. Contract o- .a+e not (n t*e purv(e, o- .tatute o- %rau's as (t (s a++e)e'+y part(a++y per-orme' Decause the co/0laint alleges and the ar'onell clai/s that the contract of sale &as 0artl" 0erfor/ed, the sa/e is re/oved fro/ the a00lication of the !tatute of Frauds and ar'onell should 'e allo&ed to esta'lish '" 0arol evidence the truth of her allegation of 0artial 0erfor/ance of the contract of saleThere &as a 0artial 0erfor/ance of the ver'al sale e4ecuted '" Poncio in favor of the ar'onell, &hen the latter 0aid P*4+-*9 to the (e0u'lic !avings Dan@ on account of Poncio;s /ortgage inde'tedness8. @an)ua)e (D(a+ect) use' o- memoran'um (n'(cates +ack o- (ntent on t*e part o- Car one++ to m(s+ea' Bonc(o The docu/ent signed '" Poncio is in the Datanes dialect, &hich, according to ar'onell;s uncontradicted evidence, is the one s0o@en '" Poncio, he 'eing a native of said region- The allegation in Poncio;s ans&er to the effect that he signed the docu/ent under the 'elief that it H&as a 0er/it for hi/ to re/ain in the 0re/ises in the event; that Hhe decided to sell the 0ro0ert"; to ar'onell at P*0 a s.- /- is, on its face, difficult to 'elieve- 5f he had not decided as "et to sell the land to ar'onell, &ho had never increased her offer of P16 a s.,/-, there &as no reason for Poncio to get said 0er/it fro/ her- ?0on the other hand, if ar'onell intended to /islead Poncio, she &ould have caused the docu/ent to 'e drafted, 0ro'a'l", in >nglish, instead of ta@ing the trou'le of seeing to it that it &as &ritten 0recisel" in his native dialect, the Datanes- Aoreover, Poncio;s signature on the docu/ent suggests that he is neither illiterate nor so ignorant as to sign a docu/ent &ithout reading its contents, a0art fro/ the fact that Aeonada had read the docu/ent to hi/ and given hi/ a co0" thereof , 'efore he signed thereon, according to Aeonada;s uncontradicted testi/on"#. Car one++ ent(t+e' to (ntro'uce paro+ ev('ence The ourt &ould not @no& &h" Poncio;s 'an@ de0osit 'oo@ is in ar'onell;s 0ossession, or &hether there is an" relation 'et&een the P*4+-*9 entr" therein and the 0artial 0a"/ent of P*4+-*9 allegedl" /ade '" ar'onell to Poncio on account of the 0rice of his land, if the ourt does not allo& ar'onell to e40lain it on the &itness stand- !he is entitled, legall" as &ell as fro/ the vie&0oint of e.uit", to an o00ortunit" to introduce 0arol evidence in su00ort of the allegations of her second a/ended co/0laint10. >neD*a+- +ot c+ear+y t*e parce+ o- +an' occup(e' y Bonc(o an' ,*ere *e *as *(s (mprovements erecte' The one half lot &as /entioned in the docu/ent 'ecause the original descri0tion carried in the title states that it &as for/erl" 0art of a 'igger lot and onl" segregated later- !uch e40lanation is tena'le, in considering the ti/e value of the contents of the docu/ent, there is a sufficient descri0tion of the lot referred to as none other than the 0arcel of land occu0ied '" Poncio and &here he has his i/0rove/ents erected- The identit" of the 0arcel of land involved is sufficientl" esta'lished '" the contents of the note11. E7(stence o- a contract o- sa+e There had 'een cele'rated a sale of the 0ro0ert" e4cluding the house for the 0rice of P,-60 0er s.uare /eter, so /uch so that on faith of that, (osario had advanced the su/ of P*4+-*9 and 'inding herself to 0a" unto Jose the 'alance of the 0urchase 0rice after deducting the inde'tedness to the Dan@- !ince the &ording of the 0rivate docu/ent goes so far as to descri'e their transaction as one of sale, alread" consu//ated 'et&een
.a+es" /001 ( 4: )
the/, as can 'e noted &ith the 0ast tense used in the 0hrase, Hthe lot sold '" hi/ to /e; and going so far even as to state that fro/ that da" on&ards, vendor &ould continue to live therein, for one "ear, Hduring &hich ti/e he &ill not 0a" an"thing; this can onl" /ean that 'et&een (osario and Jose, there had 'een a true contract of sale, consu//ated '" deliver" constitutu/ 0ossessoriu/ (3rt-1600, $e& ivil ode)G vendor;s 0ossession having 'eco/e converted fro/ then on, as a /ere tenant of vendee, &ith the s0ecial 0rivilege of not 0a"ing rental for one "ear1/. Contract (s consensua+3 >ra+ contract 'oes not (nva+('ate sa+e ut mere+y (ncapa +e o- proo>ven if the docu/ent &as not registered at all, it &as a valid contract nonetheless- ?nder the la&, a contract sale is consensual, 0erfected '" /ere consent ( outo vs- ortes, < Phil- 46,)- ?nder the $e& ivil ode, &hile a sale of an i//ova'le is ordered to 'e reduced to a 0u'lic docu/ent (3rt- 136<), that /andate does not render an oral sale of realt" invalid, 'ut /erel" inca0a'le of 0roof- :here still e4ecutor" and action is 'rought and resisted for its 0erfor/ance (1403, 0ar- *, 3)G 'ut &here alread" &holl" or 0artl" e4ecuted or &here even if not "et, it is evidenced '" a /e/orandu/, in an" case &here evidence to further de/onstrate is 0resented and ad/itted, then the oral sale 'eco/es 0erfectl" good, and 'eco/es a good cause of action not onl" to reduce it to the for/ of a 0u'lic docu/ent, 'ut even to enforce the contract in its entiret" (3rt- 136+)11. Ber-ecte' sa+e3 Fust(ce Gatma(tan correct 5n his dissent concurred in '" Justice (odrigue2, Justice Fat/aitan /aintains his decision of * $ove/'er 1,9+ as &ell as his findings of facts therein, and reiterated that the 0rivate /e/orandu/ is a 0erfected sale, as a sale is consensual and consu//ated '" /ere consent, and is 'inding on and effective 'et&een the 0arties- This state/ent of the 0rinci0le is correct14. 9ort)a)e o- +ot a out to e -orec+ose' ,*en Bonc(o a)ree' to se++ t*e +ot to Car one++3 Amp+e cons('erat(on (n t*e sa+e The /ortgage on the lot &as a'out to 'e foreclosed '" the 'an@ for failure on the 0art of Poncio to 0a" the a/orti2ations thereon- To forestall the foreclosure and at the sa/e ti/e to reali2e so/e /one" fro/ his /ortgaged lot, Poncio agreed to sell the sa/e to ar'onell at P,-60 0er s.uare /eter, on condition that ar'onell K1L should 0a" (a) the a/ount of P400-00 to Poncio and (') the arrears in the a/ount of P*4+-*9 to the 'an@G and K*L should assu/e his /ortgage inde'tedness- The 'an@ 0resident agreed to the said sale &ith assu/0tion of /ortgage in favor of ar'onell and ar'onell accordingl" 0aid the arrears of P*4+-*9- %n Januar" *+, 1,66, she 0aid the a/ount of P*00-00 to the 'an@ 'ecause that &as the a/ount that Poncio told her as his arrearages and Poncio advanced the su/ of P4+-*9 &hich a/ount &as refunded to hi/ '" ar'onell the follo&ing da"- This conve"ance &as confir/ed that sa/e da", Januar" *+, 1,66, '" the 0rivate docu/ent &hich &as 0re0ared in the Datanes dialect '" the &itness onstancio Aeonada, &ho is also fro/ Datanes li@e Poncio and ar'onell- The sale did not include Poncio;s house on the lot- Poncio &as given the right to continue sta"ing on the land &ithout 0a"ing an" rental for one "ear, after &hich he should 0a" rent if he could not still find a 0lace to transfer his house- 3ll these ter/s are 0art of the consideration of the sale to ar'onell- There &as a/0le consideration, and not /erel" the su/ of P*00-00, for the sale of Poncio to ar'onell of the lot in .uestion1$. Car one++" not Gn-ante" v(ct(m o- (n8ust(ce an' outra)e Poncio, induced '" the higher 0rice offered to hi/ '" 5nfante, reneged on his co//it/ent to ar'onell and told ar'onell, &ho confronted hi/ a'out it, that he &ould not &ithdra& fro/ his deal &ith 5nfante even if he is sent to =ail- The victi/, therefore, 7of in=ustice and outrage8 is the &ido& ar'onell and not the 5nfantes, &ho &ithout /oral co/0unction e40loited the greed and treacherous nature of Poncio, &ho, for love of /one" and &ithout re/orse of conscience, dishonored his o&n 0lighted &ord to ar'onell, his o&n cousin1:. Gn-ante not ent(t+e' to recover va+ue o- (mprovements (ntro'uce' (n t*e +ot The 'ad faith of >//a 5nfante X fro/ the ti/e she enticed Poncio to dishonor his contract &ith
.a+es" /001 ( 4! )
ar'onell, and instead to sell the lot to her (5nfante) '" offering Poncio a /uch hinger 0rice than the 0rice for &hich he sold the sa/e to ar'onell X is clear- Deing guilt" of 'ad faith, 'oth in ta@ing 0h"sical 0ossession of the lot and in recording their deed of sale, the 5nfantes cannot recover the value of the i/0rove/ents the" introduced in the lot- 3nd after the filing '" ar'onell of the co/0laint in June 1,66, the 5nfantes had less =ustification to erect a 'uilding thereon since their title to said lot is seriousl" dis0uted '" ar'onell on the 'asis of a 0rior sale to her1!. Bonc(o '(' not rema(n o,ner y possess(n) t*e +ot Deing a valid consensual contract, the docu/ent effectivel" transferred the 0ossession of the lot to the vendee ar'onell '" constitutu/ 0ossessoriu/ (3rticle 1600, $e& ivil ode)G 'ecause thereunder the vendor Poncio continued to retain 0h"sical 0ossession of the lot as tenant of the vendee and no longer as o&ner thereof- Aore than =ust the signing of the docu/ent '" Poncio and ar'onell &ith onstancio Aeonada as &itness to 0erfect the contract of sale, the transaction &as further confir/ed &hen Poncio agreed to the actual 0a"/ent '" ar'onell of his /ortgage arrearages to the 'an@ on *+ Januar" 1,66 and '" his conse.uent deliver" of his o&n /ortgage 0ass'oo@ to ar'onell- 5f he re/ained o&ner and /ortgagor, Poncio &ould not have surrendered his /ortgage 0ass'oo@ to ar'onell18. Bonc(o 'oes not o,n anot*er parce+ o- +an' ,(t* t*e same area a'8acent to Car one++ 5t is not sho&n that Poncio o&ns another 0arcel &ith the sa/e area, ad=acent to the lot of his cousin ar'onell and li@e&ise /ortgaged '" hi/ to the (e0u'lic !avings Dan@- The transaction therefore 'et&een Poncio and ar'onell can onl" refer and does refer to the lot involved- 5f Poncio had another lot to re/ove his house, the docu/ent &ould not have sti0ulated to allo& hi/ to sta" in the sold lot &ithout 0a"ing an" rent for one "ear and thereafter to 0a" rental in case he cannot find another 0lace to transfer his house1#. Car one++ +(a +e to e-un' amount Gn-ante pa(' t*e ank to re'eem t*e mort)a)e :hile ar'onell has the su0erior title to the lot, she /ust ho&ever refund to 5nfante the a/ount of P1,600, &hich 5nfante 0aid to the (e0u'lic !avings Dan@ to redee/ the /ortgage/0. Art(c+e $4: an' $4! The 5nfante s0ouses 'eing 0ossessors in 'ad faith, their rights to the i/0rove/ents the" introduced on the dis0uted lot are governed '" 3rticles 649 and 64+ of the $e& ivil ode/1. Gn-ante=s e7penses Their e40enses consisting of P1,600 for draining the 0ro0ert", filling it &ith 600 cu'ic /eters of garden soil, 'uilding a &all around it and installing a gate and P11,,*,for erecting a 'ungalo& thereon, are useful e40endituresG for the" add to the value of the 0ro0ert" (3ringo vs- 3renas, 14 Phil- *93G 3l'uro vs1illanueva, + Phil- *++G 1alencia vs- 3"ala de (o4as, 13 Phil- 46)/1. Art(c+e $4: an' $4!3 Bossessor (n )oo' -a(t* ent(t+e' to r()*t o- retent(on o- use-u+ (mprovement an' r()*t to a re-un' -or use-u+ e7penses3 Gmp+(es contrary to possessor (n a' -a(t* ?nder the second 0aragra0h of 3rticle 649, the 0ossessor in good faith can retain the useful i/0rove/ents unless the 0erson &ho defeated hi/ in his 0ossession refunds hi/ the a/ount of such useful e40enses or 0a" hi/ the increased value the land /a" have ac.uired '" reason thereof- ?nder 3rticle 64+, the 0ossessor in good faith has also the right to re/ove the useful i/0rove/ents if such re/oval can 'e done &ithout da/age to the land, unless the 0erson &ith the su0erior right elects to 0a" for the useful i/0rove/ents or rei/'urse the e40enses therefor under 0aragra0h * of 3rticle 649- These 0rovisions see/ to i/0l" that the 0ossessor in 'ad faith has neither the right of retention of useful i/0rove/ents nor the right to a refund for useful e40enses//. E2u(ty3 Gn-ante=s r()*t o- remot(on or t*e va+ue o- t*e (mprovements (not current va+ue) (Car one++ appropr(ates -or *erse+- t*e (mprovements
.a+es" /001 ( 48 )
5f the la&ful 0ossessor can retain the i/0rove/ents introduced '" the 0ossessor in 'ad faith for 0ure lu4ur" or /ere 0leasure onl" '" 0a"ing the value thereof at the ti/e he enters into 0ossession (3rticle 64, $ ), as a /atter of e.uit", the 5nfantes, although 0ossessors in 'ad faith, should 'e allo&ed to re/ove the i/0rove/ents, unless ar'onell chooses to 0a" for their value at the ti/e 5nfante introduced said useful i/0rove/ents in 1,66 and 1,6,- 5nfante cannot clai/ rei/'urse/ent for the current value of the said useful i/0rove/entsG 'ecause the" have 'een en=o"ing such i/0rove/ents for a'out * decades &ithout 0a"ing an" rent on the land and during &hich 0eriod ar'onell &as de0rived of its 0ossession and use[1:] Carum a vs. CA [G.R. No. @D/!$8!. %e ruary 18" 1#!0.] >n Danc, (e"es JDL (J): 10 concurring %acts& %n 1* 30ril 1,69, the s0ouses 3/ado anuto and $e/esia 5'asco, '" virtue of a Deed of !ale of ?nregistered Land &ith ovenants of 7:arrant",; sold a 0arcel of land, 0artl" residential and 0artl" coconut land &ith a 0eri0her" (area) of 36,-0, s.uare /eters, /ore or less, located in the 'arrio of !anto Do/ingo, 5riga, a/arines !ur, to the s0ouses 3/ado aru/'a and Denita anuto, for the su/ of P360-00- The referred deed of sale &as never registered in the %ffice of the (egister of Deeds of a/arines !ur, and the $otar", Ar- 1icente Aala"a, &as not then an authori2ed notar" 0u'lic in the 0lace- Desides, it has 'een e40ressl" ad/itted '" aru/'a that he is the 'rother)in)la& of anuto, the alleged vendor of the 0ro0ert" sold to hi/- anuto is the older 'rother of the &ife of aru/'a%n *1 Januar" 1,6+, a co/0laint for a su/ of /one" &as filed '" !antiago Dal'uena (and &ife 3ngeles Doa.uina) against anuto and 5'asco 'efore the Justice of the Peace ourt of 5riga, a/arines !ur ( ivil ase 13,) and on 16 30ril 1,9+, a decision &as rendered in favor of Dal'uena- %n 1 %cto'er 1,6<, the e4) officio !heriff, Justo 1- 5/0erial, of a/arines !ur, issued a 7Definite Deed of !ale of the 0ro0ert" in favor of Dal'uena, &hich instru/ent of sale &as registered 'efore the %ffice of the (egister of Deeds of a/arines !ur, on 3 %cto'er 1,6<- The aforesaid 0ro0ert" &as declared for ta4ation 0ur0oses in the na/e of Dal'uena in 1,6<-8 The ourt of First 5nstance a/arines !ur ( ivil ase 4949), finding that after e4ecution of the docu/ent aru/'a had ta@en 0ossession of the land, 0lanting 'ananas, coffee and other vegeta'les thereon, declared hi/ to 'e the o&ner of the 0ro0ert" under a consu//ated saleG held void the e4ecution lev" /ade '" the sheriff, 0ursuant to a =udg/ent against aru/'a;s vendor, 3/ado anutoG and nullified the sale in favor of the =udg/ent creditor, Dal'uena- The ourt, therefore, declared aru/'a the o&ner of the litigated 0ro0ert" and ordered Dal'uena to 0a" P30-00, as da/ages, 0lus the costsThe ourt of 300eals ( ase 390,4)(), &ithout altering the findings of fact /ade '" the court of origin, declared that there having 'een a dou'le sale of the land su'=ect of the suit Dal'uena;s title &as su0erior to that of his adversar" under 3rticle 1944 of the ivil ode of the Phili00ines, since the e4ecution sale had 'een 0ro0erl" registered in good faith and the sale to aru/'a &as not recorded- #ence, the 0etition for revie& on certiorari '" 3/ado aru/'aThe !u0re/e ourt reversed the decision of the against !antiago Dal'uena1. ourt of 300eals and affir/ed that of the F5G &ith costs
Inre)(stere' +an'3 Art(c+e 1$44 'oes not app+y :hile under the invo@ed 3rticle 1644, registration in good faith 0revails over 0ossession in the event of a dou't sale '" the vendor of the sa/e 0iece of land to different vendees, said article is of no a00lication to the 0resent case, even if Dal'uena, the later vendee, &as ignorant of the 0rior sale /ade '" his =udg/ent de'tor in favor of aru/'a- The reason is that the 0urchaser of ?nregistered land at a sheriff;s e4ecution sale
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onl" ste0s into the shoes of the =udg/ent de'tor, and /erel" ac.uires the latter;s interest in the 0ro0ert" sold as of the ti/e the 0ro0ert" &as levied u0on- This is s0ecificall" 0rovided '" section 36 of (ule 3, of the (evised (ules of ourt, the second 0aragra0h of said section s0ecificall" 0roviding that 7?0on the e4ecution and deliver" of said (final) deed the 0urchaser, rede/0tioner, or his assignee shall 'e su'stituted to and ac.uire all the right, title, interest, and clai/ of the =udg/ent de'tor to the 0ro0ert" as of the ti/e of the lev", e4ce0t as against the =udg/ent de'tor in 0ossession, in &hich case the su'stitution shall 'e effective as of the ti/e of the deed-8 /. Dee' o- sa+e (even (n pr(vate (nstrument) coup+e' ,(t* possess(on o- re)(stere' +an' su--(ce to vest o,ners*(p The deed of sale in favor of anuto had 'een e4ecuted on 1* 30ril 1,66, t&o "ears 'efore the decision against the for/er o&ners of the land &as rendered in favor of Dal'uena (16 30ril 1,6+), and &hile onl" e/'odied in a 0rivate docu/ent, the sa/e, cou0led &ith the fact that the 'u"er ( aru/'a) had ta@en 0ossession of the unregistered land sold, sufficed to vest o&nershi0 on the said 'u"er- :hen the lev" &as /ade '" the !heriff, therefore, the =udg/ent de'tor no longer had do/inical interest nor an" real right over the land that could 0ass to the 0urchaser at the e4ecution sale- #ence, the latter /ust "ield the land to 0etitioner aru/'a1. Ru+e '(--erent (n cases covere' y ;orrens t(t+e The rule is different in case of lands covered '" Torrens titles, &here the 0rior sale is neither recorded nor @no&n to the e4ecution 0urchaser 0rior to the lev"G 'ut the land here in .uestion is ad/ittedl" not registered under 3ct 4,9[1!] Ce+est(no Co v. Co++ector o- Gnterna+ Revenue [G.R. No. @D8$0:. Au)ust 11" 1#$:.] First Division, Deng2on (J): + concurring %acts& elestino o Q o/0an" is a dul" registered general co0artnershi0 doing 'usiness under the trade na/e of 7%riental !ash Factor"8- Fro/ 1,49 to 1,61 it 0aid 0ercentage ta4es of +I on the gross recei0ts of its sash, door and &indo& factor", in accordance &ith section 1<9 of the $ational (evenue ode i/0osing ta4es on sales of /anufactured articles- #o&ever in 1,6* it 'egan to clai/ lia'ilit" onl" to the contractor;s 3I ta4 (instead of +I) under section 1,1 of the sa/e odeG and having failed to convince the Dureau of 5nternal (evenue, it 'rought the /atter to the ourt of Ta4 300eals, &here it also failed- #ence, the a00ealThe !u0re/e ourt affir/ed the a00ealed decision1. Bus(ness name an' (ncome m(+(tates a)a(nst c+a(m as or'(nary contractor The co/0an" has ta@en all the trou'le and e40ense of registering a s0ecial trade na/e for its sash 'usiness and has ordered co/0an" stationer" carr"ing the 'old 0rint 7%riental !ash Factor" ( elestino o Q o/0an", Pro0-) ,*9 (aon !t- Uuia0o, Aanila, Tel- $o- 330+9, Aanufacturers of all @inds of doors, &indo&s, sashes, furnitures, etc- used season)dried and @iln)dried lu/'er, of the 'est .ualit" &or@/anshi0-8 5t is unli@el" that these act &ere /ade solel" for the 0ur0ose of su00l"ing the needs for doors, &indo&s and sash of its s0ecial and li/ited custo/ers- Further, the o/0an" has chosen for its tradena/e and has offered itself to the 0u'lic as a 7Factor"8, &hich /eans it is out to do 'usiness, in its chosen lines on a 'ig scaleAoreover, as sho&n fro/ the investigation of the o/0an";s 'oo@s of accounts (for transactions covering the 0eriod of 1 Januar" 1,6* to 30 !e0te/'er 1,6*), it sold sash, doors and &indo&s &orth P1<<,+64-9,- 5t &ill 'e difficult to 'elieve that such a/ount that ran to si4 figures &as derived entirel" fro/ its fe& custo/ers &ho /ade s0ecial orders- Thus, elestino o Q o/0an" ha'ituall" /a@es sash, &indo&s and doors, as it has re0resented in its stationer" and advertise/ents to the 0u'lic, and it has ad/itted '" the a00ellant itself that the co/0an" 7/anufactures-8
.a+es" /001 ( $0 )
/.
Construct(on ,ork contractors 'e-(ne' onstruction &or@ contractors are those &ho alter or re0air 'uildings, structures, streets, high&a"s, se&ers, street rail&a"s, railroads, logging roads, electric, stea/ or &ater 0lants telegra0h and tele0hone 0lants and lines, electric lines or 0o&er lines, and includes an" other &or@ for the construction, altering or re0airing for &hich /achiner" driven '" /echanical 0o&er is used- (!a,ton vs. Cit, of Anadardo '- !. .d 8 8, 88%, / 0 12". '8(. 1. Nature o- us(ness 'oes not -a++ (n any o- t*e occupat(on t*at may e c+ass(-(e' as contractor ,(t*(n t*e purv(e, o- .ect(on 1#1 o- t*e Nat(ona+ Gnterna+ Revenue Co'e >ven if it &ere to 'elieve that the co/0an" does not /anufacture read")/ade sash, doors and &indo&s for the 0u'lic and that it /a@es these articles onl" u0on s0ecial order of its custo/ers, that does not /a@e it a contractor &ithin the 0urvie& of section 1,1 of the $ational 5nternal (evenue ode- There are no less than fift" occu0ations enu/erated in the said section of the $ational 5nternal (evenue ode su'=ect to 0ercentage ta4, not one under &hich the 'usiness enter0rise of 0etitioner could a00ro0riatel" fall- 5t &ould re.uire a stretch of the la& to /a@e the 'usiness of /anufacturing sash, doors and &indo&s u0on s0ecial order of custo/ers fall under the categor" of Hroad, 'uilding, navigation, artesian &ell, &ater &or@s and other construction &or@ contractors4. Bercenta)e ta7 (mpose' un'er .ect(on 1#1 o- t*e ;a7 Co'e a ta7 on sa+es o- serv(ce" ,*(+e ta7 (mpose' y .ect(on 18: a ta7 on or()(na+ sa+es o- art(c+es The 0ercentage ta4 i/0osed in section 1,1 of the Ta4 ode is generall" a ta4 on the sales of services, in contradiction &ith the ta4 i/0osed in section 1<9 of the sa/e ode &hich is a ta4 on the original sales of articles '" the /anufacturer, 0roducer or i/0orter- (For/ille2a;s o//entaries and Juris0rudence on the $ational 5nternal (evenue ode, 1ol 55, 0- +44)- The fact that the articles sold are /anufactured '" the seller does not e4change the contract fro/ the 0urvie& of section 1<9 of the $ational 5nternal (evenue ode as a sale of articles$. Custom spec(-(cat(ons re2u(re' y customer 'oes not a+ter c*aracter o- us(ness" t*e company 'oes not ecome an emp+oyee or servant o- t*e customer $o'od" &ill sa" that &hen a sa&/ill cuts lu/'er in accordance &ith the 0eculiar s0ecifications of a custo/er, si2es not 0reviousl" held in stoc@ for sale to the 0u'lic, it there'" 'eco/es an e/0lo"ee or servant of the custo/er, not the seller of lu/'er- The sa/e consideration a00lies to this sash /anufacturer- The !ash Factor" does nothing /ore than sell the goods that it /ass)0roduces or ha'ituall" /a@esG sash, 0anels, /ouldings, fra/es, cutting the/ to such si2es and co/'ining the/ in such for/s as its custo/ers /a" desire:. Gnsta++at(on o- ,(n'o, pane+s not construct(on ,ork (n common par+ance Petitioner;s idea of 'eing a contractor doing construction =o's is untena'le- $o'od" &ould regard the doing of t&o &indo& 0anels as construction &or@ in co//on 0arlance!. Contract o- sa+e '(st(n)u(s*e' -rom a contract -or a p(ece o- ,ork 3rticle 149+ of the $e& ivil ode 0rovides that 7a contract for the deliver" at a certain 0rice of an article &hich the vendor in the ordinar" course of his 'usiness /anufactures or 0rocures for the general /ar@et, &hether the sa/e is on hand at the ti/e or not, is a contract of sale, 'ut if the goods are to 'e /anufactured s0eciall" for the custo/er and u0on his s0ecial order, and not for the general /ar@et, it is contract for a 0iece of &or@-8 5n the 0resent case, it is a00arent that the Factor" did not /erel" sell its services to Teodoro Q o- 'ecause it also sold the /aterials- :hen it sold /aterials ordinaril" /anufactured '" it (sash, 0anels, /ouldings), although in such for/ or co/'ination as suited the fanc" of the 0urchaser, such ne& for/ does not divest the Factor" of its character as /anufacturer- $either does it ta@e the transaction out of the categor" of sales under 3rticle 149+ 'ecause although the Factor" does not, in the ordinar" course of its 'usiness, /anufacture and @ee0 on stoc@ doors of the @ind sold to Teodoro, it could stoc@ andBor 0ro'a'l" had
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in stoc@ the sash, /ouldings and 0anels it used therefor8. Contract -or a p(ece o- ,ork (n %actory *appens (- t*e use o- e7traor'(nary or a''(t(ona+ e2u(pment (s re2u(re' or (- (t (nvo+ves serv(ces not )enera++y per-orme' y (t :hen the Factor" acce0ts a =o' that re.uires the use of e4traordinar" or additional e.ui0/ent, or involves services not generall" 0erfor/ed '" it, it there'" contracts for a 0iece of &or@, i-e- filling s0ecial orders &ithin the /eaning of 3rticle 149+- 5n the 0resent case, ho&ever, the orders e4hi'ited &ere not sho&n to 'e s0ecial- The" &ere /erel" orders for &or@, regular &or@#. ;rans-ers un'er .ect(on 18: o- t*e ;a7 Co'e 5f all the &or@ of a00ellant is onl" to fill orders 0reviousl" /ade, such orders should not 'e called s0ecial &or@, 'ut regular &or@G and su00osing for the /o/ent that the transactions &ere not sales, the" &ere neither lease of services nor contract =o's '" a contractor- !till, as the doors and &indo&s had 'een ad/ittedl" 7/anufactured8 '" the !ash Factor", such transactions could 'e, and should 'e ta4ed as 7transfers8 thereof under section 1<9 of the $ational (evenue ode[18] C*en) vs. Genato [G.R. No. 1/#!:0. Decem er /#" 1##8.] !econd Division, Aartine2 (J): 3 concurring %acts& (a/on D- Fenato is the o&ner of t&o 0arcels of land located at Paradise Far/s, !an Jose del Aonte, Dulacan covered '" T Ts T)+9-1,9 (A) and T)+9-1,+ (A) &ith an aggregate area of 36,<*1 s.uare /eters, /ore or less- %n 9 !e0te/'er 1,<,, Fenato entered into an agree/ent &ith s0ouses >rnesto (- Da Jose and !ocorro D- Da Jose (Da Jose s0ouses) over the t&o 0arcels of land- The agree/ent cul/inated in the e4ecution of a contract to sell for &hich the 0urchase 0rice &as P<0 0er s.- /- The contract &as in a 0u'lic instru/ent and &as dul" annotated at the 'ac@ of the t&o certificates of title on the sa/e da"- %n %cto'er 4, 1,<,, the Da Jose s0ouses, not having finished verif"ing the titles (to confir/ the truth and authenticit" of docu/ents, and that no restrictions, li/itations, and develo0/ents i/0osed on andBor affecting the 0ro0ert" su'=ect of this contract shall 'e detri/ental to his interest), as@ed for and &as granted '" Fenato an e4tension of another 30 da"s, or until 6 $ove/'er 1,<,- #o&ever, according to Fenato, the e4tension &as granted on condition that a ne& set of docu/ents is /ade + da"s fro/ 4 %cto'er 1,<,, &hich &as denied '" the Da Jose s0ouses- Pending the effectivit" of the aforesaid e4tension 0eriod, and &ithout due notice to the Da Jose s0ouses, Fenato e4ecuted an 3ffidavit to 3nnul the ontract to !ell on 13 %cto'er 1,<,- Aoreover, no annotation of the said affidavit at the 'ac@ of his titles &as /ade right a&a"- The affidavit contained the sti0ulation that the 0arties agreed that the do&n0a"/ent of P,60,000 shall 'e 0aid 30 da"s fro/ the e4ecution of the ontract (thus, on 9 %cto'er 1,<,), that the vendees failed to 0a" the do&n0a"/ent (thus, a 'reach of contract), and that the affidavit &as e4ecuted to annul the contract to sell- %n *4 %cto'er 1,<,, (icardo heng &ent to Fenato;s residence and e40ressed interest in 'u"ing the su'=ect 0ro0erties- %n that occasion, Fenato sho&ed heng co0ies of his T Ts and the annotations at the 'ac@ thereof of his contract to sell &ith the Da Jose s0ouses- Fenato also sho&ed hi/ the 3ffidavit to 3nnul the ontract to !ell &hich has not 'een annotated at the 'ac@ of the titles- Des0ite these, heng &ent ahead and issued a chec@ for P60,000-00 u0on the assurance '" Fenato that the 0revious contract &ith the Da Jose s0ouses &ill 'e annulled for &hich Fenato issued a hand&ritten recei0t- %n *6 %cto'er 1,<,, Fenato de0osited heng;s chec@- %n the sa/e da", heng called u0 Fenato re/inding hi/ to register the affidavit to annul the contract to sell- The follo&ing da", acting on heng;s re.uest, Fenato caused the registration of the 3ffidavit to 3nnul the ontract to !ell in the (egistr" of Deeds, Ae"caua"an, Dulacan as 0ri/ar" entr" *9*+0*- :hile the Da Jose s0ouses &ere at the %ffice of the (egistr" of Deeds of Ae"caua"an, Dulacan on *+ %cto'er 1,<,, the" /et Fenato '" coincidence- 5t &as onl" then that the Da Jose s0ouses discovered a'out the affidavit to annul their contract- The latter &ere shoc@ed at the disclosure and 0rotested against the rescission of their contract- 3fter 'eing re/inded that Fenato had given the Da Jose s0ouses an additional 30)da" 0eriod to finish their
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verification of his titles, that the 0eriod &as still in effect, and that the" &ere &illing and a'le to 0a" the 'alance of the agreed do&n 0a"/ent, later on in the da", Fenato decided to continue the ontract he had &ith the/- The agree/ent to continue &ith their contract &as for/ali2ed in a confor/e letter dated *+ %cto'er 1,<,- Thereafter, Fenato advised heng of his decision to continue his contract &ith the Da Jose s0ouses and the return of heng;s P60,000-00 chec@- onse.uentl", on 30 %cto'er 1,<,, heng;s la&"er sent a letter to Fenato de/anding co/0liance &ith their agree/ent to sell the 0ro0ert" to hi/ stating that the contract to sell 'et&een hi/ and Fenato &as alread" 0erfected and threatening legal action- %n * $ove/'er 1,<,, Fenato sent a letter to heng enclosing a DP5 ashier;s hec@ for P60,000 and e40ressed regret for his ina'ilit" to 7consu//ate his transaction8 &ith hi/- 3fter having received the letter of Fenato on 4 $ove/'er 1,<,, heng, ho&ever, returned the said chec@ to the for/er via ( P5 telegra/ dated 9 $ove/'er 1,<,, reiterating that 7our contract to sell "our 0ro0ert" had alread" 'een 0erfected-8 Aean&hile, also on * $ove/'er 1,<,, heng e4ecuted an affidavit of adverse clai/ and had it annotated on the su'=ect T T;s- %n the sa/e da", consistent &ith the decision of Fenato and the Da Jose s0ouses to continue &ith their ontract to !ell, the Da Jose s0ouses 0aid Fenato the co/0lete do&n 0a"/ent of P,60,000 and delivered to hi/ 3 0ostdated chec@s (all dated 9 Aa" 1,,0, the sti0ulated due date) in the total a/ount of P1,<96,9<0 to cover full 0a"/ent of the 'alance of the agreed 0urchase 0rice%n < Dece/'er 1,<,, heng instituted a co/0laint for s0ecific 0erfor/ance &ith the (T Uue2on it" (Dranch ,9) to co/0el Fenato to e4ecute a deed of sale to hi/ of the su'=ect 0ro0erties 0lus da/ages and 0ra"er for 0reli/inar" attach/ent- 3fter trial on the /erits, and on 1< Januar" 1,,4, the lo&er court ruled that the recei0t issued '" Fenato to heng unerringl" /eant a sale and not =ust a 0riorit" or an o0tion to 'u"- 5t cannot 'e true that the transaction &as su'=ected to so/e condition or reservation, li@e the 0riorit" in favor of the Da Jose s0ouses as first 'u"er 'ecause, if it &ere other&ise, the recei0t &ould have 0rovided such /aterial condition or reservation, es0eciall" as it &as Fenato hi/self &ho had /ade the recei0t in his o&n hand- 5t also o0ined that there &as a valid rescission of the ontract to !ell '" virtue of the 3ffidavit to 3nnul the ontract to !ell- Ti/e &as of the essence in the e4ecution of the agree/ent 'et&een Fenato and heng, under this circu/stance de/and, e4tra=udicial or =udicial, is not necessar"- 5t falls under the e4ce0tion to the rule 0rovided in 3rticle 119, of the ivil ode- The right of Fenato to unilaterall" rescind the contract is said to 'e under 3rticle 11,1 of the ivil ode- 3dditionall", after reference &as /ade to the su'stance of the agree/ent 'et&een Fenato and the Da Jose s0ouses, the lo&er court also concluded that heng should 'e 0referred over the Da Jose s0ouses in the 0urchase of the su'=ect 0ro0erties- The trial court rendered its decision declaring the contract to sell dated 9 !e0te/'er 1,<, e4ecuted 'et&een Fenato, as vendor, and !0ouses Da Jose, as vendees, resolved and rescinded in accordance &ith 3rticle 11,1, ivil ode, '" virtue of Fenato;s affidavit to annul contract to sell dated 13 %cto'er 1,<, and as the conse.uence of the s0ouses; failure to e4ecute &ithin + da"s fro/ 4 %cto'er 1,<, another contract to sell 0ursuant to their /utual agree/ent &ith FenatoG ordering Fenato to return to the s0ouses the su/ of P1 /illion 0lus interest at the legal rate fro/ * $ove/'er 1,<, until full 0a"/entG directing Fenato to return to the s0ouses the 3 0ostdated chec@s i//ediatel" u0on finalit" of this =udg/entG co//anding Fenato to e4ecute &ith and in favor of heng, as vendee, a deed of conve"ance and sale of the real 0ro0erties descri'ed and covered in T Ts T)+9) 1,9 (A) and T)+9-1,+ (A) of the (egistr" of Deeds of Dulacan, Ae"caua"an Dranch, at the rate of P+0Bs.uare /eter, less the a/ount of P60,000-00 alread" 0aid to Fenato, &hich is considered as 0art of the 0urchase 0rice, &ith the heng 'eing lia'le for 0a"/ent of the ca0ital gains ta4es and other e40enses of the transfer 0ursuant to the agree/ent to sell dated *4 %cto'er 1,<,G and ordering Fenato to 0a" heng and the s0ouses P60,000-00, as no/inal da/ages, to hengG P60,000-00, as no/inal da/ages, to the s0ousesG P*0,000-00, as and for attorne";s fees, to hengG P*0,000-00 as and for attorne";s fees, to the s0ousesG and the cost of the suit$ot satisfied &ith the decision, Fenato and Da Jose s0ouses a00ealed to the a00ellate court (in 3)F( 44+09) &hich, on + Jul" 1,,+, reversed such =udg/ent and ruled that the 0rior contract to sell in favor of the Da Jose s0ouses &as not validl" rescindedG that the su'se.uent contract to sell 'et&een Fenato and heng, e/'odied in the hand&ritten recei0t, &as &ithout force and effect due to the failure to rescind the 0rior
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contractG and that heng should 0a" da/ages to Fenato and the s0ouses herein 'eing found to 'e in 'ad faithThe ourt of 300eals reversed and set aside the a00ealed decision ordering the dis/issal of the co/0laintG the cancellation of the annotations of the Fenato;s 3ffidavit to 3nnul ontract to !ell and heng;s $otice of 3dverse lai/ in the su'=ect T T;s na/el", T T $o- T)+9-1,9 (A) and T T $o- T)+9-1,+ (A)G 0a"/ent '" the s0ouses of the re/aining 'alance of the 0urchase 0rice 0ursuant to their agree/ent &ith the Fenato to sus0end encash/ent of the three 0ost)dated chec@s issued since 1,<,G e4ecution '" the Fenato of the Deed of 3'solute !ale over the su'=ect t&o lots in favor of the s0ousesG return '" Fenato of the P60,000-00 0aid to hi/ '" hengG and 0a"/ent '" heng of /oral da/ages to the s0ouses of P100,000, e4e/0lar" da/ages of P60,000, attorne";s fees of P60,000, and costs of suitG and to Fenato, of P100,000 in e4e/0lar" da/ages, P60,000 in attorne";s fees- The a/ounts 0a"a'le to Fenato /a" 'e co/0ensated '" heng &ith the a/ount of the chec@ Fenato has to 0a" heng- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt denied the instant 0etition for revie& and affir/ed the assailed decision en toto1. Contract to se++3 nonDpayment o- purc*ase pr(ce not a reac* 5n a ontract to !ell, the 0a"/ent of the 0urchase 0rice is a 0ositive sus0ensive condition, the failure of &hich is not a 'reach, casual or serious, 'ut a situation that 0revents the o'ligation of the vendor to conve" title fro/ ac.uiring an o'ligator" force- 5t is one &here the ha00ening of the event gives rise to an o'ligationThus, for its non)fulfill/ent there &ill 'e no contract to s0ea@ of, the o'ligor having failed to 0erfor/ the sus0ensive condition &hich enforces a =uridical relation- 5n fact &ith this circu/stance, there can 'e no rescission of an o'ligation that is still non)e4istent, the sus0ensive condition not having occurred as "et/. Breac* contemp+ate' (n Art(c+e 11#1 The 'reach conte/0lated in 3rticle 11,1 of the $e& ivil ode is the o'ligor;s failure to co/0l" &ith an o'ligation alread" e4tant, not a failure of a condition to render 'inding that o'ligation1. No 'e-au+t can e ascr( e' to t*e spouses $o default can 'e ascri'ed to the Da Jose s0ouses since the 30)da" e4tension 0eriod has not "et e40ired- The Da Jose s0ouses; contention that no further condition &as agreed &hen the" &ere granted the 30) da"s e4tension 0eriod fro/ + %cto'er 1,<, in connection &ith a clause of their contract to sell dated 9 !e0te/'er 1,<, should 'e u0held: firstl", 5f this &ere not true, Fenato could not have 'een 0ersuaded to continue his contract &ith the/ and later on agree to acce0t the full settle/ent of the 0urchase 0rice @no&ing full" &ell that he hi/self i/0osed such sine .ua non condition in order for the e4tension to 'e validG secondl", Fenato could have i//ediatel" annotated his affidavit to annul the contract to sell on his title &hen it &as e4ecuted on 13 %cto'er 1,<, and not onl" on *9 %cto'er 1,<, after heng re/inded hi/ of the annotationG thirdl", Fenato could have sent at least a notice of such fact, there 'eing no sti0ulation authori2ing hi/ for auto/atic rescission, so as to finall" clear the encu/'rance on his titles and /a@e it availa'le to other &ould 'e 'u"ers- 5t li@e&ise settles the holding of the trial court that Fenato 7needed /one" urgentl"-8 4. A--('av(t to annu+ contract unca++e' -or3 Con'(t(ona+ o +()at(on 'oes not e7(st (- suspens(ve con'(t(on 'oes not take p+ace >ven assu/ing in gratia argu/enti that the Da Jose s0ouses defaulted, in their ontract to !ell, the e4ecution '" Fenato of the affidavit to annul the contract is not even called for- For &ith or &ithout the affidavit their non)0a"/ent to co/0lete the full do&n0a"/ent of the 0urchase 0rice i0so facto avoids their contract to sell, it 'eing su'=ected to a sus0ensive condition- :hen a contract is su'=ect to a sus0ensive condition, its 'irth or effectivit" can ta@e 0lace onl" if and &hen the event &hich constitutes the condition ha00ens or is fulfilled- 5f the sus0ensive condition does not ta@e 0lace, the 0arties &ould stand as if the conditional o'ligation had never e4isted$. Not(ce to ot*er party re2u(re' to cance+ contract3 Act a+,ays prov(s(ona+ Fenato is not relieved fro/ the giving of a notice, ver'al or &ritten, to the Da Jose s0ouses for his
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decision to rescind their contract- 5n /an" cases, even though the validit" of a sti0ulation in a contract to sell authori2ing auto/atic rescission for a violation of its ter/s and conditions is u0held, at least a &ritten notice /ust 'e sent to the defaulter infor/ing hi/ of the sa/e- The act of a 0art" in treating a contract as cancelled should 'e /ade @no&n to the other- For such act is al&a"s 0rovisional- 5t is al&a"s su'=ect to scrutin" and revie& '" the courts in case the alleged defaulter 'rings the /atter to the 0ro0er courts:. E7tra8u'(c(a+ steps to protect (nterest an e7erc(se o- 'ue '(+()ence to m(n(m(Ce 'ama)es 5n University of the Philippines vs. De Los Angeles , it &as held that the 0art" &ho dee/s the contract violated /a" consider it resolved or rescinded, and act accordingl", &ithout 0revious court action, 'ut it 0roceeds at its o&n ris@- For it is onl" the final =udg/ent of the corres0onding court that &ill conclusivel" and finall" settle &hether the action ta@en &as or &as not correct in la&- Dut the la& definitel" does not re.uire that the contracting 0art" &ho 'elieves itself in=ured /ust first file suit and &ait for a =udg/ent 'efore ta@ing e4tra=udicial ste0s to 0rotect its interest- %ther&ise, the 0art" in=ured '" the other;s 'reach &ill have to 0assivel" sit and &atch its da/ages accu/ulate during the 0endenc" of the suit until the final =udg/ent of rescission is rendered &hen the la& itself re.uires that he should e4ercise due diligence to /ini/i2e its o&n da/ages ( ivil ode- 3rticle **03)!. Not(ce re2u(re' to prevent 'e-au+t(n) party -rom assum(n) o--er st(++ (n e--ect The rule validates, 'oth in e.uit" and =ustice, contracts, in order to avoid and 0revent the defaulting 0art" fro/ assu/ing the offer as still in effect due to the o'ligee;s tolerance for such non)fulfill/ent(esultantl", litigations shall 'e 0revented and the relations a/ong &ould)'e 0arties /a" 'e 0reserved8. Gssue not ra(se' 'ur(n) tr(a+ cannot e ra(se' -or t*e -(rst t(me on appea+ 3n issue &hich &as not raised during the trial in the court 'elo& cannot 'e raised for the first ti/e on a00eal- 5ssues of fact and argu/ents not ade.uatel" 'rought to the attention of the trial court need not 'e and ordinaril" &ill not 'e considered '" a revie&ing court as the" cannot 'e raised for the first ti/e on a00eal- 5n the 0resent case, heng alleged that the P60,000 &as earnest /one", 'ut in his testi/on", offered to 0rove the transaction &as actuall" a 0erfected contract to sell- Doth courts correctl" held that the recei0t &hich &as the result of their agree/ent is a contract to sell- This &as, in fact heng;s contention in his 0leadings 'efore said courts- The 0atent t&ist onl" o0erates against heng;s 0osture &hich is indicative of the &ea@ness of his clai/#. Rece(pt" even (- a con'(t(ona+ contract o- sa+e 'oes not *ave any o +()atory -orce >ven if it is assu/ed that the recei0t is to 'e treated as a conditional contract of sale, it did not ac.uire an" o'ligator" force since it &as su'=ect to sus0ensive condition that the earlier contract to sell 'et&een Fenato and the Da Jose s0ouses should first 'e cancelled or rescinded, a condition never /et, as Fenato, to his credit, u0on reali2ing his error, redee/ed hi/self '" res0ecting and /aintaining his earlier contract &ith the Da Jose s0ouses10. Rece(pt 'oes not conta(n re2u(s(tes o- a va+(' contract o- sa+e 3 careful reading of the recei0t alone &ould not even sho& that a conditional contract of sale has 'een entered '" Fenato and heng- :hen the re.uisites of a valid contract of sale are lac@ing in said recei0t, therefore the 7sale8 is neither valid or enforcea'le11. Corone+ vs. CA not -ours2uare The factual /ilieu in oronel is not on all fours &ith those in the 0resent case- 5n oronel, the ourt found that the 0etitioners therein clearl" intended to transfer title to the 'u"er &hich 0etitioner the/selves ad/itted in their 0leading- The agree/ent of the 0arties therein &as definitivel" outlined in the 7(ecei0t of Do&n Pa"/ent8 'oth as to 0ro0ert", the 0urchase 0rice, the deliver" of the seller of the 0ro0ert" and the /anner of the transfer of title su'=ect to the s0ecific condition that u0on the transfer in their na/es of the su'=ect 0ro0ert" the oronels &ill e4ecute the deed of a'solute sale- :hereas, in the 0resent case, even '" a
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careful 0erusal of the recei0t alone, such @ind of circu/stances cannot 'e ascertained &ithout ho&ever resorting to the e4ce0tions of the (ule on Parol >vidence1/. Dou +e sa+e3 Art(c+e 1$44 3rticle 1644 0rovides that 75f the sa/e thing should have 'een sold to different vendees, the o&nershi0 shall 'e transferred to the 0erson &ho /a" have first ta@en 0ossession thereof in good faith, if it should 'e /ova'le 0ro0ert"- !hould it 'e i//ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"- !hould there 'e no inscri0tion, the o&nershi0 shall 0ertain to the 0erson &ho in good faith &as first in 0ossessionG and in the a'sence thereof, to the 0erson &ho 0resents the oldest title, 0rovided there is good faith8 11. Art(c+e 1$44 (s not apropos to present case" accor'(n) to Court o- Appea+s 3 /eticulous reading of the 3rticle 1644 sho&s that said la& is not a0ro0os to the 0resent case- This 0rovision connotes that the follo&ing circu/stances /ust concur: 7(a) The t&o (or /ore) sales transactions in issue /ust 0ertain to e4actl" the sa/e su'=ect /atter, and /ust 'e valid sales transactions- (') The t&o (or /ore) 'u"ers at odds over the rightful o&nershi0 of the su'=ect /atter /ust each re0resent conflicting interestsG and (c) The t&o (or /ore) 'u"ers at odds over the rightful o&nershi0 of the su'=ect /atter /ust each have 'ought fro/ the ver" sa/e seller-8 These situations o'viousl" are lac@ing in a contract to sell for neither a transfer of o&nershi0 nor a sales transaction has 'een consu//ated- The contract to 'e 'inding u0on the o'ligee or the vendor de0ends u0on the fulfill/ent or non)fulfill/ent of an event1$. r()*t Art(c+e 1$44 app+(es (n t*e present case" accor'(n) to .upreme Court& %(rst (n t(me" stron)er (n
The governing 0rinci0le of 3rticle 1644, ivil ode, a00lies in the 0resent situation- Juris0rudence teaches us that the governing 0rinci0le is P(5A?! T>AP%(>, P%(T5%( J?(> (first in ti/e, stronger in right)- For not onl" &as the contract 'et&een Fenato and the s0ouses first in ti/eG it &as also registered long 'efore heng;s intrusion as a second 'u"er- This 0rinci0le onl" a00lies &hen the s0ecial rules 0rovided in 3rticle 1644 of the ivil ode do not a00l" or fit the s0ecific circu/stances /andated under said la& or '" =uris0rudence inter0reting the article1:. Art(c+e 1$44" Ho, secon' uyer can '(sp+ace -(rst uyer The rule e4acted '" 3rticle 1644 of the ivil ode for the second 'u"er to 'e a'le to dis0lace the first 'u"er are: (1) that the second 'u"er /ust sho& that he acted in good faith (i-e- in ignorance of the first sale and of the first 'u"er;s rights) fro/ the ti/e of ac.uisition until title is transferred to hi/ '" registration or failing registration, '" deliver" of 0ossessionG (*) the second 'u"er /ust sho& continuing good faith and innocence or lac@ of @no&ledge of the first sale until his contract ri0ens into full o&nershi0 through 0rior registration as 0rovided '" la&- 5n the 0resent case, @no&ledge gained '" heng of the first transaction 'et&een the Da Jose s0ouses and Fenato defeats his rights even if he is first to register the second transaction, since such @no&ledge taints his 0rior registration &ith 'ad faith1!. Ano,+e')e o- -(rst uyer o- t*e secon' transact(on 'oes not 'e-eat *(s r()*ts The @no&ledge gained '" the Da Jose s0ouses, as first 'u"ers, of the ne& agree/ent 'et&een heng and Fenato &ill not defeat their rights as first 'u"ers e4ce0t &here heng, as second 'u"er, registers or annotates his transaction or agree/ent on the title of the su'=ect 0ro0erties in good faith ahead of the Da Jose s0ouses- Aoreover, although the Da Jose s0ouses, as first 'u"ers, @ne& of the second transaction it &ill not 'ar the/ fro/ availing of their rights granted '" la&, a/ong the/, to register first their agree/ent as against the second 'u"er18. Re)(strat(on 'e-(ne' 7(egistration8, as defined '" !oler and astillo, /eans an" entr" /ade in the 'oo@s of the registr", including 'oth registration in its ordinar" and strict sense, and cancellation, annotation, and even /arginal
.a+es" /001 ( $: )
notes- 5n its strict acce0tation, it is the entr" /ade in the registr" &hich records sole/nl" and 0er/anentl" the right of o&nershi0 and other real rights1#. Gnscr(pt(on o- Dee' o- .a+e (n re)(stry o- property on or()(na+ 'ocument a re)(strat(on o- sa+e :hen a Deed of !ale is inscri'ed in the registr" of 0ro0ert" on the original docu/ent itself, &hat &as done &ith res0ect to said entries or annotations and /arginal notes a/ounted to a registration of the sale- 5n the 0resent case, there is no reason &h" the annotation /ade '" the Da Jose s0ouses &ith res0ect to their ontract to !ell dated 9 !e0te/'er 1,<, should not 'e given 0riorit" in right/0. Goo' -a(t* (n re)(strat(on -or r()*t to e en-orcea +e Food faith /ust concur &ith registration for such 0rior right to 'e enforcea'le- 5n the 0resent case, the annotation /ade '" the Da Jose s0ouses on the titles of Fenato of their 7 ontract To !ell8 /ore than satisfies this re.uire/ent- :hereas in the case of Fenato;s agree/ent &ith heng such is unavailing- For even 'efore the recei0t &as issued to heng infor/ation of such 0re)e4isting agree/ent has 'een 'rought to his @no&ledge &hich did not deter hi/ fro/ 0ursuing his agree/ent &ith Fenato- !ince heng &as full" a&are, or could have 'een if he had chosen to in.uire, of the rights of the Da Jose s0ouses under the ontract to !ell dul" annotated on the T Ts of Fenato, it 'eco/es unnecessar" to further ela'orate in detail the fact that he is indeed in 'ad faith in entering into such agree/ent/1. Ano,+e')e o- 'e-ect (n t(+e cannot c+a(m )oo' -a(t* a)a(nst anot*er (nterest 5n Leung Eee vs- F - L - !trong Aachiner" o-, it &as stated that 7%ne &ho 0urchases real estate &ith @no&ledge of a defect of title in his vendor cannot clai/ that he has ac.uired title thereto in good faith as against an interest thereinG and the sa/e rule /ust 'e a00lied to one &ho has @no&ledge of facts &hich should have 0ut hi/ u0on such in.uir" and investigation as /ight 'e necessar" to ac.uaint hi/ &ith the defects in the title of his vendor- 3 0urchaser cannot close his e"es to facts &hich should 0ut a reasona'le /an u0on his guard, and then clai/ that he acted in good faith under the 'elief that there &as no defect in the title of the vendor- #is /ere refusal to 'elieve that such defect e4ists, or his &illful closing of his e"es to the 0ossi'ilit" of the e4istence of a defect in his vendor;s title, &ill not /a@e hi/ an innocent 0urchaser for value, if it after&ards develo0s that the title &as in fact defective, and it a00ears that he had such notice of the defect as &ould have led to its discover" had he acted &ith that /easure of 0recaution &hich /a" reasona'l" 'e re.uired of a 0rudent /an in a li@e situation- Food faith, or lac@ of it, is in its last anal"sis a .uestion of intentionG 'ut in ascertaining the intention '" &hich one is actuated on a given occasion, &e are necessaril" controlled '" the evidence as to the conduct and out&ard acts '" &hich alone the in&ard /otive /a", &ith safet", 'e deter/ined- !o it is that Hthe honest" of intention,; Hthe honest la&ful intent,; &hich constitutes good faith i/0lies a Hfreedo/ fro/ @no&ledge and circu/stances &hich ought to 0ut a 0erson on in.uir",; and so it is that 0roof of such @no&ledge overco/es the 0resu/0tion of good faith in &hich the courts al&a"s indulge in the a'sence of the 0roof to the contrar"- Food faith, or the &ant of it, is not a visi'le, tangi'le fact that can 'e seen or touched, 'ut rather a state or condition of /ind &hich can onl" 'e =udge of '" actual or fancied to@ens or signs-8 (:ilder vs- Fil/an, 66 1t- 604, 606G f- ardenas vs- Ailler, 10< al-, *60G Dreau4) (enoudet, "0ress Lu/'er o- vs- !hadel, 6* La- 3nn-, *0,4)*0,<G Pin@erton Dros- o- vs- Dro/el", 11, Aich-, <, 10, 1+) //. Ba' -a(t* as(s -or 'ama)es Da/ages &ere a&arded '" the a00ellate court on the 'asis of its finding that heng 7&as in 'ad faith &hen he filed the suit for s0ecific 0erfor/ance @no&ing full" &ell that his agree/ent &ith Fenato did not 0ush through-8 !uch 'ad faith, cou0led &ith his &rongful interference &ith the contractual relations 'et&een Fenato and the Da Jose s0ouses, &hich cul/inated in his filing of the 0resent suit and there'" creating &hat the counsel for Fenato and the s0ouses descri'es as 7a 0rolonged and econo/icall" unhealth" gridloc@8 on 'oth the land itself and their rights 0rovides a/0le 'asis for the da/ages a&arded- Dased on these over&hel/ing evidence of 'ad faith on the 0art of heng, the a&ard of da/ages /ade '" the a00ellate court is in order.a+es" /001 ( $! )
[1#] CGR v. En)(neer(n) E2u(pment an' .upp+y [G.R. No. @D/!044. Fune 10" 1#!$.] 3n4ineerin4 35uipment and Supp", v. CI6 *7.6. 8o. 9:. -$.. ;une &%, /0 $.+ First Division, >sguerra (J): 4 concurring %acts& >ngineering >.ui0/ent and !u00l" o- is an engineering and /achiner" fir/G and 'eing an o0erator of an integrated engineering shi0, is engaged in the design and installation of central t"0e air conditioning s"ste/, 0u/0ing 0lants and steel fa'rications- %n *+ Jul" 1,69, one Juan de la ru2, &rote the then ollector, no& o//issioner, of 5nternal (evenue denouncing the o/0an" for ta4 evasion '" /isdeclaring its i/0orted articles and failing to 0a" the correct 0ercentage ta4es due thereon in connivance &ith its foreign su00liers- The o/0an" &as li@e&ise denounced to the entral Dan@ for alleged fraud in o'taining its dollar allocations- 3cting on these denunciations, a raid and search &as conducted '" a =oint tea/ of entral Dan@, ( D), $ational Dureau of 5nvestigation ($D5) and Dureau of 5nternal (evenue (D5() agents on *+ !e0te/'er 1,69, on &hich occasion volu/inous records of the fir/ &ere sei2ed and confiscated%n 30 !e0te/'er 1,6+, revenue e4a/iners re0orted and reco//ended to the then ollector, no& o//issioner, of 5nternal (evenue that the o/0an" 'e assessed for P4<0,,1*-01 as deficienc" advance sales ta4 on the theor" that it /isdeclared its i/0ortation of air conditioning units and 0arts and accessories thereof &hich are su'=ect to ta4 under !ection 1<6(/) 1 of the Ta4 ode, instead of !ection 1<9 of the sa/e ode- This assess/ent &as revised on *3 Januar" 1,6,, in line &ith the o'servation of the hief, D5( La& Division, and &as raised to P,19,39*-69 re0resenting deficienc" advance sales ta4 and /anufacturers sales ta4, inclusive of the *6I and 60I surcharges- %n 3 Aarch 1,6,, the o//issioner assessed against, and de/anded u0on, the o/0an" 0a"/ent of the increased a/ount and suggested that P10,000 'e 0aid as co/0ro/ise in e4tra=udicial settle/ent of the o/0an";s 0enal lia'ilit" for violation of the Ta4 ode- The fir/, ho&ever, contested the ta4 assess/ent and re.uested that it 'e furnished &ith the details and 0articulars of the o//issioner;s assess/ent- The o//issioner re0lied that the assess/ent &as in accordance &ith la& and the facts of the case%n 30 Jul" 1,6,, the o/0an" a00ealed the case to the ourt of Ta4 300eals ( T3) and during the 0endenc" of the case the investigating revenue e4a/iners reduced the o/0an";s deficienc" ta4 lia'ilities fro/ P,19,39*-96 to P+40,6<+-<9, 'ased on findings after conferences had &ith the o/0an";s 3ccountant and 3uditor- %n *, $ove/'er 1,99, the T3 rendered its decision, /odif"ing the decision a00ealed fro/, declaring the o/0an" as contractor e4e/0t fro/ the deficienc" /anufacturers sales ta4 covering the 0eriod fro/ 1 June 1,4< to * !e0te/'er 1,69 'ut ordered said co/0an" to 0a" the o//issioner, or his collection agent, the su/ of P1+4,141-9* as co/0ensating ta4 and *6I surcharge for the 0eriod fro/ 1,63 to !e0te/'er 1,69G :ith costs against the o/0an"The o//issioner, not satisfied &ith the decision of the T3, a00ealed to the !u0re/e ourt on 1< Januar" 1,9+, (F( L)*+044)- %n the other hand, the o/0an", on 4 Januar" 1,9+, filed &ith the T3 a /otion for reconsiderationG &hich &as denied on 9 30ril 1,9+, 0ro/0ting the o/0an" to file also &ith the !u0re/e ourt its a00eal (F( L)*+46*)- !ince the t&o cases involve the sa/e 0arties and issues, the ourt decided to consolidate and =ointl" decide the/The !u0re/e ourt affir/ed the decision a00ealed fro/ &ith /odification that the lia'le to 0a" the 60I fraud surcharge1. o/0an" is also /ade
9anu-acturer 'e-(ne' !ection 1,4 of the Ta4 code 0rovides that 7;Aanufacturer; includes ever" 0erson &ho '" 0h"sical or che/ical 0rocess alters the e4terior te4ture or for/ or inner su'stance of an" ra& /aterial or /anufactured or
.a+es" /001 ( $8 )
0artiall" /anufactured 0roducts in such /anner as to 0re0are it for a s0ecial use or uses to &hich it could not have 'een 0ut in its original condition, or &ho '" an" such 0rocess alters the .ualit" of an" such /aterial or /anufactured or 0artiall" /anufactured 0roduct so as to reduce it to /ar@eta'le sha0e, or 0re0are it for an" of the uses of industr", or &ho '" an" such 0rocess co/'ines an" such ra& /aterial or /anufactured or 0artiall" /anufactured 0roducts &ith other /aterials or 0roducts of the sa/e or of different @inds and in such /anner that the finished 0roduct of such 0rocess of /anufacture can 'e 0ut to s0ecial use or uses to &hich such ra& /aterial or /anufactured or 0artiall" /anufactured 0roducts in their original condition could not have 'een 0ut, and &ho in addition alters such ra& /aterial or /anufactured or 0artiall" /anufactured 0roducts, or co/'ines the sa/e to 0roduce such finished 0roducts for the 0ur0ose of their sale or distri'ution to others and not for his o&n use or consu/0tion-8 /. ;est to '(st(n)u(s* contract o- sa+e an' contract -or ,ork" +a or an' mater(a+s The distinction 'et&een a contract of sale and one for &or@, la'or and /aterials is tested '" the in.uir" &hether the thing transferred is one not in e4istence and &hich never &ould have e4isted 'ut for the order of the 0art" desiring to ac.uire it, or a thing &hich &ould have e4isted and has 'een the su'=ect of sale to so/e other 0ersons even if the order had not 'een given- 5f the article ordered '" the 0urchaser is e4actl" such as the 0laintiff /a@es and @ee0s on hand for sale to an"one, and no change or /odification of it is /ade at defendant;s re.uest, it is a contract of sale, even though it /a" 'e entirel" /ade after, and in conse.uence of, the defendants order for it1. Contract o- sa+e '(st(n)u(s*e' -rom a contract -or a p(ece o- ,ork The $e& ivil ode distinguishes a contract of sale fro/ a contract for a 0iece of &or@- 3rticle 149+ 0rovides that 7a contract for the deliver" at a certain 0rice of an article &hich the vendor in the ordinar" course of his 'usiness /anufactures or 0rocures for the general /ar@et, &hether the sa/e is on hand at the ti/e or not, is a contract of sale, 'ut if the goods are to 'e /anufactured s0eciall" for the custo/er and u0on his s0ecial order and not for the general /ar@et, it is a contract for a 0iece of &or@-8 4. Contractor 'e-(ne'3 ;est to 'eterm(ne contractor The &ord 7contractor8 has co/e to 'e used &ith s0ecial reference to a 0erson &ho, in the 0ursuit of the inde0endent 'usiness, underta@es to do a s0ecific =o' or 0iece of &or@ for other 0ersons, using his o&n /eans and /ethods &ithout su'/itting hi/self to control as to the 0ett" details- (Ara<as, Annotations and ;urisprudence on the 8ationa" Interna" 6evenue Code, p. &/8, par. /0/(.(, /0 % 3d.( The true test of a contractor as &as held in the cases of 9u=on Stevedorin4 Co., vs. Trinidad -&, !hi". 8%&, 8% :8%8, and 9a Car"ota Su4ar Centra" vs. Trinidad -&, !hi". 8/', 8/0, &ould see/ to 'e that he renders service in the course of an inde0endent occu0ation, re0resenting the &ill of his e/0lo"er onl" as to the result of his &or@, and not as to the /eans '" &hich it is acco/0lished$. En)(neer(n) E2u(pment Co. (s a contractor an' not a manu-acturer The o/0an" did not /anufacture air conditioning units for sale to the general 0u'lic, 'ut i/0orted so/e ite/s (as refrigeration co/0ressors in co/0lete set, heat e4changers or coils), &hich &ere used in e4ecuting contracts entered into '" it- The o/0an" fa'ricates, asse/'les, su00lies and installs in the 'uildings of its various custo/ers the central t"0e air conditioning s"ste/G 0re0ares the 0lans and s0ecifications therefor &hich are distinct and different fro/ each otherG the air conditioning units and s0are 0arts or accessories thereof used are not the &indo& t"0e of air conditioner &hich are /anufactured, asse/'led and 0roduced locall" for sale to the general /ar@etG and the i/0orted air conditioning units and s0are 0arts or accessories thereof are su00lied and installed u0on 0revious orders of its custo/ers confor/a'l" &ith their needs and re.uire/ents-8 The facts and circu/stances su00ort the theor" that the o/0an" is a contractor rather than a /anufacturer:. En)(neer(n) E2u(pment Co. su 8ect to contractors ta7 (.ect(on 1#1)3 As (t (mports )oo's not su 8ect to sa+es ta7" (t a+so +(a +e to 10K compensat(on ta7 (.ect(on 1#0 (n re+at(on to .ect(on 18[m]" ut ,(t*out t*e $0K mark up prov('e' (n .ect(on 181[ ]
.a+es" /001 ( $# )
The o/0an", 'eing a contractor and not a /anufacturer, is su'=ect to the contractors ta4 0rescri'ed '" !ection 1,1 of the ode and not to the advance sales ta4 i/0osed '" !ection 1<6(/) in relation to !ection 1,4 of the sa/e ode- !ince it has 'een 0roved that the o/0an" i/0orted air conditioning units 0arts or accessories thereof for use in its construction 'usiness and these ite/s &ere never sold resold 'artered or e4changed the o/0an" should 'e held lia'le to 0a" ta4es 0rescri'ed under !ection 1,0 of the ode- This co/0ensating ta4 is not a ta4 on the i/0ortation of goods 'ut a ta4 on the use of i/0orted goods not su'=ect to sales ta4- The o/0an", therefore, should 'e held lia'le to the 0a"/ent of 30I co/0ensating ta4 in accordance &ith !ection 1,0 of the Ta4 ode in relation to !ection 1<6(/) of the sa/e, 'ut &ithout the 60I /ar@ u0 0rovided in !ection 1<3(')!. A(r con'(t(on(n) e2u(pment )roupe' (nto / c+ass(-(cat(ons" un(tary an' centra+ system There is a great variet" of e.ui0/ent in use to do air conditioning- !o/e devices are designed to serve a s0ecific t"0e of s0aceG others to 0erfor/ a s0ecific functionG and still others as co/0onents to 'e asse/'led into a tailor)/ade s"ste/ to fit a 0articular 'uilding- Fenerall", ho&ever, the" /a" 'e grou0ed into t&o classifications, unitar" and central s"ste/- The unitar" e.ui0/ent classification includes those designs such as roo/ air conditioner, &here all of the functional co/0onents are included in one or t&o 0ac@ages, and installation involves onl" /a@ing service connection such as electricit", &ater and drains- entral)station s"ste/s, often referred to as a00lied or 'uilt)u0 s"ste/s, re.uire the installation of co/0onents at different 0oints in a 'uilding and their interconnection- The roo/ air conditioner is a unitar" e.ui0/ent designed s0ecificall" for a roo/ or si/ilar s/all s0ace- 5t is uni.ue a/ong air conditioning e.ui0/ent in t&o res0ects: 5t is in the electrical a00liance classification, and it is /ade '" a great nu/'er of /anufacturers (>ngineering hand'oo@ '" L Aorro&)- The central t"0e air conditioning s"ste/ is an engineering =o' that re.uires 0lanning and /eticulous la"out due to the fact that usuall" architects assign definite s0ace and usuall" the s0aces the" assign are ver" s/all and of various si2es, in 'uildings dissi/ilar to e4isting 'uildings- The &indo& t"0e air conditioner is a sort of co/0ro/iseG it cannot control hu/idit" to the desired levelG rather the /anufacturers, '" hit and /iss, &ere a'le to satisf" the/selves that the desired co/fort &ithin a roo/ could 'e /ade '" a definite setting of the /achine as it co/es fro/ the factor"G &hereas the central t"0e s"ste/ definitel" re.uires an intelligent o0erator8. Ce+est(no Co v. CGR" A'vert(s(n) Assoc(ates v. Co++ector o- customs" 9an(+a ;ra'(n) v. C(ty o9an(+a not app+(ca +e The o/0an" did not and &as not engaged in the /anufacture of air conditioning units 'ut had its services contracted for the installation of a central s"ste/- The cases cited '" the o//issioner (3dvertising 3ssociates, 5nc- vs- ollector of usto/s, ,+, Phil- 939G elestino o Q o- vs- ollector of 5nternal (evenue, ,, Phil- <41 and Aanila Trading Q !u00l" o- vs- it" of Aanila, 69 %-F- 39*,), are not in 0oint$either are the" a00lica'le 'ecause the facts in all the cases cited are entirel" different5n elestino o, the ourt held the ta40a"er to 'e a /anufacturer rather than a contractor of sash, doors and &indo&s /anufactured in its factor"- Fro/ the ver" start, elestino o intended itself to 'e a /anufacturer of doors, &indo&s, sashes etc- as it did register a s0ecial trade na/e for its sash 'usiness and ordered co/0an" stationer" carr"ing the 'old 0rint 7%(5>$T3L !3!# F3 T%(E ( >L>!T5$% % 3$D %AP3$E, P(%P-) ,*9 (aon !t-, Uuia0o, Aanila, Tel- $o- etc-, Aanufacturers of 3ll Cinds of Doors, :indo&s - - -8 Li@e&ise, elestino o never 0ut u0 a contractor;s 'ond as re.uired '" 3rticle 1+*, of the ivil ode- 3lso, as a general rule, sash factories receive orders for doors and &indo&s of s0ecial design onl" in 0articular cases, 'ut the 'ul@ of their sales is derived fro/ read")/ade doors and &indo&s of standard si2es for the average ho/e, &hich 7sales8 &ere reflected in their 'oo@s of accounts totalling P11<,+64-9, for the 0eriod of onl" nine (,) /onths- The ourt found said su/ difficult to have 'een derived fro/ its fe& custo/ers &ho 0laced s0ecial orders for these ite/s5n the 0resent case, the o/0an" advertised itself as >ngineering >.ui0/ent and !u00l" o/0an", Aachiner" Aechanical !u00lies, >ngineers, ontractors, 1+4 Aar.ues de o/illas, Aanila and not as /anufacturers- 5t li@e&ise 0aid the contractors ta4 on all the contracts for the design and construction of central s"ste/- !i/ilarl", ot did not have read")/ade air conditioning units for sale.a+es" /001 ( :0 )
#. .9 @a,rence Co. v. 9c%ar+an'" CGR o- t*e .tate o- ;ennessee an' 9cCan+ess (s on a++ -ours ,(t* present case The case of !-A- La&rence o- vs- AcFarland, o//issioner of 5nternal (evenue of the !tate of Tennessee and Ac anless, 366 !: *d, 100, 101, is the one on all fours &ith the 0resent case, 7&here the cause 0resents the .uestion of &hether one engaged in the 'usiness of contracting for the esta'lish/ent of air conditioning s"ste/ in 'uildings, &hich &or@ re.uires, in addition to the furnishing of a cooling unit, the connection of such unit &ith electrical and 0lu/'ing facilities and the installation of ducts &ithin and through &alls, ceilings and floors to conve" cool air to various 0arts of the 'uilding, is lia'le for sale or use ta4 as a contractor rather than a retailer of tangi'le 0ersonal 0ro0ert"- 300ellee too@ the 0osition that a00ellant &as not engaged in the 'usiness of selling air conditioning e.ui0/ent as such 'ut in the furnishing to its custo/ers of co/0leted air conditioning s"ste/s 0ursuant to contract, &as a contractor engaged in the construction or i/0rove/ent of real 0ro0ert", and as such &as lia'le for sales or use ta4 as the consu/er of /aterials and e.ui0/ent used in the consu//ation of contracts, irres0ective of the ta4 status of its contractors- To trans/it the &ar/ or cool air over the 'uildings, the a00ellant installed s"ste/ of ducts running fro/ the 'asic units through &alls, ceilings and floors to registers- The contract called for co/0leted air conditioning s"ste/s &hich 'eca/e 0er/anent 0art of the 'uildings and i/0rove/ents to the realt"-8 The ourt held the a00ellant a contractor &hich used the /aterials and the e.ui0/ent u0on the value of &hich the ta4 herein i/0osed &ar levied in the 0erfor/ance of its contracts &ith its custo/ers, and that the custo/ers did not 0urchase the e.ui0/ent and have the sa/e installed10. En)(neer(n) E2u(pment *a' (ntent to m(s'ec+are (ts (mportat(on as ev('ence' y (ts commun(cat(ons3 Company +(a +e to $0K -rau' surc*ar)e The co//unications ('et&een the o/0an" and various su00liers such as Trane o-, 3c/e 5ndustries 5nc-, and %&ens) orning Fi'erglass or0-) 0resented as e4hi'its in the case &ere strongl" indicative of the fraudulent intent of the o/0an" to /isdeclare its i/0ortation of air conditioning units and s0are 0arts or accessories thereof to evade 0a"/ent of the 30I ta4- !ince the co//ission of fraud is altogether too glaring, the ourt cannot agree &ith the T3 in a'solving the o/0an" fro/ the 60I fraud surcharge, other&ise it &ill 'e tanta/ount to giving 0re/iu/ to a 0lainl" intolera'le act of ta4 evasion11. Company +(a +e to /$K compensat(on ta73 .ect(on 1#0 as amen'e' The original te4t of !ection 1,0 of o//on&ealth 3ct 499, other&ise @no& as the $ational 5nternal (evenue ode, as a/ended '" 3 603, effective on 1 %cto'er 1,3,, does not 0rovide for the filing of a co/0ensating ta4 return and 0a"/ent of the *6I surcharge for late 0a"/ent thereof- ?nder the original te4t of !ection 1,0 of the Ta4 ode, as a/ended '" 3 603, the contention of the o/0an" that it is not su'=ect to the *6I surcharge a00ears to 'e legall" tena'le- #o&ever, !ection 1,0 of the Ta4 ode &as su'se.uentl" a/ended '" (3 4<, *63, 391, 1611 and 191* effective 1 %cto'er 1,49, 1 Jul" 1,4<, , June 1,4,, 19 June 1,69 and *4 3ugust 1,69 res0ectivel", &hich invaria'l" 0rovides a/ong others, that 7if an" article &ithdra&n fro/ the custo/house or the 0ost office &ithout 0a"/ent of the co/0ensating ta4 is su'se.uentl" used '" the i/0orter for other 0ur0oses corres0onding entr" should 'e /ade in the loo@s of accounts if an" are @e0t or a &ritten notice thereof sent to the ollector of 5nternal (evenue and 0a"/ent of the corres0onding co/0ensating ta4 /ade &ithin 30 da"s fro/ the date of such entr" or notice and if ta4 is not 0aid &ithin such 0eriod the a/ount of the ta4 shall 'e increased '" *6I the incre/ent to 'e a 0art of the ta4,8 and that 7since the i/0orted air conditioning units and s0are 0arts or accessories thereof are su'=ect to the co/0ensating ta4 of 30I as the sa/e &ere used in the construction 'usiness of >ngineering, it is incu/'ent u0on the latter to co/0l" &ith the afore.uoted re.uire/ent of !ection 1,0 of the ode, '" 0osting in its 'oo@s of accounts or notif"ing the ollector of 5nternal (evenue that the i/0orted articles &ere used for other 0ur0oses &ithin 30 da"s- - - - onse.uentl", as the 30I co/0ensating ta4 &as not 0aid '" 0etitioner &ithin the ti/e 0rescri'ed '" !ection 1,0 of the Ta4 ode as a/ended, it is therefore su'=ect to the *6I surcharge for delin.uenc" in the 0a"/ent of the said ta4-8
.a+es" /001 ( :1 )
1/. Brescr(pt(on not yet set (n3 Brescr(pt(on o- ta7 assessment (s 10 years (- ase' on -a+se or -rau'u+ent return to eva'e ta7 3 revie& of the record reveals that the o/0an" filed a ta4 return or declaration &ith the Dureau of usto/s 'efore it 0aid the advance sales ta4 of +I, and the declaration filed reveals that it did in fact /isdeclare its i/0ortations- !ection 33* (a) of the Ta4 ode therefore is a00lica'le- !ection 33* (a) 0rovides for the e4ce0tions as to 0eriod of li/itation of assess/ent and collection of ta4es, 0roviding that 7(a) in the case of a false or fraudulent return &ith intent to evade ta4 or of a failure to file a return, the ta4 /a" 'e assessed, or a 0roceeding in court for the collection of such ta4 /a" 'e 'egun &ithout assess/ent at an" ti/e &ithin ten "ears after the discover" of the falsit", fraud or o/ission-8 Thus, considering the 0re0onderance of evidence of fraud &ith the intent to evade the higher rate of 0ercentage ta4 due fro/ the o/0an", the ta4 assess/ent &as /ade &ithin the 0eriod 0rescri'ed '" la& and 0rescri0tion had not set in against the Fovern/ent[/0] Corone+ v. CA [G.R. No. 101$!!. >cto er !" 1##:.] Third division, Aelo (J): 3 concurring, 1 too@ no 0art %acts& %n 1, Januar" 1,<6, (o/ulo oronel, et al- e4ecuted a docu/ent entitled 7(ecei0t of Do&n Pa"/ent8 in favor of (a/ona Patricia 3lcara2 for P60,000 do&n0a"/ent of the total a/ount of P1-*4A as 0urchase 0rice for an inherited house and lot (T T 11,9*+, (egistr" of Deeds of Uue2on it"), 0ro/ising to e4ecute a deed of a'solute sale of said 0ro0ert" as soon as such has 'een transferred in their na/e- The 'alance of P1-1,A is due u0on the e4ecution of said deed- %n the sa/e date, once0cion D- 3lcara2, /other of (a/ona, 0aid the do&n 0a"/ent of P60,000-00- %n 9 Fe'ruar" 1,<6, the 0ro0ert" originall" registered in the na/e of the oronels; father &as transferred in their na/es (T T 3*+043)- #o&ever, on 1< Fe'ruar" 1,<6, the oronels sold the 0ro0ert" to atalina D- Aa'anag for P1,6<0,000-00 after the latter has 0aid P300,000-00- For this reason, oronels canceled and rescinded the contract &ith 3lcara2 '" de0ositing the do&n 0a"/ent in the 'an@ in trust for 3lcara2%n ** Fe'ruar" 1,<6, 3lcara2 filed a co/0laint for s0ecific 0erfor/ance against the oronels and caused the annotation of a notice of lis 0endens at the 'ac@ of T T 3*+403- %n * 30ril 1,<6, Aa'anag caused the annotation of a notice of adverse clai/ covering the sa/e 0ro0ert" &ith the (egistr" of Deeds of Uue2on it"- %n *6 30ril 1,<6, the oronels e4ecuted a Deed of 3'solute !ale over the su'=ect 0ro0ert" in favor of Aa'anag- %n 6 June 1,<6, a ne& title over the su'=ect 0ro0ert" &as issued in the na/e of Aa'anag under T T 3616<*5n the course of the 0roceedings, the 0arties agreed to su'/it the case for decision solel" on the 'asis of docu/entar" e4hi'its- ?0on su'/ission of their res0ective /e/oranda and the corres0onding co//ent or re0l" thereto, and on 1 Aarch 1,<,, =udg/ent &as handed do&n in favor of the 0laintiffs, ordering the defendant to e4ecute a deed of a'solute sale of the land covered '" T T 3*+403 and canceling T T 3316<* and declaring the latter &ithout force and effect- lai/s for da/ages '" 0laintiffs and counterclai/s '" the defendants and intervenors &ere dis/issed- 3 /otion for reconsideration &as thereafter filed, &hich &as deniedPetitioners inter0osed an a00eal, 'ut on 19 Dece/'er 1,,1, the 3 rendered its decision full" agreeing &ith the trial court- #ence, the instant 0etitionThe !u0re/e ourt dis/issed the 0etition and affir/ed the a00ealed =udg/ent1. Rece(pt o- 'o,npayment a (n'(n) contract3 9eet(n) o- t*e m(n's The docu/ent e/'odied the 'inding contract 'et&een (a/ona Patricia 3lcara2 and the heirs of
.a+es" /001 ( :/ )
onstancio P- oronel, 0ertaining to a 0articular house and lot covered '" T T 11,9*+, as defined in 3rticle 1306 of the ivil ode of the Phili00ines/. De-(n(t(on o- contract o- sa+e The ivil ode defines a contract of sale, in Article 1458, as 7one of the contracting 0arties o'ligates hi/self to transfer the o&nershi0 of and to deliver a deter/inate thing, and the other to 0a" therefor a 0rice certain in /one" or its e.uivalent-8 !ale, thus, '" its ver" nature a consensual contract 'ecause it is 0erfected '" /ere consent1. E+ements o- contract o- sa+e3 Contract to se++ not contract o- sa+e 'ue to t*e +ack o- -(rst e+ement3 D(st(nct(on necessary ,*en property (s so+' to a t*(r' person The essential ele/ents of a contract of sale are (a) onsent or /eeting of the /inds, that is, consent to transfer o&nershi0 in e4change for the 0riceG (') Deter/inate su'=ect /atterG and (c) Price certain in /one" or its e.uivalent- 3 ontract to !ell /a" not 'e considered as a ontract of !ale 'ecause the first essential ele/ent is lac@ing- 5t is essential to distinguish 'et&een a contract to sell and a conditional contract of sale s0eciall" in cases &here the su'=ect 0ro0ert" is sold '" the o&ner not to the 0art" the seller contracted &ith, 'ut to a third 0erson4. Contract to se++& .e++er a)rees to se++ property ,*en purc*ase pr(ce (s 'e+(vere' to *(m3 se++er reserves trans-er o- t(t+e unt(+ -u+-(++ment o- suspens(ve con'(t(on (payment) 5n a contract to sell, the 0ros0ective seller e40licitl" reserves the transfer of title to the 0ros0ective 'u"er, /eaning, the 0ros0ective seller does not as "et agree or consent to transfer o&nershi0 of the 0ro0ert" su'=ect of the contract to sell until the ha00ening of an event, &hich for 0resent 0ur0oses ta@en to 'e the full 0a"/ent of the 0urchase 0rice- :hat the seller agrees or o'liges hi/self to do is to fulfill his 0ro/ise to sell the su'=ect 0ro0ert" &hen the entire a/ount of the 0urchase 0rice is delivered to hi/- 5n other &ords the full 0a"/ent of the 0urchase 0rice 0arta@es of a sus0ensive condition, the non)fulfill/ent of &hich 0revents the o'ligation to sell fro/ arising and thus, o&nershi0 is retained '" the 0ros0ective seller &ithout further re/edies '" the 0ros0ective 'u"er$. Contract to se++& -a(+ure to 'e+(ver payment (s not a reac* ut event prevent(n) ven'or to convey t(t+e3 o +()at(on 'eman'a +e upon -u++ payment o- pr(ce3 prom(se (n'(n) (- supporte' y payment '(st(nct -rom t*e pr(ce :hen a contract is a contract to sell &here the o&nershi0 or title is retained '" the seller and is not to 0ass until the full 0a"/ent of the 0rice, such 0a"/ent 'eing a 0ositive sus0ensive condition and failure of &hich is not a 'reach, casual or serious, 'ut si/0l" an event that 0revented the o'ligation of the vendor to conve" title fro/ ac.uiring 'inding force (6o5ue v. 9apu=(. ?0on the fulfill/ent of the sus0ensive condition &hich is the full 0a"/ent of the 0urchase 0rice, the 0ros0ective seller;s o'ligation to sell the su'=ect 0ro0ert" '" entering into a contract of sale &ith the 0ros0ective 'u"er 'eco/es de/anda'le as 0rovided in Article 1479 of the ivil ode (73 0ro/ise to 'u" and sell a deter/inate thing for a 0rice certain is reci0rocall" de/anda'le-8) 3n acce0ted unilateral 0ro/ise to 'u" or to sell a deter/inate thing for a 0rice certain is 'inding u0on the 0ro/issor if the 0ro/ise is su00orted '" a consideration distinct fro/ the 0rice:. Contract to se++ 'e-(ne' 3 contract to sell 'e defined as a 'ilateral contract &here'" the 0ros0ective seller, &hile e40ressl" reserving the o&nershi0 of the su'=ect 0ro0ert" des0ite deliver" thereof to the 0ros0ective 'u"er, 'inds hi/self to sell the said 0ro0ert" e4clusivel" to the 0ros0ective 'u"er u0on fulfill/ent of the condition agreed u0on, that is, full 0a"/ent of the 0urchase 0rice!. Contract to se++ not a con'(t(ona+ contract o- sa+e (e7(stence o- -(rst e+ement) 3 contract to sell /a" not even 'e considered as a conditional contract of sale &here the seller /a" li@e&ise reserve title to the 0ro0ert" su'=ect of the sale until the fulfill/ent of a sus0ensive condition, 'ecause
.a+es" /001 ( :1 )
in a conditional contract of sale, the first ele/ent of consent is 0resent, although it is conditioned u0on the ha00ening of a contingent event &hich /a" or /a" not occur8. Con'(t(ona+ contract o- sa+e& (- suspens(ve con'(t(on not -u+-(++e'" pe-ect(on a ate'3 (- -u+-(++e'" contract o- sa+e per-ecte' an' o,ners*(p automat(ca++y trans-ers to uyer 5f the sus0ensive condition is not fulfilled, the 0erfection of the contract of sale is co/0letel" a'ated (cf. #omesite and #ousin4 Corp. vs. Court of Appea"s, /&& SC6A */08-+( - #o&ever, if the sus0ensive condition is fulfilled, the contract of sale is there'" 0erfected, such that if there had alread" 'een 0revious deliver" of the 0ro0ert" su'=ect of the sale to the 'u"er, o&nershi0 thereto auto/aticall" transfers to the 'u"er '" o0eration of la& &ithout an" further act having to 'e 0erfor/ed '" the seller#. Contract to se++& (- suspens(ve con'(t(on -u+-(++e'" se++er *as st(++ to convey t(t+e even (- property (s prev(ous+y 'e+(vere' 5n a contract to sell, u0on the fulfill/ent of the sus0ensive condition &hich is the full 0a"/ent of the 0urchase 0rice, o&nershi0 &ill not auto/aticall" transfer to the 'u"er although the 0ro0ert" /a" have 'een 0reviousl" delivered to hi/- The 0ros0ective seller still has to conve" title to the 0ros0ective 'u"er '" entering into a contract of a'solute sale10. Contract to se++& t*ere (s no 'ou +e sa+e3 (- property so+' to anot*er" t*e se++er may e sue' -or 'ama)es 5n a contract to sell, there 'eing no 0revious sale of the 0ro0ert", a third 0erson 'u"ing such 0ro0ert" des0ite the fulfill/ent of the sus0ensive condition such as the full 0a"/ent of the 0urchase 0rice, for instance, cannot 'e dee/ed a 'u"er in 'ad faith and the 0ros0ective 'u"er cannot see@ the relief of reconve"ance of the 0ro0ert"- There is no dou'le sale in such case- Title to the 0ro0ert" &ill transfer to the 'u"er after registration 'ecause there is no defect in the o&ner)seller;s title 0er se, 'ut the latter, of course, /a" 'e sued for da/ages '" the intending 'u"er11. Con'(t(ona+ contract o- sa+e& sa+e ecomes a so+ute upon -u+-(++ment o- con'(t(on3 (- property so+' to anot*er" -(rst uyer may seek reconveyance 5n a conditional contract of sale, u0on the fulfill/ent of the sus0ensive condition, the sale 'eco/es a'solute and this &ill definitel" affect the seller;s title thereto- 5n fact, if there had 'een 0revious deliver" of the su'=ect 0ro0ert", the seller;s o&nershi0 or title to the 0ro0ert" is auto/aticall" transferred to the 'u"er such that, the seller &ill no longer have an" title to transfer to an" third 0erson- 300l"ing Article 1544 of the ivil ode, such second 'u"er of the 0ro0ert" &ho /a" have had actual or constructive @no&ledge of such defect in the seller;s title, or at least &as charged &ith the o'ligation to discover such defect, cannot 'e a registrant in good faith- !uch second 'u"er cannot defeat the first 'u"er;s title- 5n case a title is issued to the second 'u"er, the first 'u"er /a" see@ reconve"ance of the 0ro0ert" su'=ect of the sale1/. Gnterpretat(on o- contracts" natura+ an' mean(n) o- ,or's un+ess tec*n(ca+ mean(n) ,as (nten'e' 5t is a canon in the inter0retation of contracts that the &ords used therein should 'e given their natural and ordinar" /eaning unless a technical /eaning &as intended (Tan vs. Court of Appea"s, ./. SC6A $8' */00.+(11. Document ent(t+e' 4Rece(pt o- Do,n Bayment6 (n'(cates Con'(t(ona+ Contract o- .a+e an' not contract to se++ The agree/ent could not have 'een a contract to sell 'ecause the sellers /ade no e40ress reservation of o&nershi0 or title to the su'=ect 0arcel of land- Further/ore, the circu/stance &hich 0revented the 0arties fro/ entering into an a'solute contract of sale 0ertained to the sellers the/selves (the certificate of title &as not in their na/es) and not the full 0a"/ent of the 0urchase 0rice- ?nder the esta'lished facts and circu/stances of the case, had the certificate of title 'een in the na/es of 0etitioners)sellers at that ti/e, there
.a+es" /001 ( :4 )
&ould have 'een no reason &h" an a'solute contract of sale could not have 'een e4ecuted and consu//ated right there and then- Aoreover, unli@e in a contract to sell, 0etitioners did not /erel" 0ro/ise to sell the 0ro0ert" to 0rivate res0ondent u0on the fulfill/ent of the sus0ensive condition- %n the contrar", having alread" agreed to sell the su'=ect 0ro0ert", the" undertoo@ to have the certificate of title changed to their na/es and i//ediatel" thereafter, to e4ecute the &ritten deed of a'solute sale- :hat is clearl" esta'lished '" the 0lain language of the su'=ect docu/ent is that &hen the said 7(ecei0t of Do&n Pa"/ent8 &as 0re0ared and signed '" 0etitioners, the 0arties had agreed to a conditional contract of sale, consu//ation of &hich is su'=ect onl" to the successful transfer of the certificate of title fro/ the na/e of 0etitioners; father to their na/es- The sus0ensive condition &as fulfilled on 9 Fe'ruar" 1,<6 and thus, the conditional contract of sale 'et&een the 0arties 'eca/e o'ligator", the onl" act re.uired for the consu//ation thereof 'eing the deliver" of the 0ro0ert" '" /eans of the e4ecution of the deed of a'solute sale in a 0u'lic instru/ent, &hich 0etitioners une.uivocall" co//itted the/selves to do as evidenced '" the 7(ecei0t of Do&n Pa"/ent-8 14. Art(c+e 14!$ an' 1181 app+(es to present case3 Ber-ect(on o- a contract o- sa+e an' Con'(t(ona+ o +()at(on ase' on t*e *appen(n) o- t*e event Article 1475 of the $e& ivil ode 0rovides that 7the contract of sale is 0erfected at the /o/ent there is a /eeting of /inds u0on the thing &hich is the o'=ect of the contract and u0on the 0rice-8 Fro/ that /o/ent, the 0arties /a" reci0rocall" de/and 0erfor/ance, su'=ect to the 0rovisions of the la& governing the for/ of contracts- Article 1181 of the sa/e code 0rovides that 7in conditional o'ligations, the ac.uisition of rights, as &ell as the e4tinguish/ent or loss of those alread" ac.uired, shall de0end u0on the ha00ening of the event &hich constitutes the condition-8 5n the 0resent case, since the condition conte/0lated '" the 0arties &hich is the issuance of a certificate of title in 0etitioners; na/es &as fulfilled on 9 Fe'ruar" 1,<6, the res0ective o'ligations of the 0arties under the contract of sale 'eca/e /utuall" de/anda'le, i-e- the sellers &ere o'liged to 0resent the T T alread" in their na/es to he 'u"er, and to i//ediatel" e4ecute the deed of a'solute sale, &hile the 'u"er on her 0art, &as o'liged to forth&ith 0a" the 'alance of the 0urchase 0rice a/ounting to P1,1,0,000-001$. Con'(t(on 'eeme' -u+-(++e' ,*en o +()or vo+untary prevents (ts -u+-(++ment3 Con'(t(on -u+-(++e'" suc* -act contro++(n) over *ypot*et(ca+ ar)uments Article 118 0rovides that 7the condition shall 'e dee/ed fulfilled &hen the o'ligor voluntaril" 0revents its fulfill/ent-8 Thus, in the 0resent case, the 0etitioners having recogni2ed that the" entered into a contract of sale su'=ect to a sus0ensive condition, as evidenced in the first 0aragra0h in 0age , of their 0etition, cannot no& contend that there could have 'een no 0erfected contract of sale had the 0etitioners not co/0lied &ith the condition of first transferring the title of the 0ro0ert" under their na/es- 5t should 'e stressed and e/0hasi2ed that the condition &as fulfilled on 9 Fe'ruar" 1,<6, &hen T T 3*+403 &as issued in 0etitioners; na/e, and such fact is /ore controlling than /ere h"0othetical argu/ents1:. Retroact(v(ty o- con'(t(ona+ o +()at(on to 'ay o- const(tut(on o- o +()at(on 3rticle 11<+ 0rovides that 7the effects of conditional o'ligation to give, once the condition has 'een fulfilled, shall retroact to the da" of the constitution of the o'ligation-8 5n o'ligations to do or not to do, the courts shall deter/ine, in each case, the retroactive effect of the condition that has 'een co/0lied &ith- 5n the 0resent case, the rights and o'ligations of the 0arties &ith res0ect to the 0erfected contract of sale 'eca/e /utuall" due and de/anda'le as of the ti/e of fulfill/ent or occurrence of the sus0ensive condition on 9 Fe'ruar" 1,<6- 3s of that 0oint in ti/e, reci0rocal o'ligations of 'oth seller and 'u"er arose1!. .uccess(on as a mo'e o- trans-err(n) o,ners*(p 3rticle ++4 of the ivil ode defines !uccession as a /ode of transferring o&nershi0, 0roviding 7succession is a /ode of ac.uisition '" virtue of &hich the 0ro0ert", rights and o'ligations to the e4tent and value of the inheritance of a 0erson are trans/itted through his death to another or others '" his &ill or '" o0eration of la&-8 5n the 0resent case, 0etitioners)sellers 'eing the sons and daughters of the decedent onstancio P- oronel are co/0ulsor" heirs &ho &ere called to succession '" o0eration of la&- Thus, at the
.a+es" /001 ( :$ )
instance of their father;s death, 0etitioners ste00ed into his shoes insofar as the su'=ect 0ro0ert" is concerned, such that an" rights or o'ligations 0ertaining thereto 'eca/e 'inding and enforcea'le u0on the/- 5t is e40ressl" 0rovided that rights to the succession are trans/itted fro/ the /o/ent of death of the decedent (Artic"e , Civi" Code> Cuison vs. ?i""anueva, 0% !hi". 8$% */0$.+(. 18. Estoppe+" as to +ack o- capac(ty 3rticle 1431 0rovides that 7through esto00el an ad/ission or re0resentation is rendered conclusive u0on the 0erson /a@ing it, and cannot 'e denied or dis0roved as against the 0erson rel"ing thereon-8 5n the 0resent case, the 0etitioners, having re0resented the/selves as the true o&ners of the su'=ect 0ro0ert" at the ti/e of sale, cannot clai/ no& that the" &ere not "et the a'solute o&ners thereof at the ti/e the" entered into agree/ent1#. 9ere a++e)at(on (s not ev('ence The su00osed grounds for 0etitioners; rescission, are /ere allegations found onl" in their res0onsive 0leadings, &hich '" e40ress 0rovision of the rules, are dee/ed controverted even if no re0l" is filed '" the 0laintiffs (Sec. //, 6u"e ', 6evised 6u"es of Court(- The records are a'solutel" 'ereft of an" su00orting evidence to su'stantiate 0etitioners; allegations- :e have stressed ti/e and again that allegations /ust 'e 0roven '" sufficient evidence (84 Cho Cio vs. 84 @ion4, //% !hi". 88. */0'/+> 6ecaro vs. 3mAisan, . SC6A $08 */0'/+(. Aere allegation is not an evidence (9a4asca vs. @e ?era, 0 !hi". & ' */0- +(. /0. No st(pu+at(on to aut*or(Ce e7tra8u'(c(a+ resc(ss(on o- contract o- sa+e >ven assu/ing arguendo that (a/ona P- 3lcara2 &as in the ?nited !tates of 3/erica on 9 Fe'ruar" 1,<6, 0etitioners)sellers; act of unilaterall" and e4tra=udiciall" rescinding the contract of sale cannot 'e =ustified as there &as no e40ress sti0ulation authori2ing the sellers to e4tra=udiciall" rescind the contract of sale- (cf @i4nos vs. CA, /$8 SC6A & $ */088+> Ta4uAa vs. ?da. de 9eon, /&. SC6A .. */08-+( /1. Estoppe+" acceptance o- c*eck -rom uyer=s mot*er3 uyer=s a sence not a )roun' -or resc(ss(on Petitioners are esto00ed fro/ raising the alleged a'sence of (a/ona P- 3lcara2 'ecause although the evidence on record sho&s that the sale &as in the na/e of (a/ona P- 3lcara2 as the 'u"er, the sellers had 'een dealing &ith once0cion D- 3lcara2, (a/ona;s /other, &ho had acted for and in 'ehalf of her daughter, if not also in her o&n 'ehalf- 5ndeed, the do&n 0a"/ent &as /ade '" once0cion D- 3lcara2 &ith her o&n 0ersonal chec@ (>4h- 7D8G >4h- 7*8) for and in 'ehalf of (a/ona P- 3lcara2- There is no evidence sho&ing that 0etitioners ever .uestioned once0cion;s authorit" to re0resent (a/ona P- 3lcara2 &hen the" acce0ted her 0ersonal chec@- $either did the" raise an" o'=ection as regards 0a"/ent 'eing effected '" a third 0erson3ccordingl", as far as 0etitioners are concerned, the 0h"sical a'sence of (a/ona P- 3lcara2 is not a ground to rescind the contract of sale//. Buyer not (n 'e-au+t as t*ere (s no proo- t*at se++er presente' t*e ;C; an' s()n(-y t*e(r rea'(ness to e7ecute t*e 'ee' o- a so+ute sa+e Article 11 9 of the ivil ode defines &hen a 0art" in a contract involving reci0rocal o'ligations /a" 'e considered in default- !aid article 0rovides that 7those o'liged to deliver or to do so/ething, incur in dela" fro/ the ti/e the o'ligee =udiciall" or e4tra=udiciall" de/ands fro/ the/ the fulfill/ent of their o'ligation444 5n reci0rocal o'ligations, neither 0art" incurs in dela" if the other does not co/0l" or is not read" to co/0l" in a 0ro0er /anner &ith &hat is incu/'ent u0on hi/- Fro/ the /o/ent one of the 0arties fulfill his o'ligation, dela" '" the other 'egins-8 In the present case, there is no 0roof offered &hatsoever to sho& that the seller actuall" 0resented the ne& transfer certificate of title in their na/es and signified their &illingness and readiness to e4ecute the deed of a'solute sale in accordance &ith their agree/ent- (a/ona;s corres0onding o'ligation to 0a" the 'alance of the 0urchase 0rice in the a/ount of P1,1,0,000-00 (as 'u"er) never 'eca/e due and de/anda'le and, therefore, she cannot 'e dee/ed to have 'een in default/1. Dou +e sa+e3 Art(c+e 1$44" para)rap* / app+(es (n t*e present case
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Article 1544 of the ivil ode 0rovides that 75f the sa/e thing should have 'een sold to different vendees, the o&nershi0 shall 'e transferred to the 0erson &ho /a" have first ta@en 0ossession thereof in good faith, if it should 'e /ova'le 0ro0ert"- !hould if 'e i//ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"- !hould there 'e no inscri0tion, the o&nershi0 shall 0ertain to the 0erson &ho in good faith &as first in the 0ossessionG and, in the a'sence thereof to the 0erson &ho 0resents the oldest title, 0rovided there is good faith-8 In the present case, the record of the case sho&s that the Deed of 3'solute !ale dated *6 30ril 1,<6 as 0roof of the second contract of sale &as registered &ith the (egistr" of Deeds of Uue2on it" giving rise to the issuance of a ne& certificate of title in the na/e of atalina D- Aa'anag on 6 June 1,<6- Thus, the second 0aragra0h of 3rticle 1644 shall a00l"/4. Dou +e sa+e presumes t(t+e to pass to -(rst uyer" e7cept(ons 3rticle 1644, the 0rovision on dou'le sale, 0resu/es title or o&nershi0 to 0ass to the first 'u"er, the e4ce0tions 'eing: (a) &hen the second 'u"er, in good faith, registers the sale ahead of the first 'u"er, and (') should there 'e no inscri0tion '" either of the t&o 'u"ers, &hen the second 'u"er, in good faith, ac.uires 0ossession of the 0ro0ert" ahead of the first 'u"er- ?nless, the second 'u"er satisfies these re.uire/ents, title or o&nershi0 &ill not transfer to hi/ to the 0re=udice of the first 'u"er/$. Br(us tempore" pot(or 8ure (-(rst (n t(me" stron)er (n r()*t)3 %(rst to re)(ster (n )oo' -a(t* The governing 0rinci0le is 0rius te/0ore, 0otior =ure (first in ti/e, stronger in right)- Cno&ledge '" the first 'u"er of the second sale cannot defeat the first 'u"er;s rights e4ce0t &hen the second 'u"er first registers in good faith the second sale (1"ivares vs. 7on=a"es, /$0 SC6A &&(. onversel", @no&ledge gained '" the second 'u"er of the first sale defeats his rights even if he is first to register, since @no&ledge taints his registration &ith 'ad faith (see a"so Astor4a vs. Court of Appea"s, 7.6. 8o. $8$&%, .' @ecemAer /08-(. 5t &as further held that it is essential, to /erit the 0rotection of 3rticle 1644, second 0aragra0h, that the second realt" 'u"er /ust act in good faith in registering his deed of sale (Cru= v. CaAana, /.0 SC6A '$', citin4 CarAone"" vs. Court of Appea"s, '0 SC6A 00, Crisostomo vs. CA, 7.6. 8o. 0$8-&, %. SeptemAer /00.(. /:. Dou +e sa+e3 )oo' -a(t* (n recor'(n) o- secon' sa+e" not (n uy(n) 5n a case of dou'le sale, &hat finds relevance and /aterialit" is not &hether or not the second 'u"er &as a 'u"er in good faith 'ut &hether or not said second 'u"er registers such second sale in good faith, that is, &ithout @no&ledge of an" defect in the title of the 0ro0ert" sold- 5n the 0resent case, Aa'anag could not have in good faith registered the sale entered into on 1< Fe'ruar" 1,<6 'ecause as earl" as ** Fe'ruar" 1,<6, a notice of lis 0endens had 'een annotated on the T T in the na/es of 0etitioners, &hereas Aa'anag registered the said sale so/eti/e in 30ril 1,<6- 3t the ti/e of registration, therefore, 0etitioner @ne& that the sa/e 0ro0ert" had alread" 'een 0reviousl" sold to oronel, or, at least, she &as charged &ith @no&ledge that a 0revious 'u"er is clai/ing title to the sa/e 0ro0ert"- Aa'anag thus cannot close her e"es to the defect in 0etitioners; title to the 0ro0ert" at the ti/e of the registration of the 0ro0ert"/!. Dou +e sa+e3 Ba' -a(t* (n re)(strat(on 'oes not con-er re)(strant any r()*t 5f a vendee in a dou'le sale registers the sale after he has ac.uired @no&ledge that there &as a 0revious sale of the sa/e 0ro0ert" to a third 0art" or that another 0erson clai/s said 0ro0ert" in a 0revious sale, the registration &ill constitute a registration in 'ad faith and &ill not confer u0on hi/ an" right- (!alvoro vs- Tanega, <+ ! (3 34, K1,<1LGciting Palarca vs- Director of Land, 43 Phil- 149G agaoan vs- agaoan, 43 Phil- 664G Fernande2 vs- Aercader, 43 Phil- 6<1-) /8. A)ency3 ;*e (ssue ,*et*er Concepc(on" mot*er o- Ramona" (s an a)ent or a coD uyer (s un'(stur e' 3lthough there /a" 'e a/0le indications that there &as in fact an agenc" 'et&een (a/ona as 0rinci0al and once0cion, her /other, as agent insofar as the su'=ect contract of sale is concerned, the issue of &hether or not once0cion &as also acting in her o&n 'ehalf as a co)'u"er is not s.uarel" raised in the
.a+es" /001 ( :! )
instant 0etition, nor in such assu/0tion dis0uted 'et&een /other and daughter- The ourt did not touch this issue and did not distur' the lo&er courts; ruling on this 0oint[/1] Corone+ vs. >na [G.R. No. 10/80. %e ruary !" 1#1:.] First Division, Torres (J): 3 concurring, 1 too@ no 0art %acts& 5n the ad/inistration of the intestate estate of the deceased 5sidra oronel, the ad/inistrator thereof, >ngracio oronel, discovered certain arrange/ents 'et&een the surviving s0ouse, enon %na, and other 0ersons, &hich decreased and in=ured the 0ro0ert" under ad/inistration, &hereof, '" 0er/ission of the court, the said ad/inistrator on 19 Aa" 1,13, filed suit against enon, et- al-, in &hich suit, '" agree/ent of the 0arties, the" &ere included as 0laintiffs the heirs of the said deceased na/ed Francisco oronel, 3gri0ina oronel, >ngracia Torres, Aanuela Torres and her hus'and Lucio PaMgani'an, and the /inor 3nastacia (a/on, re0resented '" his curator ad lite/, >ngracio oronel- oronel, et- al- allege in their co/0laint that the ad/inistration is the o&ner of one)half 0ro indiviso of a rural estate, 10 hectares and 4* centares in area, situate in the 'arrio of Lagalag of the to&n of Tiaong, Province of Ta"a'as, 0lanted &ith *,000 coco 0al/s fro/ 4 to 6 "ears old, the 'oundaries &hereof are set forth in the co/0laint, said realt" 'eing con=ugal 0ro0ert" as it &as ac.uired for a consideration '" the deceased 5sidra oronel and her hus'and enon %na during their /arriageG that u0on the death of the &ife in 30ril 1,11, the surviving s0ouse enon %na 'eca/e the ad/inistrator of said undivided 0ro0ert", ta@ing all its 0roducts and refusing to /a@e 0artition of the land &ith the la&ful heirs of his deceased &ifeG that on 6 $ove/'er 1,1*, enon %na and the other defendants for/ed a cons0irac", &ith intent of gain for the/selves, to the fraud and in=ur" of the 0laintiff ad/inistration, and dre& u0 and signed an alleged instru/ent of sale, &here'" enon %na sold to the s0ouses Denigno $adres and 1ictoria 1illa the said land, &hich instru/ent the" falsel" dated as 0rior to the death of his &ife 5sidra oronel and forged and i/itated her signature or /ar@ '" &riting her na/e and surna/e thereon &ith a cross 'et&een the/G that on the sa/e date, 6 $ove/'er 1,1*, the sa/e defendants, continuing their fraudulent 0roceedings, e4ecuted another instru/ent of sale of the sa/e land, &herein the" /ade to a00ear as vendors thereof Denigno $adres and 1ictoria 1illa and as vendees the s0ouses ris0in astillo and Aaria recto, so that there'" it &ould 'e /ore difficult for the 0laintiff ad/inistration to recover said estate, and fro/ that date enon %na surrendered 0ossession and en=o"/ent of the said land to the s0ouses ris0in astillo and Aaria (ecto, &ho have 'een u0 to the 0resent ti/e in 0ossession thereof and have ta@en the 0roducts therefro/, having refused to give the ad/inistration an" 0ortion of the latterG that '" reason of the /alicious and fraudulent acts of these defendants the ad/inistration has suffered da/ages to the e4tent of P1,000- %n *, Aa" 1,13, Denigno $adres, 1ictoria 1illa, ris0in astillo, and Aaria (ecto ans&ered the co/0laint, den"ing all the allegations thereof generall" and s0ecificall", and alleging in s0ecial defense: That on < $ove/'er 1,10, the s0ouses Denigno $adres and 1ictoria astillo K1illaL had ac.uired the land &hich is the su'=ect /atter of the co/0laint at a genuine and a'solute sale fro/ the s0ouses enon %na and 5sidra oronel, and that s0ouses ris0in astillo and Aaria (ecto ac.uired the sa/e land on 6 $ove/'er 1,1*, at a genuine and a'solute sale fro/ $adres and 1illa- 5n another docu/ent of a later date, ris0in astillo and Aaria (ecto, denied the facts set forth in the co/0laint and in s0ecial defense alleged that the" are the e4clusive o&ners of the land descri'ed in the co/0laint, as the" ac.uired it '" 0urchase fro/ the s0ouses $adres and 1illa- ounsel for enon %na in ans&er denied generall" and s0ecificall" all the 0aragra0hs of the co/0laint and alleged solel" in s0ecial defense that he had never, either 'efore or at the ti/e of the sale /ade '" hi/ and his deceased &ife 5sidra oronel of the land &hich is the su'=ect /atter of the co/0laint, concerted or cons0ired &ith his codefendants to effect said sale- 3fter trial and e4a/ination of the evidence adduced '" 'oth 0arties and on *, 30ril 1,14, the F5 Ta"a'as rendered the =udg/ent den"ing the clai/ of s0ouses ris0in astillo and Aaria (ecto, for recover" of da/ages the" had suffered '" reason of the filing of the co/0laint against the/, finding that the instru/ents of conve"ance of the land in litigation void and of no force or legal effect 'ecause the 0arties &ho sold the land '" /eans of said instru/ents lac@ed an" right to alienate itG den"ing the clai/ of oronel, et- al- that the defendants 0a" the value of one)half of the 0roducts
.a+es" /001 ( :8 )
of this land received '" the/ and a su/ of /one" in the nature of co/0ensator" da/ages, and /erel" sentencing enon %na and Denigno $adres to the 0a"/ent of the costs in e.ual 0arts- #ence the a00eal through a 'ill of e4ce0tions '" counsel for the defendantsThe !u0re/e affir/ed the =udg/ent a00ealed fro/, &ith the costs against the a00ellants1. %acts& G'ent(ty o- property not '(spute' There is no .uestion &hatsoever as to the identit" of the land clai/ed in the co/0laint, it 'eing a rural estate situated in the 'arrio of Lagalag of the /unici0alit" of Tiaong, Ta"a'as, &ith an area of ten hectares and fort")t&o centiares and 0lanted &ith *,000 coco 0al/s/. Broperty con8u)a+3 Corone+=s *e(rs y operat(on o- +a, enon %na &as la&full" /arried to 5sidra oronel and during their /arriage the" ac.uired '" 0urchase fro/ Juan adi2 the land, &herefore said realt" is their con=ugal 0ro0ert"- This /arriage &as dissolved '" the death of 5sidra oronel on 13 30ril 1,11, &ithout issue fro/ these s0ouse and &ithout a &ill e4ecuted in life '" the &o/an, so the heirs that '" o0erations of la& /ust succeed said deceased 5sidra oronel are her 'rothers and sisters and ne0he&s and nieces, residing in the to&n of !an Juan de Doc'oc, Datangas- The land in litigation is not onl" con=ugal 0ro0ert", &ith one)half thereof 'elonging to the deceased 5sidra oronel, 'ut also fro/ the /o/ent of her death it 0assed '" o0eration of la& into the o&nershi0 of her intestate heirs, and for this reason her &ido&er could not dis0ose of said half to the in=ur" of the nearest relatives and heirs of his deceased &ife- (3rts- 96+, 96,, 991, ivil ode-) 1. %acts& .t(pu+at(ons (n t*e (nstrument o- purc*ase an' sa+e 5n the instru/ent of 0urchase and sale, &ritten in the Tagalog dialect ( ase ++9) and translated in the 0resent case, the s0ouses enon %na and 5sidra oronel transferred '" a'solute sale on < $ove/'er 1,10, the land litigation to te s0ouses Denigno $adres and 1ictoria 1illa, under the follo&ing conditions: (1) The s0ouses enon %na and 5sidra oronel had 0lanted coco 0al/s on a certain tract of land 'elonging to Denigno $adres and his &ife, &hich land enon %na and 5sidra oronel had alienated &ithout the consent of the o&ners thereof, the said $adres and &ifeG (*) on their 0art the s0ouses %na and oronel 0ossessed another tract of land &hich the" had 0urchased fro/ Juan adi2, &hereon the" has alread" set out 1,400 "oung coco 0al/s and <00 /ore could 'e 0lantedG (3) as Denigno $adres and his &ife &ere de/anding return of the land 0reviousl" sold '" %na and oronel, the latter thought it fair to cede their o&n land to said $adres and &ife in e4change for &hat the" had alienated, $adres and his &ife there in hand 0a"ing P*,600 as the increase in the 0riceG (4) this e4change &as /ade on the condition that enon %na and his &ife should for the 0eriod of four "earsG (6) the 'etel nut, 0add", 'uri, and other 0roducts shall 0ertain e4clusivel" to the vendors, enon %na and 5sidra oronel, &ho shall 0a" the land ta4 for the said four "ears of the life of the contractG and (9) the s0ouses Denigno $adres and 1ictoria 1illa &ere agreed that the" &ould no 0artici0ation in the cro0s fro/ the land- This instru/ent is signed '" the contracting 0arties and the &itnesses, e4ce0t 5sidra oronel, &ho 0laced her /ar@ on the instru/ent her na/e and surna/e, &hich /ust have 'een affi4ed '" another 0erson, as she could not &rite4. De'uce' -acts o- t*e case Fro/ the a'undant, 'ut contradictor", evidence adduced at the trial, the follo&ing facts are deduced: (1) The consideration &hich gave rise to the e4ecution '" enon %na and 5sidra oronel, &ith reference to their having alienated a 0arcel of land 'elonging to Denigno $adres and his &ife, is not a valid oneG (*) the consideration for the transfer of the land in .uestion to the $adres cou0le, &ith 0a"/ent '" the/ of P*,600 to the vendors, is false and si/ulatedG (3) the instru/ent evidencing the sale of this land &as e4ecuted after 5sidra oronel;s death and cannot therefore 0roduce an" effect against her heirsG and (4) the transfer '" e4change and sale of the land to the vendee Denigno $adres is not valid, as said transfer &as recorded in the instru/ent for the sole and deli'erate 0ur0ose of 0reventing the la&ful heirs of 5sidra oronel fro/ inheriting their 0ortion thereof.a+es" /001 ( :# )
$.
Cons('erat(on -a+se an' s(mu+ate' enon %na stated that he and his &ife 5sidra oronel had received a tract of land fro/ said Denigno $adres, on &hich to set out coco)0al/s, &ith the condition that after the 0lanting had 'een finished and 9 "ears had ela0sed, he and his &ife should 'eco/e the o&ners if one)half of the said tract, as had ha00ened, and as he &as then in need of /one" he had sold to a third 0erson said 0ortion of land that then 'elonged to hi/G 'ut it is not true that he o'ligated hi/self not to sell that 0ortion of land to an"'od" 'ut its original o&ner, $adres- This testi/on" of %na, &hich &as not re'utted or contradicted '" the other defendants, constitutes conclusive 0roof of the invalidit" of the reason given for the e4change of the land in .uestion for that 0reviousl" sold and for transferring it to the said Denigno $adres and his &ifeG and it is further/ore to 'e noted that %na hi/self stated under oath that in transferring this land to $adres on < $ove/'er 1,10, he had no intention of transferring it a'solutel" 'ut had /ade this transfer a00ear in an instru/ent so that $adres /ight ta@e charge of the land and not 'other hi/, as he &as then old, and also to 0revent the heirs of his &ife oronel fro/ 0artici0ating in her inheritance- #ence it is inferred that the consideration &hich gave rise to the transfer of this land to $adres and his &ife is not valid, 'ut false and si/ulated- #ence, said realt" &as not sold to $adres 'ut a 0retense &as /ade of transferring it in order to sell it as the agent of %na, and therefore the land continued to 'elong to %na and his &ife, the deceased oronel- 5t is further/ore to 'e noted that &hen said transfer &as /ade to $adres the heirs of the deceased oronel had alread" filed a clai/ for the land and conse.uentl" an" alienation thereof that /a" have 'een /ade after the date of said clai/ filed '" the heirs of the deceased oronel is fraudulent- (%ria vs- AcAic@ing, *1 Phil-, (e0-, *43,*4,) !. Gnstrument s(mu+ate' The si/ulation of the instru/ent is corro'orated '" the fact that enon %na delivered to the ad/inistrator, >ngracio oronel, the su/ of P,00 so that the latter and his co0laintiffs should desist fro/ filing a =udicial, clai/ to the land in litigation, and, according to agree/ent, the" e4ecuted the instru/ent setting forth that su/, 'oth 0arties, signing it in the 0resence of t&o &itnesses and ratif"ing it 'efore a =ustice of the 0eace- oronel and %na affir/ the truth of the fact set forth in said instru/ent to de/onstrate that the land &as not a'solutel" alienated 'ut continued to 'e at the dis0osition of the &ido&er- Dut the F5 disa00roved said agree/ent and ordered restitution to the &ido&er %na of the /one" received '" oronel8. .uppresse' test(mony presume' pre8u'(c(a+ %ne of the individuals &ho 0la"ed a 0rinci0al 0art in the sale of the realt", Denigno $adres, &as not 0resented '" the defendants s a &itness at the trial to clear u0 certain o'scure and dou'tful 0oints, for he onl" testified in re'uttal, although he &as 0resent in the court at the last session of the trial in this caseG &herefore it is to 'e su00osed, in the a'sence of 0roof to the contrar", that his testi/on", &hich &as &illfull" su00ressed '" the defendants, &ould have 'een 0re=udicial to the/ ($o- 6, section 334, ode of ivil Procedure), &hile the record sho&s that enon %na /ade declarations contrar" to the interest of his other codefendants, &hich could not 'e contradicted or i/0ugned as false#. %(rst sa+e s(mu+ate'" .econ' sa+e vo(' an' (ne--ect(ve -or +ack o- r()*t to '(spose o- +an' #aving reached the conclusion that the instru/ent, &here it a00ears that the s0ouses Denigno $adres and 1ictoria 1illa 0urchased the land in .uestion, is false and void, 'ecause said sale &as not effectedTherefore, the sale /ade '" the/ to the s0ouses ris0in astillo and Aaria (ecto on 6 $ove/'er 1,1*, is also void and ineffective, for the 0arties &ho figure therein as vendors had no right to dis0ose of the land, nor could the" trans/it to the vendees an" title of o&nershi0, nor could the latter ac.uire o&nershi0 of the land sold10. Art(c+e 1/$4 o- t*e C(v(+ Co'e3 Consent 3rticle 1*64 of the ivil ode states 73 contract e4ists fro/ the /o/ent one or /ore 0ersons consent to 'ind hi/self or the/selves, &ith regard to another or others, to give so/ething or to render so/e service-8 5n the 0resent case, since oronel &as dead on the date &hen the contract &as dra&n u0 and could
.a+es" /001 ( !0 )
not have ta@en 0art in the e4ecution thereof or given her consent to the 0retended sale of the land to &hich it refers and &hich 'elonged to the con=ugal 0artnershi0 of %na and oronel, said contract has never e4isted, and 'eing void it could not serve as a legal /eans for transferring o&nershi0 to the alleged 0urchasers, $adres and 1illaG and as the" could not ac.uire an" right of o&nershi0 to the land sold '" virtue of a contract that had not e4isted and &as conse.uentl" null and void the" had not transfer such a right to the s0ouses ris0in astillo and Aaria (ecto11. Re2u(s(tes o- a va+(' contract3 Art(c+e 1/:1 There is no contract, sa"s article 1*91 of the sa/e ode, unless there e4ist the essential re.uisites of consent of the contracting 0arties, a definite o'=ect &hich /a" 'e the su'=ect of the contract, and the consideration for the o'ligation &hich /a" 'e esta'lished- 5n the 0resent case, 5sidra oronel &as not 0resent to give her consent to the alleged contract of sale, 'ecause she &as dead &hen said contract &as si/ulated, nor is an" consideration for the o'ligation stated therein, and conse.uentl" the contract set forth in said instru/ent is flagrantl" null and void- 3lthough it a00ears to have 'een dated < $ove/'er 1,10, &hile 5sidra oronel &as still alive, it &as 0re0ared on 6 $ove/'er 1,1*, for the &ido&er enon %na so testified1/. Cr(sp(n Cast(++o an' 9ar(a Recto not ent(t+e' to 'ama)es !ince oronel, et- al- did not ta@e 0art in the e4ecution of the contracts of sale and did not act in 'ad faith in filing this co/0laint against the efendants, ris0in astillo and Aaria (ecto, the latter are not entitled to recover an" inde/nit" for da/ages11. Coco pa+ms not yet orne -ru(t" t*ere-ore c+a(m on va+ue o- pro'ucts cannot e )rante' D" the declaration of the ad/inistrator hi/self, >ngracio oronel, and '" that of enon %na, that the coco 0al/s set out on the land in dis0ute have not "et 'orne fruit, &herefore oronel et-al;s clai/ that the" 'e 0aid the value of one)half of the 0roducts ta@en fro/ the land in .uestion cannot 'e granted[//] CruC vs. Ca ana [G.R. No. $:/1/. Fune //" 1#84.] First Division, Teehan@ee (J): 6 concurring %acts& The land in .uestion &as sold '" Leodegracia a'ana &ith right of re0urchase on 1 June 1,96 to !0ouses Teofilo Legas0i and llu/inada a'aMa- The said docu/ent HDilihang Auling Aa'i'ili; sti0ulated that the land can 'e re0urchased '" the vendor &ithin 1 "ear fro/ 31 Dece/'er 1,99- !aid land &as not re0urchased and in the /eanti/e, said s0ouses too@ 0ossession of the land- ?0on re.uest of Leodegaria a'aMa, the title of the land &as lent to her in order to /ortgage the 0ro0ert" to the P$D- !aid title &as, forth&ith, de0osited &ith the P$D- %n *1 %cto'er 1,9<, a'aMa sold the land '" &a" of a'solute sale to the s0ouses- !aid s0ouses atte/0ted to register the deed of sale 'ut said registration &as not acco/0lished 'ecause the" could not 0resent the o&ner;s du0licate of title &hich &as at that ti/e in the 0ossession of the P$D as /ortgage- #o&ever, on *, $ove/'er 1,9< a'ana sold the sa/e 0ro0ert" to 3'ellardo ru2Li@e&ise, &hen ru2 tried to register the deed of sale e4ecuted '" Leodegaria a'aMa on 3 !e0te/'er 1,+0, he &as infor/ed that the o&ner thereof had sold the land to the s0ouses on *1 %cto'er 1,9<- !till, ru2 &as a'le to register the land in his na/e on , Fe'ruar" 1,+1(aised in the F5 Uue2on Province, the court ruled in favor of the s0ouses- 300eal &as /ade in the ourt of 300eals- 3'elardo ru2 died &hile the case &as 0ending, and '" resolution, he &as su'stituted '" his heirs, onsuelo - ru2, laro - ru2 and !te0hen - ru2- The ourt of 300eals affir/ed the decision of the F5The !u0re/e ourt affir/ed in toto the a00ealed =udg/ent of a00ellate court, u0holding s0ouses Teofilo Legas0i and 5lu/inada a'ana as the true and rightful o&ners of the 0ro0ert" in litigation and ordering the
.a+es" /001 ( !1 )
issuance of a ne& title &ith the cancellation as null and void of Title T),,140 o'tained '" 3'elardo - ru2G and ordered Leodegracia a'ana, in accordance &ith the 0artial grant of ru2; 0ra"er for alternative relief, to rei/'urse and 0a" to ru2; heirs the total su/ of P6,+60 (P*,36*-60 as 0a"/ent to P$D to discharge /ortgage o'ligation, and P3,3,+-60 as consideration of the sale &ith 0acto de retro of the 0ro0ert")1. CA Ru+(n)& App+(ca (+(ty o- Art(c+e 1$44" ,*en (nvoke'3 Re)(strat(on s*ou+' e (n )oo' -a(t* 5n order that the 0rovisions of 3rticle 1644 of the ne& ivil ode /a" 'e invo@ed, it is necessar" that the conve"ance /ust have 'een /ade '" a 0art" &ho has an e4isting right in the thing and the 0o&er to dis0ose of it (10 Aanresa 1+0, 1+1)- 5t cannot 'e set u0 '" a second 0urchaser &ho co/es into 0ossession of the 0ro0ert" that has alread" 'een ac.uired '" the first 0urchaser in full do/inion (Dautista vs- !ison, 3, Phil916), this not&ithstanding that the second 0urchaser records his title in the 0u'lic registr", if the registration 'e done in 'ad faith- The 0hiloso0h" underl"ing this rule 'eing that the 0u'lic records cannot 'e covered into instru/ents of fraud and o00ression '" one &ho secures an inscri0tion therein in 'ad faith ( hu0inghong vsDorreros, + 3 (e0- 9,,)/. CA Ru+(n)& Burc*aser ,(t* kno,+e')e o- 'e-ect o- ven'or=s t(t+e not a purc*aser (n )oo' -a(t* 3 0urchaser &ho has @no&ledge of fact &hich &ould 0ut hi/ u0on in.uir" and investigation as to 0ossi'le defects of the title of the vendor and fails to /a@e such in.uir" and investigation, cannot clai/ that he is a 0urchaser in good faith- Cno&ledge of a 0rior transfer of a registered 0ro0ert" '" a su'se.uent 0urchaser /a@es hi/ a 0urchaser in 'ad faith and his @no&ledge of such transfer vitiates his title ac.uired '" virtue of the latter instru/ent of conve"ance &hich creates no right as against the first 0urchaser ((e"lago vsJara'e, L)*0049, Aarch *+, 1,9<, ** ! (3 1*4+)1. CA Ru+(n)& .pouses -(rst to re)(ster 'ee' o- sa+e The s0ouses registered the deed of a'solute sale ahead of ru2- !aid s0ouses &ere not onl" a'le to o'tain the title 'ecause at that ti/e, the o&ner;s du0licate certificate &as still &ith the Phili00ine $ational Dan@4. CA Ru+(n)& .pouses -(rst (n possess(on The s0ouses have 'een in 0ossession all along of the land in .uestion- 5f i//ova'le 0ro0ert" is sold to different vendees, the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the registr" of 0ro0ert"G and should there 'e no inscri0tion, the o&nershi0 shall 0ertain to the 0erson &ho in good faith &as first in the 0ossession (!oriano, et al- vs- The #eirs of Do/ingo Aagali, et al-, L)16133, Jul" 31, 1,93, < ! (3 4<,)- Priorit" of 0ossession stands good in favor of the s0ouses (>vangelista vs- 3'ad, K 3L 39 %-F- *,13G !anche2 vs- (a/os, 40 Phil- 914G Uui/son vs- (osete, <+ Phil- 16,)-8 $. Dou +e .a+e3 Art(c+e 1$44 3rticle 1644 0rovides that 75f the sa/e thing should have 'een sold to different vendees, the o&nershi0 shall 'e transferred to the 0erson &ho /a" have first ta@en 0ossession thereof in good faith, if it should 'e /ova'le 0ro0ert"- !hould it 'e i//ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"- !hould there 'e no inscri0tion, the o&nershi0 shall 0ertain to the 0erson &ho in good faith &as first in the 0ossessionG and, in the a'sence thereof, to the 0erson &ho 0resents the oldest title, 0rovided there is good faith-8 :. .pouses are -(rst uyers3 .pouses -(rst an' on+y ones (n possess(on !0ouses &ere the first 'u"ers, first on 1 June 1,96 under a sale &ith right of re0urchase and later on *1 %cto'er 1,9< under a deed of a'solute sale and that the" had ta@en 0ossession of the land sold to the/ru2 &as the second 'u"er under a deed of sale dated *, $ove/'er 1,9<, &hich to all indications, contrar" to the te4t, &as a sale &ith right of re0urchase for ,0 da"s- The s0ouses &ere the first and the onl" ones to 'e in 0ossession of the su'=ect 0ro0ert"-
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!.
.pouses -(rst to re)(ster sa+e3 CruC re)(stere' sa+e (n a' -a(t* The s0ouses &ere li@e&ise the first to register the sale &ith right of re0urchase in their favor on 13 Aa" 1,96 under Pri/ar" >ntr" *10113 of the (egister of Deeds- The" could not register the a'solute deed of sale in their favor and o'tain the corres0onding transfer certificate of title 'ecause at that ti/e the seller;s du0licate certificate &as still &ith the 'an@- :hen ru2 succeeded in registering the later sale in his favor, he @ne& and he &as infor/ed of the 0rior sale in favor of the s0ouses- !uch 7@no&ledge of a 0rior transfer of a registered 0ro0ert" '" a su'se.uent 0urchaser /a@es hi/ a 0urchaser in 'ad faith and his @no&ledge of such transfer vitiates his title ac.uired '" virtue of the latter instru/ent of conve"ance &hich creates no right as against the first 0urchaser-8 8. Buyer must act (n )oo' 'a(t* to mer(t protect(on o- t*e secon' para)rap* o- Art(c+e 1$443 Govern(n) pr(nc(p+e (s Br(us tempore" pot(or 8ure3 Ho, secon' uyer may '(sp+ace -(rst uyer 3s held in Car!onell vs. Court of Appeals, 7it is essential that the 'u"er of realt" /ust act in good faith in registering his deed of sale to /erit the 0rotection of the second 0aragra0h of 3rticle 1644-8 The governing 0rinci0le here is 0rius te/0ore, 0otior =ure (first in ti/e, stronger in right)- Cno&ledge gained '" the first 'u"er of the second sale cannot defeat the first 'u"er;s rights e4ce0t onl" as 0rovided '" the ivil ode and that is &here the second 'u"er first registers in good faith the second sale ahead of the first- !uch @no&ledge of the first 'u"er does not 'ar her fro/ availing of her rights under the la&, a/ong the/, to register first her 0urchase as against the second 'u"er- Dut in converso @no&ledge gained '" the second 'u"er of the first sale defeats his rights even if he is first to register the second sale, since such @no&ledge taints his 0rior registration &ith 'ad faith- This is the 0rice e4acted '" 3rticle 1644 of the ivil ode for the second 'u"er 'eing a'le to dis0lace the first 'u"erG that 'efore the second 'u"er can o'tain 0riorit" over the first, he /ust sho& that he acted in good faith throughout (i-e- in ignorance of the first sale and of the first 'u"er;s rights) J fro/ the ti/e of ac.uisition until the title is transferred to hi/ '" registration or failing registration, '" deliver" of 0ossession- The second 'u"er /ust sho& continuing good faith and innocence or lac@ of @no&ledge of the first sale until his contract ri0ens into full o&nershi0 through 0rior registration as 0rovided '" la&-8 #. CruC= prayer o- a--(rmat(ve re+(e-3 Ca ana" not t*e @e)asp( spouses" +(a +e -or amounts pa('3 No re(m ursement -or rea+ty ta7es ru2; 0ra"er for alternative relief for rei/'urse/ent of the a/ount of P*,36*-60 0aid '" hi/ to the 'an@ to discharge the e4isting /ortgage on the 0ro0ert" and of the a/ount of P3,3,+-60 re0resenting the 0rice of the second sale are &ell ta@en insofar as the seller Leodegaria a'ana is concerned- These a/ounts have 'een received '" a'ana on account of a void second sale and /ust 'e dul" rei/'ursed '" her to ru2; heirs, 'ut the Legas0i s0ouses cannot 'e held lia'le therefor since the" had nothing to do &ith the said second sale nor did the" receive an" 'enefit therefro/- ru2; clai/ for rei/'urse/ent of the a/ount of P10*-6< as real estate ta4es 0aid on the 0ro0ert" is not &ell ta@en 'ecause the Legas0i s0ouses had 'een 0a"ing the real estate ta4es on the sa/e 0ro0ert" since 1 June 1,9,[/1] CruC vs. %(+(p(nas Gnvestment [G.R. No. @D/4!!/. 9ay /!" 1#:8.] >n Danc, (e"es JDL (J): + concurring, 1 on leave %acts& %n 16 Jul" 1,93, (u0erto F- ru2 0urchased on install/ents, fro/ the Far >ast Aotor or0oration, 1 unit of 5su2u Diesel Dus for P44,919-*4, 0a"a'le in install/ents of P1,4<+-*0 0er /onth for 30 /onths, 'eginning ** %cto'er 1,93, &ith 1*I interest 0er annu/, until full" 0aid- 3s evidence of said inde'tedness, ru2 e4ecuted and delivered to the Far >ast Aotor or0oration a negotia'le 0ro/issor" in the su/ of P44,919-*4- To secure the 0a"/ent of the 0ro/issor" note, ru2 e4ecuted in favor of the seller Far >ast Aotor or0oration, a chattel /ortgage over the /otor vehicle- 3s no do&n 0a"/ent &as /ade '" ru2, the seller, Far >ast Aotor or0oration, on the ver" sa/e date, 16 Jul" 1,93, re.uired and ru2 agreed to give, additional securit" for his o'ligation 'esides the chattel /ortgage- 3dditional securit" &as given '" Felicidad
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1da- de (e"es in the for/ of !econd Aortgage on a 0arcel of land o&ned '" her (9<,,0* s.- /s-, T T T) 394<0 of the (egistr" of Deeds of Dulacan, /ortgaged to the DDP to secure loan of P*,900), together &ith the 'uilding and i/0rove/ents thereon, in !an Aiguel, Dulacan- %n 16 Jul" 1,93, the Far >ast Aotors for value received indorsed the 0ro/issor" note and assigned all its rights and interest in the Deeds of hattel Aortgage and in the Deed of (eal >state Aortgage to Fili0inas 5nvest/ent Q Finance or0oration (F5F ), &ith due notice of such assign/ent to ru2, et-al- ru2 defaulted in the 0a"/ent of the 0ro/issor" note and that the onl" su/ ever 0aid &as P600 on * %cto'er 1,93, &hich &as a00lied as 0artial 0a"/ent of interests on his 0rinci0al o'ligation- $ot&ithstanding F5F ;s de/ands, ru2 /ade no 0a"/ent on an" of the install/ents sti0ulated in the 0ro/issor" note- D" reason of ru2;s default, F5F too@ ste0s to foreclose the chattel /ortgage on the 'us- #o&ever, said vehicle had 'een da/aged in an accident &hile in the 0ossession of ru23t the foreclosure sale held on 31 Januar" 1,94 '" the !heriff of Aanila, F5F &as the highest 'idder (for P16,000-00)- The 0roceeds of the sale of the 'us &ere not sufficient to cover the e40enses of sale, the 0rinci0al o'ligation, interests, and attorne";s fees, i-e-, the" &ere not sufficient to discharge full" the inde'tedness of ru2 to F5F - %n 1* Fe'ruar" 1,94, 0re0arator" to foreclosing its real estate /ortgage on Ars- (e"es; land, F5F 0aid the /ortgage inde'tedness of Ars- (e"es to the DDP, in the su/ of P*,14<-0+, the un0aid 'alance of said o'ligation- Pursuant to a 0rovision of the real estate /ortgage contract, authori2ing the /ortgagee to foreclose the /ortgage =udiciall" or e4tra)=udiciall", F5F on *, Fe'ruar" 1,94 re.uested the Provincial !heriff of Dulacan to ta@e 0ossession of, and sell, the land su'=ect of the (eal >state Aortgage to satisf" the su/ of P43,31<-,*, the total outstanding o'ligation of ru2, et- al- to F5F - $otices of sale &ere dul" 0osted and served to the Aortgagor, Ars- (e"es, 0ursuant to and in co/0liance &ith the re.uire/ents of 3ct 3136- %n *0 Aarch 1,94, (e"es through counsel, &rote a letter to F5F as@ing for the cancellation of the real estate /ortgage on her land, 'ut F5F did not co/0l" &ith such de/and as it &as of the 'elief that (e"es; re.uest &as &ithout an" legal 'asis3n action &as co//enced '" ru2 and (e"es in the F5 (i2al ( ivil ase U) +,4,), for cancellation of the real estate /ortgage constituted on (e"es; land in favor of F5F (as assignee of the Far >ast Aotor or0oration)- The 0rovincial !heriff of Dulacan held in a'e"ance the sale of the /ortgaged real estate 0ending the resolution of the case- The trial court in its decision of *1 30ril 1,96, sustained ru2, et-al-;s stand and declared that the e4tra=udicial foreclosure of the chattel /ortgage on the 'us 'arred further action against the additional securit" 0ut u0 '" (e"es- onse.uentl", the real estate /ortgage constituted on (e"es; land &as ordered cancelled and F5F &as directed to 0a" (e"es attorne";s fees in the su/ of P*00-00- #ence, the a00eal '" F5F The !u0re/e ourt /odified the decision a00ealed fro/, '" ordering (e"es to rei/'urse to F5F the su/ of P*,14<-0+, &ith legal interest thereon fro/ the finalit" of this decision until it is full" 0aid- 5n all other res0ects, the =udg/ent of the trial court &as affir/ed, &ith costs against F5F 1. Art(c+e 1484 o- t*e C(v(+ Co'e 3rticle 14<4 of the ivil ode of the Phili00ines is the 0ertinent legal 0rovision on sale of 0ersonal 0ro0ert" on install/ents- 5t 0rovides that 75n a contract of sale of 0ersonal 0ro0ert" the 0rice of &hich is 0a"a'le in install/ents, the vendor /a" e4ercise an" of the follo&ing re/edies: (1) >4act fulfill/ent of the o'ligation, should the vendee fail to 0a"G (*) ancel the sale, should the vendee;s failure to 0a" cover t&o or /ore install/entsG (3) Foreclose the chattel /ortgage on the thing sold, if one has 'een constituted, should the vendee;s failure to 0a" cover t&o or /ore install/ents- 5n this case, he shall have no further action against the 0urchaser to recover an" un0aid 'alance of the 0rice- 3n" agree/ent to the contrar" shall 'e void-8 /. Brov(s(on c+ear as to ava(+a +e reme'(es3 Reme'(es a+ternat(ve not cumu+at(ve The 0rovision is clear and si/0le: should the vendee or 0urchaser of a 0ersonal 0ro0ert" default in the 0a"/ent of t&o or /ore of the agreed install/ents, the vendor or seller has the o0tion to avail of an" one of these three re/edies J either to e4act fulfill/ent '" the 0urchaser of the o'ligation, or to cancel the sale, or to foreclose the /ortgage on the 0urchased 0ersonal 0ro0ert", if one &as constituted- These re/edies have
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'een recogni2ed as alternative, not cu/ulative, that the e4ercise of one &ould 'ar the e4ercise of the orders1. %orec+osure an' actua+ sa+e o- mort)a)e c*atte+ ars recovery o- any a+ance y ven'or3 Reason -or t*e 'octr(ne The foreclosure and actual sale of a /ortgage chattel 'ars further recover" '" the vendor of an" 'alance on the 0urchaser;s outstanding o'ligation not so satisfied '" the sale- The reason for the doctrine &as a0tl" stated in the case of Dachrach Aotor o- vs- Aillan, thus 7the 0rinci0al o'=ect of the a/end/ent &as to re/ed" the a'uses co//itted in connection &ith the foreclosure of chattel /ortgages- This a/end/ent 0revents /ortgagees fro/ sei2ing the /ortgaged 0ro0ert", 'u"ing it at foreclosure sale for a lo& 0rice and then 'ringing suit against the /ortgagor for a deficienc" =udg/ent- The al/ost invaria'le result of this 0rocedure &as that the /ortgagor found hi/self /inus the 0ro0ert" and still o&ing 0racticall" the full a/ount of his original inde'tedness- ?nder this a/end/ent the vendor of 0ersonal 0ro0ert", the 0urchase 0rice of &hich is 0a"a'le in install/ents, has the right to cancel the sale or foreclose the /ortgage if one has 'een given on the 0ro0ert"- :hichever right the vendor elects he need not return to the 0urchaser the a/ount of the install/ents alread" 0aid, Hif there 'e an agree/ent to that effect- Further/ore, if the vendor avails hi/self of the right to foreclose the /ortgage this a/end/ent 0rohi'its hi/ fro/ 'ringing an action against the 0urchaser for the un0aid 'alance-8 4. %urt*er act(on a)a(nst )uarantor ,ou+' (n'(rect+y su vert protect(on )(ven y Art(c+e 1484 to purc*aser To sustain F5F ;s argu/ent (that &hat is 'eing &ithheld fro/ the vendor, '" the 0roviso of 3rticle 14<4 of the ivil ode, is onl" the right to recover 7against the 0urchaser8 and not a recourse to the additional securit" 0ut u0, not '" the 0urchaser hi/self, 'ut '" a third 0erson) is to overloo@ the fact that if the guarantor should 'e co/0elled to 0a" the 'alance of the 0urchaser 0rice, the guarantor &ill in turn 'e entitled to recover &hat she has 0aid fro/ the de'tor vendee (3rticle *099, ivil ode)- Thus, ulti/atel", it &ill 'e the vendee &ho &ill 'e /ade to 'ear the 0a"/ent of the 'alance of the 0rice, des0ite the earlier foreclosure of the chattel /ortgage given '" hi/- Thus, the 0rotection given '" 3rticle 14<4 &ould 'e indirectl" su'verted, and 0u'lic 0olic" overturned$. 4Act(on6 ,(t*out a 'e-(n(t(ve or e7c+us(ve mean(n)3 Act(on re-erre' to (n Art(c+e 1484 t*us may e 8u'(c(a+ or e7tra8u'(c(a+ The &ord 7action8 is &ithout a definite or e4clusive /eaning- 5t has 'een invaria'l" defined as 7the legal de/and of one;s right, or rightsG the la&ful de/and of one;s rights in the for/ given '" la&G a de/and of a right in a court of =usticeG the la&ful de/and of one;s right in a court of =usticeG the legal and for/al de/and of one;s rights fro/ another 0erson or 0art", /ade and insisted on in a court of =usticeG a clai/ /ade 'efore a tri'unalG an assertion in a court of =ustice of a right given '" la&G a de/and or legal 0roceeding in a court of =ustice to secure one;s rightsG the 0rosecution of so/e de/and in a court of =usticeG the /eans '" &hich /en litigate &ith each otherG the /eans that the la& has 0rovided to 0ut the cause of action into effect8 (Futierre2 #er/anos vs- De la (iva, 49 Phil- <*+, <34)<36)- onsidering the 0ur0ose for &hich the 0rohi'ition contained in 3rticle 14<4 &as intended, the &ord 7action8 used therein /a" 'e construed as referring to an" =udicial or e4tra=udicial 0roceeding '" virtue of &hich the vendor /a" la&full" 'e ena'led to e4act recover" of the su00osed unsatisfied 'alance of the 0urchase 0rice fro/ the 0urchaser or his 0riv"ertainl", an e4tra=udicial foreclosure of a real estate /ortgage is one such 0roceeding:. A,ar' o- attorney=s -ees3 @(t()at(on ,as avo('a +e as +a, an' 8ur(spru'ence are e7p+(c(t The 0rovision of la& and =uris0rudence on the /atter 'eing e40licit so that this litigation could have 'een avoided, the a&ard '" the lo&er court of attorne";s fees to ru2, et-al- in the su/ of P*00-00 is reasona'le and in order!. Re(m ursement -or %G%C payment o- Reyes= outstan'(n) a+ance on +oan ,(t* DBB To the e4tent that she &as 'enefited '" the 0a"/ent of F5F to DDP, for the release of the first
.a+es" /001 ( !$ )
/ortgage of (e"es; land, (e"es should have 'een re.uired to rei/'urse F5F [/4] Cu,u4an v. Santos, &- !#I9 /%% (/0/'( [/$] Da)upan ;ra'(n) vs. 9acam [G.R. No. @D184#!. 9ay 11" 1#:$.] >n Danc, Di2on (J): + concurring %acts& 5n 1,66, !a//" Aaron and his + 'rothers and sisters &ere 0ro)indiviso o&ners of a 0arcel of unregistered land located in 'arrio Para"ao, Din/ale", Pangasinan- :hile their a00lication for registration of said land under 3ct 4,9 &as 0ending, the" e4ecuted, on June 1, and *1 !e0te/'er 1,66, t&o deeds of sale conve"ing the 0ro0ert" to (ustico Aaca/, &ho thereafter too@ 0ossession thereof and 0roceeded to introduce su'stantial i/0rove/ents therein- %ne /onth later, that is on 14 %cto'er 1,66, % T 9,4* covering the land &as issued in the na/e of the Aarons, free fro/ all liens and encu/'rances- %n 4 3ugust 1,69, '" virtue of a final =udg/ent rendered in ivil ase 4**16 of the Aunici0al ourt of Aanila against !a//" Aaron in favor of the Aanila Trading and !u00l" o/0an", lev" &as /ade u0on &hatever interest he had in the the 0ro0ert", and thereafter said interest &as sold at 0u'lic auction to the =udg/ent creditor- The corres0onding notice of lev", certificate of sale and the sheriff;s certificate of final sale in favor of the Aanila Trading and !u00l" o('ecause no'od" e4ercised the right of rede/0tion) &ere dul" registered- %n 1 Aarch 1,6<, the latter sold all its rights and title in the 0ro0ert" to Dagu0an Trading o/0an"%n 4 !e0te/'er 1,6<, Dagu0an Trading co//enced an action against Aaca/ &ith the F5 Pangasinan ( ivil ase 13++*), 0ra"ing that it 'e declared o&ner of 1B+ 0ortion of the landG that a 0artition of the &hole 0ro0ert" 'e /adeG that Aaca/ 'e ordered to 0a" it the a/ount of P600-00 a "ear as da/ages fro/ 1,6< until said 0ortion is delivered, 0lus attorne";s fees and costs- 3ns&ering the co/0laint, Aaca/ alleged that !a//" Aaron;s share in the 0ro0ert", as &ell as that of all his co)heirs, had 'een ac.uired '" 0urchase '" hi/ since June 1, and *1 !e0te/'er 1,66, 'efore the issuance of the % T in their na/eG that at the ti/e lev" in e4ecution &as /ade on Aaron;s share therein, the latter had no longer an" right or interest in said 0ro0ert"G that Dagu0an Trading and its 0redecessor in interest &ere cogni2ant of the facts alread" /entionedG that since the sales /ade in his favor, he had en=o"ed uninterru0ted 0ossession of the 0ro0ert" and introduced considera'le i/0rove/ents therein- Aaca/ li@e&ise sought to recover da/ages '" &a" of counterclai/3fter trial u0on the issue thus =oined, the court rendered =udg/ent dis/issing the co/0laint, &hich, on a00ear, &as affir/ed '" the ourt of 300eals- #ence, the a00eal '" Dagu0an TradingThe !u0re/e ourt affir/ed the decision a00ealed fro/G &ith costs1. [G-] .(tuat(on 1& Inre)(stere' +an'" 9acam *av(n) etter r()*t 5f the 0ro0ert" covered '" the conflicting sales &ere unregistered land, Aaca/ &ould undou'tedl" have the 'etter right in vie& of the fact that his clai/ is 'ased on a 0rior sale cou0led &ith 0u'lic, e4clusive and continuous 0ossession thereof as o&ner/. [G-] .(tuat(on /& Re)(stere' @an'" Da)upan ;ra'(n) *av(n) etter r()*t :ere the land involved in the conflicting transactions dul" registered land, Dagu0an Trading has the 'etter right 'ecause in case of conve"ance of registered real estate, the registration of the deed of sale is the o0erative act that gives validit" to the transfer- This &ould 'e fatal to Aaca/;s clai/, the deeds of sale e4ecuted in his favor '" the Aarons not having 'een registered, &hile the lev" in e4ecution and the 0rovisional certificate of sale as &ell as the final deed of sale in favor of a00ellant &ere registered.a+es" /001 ( !: )
onse.uentl", this registered conve"ance /ust 0revail although 0osterior to the one e4ecuted in favor of Aaca/, and Dagu0an Trading /ust 'e dee/ed to have ac.uired such right, title and interest as a00eared on the certificate of title issued in favor of !a//" Aaron, su'=ect to no lien, encu/'rance or 'urden not noted thereon- (3nderson Q o-, vs- Farcia 94 Phil- 609G (e"nes et al-, vs- Darrera, et al-, 9< Phil- 969G Danco $ational, etc- vs- a/us, +0 Phil- *<,) 1. Bresent case 'oes not -a++ ,(t*(n e(t*er s(tuat(on3 @ast para)rap* o- .ect(on 1$" Ru+e 1# o- Ru+es o- Court app+(es The sale in favor of Aaca/ &as e4ecuted 'efore the land su'=ect /atter thereof &as registered, &hile the conflicting sale in favor of Dagu0an Trading &as e4ecuted after the sa/e 0ro0ert" had 'een registeredThe case, therefore, cannot 'e decide the case in the light of &hatever ad=udicated cases there are covering the t&o situations /entioned- :hat should deter/ine the issue are the 0rovisions of the last 0aragra0h of !ection 36, (ule 3, of the (ules of ourt, to the effect that u0on the e4ecution and deliver" of the final certificate of sale in favor of the 0urchaser of land sold in an e4ecution sale, such 0urchaser 7shall 'e su'stituted to and ac.uire all the right, title, interest and clai/ of the =udg/ent de'tor to the 0ro0ert" as of the ti/e of the lev"84. 9aron 'oes not *ave c+a(m an' (nterest on 1<8 port(on o- +an' at t(me o- +evy !a//" Aaron has no interest or clai/ on the 1B< 0ortion of the 0ro0ert" inherited '" hi/ and his co) heirs, at the ti/e of the lev", 'ecause for a considera'le ti/e 0rior to the lev", his interest had alread" 'een conve"ed to Aaca/, 7full" and irretrieva'l"-8 $. @evy ,as vo(' an' o- no e--ect onse.uentl", su'se.uent lev" /ade on the 0ro0ert" for the 0ur0ose of satisf"ing the =udg/ent rendered against !a//" Aaron in favor of the Aanila Trading o/0an" &as void and of no effect- (Duson vs- Licauco 13 Phil- 36+)36<G Landig vs- ?- !- o//ercial o/0an", <, Phil- 93<):. ;orrens t(t+e '(' not cance+ unre)(stere' sa+e an' conse2uent conveyance o- t(t+e an' o,ners*(p The unregistered sale and the conse.uent conve"ance of title and o&nershi0 in favor of Aaca/ could not have 'een cancelled and rendered of no effect u0on the su'se.uent issuance of the Torrens title over the entire 0arcel of land!. R()*t -(7e' an' esta +(s*e' cannot e overt*ro,n y art(-(c(a+ an' tec*n(ca+ )roun's 5n the inevita'le conflict 'et&een a right of o&nershi0 alread" fi4ed and esta'lished under the ivil La& andBor the !0anish Aortgage La& (&hich cannot 'e affected '" an" su'se.uent lev" or attach/ent or e4ecutions) and a ne& la& or s"ste/ &hich &ould /a@e 0ossi'le the overthro&ing of such o&nershi0 on ad/ittedl" artificial and technical grounds, the for/er /ust 'e u0held and a00lied8. C(rcumstances 'oes not 8ust(-y tec*n(ca+(ty to preva(+3 Fust(ce an' E2u(ty 3n i/0ortant circu/stance /ust 'e notedG that u0on the e4ecution of the deed of sale in his favor '" !a//" Aaron, Aaca/ too@ 0ossession of the land conve"ed as o&ner thereof, and introduced considera'le i/0rove/ents therein- To de0rive hi/ no& of the sa/e '" sheer force of technicalit" &ould 'e against 'oth =ustice and e.uit"[/:] Da+(on vs. CA [G.R. No. !8#01. %e ruary /8" 1##0.] First Division, Aedialdea (J): 3 concurring %acts& %n *< Aa" 1,+3, (u0erto !a'esa=e Jr- sued to recover o&nershi0 of a 0arcel of land (located at Pan"a&an, !ogod, !outhern Le"teG T T 1114<, &ith an area of <,4+ s.-/s-, assessed at P1<0), 'ased on a 0rivate docu/ent of a'solute sale, dated 1 Jul" 1,96, allegedl" e4ecuted '" !egundo Dalion, &ho, ho&ever
.a+es" /001 ( !! )
denied the fact of sale, contending that the docu/ent sued u0on is fictitious, his signature thereon, a forger", and that su'=ect land is con=ugal 0ro0ert", &hich he and his &ife (>0ifania !a'esa=e)Dalion) ac.uired in 1,90 fro/ !aturnina !a'esa=e as evidenced '" the 7>scritura de 1enta 3'soluta-8 The s0ouses denied clai/s of !a'esa=e that after e4ecuting a deed of sale over the 0arcel of land, the" had 0leaded &ith !a'esa=e, their relative, to 'e allo&ed to ad/inister the land 'ecause Dalion did not have an" /eans of livelihood- The" ad/itted, ho&ever, ad/inistering since 1,6<, 6 0arcels of land in !ogod, !outhern Le"te, &hich 'elonged to Leonardo !a'esa=e, grandfather of !a'esa=e, &ho died in 1,69- The" never received their agreed 10I and 16I J co//ission on the sales of co0ra and a'aca, res0ectivel"- !a'esa=e;s suit, the" countered, &as intended /erel" to harass, 0ree/0t and forestall Dalion;s threat to sue for these un0aid co//issions- The trial court rendered its decision on 1+ Januar" 1,<4, ordering Dalion to deliver to !a'esa=e the 0arcel of land su'=ect of the case and to e4ecute the corres0onding for/al deed of conve"ance in a 0u'lic docu/ent in favor of !a'esa=e (or in case of default, the deed shall 'e e4ecuted in their 'ehalf '" the Provincial !heriff or his de0ut"), ordering Dalion to 0a" !a'esa=e the a/ount of P*,000 as attorne" fees and P600 as litigation fees, and to 0a" the costsFro/ the adverse decision of the trial court, Dalion a00ealed, assigning errors so/e of &hich, ho&ever, &ere disregarded '" the a00ellate court, not having 'een raised in the trial court- %n *9 Aa" 1,<+, the ourt of 300eals affir/ed in toto the ruling of the trial court, u0holding the validit" of the sale of a 0arcel of land '" !egundo Dalion in favor of (u0erto !a'esa=e, Jr- #ence, the 0etitionThe !u0re/e ourt denied the 0etition, and affir/ed the decision of the ruling of the trial courtG &ithout costs1. ourt of 300eals u0holding the
A'm(ss( (+(ty o- a pr(vate ,r(t(n) !ection *1, (ule 13* of the (ules of ourt (Private &riting, its e4ecution and authenticit", ho& 0roved) 0rovides that 7Defore an" 0rivate &riting /a" 'e received in evidence, its due e4ecution and authenticit" /ust 'e 0roved either: (a) D" an"one &ho sa& the &riting e4ecutedG (') D" evidence of the genuineness of the hand&riting of the /a@erG or (c) D" a su'scri'ing &itness-8 /. Broo- o- Han',r(t(n) !ection *3, (ule 13* of the (ules of ourt (#and&riting, ho& 0roved-) 0rovides that 7The hand&riting of a 0erson /a" 'e 0roved '" an" &itness &ho 'elieves it to 'e the hand&riting of such 0erson, and has seen the 0erson &rite, or has seen &riting 0ur0orting to 'e his u0on &hich the &itness has acted or 'een charged, and has thus ac.uired @no&ledge of the hand&riting of such 0erson- >vidence res0ecting the hand&riting /a" also 'e given '" a co/0arison, /ade '" the &itness or the court, &ith &ritings ad/itted or treated as genuine '" the 0art" against &ho/ the evidence is offered, or 0roved to 'e genuine to the satisfaction of the =udge-8 1. Eac* party must prove *(s o,n a--(rmat(ve a++e)at(ons 3gainst Dalion;s /ere denial that he signed the docu/ent, the 0ositive testi/onies of the instru/ental &itnesses %gsoc (the one &ho 0re0ared the deed) and >s0ina, aside fro/ the testi/on" of !a'esa=e, /ust 0revail- Dalion has affir/ativel" alleged forger", 'ut he never 0resented an" &itness or evidence to 0rove his clai/ of forger"- >ach 0art" /ust 0rove his o&n affir/ative allegations (!ection 1, (ule 131, (ules of ourt)4. %or)ery not presume'3 Bresumpt(on o- (nnocence 5t is 0resu/ed that a 0erson is innocent of a cri/e or &rong (!ection 6 (a), ide/), and defense should have co/e for&ard &ith clear and convincing evidence to sho& that !a'esa=e co//itted forger" or caused said forger" to 'e co//itted, to overco/e the 0resu/0tion of innocence- Aere denial of having signed does not suffice to sho& forger"-
.a+es" /001 ( !8 )
$.
%or)er ,ou+' attempt to -or)e an unnecessary s()nature T&o signatures of !egundo D- Dalion a00ear on the face of the .uestioned docu/ent, one at the right corner 'otto/ of the docu/ent and the other at the left hand /argin thereof- The second signature is alread" a sur0lusage- 3 forger &ould not atte/0t to forge another signature, an unnecessar" one, for fear he /a" co//it a revealing error or an erroneous stro@e:. Conc+us(ons an' -(n'(n)s o- -act y tr(a+ court ent(t+e' to )reat ,e()*t on appea+ 300ellate courts have consistentl" su'scri'ed to the 0rinci0le that conclusions and findings of fact '" the trial courts are entitled to great &eight on a00eal and should not 'e distur'ed unless for strong and cogent reasons, since it is undenia'le that the trial court is in a /ore advantageous 0osition to e4a/ine real evidence, as &ell as to o'serve the de/eanor of the &itnesses &hile testif"ing in the case ( hase v- Duenca/ino, !r-, F-(- $o- L)*03,6, Aa" 13, 1,<6, 139 ! (3 396G Pring v- ourt of 300eals, F-(- $o- L)41906, 3ugust 1,, 1,<6, 13< ! (3 1<6) !. Art(c+e 11$8 -or conven(ence" not -or va+('(ty or en-orcea (+(ty The 0rovision of 3rticle 136< on the necessit" of a 0u'lic docu/ent (i-e- 7acts and contracts &hich have for their o'=ect the creation, trans/ission, /odification or e4tinction of real rights over i//ova'le 0ro0ert" /ust a00ear in a 0u'lic instru/ent8) is onl" for convenience, not for validit" or enforcea'ilit"- 5t is not a re.uire/ent for the validit" of a contract of sale of a 0arcel of land that this 'e e/'odied in a 0u'lic instru/ent8. Contract o- sa+e (s consensua+ 3 contract of sale is a consensual contract, &hich /eans that the sale is 0erfected '" /ere consent$o 0articular for/ is re.uired for its validit"- ?0on 0erfection of the contract, the 0arties /a" reci0rocall" de/and 0erfor/ance (3rt- 14+6, $ ), i-e-, the vendee /a" co/0el transfer of o&nershi0 of the o'=ect of the sale, and the vendor /a" re.uire the vendee to 0a" the thing sold (3rt- 146<, $ )#. t*(n) De+(very3 E7ecut(on o- -orma+ 'ee' o- conveyance (n pu +(c 'ocument e2u(va+ent to 'e+(very o-
?nder 3rt- 14,<, $ , &hen the sale is /ade through a 0u'lic instru/ent, the e4ecution of the corres0onding for/al deed of conve"ance in a 0u'lic docu/ent thereof is e.uivalent to the deliver" of the thing- Deliver" /a" either 'e actual (real) or constructive- Thus deliver" of a 0arcel of land /a" 'e done '" 0lacing the vendee in control and 0ossession of the land (real) or '" e/'od"ing the sale in a 0u'lic instru/ent (constructive)10. .u(t -or recovery o- o,ners*(p (s proper 3rticle 14+6 of the ivil ode gives the 0arties to a 0erfected contract of sale the right to reci0rocall" de/and 0erfor/ance, and to o'serve a 0articular for/, if &arranted, (3rt- 136+)- !a'esa=e;s co/0laint sufficientl" alleged a cause of action to co/0el Dalion to e4ecute a for/al deed of sale, and the suit for recover" of o&nershi0, &hich is 0re/ised on the 'inding effect and validit" inter 0artes of the contract of sale, /erel" see@s consu//ation of said contract11. .a+e o- rea+ property may e (n a pr(vate (nstrument 3 sale of a real 0ro0ert" /a" 'e in a 0rivate instru/ent, 'ut that contract is valid and 'inding 'et&een the 0arties u0on its 0erfection- 3nd a 0art" /a" co/0el the other 0art" to e4ecute a 0u'lic instru/ent e/'od"ing their contract affecting real rights once the contract a00earing in a 0rivate instru/ent has 'een 0erfected (!ee 3rt- 136+)[/!] Da)u(+an vs. GAC [G.R. No. @D:##!0. Novem er /8" 1#88.]
.a+es" /001 ( !# )
First Division, ru2 (J): 4 concur %acts& T&o lots &ere o&ned '" Do/ingo Aelad- The lots are clai/ed '" 'oth Feli4 Daguilan and 30olonia Aelad (and her hus'and Jose Tagaca")- %n *, Januar" 1,9*, 30olonia Aelad filed a co/0laint against Daguilan in the then F5 aga"an for recover" of a far/ lot and a residential lot &hich she clai/ed she had 0urchased fro/ Do/ingo Aelad in 1,43 and &ere no& 'eing unla&full" &ithheld '" Daguilan- 5n his ans&er, Daguilan denied the allegation and averred that he &as the o&ner of the said lots of &hich he had 'een in o0en, continuous and adverse 0ossession, having ac.uired the/ fro/ Do/ingo Aelad in 1,41 and 1,43- The case &as dis/issed for failure to 0rosecute 'ut &as refiled in 1,9+- 3t the trial, Aelad 0resented a deed of sale dated 4 Dece/'er 1,43, 0ur0ortedl" signed '" Do/ingo Aelad and dul" notari2ed, &hich conve"ed the said 0ro0erties to her for the su/ of P<0-00- !he said the a/ount &as earned '" her /other as a &or@er at the Ta'acalera factor"- !he clai/ed to 'e the illegiti/ate daughter of Do/ingo Aelad, &ith &ho/ she and her /other &ere living &hen he died in 1,46- !he /oved out of the far/ onl" &hen in 1,49 Feli4 Danguilan a00roached her and as@ed 0er/ission to cultivate the land and to sta" therein- !he had agreed on condition that he &ould deliver 0art of the harvest fro/ the far/ to her, &hich he did fro/ that "ear to 1,6<The deliveries having sto00ed, she then consulted the /unici0al =udge &ho advised her to file the co/0laint against Danguilan- Aelad;s /other, her onl" other &itness, corro'orated this testi/on"- Daguilan testified that he &as the hus'and of 5sidra Aelad, Do/ingo;s niece, &ho/ Do/ingo Aelad and his &ife Juana Aalu0ang had ta@en into their ho/e as their &ard as the" had no children of their o&n- #e and his &ife lived &ith the cou0le in their house on the residential lot and hel0ed Do/ingo &ith the cultivation of the far/Do/ingo Aelad signed in 1,41 a 0rivate instru/ent in &hich he gave Daguilan the far/ and in 1,43 another 0rivate instru/ent in &hich he also gave hi/ the residential lot, on the understanding that the latter &ould ta@e care of the grantor and &ould 'ur" hi/ u0on his death- Danguilan 0resented three other &itnesses to corro'orate his state/ents and to 0rove that he had 'een living in the land since his /arriage to 5sidra and had re/ained in 0ossession thereof after Do/ingo Aelad;s death in 1,46- T&o of said &itnesses declared that neither the 0laintiff nor her /other lived in the land &ith Do/ingo Aelad- The trial court 'elieved Daguilan and rendered a decision 'ased /ainl" on the issue of 0ossession%n a00eal, ho&ever, the a00ellate court u0held Aelad as the true and la&ful o&ner of the dis0uted 0ro0ert", holding that the 0rivate instru/ents &here Do/ingo Aelad had conve"ed the land to Daguilan &ere null and void for reason that donation of real 0ro0ert" should 'e effected through a 0u'lic instru/ent- #ence, the 0etition to the !u0re/e ourtThe !u0re/e ourt set aside the decision of the a00ellate court and reinstated that of the trial court, &ith costs against 30olonia Aelad1. >nerous 'onat(ons not covere' y Art(c+e' !4#" re2u(r(n) 'onat(ons o- rea+ propert(es e e--ecte' t*rou)* a pu +(c (nstrument onsidering the language of the t&o 0rivate instru/ents delivering the residential lots, Do/ingo Aelad did intend to donate the 0ro0erties to Da.guilan- The donee, ho&ever, &as not /oved '" 0ure li'eralit"- :hile trul" donations, the conve"ances &ere onerous donations as the 0ro0erties &ere given to Daguilan in e4change for his o'ligation to ta@e care of the donee for the rest of his life and 0rovide for his 'urial- #ence, it &as not covered '" the rule in 3rticle +4, of the ivil ode re.uiring donations of real 0ro0erties to 'e effected through a 0u'lic instru/ent/. Doctr(ne (n 9ana+o vs. 'e 9esa app+(es The 0resent case is s.uarel" under the doctrine laid do&n in Aanalo v- De Aesa, &here it &as held that 7the donation in .uestion &as /ade for a valua'le consideration, since the donors /ade it conditional u0on the donees; 'earing the e40enses that /ight 'e occasioned '" the death and 'urial of the donor, a condition and o'ligation &hich the donee carried out in his o&n 'ehalf and for his &ife- Therefore, in order to deter/ine &hether or not said donation is valid and effective, it should 'e sufficient to de/onstrate that, as a
.a+es" /001 ( 80 )
contract, it e/'races the conditions the la& re.uires and is valid and effective, although not recorded in a 0u'lic instru/ent1. No ev('ence a''uce' to support va+ues e7c*an)e' ,ere '(sproport(onate or e2ua+ $o evidence has 'een adduced to su00ort the contention that the values e4changed (the value of the lands donated and the services for &hich the" &ere 'eing e4changed) &ere dis0ro0ortionate or une.ual for the t&o transactions to 'e considered 0ure or gratuitous donations of real rights, and hence, 'e effected through a 0u'lic instru/ent and not '" /ere 0rivate &ritings4. Da)u(+an took care o- t*e 9e+a' spouses3 Broo- o- onerous 'onat(on Doth the trial and a00ellate court affir/ed the factual allegation that Daguilan too@ care of Do/ingo Aelad and later arranged for his 'urial in accordance &ith the condition i/0osed '" the donor- Daguilan far/ed the land 0racticall" '" hi/self and so 0rovided for the donee (and his &ife) during the latter 0art of Do/ingo Aelad;s life- 5t /a" 'e assu/ed that there &as a fair e4change 'et&een the donor and the donee that /ade the transaction an onerous donation$. Dee' o- .a+e (n -avor o- Apo+on(a 9e+a' susp(c(ous The deed of sale in favor of 30olonia Aelad &as sus0icious- 5t &as allegedl" e4ecuted &hen 30olonia &as onl" three "ears old and the consideration &as su00osedl" 0aid '" her /other, Aaria Eedan, fro/ her earnings as a &age &or@er in a factor"- %ne /a" &ell &onder &h" the transfer &as not /ade to the /other herself, &ho &as after all the one 0a"ing for the lands- The sale &as /ade out in favor of 30olonia Aelad although she had 'een using the surna/e Eedan, her /other;s surna/e, 'efore that instru/ent &as signed and in fact even after she got /arried- 3ver/ent &as also /ade that the contract &as si/ulated and 0re0ared after Do/ingo Aelad;s death in 1,46- 5t &as also alleged that even after the su00osed e4ecution of the said contract, 30olonia Aelad considered Do/ingo Aelad the o&ner of the 0ro0erties and that she had never occu0ied the sa/e- onsidering these serious challenges, the a00ellate court could have devoted a little /ore ti/e to e4a/ining the deed and the circu/stances surrounding its e4ecution 'efore 0ronouncing its validit":. Bresumpt(on o- 'ue e7ecut(on o- a pu +(c (nstrument Due e4ecution of a 0u'lic instru/ent is 0resu/ed, the 0resu/0tion is dis0uta'le and &ill "ield to contradictor" evidence, &hich in the 0resent case &as not refuted!. sa+e 9e+a'=s test(mony (ncons(stent" -a(+s to prove actua+ 'e+(very o- t*(n) so+' (n t*e a++e)e' 'ee' o-
>ven assu/ing the validit" of the deed of sale, the record sho&s that Aelad did not ta@e 0ossession of the dis0uted 0ro0erties and indeed &aited until 1,9* to file the action for recover" of the lands fro/ Daguilan- 5f she did have 0ossession, she transferred the sa/e to Daguilan in 1,49, '" her o&n s&orn ad/ission, and /oved out to another lot 'elonging to her ste0)'rother- #er clai/ that Daguilan &as her tenant (later changed to ad/inistrator) &as dis'elieved '" the trial court, and 0ro0erl" so, for its inconsistenc"- 5n short, she failed to sho& that she consu//ated the contract of sale '" actual deliver" of the 0ro0erties to her and her actual 0ossession thereof in conce0t of 0urchaser)o&ner8. Garc*(torena vs. A+me'a3 ;ra'(t(on& >,ners*(p 'oes not pass y mere st(pu+at(on ut on+y y 'e+(very 3s held in "architorena v. Al#e$a, it is a funda/ental and ele/entar" 0rinci0le that o&nershi0 does not 0ass '" /ere sti0ulation 'ut onl" '" deliver" ( ivil ode, 3rt- 10,6G Fidelit" and !uret" o- v- :ilson, < Phil- 61), and the e4ecution of a 0u'lic docu/ent does not constitute sufficient deliver" &here the 0ro0ert" involved is in the actual and adverse 0ossession of third 0ersons (3ddison vs- Feli4, 3< Phil- 404G Aasallo vsesar, 3, Phil- 134), it 'eco/es incontesta'le that even if included in the contract, the o&nershi0 of the 0ro0ert" in dis0ute did not 0ass to the vendee.a+es" /001 ( 81 )
#. Garc*(torena vs. A+me'a3 Broper act(on a)a(nst present possessors& spec(-(c per-ormance o- sa+e an' not rev(n'(cac(on $ot having 'eco/e the o&ner for lac@ of deliver", the vendee cannot 0resu/e to recover the 0ro0ert" fro/ its 0resent 0ossessors- #is action, therefore, is not one of revindicacion, 'ut one against his vendor for s0ecific 0erfor/ance of the sale to hi/#. Non mu'(s pact(s" se' tra'(t(one 'om(n(a rerum trans-eruntur 5n %i$elity an$ Deposit Co. v. &ilson, it &as declared that it is a funda/ental 0rinci0le in all /atters of contracts and a &ell)@no&n doctrine of la& that 7non /udis 0actis, sed traditione do/inia reru/ transferuntur8- 3s esta'lished in 0aragra0h * of article 90, of ivil ode, the o&nershi0 and other 0ro0ert" rights are ac.uired and trans/itted '" la&, '" gift, '" testate or intestate succession, and, in conse.uence of certain contracts, '" tradition- The logical a00lication of this dis0osition article 10,6 0rescri'es that a creditor has the rights to the fruits of a thing fro/ the ti/e the o'ligation to deliver it arises- #o&ever, he shall not ac.uire a real right (and the o&nershi0 is surel" such) until the 0ro0ert" has 'een delivered to hi/- 5n accordance &ith such dis0osition and 0rovisions the deliver" of a thing constitutes a necessar" and indis0ensa'le re.uisite for the 0ur0ose of ac.uiring the o&nershi0 of the sa/e '" virtue of a contract10. Doctr(ne o- trans-er o- property y mere consent not a'm(tte' 3s Aanresa states in his o//entaries on the ivil ode, volu/e 10, 0ages 33, and 340: 7%ur la& does not ad/it the doctrine of the transfer of 0ro0ert" '" /ere consent 'ut li/its the effect of the agree/ent to the due e4ecution of the contract - - - The o&nershi0, the 0ro0ert" right, is onl" derived fro/ the deliver" of a thing - - - 7 11. Actua+ 'e+(very o- t*e t*(n) so+' The ode i/0oses u0on the vendor the o'ligation to deliver the thing sold- The thing is considered to 'e delivered &hen it is 0laced in the hands and 0ossession of the vendee- ( ivil ode, art- 149*)- 5t is true that the sa/e article declares that the e4ecution of a 0u'lic instru/ent is e.uivalent to the deliver" of the thing &hich is the o'=ect of the contract, 'ut, in order that this s"/'olic deliver" /a" 0roduce the effect of tradition, it is necessar" that the vendor shall have had such control over the thing sold that, at the /o/ent of the sale, its /aterial deliver" could have 'een /ade- 5t is not enough to confer u0on the 0urchaser the o&nershi0 and the right of 0ossession- The thing sold /ust 'e 0laced in his control- :hen there is no i/0edi/ent &hatever to 0revent the thing sold 0assing into the tenanc" of the 0urchaser '" the sole &ill of the vendor, s"/'olic deliver" through the e4ecution of a 0u'lic instru/ent is sufficient- Dut if, not&ithstanding the e4ecution of the instru/ent, the 0urchaser cannot have the en=o"/ent and /aterial tenanc" of the thing and /a@e use of it hi/self or through another in his na/e, 'ecause such tenanc" and en=o"/ent are o00osed '" the inter0osition of another &ill, then fiction "ields to realit" J the deliver" has not 'een effected- 5n the 0resent case, Daguilan and not Aelad is in actual 0ossession of the litigated 0ro0erties1/. Gn case t*e respect(ve c+a(ms o- t*e part(es are ,eak3 .antos N Esp(nosa v. Este8a'a >ven if the res0ective clai/s of the 0arties &ere 'oth to 'e discarded as 'eing inherentl" &ea@, the decision should still incline in favor of Daguilan 0ursuant to the doctrine announced in 'antos ( )spinosa v. )ste*a$a, &here the ourt announced that if the clai/ of 'oth the 0laintiff and the defendant are &ea@, =udg/ent /ust 'e for the one &ho is in 0ossession, as he is 0resu/ed to 'e the o&ner, and cannot 'e o'liged to sho& or 0rove a 'etter right[/8] De +a Cava'a v. D(aC [G.R. No. @D11::8. Apr(+ 1" 1#18.] First Division, Johnson (J): 6 concurring
.a+es" /001 ( 8/ )
%acts& %n 16 $ove/'er 1,1*, 3ntonio Dia2 and 3ntonio >nri.ue2 de la avada entered into a 7contract of o0tion8 for the latter to 0urchase the for/er;s hacienda at Pitogo, &ithin the 0eriod necessar" for the a00roval and issuance of a Torrens title thereto '" the Fovern/ent for P30,000 in cash or P40,000 &ith 9I interest 0er annu/ &ithin 9 "ears &ith due securit", i-e- the 100 hectares of land in Pitogo, Ta"a'asG containing *0,000 coconut trees and 10,000 ni0a)0al/ trees sold to >nri.ue2 for P+0,000- !u'se.uentl", >nri.ue2 infor/ed Dia2 of his confor/it" &ith the letter of o0tion under the condition that he shall send a surve"or to surve" the said 0ro0ert", and to a00l" to the Fovern/ent for a Torrens title therefor, and, if the e40enses incurred for the sa/e should not e4ceed P1,000, he shall 0a" the P600 and "ou the other P600G Provided, ho&ever, that Dia2 shall give the surve"or all necessar" assistance during his sta" at the haciendaG and that he shall 0a" the 0urchase 0rice to "ou in confor/it" &ith our letter of o0tion of this date, and after the Torrens title shall have 'een officiall" a00roved- !oon after the e4ecution of said contract, and in 0art co/0liance &ith the ter/s thereof, Dia2 0resented * 0etitions in the ourt of Land (egistration (13,0, and 13,1,), each for the 0ur0ose of o'taining the registration of a 0art of the 7#acienda de Pitogo-8 !aid 0etitions &ere granted, and each 0arcel &as registered and a certificate of title &as issued for each 0art under the Torrens s"ste/ to Dia2- Later, and 0retending to co/0l" &ith the ter/s of said contract, Dia2 offered to transfer to >nri.ue2 one of said 0arcels onl", &hich &as a 0art of said 7hacienda-8 >nri.ue2 refused to acce0t said certificate for a 0art onl" of said 7hacienda8 u0on the ground that it &as onl" a 0art of the 7#acienda de Pitogo,8 and under the contract he &as entitled to a transfer to hi/ a all said 7hacienda-8 (aised in the lo&er court, Dia2; theori2ed that the contract of sale of said 7#acienda de Pitogo8 included onl" 100 hectares, /ore or less, of said 7hacienda,8 and that offering to conve" to >nri.ue2 a 0ortion of said 7hacienda,8 and that '" offering to conve" to >nri.ue2 a 0ortion of said 7hacienda8 co/0osed of 7100 hectares, /ore or less,8 he there'" co/0lied &ith the ter/s of the contract- >nri.ue2 theori2ed, on the other hand, that he had 0urchased all of said 7hacienda,8 and that the sa/e contained, at least, 100 hectares, /ore or less- The lo&er court sustained the contention of >nri.ue2, that the sale &as a sale of the 7#acienda de Pitogo8 and not a sale of a 0art of it- The ourt ordered Dia2, &ithin 30 da"s fro/ the date u0on &hich this decision 'eco/es final, conve" to >nri.ue2 a good and sufficient title in fee si/0le to the ourt of Land (egistration, u0on 0a"/ent or legal tender of 0a"/ent '" >nri.ue2 of the su/ of P30,000 in cash, and u0on >nri.ue2 giving securit" a00roved '" this court for the 0a"/ent &ithin the ter/ of 9 "ears fro/ the date of the conve"ance for the additional su/ of P40,000 &ith interest at the rate of 9I 0er annu/- The ourt further ordered and ad=udged that in the event of the failure of Dia2 to e4ecute the conve"ance, >nri.ue2 has and recover =udg/ent against hi/, Dia2, for the su/ of P*0,000, &ith interest at the rate of 9I (9I 0er annu/ fro/ the date u0on &hich the conve"ance should have 'een /ade)- Fro/ the =udg/ent, Dia2 a00ealedThe !u0re/e ourt affir/ed the =udg/ent of the lo&er court, &ith costs1. A)reement et,een part(es (n c(v(+ +(t()at(on va+(' %n *1 $ove/'er 1,14, the 0arties agreed (&ith reference to the /ethod of 0resenting their 0roof) that each of the litigating 0arties shall 0resent his evidence 'efore Don Feli0e anillas, assistant cler@ of the F5 Aanila, &ho, for such 0ur0ose, should 'e a00ointed co//issionerG that said co//issioner shall set a da" and hour for the 0resentation of the evidence, 'oth oral and docu/entar", and in the stenogra0hic notes shall have record entered of all o'=ections /ade to the evidence '" either 0art", in order that the" /a" after&ards 'e decided '" the courtG that the transcri0tion of the stenogra0hic notes, containing the record of the evidence ta@en, shall 'e 0aid for in e.ual shares '" 'oth 0artiesG and that at the close of the ta@ing of the evidence, each of the 0arties shall file his 'rief in res0ect to such evidence, &hereu0on the case as it then stands shall 'e su'/itted to the decision of the court- !aid agree/ent &as a00roved '" the lo&er court- There is nothing in the la& nor in 0u'lic 0olic" &hich 0rohi'its the 0arties in a civil litigation fro/ /a@ing an agree/ent on the /ethod of 0resentation of their 0roofs- :hile the la& concedes to 0arties litigant, generall", the right to have their 0roof ta@en in the 0resence of the =udge, such a right is a renouncea'le one- 5n a civil action the 0arties litigant have a right to agree, outside of the court, u0on the facts in litigation- ?nder certain conditions the
.a+es" /001 ( 81 )
0arties litigant have a right to ta@e the de0ositions of &itnesses and su'/it the s&orn state/ents in that for/ to the court- The 0roof, as it &as su'/itted to the court in the 0resent case, '" virtue of said agree/ent, &as, in effect, in the for/ of a de0osition of the various &itnesses 0resented- #aving agreed to the /ethod of ta@ing the 0roof, and the sa/e having 'een ta@ing in co/0liance &ith said agree/ent, it is no& too late, there 'eing no la& to the contrar", for the/ to den" and re0udiate the effect of their agree/ent- ()iunas vs. Mora, 6.7. 8o. //-'-, March //, /0/8> )ehr vs. 9ev, #ermanos, 6.7. 8o. /..//, March /0, /0/8.( $ot onl" is there no la& 0rohi'iting the 0arties fro/ entering into an agree/ent to su'/it their 0roof to the court in civil actions, 'ut it /a" 'e a /ethod highl" convenient, not onl" to the 0arties, 'ut to 'us" courts- The =udg/ent of the lo&er court, therefore, should not 'e /odified or reversed/. Contract o--ere' (n ev('ence" an' not o 8ecte' to3 t*us" ,as proper+y presente' The contract &as offered in evidence and ad/itted as 0roof &ithout o'=ection- !aid contract &as, therefore, 0ro0erl" 0resented to the court as 0roof- $ot onl" &as the contract 'efore the court '" reason of its having 'een 0resented in evidence, 'ut that Dia2 hi/self /ade said contract an integral 0art of his 0leadingsDia2 ad/itted the e4ecution and deliver" of the contract, and alleged that he /ade an effort to co/0l" &ith its ter/s- #is onl" defense is that he sold to >nri.ue2 a 0art of the 7hacienda8 onl" and that he offered, in co/0liance &ith the ter/s of the contract, to conve" to >nri.ue2 all of the land &hich he had 0ro/ised to sell1. Gna'e2uacy o- cons('erat(on ra(se' -or t*e -(rst t(me on appea+ :ith reference to the o'=ection that there &as no consideration for said contract it /a" 'e said (a) that the contract &as for the sale of a definite 0arcel of land: (') that it &as reduced to &ritingG (c) that Dia2 0ro/ised to conve" to >nri.ue2 said 0arcel of landG (d) that >nri.ue2 0ro/ised to 0a" therefor the su/ of P+0,000 in the /anner 0rescri'ed in said contractG (e) that Dia2 ad/itted the e4ecution and deliver" of the contract and alleged that he /ade an effort to co/0l" &ith the sa/e and re.uested >nri.ue2 to co/0l" &ith his 0art of the contractG and (f) that no defense or 0revention &as /ade in the lo&er court that there &as no consideration for his contract- #aving ad/itted the e4ecution and deliver" of the contract, having ad/itted an atte/0t to co/0l" &ith its ter/s, and having failed in the court 'elo& to raise an" .uestion &hatsoever concerning the inade.uac" of consideration, it is rather late, in the face of said ad/issions, to raise that .uestion for the first ti/e in the !u0re/e ourt4. A prom(se ma'e (n accor'ance ,(t* -orms re2u(re' y +a, may e a )oo' cons('erat(on -or a anot*er party=s prom(se 3 0ro/ise /ade '" one 0art", if /ade in accordance &ith the for/s re.uired '" the la&, /a" 'e a good consideration (causa) for a 0ro/ise /ade '" another 0art"- (3rt- 1*+4, ivil ode-) The consideration (causa) need not 0ass fro/ one to the other at the ti/e the contract is entered into- For e4a/0le, 3 0ro/ises to sell a certain 0arcel of land to D for the su/ of P+0,000- 5f 3, '" virtue of the 0ro/ise of D to P+0,000, 0ro/ises to sell said 0arcel of land to D for said su/, then the contract is co/0lete, 0rovided the" have co/0lied &ith the for/s re.uired '" the la&- 3 cannot enforce a co/0liance &ith the contract and re.uire D to 0a" said su/ until he has co/0lied &ith his 0art of the contract$. Contract not an 4opt(ona+ contract6 (n (ts or'(nary mean(n)" ut an a so+ute prom(se to se++ a +an' -or a -(7e' pr(ce upon 'e-(n(te con'(t(on The contract &as not an 7o0tional contract8 as that 0hrase in generall" used- 5t is clearl" an a'solute 0ro/ise to sell a definite 0arcel of land for a fi4ed 0rice u0on definite conditions- Dia2 0ro/ised to conve" to >nri.ue2 the land in .uestion as soon as the sa/e &as registered under the Torrens s"ste/, and >nri.ue2 0ro/ised to 0a" to Dia2 the su/ of P+0,000, under the condition na/ed, u0on the ha00ening of that event:. Contract o- opt(on '(st(n)u(s*e' -rom present contract The contract &as not &hat is generall" @no&n as a 7contract of o0tion-8 5t differs ver" essentiall" fro/ a contract of o0tion- 3n o0tional contract is a 0rivilege e4isting in one 0erson, for &hich he had 0aid a consideration, &hich gives hi/ the right to 'u", for e4a/0le, certain /erchandise of certain s0ecified
.a+es" /001 ( 84 )
0ro0ert", fro/ another 0erson, if he chooses, at an" ti/e &ithin the agreed 0eriod, at a fi4ed 0rice- The contract of o0tion is a se0arate and distinct contract fro/ the contract &hich the 0arties /a" enter into u0on the consu//ation of the o0tion- 3 consideration for an o0tional contract is =ust as i/0ortant as the consideration for an" other @ind of contract- 5f there &as no consideration for the contract of o0tion, then it cannot 'e enforced an" /ore than an" other contract &here no consideration e4ists- +o illustrate, 3 and D the su/ of P100,000 for the o0tion of 'u"ing his 0ro0ert" &ithin the 0eriod of 30 da"s- :hile it is true that the conditions u0on &hich 3 0ro/ises to 'u" the 0ro0ert" at the end of the 0eriod /entioned are usuall" fi4ed in the o0tion, the consideration fro/ the consideration of the contract &ith reference to &hich the o0tion e4ists3 contract of o0tion is a contract '" virtue of the ter/s of &hich the 0arties thereto 0ro/ise and o'ligate the/selves to enter into another contract at a future ti/e, u0on the ha00ening of certain events, or the fulfill/ent of certain conditions!. @ay(n) t*e -oun'at(on -or act(on 'ama)es :hen Dia2 alleged that he had co/0lied &ith his 0art of the contract and de/anded that >nri.ue2 should i//ediatel" co/0l" &ith his 0art of the sa/e, he evident &as la"ing the foundation for an action da/ages, the nullification or a s0ecific co/0liance &ith contract8. Contract ma'e ,(t* Enr(2ueC" an' not Rosenstock ?0on the face of the contract, the contract &as /ade '" Dia2 &ith >nri.ue2- $ot having raised the contention, that the contract &as /ade &ith (osenstoc@, >lser Q o- and not &ith >nri.ue2, in the lo&er court, and having ad/itted the e4ecution and deliver" of the contract in .uestion &ith the 0laintiff, Dia2; ad/ission is conclusive u0on that .uestion and need not 'e further discussed#. Act(on not premature3 Bayment s(mu+taneous ,(t* 'e+(very o- 'ee' o- conveyance ut not nee' not e ma'e unt(+ 'ee' o- conveyance (s o--ere' The action &as not 0re/ature- The contention that >nri.ue2 had not 0aid nor offered to 0a" the 0rice agreed u0on, under the conditions na/ed, for the land in .uestion &as not raised in the lo&er court, &hich fact, ordinaril", &ould 'e a sufficient ans&er to the contention of the a00ellant- !till, Dia2 could not de/and the 0a"/ent until he had offered the deeds of conve"ance, in accordance &ith the ter/s of the contract, as he did not offer to co/0l" &ith the ter/s of his contract- #e offered to co/0l" 0artiall" &ith the ter/s of the contract, 'ut not full"- :hile the 0a"/ent /ust 'e si/ultaneous &ith the deliver" of the deeds of conve"ance, the 0a"/ent need not 'e /ade until deed of conve"ance is offered- >nri.ue2 stood read" and &illing to 0erfor/ his 0art of the contract i//ediatel" u0on on the 0art of Dia2- (3rts- 1*6< and 1461 of ivil ode-) 10. Enr(2ueC stoo' rea'y to comp+y 5t cannot 'e said that Dia2 &as not o'ligated to sell the 7#acienda de Pitogo8 to >nri.ue2 due to >nri.ue2; alleged nonfulfill/ent, renunciation, a'andon/ent and negligence, as such .uestion &as not 0resented to the lo&er court- !till, the record sho&s that >nri.ue2, at all ti/es, insisted u0on a co/0liance &ith the ter/s of the contract on the 0art of Dia2, standing read" to co/0l" &ith his 0art of the sa/e>nri.ue2 &as constantl" insisting u0on co/0liance &ith the ter/s of the contract, to &it, a conve"ance to hi/ of the 7#acienda de Pitogo8 '" Dia2- $aturall", he refused, under the contract, to acce0t a conve"ance of a 0art onl" 'e said 7hacienda-8 11. No mo'(-(cat(on 'ue to Enr(2ueC= c+a(m -or 'ama)es The onl" 0roof u0on the .uestion of da/ages suffered '" >nri.ue2 for the nonco/0liance &ith the ter/s of the contract in .uestion on the 0art of Dia2 is that >nri.ue2, in conte/0lation of the co/0liance &ith the ter/s of the contract on the 0art of Dia2, entered into a contract &ith a third 0art" to sell the said 7hacienda8 at a 0rofit of P30,000- That 0roof is not dis0uted- $o atte/0t &as /ade in the lo&er court to den" that fact- The 0roof sho&s that the 0erson &ith &ho/ >nri.ue2 had entered into a conditional sale of the land in .uestion had /ade a de0osit for the 0ur0ose of guaranteeing the final consu//ation of the that contractD" reason of the failure of Dia2 to co/0l" &ith the contract here in .uestion, Dia2 &as o'liged to return the
.a+es" /001 ( 8$ )
su/ de0osited '" said third 0art" &ith a 0ro/ise to 0a" da/ages- The record does not sho& &h" >nri.ue2 did not as@ for da/ages in the su/ of P30,000, 'ut as@ed for a =udg/ent onl" in the su/ of P*0,000- onsidering the fact that he neither as@ed for a =udg/ent for /ore than P*0,000 nor a00ealed fro/ the =udg/ent of the lo&er court, >nri.ue2; re.uest to /odif" the =udg/ent of the lo&er court cannot 'e granted1/. .u se2uent sa+e o- +an' to t*(r' person not an e7cuse -or comp+(ance o- terms o- contracts or to ans,er -or 'ama)es The /ere fact that Dia2 had sold a 0art of the 7hacienda8 to other 0erson, is no sufficient reason for not re.uiring a strict co/0liance &ith the ter/s of his contract &ith >nri.ue2, or to ans&er in da/ages for his failure- (3rts- 1101 and 1*61 of the ivil ode-) [/#] De+ta 9otors .a+es vs. N(u A(m Duan [G.R. No. :1041. .eptem er /" 1##/.] !econd Division, $ocon (J): 4 concurring %acts& %n 6 Jul" 1,+6, $iu Ci/ Duan and han Fue >ng (defendants) 0urchased fro/ Delta Aotor !ales or0oration 3 units of HD35C5$; air)conditioner all valued at P1,,360-00- The deed of sale sti0ulates that the defendants shall 0a" a do&n 0a"/ent of P++4-00 and the 'alance of P1<,6+9-00 shall 'e 0aid '" the/ in *4 install/entsG that the title to the 0ro0erties 0urchased shall re/ain &ith Delta Aotors until the 0urchase 0rice thereof is full" 0aidG that if an" t&o install/ents are not 0aid '" the defendants on their due dates, the &hole of the 0rinci0al su/ re/aining un0aid shall 'eco/e due, &ith interest at the rate of 14I 0er annu/: and in case of a suit, the defendants shall 0a" an a/ount e.uivalent to *6I of the re/aining un0aid o'ligation as da/ages, 0enalt" and attorne";s feesG that to secure the 0a"/ent of the 'alance of P1<,6+9-00 the defendants =ointl" and severall" e4ecuted in favor of the Delta Aotors a 0ro/issor" note- The 3 air)conditioners &ere delivered to and received '" the defendants- 3fter 0a"ing the a/ount of P9,,99-00, the defendants failed to 0a" at least * /onthl" install/entsG that as of 9 Januar" 1,++, the re/aining un0aid o'ligation of the defendants a/ounted to P1*,,*0-0<- !tate/ents of accounts &ere sent to the defendants and the Delta Aotors; collectors 0ersonall" &ent to the for/er to effect collections 'ut the" failed to do so- Decause of the un=ustified refusal of the defendants to 0a" their outstanding account and their &rongful detention of the 0ro0erties in .uestion, Delta Aotors tried to recover the said 0ro0erties e4tra)=udiciall" 'ut it failed to do soThe /atter &as later referred '" Delta Aotors to its legal counsel for legal action5n its verified co/0laint dated *< Januar" 1,++, Delta Aotors 0ra"ed for the issuance of a &rit of re0levin, &hich the ourt granted in its %rder dated *< Fe'ruar" 1,++, after Delta Aotors 0osted the re.uisite 'ond- %n 11 30ril 1,++, Delta Aotors, '" virtue of the &rit, succeeded in retrieving the 0ro0erties in .uestion- 3s of 3 %cto'er 1,++, the outstanding account of the defendants is onl" in the a/ount of P9,1<<-*, as sho&n '" the co/0utation, after deducting the interests in arrears, cover charges, re0levin 'ond 0re/iu/s, the value of the units re0ossessed and the li@e- 5n vie& of the failure of the defendants to 0a" their o'ligations, the a/ount of P9,,99-00 &hich had 'een 0aid '" &a" of install/ents &ere treated as rentals for the units in .uestion for * "ears 0ursuant to the 0rovisions of 0aragra0h 6 of the Deed of onditional !ale- The trial court 0ro/ulgated its decision on 11 %cto'er 1,++ ordering the defendants to 0a" Delta Aotors the a/ount of P9,1<<-*, &ith a 14I 0er annu/ interest &hich &as due on the 3 7Dai@in8 air)conditioners the defendants 0urchased fro/ Delta Aotors under a Deed of onditional !ale, after the sa/e &as declared rescinded '" the trial court- The" &ere li@e&ise ordered to 0a" Delta Aotors P1,000-00 for and as attorne";s fees$iu Ci/ Duan and han Fue >ng a00ealed- The case &as elevated to the !u0re/e 300eals, in its (esolution of *0 Aa" 1,<*, on a 0ure .uestion of la&ourt '" the ourt of
The !u0re/e ourt set aside the =udg/ent of the trial court in ivil ase *66+< and dis/issed the co/0laint filed '" Delta Aotor !ales or0orationG &ithout costs.a+es" /001 ( 8: )
1. ;reatment o- (nsta++ment payments as renta+s not unconsc(ona +e (even (- (t appro7(mates 1<1 ocost o- t*e 1 a(rcon'(t(oners) Defendants cannot co/0lain that their do&n0a"/ent of P++4-00 and install/ent 0a"/ents of P6,966-,* &ere treated as rentals, even though the total a/ount of P9,4*,,,* &hich the" had 0aid, a00ro4i/ates one)third (1B3) of the cost of the 3 air)conditioners- 3 sti0ulation in a contract that the install/ents 0aid shall not 'e returned to the vendee is valid insofar as the sa/e /a" not 'e unconsciona'le under the circu/stances is sanctioned '" 3rticle 14<9 of the $e& ivil ode- The /onthl" install/ent 0a"a'le '" defendants &as P++4-00- The P6,966-,* install/ent 0a"/ents corres0ond onl" to + /onthl" install/ents- !ince the" ad/it having used the air)conditioners for ** /onths, this /eans that the" did not 0a" 16 /onthl" install/ents on the said air)conditioners and &ere thus using the sa/e F(>> for said 0eriod, to the 0re=udice of Delta Aotors- ?nder the circu/stances, the treat/ent of the install/ent 0a"/ents as rentals cannot 'e said to 'e unconsciona'le/. Reme'(es ava(+a +e to ven'or (n a sa+e o- persona+ property paya +e (n (nsta++ments The vendor in a sale of 0ersonal 0ro0ert" 0a"a'le in install/ents /a" e4ercise one of three re/edies, na/el", (1) e4act the fulfill/ent of the o'ligation, should the vendee fail to 0a"G (*) cancel the sale u0on the vendee;s failure to 0a" t&o or /ore install/entsG (3) foreclose the chattel /ortgage, if one has 'een constituted on the 0ro0ert" sold, u0on the vendee;s failure to 0a" t&o or /ore install/ents- The third o0tion or re/ed", ho&ever, is su'=ect to the li/itation that the vendor cannot recover an" un0aid 'alance of the 0rice and an" agree/ent to the contrar" is void (3rt- 14<4)1. Reme'(es a+ternat(ve" not cumu+at(ve The 3 re/edies are alternative and $%T cu/ulative- 5f the creditor chooses one re/ed", he cannot avail hi/self of the other t&o4. A(rDcon'(t(on(n) un(ts repossesse'" ars act(on to e7act payment -or a+ance o- t*e pr(ce Delta Aotors had ta@en 0ossession of the 3 air)conditioners, through a &rit of re0levin &hen defendants refused to e4tra)=udiciall" surrender the sa/e- The case Delta Aotors filed &as to see@ a =udicial declaration that it had validl" rescinded the Deed of onditional !ale- Delta Aotors thus chose the second re/ed" of 3rticle 14<4 in see@ing enforce/ent of its contract &ith defendants- #aving done so, it is 'arred fro/ e4acting 0a"/ent fro/ defendants of the 'alance of the 0rice of the three air)conditioning units &hich it had alread" re0ossessed- 5t cannot have its ca@e and eat it too[10] D()nos vs. @umun)so' [G.R. No. @D$#/::. %e ruary /#" 1#88.] Third Division, Didin (J): 4 concurring %acts& The s0ouses !ilvestre Dignos and 5sa'el Lu/ungsod &ere o&ners of a 0arcel of land (Lot 3463, %0on adastre), of the cadastral surve" of %0on, La0u)La0u it"- %n + June 1,96, the Dignos s0ouses sold the said 0arcel of land to 3tilano J- Ja'il for the su/ of P*<,000-00, 0a"a'le in t&o install/ents, &ith an assu/0tion of inde'tedness &ith the First 5nsular Dan@ of e'u in the su/ of P1*,000-00, &hich &as 0aid and ac@no&ledged '" the vendors in the deed of sale e4ecuted in favor of Ja'il, and the ne4t install/ent in the su/ of P4,000-00 to 'e 0aid on or 'efore 16 !e0te/'er 1,96- %n *6 $ove/'er 1,96, the Dignos s0ouses sold the sa/e land in favor of Luciano a'igas and Jovita L- De a'igas, &ho &ere then ?! citi2ens, for the 0rice of P36,000-00- 3 deed of a'solute sale &as e4ecuted '" the Dignos s0ouses in favor of the a'igas s0ouses, and &hich &as registered in the %ffice of the (egister of Deeds 0ursuant to the 0rovisions of 3ct 33443s the Dignos s0ouses refused to acce0t fro/ Ja'il the 'alance of the 0urchase 0rice of the land, and as Ja'il
.a+es" /001 ( 8! )
discovered the second sale /ade '" the Dignos s0ouses to the a'igas s0ouses, Ja'il filed the suit &ith the F5 e'u ( ivil ase *3)L)- 3fter due trial, the F5 e'u rendered its Decision on *6 3ugust 1,+*, declaring the deed of sale e4ecuted on *6 $ove/'er 1,96 in favor of the a'igas s0ouses null and void, and the deed of sale in favor of Ja'il not rescindedG ordering Ja'il to 0a" the su/ of P19,0000 to the Dignos s0ouses u0on the e4ecution of the Deed of 3'solute !ale and &hen the decision of the case 'eco/es final and e4ecutor"G ordering Ja'il to rei/'urse the a'igas cou0le reasona'le a/ount corres0onding to the e40enses or costs of the hollo& 'loc@ fence, so far constructedG ordering the Dignos s0ouses to return to the a'igas s0ouses the su/ of P36,000G and /a@ing the &rit of 0reli/inar" in=unction issued *3 !e0te/'er 1,99 0er/anent '" virtue of the decisionJa'il and the Dignos s0ouses a00ealed to the ourt of 300eals ( 3)F( 643,3)()- %n 31 Jul" 1,<1, the ourt of 300eals affir/ed the decision of the lo&er court e4ce0t as to the 0ortion ordering Ja'il to 0a" for the e40enses incurred '" the a'igas s0ouses for the 'uilding of a fence u0on the land in .uestion- 3 /otion for reconsideration of said decision &as filed '" the Dignos s0ouses, 'ut on 19 Dece/'er 1,<1, a resolution &as issued '" the ourt of 300eals den"ing the /otion for lac@ of /erit- #ence, the 0etition for revie& on certiorari5n the resolution of 10 Fe'ruar" 1,<*, the !econd Division of the !u0re/e ourt denied the 0etition for lac@ of /erit- 3 /otion for reconsideration of said resolution &as filed on 19 Aarch 1,<*- 5n the resolution dated *9 30ril 1,<*, Ja'il &as re.uired to co//ent thereon, &hich co//ent &as filed on 11 Aa" 1,<* and a re0l" thereto &as filed on *9 Jul" 1,<* in co/0liance &ith the resolution of 19 June 1,<* - %n , 3ugust 1,<*, acting on the /otion for reconsideration and on all su'se.uent 0leadings filed, the !u0re/e ourt resolved to reconsider its resolution of 10 Fe'ruar" 1,<* and to give due course to the 0resent 0etition- %n 9 !e0te/'er 1,<*, Ja'il filed a re=oinder to re0l" of the Dignos s0ouses &hich &as noted on the resolution of *0 !e0te/'er 1,<*- The !u0re/e ourt dis/issed the 0etition filed for lac@ of /erit and affir/ed the assailed decision of the ourt of 300eals in toto1. Contract (s a Dee' o- .a+e The contract in .uestion is a Deed of !ale, &ith the conditions that (1) 3tilano F- Ja'il is to 0a" the a/ount of T&elve Thousand Pesos (P1*,000-00) Phili00ine urrenc" as advance 0a"/entG (*) 3tilano FJa'il is to assu/e the 'alance of T&elve Thousand Pesos (P1*,000-00) Loan fro/ the First 5nsular Dan@ of e'uG (3) 3tilano F- Ja'il is to 0a" the said s0ouses the 'alance of Four Thousand Pesos (P4,000-00) on or 'efore !e0te/'er 16, 1,96- (4) That the said s0ouses agreed to defend the said 3tilano F- Ja'il fro/ other clai/s on the said 0ro0ert"G (6) the s0ouses agrees to sign a final deed of a'solute sale in favor of 3tilano FJa'il over the a'ove)/entioned 0ro0ert" u0on the 0a"/ent of the 'alance of Four Thousand Pesos-8 D" and large, the issues in the 0resent case have alread" 'een settled '" the ourt in analogous cases/. Dee' o- .a+e a so+ute a+t*ou)* 'enom(nate' as a 4Dee' o- Con'(t(ona+ .a+e6 3 deed of sale is a'solute in nature although deno/inated as a 7Deed of onditional !ale8 &here no&here in the contract in .uestion is a 0roviso or sti0ulation to the effect that title to the 0ro0ert" sold is reserved in the vendor until full 0a"/ent of the 0urchase 0rice, nor is there a sti0ulation giving the vendor the right to unilaterall" rescind the contract the /o/ent the vendee fails to 0a" &ithin a fi4ed 0eriod (Ta4uAa v. ?da. de 9eon, /&. SC6A ..> 9u=on )ro2era4e Co., Inc. v. Maritime )ui"din4 Co., Inc., 8' SC6A &%$(. 5n the 0resent case, there is no sti0ulation reserving the title of the 0ro0ert" on the vendors nor does it give the/ the right to unilaterall" rescind the contract u0on non)0a"/ent of the 'alance thereof &ithin a fi4ed 0eriod1. E+ements o- va+(' contract present3 Art(c+e 14$8 3ll the ele/ents of a valid contract of sale under 3rticle 146< of the ivil ode, are 0resent, such as: (1) consent or /eeting of the /indsG (*) deter/inate su'=ect /atterG and (3) 0rice certain in /one" or its e.uivalent-
.a+es" /001 ( 88 )
4.
>,ners*(p trans-erre' upon actua+ or construct(ve 'e+(very3 %ro(+an vs. Ban >r(enta+ .*(pp(n) 5n addition, 3rticle 14++ of the sa/e ode 0rovides that 7The o&nershi0 of the thing sold shall 'e transferred to the vendee u0on actual or constructive deliver" thereof- 3s a00lied in the case of Froilan v- Pan %riental !hi00ing o-, et al- (1* ! (3 *+9), the !u0re/e ourt held that in the a'sence of sti0ulation to the contrar", the o&nershi0 of the thing sold 0asses to the vendee u0on actual or constructive deliver" thereof$. Actua+ 'e+(very ma'e (n t*e present case :hile there &as no constructive deliver" of the land sold in the 0resent case, as su'=ect Deed of !ale is a 0rivate instru/ent, it is 'e"ond .uestion that there &as actual deliver" thereof- 3s found '" the trial court, the Dignos s0ouses delivered the 0ossession of the land in .uestion to Ja'il as earl" as *+ Aarch 1,96 so that the latter constructed thereon !all";s Deach (esort also @no&n as Ja'il;s Deach (esort in Aarch, 1,96G Aactan :hite Deach (esort on 16 Januar" 1,99 and Devirl"n;s Deach (esort on 1 !e0te/'er 1,96- !uch facts &ere ad/itted '" the Dignos s0ouses:. Contemporaneous acts s*o, t*at a so+ute 'ee' o- sa+e ,as (nten'e' The ourt of 300eals in its resolution dated 19 Dece/'er 1,<1 found that the acts of the Dignos s0ouses, conte/0oraneous &ith the contract, clearl" sho& that an a'solute deed of sale &as intended '" the 0arties and not a contract to sell!. .u se2uent sa+e to t*e Ca ()as spouses nu++ an' vo(' :hen the Dignoes s0ouses sold said land to the a'igas s0ouses, the" &ere no longer o&ners of the sa/e and the sale is null and void8. ;a)u a vs. H'a. De @eon on a++ -ours3 Art(c+es 1$#/ o- t*e C(v(+ Co'e 300l"ing the rationale of the case of Tagu'a v- 1da- de Leon (su0ra) &hich is on all fours &ith the 0resent case, the contract of sale 'eing a'solute in nature is governed '" 3rticle 16,* of the ivil ode- The Dignos s0ouses never notified Ja'il '" notarial act that the" &ere rescinding the contract, and neither did the" file a suit in court to rescind the sale#. Art(c+e 11$8 o- t*e C(v(+ Co'e" Acts an' contracts -or t*e e7t(n)u(s*ments o- rea2+ r()*ts over (mmova +e property must appear (n pu +(c 'ocument The /ost that the Dignos s0ouses &ere a'le to sho& is a letter of i0riano 3/istad &ho, clai/ing to 'e an e/issar" of Ja'il, infor/ed the Dignos s0ouses not to go to the house of Ja'il 'ecause the latter had no /one" and further advised the Dignos s0ouses to sell the land in litigation to another 0art"- There is no sho&ing that 3/istad &as 0ro0erl" authori2ed '" Ja'il to /a@e such e4tra =udicial rescission for the latter &ho, on the contrar", vigorousl" denied having sent 3/istad to tell the Dignos s0ouses that he &as alread" &aiving his rights to the land in .uestion- ?nder 3rticle 136< of the ivil ode, it is re.uired that acts and contracts &hich have for their o'=ect the e4tinguish/ent of real rights over i//ova'le 0ro0ert" /ust a00ear in a 0u'lic docu/ent10. .+()*t 'e+ay y one party not su--(c(ent )roun' -ro resc(ss(on :here ti/e is not of the essence of the agree/ent, a slight dela" on the 0art of one 0art" in the 0erfor/ance of his o'ligation is not a sufficient ground for the rescission of the agree/ent (Tagu'a v- 1da- de Leon, su0ra)- onsidering that Ja'il has onl" a 'alance of P4,000-00 and &as dela"ed in 0a"/ent onl" for one /onth, e.uit" and =ustice /andate as in the case that Ja'il 'e given an additional 0eriod &ithin &hich to co/0lete 0a"/ent of the 0urchase 0rice[11] @i=on v. CA, &%. SC6A .88
.a+es" /001 ( 8# )
[1/] Doroma+ vs. CA [G.R. No. @D1:081. .eptem er $" 1#!$.] >n Danc, Darredo (J): 9 concurring, * too@ no 0art, * on leave %acts& Lot 3604 of the cadastral surve" of 5loilo, situated in the 0o'lacion of La Pa2, one of its districts, &ith an area of a little /ore than *)1B* hectares &as originall" decreed in the na/e of the late Justice 3ntonio #orilleno, in 1,19, under % T 1314- Defore he died, on a date not 0articulari2ed in the record, he e4ecuted a last &ill and testa/ent attesting to the fact that it &as a co)o&nershi0 'et&een hi/self and his 'rothers and sisters- The truth &as that the o&ners or 'etter stated, the co)o&ners &ere, 'esides Justice #orilleno, Luis, !oledad, Fe, (osita, arlos and >s0eran2a, all surna/ed #orilleno, in the 0ro0ortion of 1B+ undivided o&nershi0 each- !ince >s0eran2a had alread" died, she &as succeeded '" her onl" daughter, Filo/ena Javellana- !till, even though their right had not as "et 'een annotated in the title, the co)o&ners led '" arlos, and as to deceased Justice 3ntonio #orilleno, his daughter Aar", so/eti/e since earl" 1,9+, had &anted to sell their shares, or if 0ossi'le if Filo/ena Javellana &ere agreea'le, to sell the entire 0ro0ert"- The" hired an ac.uaintance resencia #arder, to loo@ for 'u"ers, and the latter ca/e to the interest of (a/on Doro/al, !rand Jr- 5n 0re0aration for the e4ecution of the sale (since the 'rothers and sisters #orilleno &ere scattered in various 0arts of the countr": arlos in 5locos !ur, Aar" in Daguio, !oledad and Fe, in Aandalu"ong, (i2al, and (osita in Dasilan it"), the #orillenos e4ecuted various 0o&ers of attorne" in favor of their niece, Aar" #- Ji/ene2- The" also caused 0re0aration of a 0o&er of attorne" of identical tenor for signature '" Javellana, and sent it &ith a letter of arlos, dated 1< Januar" 1,9< unto her thru Ars- #arder- arlos infor/ed Javellana that the 0rice &as P4-00 a s.uare /eter- 5t a00ears, ho&ever, that as earl" as ** %cto'er, 1,9+, arlos had received in chec@ as earnest /one" fro/ (a/on Doro/al, Jr-, the su/ of P6,000-00 and the 0rice therein agreed u0on &as P6-00 a s.uare /eter- 3t an" rate, Javellana, not 'eing agreea'le, did not sign the 0o&er of attorne", and the rest of the co)o&ners &ent ahead &ith their sale of their 9B+- arlos sa& to it that the deed of sale 0re0ared '" their co//on attorne" in fact, Aar" #- Ji/ene2, 'e signed and ratified- The Deed &as signed and ratified in andon, 5locos !ur, on 16 Januar" 1,9<, and &as 'rought to 5loilo '" arlos in the sa/e /onth- The (egister of Deeds of 5loilo refused to register right a&a", since the original registered o&ner, Justice 3ntonio #orilleno &as alread" dead- arlos had to hire 3tt"- Teoti/o 3randela to file a 0etition &ithin the cadastral case, on *9 Fe'ruar" 1,9<, for the 0ur0ose- 3fter &hich, arlos returned to Lu2on- 3fter co/0liance &ith the re.uisites of 0u'lication, hearing and notice, the 0etition &as a00roved- %n *, 30ril 1,9<, arlos (in 5loilo) &ent to the (egister of Deeds and caused the registration of the order of the cadastral court a00roving the issuance of a ne& title in the na/e of the co)o&ners, as &ell as of the deed of sale to the Doro/als, as a result of &hich on that sa/e date, a ne& title &as issued T T *316*, in the na/e of the #orillenos to 9B+ and Javellana to 1B+, >4h- D, onl" to 'e cancelled on the sa/e da" under T T *3163, , alread" in the na/es of the vendees Doro/als for 9B+ and to Javellana, 1B+- %n 30 30ril 1,9<, the Doro/als 0aid arlos the su/ of P,+,000-00 '" a chec@ of the hartered Dan@ &hich &as later su'stituted '" chec@ of P$D, 'ecause there &as no hartered Dan@ Dranch in 5locos !ur- Desides the a/ount 0aid in chec@, the Doro/als according to their evidence still 0aid an additional a/ount in cash of P1<,*60-00 since the agreed 0rice &as P6-00 a s.uare /eterG and thus &as consu//ated the transaction- %n 10 June 1,9<, 3tt"- 3rturo #1illanueva (Javellana;s la&"er) arrived at the residence of the Doro/als in Du/angas, 5loilo, 'ringing &ith hi/ her letter of that date, /a@ing a for/al offer to re0urchase or redee/ the 9B+ undivided share in Lot $o3604, of the 5loilo adastre, &hich the Doro/als 'ought fro/ her erst&hile co)o&ners, the #orillenos, for the su/ of P30,000-00 (the su/ 3tt"- 1illanueva has &ith hi/ &hich he &ould deliver to the Doro/als as soon as the" e4ecute the contract of sale in her favor)- The Doro/als refused%n 11 June, 1,9<, Javellana filed the case 'efore the F5 5loilo see@ing to e4ercise her right to redee/ the share of the 0ro0ert", as co)o&ner, at the 0rice stated in the deed of sale, i-e- P30,000-00- The trial =udge, after hearing the evidence, ruled in favor of the Doro/als, holding that Javellana had no /ore right, to redee/ as she &as alread" infor/ed of the intended sale of the 9B+ share 'elonging to the #orillenos, and further conde/ned Javellana to 0a" attorne";s fees, and /oral and e4e/0lar" da/ages- Javellana a00ealed.a+es" /001 ( #0 )
The ourt of 300eals (in 3)F( 4+,46)() reversed the trial court;s decision and held that although res0ondent Javellana &as infor/ed of her co)o&ners; 0ro0osal to sell the land in .uestion to the Doro/als she &as, ho&ever, 7never notified least of all, in &riting8, of the actual e4ecution and registration of the corres0onding deed of sale, hence, Javellana Hs right to redee/ had not "et e40ired at the ti/e she /ade her offer for that 0ur0ose thru her letter of 10 June 1,9< delivered to the Doro/als on even date- The inter/ediate court further held that the rede/0tion 0rice to 'e 0aid '" Javellana should 'e that stated in the deed of sale &hich is P30,000 not&ithstanding that the 0re0onderance of the evidence 0roves that the actual 0rice 0aid '" the Doro/als &as P116,*60- The Doro/als a00ealedThe !u0re/e ourt affir/ed the decision of the and Doro/al Jr1. ourt of 300eals, &ith costs against !0ouses Doro/al !r-
R()*t o- preDempt(on or re'empt(on 3rticle 19*3 of the ivil ode &hich 0rovides that 7The right of legal 0re)e/0tion or rede/0tion shall not 'e e4ercised e4ce0t &ithin thirt" da"s fro/ the notice in &riting '" the 0ros0ective vendor, or '" the vendor, as the case /a" 'e- The deed of sale shall not 'e recorded in the (egistr" of Pro0ert", unless acco/0anied '" an affidavit of the vendor that he has given &ritten notice thereof to all 0ossi'le rede/0tioners- The right of rede/0tion of co)o&ners e4cludes that of ad=oining o&ners-8 /. Car+os= +etters 'o not const(tute not(ce -or t*e computat(on o- t*e 10D'ay per(o' (n Art(c+e 1:/13 A++e)e' +etters 'o not re-er to a consummate' sa+e The letters sent '" arlos #orilleno to Filo/ena Javellana (dated 1< Januar" 1,9< and 6 $ove/'er 1,9+) do not constitute the re.uired notice in &riting fro/ &hich the 30)da" 0eriod fi4ed in said 0rovision should 'e co/0uted- There is no sho&ing that said letters &ere in fact received '" Javellana and &hen the" &ere actuall" received- 5n an" event, neither of said letters referred to a consu//ated sale- 5t &as arlos #orilleno alone &ho signed the/, and as of 1< Januar" 1,9<, 0o&ers of attorne" fro/ the various co)o&ners &ere still to 'e secured- 5ndeed, the later letter of 1< Januar" 1,9< /entioned that the 0rice &as P4-00Bs.-/&hereas in the earlier letter of 6 $ove/'er 1,9+ it &as P6-00- 5n fact, as earl" as *1 %cto'er 1,9+, arlos had alread" received P6,000 fro/ the Doro/als su00osedl" as earnest /one", of &hich, ho&ever, /ention &as /ade '" hi/ to his niece onl" in the later letter of 1< Januar" 1,9<, the e40lanation 'eing that 7at later negotiation it &as increased to P6-00Bs.-/-8 1. .a+e not yet per-ecte' 'ur(n) t*e t(me o- t*e sen'(n) o- +etters3 4Earnest money6 ,as ma'e as un'erstoo' un'er t*e >+' C(v(+ Co'e :hile the letters relied u0on '" the Doro/als could conve" the idea that /ore or less so/e @ind of consensus had 'een arrived at a/ong the other co)o&ners to sell the 0ro0ert" in dis0ute to the Doro/als, it cannot 'e said definitel" that such a sale had even 'een actuall" 0erfected- The difference in the 0rices 0er s.uare /eter in the t&o letters negatives the 0ossi'ilit" that a 70rice definite8 had alread" 'een agreed u0on:hile P6,000 /ight have indeed 'een 0aid to arlos in %cto'er 1,9+, there is nothing to sho& that the sa/e &as in the conce0t of the earnest /one" conte/0lated in 3rticle 14<* of the ivil ode as signif"ing 0erfection of the sale- 1ie&ed in the 'ac@dro0 of the factual /ilieu thereof e4tant in the record, said P6,000 &ere 0aid in the conce0t of earnest /one" as the ter/ &as understood under the %ld ivil ode, that is, as a guarantee that the 'u"er &ould not 'ac@ out, considering that it is not clear that there &as alread" a definite agree/ent as to the 0rice then and that the Doro/als &ere decided to 'u" 9B+ onl" of the 0ro0ert" should Javellana refuse to agree to 0art &ith her 1B+ share1. R()*t o- re'empt(on3 Re2u(rement o- not(ce" must e (n a pu +(c (nstrument (Art(c+e 1:/0 an' 1:/1) For 0ur0oses of the co)o&ner;s right of rede/0tion granted '" 3rticle 19*0 of the ivil ode, the notice in &riting &hich 3rticle 19*3 re.uires to 'e /ade to the other co)o&ners and fro/ recei0t of &hich the
.a+es" /001 ( #1 )
30)da" 0eriod to redee/ should 'e counted is a notice not onl" of a 0erfected sale 'ut of the actual e4ecution and deliver" of the deed of sale- This is i/0lied fro/ the latter 0ortion of 3rticle 19*3 &hich re.uires that 'efore a register of deeds can record a sale '" a co)o&ner, there /ust 'e 0resented to hi/, an affidavit to the effect that the notice of the sale had 'een sent in &riting to the other co)o&ners- 3 sale /a" not 'e 0resented to the register of deeds for registration unless it 'e in the for/ of a dul" e4ecuted 0u'lic instru/entAoreover, the la& 0refers that all the ter/s and conditions of the sale should 'e definite and in &riting4. CoDo,ner=s r()*t o- re'empt(on (Art(c+e 1:1#) 3rticle 191, of the ivil ode 'esto&s unto a co)o&ner the right to redee/ and 7to 'e su'rogated under the sa/e ter/s and conditions sti0ulated in the contract8, and to avoid an" controvers" as to the ter/s and conditions under &hich the right to redee/ /a" 'e e4ercised, it is 'est that the 0eriod therefor should not 'e dee/ed to have co//enced unless the notice of the dis0osition is /ade after the for/al deed of dis0osal has 'een dul" e4ecuted$. Fave++ana not not(-(e' (n ,r(t(n) Javellana has never 'een notified in &riting of the e4ecution of the deed of sale '" &hich the Doro/als ac.uired the su'=ect 0ro0ert", it necessaril" follo&s that her tender to redee/ the sa/e /ade on 10 June 1,9< &as &ell &ithin the 0eriod 0rescri'ed '" la&- 5ndeed, it is i//aterial &hen she /ight have actuall" co/e to @no& a'out said deed, it a00earing she has never 'een sho&n a co0" thereof through a &ritten co//unication '" either an" of the Doro/als or an" of the #orillenos- ( f- orne=o et al- vs- 3 et al-, 19 ! (3 ++6-) :. ;a7 evas(on must e con'emne' 5t is i/0ossi'le for the !u0re/e ourt to sanction the Doro/als; 0rag/atic 'ut i//oral 0ostureDeing 0atentl" violative of 0u'lic 0olic" and in=urious to 0u'lic interest, the see/ingl" &ide 0ractice of understating considerations of transactions for the 0ur0ose of evading ta4es and fees due to the govern/ent /ust 'e conde/ned and all 0arties guilt" thereof /ust 'e /ade to suffer the conse.uences of their ill)advised agree/ent to defraud the state- The trial court fell short of its devotion and lo"alt" to the (e0u'lic in officiall" giving its sta/0 of a00roval to the stand of the Doro/als and even 'erating Javellana as &anting to enrich herself 7at the e40ense of her o&n 'lood relatives &ho are her aunts, uncles and cousins-8 %n the contrar", said 7'lood relatives8 should have 'een sternl" told that the" are in 0ari)delicto &ith the Doro/als in co//itting ta4 evasion and should not receive an" consideration fro/ an" court in res0ect to the /one" 0aid for the sale in dis0ute- Their situation is si/ilar to that of 0arties to an illegal contract!. Cons('erat(on (s B10"000 The consideration of P30,000 onl" &as 0laced in the deed of sale to /ini/i2e the 0a"/ent of the registration fees, sta/0s and sales ta4- The rede/0tion in controvers" should 'e onl" for the 0rice sti0ulated in the deed, regardless of &hat /ight have 'een actuall" 0aid '" the Doro/als8. Art(c+e 1:1#& @e)a+ re'empt(on as t*e r()*t to e su ro)ate' Legal rede/0tion is the right to 'e su'rogated, u0on the sa/e ter/s and conditions sti0ulated in the contract, in the 0lace of one &ho ac.uires a thing '" 0urchase or dation in 0a"/ent, or '" an" other transaction &here'" o&nershi0 is trans/itted '" onerous title- 5n the 0resent case, the sti0ulation in the 0u'lic evidence of the contract, /ade 0u'lic '" 'oth vendors and vendees is that the 0rice &as P30,000-00#. Art(c+e 1:/0 an' 1:/13 Reasona +e pr(ce 73 co)o&ner of a thing /a" e4ercise the right of rede/0tion in case the share of all the other co) o&ners or an" of the/, are sold to a third 0erson- 5f the 0rice of the alienation is grossl" e4cessive, the rede/0tioner shall 0a" onl" a reasona'le one-8 The la& see@s to 0rotect rede/0tioner and converts his 0osition into one not that of a contractuall" 'ut of a legall" su'rogated creditor as to the right of rede/0tion, if the 0rice is not Hgrossl" e4cessive;, &hat the la& had intended rede/0tioner to 0a" can 'e read in 3rt- 19*3,
.a+es" /001 ( #/ )
&hich 0rovides that 7The right of a legal 0re)e/0tion or rede/0tion shall not 'e e4ercised e4ce0t &ithin thirt" (30) da"s fro/ the notice in &riting '" the 0ros0ective vendor, or '" the vendor as the case /a" 'e- The deed of sale shall not 'e recorded in the (egistr" of Pro0ert", unless acco/0anied '" an affidavit of the vendor that he has given &ritten notice thereof of all 0ossi'le rede/0tioners-8 10. A--('av(ts (nten'e' -or a 'e-(n(t(ve purpose 3ffidavit /ust have 'een intended '" the la&/a@ers for a definite 0ur0ose, to argue that this affidavit has no 0ur0ose is to go against all canons of statutor" construction- $o la& /andator" in character and &orse, 0rohi'itive should 'e understood to have no 0ur0ose at all- That &ould 'e an a'surdit"- Pur0ose could not 'ut have 'een to give a clear and un/ista@a'le guide to rede/0tioner, on ho& /uch he should 0a" and &hen he should redee/- $otice /ust have 'een intended to state the truth and if vendor and vendee should have instead, decided to state an untruth therein, it is the" &ho should 'ear the conse.uences of having there'" /isled the rede/0tioner &ho had the right to rel" and act thereon and on nothing else11. E2u(ta +e estoppe+ !tated other&ise, all the ele/ents of e.uita'le esto00el are 0resent since the re.uire/ent of the la& is to su'/it the affidavit of notice to all 0ossi'le rede/0tioners, that affidavit to 'e a condition 0recedent to registration of the sale therefore- The la& /ust have intended that it 'e '" the 0arties understood that the" &ere there as@ing a sole/n re0resentation to all 0ossi'le rede/0tioners, &ho u0on faith of that are thus induced to act- 5n the 0resent case, the 0arties to the sale sought to avoid co/0liance &ith the la& and certainl" refusal to co/0l" cannot 'e re&arded &ith e4ce0tion and acce0tance of the 0lea that the" cannot 'e no& esto00ed '" their o&n re0resentation1/. No un8ust enr(c*ment" as r()*t (s not contractua+ ut )rante' y +a, Javellana;s right is not contractual, 'ut a /ere legal one, the e4ercise of a right granted '" the la&, and the la& is definite that she can su'rogate herself in 0lace of the 'u"er, u0on the sa/e ter/s and conditions sti0ulated in the contract, in the &ords of 3rt- 191,, and here the 0rice- sti0ulated in the contract &as P30,000-00, in other &ords, if this 'e 0ossi'le enrich/ent on the 0art of Javellana, it &as not un=ust 'ut =ust enrich/ent 'ecause 0er/itted '" the la&11. E7erc(se o- r()*t" 8ust so+ut(on" promot(on o- 8ust(ce :hat Javellana sought to enforce is not an a'use 'ut a /ere e4ercise of a right- The solution is not un=ust 'ecause it onl" 'inds the 0arties to /a@e good their sole/n re0resentation to 0ossi'le rede/0tioners on the 0rice of the sale, to &hat the" had sole/nl" averred in a 0u'lic docu/ent re.uired '" the la& to 'e the onl" 'asis for that e4ercise of rede/0tion- This thus 0ro/ote =ustice[11] Dy vs. CA [G.R. No. #/#8#. Fu+y 8" 1##1.] Third Division, Futierre2 Jr- (J): 3 concur, 1 too@ no 0art %acts& Perfecto D" and :ilfredo D" are 'rothers- !o/eti/e in 1,+,, :ilfredo D" 0urchased a truc@ and a far/ tractor through financing e4tended '" Li'ra Finance and 5nvest/ent or0oration (Li'ra)- Doth truc@ and tractor &ere /ortgaged to Li'ra as securit" for the loan- Perfecto D" &anted to 'u" the tractor fro/ his 'rother so on *0 3ugust 1,+,, he &rote a letter to Li'ra re.uesting that he 'e allo&ed to 0urchase fro/ :ilfredo D" the said tractor and assu/e the /ortgage de't of the latter- 5n a letter dated *+ 3ugust 1,+,, Li'ra thru its /anager, i0riano 3res a00roved the Perfecto;s re.uest- Thus, on 4 !e0te/'er 1,+,, :ilfredo e4ecuted a deed of a'solute sale in favor of Perfecto over the tractor in .uestion- 3t that ti/e, the su'=ect tractor &as in the 0ossession of Li'ra Finance due to :ilfredo;s failure to 0a" the a/orti2ations- Des0ite the offer of full 0a"/ent '" Perfecto to Li'ra for the tractor, the i//ediate release could not 'e effected 'ecause :ilfredo had o'tained financing not onl" for said tractor 'ut also for a truc@ and Li'ra insisted on full
.a+es" /001 ( #1 )
0a"/ent for 'oth- Perfecto &as a'le to convince his sister, arol D")!eno, to 0urchase the truc@ so that full 0a"/ent could 'e /ade for 'oth- %n ** $ove/'er 1,+,, a P$D chec@ &as issued in the a/ount of P**,000 in favor of Li'ra, thus settling in full the inde'tedness of :ilfredo &ith the financing fir/- Pa"/ent having 'een effected through an out)of)to&n chec@, Li'ra insisted that it 'e cleared first 'efore Li'ra could release the chattels in .uestionAean&hile, ivil ase ()19949 entitled 7Felac Trading, 5nc- v- :ilfredo D"8, a collection case to recover the su/ of P1*,*9,-<0 &as 0ending in another court in e'u- %n the strength of an alias &rit of e4ecution issued on *+ Dece/'er 1,+,, the 0rovincial sheriff &as a'le to sei2e and lev" on the tractor &hich &as in the 0re/ises of Li'ra in ar/en, e'u- The tractor &as su'se.uentl" sold at 0u'lic auction &here Felac Trading &as the lone 'idder- Later, Felac sold the tractor to one of its stoc@holders, 3ntonio Fon2ales- 5t &as onl" &hen the chec@ &as cleared on 1+ Januar" 1,<0 that Perfecto learned a'out F>L3 having alread" ta@en custod" of the su'=ect tractorPerfecto D" filed an action to recover the su'=ect tractor against F>L3 Trading &ith the (T e'u it"- %n < 30ril 1,<<, the (T rendered =udg/ent in favor of Perfecto, 0ronouncing that Perfecto is the o&ner of the tractor and directing Felac Trading or0oration and 3ntonio Fon2ales to return the sa/e to PerfectoG directing the Felac Trading and Fon2ales =ointl" and severall" to 0a" Perfecto the a/ount of P1,641-00 as e40enses for hiring a tractorG P60,000 for /oral da/agesG P60,000 for e4e/0lar" da/agesG and to 0a" the cost%n a00eal, the ourt of 300eals reversed the decision of the (T and dis/issed the co/0laint &ith costs against Perfecto- The ourt of 300eals held that the tractor in .uestion still 'elonged to :ilfredo D" &hen it &as sei2ed and levied '" the sheriff '" virtue of the alias &rit of e4ecution issued in ivil ase ()19949#ence, the 0etition for revie& on certiorariThe !u0re/e ourt granted the 0etition, set aside the decision of the ourt of 300eals 0ro/ulgated on *3 Aarch 1,,0, and reinstated the decision of the (egional Trial ourt dated < 30ril 1,<<1. .a+e o- mort)a)e' property va+('3 9ort)a)or ma(nta(ns o,ners*(p o- t*e property o--ere' as secur(ty 5n the case of 'ervice-i$e 'pecialists .nc. v. .nter#e$iate Appellate Court (1+4 ! (3 <0 K1,<,L), it &as stated that 7the chattel /ortgagor continues to 'e the o&ner of the 0ro0ert", and therefore, has the 0o&er to alienate the sa/eG ho&ever, he is o'liged under 0ain of 0enal lia'ilit", to secure the &ritten consent of the /ortgagee- (Francisco, 1icente, Jr-, (evised (ules of ourt in the Phili00ines, K1,+*L, 1olu/e 51)s Part 5, 06s*61) Thus, the instru/ents of /ortgage are 'inding, &hile the" su'sist, not onl" u0on the 0arties e4ecuting the/ 'ut also u0on those &ho later, '" 0urchase or other&ise, ac.uire the 0ro0erties referred to therein- The a'sence of the &ritten consent of the /ortgagee to the sale of the /ortgaged 0ro0ert" in favor of a third 0erson, therefore, effects not the validit" of the sale 'ut onl" the 0enal lia'ilit" of the /ortgagor under the (evised Penal ode and the 'inding effect of such sale on the /ortgagee under the Deed of hattel Aortgage-8 The /ortgagor &ho gave the 0ro0ert" as securit" under a chattel /ortgage did not 0art &ith the o&nershi0 over the sa/e- #e had the right to sell it although he &as under the o'ligation to secure the &ritten consent of the /ortgagee or he la"s hi/self o0en to cri/inal 0rosecution under the 0rovision of 3rticle 31, 0ar- * of the (evised Penal ode- 3nd even if no consent &as o'tained fro/ the /ortgagee, the validit" of the sale &ould still not 'e affected- 5n the 0resent case, :ilfredo D" can sell the su'=ect tractor- The consent of Li'ra Finance &as o'tained- 5n a letter dated *+ 3ugust 1,+,, Li'ra allo&ed Perfecto to 0urchase the tractor and assu/e the /ortgage de't of his 'rother- The sale 'et&een the 'rothers &as therefore valid and 'inding as 'et&een the/ and to the /ortgagee, as &ell/. >,ners*(p ac2u(re' ,*en t*(n) 'e+(vere' to ven'ee3 Art(c+e 14#: 3rticle 14,9 of the ivil ode states that the o&nershi0 of the thing sold is ac.uired '" the vendee
.a+es" /001 ( #4 )
fro/ the /o/ent it is delivered to hi/ in an" of the &a"s s0ecified in 3rticles 14,+ to 1601 or in an" other /anner signing an agree/ent that the 0ossession is transferred fro/ the vendor to the vendee1. Art(c+e 14#8 an' 14## app+(ca +e (n present case3 ;ractor cannot e 'e+(vere' 3rticles 14,< and 14,, are a00lica'le in the 0resent case- 3rticle 14,< states that 7&hen the sale is /ade through a 0u'lic instru/ent, the e4ecution thereof shall 'e e.uivalent to the deliver" of the thing &hich is the o'=ect of the contract, if fro/ the deed the contrar" does not a00ear or cannot clearl" 'e inferred-8 3rticle 14,, 0rovides that 7The deliver" of /ova'le 0ro0ert" /a" li@e&ise 'e /ade '" the /ere consent or agree/ent of the contracting 0arties, if the thing sold cannot 'e transferred to the 0ossession of the vendee at the ti/e of the sale, or if the latter alread" had it in his 0ossession for an" other reason-8 5n the 0resent case, actual deliver" of the su'=ect tractor could not 'e /ade- #o&ever, there &as constructive deliver" alread" u0on the e4ecution of the 0u'lic instru/ent 0ursuant to 3rticle 14,< and u0on the consent or agree/ent of the 0arties &hen the thing sold cannot 'e i//ediatel" transferred to the 0ossession of the vendee4. 9ort)a)ee=s r()*t o- -orec+osure3 (mp+(e' r()*t to possess property to e--ect -orec+osure 3 /ortgagee has the right of foreclosure u0on default '" the /ortgagor in the 0erfor/ance of the conditions /entioned in the contract of /ortgage- The la& i/0lies that the /ortgagee is entitled to 0ossess the /ortgaged 0ro0ert" 'ecause 0ossession is necessar" in order to ena'le hi/ to have the 0ro0ert" sold- 5n the 0resent case, it &as Li'ra Finance &hich &as in 0ossession of the su'=ect tractor due to :ilfredo;s failure to 0a" the a/orti2ation as a 0reli/inar" ste0 to foreclosure$. 9ort)a)ee not o,ner o- t*e property mort)a)e'3 9ort)a)ee=s reme'y (s to *ave property so+' (n pu +(c auct(on an' to app+y procee's to o +()at(on secure' :hile it is true that :ilfredo D" &as not in actual 0ossession and control of the su'=ect tractor, his right of o&nershi0 &as not divested fro/ hi/ u0on his default- $either could it 'e said that Li'ra &as the o&ner of the su'=ect tractor 'ecause the /ortgagee can not 'eco/e the o&ner of or convert and a00ro0riate to hi/self the 0ro0ert" /ortgaged- (3rticle *0<<, ivil ode) !aid 0ro0ert" continues to 'elong to the /ortgagor- The onl" re/ed" given to the /ortgagee is to have said 0ro0ert" sold at 0u'lic auction and the 0roceeds of the sale a00lied to the 0a"/ent of the o'ligation secured '" the /ortgagee- (!ee Aartine2 v- P$D, ,3 Phil- +96, +9+ K1,63L) There is no sho&ing that Li'ra Finance has alread" foreclosed the /ortgage and that it &as the ne& o&ner of the su'=ect tractor:. ;*(r' person ,*o purc*ases t*e mort)a)e' property assumes o +()at(on o- or()(na+ mort)a)or :here a third 0erson 0urchases the /ortgaged 0ro0ert", he auto/aticall" ste0s into the shoes of the original /ortgagor- (!ee 5ndustrial Finance or0- v- 30ostol, 1++ ! (3 6*1K1,<,L)- #is right of o&nershi0 shall 'e su'=ect to the /ortgage of the thing sold to hi/- 5n the 0resent case, Perfecto &as full" a&are of the e4isting /ortgage of the su'=ect tractor to Li'ra- 5n fact, &hen he &as o'taining Li'ra;s consent to the sale, he volunteered to assu/e the re/aining 'alance of the /ortgage de't of :ilfredo &hich Li'ra undenia'l" agreed to!. pr(ce Bayment o- c*eck (nten'e' to e7t(n)u(s* mort)a)e o +()at(on an' not a payment o- purc*ase
The 0a"/ent of the chec@ &as actuall" intended to e4tinguish the /ortgage o'ligation so that the tractor could 'e released to Perfecto- 5t &as never intended nor could it 'e considered as 0a"/ent of the 0urchase 0rice 'ecause the relationshi0 'et&een Li'ra and Perfecto is not one of sale 'ut still a /ortgage- The clearing or encash/ent of the chec@ &hich 0roduced the effect of 0a"/ent deter/ined the full 0a"/ent of the /one" o'ligation and the release of the chattel /ortgage- 5t &as not deter/inative of the consu//ation of the sale- The transaction 'et&een the 'rothers is distinct and a0art fro/ the transaction 'et&een Li'ra and Perfecto- The contention, therefore, that the consu//ation of the sale de0ended u0on the encash/ent of the chec@ is untena'le-
.a+es" /001 ( #$ )
8.
.a+e consummate' upon e7ecut(on o- pu +(c (nstrument3 Construct(ve 'e+(very The sale of the su'=ect tractor &as consu//ated u0on the e4ecution of the 0u'lic instru/ent on 4 !e0te/'er 1,+,- 3t this ti/e constructive deliver" &as alread" effected- #ence, the su'=ect tractor &as no longer o&ned '" :ilfredo D" &hen it &as levied u0on '" the sheriff in Dece/'er 1,+,#. >n+y propert(es un2uest(ona +y o,ne' y 8u')ment 'e tor can e +ev(e' upon %nl" 0ro0erties un.uestiona'l" o&ned '" the =udg/ent de'tor and &hich are not e4e/0t '" la& fro/ e4ecution should 'e levied u0on or sought to 'e levied u0on- For the 0o&er of the court in the e4ecution of its =udg/ent e4tends onl" over 0ro0erties 'elonging to the =udg/ent de'tor- ( onsolidated Dan@ and Trust or0v- ourt of 300eals, F-(- $o- +<++1, Januar" *3, 1,,1)10. ;*(r' party not prec+u'e' -rom tak(n) ot*er +e)a+ reme'(es to prosecute c+a(m 5t is inconse.uential &hether a third 0art" clai/ has 'een filed or not '" Perfecto during the ti/e the sheriff levied on the su'=ect tractor- 3 0erson other than the =udg/ent de'tor &ho clai/s o&nershi0 or right over levied 0ro0erties is not 0recluded, ho&ever, fro/ ta@ing other legal re/edies to 0rosecute his clai/( onsolidated Dan@ and Trust or0- v- ourt of 300eals, su0ra) This is 0recisel" &hat the 0etitioner did &hen he filed the action for re0levin &ith the (T 11. %actua+ -(n'(n) o- tr(a+ court )(ven )reat respect an' ,e()*t3 %rau' not presume' ut esta +(s*e' y c+ear ev('ence3 Re+at(ons*(p not a a')e o- -rau' The ourt accords great res0ect and &eight to the findings of fact of the trial court- There is no sufficient evidence to sho& that the sale of the tractor &as in fraud of :ilfredo and creditors- :hile it is true that :ilfredo and Perfecto are 'rothers, this fact alone does not give rise to the 0resu/0tion that the sale &as fraudulent- (elationshi0 is not a 'adge of fraud (Fo.uiola" v- !"ci0, , ! (3 993 K1,93L)- Aoreover, fraud can not 'e 0resu/edG it /ust 'e esta'lished '" clear convincing evidence1/. Actuat(ons o- Ge+ac tra'(n) v(o+at(ve o- prov(s(ons on *uman re+at(ons Felac Trading @ne& ver" &ell of the transfer of the 0ro0ert" to Perfecto on 14 Jul" 1,<0 &hen it received su//ons 'ased on the co/0laint for re0levin filed '" Perfecto &ith the (T - $ot&ithstanding said su//ons, it continued to sell the su'=ect tractor to one of its stoc@holders on * 3ugust 1,<0[14] EDCA Bu +(s*(n) vs. .antos [G.R. No. 80/#8. Apr(+ /:" 1##0.] First Division, ru2 (J): 4 concur %acts& %n 6 %cto'er 1,<1, a 0erson identif"ing hi/self as Professor Jose ru2 0laced an order '" tele0hone &ith >D 3 Pu'lishing and Distri'uting or0- for 409 'oo@s, 0a"a'le on deliver"- >D 3 0re0ared the corres0onding invoice and delivered the 'oo@s as ordered, for &hich ru2 issued a 0ersonal chec@ covering the 0urchase 0rice of P<,,,6-96- %n + %cto'er 1,<1, ru2 sold 1*0 of the 'oo@s to Leonor !antos &ho, after verif"ing the seller;s o&nershi0 fro/ the invoice he sho&ed her, 0aid hi/ P1,+00-00- Aean&hile, >D 3 having 'eco/e sus0icious over a second order 0laced '" ru2 even 'efore clearing of his first chec@, /ade in.uiries &ith the De la !alle ollege &here he had clai/ed to 'e a dean and &as infor/ed that there &as no such 0erson in its e/0lo"- Further verification revealed that ru2 had no /ore account or de0osit &ith the Phili00ine 3/anah Dan@, against &hich he had dra&n the 0a"/ent chec@- >D 3 then &ent to the 0olice, &hich set a tra0 and arrested ru2 on + %cto'er 1,<1- 5nvestigation disclosed his real na/e as To/as de la PeMa and his sale of 1*0 of the 'oo@s he had ordered fro/ >D 3 to Leonor !antos (and Ferardo !antos, doing 'usiness as !antos Doo@store)- %n the night of said date + %cto'er 1,<1, >D 3 sought the assistance of the 0olice in Precinct 6 at the ?$ 3venue, &hich forced their &a" into !antos Doo@store and threatened Leonor !antos &ith 0rosecution for 'u"ing stolen 0ro0ert"- The" sei2ed the 1*0 'oo@s &ithout &arrant, loading the/ in a van 'elonging to >D 3, and thereafter turned the/ over to >D 3- Protesting this high)
.a+es" /001 ( #: )
handed action, the !antos s0ouses sued for recover" of the 'oo@s after de/and for their return &as re=ected '" >D 3- 3 &rit of 0reli/inar" attach/ent &as issued and >D 3, after initial refusal, finall" surrendered the 'oo@s to the !antos s0ouses%&nershi0 of the 'oo@s &as recogni2ed in the !antos s0ouses '" the Aunici0al Trial ourt, &hich &as sustained '" the (egional Trial ourt, &hich &as in turn sustained '" the ourt of 300eals- >D 3 a00ealed to the !u0re/e ourtThe !u0re/e Pu'lishing1. ourt affir/ed the challenged decision and denied the 0etition, &ith costs against >D 3
Art(c+e $$# o- t*e C(v(+ Co'e 3rticle 66, 0rovides that 7The 0ossession of /ova'le 0ro0ert" ac.uired in good faith is e.uivalent to a title- $evertheless, one &ho has lost an" /ova'le or has 'een unla&full" de0rived thereof, /a" recover it fro/ the 0erson in 0ossession of the sa/e- 5f the 0ossessor of a /ova'le lost or of &hich the o&ner has 'een unla&full" de0rived has ac.uired it in good faith at a 0u'lic sale, the o&ner cannot o'tain its return &ithout rei/'ursing the 0rice 0aid therefor/. Ar (trary act(on" act o- tak(n) t*e +a, on o,n *an's" con'emne' The ourt e40resses its disa00roval of the ar'itrar" action of >D 3 Pu'lishing in ta@ing the la& into its o&n hands and forci'l" recovering the dis0uted 'oo@s fro/ the !antos s0ouses- The circu/stance that it did so &ith the assistance of the 0olice, &hich should have 'een the first to u0hold legal and 0eaceful 0rocesses, has co/0ounded the &rong even /ore de0lora'l"- Uuestions, such as the o&nershi0 of the 'oo@s, are decided not '" 0olice/en 'ut '" =udges and &ith the use not of 'rute force 'ut of la&ful &rits1. Bossess(on o- mova +e property ac2u(re' (n )oo' -a(t* e2u(va+ent to t(t+e The first sentence of 3rticle 66, 0rovides that 7the 0ossession of /ova'le 0ro0ert" ac.uired in good faith is e.uivalent to a title,8 thus dis0ensing &ith further 0roof- 5t cannot 'e said that the s0ouses cannot esta'lish their o&nershi0 of the dis0uted 'oo@s 'ecause the" have not even 0roduced a recei0t to 0rove the" had 'ought the stoc@4. .antos a purc*aser (n )oo' -a(t*" even (- ooks ,ere ou)*t at '(scount Leonor !antos first ascertained the o&nershi0 of the 'oo@s fro/ the >D 3 invoice sho&ing that the" had 'een sold to ru2, &ho said he &as selling the/ for a discount 'ecause he &as in financial need- The !antos s0ouses are in the 'usiness of 'u"ing and selling 'oo@s and often deal &ith hard)u0 sellers &ho urgentl" have to 0art &ith their 'oo@s at reduced 0rices- To Leonor !antos, ru2 /ust have 'een onl" one of the /an" such sellers she &as accusto/ed to dealing &ith- 5t is hardl" 'ad faith for an" one in the 'usiness of 'u"ing and selling 'oo@s to 'u" the/ at a discount and resell the/ for a 0rofit$. Contract o- sa+e consensua+ an' (s per-ecte' upon a)reement The contract of sale is consensual and is 0erfected once agree/ent is reached 'et&een the 0arties on the su'=ect /atter and the consideration- 3ccording to 3rticle 14+6 of the ivil ode, 7The contract of sale is 0erfected at the /o/ent there is a /eeting of /inds u0on the thing &hich is the o'=ect of the contract and u0on the 0rice- Fro/ that /o/ent, the 0arties /a" reci0rocall" de/and 0erfor/ance, su'=ect to the 0rovisions of the la& governing the for/ of contracts-8 3rticle 14++, on the other hand, 0rovides that 7The o&nershi0 of the thing sold shall 'e transferred to the vendee u0on the actual or constructive deliver" thereof-8 3rticle 14+< 0rovides that 7The 0arties /a" sti0ulate that o&nershi0 in the thing shall not 0ass to the 0urchaser until he has full" 0aid the 0rice-8 :. Ru+e (n t*e trans-er o- o,ners*(p %&nershi0 in the thing sold shall not 0ass to the 'u"er until full 0a"/ent of the 0urchase 0rice onl" if
.a+es" /001 ( #! )
there is a sti0ulation to that effect- %ther&ise, the rule is that such o&nershi0 shall 0ass fro/ the vendor to the vendee u0on the actual or constructive deliver" of the thing sold even if the 0urchase 0rice has not "et 'een 0aid- 3'sent the sti0ulation, deliver" of the thing sold &ill effectivel" transfer o&nershi0 to the 'u"er &ho can in turn transfer it to another!. E--ect o- nonDpayment3 Re+(e$on)0a"/ent onl" creates a right to de/and 0a"/ent or to rescind the contract, or to cri/inal 0rosecution in the case of 'ouncing chec@s8. va+(' As(at(c Commerc(a+ Corporat(on vs. An)3 Company not un+a,-u++y 'epr(ve' o- property" sa+e
5n 3siatic o//ercial or0oration v- 3ng, the co/0an" sold so/e cos/etics to Francisco 3ng, &ho in turn sold the/ to Tan !it Din- 3siatic not having 'een 0aid '" 3ng, it sued for the recover" of the articles fro/ Tan, &ho clai/ed he had validl" 'ought the/ fro/ 3ng, 0a"ing for the sa/e in cash- Finding that there &as no cons0irac" 'et&een Tan and 3ng to deceive 3siatic, the ourt of 300eals declared that the co/0an" &as not unla&full" de0rived of the cartons of Floco Tonic &ithin the sco0e of this legal 0rovision- 5t has voluntaril" 0arted &ith the/ 0ursuant to a contract of 0urchase and sale- The circu/stance that the 0rice &as not su'se.uentl" 0aid did not render illegal a transaction &hich &as valid and legal at the 'eginning#. ;a)atac vs. F(meneC3 .a+e vo('a +e 'ue to -rau' ut su s(sts as va+(' unt(+ annu++e' 5n Tagatac v- Ji/ene2, Trinidad - Tagatac sold her car to :arner Feist, &ho sold it to !anche2, &ho sold it to Ji/ene2- :hen the 0a"/ent chec@ issued to Tagatac '" Feist &as dishonored, Tagatac sued to recover the vehicle fro/ Ji/ene2 on the ground that she had 'een unla&full" de0rived of it '" reason of Feist;s dece0tion- 5n ruling for Ji/ene2, the ourt of 300eals held that 7the fraud and deceit 0racticed '" Feist ear/ar@s this sale as a voida'le contract (3rticle 13,0)- Deing a voida'le contract, it is susce0ti'le of either ratification or annul/ent- 5f the contract is ratified, the action to annul it is e4tinguished (3rticle 13,*) and the contract is cleansed fro/ all its defects (3rticle 13,9)G if the contract is annulled, the contracting 0arties are restored to their res0ective situations 'efore the contract and /utual restitution follo&s as a conse.uence (3rticle 13,<)- #o&ever, as long as no action is ta@en '" the 0art" entitled, either that of annul/ent or of ratification, the contract of sale re/ains valid and 'inding- :hen Tagatac delivered the car to Feist '" virtue of said voida'le contract of sale, the title to the car 0assed to Feist (the title &as defective and voida'le)$evertheless, at the ti/e he sold the car to Feli4 !anche2, his title thereto had not 'een avoided and he therefore conferred a good title on the latter, 0rovided he 'ought the car in good faith, for value and &ithout notice of the defect in Feist;s title (3rticle 1609)- There 'eing no 0roof on record that Feli4 !anche2 acted in 'ad faith, it is safe to assu/e that he acted in good faith10. >,ners*(p va+('+y trans-erre' to t*e .antos spouses 3ctual deliver" of the 'oo@s having 'een /ade, ru2 ac.uired o&nershi0 over the 'oo@s &hich he could then validl" transfer to the !antos s0ouses- The fact that he had not "et 0aid for the/ to >D 3 &as a /atter 'et&een hi/ and >D 3 and did not i/0air the title ac.uired '" the s0ouses to the 'oo@s11. Gn8ust(ce ,(++ ar(se (- 4un+a,-u++y 'epr(ve'6 ,ou+' e (nterprete' (n a '(--erent manner %ne /a" &ell i/agine the adverse conse.uences if the 0hrase 7unla&full" de0rived8 &ere to 'e inter0reted in the /anner 0re/ised on the argu/ent that the i/0ostor ac.uired no title to the 'oo@s that he could have validl" transferred to the s0ouses- 3 0erson rel"ing on the seller;s title &ho 'u"s a /ova'le 0ro0ert" fro/ hi/ &ould have to surrender it to another 0erson clai/ing to 'e the original o&ner &ho had not "et 'een 0aid the 0urchase 0rice therefor- The 'u"er in the second sale &ould 'e left holding the 'ag, so to s0ea@, and &ould 'e co/0elled to return the thing 'ought '" hi/ in good faith &ithout even the right to rei/'urse/ent of the a/ount he had 0aid for it1/. D(+()ence e7erc(se' y .antos" ut not y EDCA
.a+es" /001 ( #8 )
Leonor !antos too@ care to ascertain first that the 'oo@s 'elonged to ru2 'efore she agreed to 0urchase the/- The >D 3 invoice ru2 sho&ed her assured her that the 'oo@s had 'een 0aid for on deliver"!antos did not have to go 'e"ond that invoice to satisf" herself that the 'oo@s 'eing offered for sale '" ru2 'elonged to hi/G "et she did- 3lthough the title of ru2 &as 0resu/ed under 3rticle 66, '" his /ere 0ossession of the 'oo@s, these 'eing /ova'le 0ro0ert", Leonor !antos nevertheless de/anded /ore 0roof 'efore deciding to 'u" the/- D" contrast, >D 3 &as less than cautious J in fact, too trusting J in dealing &ith the i/0ostor- 3lthough it had never transacted &ith hi/ 'efore, it readil" delivered the 'oo@s he had ordered ('" tele0hone) and as readil" acce0ted his 0ersonal chec@ in 0a"/ent- 5t did not verif" his identit" although it &as eas" enough to do this- 5t did not &ait to clear the chec@ of this un@no&n dra&er- :orse, it indicated in the sales invoice issued to hi/, '" the 0rinted ter/s thereon, that the 'oo@s had 'een 0aid for on deliver", there'" vesting o&nershi0 in the 'u"er11. .antos spouses cannot e ma'e to su--er 5t &ould certainl" 'e unfair to /a@e the s0ouses 'ear the 0re=udice sustained '" >D 3 as a result of its o&n negligence- There is no =ustice in transferring >D 3;s loss to the !antoses &ho had acted in good faith, and &ith 0ro0er care, &hen the" 'ought the 'oo@s fro/ ru2- :hile the ourt s"/0athi2ed &ith >D 3 for its 0light, it is clear that its re/ed" is not against the s0ouses 'ut against To/as de la PeMa, &ho has a00arentl" caused all this trou'le14. .antos *ave t*e r()*t to comp+a(n The s0ouses have the/selves 'een undul" inconvenienced, and for /erel" transacting a custo/ar" deal not reall" unusual in their @ind of 'usiness- 5t is the" and not >D 3 &ho have a right to co/0lain[1$] 3"isco Too" Manufacturin4 v. CA, &%8 SC6A &/ (/000( [1:] En)(neer(n) an' 9ac*(nery Corp. v. CA [G.R. No. $//:!. Fanuary /4" 1##:.] Third Division, Pangani'an (J): 3 concur %acts& Pursuant to the contract dated 10 !e0te/'er 1,9* 'et&een the >ngineering and Aachiner" or0oration (the or0oration) and 3l/eda, the for/er undertoo@ to fa'ricate, furnish and install the air) conditioning s"ste/ in the latter;s 'uilding along Duendia 3venue, Aa@ati in consideration of P1*,000-00The or0oration &as to furnish the /aterials, la'or, tools and all services re.uired in order to so fa'ricate and install said s"ste/- The s"ste/ &as co/0leted in 1,93 and acce0ted '" 3l/eda, &ho 0aid in full the contract 0rice- %n * !e0te/'er 1,96, 3l/eda sold the 'uilding to the $ational 5nvest/ent and Develo0/ent or0oration ($5D )- The latter too@ 0ossession of the 'uilding 'ut on account of $5D ;s nonco/0liance &ith the ter/s and conditions of the deed of sale, 3l/eda &as a'le to secure =udicial rescission thereof- The o&nershi0 of the 'uilding having 'een decreed 'ac@ to 3l/eda, he re)ac.uired 0ossession so/eti/e in 1,+15t &as then that he learned fro/ so/e $5D e/0lo"ees of the defects of the air)conditioning s"ste/ of the 'uilding- 3cting on this infor/ation, 3l/eda co//issioned >ngineer David (- !a0ico to render a technical evaluation of the s"ste/ in relation to the contract &ith the or0oration- 5n his re0ort, !a0ico enu/erated the defects of the s"ste/ and concluded that it &as 7not ca0a'le of /aintaining the desired roo/ te/0erature of +9YF J *YF-8 %n the 'asis of this re0ort, 3l/eda filed on < Aa" 1,+1 an action for da/ages against the or0oration &ith the then F5 (i2al ( ivil ase 14+1*)- The co/0laint alleged that the air)conditioning s"ste/ installed '" the or0oration did not co/0l" &ith the agreed 0lans and s0ecifications, hence, 3l/eda 0ra"ed for the a/ount of P*10,000-00 re0resenting the rectification cost, P100,000-00 as da/ages and P16,000-00 as attorne";s fees.a+es" /001 ( ## )
The or0oration /oved to dis/issed the case, alleging 0rescri0tion, 'ut &hich &as denied '" the ourtThereafter, 3l/eda filed an e4)0arte /otion for 0reli/inar" attach/ent on the strength of the or0oration;s o&n state/ent to the effect that it had sold its 'usiness and &as no longer doing 'usiness in Aanila- The trial court granted the /otion and, u0on 3l/eda;s 0osting of a 'ond of P60,000-00, ordered the issuance of a &rit of attach/ent5n due course, and on 16 30ril 1,+4, the trial court rendered a decision, &hich ordered the or0oration to 0a" 3l/eda the a/ount needed to rectif" the faults and deficiencies of the air)conditioning s"ste/ installed '" the or0oration in 3l/eda;s 'uilding, 0lus da/ages, attorne";s fees and costs)- Petitioner a00ealed to the ourt of 300eals, &hich affir/ed on *< $ove/'er 1,+< the decision of the trial court- #ence, it instituted a 0etition for revie& on certiorari under (ule 46 of the (ules of ourtThe !u0re/e ourt denied the 0etition and affir/ed the decision assailedG &ithout costs1. ;*e Court=s po,er to rev(e, The !u0re/e ourt revie&s onl" errors of la& in 0etitions for revie& on certiorari under (ule 46- 5t is not the function of this ourt to re)e4a/ine the findings of fact of the a00ellate court unless said findings are not su00orted '" the evidence on record or the =udg/ent is 'ased on a /isa00rehension of facts- The ourt has consistentl" held that the factual findings of the trial court, as &ell as the ourt of 300eals, are final and conclusive and /a" not 'e revie&ed on a00eal- 3/ong the e4ce0tional circu/stances &here a reassess/ent of facts found '" the lo&er courts is allo&ed are &hen the conclusion is a finding grounded entirel" on s0eculation, sur/ises or con=ecturesG &hen the inference /ade is /anifestl" a'surd, /ista@en or i/0ossi'leG &hen there is grave a'use of discretion in the a00reciation of factsG &hen the =udg/ent is 0re/ised on a /isa00rehension of factsG &hen the findings &ent 'e"ond the issues of the case and the sa/e are contrar" to the ad/issions of 'oth a00ellant and a00ellee- 3fter a careful stud" of the case at 'ench, &e find none of the a'ove grounds 0resent to =ustif" the re)evaluation of the findings of fact /ade '" the courts 'elo&/. Contract o- a p(ece o- ,ork 'e-(ne' 3rticle 1+13 of the ivil ode defines a contract for a 0iece of &or@ as 7'" the contract for a 0iece of &or@ the contractor 'inds hi/self to e4ecute a 0iece of &or@ for the e/0lo"er, in consideration of a certain 0rice or co/0ensation- The contractor /a" either e/0lo" onl" his la'or or s@ill, or also furnish the /aterial-8 1. Contract -or a p(ece o- ,ork '(st(n)u(s*e' -rom a contract o- sa+e 3 contract for a 0iece of &or@, la'or and /aterials /a" 'e distinguished fro/ a contract of sale '" the in.uir" as to &hether the thing transferred is one not in e4istence and &hich &ould never have e4isted 'ut for the order of the 0erson desiring it - 5n such case, the contract is one for a 0iece of &or@, not a sale- %n the other hand, if the thing su'=ect of the contract &ould have e4isted and 'een the su'=ect of a sale to so/e other 0erson even if the order had not 'een given, then the contract is one of sale73 contract for the deliver" at a certain 0rice of an article &hich the vendor in the ordinar" course of his 'usiness /anufactures or 0rocures for the general /ar@et &hether the sa/e is on hand at the ti/e or not is a contract of sale, 'ut if the goods are to 'e /anufactured s0eciall" for the custo/er and u0on his s0ecial order, and not for the general /ar@et, it is a contract for a 0iece of &or@ (3rt- 149+, ivil ode)- The /ere fact alone that certain articles are /ade u0on 0revious orders of custo/ers &ill not argue against the i/0osition of the sales ta4 if such articles are ordinaril" /anufactured '" the ta40a"er for sale to the 0u'lic-8 (Ce"estino Co. vs. Co""ector, 00 !hi". 8-//(. To Tolentino, the distinction 'et&een the t&o contracts de0ends on the intention of the 0arties- Thus, if the 0arties intended that at so/e future date an o'=ect has to 'e delivered, &ithout considering the &or@ or la'or of the 0art" 'ound to deliver, the contract is one of sale- Dut if one of the 0arties acce0ts the underta@ing on the 'asis of so/e 0lan, ta@ing into account the &or@ he &ill e/0lo" 0ersonall" or through another, there is a contract for a 0iece of &or@-
.a+es" /001 ( 100 )
4.
Contract (n 2uest(on (s one -or a p(ece o- ,ork The contract in .uestion is one for a 0iece of &or@- 5t is not the or0oration;s line of 'usiness to /anufacture air)conditioning s"ste/s to 'e sold 7off)the)shelf-8 5ts 'usiness and 0articular field of e40ertise is the fa'rication and installation of such s"ste/s as ordered '" custo/ers and in accordance &ith the 0articular 0lans and s0ecifications 0rovided '" the custo/ers- $aturall", the 0rice or co/0ensation for the s"ste/ /anufactured and installed &ill de0end greatl" on the 0articular 0lans and s0ecifications agreed u0on &ith the custo/ers$. > +()at(ons o- a contractor -or a p(ece o- ,ork The o'ligations of a contractor for a 0iece of &or@ are set forth in 3rticles 1+14 and 1+16 of the ivil ode- 3rticle 1+14 0rovides that 7if the contractor agrees to 0roduce the &or@ fro/ /aterial furnished '" hi/, he shall deliver the thing 0roduced to the e/0lo"er and transfer do/inion over the thing- J This contract shall 'e governed '" the follo&ing articles as &ell as '" the 0ertinent 0rovisions on &arrant" of title and against hidden defects and the 0a"/ent of 0rice in a contract of sale-8 3rticle 1+16 0rovides that 7the contractor shall e4ecute the &or@ in such a /anner that it has the .ualities agreed u0on and has no defects &hich destro" or lessen its value or fitness for its ordinar" or sti0ulated use- !hould the &or@ 'e not of such .ualit", the e/0lo"er /a" re.uire that the contractor re/ove the defect or e4ecute another &or@- 5f the contractor fails or refuses to co/0l" &ith this o'ligation, the e/0lo"er /a" have the defect re/oved or another &or@ e4ecuted, at the contractor;s cost-8 :. Brov(s(ons on ,arranty a)a(nst *(''en 'e-ects The 0rovisions on &arrant" against hidden defects, referred to in 3rticle 1+14, are found in 3rticles 1691 and 1699- 3rticle 1691 0rovides that 7the vendor shall 'e res0onsi'le for &arrant" against the hidden defects &hich the thing sold /a" have, should the" render it unfit for the use for &hich it is intended, or should the" di/inish its fitness for such use to such an e4tent that, had the vendee 'een a&are thereof, he &ould not have ac.uired it or &ould have given a lo&er 0rice for itG 'ut said vendor shall not 'e ans&era'le for 0atent defects or those &hich /a" 'e visi'le, or for those &hich are not visi'le if the vendee is an e40ert &ho, '" reason of his trade or 0rofession, should have @no&n the/-8 3rticle 1699 0rovides that 7the vendor is res0onsi'le to the vendee for an" hidden faults or defects in the thing sold, even though he &as not a&are thereof,8 and 0rovides further that the 0rovision 7shall not a00l" if the contrar" has 'een sti0ulated, and the vendor &as not a&are of the hidden faults or defects in the thing sold-8 !. Reme'y a)a(nst v(o+at(on o- t*e ,arranty a)a(nst *(''en 'e-ects The re/ed" against violations of the &arrant" against hidden defects is either to &ithdra& fro/ the contract (rehi'itor" action) or to de/and a 0ro0ortionate reduction of the 0rice (accion .uanti /inoris), &ith da/ages in either case8. Brescr(pt(ve per(o' as spec(-(e' (n e7press ,arranty" or (n t*e a sence o- ,*(c*" 4 years3 Brescr(pt(ve per(o' o- : mont*s -or re*( (tory act(on (s app+(ca +e on+y (n (mp+(e' ,arrant(es :hile it is true that 3rticle 16+1 of the ivil ode 0rovides for a 0rescri0tive 0eriod of si4 /onths for a rehi'itor" action, a cursor" reading of the ten 0receding articles to &hich it refers &ill reveal that said rule /a" 'e a00lied onl" in case of i/0lied &arrantiesG and &here there is an e40ress &arrant" in the contract, the 0rescri0tive 0eriod is the one s0ecified in the e40ress &arrant", and in the a'sence of such 0eriod, the general rule on rescission of contract, &hich is four "ears (3rticle 13<,, ivil ode) shall a00l"- (?i""ostas v. CA( #. >r()(na+ comp+a(nt (s one -or ar(s(n) -rom reac* o- a ,r(tten contact an' not a su(t to en-orce ,arranty a)a(nst *(''en 'e-ects3 Art(c+e 1!1$ (n re+at(on to Art(c+e 1144 app+y" prescr(pt(on (n 10 years3 Act(on not prescr( e' The lo&er courts o0ined and so held that the failure of the defendant to follo& the contract s0ecifications and said o/issions and deviations having resulted in the o0erational ineffectiveness of the s"ste/ installed /a@es the defendant lia'le to the 0laintiff in the a/ount necessar" to rectif" to 0ut the air
.a+es" /001 ( 101 )
conditioning s"ste/ in its 0ro0er o0erational condition to /a@e it serve the 0ur0ose for &hich the 0laintiff entered into the contract &ith the defendant- Thus, having concluded that the original co/0laint is one for da/ages arising fro/ 'reach of a &ritten contract, and not a suit to enforce &arranties against hidden defects, the governing la& therefore is 3rticle 1+16- #o&ever, inas/uch as this 0rovision does not contain a s0ecific 0rescri0tive 0eriod, the general la& on 0rescri0tion, &hich is 3rticle 1144 of the ivil ode, &ill a00l"- !aid 0rovision states, inter alia, that actions 7u0on a &ritten contract8 0rescri'e in 10 "ears- !ince the governing contract &as e4ecuted on 10 !e0te/'er 1,9* and the co/0laint &as filed on < Aa" 1,+1, it is clear that the action has not 0rescri'ed10. Acceptance o- t*e ,ork y t*e emp+oyer 'oes not re+(eve t*e contractor o- +(a (+(ty -or any 'e-ect (n t*e ,ork The /ere fact that 3l/eda acce0ted the &or@ does not, i0so facto, relieve the or0oration fro/ lia'ilit" for deviations fro/ and violations of the &ritten contract, as the la& gives hi/ 10 "ears &ithin &hich to file an action 'ased on 'reach thereof- 3s held '" the ourt of 300eals, 7as the 'reach of contract consisted in a00ellant;s o/ission to install the e.ui0/ent KsicL, 0arts and accessories not in accordance &ith the 0lan and s0ecifications 0rovided for in the contract and the deviations /ade in 0utting into the air)conditioning s"ste/ 0arts and accessories not in accordance &ith the contract s0ecifications, it is evident that the defect in the installation &as not a00arent at the ti/e of the deliver" and acce0tance of the &or@, considering further that 3l/eda is not an e40ert to recogni2e the sa/e- Fro/ the ver" nature of things, it is i/0ossi'le to deter/ine '" the si/0le ins0ection of air conditioning s"ste/ installed in an <)floor 'uilding &hether it has 'een furnished and installed as 0er agreed s0ecifications-8 [1!] E2uator(a+ Rea+ty vs. 9ay-a(r ;*eater [G.R. No. 10:0:1. Novem er /1" 1##:.] >n Danc, #er/osisi/a Jr- (J): 13 concur, 1 too@ no 0art %acts& ar/elo Q Dauer/ann 5nc- ( ar/elo) o&ned a 0arcel of land, together &ith t&o *)store" 'uildings constructed thereon located at laro A (ecto 3venue, Aanila (T T 1<6*,, (egister of Deeds of Aanila)- %n 1 June 1,9+, ar/elo entered into a contract of lease &ith Aa"fair Theater for the latter;s lease of a 0ortion of ar/elo;s 0ro0ert", i-e- a 0ortion of the *BF of the t&o)store" 'uilding &ith floor area of 1910 s.-/s- and the second floor and /e22anine of the t&o)store" 'uilding situated at A (ecto 3venue, Aanila &ith a floor area of 160 s.-/s- for use '" Aa"fair as a /otion 0icture theater and for a ter/ of *0 "ears- Aa"fair thereafter constructed on the leased 0ro0ert" a /ovie house @no&n as Aa4i/ Theatre- %n 31 Aarch 1,9,, Aa"fair entered into a second contract of lease &ith ar/elo for the lease of another 0ortion of ar/elo;s 0ro0ert", i-e- a 0ortion of the *BF of the t&o)store" 'uilding &ith floor area of 1094 s.-/s- and t&o store s0aces at the ground floor and /e22anine of the t&o)store" 'uilding situated at A (ecto 3venue, Aanila &ith a floor area of 300 s.-/s- and 'earing street nu/'ers 1<+1 and 1<+6 for si/ilar use as a /ovie theater and for a si/ilar ter/ of *0 "ears- Aa"fair 0ut u0 another /ovie house @no&n as HAira/ar Theatre; on this leased 0ro0ert"- Doth contracts of lease 0rovide identicall" &orded 0aragra0h <, &hich reads 7That if the L>!!%( should desire to sell the leased 0re/ises, the lessee shall 'e given 30)da"s e4clusive o0tion to 0urchase the sa/e- 5n the event, ho&ever, that the leased 0re/ises is sold to so/eone other than the Lessee, the lessor is 'ound and o'ligated, as it here'" 'inds and o'ligates itself, to sti0ulate in the Deed of !ale thereof that the 0urchaser shall recogni2e this lease and 'e 'ound '" all the ter/s and conditions thereof-8 !o/eti/e in 3ugust 1,+4, Ar- #enr" Pascal of ar/elo infor/ed Ar- #enr" Eang, President of Aa"fair, through a tele0hone conversation that ar/elo &as desirous of selling the entire laro A- (ecto 0ro0ert"- ArPascal told Ar- Eang that a certain Jose 3raneta &as offering to 'u" the &hole 0ro0ert" for ?!T1,*00,000, and Ar- Pascal as@ed Ar- Eang if the latter &as &illing to 'u" the 0ro0ert" for P9 /illion to P+ /illion- ArEang re0lied that he &ould let Ar- Pascal @no& of his decision- %n *3 3ugust 1,+4, Aa"fair re0lied through a letter confir/ing the corres0ondence 'et&een Pascual and Eang and reiterating 0aragra0h < of the t&o contracts of lease- ar/elo did no re0l" to this letter- %n 1< !e0te/'er 1,+4, Aa"fair sent another letter to
.a+es" /001 ( 10/ )
ar/elo 0ur0orting to e40ress interest in ac.uiring not onl" the leased 0re/ises 'ut the entire 'uilding and other i/0rove/ents if the 0rice is reasona'le- #o&ever, 'oth ar/elo and >.uatorial .uestioned the authenticit" of the second letter- Four "ears later, on 30 Jul" 1,+<, ar/elo sold its entire A- (ecto 3venue land and 'uilding, &hich included the leased 0re/ises housing the HAa4i/; and HAira/ar; theatres, to >.uatorial '" virtue of a Deed of 3'solute !ale, for the total su/ of P1,300,0005n !e0te/'er 1,+<, Aa"fair instituted the action for s0ecific 0erfor/ance and annul/ent of the sale of the leased 0re/ises to >.uatorial- 5n its 3ns&er, ar/elo alleged as s0ecial and affir/ative defense that it had infor/ed Aa"fair of its desire to sell the entire A- (ecto 3venue 0ro0ert" and offered the sa/e to Aa"fair, 'ut the latter ans&ered that it &as interested onl" in 'u"ing the areas under lease, &hich &as i/0ossi'le since the 0ro0ert" &as not a condo/iniu/G and that the o0tion to 0urchase invo@ed '" Aa"fair is null and void for lac@ of consideration- >.uatorial, in its 3ns&er, 0leaded as s0ecial and affir/ative defense that the o0tion is void for lac@ of consideration and is unenforcea'le '" reason of its i/0ossi'ilit" of 0erfor/ance 'ecause the leased 0re/ises could not 'e sold se0aratel" fro/ the other 0ortions of the land and 'uilding- 5t counterclai/ed for cancellation of the contracts of lease, and for increase of rentals in vie& of alleged su0ervening e4traordinar" devaluation of the currenc"- >.uatorial li@e&ise cross)clai/ed against codefendant ar/elo for inde/nification in res0ect of Aa"fair;s clai/s- 3fter assessing the evidence, the court rendered decision dis/issing the co/0laint &ith costs against Aa"fairG ordering Aa"fair to 0a" ar/elo Q Dauer/ann P40,000-00 '" &a" of attorne"s;s fees on its counterclai/G and ordering Aa"fair to 0a" >.uatorial (ealt" P36,000-00 0er /onth as reasona'le co/0ensation for the use of areas not covered '" the contracts of lease fro/ 31 Jul" 1,+, until Aa"fair vacates said areas 0lus legal interest fro/ 31 Jul" 1,+<G P+0,000-00 0er /onth as reasona'le co/0ensation for the use of the 0re/ises covered '" the contracts of lease dated (1 June 1,9+ fro/ 1 June 1,<+ until Aa"fair vacates the 0re/ises 0lus legal interest fro/ 1 June 1,<+G P66,000-00 0er /onth as reasona'le co/0ensation for the use of the 0re/ises covered '" the contract of lease dated 31 Aarch 1,9, fro/ 30 Aarch 1,<, until Aa"fair vacates the 0re/ises 0lus legal interest fro/ 30 Aarch 1,<,G and P40,000-00 as attorne";s feesG and dis/issing >.uatorial;s crossclai/ against ar/elo Q Dauer/annThe trial court ad=udged the identicall" &orded 0aragra0h < found in 'oth lease contracts to 'e an o0tion clause &hich ho&ever cannot 'e dee/ed to 'e 'inding on ar/elo 'ecause of lac@ of distinct consideration thereforAa"fair ta@ing e4ce0tion to the decision of the trial court, a00ealed to the ourt of 300eals- The a00ellate court reversed the trial court and rendered =udg/ent reversing and setting aside the a00ealed DecisionG directing Aa"fair to 0a" and return to >.uatorial the a/ount of P11,300,000-00 &ithin 16 da"s fro/ notice of this Decision, and ordering >.uatorial to acce0t such 0a"/entG directing >.uatorial, u0on 0a"/ent of the su/ of P11,300,000, to e4ecute the deeds and docu/ents necessar" for the issuance and transfer of o&nershi0 to Aa"fair of the lot registered under T T 1+360, 11<91*, 90,39, and 6*6+1G and should Aa"fair 'e una'le to 0a" the a/ount as ad=udged, declaring the Deed of 3'solute !ale 'et&een ar/elo and >.uatorial as valid and 'inding u0on an the 0arties- #ence, the 0etition for revie&The !u0re/e ourt denied the 0etition for revie& of the decision of the ourt of 300eals (*3 June 1,,*, in 3)F( 1 3*,1<), declaring the Deed of 3'solute !ale 'et&een >.uatorial and ar/elo as dee/ed rescindedG ordering ar/elo to return to >.uatorial the 0urchase 0riceG directing >.uatorial to e4ecute the deeds and docu/ents necessar" to return o&nershi0 to ar/elo of the dis0uted lotsG and ordering ar/elo to allo& Aa"fair to 'u" the lots for P11,300,0001. Gssue on (rre)u+ar(t(es (n Court o- Appea+s passe' upon so as not to preempt t*e a'm(n(strat(ve procee'(n)s re+ate' t*ereto 5t &as raised that the ourt of 300eals violated its o&n internal rules in the assign/ent of a00ealed cases &hen it allo&ed the sa/e Division R55, 0articularl" Justice Aanuel #errera, to resolve all the /otions in the 7 o/0letion Process8 and to still resolve the /erits of the case in the 7Decision !tage-8 This &as related to letter co/0laint &ritten '" the counsel for >.uatorial on *0 !e0te/'er 1,,* to the !u0re/e ourt
.a+es" /001 ( 101 )
alleging certain irregularities and infractions co//itted '" certain la&"ers, and Justices of the ourt of 300eals and of the !u0re/e ourt in connection &ith case 3)F( 1 3*,1< (F( 109093)- This 0arta@es of the nature of an ad/inistrative co/0laint for /isconduct, against /e/'ers of the =udiciar"- :hile the letter) co/0laint arose as an incident in said case, the dis0osition thereof should 'e se0arate and inde0endent fro/ case F( 109093- 5t &ould 'e correct, 0rudent and consistent course of action not to 0re)e/0t the ad/inistrative 0roceedings to 'e underta@en res0ecting the said irregularities- 3 discussion of such in the 0resent case &ould entail a finding on the /erits as to the real nature of the .uestioned 0rocedures and the true intentions and /otives of the 0la"ers therein/. Bara)rap* 8 o- +ease contracts prov('es -or a r()*t o- -(rst re-usa+" an' (s not an opt(on c+ause nor an opt(on contract The contractual sti0ulation (Paragra0h <) 0rovides for a right of first refusal in favor of Aa"fair- 5t is not an o0tion clause or an o0tion contact- 5t is a contract of a right of first refusal- The true nature of the 0aragra0h < is ascertained to 'e that of a contractual grant of the right of first refusal to Aa"fair1. >pt(on contract3 Ha+('(ty ase' on a separate an' '(st(nct cons('erat(on 3s earl" as 1,19, in the case of Deau/ont vs- Prieto, une.uivocal &as our characteri2ation of an o0tion contract as one necessaril" invo@ing the choice granted to another for a distinct and se0arate consideration as to &hether or not to 0urchase a deter/inate thing at a 0redeter/ined fi4ed 0rice- T he deed of o0tion or o0tion clause in a contract, in order to 'e valid and enforcea'le, /ust, a/ong other things, indicate the definite 0rice at &hich the 0erson granting the o0tion, is &illing to sell4. >pt(on contract" accor'(n) to Bouv(er @a, D(ct(onary Douvier, in his La& Dictionar" (edition of 1<,+) defines an o0tion as a contract, 7a contract '" virtue of &hich 3, in consideration of the 0a"/ent of a certain su/ to D, ac.uires the 0rivilege of 'u"ing fro/, or selling to D, certain securities or 0ro0erties &ithin a li/ited ti/e at a s0ecified 0rice- (!tor" vs !ala/on, +1 $-E- 4*0-)8 $. >pt(on contract" accor'(n) to 45or's an' B*rases6 3n agree/ent in &riting to give a 0erson the o0tion to 0urchase lands &ithin a given ti/e at a na/ed 0rice is neither a sale nor an agree/ent to sell- 5t is si/0l" a contract '" &hich the o&ner of 0ro0ert" agrees &ith another 0erson that he shall have the right to 'u" his 0ro0ert" at a fi4ed 0rice &ithin a certain ti/e- #e does not sell his land, he does not then agree to sell itG 'ut he does sell so/ethingG that is, the right or 0rivilege to 'u" at the election or o0tion of the other 0art"- The second 0art" gets in 0raesenti, not lands, nor an agree/ent that he shall have lands, 'ut he does get so/ething of value, that is, the right to call for and receive lands if he elects The o&ner 0arts &ith his right to sell his lands, e4ce0t to the second 0art", for a li/ited 0eriod The second 0art" receives this right, or, rather, fro/ his 0oint of vie&, he receives the right to elect to 'u"- (1ol- 9, 0age 6001, of the &or@ H:ords and Phrases, H citing the case of 5de vs- Leiser K*4 Pac-, 9,6G 10 Aont-, 6G *4 3/- !t- (e0-, 1+L):. Cases (nvo+v(n) opt(on contracts 5n +uason vs. $e Asis (10+ P#5L 131 K1,90L), it &as held that the lessee loses his right to 'u" the leased 0ro0ert" for a na/ed 0rice 0er s.uare /eter u0on failure to /a@e the 0urchase &ithin the ti/e s0ecified- 5n /en$o0a vs. Co#ple (16 ! (3 19*), the ourt freed the lando&ner fro/ her 0ro/ise to sell her land if the 0ros0ective 'u"er could raise P4,600-00 in 3 &ee@s 'ecause such o0tion &as not su00orted '" a distinct consideration- 5n the sa/e vein, in 'anche0 vs. 1igos (46 ! (3 39< K1,+*L), the ourt also invalidated an instru/ent entitled, 7%0tion to Purchase8 a 0arcel of land for the su/ of P1,610-00 'ecause of lac@ of consideration- 3nd as an e4ce0tion to the doctrine enu/erated in the t&o 0receding cases, in 2$a $e 3uirino vs. Palarca (*, ! (3 1 K1,9,L), it &as ruled that the o0tion to 'u" the leased 0re/ises for P1*,000-00 as sti0ulated in the lease contract, is not &ithout consideration for in reci0rocal contracts, li@e lease, the o'ligation or 0ro/ise of each 0art" is the consideration for that of the other- 5n all these cases, the
.a+es" /001 ( 104 )
selling 0rice of the o'=ect thereof is al&a"s 0redeter/ined and s0ecified in the o0tion clause in the contract or in the se0arate deed of o0tionAn) ?u Asunc(on case& !. Ber-ect(on o- a contract o- sa+e 5n sales, the contract is 0erfected &hen a 0erson, called the seller, o'ligates hi/self, for a 0rice certain, to deliver and to transfer o&nershi0 of a thing or right to another, called the 'u"er, over &hich the latter agrees- 3rticle 146< of the ivil ode 0rovides that 7D" the contract of sale one of the contracting 0arties o'ligates hi/self to transfer the o&nershi0 of and to deliver a deter/inate thing, and the other to 0a" therefor a 0rice certain in /one" or its e.uivalent- 3 contract of sale /a" 'e a'solute or conditional-8 8. Contract to se++ (s con'(t(ona+3 E--ect o- reac* o- con'(t(on :hen the sale is not a'solute 'ut conditional, such as in a 7 ontract to !ell8 &here invaria'l" the o&nershi0 of the thing sold is retained until the fulfill/ent of a 0ositive sus0ensive condition (nor/all", the full 0a"/ent of the 0urchase 0rice), the 'reach of the condition &ill 0revent the o'ligation to conve" title fro/ ac.uiring an o'ligator" force#. Incon'(t(ona+ mutua+ prom(se to uy an' se++ o +()atory on t*e part(es 3n unconditional /utual 0ro/ise to 'u" and sell, as long as the o'=ect is /ade deter/inate and the 0rice is fi4ed, can 'e o'ligator" on the 0arties, and co/0liance there&ith /a" accordingl" 'e e4acted10. Ber-ecte' contract o- opt(on 3n acce0ted unilateral 0ro/ise &hich s0ecifies the thing to 'e sold and the 0rice to 'e 0aid, &hen cou0led &ith a valua'le consideration distinct and se0arate fro/ the 0rice, is &hat /a" 0ro0erl" 'e ter/ed a 0erfected contract of o0tion- This contract is legall" 'inding, and in sales, it confor/s &ith the second 0aragra0h of 3rticle 14+, of the ivil ode, &hich 0rovides that 73n acce0ted unilateral 0ro/ise to 'u" or to sell a deter/inate thing for a 0rice certain is 'inding u0on the 0ro/issor if the 0ro/ise is su00orted '" a consideration distinct fro/ the 0rice- (1461a)8 11. >pt(on not t*e contract o- sa+e (tse+The o0tion is not the contract of sale itself- The o0tionee has the right, 'ut not the o'ligation, to 'u"%nce the o0tion is e4ercised ti/el", i-e-, the offer is acce0ted 'efore a 'reach of the o0tion, a 'ilateral 0ro/ise to sell and to 'u" ensues and 'oth 0arties are then reci0rocall" 'ound to co/0l" &ith their res0ective underta@ings1/. >--er 3 negotiation is for/all" initiated '" an offer- 3n i/0erfect 0ro/ise (0olicitacion) is /erel" an offerPu'lic advertise/ents or solicitations and the li@e are ordinaril" construed as /ere invitations to /a@e offers or onl" as 0ro0osals- These relations, until a contract is 0erfected, are not considered 'inding co//it/entsThus, at an" ti/e 0rior to the 0erfection of the contract, either negotiating 0art" /a" sto0 the negotiation- The offer, at this stage, /a" 'e &ithdra&nG the &ithdra&al is effective i//ediatel" after its /anifestation, such as '" its /ailing and not necessaril" &hen the offeree learns of the &ithdra&al (Laudico vs- 3rias, 43 Phil- *+0)11. >--er ,(t* a per(o'3 E--ects o- ,(t*'ra,a+ (1) 5f the 0eriod is not itself founded u0on or su00orted '" a consideration, the offeror is still free and has the right to &ithdra&al the offer 'efore its acce0tance, or, if an acce0tance has 'een /ade, 'efore the offeror;s co/ing to @no& of such fact, '" co//unicating that &ithdra&al to the offeree (see 3rt- 13*4, ivil odeG see also 3t@ins, Croll Q o- vs- ua, 10* Phil- ,4<, holding that this rule is a00lica'le to a unilateral 0ro/ise to sell under 3rt- 14+,, /odif"ing the 0revious decision in !outh :estern !ugar vs- 3tlantic Fulf, ,+ Phil- *4,G see also 3rt- 131,, ivil odeG (ural Dan@ of ParaMa.ue, 5nc-, vs- (e/olado, 136 ! (3 40,G
.a+es" /001 ( 10$ )
!anche2 vs- (igos, 46 ! (3 39<)- The right to &ithdra&, ho&ever, /ust not 'e e4ercised &hi/sicall" or ar'itraril"G other&ise, it could give rise to a da/age clai/ under 3rticle 1, of the ivil ode &hich ordains that 7ever" 0erson /ust, in the e4ercise of his rights and in the 0erfor/ance of his duties, act &ith =ustice, give ever"one his due, and o'serve honest" and good faith-8 (*) 5f the 0eriod has a se0arate consideration, a contract of 7o0tion8 is dee/ed 0erfected, and it &ould 'e a 'reach of that contract to &ithdra& the offer during the agreed 0eriod- The o0tion, ho&ever, is an inde0endent contract '" itself, and it is to 'e distinguished fro/ the 0ro=ected /ain agree/ent (su'=ect /atter of the o0tion) &hich is o'viousl" "et to 'e concluded- 5f, in fact, the o0tioner)offeror &ithdra&s the offer 'efore its acce0tance (e4ercise of the o0tion) '" the o0tionee)offeree, the latter /a" not sue for s0ecific 0erfor/ance on the 0ro0osed contract (7o'=ect8 of the o0tion) since it has failed to reach its o&n stage of 0erfection- The o0tioner)offeror, ho&ever, renders hi/self lia'le for da/ages for 'reach of the o0tion- 5n these cases, care should 'e ta@en of the real nature of the consideration given, for if, in fact, it has 'een intended to 'e 0art of the consideration for the /ain contract &ith a right of &ithdra&al on the 0art of the o0tionee, the /ain contract could 'e dee/ed 0erfectedG a si/ilar instance &ould 'e an 7earnest /one"8 in a contract of sale that can evidence its 0erfection (3rt- 14<*, ivil ode)14. Re2u(rement -or separate cons('erat(on *as no app+(ca (+(ty as para)rap* 8 (s not an opt(on contract ut a r()*t o- -(rst re-usa+ $o o0tion to 0urchase in conte/0lation of the second 0aragra0h of 3rticle 14+, of the ivil ode, has 'een granted to Aa"fair under the said lease contracts- Paragra0h < grants the right of first refusal to Aa"fair and is not an o0tion contract- The re.uire/ent of a se0arate consideration for the o0tion, thus, has no a00lica'ilit" in the case- There is nothing in 0aragra0h 7<8 of the contracts &hich &ould 'ring the/ into the a/'it of the usual offer or o0tion re.uiring an inde0endent consideration1$. >pt(on an' R()*t o- %(rst Re-usa+ '(st(n)u(s*e' 3n o0tion is a contract granting a 0rivilege to 'u" or sell &ithin an agreed ti/e and at a deter/ined 0rice- 5t is a se0arate and distinct contract fro/ that &hich the 0arties /a" enter into u0on the consu//ation of the o0tion- 5t /ust 'e su00orted '" consideration- 5n the instant case, the right of first refusal is an integral 0art of the contracts of lease- The consideration is 'uilt into the reci0rocal o'ligations of the 0arties1:. R()*t o- %(rst Re-usa+ (nut(+e (- )overne' y Art(c+e 11/4 on ,(t*'ra,a+ o- t*e o--er on Art(c+e 14!# on prom(se to uy an' se++ To rule that a contractual sti0ulation such as that found in 0aragra0h < of the contracts is governed '" 3rticle 13*4 on &ithdra&al of the offer on 3rticle 14+, on 0ro/ise to 'u" and sell &ould render ineffectual or 7inutile8 the 0rovisions on right of first refusal so co//onl" inserted in leases of real estate no&ada"sParagra0h < &as incor0orated into the contracts of lease for the 'enefit of Aa"fair &hich &anted to 'e assured that it shall 'e given the first crac@ or the first o0tion to 'u" the 0ro0ert" at the 0rice &hich ar/elo is &illing to acce0t1!. Cons('erat(on (n an a)reement o- r()*t o- -(rst re-usa+& Cons('erat(on -or +ease 5t is not correct to sa" that there is no consideration in an agree/ent of right of first refusal- The sti0ulation is 0art and 0arcel of the entire contract of lease- The consideration for the lease includes the consideration for the right of first refusal18. Cons('erat(on (n an a)reement o- r()*t o- -(rst re-usa+& Cons('erat(on (s o +()at(on or prom(se (rec(proca+ contract) Aa"fair is in effect stating that it consents to lease the 0re/ises and to 0a" the 0rice agreed u0on 0rovided the lessor also consents that, should it sell the leased 0ro0ert", then, Aa"fair shall 'e given the right to /atch the offered 0urchase 0rice and to 'u" the 0ro0ert" at that 0rice- 3s stated in 2$a. De 3uirino vs. Palarca, in reci0rocal contract, the o'ligation or 0ro/ise of each 0art" is the consideration for that of the other.a+es" /001 ( 10: )
1#.
D(--erence to An) ?u Asunc(on case& E2uator(a+ Rea+ty an' Carme+o acte' (n a' -a(t* ar/elo and >.uatorial (ealt" acted in 'ad faith to render Paragra0h < 7inutile-8 :hat ar/elo and Aa"fair agreed to, '" e4ecuting the t&o lease contracts, &as that Aa"fair &ill have the right of first refusal in the event ar/elo sells the leased 0re/ises- 5t is undis0uted that ar/elo did recogni2e this right of Aa"fair, for it infor/ed the latter of its intention to sell the said 0ro0ert" in 1,+4- There &as an e4change of letters evidencing the offer and counter)offers /ade '" 'oth 0arties- ar/elo, ho&ever, did not 0ursue the e4ercise to its logical end- :hile it initiall" recogni2ed Aa"fair;s right of first refusal, ar/elo violated such right &hen &ithout affording its negotiations &ith Aa"fair the full 0rocess to ri0en to at least an interface of a definite offer and a 0ossi'le corres0onding acce0tance &ithin the 730)da" e4clusive o0tion8 ti/e granted Aa"fair, ar/elo a'andoned negotiations, @e0t a lo& 0rofile for so/e ti/e, and then sold, &ithout 0rior notice to Aa"fair, the entire laro A- (ecto 0ro0ert" to >.uatorial/0. Resc(ss(on +(es ,*en t*e purc*ase (s (n a' -a(t* >.uatorial ('eing a&are of the lease contracts 'ecause its la&"ers had, 0rior to the sale, studied the said contracts) is a 'u"er in 'ad faith, and thus renders the sale to it of the 0ro0ert" in .uestion rescissi'leGuCman" Boca+(n) N Co. vs. Bonnev(e case /1. Resc(ss(on as reme'y (escission is a re/ed" granted '" la& to the contracting 0arties and even to third 0ersons, to secure re0aration for da/ages caused to the/ '" a contract, even if this should 'e valid, '" /eans of the restoration of things to their condition at the /o/ent 0rior to the cele'ration of said contract- 5t is a relief allo&ed for the 0rotection of one of the contracting 0arties and even third 0ersons fro/ all in=ur" and da/age the contract /a" cause, or to 0rotect so/e inco/0ati'le and 0referential right created '" the contract- (escission i/0lies a contract &hich, even if initiall" valid, 0roduces a lesion or 0ecuniar" da/age to so/eone that =ustifies its invalidation for reasons of e.uit"//. Burc*aser not cons('ere' a t*(r' party 5t is true that the ac.uisition '" a third 0erson of the 0ro0ert" su'=ect of the contract is an o'stacle to the action for its rescission &here it is sho&n that such third 0erson is in la&ful 0ossession of the su'=ect of the contract and that he did not act in 'ad faith- #o&ever, this rule is not a00lica'le in the case 'efore us 'ecause the 0etitoner is not considered a third 0art" in relation to the ontract of !ale nor /a" its 0ossession of the su'=ect 0ro0ert" 'e regarded as ac.uired la&full" and in good faith/1. Burc*aser (n )oo' -a(t* 'e-(ne' 3 0urchaser in good faith and for value &ho 'u"s the 0ro0ert" of another &ithout notice that so/e other 0erson has a right to or interest in such 0ro0ert" and 0a"s a full and fair 0rice for the sa/e at the ti/e of such 0urchase or 'efore he has notice of the clai/ or interest of so/e other 0erson in the 0ro0ert"- Food faith connotes an honest intention to a'stain fro/ ta@ing unconscientious advantage of another- Tested '" these 0rinci0les, the 0etitioner cannot tena'l" clai/ to 'e a 'u"er in good faith as it had notice of the lease of the 0ro0ert" and such @no&ledge should have cautioned it to loo@ dee0er into the agree/ent to deter/ine if it involved sti0ulations that &ould 0re=udice its o&n interests/4. Burc*aser re2u(re' to kno, term o- +ease contract ,*en uy(n) property un'er +ease #aving @no&n that the 0ro0ert" it &as 'u"ing &as under lease, it 'ehooved it as a 0rudent 0erson to have re.uired the o&ner of the 0ro0ert" or the 'ro@er to sho& to it the ontract of Lease in &hich the right of first refusal is contained/$. Gn'(v(s( (+(ty o- t*e property o//on sense and fairness dictate that instead of nullif"ing the agree/ent on the 'asis that the entire
.a+es" /001 ( 10! )
0ro0ert" is indivisi'le 0ro0ert", the sti0ulation should 'e given effect '" including the indivisi'le a00urtenances in the sale of the do/inant 0ortion under the right of first refusal- 3 valid and legal contract &here the ascendant or the /ore i/0ortant of the t&o 0arties is the lando&ner should 'e given effect, if 0ossi'le, instead of 'eing nullified on a selfish 0rete4t 0osited '" the o&ner- Follo&ing the argu/ents of 0etitioners and the 0artici0ation of the o&ner in the atte/0t to stri0 Aa"fair of its rightsG the right of first refusal should include not onl" the 0ro0ert" s0ecified in the contracts 'ut also the a00urtenant 0ortions sold to >.uatorial &hich are clai/ed '" 0etitioners to 'e indivisi'le/:. Boun'ar(es o- t*e property so+' Aa"fair is authori2ed to e4ercise its right of first refusal under the contract to include the entiret" of the indivisi'le 0ro0ert"- The 'oundaries of the 0ro0ert" sold should 'e the 'oundaries of the offer under the right of first refusal/!. Doctr(ne (n An) ?u Asunc(on 'eeme' mo'(-(e' 3s to the re/ed" to enforce Aa"fair;s right, the ourt disagrees to a certain e4tent &ith the concluding 0art of the dissenting o0inion of Justice 1itug- The doctrine enunciated in 3ng Eu 3suncion vsourt of 300eals should 'e /odified, it not a/0lified under the 0eculiar facts of the 0resent case/8. 9u+t(p+(c(ty o- su(ts -ro,ne' upon y Court3 Re+(e-& (1) Contract et,een E2uator(a+ an' Carme+o resc(n'e'" (/) Br(ce -(7e' The !u0re/e ourt has al&a"s 'een against /ulti0licit" of suits &here all re/edies according to the facts and the la& can 'e included- !ince Aa"fair has a right of first refusal, it can e4ercise the right onl" if the fraudulent sale is first set aside or rescinded- 3ll of these /atters are no& 'efore us and so there should 'e no 0iece/eal deter/ination of this case and leave festering sores to deteriorate into endless litigation- !ince ar/elo sold the 0ro0ert" for P11,300,000 to >.uatorial, the 0rice at &hich Aa"fair could have 0urchased the 0ro0ert" is, therefore, fi4ed- The da/ages &hich Aa"fair suffered are in ter/s of actual in=ur" and lost o00ortunities- The fairest solution &ould 'e to allo& Aa"fair to e4ercise its right of first refusal at the 0rice &hich it &as entitled to acce0t or re=ect &hich is P11,300,000- To follo& an alternative solution that ar/elo and Aa"fair /a" resu/e negotiations for the sale to the latter of the dis0uted 0ro0ert" &ould 'e un=ust and un@ind to Aa"fair 'ecause it is once /ore co/0elled to litigate to enforce its right/#. Bresent case covere' y +a, on contracts" not mere+y y co'a+ prov(s(ons on *uman re+at(ons ?nder the 3ng Eu 3suncion vsourt of 300eals decision, the ourt stated that there &as nothing to e4ecute 'ecause a contract over the right of first refusal 'elongs to a class of 0re0arator" =uridical relations governed not '" the la& on contracts 'ut '" the codal 0rovisions on hu/an relations- This /a" a00l" if the contract is li/ited to the 'u"ing and selling of the real 0ro0ert"- #o&ever, the o'ligation of ar/elo to first offer the 0ro0ert" to Aa"fair is e/'odied in a contract- 5t is Paragra0h < on the right of first refusal &hich created the o'ligation- 5t should 'e enforced according to the la& on contracts instead of the 0anora/ic and indefinite rule on hu/an relations- The latter re/ed" encourages /ulti0licit" of suits- There is so/ething to e4ecute and that is for ar/elo to co/0l" &ith its o'ligation to the 0ro0ert" under the right of the first refusal according to the ter/s at &hich the" should have 'een offered then to Aa"fair, at the 0rice &hen that offer should have 'een /ade- 3lso, Aa"fair has to acce0t the offer- This =uridical relation is not a/or0hous nor is it /erel" 0re0arator"- Paragra0hs < of the t&o leases can 'e e4ecuted according to their ter/s10. No (nterest 'ue ar/elo and >.uatorial cannot avail of considerations 'ased on e.uit" &hich /ight &arrant the grant of interests- The vendor received as 0a"/ent fro/ the vendee &hat, at the ti/e, &as a full and fair 0rice for the 0ro0ert"- 5t has used the P11,300,000-00 all these "ears earning inco/e or interest fro/ the a/ount>.uatorial, on the other hand, has received rents and other&ise 0rofited fro/ the use of the 0ro0ert" turned over to it '" ar/elo- 5n fact, during all the "ears that this controvers" &as 'eing litigated, Aa"fair 0aid rentals regularl" to the 'u"er &ho had an inferior right to 0urchase the 0ro0ert"- Aa"fair is under no
.a+es" /001 ( 108 )
o'ligation to 0a" an" interests arising fro/ this =udg/ent to either ar/elo or >.uatorial[18] Gntestate Estate o- Em(+(o Camon3 Ereneta v. BeCore [G.R. No. @D/#!4:. Novem er /:" 1#!1.] First Division, astro (J): 6 concur %acts& >/ilio a/on &as the lessee of the hacienda (osario, located in Pontevedra, $egros %ccidental, for the 0eriod fro/ cro0 "ear 1,40)41 to cro0 "ear 1,90)91- P 0ro)indiviso of the said sugar 0lantation 'elonged to 5gnatius #enr" De2ore, >l&ood Cnic@er'oc@er and Aar" 5rene Fallon Ac or/ic@ (as their inheritance fro/ the late Tho/as Fallon), &hile the other half 'elonged to Petronila 3lunan vdade !ta- (o/ana, 3/0aro !ta- (o/ana and 3l'erta vdade #o0on (as their inheritance fro/ their /other (osario !ta- (o/ana)?0on the death of >/ilio a/on in 1,9+, his &ido&, Concepcion )re4eta, file$ a petition in the F5 $egros %ccidental (!0ecial Proceeding <399) 0ra"ing for the grant to her of letters of ad/inistration of the estate of the deceased a/on- The 0etition &as granted- Thereafter, the court issued an order re.uiring all 0ersons &ith /one" clai/s against the estate to file their clai/s &ithin the 0eriod 0rescri'ed in the order-Thru their =udicial ad/inistrator and counsel, Aartiniano %- de la ru2, 5e0ore, et al. file$ a clai# against the estate in the a/ounts of P9*,096 as the /one" value of sugar allot/ents and allo&ances and P*,100 as the /one" value of 0ala" and rentals, or a total of P94,196, a00ertaining to the clai/ants; half)share in the hacienda- De2ore, etal- and >reneta are agreed that the late >/ilio a/on a00ro0riated for hi/self the a/ounts clai/ed- De2ore, et- al- had de/anded 0a"/ent of their clai/ fro/ >/ilio a/on &hen he &as still alive, 'ut )reneta ignore$ the $e#an$s. 3t the trial, 6 $ocu#ents -ere su!#itte$ in evi$ence !y )reneta , the authenticit" of each of &hich is not controverted '" De2ore, et-al-G i-e- (1) 3n 73gree/ent to !ell,8 e4ecuted on 11 Januar" 1,91, &here'" De2ore, et al-, agreed to sell their P share in the hacienda (osario to 3/0aro !ta- (o/ana and 3l'erta vdade #o0onG (*) 3 7(elease and :aiver of lai/s,8 e4ecuted on 1* Januar" ,91, &here'" 3/0aro !ta- (o/ana and 3l'erta vdade #o0on, for and in consideration of 7their gratitude for the various services, financial and 0ersonal8 e4tended to the/ '" >/ilio a/on, released hi/ fro/ 7an" and all clai/s that /a" have accrued 0ertaining to the *B4 0ro)indiviso share in #acienda (osario8 o&ned '" De2ore, et- al- &ho had 'ound the/selves 7to sell their share in the said #acienda (osario8 to 3/0aro and 3l'erta, 7including rights accrued or accruing,8 and &here'" 3/0aro and 3l'erta 'ound the/selves 7to &aive in favor of Ar- >/ilio a/on for his o&n use and 'enefit said rights accrued or accruingG8 and (3) 3 7Deed of !ale,8 e4ecuted on 4 3ugust 1,91, &here'" De2ore, et al-, for and in consideration of the su/ of P+<,000, to 'e 0aid in the /anner stated in the instru/ent, sold, transferred and conve"ed 7all their rights, title, interest and 0artici0ation, &hether accrued or accruing in their *B4 0ro)indiviso share8 in the hacienda (osario, 7together &ith all the i/0rove/ents e4isting thereon, including its sugar .uota,8 in favor of 3/0aro !ta- (o/ana and 3l'erta vdade #o0on- %n *0 Jul" 1,9<, the lo-er court $is#isse$ the clai# , re=ecting De2ore et-al;s contention that the sugar allot/ents and allo&ances, su'=ect of their clai/ against the estate of >/ilio a/on, &ere not included in the sale, and held that '" the 0ositive and categorical ter/s of the deed of sale, all 'enefits accrued and accruing to the a00ellants 'efore 4 3ugust 1,91 &ere included in the sale- 5e0ore, et.al. file$ a $irect appeal &ith the !u0re/e ourtThe !u0re/e ourt affir/ed the order of the lo&er court, at De2ore et- al-;s cost1. R()*t to accrue' c+a(ms not ,a(ve' (n Fanuary 1#:1 3t the ti/e of the e4ecution, on 1* Januar" 1,91, of the deed of 7(elease and :aiver of lai/s,8 3/0aro !ta- (o/ana and 3l'erta vdade #o0on could not release or &aive accrued clai/s 'elonging to De2ore et--al, 'ecause the right that 3/0aro and 3l'erta then had &as a /ere 0ro/ise '" De2ore, et-al- to sell their share in the hacienda, not the right to the accrued clai/s- :hat &as agreed to 'e sold in the future &as different fro/ &hat &as 0ur0ortedl" &aivedG and even if the o'=ect in 'oth contracts &ere the sa/e, the &aiver &ould still 'e invalid for it is essential that a right, in order that it /a" 'e validl" &aived, /ust 'e in
.a+es" /001 ( 10# )
e4istence at the ti/e of the &aiver/. De-ect (n ,a(ver cure' (n Au)ust 1#:13 BeCore" et.a+. parte' ,(t* t*e(r accrue' r()*ts :hatever defect there &as in the &aiver &as su'se.uentl" cured '" the deed of sale of 4 3ugust 1,91 '" virtue of &hich De2ore, et-al- sold not onl" their 0ro)indiviso half)share in the hacienda 'ut also their accrued rights therein- 5t is i//aterial that >/ilio a/on &as not the vendee since &hat /attered is that De2ore, et-al- 0arted &ith their accrued rights for a valua'le consideration1. Juest(on o- -act not rev(e,a +e (n '(rect appea+ to .upreme Court :hether the vendees (De2ore etal) re0resented to Aartiniano %- de la ru2 that the sugar .uedans and 0ala" &ere not included in the sale and that such &as the intention of the 0arties, involves a .uestion of fact &hich is not revie&a'le in a direct a00eal to the !u0re/e ourt4. 4Accrue' or accru(n)63 @(tera+ mean(n) o- contractua+ st(pu+at(ons contro+ (- terms are c+ear The &ords 7accrued or accruing; in the deed of sale are not o'scure and, as the lo&er court declared, are in fact 0ositive and categorical enough to include accrued allot/ents and allo&ances- !ince the said &ords are not a/'iguous, there is no need to inter0ret the/- 3rticle 13+0 of the ivil ode 0rovides that 7if the ter/s of a contract are clear and leave no dou't u0on the intention of the contracting 0arties, the literal /eaning of its sti0ulations shall control-8 $. Gna'e2uacy o- cause 'oes not o- (tse+- (nva+('ates t*e contract That the consideration in the sale &as 7chea08 is not a ground for the infir/it" of the sale5nade.uac" of cause in a contract does not of itself invalidate the contract:. .(+ence as to 'eman' +etters not a'm(ss(on o- 'e t The silence of a/on &ith res0ect to the several de/and letters sent to hi/ &as an ad/ission of his de't, is &ithout su00ort or sanction in la& of evidence!. No c*an)e (n t*e 8ur('(ca+ re+at(ons*(p et,een *ac(en'a o,ners an' Em(+(o Camon a-ter t*e ,r(tten contract o- +ease3 Cont(nue' cu+t(vat(on mere+y (mp+(e' a ne, +ease" '(' not convert (nto e7press trust There &as no change in the =uridical relationshi0 'et&een the hacienda o&ners and >/ilio a/on &hen, after the e40iration of their &ritten contract of lease, he continued cultivating the hacienda during the cro0 "ears 1,6*)63 to 1,90)91- The continuance in the cultivation, &ith the ac.uiescence of the o&ners, did not convert the original relationshi0 into an e40ress trust 'ut /erel" i/0lied a ne& lease over the 0ro0ert", &ith the sa/e ter/s and conditions 0rovided in the original contract, e4ce0t as to the 0eriod of the lease8. Art(c+e 1:!0 o- t*e C(v(+ Co'e 3rticle 19+0 of the ivil ode 0rovides that 7if at the end of the contract the lessee should continue en=o"ing the thing leased for 16 da"s &ith the ac.uiescence of the lessor, and unless a notice to the contrar" '" either 0art" has 0reviousl" 'een given, it is understood that there is an i/0lied ne& lease, not for the 0eriod of the original contract, 'ut for the ti/e esta'lished in articles 19<* and 19<+- The other ter/s of the original contract shall 'e revived-8 #. %('uc(ary re+at(ons*(p an essent(a+ c*aracter(st(c o- trust3 No e7press trust There is nothing in the record that evidence the creation of a fiduciar" relationshi0 'et&een the lessors and the lessee after the e40iration of their &ritten contract of lease- Fiduciar" relationshi0 is an essential characteristic of trust, and no &ritten instru/ent has 'een 0ointed to as esta'lishing an e40ress trust, &hich &riting is re.uired in e40ress trusts over i//ova'les- There is no 'asis for the clai/ that an e40ress trust &as created &hen a/on continued to cultivate the land after the e40iration of the &ritten contract of lease.a+es" /001 ( 110 )
[1#] He(rs o- Escan+ar" et.a+. v. CA [G.R. No. 11#!!!. >cto er /1" 1##!.] #olgado, et- al- v- 3 KF-(- $o- 1*09,0- %cto'er *3, 1,,+-L Third division, (o/ero (J): 3 concur, 1 on leave %acts& !0ouses Fuiller/o $o/'re and 1ictoriana ari)an died &ithout issue in 1,*4 and 1,3<, res0ectivel"$o/'re;s heirs include his ne0he&s and grandne0he&s- 1ictoriana ari)an &as succeeded '" her late 'rother;s son, Fregorio ari)an- The latter &as declared as 1ictoriana;s heir in the estate 0roceedings for $o/'re and his &ife (!0ecial Proceeding +)+*+,)- 3fter Fregorio died in 1,+1, his &ife, Fenerosa Aartine2, and children, (odolfo, ar/en, Leonardo and Fredis/inda ari)an, &ere also ad=udged as heirs '" re0resentation to 1ictoriana;s estate- Leonardo ari)an 0assed a&a", leaving his &ido&, $ell" hua vdade ari)an and /inor son Leonell, as his heirs* 0arcels of land, deno/inated as Lot 1919 and 191+ of the Ca'an@alan adastre &ith an area of *,,360 s.-/s- and 490,,4< s.-/s-, res0ectivel", for/ed 0art of the estate of $o/'re and ari)an- %n 16 !e0te/'er 1,+<, Fregorio ari)an;s heirs e4ecuted the Deed of !ale of (ights, 5nterests and Partici0ation in favor of Pedro >scanlar and Francisco #olgado P 0ortion 0ro)indiviso of Lot 1919 and 191+ of the Ca'an@alan adastre, 0ertaining to the P 0ortion 0ro)indiviso of the late 1ictoriana ari)an in consideration of P*+6,000 to 'e 0aid to the heirs e4ce0t the share of the /inor Leonell ari)an, &hich shall 'e de0osited &ith the Aunici0al Treasurer of #i/a/a"lan, $egros %ccidentalG 0ursuant to the order of the F5 $egros %ccidental (Dranch 15) #ii/a/a"lanG said contract of sale 'eing effective onl" u0on the a00roval of said F5 in #i/a/a"lan- >scanlar and #olgado, the vendees, &ere concurrentl" the lessees of the lots referred to- The" sti0ulated that the 'alance of the 0urchase 0rice (P**6,000-00) shall 'e 0aid on or 'efore Aa" 1,+, in a Deed of 3gree/ent e4ecuted '" the 0arties on the sa/e da" confir/ing and affir/ing the Deed of !ale of 16 !e0te/'er 1,+<G that 0ending co/0lete 0a"/ent thereof, the vendees are not to assign, sell, lease, nor /ortgage the rights, interests and 0artici0ation over said landG and that in the event the vendees fail andBor o/it to 0a" the 'alance of said 0urchase 0rice on 31 Aa" 1,+, and the cancellation of said ontract of !ale is /ade there'", the su/ of P60,000-00 shall 'e dee/ed as da/ages thereof to vendors- >scanlar and #olgado &ere una'le to 0a" the ari)an heirs; individual shares, a/ounting to P66,000-00 each, '" the due date#o&ever, said heirs received at least 1* install/ents fro/ the/ after Aa" 1,+,- (odolfo ari)an &as full" 0aid '" *1 June 1,+,- Fenerosa Aartine2, ar/en ari)an and Fredis/inda ari)an &ere li@e&ise full" co/0ensated for their individual shares, 0er recei0ts given in evidence- The /inor Leonell;s share &as de0osited &ith the (T on + !e0te/'er 1,<*- Deing for/er lessees, >scanlar and #olgado continued in 0ossession of Lots 1919 and 191+- 5nterestingl", the" continued to 0a" rent 'ased on their lease contract%n 10 !e0te/'er 1,<1, >scanlar and #olgado /oved to intervene in the 0ro'ate 0roceedings of $o/'re and ari)an as the 'u"ers of the ari)ans; share in Lots 1919 and 191+- Their /otion for a00roval of the 16 !e0te/'er 1,+< sale 'efore the sa/e court, filed on 10 $ove/'er 1,<1, &as o00osed '" the ari)ans on 6 Januar" 1,<*- %n 19 !e0te/'er 1,<*, the 0ro'ate court a00roved a /otion filed '" the heirs of ari)an and $o/'re to sell their res0ective shares in the estate- %n *1 !e0te/'er 1,<*, the ari)ans, in addition to so/e heirs of Fuiller/o $o/'re, sold their shares in < 0arcels of land including Lots 1919 and 191+ to the s0ouses $e" !arrosa hua and Pa.uito hua for P1,<60,000-00- 3 &ee@ later, the vendor)heirs, including the ari) ans, filed a /otion for a00roval of sale of hereditar" rights, i-e- the sale /ade on *1 !e0te/'er 1,<* to the huasThe ari)ans instituted a case for cancellation of sale against >scanlar and #olgado on 3 $ove/'er 1,<*The" co/0lained of the latter;s failure to 0a" the 'alance of the 0urchase 0rice '" 31 Aa" 1,+, and alleged that the" onl" received a total of P13*,661-00 in cash and goods- >scanlar and #olgado re0lied that the ari) ans, having 'een 0aid, had no right to resell the su'=ect lotsG that the huas &ere 0urchasers in 'ad faithG and
.a+es" /001 ( 111 )
that the court a00roval of the sale to the huas &as su'=ect to their e4isting clai/ over said 0ro0erties- %n *0 30ril 1,<3, >scanlar and #olgado also sold their rights and interests in the su'=ect 0arcels of land (Lots 1919 and 191+) to >d&in Ja"/e for P+36,000-00 and turned over 0ossession of 'oth lots to the latter- The Ja"/es in turn, &ere included in the civil case as fourth)0art" defendants%n 3 Dece/'er 1,<4, the 0ro'ate court a00roved the *1 !e0te/'er 1,<* sale 7&ithout 0re=udice to &hatever rights, clai/s and interests over an" of those 0ro0erties of the estate &hich cannot 'e 0ro0erl" and legall" ventilated and resolved '" the court in the sa/e intestate 0roceedings-8 The certificates of title over the < lots sold '" the heirs of $o/'re and ari)an &ere later issued in the na/e of the s0ouses huaThe trial court allo&ed a third)0art" co/0laint against the s0ouses hua on + Januar" 1,<9 &here >scanlar and #olgado alleged that the ari)ans cons0ired &ith the huas &hen the" e4ecuted the second sale on *1 !e0te/'er 1,<* and that the latter sale is illegal and of no effect- !0ouses hua countered that the" did not @no& of the earlier sale of P 0ortion of the su'=ect lots to >scanlar and #olgado- Doth 0arties clai/ed da/ages- %n *< 30ril 1,<<, the trial court a00roved the huas; /otion to file a fourth)0art" co/0laint against the s0ouses Ja"/e- !0ouses hua alleged that the Ja"/es refused to vacate said lots des0ite re0eated de/andsG and that '" reason of the illegal occu0ation of Lots 1919 and 191+ '" the Ja"/es, the" suffered /ateriall" fro/ uncollected rentalsAean&hile, the (T #i/a/a"lan &hich too@ cogni2ance of !0ecial Proceeding +)+*+, (5ntestate >state of Fuiller/o $o/'re and 1ictoriana ari)an) had rendered its decision on 30 %cto'er 1,<+- The 0ro'ate court concluded that since all the 0ro0erties of the estate &ere dis0osed of or sold '" the declared heirs of 'oth s0ouses, the case is considered ter/inated and the intestate estate of Fuiller/o $o/'re and 1ictoriana ari) an is closed, and thus found it unnecessar" to resolve the Aotion for !u'rogation of /ovants >scanlar and #olgado in vie& of the 0roceeding;s su//ar" nature and the 0ro'ate court;s lac@ of =urisdiction u0on the validit" of sale of rights of the $o/'re and ari)an heirs to third 0arties%n 1< Dece/'er 1,,1, the trial court resolved the case in favor of the cancellation of the 16 !e0te/'er 1,+< sale as it &as not a00roved '" the 0ro'ate court as re.uired '" the contested deed of sale of rights, interests and 0artici0ation and 'ecause the ari)ans &ere not full" 0aid- onse.uentl", the Deed of !ale e4ecuted '" the heirs of $o/'re and ari)an in favor of the s0ouses hua, &hich &as a00roved '" the 0ro'ate court, &as u0held- Thus, the court declared the 16 !e0te/'er 1,+< Deed of !ale, and li@e&ise the Deed of 3gree/ent of the sa/e date, e4ecuted '" the heirs in favor of >scanlar and #olgadoG the *0 30ril 1,<3 Deed of sale, and li@e&ise the sale of leasehold rights, e4ecuted '" >scanlar and #olgado in favor of s0ouses Ja"/eG &ere declared null and void and of no effect- The court also declared the a/ount of P60,000 as forfeited in favor of the heirs 'ut ordering the heirs to return to >scanlar and #olgado the a/ounts the" received after 31 Aa" 1,+, and the a/ount of P36,*1<-+6 de0osited &ith the Treasurer of #i/a/a"lanG declared the *3 !e0te/'er 1,<* Deed of !ale in favor of s0ouses hua as legal, valid and enforcea'le su'=ect to the 'urdens of the estateG ordered #olgado, >scanlar and s0ouses Ja"/e to 0a" in solidu/ the a/ount of P100,000 as /oral da/ages, P30,000 as attorne";s fees to s0ouses huaG ordered s0ouses Ja"/e to 0a" s0ouses hua the su/ of P16+,000 as rentals for the (iceland and P3,*00,000 as rentals for the fish0ond fro/ %cto'er 1,<6 to *4 Jul" 1,<, 0lus rentals fro/ the latter date until the 0ro0ert" is delivered to the s0ouses huaG ordered >scanlar, #olgado and s0ouses Ja"/e to i//ediatel" vacate Lots 1919 and 191+, and to 0a" the costs>scanlar and #olgado raised the case to the ourt of 300eals ( 3)F( 1 3,,+6)- The a00ellate court affir/ed the decision of the trial court on 1+ Fe'ruar" 1,,6 and held that the .uestioned deed of sale of rights, interests and 0artici0ation is a contract to sell 'ecause it shall 'eco/e effective onl" u0on a00roval '" the 0ro'ate court and u0on full 0a"/ent of the 0urchase 0rice- Their /otion for reconsideration &as denied '" the a00ellate court on 3 30ril 1,,6- #ence, the consolidated 0etitions for revie&The !u0re/e ourt granted the 0etitionsG reversed and set aside the decision of the ourt of 300eals under
.a+es" /001 ( 11/ )
revie&G re/anded the case to the (T $egros %ccidental (Dranch 91) for >scanlar and #olgado and the ari) ans or their successors)in)interest to deter/ine e4actl" &hich P 0ortion of Lots 1919 and 191+ &ill 'e o&ned '" each 0art", at the o0tion of >scanlar and #olgadoG and directed the trial court to order the issuance of the corres0onding certificates of title in the na/e of the res0ective 0arties and to resolve the /atter of rental 0a"/ents of the land not delivered to the hua s0ouses su'=ect to the rates s0ecified '" the ourt &ith legal interest fro/ date of de/and1. D(st(nct(on ,(t* contracts o- sa+e an' contract to se++ ,(t* reserve' t(t+e The distinction 'et&een contracts of sale and contracts to sell &ith reserved title has 'een recogni2ed '" the ourt in re0eated decisions, such as that in Lu2on Dro@erage o- 5nc- v- Aariti/e Duilding o-, 5nc-, u0holding the 0o&er of 0ro/isors under contracts to sell in case of failure of the other 0art" to co/0lete 0a"/ent, to e4tra=udiciall" ter/inate the o0eration of the contract, refuse the conve"ance, and retain the su/s of install/ents alread" received &here such rights are e40ressl" 0rovided for/. Contract to se++ vs. Dee' o- con'(t(ona+ sa+e 5n contracts to sell, o&nershi0 is retained '" the seller and is not to 0ass until the full 0a"/ent of the 0rice- !uch 0a"/ent is a 0ositive sus0ensive condition, the failure of &hich is not a 'reach of contract 'ut si/0l" an event that 0revented the o'ligation of the vendor to conve" title fro/ ac.uiring 'inding force- To illustrate, although a deed of conditional sale is deno/inated as such, a'sent a 0roviso that title to the 0ro0ert" sold is reserved in the vendor until full 0a"/ent of the 0urchase 0rice nor a sti0ulation giving the vendor the right to unilaterall" rescind the contract the /o/ent the vendee fails to 0a" &ithin a fi4ed 0eriod, '" its nature, it shall 'e declared a deed of a'solute sale1. ;*e 1$ .eptem er 1#!8 Dee' o- .a+e o- R()*ts" Gnterests an' Bart(c(pat(on a contract o- sa+e The 16 !e0te/'er 1,+< sale of rights, interests and 0artici0ation as to P 0ortion 0ro indiviso of the * su'=ect lots is a contract of sale for the reasons that (1) the sellers did not reserve unto the/selves the o&nershi0 of the 0ro0ert" until full 0a"/ent of the un0aid 'alance of P**6,000-00G (*) there is no sti0ulation giving the sellers the right to unilaterall" rescind the contract the /o/ent the 'u"er fails to 0a" &ithin the fi4ed 0eriod4. De+(very e--ecte' -or t*e 1$ .eptem er 1#!8 'ee' o- sa+e3 ;ra'(t(o rev( manu Prior to the sale, >scanlar &ere in 0ossession of the su'=ect 0ro0ert" as lessees- ?0on sale to the/ of the rights, interests and 0artici0ation as to the P 0ortion 0ro indiviso, the" re/ained in 0ossession, not in conce0t of lessees an"/ore 'ut as o&ners no& through s"/'olic deliver" @no&n as traditio 'revi /anu?nder 3rticle 14++ of the ivil ode, the o&nershi0 of the thing sold is ac.uired '" the vendee u0on actual or constructive deliver" thereof$. NonDpayment o- pr(ce (n a contract o- sa+e3 Reme'(es 5n a contract of sale, the non)0a"/ent of the 0rice is a resolutor" condition &hich e4tinguishes the transaction that, for a ti/e, e4isted and discharges the o'ligations created thereunder- The re/ed" of an un0aid seller in a contract of sale is to see@ either s0ecific 0erfor/ance or rescission:. Contracts" Re2u(s(tes ?nder 3rticle 131< of the ivil ode, the essential re.uisites of a contract are: consent of the contracting 0artiesG o'=ect certain &hich is the su'=ect /atter of the contract and cause of the o'ligation &hich is esta'lished- 3'sent one of the a'ove, no contract can arise- onversel", &here all are 0resent, the result is a valid contract!. 9o'a+(t(es an' restr(ct(ons 'o not a--ect va+('(ty o- t*e contract" mere+y (ts e--ect(v(ty !o/e 0arties introduce various @inds of restrictions or /odalities, the lac@ of &hich &ill not, ho&ever, affect the validit" of the contract- 5n the 0resent case, the Deed of !ale is a valid one, even if it did
.a+es" /001 ( 111 )
not 'ear the sta/0 of a00roval of the 0ro'ate court- The contract;s validit" &as not affected for in the &ords of the sti0ulation, 7this ontract of !ale of rights, interests and 0artici0ations shall 'eco/e effective onl" u0on the a00roval '" the #onora'le ourt-8 %nl" the effectivit" and not the validit" of the contract is affected8. Nee' o- pro ate court=s approva+ e7(sts ,*ere spec(-(c propert(es o- t*e estate are so+' an' not ,*en ('ea+ an' (n'(v(s( +e s*ares o- an *e(r are '(spose' oThe need for a00roval '" the 0ro'ate court e4ists onl" &here s0ecific 0ro0erties of the estate are sold and not &hen onl" ideal and indivisi'le shares of an heir are dis0osed of- 5n Dillena v. Court of Appeals, the ourt declared that it is &ithin the =urisdiction of the 0ro'ate court to a00rove the sale of 0ro0erties of a deceased 0erson '" his 0ros0ective heirs 'efore final ad=udication- The 0ro'ate court;s a00roval is necessar" for the validit" of an" dis0osition of the decedent;s estate- #o&ever, reference to =udicial a00roval cannot adversel" affect the su'stantive rights of the heirs to dis0ose of their ideal share in the co)heirshi0 andBor co) o&nershi0 a/ong the heirs- 5t /ust 'e recalled that during the 0eriod of indivision of a decedent;s estate, each heir, 'eing a co)o&ner, has full o&nershi0 of his 0art and /a" therefore alienate it- Dut the effect of the alienation &ith res0ect to the co)o&ners shall 'e li/ited to the 0ortion &hich /a" 'e allotted to hi/ in the division u0on the ter/ination of the co)o&nershi0#. Here'(tary r()*ts (n an estate va+('+y so+' ,(t*out nee' o- court approva+ #ereditar" rights in an estate can 'e validl" sold &ithout need of court a00roval- 5n the 0resent case, &hen the ari)ans sold their rights, interests and 0artici0ation in Lots 1919 and 191+, the" could legall" sell the sa/e &ithout the a00roval of the 0ro'ate court10. Contractua+ st(pu+at(ons cons('ere' +a, et,een part(es3 E7cept(on& contemporaneous acts opart(es 3s a general rule, the 0ertinent contractual sti0ulation (re.uiring court a00roval) should 'e considered as the la& 'et&een the 0arties- #o&ever, the 0resence of t&o factors /ilitate against this conclusion: (1) the evident intention of the 0arties a00ears to 'e contrar" to the /andator" character of said sti0ulation- :hoever crafted the docu/ent of conve"ance, /ust have 'een of the 'elief that the controversial sti0ulation &as a legal re.uire/ent for the validit" of the sale- Dut the conte/0oraneous and su'se.uent acts of the 0arties reveal that the original o'=ective of the 0arties &as to give effect to the deed of sale even &ithout court a00roval(ecei0t and acce0tance of the nu/erous install/ents on the 'alance of the 0urchase 0rice '" the ari)ans, although the 0eriod to 0a" the 'alance of the 0urchase 0rice e40ired in Aa" 1,+,, and leaving >scanlar and #olgado in 0ossession of Lots 1919 and 191+ reveal their intention to effect the /utual trans/ission of rights and o'ligations- The ari)ans did not see@ =udicial relief until late 1,<* or three "ears laterG (*) the re.uisite a00roval &as virtuall" rendered i/0ossi'le '" the ari)ans 'ecause the" o00osed the /otion for a00roval of the sale filed '" >scanlar and #olgado, and sued the latter for the cancellation of that sale- #aving 0rovided the o'stacle and the =ustification for the sti0ulated a00roval not to 'e granted, the ari)ans should not 'e allo&ed to cancel their first transaction &ith >scanlar and #olgado 'ecause of lac@ of a00roval '" the 0ro'ate court, &hich lac@ is of their o&n /a@ing11. Resc(ss(on o- a sa+e o- rea+ property3 Hen'ee may pay eyon' 'ue 'ate as +on) as t*ere (s no 8u'(c(a+ or notar(a+ 'eman' -or resc(ss(on :ith res0ect to rescission of a sale of real 0ro0ert", 3rticle 16,* of the ivil ode governs- The 0rovides that 7in the sale of i//ova'le 0ro0ert", even though it /a" have 'een sti0ulated that u0on failure to 0a" the 0rice at the ti/e agreed u0on the rescission of the contract shall of right ta@e 0lace, the vendee /a" 0a", even after the e40iration of the 0eriod, a long as no de/and for rescission of the contract has 'een /ade u0on hi/ either =udiciall" or '" a notarial act- 3fter the de/and, the court /a" not grant hi/ a ne& ter/-8 5n the 0resent case, the sellers gave the 'u"ers until Aa" 1,+, to 0a" the 'alance of the 0urchase 0rice- 3fter the latter failed to 0a" install/ents due, the for/er /ade no =udicial de/and for rescission of the contract nor did the" e4ecute an" notarial act de/anding the sa/e, as re.uired under 3rticle 16,*- onse.uentl", the 'u"ers
.a+es" /001 ( 114 )
could la&full" /a@e 0a"/ents even after the Aa" 1,+, deadline, as in fact the" 0aid several install/ents to the sellers &hich the latter acce0ted1/. Acceptance o- payment eyon' 'ue 'ate a ,a(ver to r()*t to resc(n'3 .e++ers estoppe' 3s the sellers, u0on the e40iration of the 0eriod to 0a", /ade no /ove to rescind 'ut continued acce0ting late 0a"/ents, such act cannot 'ut 'e construed as a &aiver of the right to rescind- :hen the sellers, instead of availing of their right to rescind, acce0ted and received dela"ed 0a"/ents of install/ents 'e"ond the 0eriod sti0ulated, and the 'u"ers &ere in arrears, the sellers in effect &aived and are no& esto00ed fro/ e4ercising said right to rescind11. Ev('ence 'oes not prove Escan+ar an' Ho+)a'o ,ere una +e to comp+ete payments Des0ite all her clai/s, Fredis/inda;s testi/on" fails to convince the ourt that the heirs &ere not full" co/0ensated '" >scanlar and #olgado- Fredis/inda ad/its that her /other and her sister signed their individual recei0ts of full 0a"/ent on their o&n and not in her 0resence- The recei0ts 0resented in evidence sho& that Fenerosa Aartine2 &as 0aid P46,9*6-00G ar/en ari)an, P46,9*6-00G (odolfo ari)an, P4+,600-00 on June *1, 1,+,G $ell" hua vdade ari)an, P11,334-00 and the su/ of P34,*1<-00 &as consigned in court for the /inor Leonell ari)an- Fredis/inda insists that she signed a recei0t for full 0a"/ent &ithout receiving the /one" therefor and ad/its that she did not o'=ect to the co/0utation- 5t is incredi'le that a /ature &o/an li@e Fredis/inda ari)an, &ould sign a recei0t for /one" she did not receiveFurther/ore, her clai/s regarding the actual a/ount of the install/ents 0aid to her and her @in are .uite vague and unsu00orted '" co/0etent evidence- !he even ad/its that all the recei0ts &ere ta@en '" >scanlar!u00orting testi/on" fro/ her co)heirs and si'lings ar/en ari)an, (odolfo ari)an and $ell" hua vdade ari)an is also a'sent- Thus, in the a'sence of 0roof on the contrar", the ari)ans &ere indeed 0aid the 'alance of the 0urchase 0rice, des0ite having acce0ted install/ents therefor 'elatedl"- There is thus no ground to rescind the contract of sale 'ecause of non)0a"/ent14. Cont(nue' payment o- +ease (n'(cate ven'ees '(' not take un'ue a'vanta)e o- t*e Car(Dan *e(rs >scanlar and #olgado, in continuing to 0a" the rent for the 0arcels of land the" allegedl" 'ought until 1,<9 in co/0liance &ith their lease contract, onl" 0roves that the" res0ected the contract and did not ta@e undue advantage of the heirs of $o/'re and ari)an &ho 'enefited fro/ the leaseG contrar" to the findings of the lo&er court that such act ad/its that the 0urchase 0rice &as not full" 0aid the ari)ans- 5t should 'e stressed that >scanlar and #olgado 0urchased the hereditar" shares solel" of the ari)ans and not the entire lot1$. .u se2uent sa+e o- 8 parce+s o- +an' to spouses C*ua (s va+(' e7cept to t*e e7tent o- ,*at ,as so+' to Escan+ar an' Ho+)a'o on 1$ .eptem er 1#!8 5t /ust 'e e/0hasi2ed that &hat &as sold to >scanlar and #olgado &as onl" the ari)an;s hereditar" shares in Lots 1919 and 191+ 'eing held 0ro indiviso '" the/ and is thus a valid conve"ance onl" of said ideal shares- !0ecific or designated 0ortions of land &ere not involved- Thus, the su'se.uent sale of < 0arcels of land, including Lots 1919 and 191+, to the s0ouses hua is valid e4ce0t to the e4tent of &hat &as sold to >scanlar and #olgado in the 16 !e0te/'er 1,+< conve"ance1:. Gntestate procee'(n)s -(na+ an' cannot e reDopene'3 Nee' -or t*e .upreme Court to reso+ve case 'e-(n(t(ve+y The 0roceedings surrounding the estate of $o/'re and ari)an having attained finalit" for nearl" a decade since, the sa/e cannot 'e re)o0ened- 5t /ust 'e noted that the 0ro'ate court desisted fro/ a&arding the individual shares of each heir 'ecause all the 0ro0erties 'elonging to the estate had alread" 'een soldThus it is not certain ho& /uch the ari)ans &ere entitled to &ith res0ect to the t&o lots, or if the" &ere even going to 'e a&arded shares in said lots- The 0rotracted 0roceedings &hich have undou'tedl" left the 0ro0ert" under a cloud and the 0arties involved in a state of uncertaint" co/0els the !u0re/e ourt to resolve it definitivel".a+es" /001 ( 11$ )
1!. Car(Dan *e(rs (an' successorD(nD(nterest) ent(t+e' to *a+- o- t*e estate" or *a+- (nterest (n eac* property (n t*e estate The ari)ans are the sole heirs '" re0resentation of 1ictoriana ari)an &ho &as indis0uta'l" entitled to half of the estate- There 'eing no e4act a00ortion/ent of the shares of each heir and no co/0etent 0roof that the heirs received une.ual shares in the dis0osition of the estate, it can 'e assu/ed that the heirs of 1ictoriana ari)an collectivel" are entitled to half of each 0ro0ert" in the estate- Aore 0articularl", the ari) ans are entitled to half of Lots 1919 and 191+ (14,9+6 s.-/s- of Lot 1919 and *30,4+4 s.-/s- of Lot 191+)onse.uentl", >scanlar and #olgado, as their successors)in)interest, o&n said half of the su'=ect lots and ought to deliver the 0ossession of the other half, as &ell as 0a" rents thereon, to the s0ouses hua 'ut onl" if the for/er (>scanlar and #olgado) re/ained in 0ossession thereof18. Rate o- renta+s The rate of rental 0a"/ents to 'e /ade &ere given in evidence '" $e" !arrosa hua in her unre'utted testi/on" on *4 Jul" 1,<,: For the fish0ond (Lot 191+) J Fro/ 1,<* u0 to 1,<9, rental 0a"/ent of P3,000-00 0er hectareG fro/ 1,<9)1,<, (and succeeding "ears), rental 0a"/ent of P10,000-00 0er hectareFor the riceland (Lot 1919) J 16 cavans 0er hectare 0er "earG fro/ 1,<* to 1,<9, P1*6-00 0er cavanG 1,<+) 1,<<G P1+6-00 0er cavanG and 1,<, and succeeding "ears, P*00-00 0er cavan[40] Esp(r(tu vs. Ha+er(o [G.R. No. @D18018. Decem er /:" 1#:1.] >n Danc, Di2on (J): , concur, 1 too@ no 0art %acts& %n 16 !e0te/'er 1,66 1alerio filed an action to .uiet title in the F5 Pangasinan ( ivil ase 13*,3) against >s0eran2a >s0iritu and 3ntonia 30ostol, alleging in his co/0laint that he &as the o&ner of a 0arcel of unregistered land containing an area of a00ro4i/atel" <,6+3 s.uare /eters situated in Darrio %lo, Aunici0alit" of Aangatare/, Pangasinan, having ac.uired the sa/e fro/ the for/er o&ner, Pelagia 1egilia, as evidenced '" a deed of sale e4ecuted '" the latter in his favor on 31 Januar" 1,66G that >s0iritu and 30ostol had 'een asserting adversar" rights over said land and distur'ing his 0ossession thereof- >s0iritu and 30ostol denied the /aterial allegations of the co/0laint and alleged that the" &ere the o&ners of the land in .uestion, having ac.uired it '" inheritance fro/ the late !antiago 30ostol, hus'and and father of a00ellants >s0iritu and 30ostol, res0ectivel"G that said deceased 'ought the 0ro0ert" fro/ Aariano 1egilia on 3 June 1,34, as evidenced '" the deed of sale, &ho, in turn, had ac.uired it fro/ his niece, Pelagia 1egilia, on *9 Aa" 1,3*, '" virtue of the deed of sale- The F5 rendered decision declaring 1alerio to 'e the o&ner of the land and en=oined >s0iritu and 30ostol fro/ /olesting hi/ in the 0eaceful 0ossession thereof- #ence, the a00eal '" >s0iritu and her daughter 30ostolThe !u0re/e ourt affir/ed the decision a00ealed fro/, &ith costs1. Esp(r(tu an' Aposto+ *ave etter r()*t on+y (- ot* t*e(r 'ee's ,ere va+(' The 0resent a00eal de0ends entirel" u0on the validit" of the Deed of !ale allegedl" e4ecuted '" Pelagia 1egilia in favor of Aariano 1egilia, and of the Deed of !ale allegedl" e4ecuted '" the latter in favor of !antiago 30ostol- 5f 'oth are valid, >s0iritu;s and 30ostol;s contention that the" have a 'etter right than that clai/ed '" 1alerio &ould see/ to 'e /eritorious in the light of the facts of the case and the 0rovisions of 3rticle 1644 of the $e& ivil ode, it not 'eing dis0uted that the Deed of !ale in favor of 1alerio &as registered under the 0rovisions of 3ct 3344 on 19 June 1,66, &hile the t&o deeds of >s0iritu and 30ostol &ere si/ilarl" registered 11 da"s 'efore/. Dee's < Documents -a+s(-(e'3 5(tnesses an' prooThe docu/ent dated *9 Aa" 1,3*, 7is fictitious and a falsification,8 and that the 0rivate docu/ent of
.a+es" /001 ( 11: )
3 June 1,34 is li@e&ise null and void, 'eing &ithout the necessar" for/al re.uisites, aside to its 'eing fictitious and the fact that the alleged vendor ac.uired no right &hatsoever in the land- The deter/ination that the docu/ents are falsified is 'ased u0on the testi/on" of Pelagia 1egilia and Aariano 1egilia- Pelagia e/0haticall" denied that she sold the land in .uestion to Aariano 1egilia, and that she a00eared 'efore $otar" Pu'lic Lino 3'ad Pine 'efore &ho/ the H>scritura de o/0raventa Definita;, &as allegedl" ratified- %n the other hand, Aariano denied that he 'ought the said land fro/ Pelagia 1egilia, and that he sold the sa/e to !antiago 30ostol as recited in HPecivo;- 5n giving credence to the testi/on" of the t&o &itnesses, the trial court said that (1) an e4a/ination of first deed reveals the glaring fact that it cannot 'e deter/ined &hose thu/'/ar@ is the one a00earing on said docu/ent for the si/0le reason that it i//ediatel" 0recedes the na/e 3nsel/o 1egilia 'ut it is under the na/e Pelagia 1egilia- %rdinaril", this thu/'/ar@ &ould 'e considered as the thu/'/ar@ of 3nsel/o 1egilia and not of Pelagia 1egiliaG (*) that the one &ho &rote the na/e 3nsel/o 1egilia is the ver" one &ho &rote the na/e Pelagia 1egiliaG (3) that 3nsel/o 1egilia could not have &ritten the na/e 3nsel/o 1egilia in the docu/ent for the si/0le reason that it has 'een certified '" the $otar" Pu'lic that said 3nsel/o 1egilia is 0h"sicall" inca0a'le (inutil 0h"sica/ente)G (4) that there is an a00arent difference of the in@ used in &riting the na/es of Pelagia 1egilia and 3nsel/o 1egilia fro/ the in@ used '" the other 0ersons &ho signed the docu/ent indicating that the na/es Pelagia 1egilia and 3nsel/o 1egilia /ust have 'een &ritten in a /uch later date than the other na/es a00earing in the said docu/ent- %n the other docu/ent, the na/es Aariano 1egilia and Jose D- 3viles /ust have 'een &ritten '" onl" one /an[41] Esto2ue vs. Ba8(mu+a [G.R. No. @D/441#. Fu+y 1$" 1#:8.] >n Danc, (e"es JDL (J): < concur %acts& Lot <0* of the adastral surve" of (osario, covered '" % T (%)*+*0 ($-3-), &as originall" o&ned '" the late s0ouses (osendo Pere2 and Fortunata Dernal, &ho &ere survived '" their children na/el", ris0ina Pere2, Loren2o Pere2 and (icardo Pere2- (icardo Pere2 is also no& dead- %n *< %cto'er 1,61, ris0ina P- 1da- de 3.uitania sold her right and 0artici0ation in Lot <0* consisting of 1B3 0ortion &ith an area of 940 s.uare /eters to Leonora >sto.ue- %n *, %cto'er 1,61, Loren2o Pere2, ris0ina Pere2 and >/ilia PPosadas, &ido& of her deceased hus'and, (icardo Pere2, for herself and in 'ehalf of her /inor children, Fu/ersindo, (a.uel, >/ilio and (icardo, Jr-, e4ecuted a deed of e4tra=udicial settle/ent &herein Loren2o Pere2, >/ilia P- Posadas and her /inor children assigned all their right, interest and 0artici0ation in Lot <0* to ris0ina Pere2- %n 30 Dece/'er 1,6,, ris0ina Pere2 and her children, (osita 3.uitania Del/onte, (e/edios 3.uitania Aisa, Aanuel 3.uitania, !ergio 3.uitania and 3urora 3.uitania sold to >lena Pa=i/ula (and iriaco Pa=i/ula), the re/aining *B3 &estern 0ortion of Lot <0* &ith an area of ,6< s.uare /etersLeonora >sto.ue 'ased her co/0laint for legal rede/0tion on a clai/ that she is a co)o&ner of lot <0*, for having 0urchased 1B3 0ortion thereof, containing an area of 940 s.uare /eters as evidenced '" a deed of sale, &hich &as e4ecuted on *< %cto'er 1,61 '" ris0ina Pere2 de 3.uitania, one of the co)o&ners, in her favor%n the other hand, >lena Pa=i/ula (and iriaco Pa=i/ula), &ho on 30 Dece/'er 1,6, ac.uired the other *B3 0ortion of Lot <0* fro/ ris0ina 3.uitania and her children, clai/ed that >sto.ue 'ought the 1B3 southeastern 0ortion, &hich is definitel" identified and segregated hence there e4isted no co)o&nershi0 at the ti/e and after >sto.ue 'ought the 0ortion, u0on &hich right of legal rede/0tion can 'e e4ercised or ta@en advantage of- The F5 La ?nion ( ivil ase 1,,0), u0on /otion '" Pa=i/ula, dis/issed the co/0laint for legal rede/0tion '" a co)o&ner (retracto legal de co/uneros) on account of failure to state a cause of actionThe ourt held that the deeds of sale sho& that the lot ac.uired '" >sto.ue &as different fro/ that of the Pa=i/ulaG hence the" never 'eca/e co)o&ners, and the alleged right of legal rede/0tion &as not 0ro0er>sto.ue a00ealedThe !u0re/e ourt affir/ed the a00ealed order of dis/issalG &ith cost against >sto.ue-
.a+es" /001 ( 11! )
1.
CoDo,ners*(p 'oes not e7(st3 Art(c+e 1:/0 'oes not app+y The lo&er court held that the deeds of sale sho& that the lot ac.uired '" >sto.ue &as different fro/ that of the Pa=i/ulaG hence the" never 'eca/e co)o&ners, and the alleged right of legal rede/0tion &as not 0ro0er- 3rticle 19*0, &hich 0rovides that 73 co)o&ner of a thing /a" e4ercise the right of rede/0tion in case the shares of all the other co)o&ners or of an" of the/, are sold to a third 0erson- 5f the 0rice of the alienation is grossl" e4cessive the rede/0tioner shall 0a" onl" a reasona'le one- !hould t&o or /ore co)o&ners desire to e4ercise the right of rede/0tion, the" /a" onl" do so in 0ro0ortion to the share the" /a" res0ectivel" have in the thing o&ned in co//on,8 does not a00l"/. > 8ect so+' (s t*e sout*eastern t*(r' port(on" not oneDt*(r' un'(v('e' (nterest (n @ot 80/ The deed of sale to >sto.ue clearl" s0ecifies the o'=ect sold as the southeastern third 0ortion of Lot <0* of the (osario adastre, &ith an area of <40 s.uare /eters, /ore or less- Franting that the seller, ris0ina Pere2 1da- de 3.uitania could not have sold this 0articular 0ortion of the lot o&ned in co//on '" her and her t&o 'rothers, Loren2o and (icardo Pere2, '" no /eans does it follo& that she intended to sell to >sto.ue her 1B3 undivided interest in the lot- There is nothing in the deed of sale to =ustif" such inference- That the seller could have validl" sold her one)third undivided interest to a00ellant is no 0roof that she did choose to sell the sa/e- 3' 0osse ad actu non valet illatio1. Esto2ue=s 'ee' (n(t(a++y (ne--ect(ve ut va+('ate' ,*en Cr(sp(na BereC ac2u(re' ent(re (nterest (n @ot 80/ :hile on the date of the sale to >sto.ue said contract /a" have 'een ineffective, for lac@ of 0o&er in the vendor to sell the s0ecific 0ortion descri'ed in the deed, the transaction &as validated and 'eca/e full" effective &hen the ne4t da" the vendor, ris0ina Pere2, ac.uired the entire interest of her re/aining co) o&ners and there'" 'eca/e the sole o&ner of Lot <0* of the (osario adastral surve" (Llacer vs- AuMo2, 1* Phil- 3*<)- 3rticle 1434 of the ivil ode of the Phili00ines clearl" 0rescri'es that 7:hen a 0erson &ho is not the o&ner of a thing sells or alienates and delivers it, and later the seller or grantor ac.uires title thereto, such title 0asses '" o0eration of la& to the 'u"er or grantee-8 Pursuant to this rule, >sto.ue 'eca/e the actual o&ner of the southeastern third of lot <0* on *, %cto'er 1,614. Esto2ue ac2u(re' no un'(v('e' (nterest (n @ot 80/ as port(ons so+' to Esto2ue an' Ba8(mu+a '(st(nct an' separate >sto.ue never ac.uired an undivided interest in Lot <0*- 3nd &hen eight "ears later ris0ina Pere2 sold to Pa=i/ula the &estern t&o)thirds of the sa/e lot >sto.ue did not ac.uire a right to redee/ the 0ro0ert" thus sold, since their res0ective 0ortions &ere distinct and se0arate[4/] %(+(nvest Cre'(t vs. CA [G.R. No. 8/$08. .eptem er /#" 1#8#.] !econd Division, !ar/iento (J): 3 concur, 1 on leave %acts& The s0ouses Jose !" Dang and 5lu/inada Tan &ere engaged in the sale of gravel 0roduced fro/ crushed roc@s and used for construction 0ur0oses- 5n order to increase their 0roduction, the" engaged the services of Ar- (u'en Aercurio, the 0ro0rietor of Fe/ini Aotor !ales in Lucena it", to loo@ for a roc@ crusher &hich the" could 'u"- Ar- Aercurio referred the s0ouses to the (i2al onsolidated or0oration &hich then had for sale one such /achiner" (Li00/an 0orta'le crushing 0lant, reconditionedG Ja& crusher, 10 4 19, Dou'le roll crusher, 19 4 19G 3 units 0roduct conve"or, +6 #P electric /otor, < 0cs- Drand ne& tiresG hassis 1,9,9, Food running condition)- %scar !" Dang, a 'rother of Jose !" Dang, &ent to ins0ect the /achine at the (i2al onsolidated;s 0lant site- 300arentl" satisfied &ith the /achine, !" Dang signified their intent to 0urchase the sa/e- The" &ere confronted &ith a 0ro'le/, the roc@ crusher carried a cash 0rice tag of P660,000-00- Dent on ac.uiring the /achiner", the s0ouses a00lied for financial assistance fro/ Filinvest redit or0oration- Filinvest agreed to e4tend to the s0ouses financial aid on the follo&ing conditions: that
.a+es" /001 ( 118 )
the /achiner" 'e 0urchased in Filinvest;s na/eG that it 'e leased (&ith o0tion to 0urchase u0on the ter/ination of the lease 0eriod) to the s0ousesG and that the s0ouses e4ecute a real estate /ortgage in favor of Filinvest as securit" for the a/ount advanced '" the latter- 3ccordingl", on 1< Aa" 1,<1, a contract of lease of /achiner" (&ith o0tion to 0urchase) &as entered into '" the 0arties &here'" the s0ouses agreed to lease fro/ the 0etitioner the roc@ crusher for t&o "ears starting fro/ 6 Jul" 1,<1 0a"a'le at P10,000-00 for first 3 /onths, P*3,000-00 for the ne4t 9 /onths, and P*4,<00-00 for the ne4t 16 /onths- The contract li@e&ise sti0ulated that at the end of the t&o)"ear 0eriod, the /achine &ould 'e o&ned '" the s0ouses- Thus, the s0ouses issued in favor of Filinvest a chec@ for P160,660-00, as initial rental (or guarant" de0osit), and *4 0ostdated chec@s corres0onding to the *4 /onthl" rentals- 5n addition, to guarantee their co/0liance &ith the lease contract, the s0ouses e4ecuted a real estate /ortgage over t&o 0arcels of land in favor of Filinvest- The roc@ crusher &as delivered to the s0ouses on , June 1,<1- Three /onths fro/ the date of deliver", or on + !e0te/'er 1,<1, ho&ever, the s0ouses, clai/ing that the" had onl" tested the /achine that /onth, sent a letter)co/0laint to Filinvest, alleging that contrar" to the *0 to 40 tons 0er hour ca0acit" of the /achine as stated in the lease contract, the /achine could onl" 0rocess 6 tons of roc@s and stones 0er hour- The" then de/anded that Filinvest /a@e good the sti0ulation in the lease contract- The" follo&ed that u0 &ith si/ilar &ritten co/0laints to Filinvest, 'ut the latter did not, ho&ever, act on the/- !u'se.uentl", the s0ouses sto00ed 0a"/ent on the re/aining chec@s the" had issued to Filinvest- 3s a conse.uence of the non)0a"/ent '" the s0ouses of the rentals on the roc@ crusher as the" fell due des0ite the re0eated &ritten de/ands, Filinvest e4tra=udiciall" foreclosed the real estate /ortgage- %n 1< 30ril 1,<3, the s0ouses received a !heriff a $otice of 3uction !ale infor/ing the/ that their /ortgaged 0ro0erties &ere going to 'e sold at a 0u'lic auction on *6 Aa" 1,<3, 10:00 a-/-, at the %ffice of the Provincial !heriff in Lucena it" to satisf" their inde'tedness to FilinvestTo th&art the i/0ending auction of their 0ro0erties, the s0ouses filed 'efore the (T Uue2on (Dranch L5R, Lucena it"), on 4 Aa" 1,<3, a co/0laint against Filinvest for the rescission of the contract of lease, annull/ent of the real estate /ortgage, and for in=unction and da/ages, &ith 0ra"er for the issuance of a &rit of 0reli/inar" in=unction- %n *3 Aa" 1,<3, 3 da"s 'efore the scheduled auction sale, the trial court issued a te/0orar" restraining order co//anding the Provincial !heriff of Uue2on, and Filinvest, to refrain and desist fro/ 0roceeding &ith the 0u'lic auction- T&o "ears later, on 4 !e0te/'er 1,<6, the trial court rendered a decision in favor of the s0ouses, /a@ing the in=unction 0er/anent, rescinding the contract of lease of the /achiner" and e.ui0/ent and ordering the s0ouses to return to the Filinvest the /achiner" su'=ect of the lease contract, and Filinvest to return to the s0ouses the su/ of P4+0,,60-00 it received fro/ the latter as guarant" de0osit and rentals &ith legal interest thereon until the a/ount is full" restitutedG annulling the real estate /ortgage constituted over the 0ro0erties of the s0ouses covered '" T Ts T)3*4<0 and T)6++, of the (egistr" of Deeds of Lucena it"G and ordering the Filinvest to 0a" the s0ouses P30,000-00 as attorne";s fees and the costs of the suitDissatisfied &ith the trial court;s decision, Filinvest elevated the case to the ourt of 300eals- %n 1+ Aarch 1,<<, the a00ellate court, finding no error in the a00ealed =udg/ent, affir/ed the sa/e in toto- #ence, the 0etition for revie& on certiorari '" FilinvestThe !u0re/e ourt granted the 0etition, reversed and set aside the 1+ Aarch 1,<< Decision of the ourt of 300eals, and rendered another one dis/issing the co/0laintG &ith costs against the s0ouses1. %(nanc(a+ (nst(tut(on not (mmune -rom recourse o- t*e spouses3 %(+(nvest o,ns crus*er :hile it is acce0ted that Filinvest redit or0oration is a financing institution, it is not, ho&ever, i//une fro/ an" recourse '" the 0rivate res0ondents- $ot&ithstanding the testi/on" of Jose !" Dang that he did not 0urchase the roc@ crusher fro/ Filinvest, the fact that the roc@ crusher &as 0urchased fro/ (i2al onsolidated or0oration in the na/e and &ith the funds of Filinvest 0roves 'e"ond dou't that the o&nershi0 thereof &as effectivel" transferred to it- 5t is 0recisel" this o&nershi0 &hich ena'led Filinvest to enter into the 7 ontract of Lease of Aachiner" and >.ui0/ent8 &ith the s0ouses
.a+es" /001 ( 11# )
/.
Nomenc+ature o- a)reement cannot c*an)e (ts true essence3 sa+e on (nsta++ment The real intention of the 0arties should 0revail- The no/enclature of the agree/ent cannot change its true essence, i-e-, a sale on install/ents- 5t is 'asic that a contract is &hat the la& defines it and the 0arties intend it to 'e, not &hat it is called '" the 0arties- 5t is a00arent that the intent of the 0arties to the su'=ect contract is for the so)called rentals to 'e the install/ent 0a"/ents- ?0on the co/0letion of the 0a"/ents, then the roc@ crusher, su'=ect /atter of the contract, &ould 'eco/e the 0ro0ert" of the s0ouses- This for/ of agree/ent has 'een critici2ed as a lease onl" in na/e1. Bayment (n contract o- +ease ,(t* opt(on to uy are (nsta++ment payments 5n 1da- de Jose v- Darrueco, it &as stated that 7!ellers desirous of /a@ing conditional sales of their goods, 'ut &ho do not &ish o0enl" to /a@e a 'argain in that for/, for one reason or another, have fre.uentl" resorted to the device of /a@ing contracts in the for/ of leases either &ith o0tions to the 'u"er to 0urchase for a s/all consideration at the end of ter/, 0rovided the so)called rent has 'een dul" 0aid, or &ith sti0ulations that if the rent throughout the ter/ is 0aid, title shall thereu0on vest in the lessee- 5t is o'vious that such transactions are leases onl" in na/e- The so)called rent /ust necessaril" 'e regarded as 0a"/ent of the 0rice in install/ents since the due 0a"/ent of the agreed a/ount results, '" the ter/s of 'argain, in the transfer of title to the lessee-8 4. Art(c+e 1484 3rticle 14<4 of the ne& ivil ode, &hich 0rovides for the re/edies of an un0aid seller of /ova'les in install/ent 'asis, states 75n a contract of sale of 0ersonal 0ro0ert" the 0rice of &hich is 0a"a'le in install/ents, the vendor /a" e4ercise an" of the follo&ing re/edies: (1) >4act fulfill/ent of the o'ligation, should the vendee fail to 0a"G (*) ancel the sale, should the vendee;s failure to 0a" cover t&o or /ore install/entsG (3) Foreclose the chattel /ortgage or the thing sold, if one has 'een constituted, should the vendee;s failure to 0a" cover t&o or /ore install/ents- 5n this case, he shall have no further action against the 0urchaser to recover an" un0aid 'alance of the 0rice- 3n" agree/ent to the contrar" shall 'e void-8 $. Reme'(es un'er Art(c+e 1484 a+ternat(ve an' not cumu+at(ve ?nder 3rticle 14<4, the seller of /ova'les in install/ents, in case the 'u"er fails to 0a" t&o or /ore install/ents, /a" elect to 0ursue either of the follo&ing re/edies: (1) e4act fulfill/ent '" the 0urchaser of the o'ligationG (*) cancel the saleG or (3) foreclose the /ortgage on the 0urchased 0ro0ert" if one &as constituted thereon- 5t is no& settled that the said re/edies are alternative and not cu/ulative and therefore, the e4ercise of one 'ars the e4ercise of the others:. Contract o- +ease ,(t* opt(on to uy a 'ev(ce to c(rcumvent Art(c+e 1484 The device J contract of lease &ith o0tion to 'u" J is at ti/es resorted to as a /eans to circu/vent 3rticle 14<4, 0articularl" 0aragra0h (3) thereof- Through the set)u0, the vendor, '" retaining o&nershi0 over the 0ro0ert" in the guise of 'eing the lessor, retains, li@e&ise, the right to re0ossess the sa/e, &ithout going through the 0rocess of foreclosure, in the event the vendee)lessee defaults in the 0a"/ent of the install/entsThere arises therefore no need to constitute a chattel /ortgage over the /ova'le sold- Aore i/0ortant, the vendor, after re0ossessing the 0ro0ert" and, in effect, canceling the contract of sale, gets to @ee0 all the install/ents)cu/)rentals alread" 0aid!. Art(c+e 148$ p+aces contract o- +ease ,(t* opt(on to uy ,(t*(n t*e app+(ca (+(ty o- Art(c+e 1484 3rticle 14<6 of the ne& ivil ode 0rovides that 7The 0receding article shall 'e a00lied to contracts 0ur0orting to 'e leases of 0ersonal 0ro0ert" &ith o0tion to 'u", &hen the lessor has de0rived the lessee of 0ossession or en=o"/ent of the thing-8 8. No reason to *o+' %(+(nvest +(a +e -or -a(+ure o- rock crus*er to pro'uce (n accor'ance ,(t* (ts capac(ty
.a+es" /001 ( 1/0 )
The ourt failed to find an" reason to hold the 0etitioner lia'le for the roc@ crusher;s failure to 0roduce in accordance &ith its descri'ed ca0acit"- 5t &as the s0ouses &ho chose, ins0ected, and tested the su'=ect /achiner"- 5t &as onl" after the" had ins0ected and tested the /achine, and found it to their satisfaction, that the s0ouses sought financial aid fro/ Filinvest- These allegations of the 0etitioner had never 'een re'utted '" the s0ouses, 'ut in fact, even 'een ad/itted in the contract the" signed (7L>!!>>;! !>L> T5%$, 5$!P> T5%$ 3$D 1>(5F5 3T5%$- J The L>!!>> here'" confir/s and ac@no&ledges that he has inde0endentl" ins0ected and verified the leased 0ro0ert" and has selected and received the sa/e fro/ the Dealer of his o&n choosing in good order and e4cellent running and o0erating condition and on the 'asis of such verification, etc- the L>!!>> has agreed to enter into this ontract-8) #. .pouses presume' kno,+e')ea +e on mac*(nery su 8ect o- t*e contract3 .pouses ne)+()ent onsidering that 'et&een the 0arties, it is the s0ouses, '" reason of their 'usiness, &ho are 0resu/ed to 'e /ore @no&ledgea'le, if not e40erts, on the /achiner" su'=ect of the contract, the" should not therefore 'e heard no& to co/0lain of an" alleged deficienc" of the said /achiner"- 5t is their failure or neglect to e4ercise the caution and 0rudence of an e40ert, or, at least, of a 0rudent /an, in the selection, testing, and ins0ection of the roc@ crusher that gave rise to their difficult" and to this conflict- 3 &ell)esta'lished 0rinci0le in la& is that 'et&een t&o 0arties, he, &ho '" his negligence caused the loss, shall 'ear the sa/e10. .pouses prec+u'e' -rom (mput(n) +(a (+(ty on %(+(nvest3 E7press ,a(ver o- ,arrant(es >ven if the s0ouses could not 'e ad=udged as negligent, the" still are 0recluded fro/ i/0uting an" lia'ilit" on Filinvest- %ne of the sti0ulations in the contract the" entered into &ith Filinvest is an e40ress &aiver of &arranties in favor of the latter- D" so signing the agree/ent, the s0ouses a'solved Filinvest fro/ an" lia'ilit" arising fro/ an" defect or deficienc" of the /achiner" the" 'ought- The sti0ulation on the /achine;s 0roduction ca0acit" 'eing 7t"0e&ritten8 and that of the &aiver 'eing 70rinted8 does not /ilitate against the latter;s effectivit"- 3s such, &hether 7a ca0acit" of *0 to 40 tons 0er hour8 is a condition or a descri0tion is of no /o/ent- :hat stands is that the s0ouses had e40ressl" e4e/0td Filinvest fro/ an" &arrant" &hatsoever- Their ontract of Lease %f Aachiner" 3nd >.ui0/ent states 7:3((3$TE J L>!!>> a'solutel" releases the lessor fro/ an" lia'ilit" &hatsoever as to an" and all /atters in relation to &arrant" in accordance &ith the 0rovisions hereinafter sti0ulated-8 11. Common sense '(ctates uyer (nspects pro'uct e-ore purc*as(n) (t3 Caveat emptor o//on sense dictates that a 'u"er ins0ects a 0roduct 'efore 0urchasing it (under the 0rinci0le of caveat e/0tor or 7'u"er 'e&are8) and does not return it for defects discovered later on, 0articularl" if the return of the 0roduct is not covered '" or sti0ulated in a contract or &arrant"1/. Dec+arat(on o- ,a(ver as nonDe--ect(ve ,ou+' (mpa(r o +()at(ons o- contracts Ta@ing into account that due to the nature of its 'usiness and its /ode of 0roviding financial assistance to clients, Filinvest deals in goods over &hich it has no sufficient @no&)ho& or e40ertise, and the selection of a 0articular ite/ is left to the client concerned, the latter, therefore, shoulders the res0onsi'ilit" of 0rotecting hi/self against 0roduct defects- This is &here the &aiver of &arranties is of 0ara/ount i/0ortance5n the 0resent case, to declare the &aiver as non)effective &ould i/0air the o'ligation of contracts- ertainl", the &aiver in .uestion could not 'e considered a /ere sur0lusage in the contract 'et&een the 0artiesAoreover, no&here is it sho&n in the records of the case that the s0ouses has argued for its nullit" or illegalit"11. No am ()u(ty (n t*e +an)ua)e o- t*e ,a(ver 5n an" event, there is no a/'iguit" in the language of the &aiver or the release of &arrant"- There is therefore no roo/ for an" inter0retation as to its effect or a00lica'ilit" vis)a)vis the deficient out0ut of the roc@ crusher- !uffice it to sa" that the s0ouses have validl" e4cused Filinvest fro/ an" &arrant" on the roc@ crusher- #ence, the" should 'ear the loss for an" defect found therein-
.a+es" /001 ( 1/1 )
[41] %(+(p(nas Gnvestment vs. R('a' [G.R. No. @D/!:4$. Novem er /8" 1#:#.] >n Danc, astro (J): , concur %acts& The s0ouses (idad (Lourdes 1- (idad and Luis (idad) 'ought fro/ the !u0re/e !ales Q Develo0/ent or0oration, Fili0inas 5nvest/ent and Finance or0oration (F5F );s assignor)in)interest, a Ford onsul sedan for the total 0rice of P13,3+1-40- The su/ of P1,190 &as 0aid on deliver", the 'alance of P1*,*11-60 'eing 0a"a'le in *4 e.ual /onthl" install/ents, &ith interest at 1*I 0er annu/, secured '" a 0ro/issor" note and a chattel /ortgage on the car e4ecuted on 1, Aarch 1,94- The s0ouses thereafter failed to 0a" 6 consecutive install/ents on a re/aining 'alance of P6,*+4-63- %n 13 %cto'er 1,96, F5F instituted a re0levin suit in the cit" court of Aanila for the sei2ure of the car, or the recover" of the un0aid 'alance in case deliver" could not 'e effected- The car &as then sei2ed '" the sheriff of Aanila and 0ossession thereof &as a&arded to F5F - During the 0rogress of the case, F5F instituted e4tra=udicial foreclosure 0roceedings, as a result of &hich, on ** Dece/'er 1,96, the car &as sold at 0u'lic auction &ith F5F as the highest 'idder and 0urchaserAean&hile, in vie& of the failure of the s0ouses to a00ear at the scheduled hearing of the case, allegedl" due to non)recei0t of the su//ons, the" &ere declared in default- The default =udg/ent ordered the/ to 0a" to F5F the su/ of P600 as attorne";s fees, and P193,96 re0resenting actual e40enses relative to the sei2ure of the car, 0lus costs- Their /otion to set aside the order of default and the decision having 'een denied, the" a00ealed to the ourt of First 5nstance of AanilaThe F5 advanced the o0inion (during 0re)trial) that there &as no need for the 0arties to adduce evidence and that the case could 'e decided on the 'asis of the 0leadings su'/itted '" the 0arties- %n 6 !e0te/'er 1,99, the trial court rendered =udg/ent holding that F5F is entitled to recover the a/out of P193-96 &hich re0resents the e40enses incurred '" F5F in the sei2ure of the car involved- The court also reduced the attorne";s fees granted to the 0laintiff to P300-00 considering that F5F recovered the car &hile still in the lo&er court and that the (idads did not resist the case- The s0ouses (idads a00ealedThe !u0re/e ourt affir/ed the =udg/entG &ithout costs1. Dec(s(on comp+(es ,(t* re2u(rements o- +a, y re-err(n) to preDtr(a+ or'er as part o- (ts conc+us(on The dis0uted decision of the lo&er court co/0lies su'stantiall" &ith the re.uire/ents of la& 'ecause it referred to the 0re)trial order it issued on *+ Aa" 1,99 &hich contains su'stantial findings of facts- For although settled is the doctrine that a decree &ith a'solutel" nothing to su00ort it is a nullit", the la&, ho&ever, /erel" re.uires that a decision state the 7essential ulti/ate facts u0on &hich the court;s conclusion is dra&n-8 There 'eing an e40ress reference to the 0re)trial order, the latter /ust 'e considered and ta@en as for/ing 0art of the decision- The clai/, therefore, that the =udg/ent clearl" transgresses the legal 0rece0t 'ecause it does not state the facts of the case and the la& on &hich it is 'ased and hence, is a nullit", finds no =ustification here/. Art(c+e 1484 app+(es even (- case (s one -or rep+ev(n as (t cu+m(nate' (n t*e -orec+osure o- c*atte+ mort)a)e 5t is true that the 0resent action is one for re0levin, 'ut 'ecause it cul/inated in the foreclosure of the chattel /ortgage and the sale of the car at 0u'lic auction, it is our vie& that the 0rovisions of art- 14<4 of the ivil ode ((ecto La&) /ust govern the resolution of the issue 0resented1. Art(c+e 1484 75n a contract of sale of 0ersonal 0ro0ert" the 0rice of &hich is 0a"a'le in install/ents, the vendor
.a+es" /001 ( 1// )
/a" e4ercise an" of the follo&ing re/edies: (1) >4act fulfill/ent of the o'ligation, should the vendee fail to 0a"G (*) ancel the sale, should the vendee;s failure to 0a" cover t&o or /ore install/entsG (3) Foreclose the chattel /ortgage on the thing sold, if one has 'een constituted, should the vendee;s failure to 0a" cover t&o or /ore install/ents- 5n this case, he shall have no further action against the 0urchaser to recover an" un0aid 'alance of the 0rice- 3n" agree/ent to the contrar" shall 'e void-8 4. .ource o- Art(c+e 14$4 3rticle 1464 &as re0roduced fro/ the old 3rticle 1464)3, &hich in turn &as inserted '" 3ct 41** ((ecto La&)- 7Three re/edies are availa'le to the vendor &ho has sold 0ersonal 0ro0ert" on the install/ent 0lan: (1) #e /a" elect to e4act the fulfill/ent of the o'ligation- (Dachrach Aotor o- vs- Aillan, 91 Phil40,) (*) 5f the vendee shall have failed to 0a" t&o or /ore install/ents, the vendor /a" cancel the sale- (3) 5f the vendee shall have failed to 0a" t&o or /ore install/ents, the vendor /a" foreclose the /ortgage, if one has 'een given on the 0ro0ert"- The 'asis of the first o0tion is the ivil ode- The 'asis of the last t&o o0tions is 3ct 41** (inserted in the !0anish ivil ode as art- 4164)3 and no& re0roduced in arts- 14<6 and 14<6), a/endator" of the ivil ode- 3nd the 0roviso to the right to foreclose is that if the vendor has chosen this re/ed", he shall have no further action against the 0urchaser for the recover" of an" un0aid 'alance o&ing '" the sa/e- 5n other &ords, as &e see it, the 3ct does no /ore than .ualif" the re/ed"-8 $. 9acon'ray N Co. vs. Eusta2u(o3 9ort)a)e +(m(te' to property mort)a)e an' not ent(t+e' to attorneyOs -ees an' cost o- su(t ?nder the a/end/ent, in all 0roceedings for the foreclosure of a chattel /ortgage, e4ecuted on chattels &hich have 'een sold on the install/ent 0lan, the /ortgagee is li/ited to the 0ro0ert" /ortgaged and is not entitled to attorne";s fees and costs of suit:. @uneta 9otor vs. .a+va'or3 Cance++at(on o- attorney=s -ees an' cost o- su(t ,*en c*atte+ mort)a)e ,as -orec+ose' 'ur(n) pro)ress o- act(on to recover unpa(' a+ance o- purc*ase pr(ce 5n a su'se.uent case, &here the vendor in a sale of 0ersonal 0ro0ert" in install/ents, u0on failure of the vendee to 0a" his o'ligations, the vendor co//enced, through court action, to recover the un0aid 'alance of the 0urchase 0rice, 'ut later, during the 0rogress of the action, foreclosed the chattel /ortgage constituted on the 0ro0ert", attorne";s fees and costs of suit &ere denied to the vendor!. @uneta 9otor vs. .a+va'or3 Reme'(es a+ternat(ve not pursue' con8unct(ve+y Paragra0h 3 of 3rticle 14<4, $e& ivil ode, is clear that foreclosure of the chattel /ortgage and recover" of the un0aid 'alance of the 0rice are alternative re/edies and /a" not 'e 0ursued con=unctivel"- 5t a00earing that the vendor had alread" foreclosed the chattel /ortgage constituted on the 0ro0ert" and had ta@en 0ossession thereof, the lo&er court acted rightl" in dis/issing the co/0laint filed for the 0ur0ose of recovering the un0aid 'alance of the 0urchase 0rice- Thus, in that case, '" sei2ing the truc@ and foreclosing the /ortgage at the 0rogress of the suit, the 0laintiff renounced &hatever clai/ it /a" have had under the 0ro/issor" note, and conse.uentl", he has no /ore cause of action against the 0ro/isor and the guarantor3nd he has no /ore right either to the costs and the attorne";s fees that &ould go &ith the suit- This /ight 'e considered a reiteration of the ruling in Aacondra"8. Burpose o- t*e 'octr(ne as to Art(c+e 1484 (1) The doctrine;s ulti/ate and salutar" 0ur0ose is to 0revent the vendor fro/ circu/venting the (ecto La&- ongress sought to 0rotect the 'u"ers on install/ent &ho /ore often than not have 'een victi/i2ed '" sellers &ho, 'efore the enact/ent of this la&, succeeded in un=ustl" enriching the/selves at the e40ense of the 'u"ers, 'ecause aside fro/ recovering the goods sold, u0on default of the 'u"er in the 0a"/ent of t&o install/ents, still retained for the/selves all a/ounts alread" 0aid, and, in addition, &ere ad=udged entitled to da/ages, such as attorne";s fees, e40enses of litigation and costs- ongress could not have intended to i/0air /uch less do a&a" &ith, the right of the seller to /a@e co//ercial use of his credit against the 'u"er, 0rovided the 'u"er is not 'urdened 'e"ond &hat this la& allo&s.a+es" /001 ( 1/1 )
#.
B*(+osop*y o- t*e Recto @a, The e/0hasis and 0recision of the language e/0lo"ed in the decisions alread" adverted to that in no instance &hatsoever /a" the /ortgagee re cover fro/ the /ortgagor an" a/ount or su/ after the foreclosure of the /ortgage, for, as &e understand it, the 0hiloso0h" of the (ecto La& is that the under0rivileged /ortgagors /ust 'e afforded full 0rotection against the ra0acit" of the /ortgagees10. Act(on -or rep+ev(n3 Necessary e7penses orne y mort)a)or 5t is 0art of conventional &isdo/ and the rule of la& that no /an can ta@e the la& into his o&n handsG so it is not to 'e su00osed that the Legislature intended that the /ortgagee should &rest or sei2e the chattel forci'l" fro/ the control and 0ossession of the /ortgagor, even to the e4tent of using violence &hich is un&arranted in la&- !ince the /ortgagee &ould enforce his rights through the /eans and &ithin the li/its delineated '" la&, the ne4t ste0 in such situations 'eing the filing of an action for re0levin to the end that he /a" recover i//ediate 0ossession of the chattel and, thereafter, enforce his rights in accordance &ith the contractual relationshi0 'et&een hi/ and the /ortgagor as e/'odied in their agree/ent, then it logicall" follo&s as a /atter of co//on sense, that the necessar" e40enses incurred in the 0rosecution '" the /ortgagee of the action for re0levin so that he can regain 0ossession of the chattel, should 'e 'orne '" the /ortgagor- (ecovera'le e40enses &ould include e40enses 0ro0erl" incurred in effecting sei2ure of the chattel and reasona'le attorne";s fees in 0rosecuting the action for re0levin- The a/ounts a&arded '" the lo&er court to the /ortgagee are reasona'le11. Note as to potent(a+ matters ,*(c* may e o (ter '(ctum To the e4tent that the 0ronounce/ent in the 0resent case conflicts &ith the ruling announced and follo&ed in the cases discussed, the latter /ust 'e considered 0ro tanto .ualified[44] First !hi"ippine Internationa" )an2 v. CA, .$. SC6A (/00'( [4$] Froi"an v. !an:1rienta" Shippin4 Co., /. SC6A . ' (/0'-( [4:] %u+e v. CA [G.R. No. 11//1/. 9arc* /" 1##8.] Third division, (o/ero (J): 3 concur %acts& Fr- 3ntonio Jaco'e initiall" /ortgage a 10)hectare 0ro0ert" in Tana", (i2al (covered '" T T 3*0+*6) to the (ural Dan@ of 3la/inos, Laguna to secure a loan in the a/ount of P10,000- !aid /ortgage &as later foreclosed and the 0ro0ert" offered for 0u'lic auction u0on his default- 5n June 1,<4, Fregorio Fule, as cor0orate secretar" of the 'an@, as@ed (e/elia Dichoso and %livia Aendo2a to loo@ for a 'u"er &ho /ight 'e interested in the Tana" 0ro0ert"- The t&o found one in the 0erson of $inevetch ru2- 5t so ha00ened that in Januar" of said "ear, Fregorio Fule, also a =e&eler, has sho&n interest in 'u"ing a 0air of e/erald)cut dia/ond earrings o&ned '" Dr- ru2- Dr- ru2 has declined Fule;s offer to 'u" said =e&elr" for P100,000G and a su'se.uent 'id '" Fule to 'u" the/ for ?!T9,000 at T1 to P*6 &hile /a@ing a s@etch of said =e&elr" during an ins0ection at the lo''" of Prudential Dan@ (the latter instance &as declined, since the e4change rate a00reciated to P1, 0er dollar)- !u'se.uentl", ho&ever, negotiations for the 'arter of the =e&elr" and the Tana" 0ro0ert" ensued- 3tt"- Delar/ino &as re.uested '" Dr- ru2 to chec@ the 0ro0ert" and found out that no sale or 'arter &as feasi'le as the 1)"ear 0eriod of rede/0tion has not e40ired- 5n an effort to cut through an" legal i/0edi/ent, Fule e4ecuted on 1, %cto'er 1,<4, a deed of rede/0tion on 'ehalf of Fr- Jaco'e 0ur0ortedl" in
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the a/ount of P16,,<+-+<, and on even date, Fr- Jaco'e sold the 0ro0ert" to Fule for P+6,000-00- The haste &ith &hich the t&o deeds &ere e4ecuted is sho&n '" the fact that the deed of sale &as notari2ed ahead of the deed of rede/0tion- 3s Dr- ru2 had alread" agreed to the 0ro0osed 'arter, Fule &ent to Prudential Dan@ to ta@e a loo@ at the =e&elr"%n *3 %cto'er 1,<4, Fule /et 3tt"- Delar/ino at the latter;s residence to 0re0are the docu/ents of sale- 3tt"Delar/ino accordingl" caused the 0re0aration of a deed of a'solute sale &hile Fule and Dr- ru2 attended to the safe@ee0ing of the =e&elr"- The follo&ing da", Fule, together &ith Dichoso and Aendo2a, arrived at the residence of 3tt"- Delar/ino to finall" e4ecute a deed of a'solute sale- Fule signed the deed and gave 3tt"Delar/ino the a/ount of P13,+00-00 for necessar" e40enses in the transfer of title over the Tana" 0ro0ert"G and issued a certification to the effect that the actual consideration of the sale &as P*00,000-00 and not P<0,000-00 as indicated in the deed of a'solute sale (the dis0arit" 0ur0ortedl" ai/ed at /ini/i2ing the a/ount of the ca0ital gains ta4 that Fule &ould have to shoulder)- !ince the =e&elr" &as a00raised onl" at P190,000-00, the 0arties agreed that the 'alance of P40,000-00 &ould =ust 'e 0aid later in cash- Thereafter, at the 'an@, as 0re)arranged, Dr- ru2 and the cashier o0ened the safet" de0osit 'o4, and delivered the contents thereof to Fule- Fule ins0ected the =e&elr", near the electric light at the 'an@;s lo''", for 10)16 /inutes- Fule e40ressed his satisfaction '" nodding his head &hen as@ed '" Dr- ru2 if the =e&elr" &as o@a"- For services rendered, Fule 0aid the agents, Dichoso and Aendo2a, the a/ount of ?!T300-00 and so/e 0ieces of =e&elr"#e did not, ho&ever, give the/ half of the 0air of earrings in .uestion, &hich he had earlier 0ro/ised- Later in the evening, Fule arrived at the residence of 3tt"- Delar/ino co/0laining that the =e&elr" given hi/ &as fa@e- Dichoso, &ho 'orro&ed the car of Dr- ru2, called u0 3tt"- Delar/ino- 5nfor/ed that Fule &as at the la&"er;s house, &ent there 0osthaste thin@ing that Fule had finall" agreed to give the/ half of the 0air of earrings, onl" to find Fule de/onstrating &ith a tester that the earrings &ere fa@e- Fule then accused Dichoso and Aendo2a of deceiving hi/ &hich the", ho&ever, denied- The" countered that Fule could not have 'een fooled 'ecause he had vast e40erience regarding =e&elr"- Fule nonetheless too@ 'ac@ the ?!T300-00 and =e&elr" he had given the/- Thereafter, the grou0 decided to go to the house of a certain Aacario Di/a"uga, a =e&eler, to have the earrings tested- Di/a"uga, after ta@ing one loo@ at the earrings, i//ediatel" declared the/ counterfeit- 3t around ,:30 0-/-, Fule &ent to one 3tt"- (e"naldo 3lcantara residing at La@eside !u'division in !an Pa'lo it", co/0laining a'out the fa@e =e&elr"- ?0on 'eing advised '" the latter, Fule re0orted the /atter to the 0olice station &here Dichoso and Aendo2a li@e&ise e4ecuted s&orn state/ents%n *9 %cto'er 1,<4, Fule filed a co/0laint 'efore the (T !an Pa'lo it" against 0rivate res0ondents 0ra"ing, a/ong other things, that the contract of sale over the Tana" 0ro0ert" 'e declared null and void on the ground of fraud and deceit- %n 30 %cto'er 1,<4, the lo&er court issued a te/0orar" restraining order directing the (egister of Deeds of (i2al to refrain fro/ acting on the 0ertinent docu/ents involved in the transaction- %n *0 $ove/'er 1,<4, ho&ever, the sa/e court lifted its 0revious order and denied the 0ra"er for a &rit of 0reli/inar" in=unction- 3fter trial, the lo&er court rendered its decision on + Aarch 1,<,G holding that the genuine 0air of earrings used as consideration for the sale &as delivered '" Dr- ru2 to Fule, that the contract &as valid even if the agree/ent 'et&een the 0arties &as 0rinci0all" a 'arter contract, that the agree/ent has 'een consu//ated at the ti/e the 0rinci0al 0arties 0arted &a"s at the 'an@, and that da/ages are due to the defendants- Fro/ the trial court;s adverse decision, 0etitioner elevated the /atter to the ourt of 300eals- %n *0 %cto'er 1,,*, the ourt of 300eals, ho&ever, rendered a decision affir/ing in toto the lo&er court;s decision- #is /otion for reconsideration having 'een denied on 1, %cto'er 1,,3#ence, the 0etition for revie& on certiorariThe !u0re/e ourt affir/ed in toto the decision of the ourt of 300eals, 'ut ordered Dr- ru2 to 0a" Fule the 'alance of the 0urchase 0rice of P40,000 &ithin 10 da"s fro/ the finalit" of the decisionG &ith costs against 0etitioner1. Ne, -actua+ (ssues cannot Court=s rev(e, po,er e e7am(ne' as (t un'u+y transcen's t*e +(m(ts o- t*e .upreme
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The !u0re/e ourt cannot entertain a factual issue, and thus e4a/ine and &eigh ane& the facts regarding the genuineness of the earrings 'artered in e4change for the Tana" 0ro0ert", as this &ould undul" transcend the li/its of the ourt;s revie& 0o&er in 0etitions of this nature &hich are confined /erel" to 0ure .uestions of la&- 3s a general rule, the !u0re/e ourt accords conclusiveness to a lo&er court;s findings of fact unless it is sho&n, inter alia, that: (1) the conclusion is a finding grounded on s0eculations, sur/ises or con=ecturesG (*) the inference is /anifestl" /ista@en, a'surd and i/0ossi'leG (3) &hen there is a grave a'use of discretionG (4) &hen the =udg/ent is 'ased on a /isa00rehension of factsG (6) &hen the findings of fact are conflictingG and (9) &hen the ourt of 300eals, in /a@ing its findings, &ent 'e"ond the issues of the case and the sa/e is contrar" to the ad/ission of 'oth 0arties- To reiterate, the !u0re/e ourt;s =urisdiction is onl" li/ited to revie&ing errors of la& in the a'sence of an" sho&ing that the findings co/0lained of are totall" devoid of su00ort in the record or that the" are glaringl" erroneous as to constitute serious a'use of discretion/. Gmme'(ate ren'(t(on o- 'ec(s(on not anoma+ous $o 0roof has 'een adduced that Judge Jara/illo &as /otivated '" a /alicious or sinister intent in dis0osing of the case &ith dis0atch- $either is there 0roof that so/eone else &rote the decision for hi/- The i//ediate rendition of the decision &as no /ore than Judge Jara/illo;s co/0liance &ith his dut" as a =udge to 7dis0ose of the court;s 'usiness 0ro/0tl" and decide cases &ithin the re.uired 0eriods-8 The t&o)"ear 0eriod &ithin &hich Judge Jara/illo handled the case 0rovided hi/ &ith all the ti/e to stud" it and even &rite do&n its facts as soon as these &ere 0resented to court- 5n fact, the !u0re/e ourt does not see an"thing &rong in the 0ractice of &riting a decision da"s 'efore the scheduled 0ro/ulgation of =udg/ent and leaving the dis0ositive 0ortion for t"0ing at a ti/e close to the date of 0ro/ulgation, 0rovided that no /alice or an" &rongful conduct attends its ado0tion- The 0ractice serves the dual 0ur0oses of safeguarding the confidentialit" of draft decisions and rendering decisions &ith 0ro/0tness- $either can Judge Jara/illo 'e /ade ad/inistrativel" ans&era'le for the i//ediate rendition of the decision- The acts of a =udge &hich 0ertain to his =udicial functions are not su'=ect to disci0linar" 0o&er unless the" are co//itted &ith fraud, dishonest", corru0tion or 'ad faith- #ence, in the a'sence of sufficient 0roof to the contrar", Judge Jara/illo is 0resu/ed to have 0erfor/ed his =o' in accordance &ith la& and should instead 'e co//ended for his close attention to dut"1. Contract per-ecte' y mere consent" (n's part(es to st(pu+at(on an' a++ t*e conse2uences3 Contract o- sa+e per-ecte' upon meet(n) o- m(n's upon t*e t*(n) o 8ect o- t*e contract an' upon pr(ce3 Em o'(ment o- contract (n pu +(c (nstrument on+y -or conven(ence" an' re)(strat(on on+y to a--ect t*(r' part(es3 @ack o- -orma+ re2u(rements 'oes not (nva+('ate t*e contract The ivil ode 0rovides that contracts are 0erfected '" /ere consent- Fro/ this /o/ent, the 0arties are 'ound not onl" to the fulfill/ent of &hat has 'een e40ressl" sti0ulated 'ut also to all the conse.uences &hich, according to their nature, /a" 'e in @ee0ing &ith good faith, usage and la&3 contract of sale is 0erfected at the /o/ent there is a /eeting of the /inds u0on the thing &hich is the o'=ect of the contract and u0on the 0rice- Deing consensual, a contract of sale has the force of la& 'et&een the contracting 0arties and the" are e40ected to a'ide in good faith '" their res0ective contractual co//it/ents3rticle 136< of the ivil ode &hich re.uires the e/'odi/ent of certain contracts in a 0u'lic instru/ent, is onl" for convenience, and registration of the instru/ent onl" adversel" affects third 0artiesFor/al re.uire/ents are, therefore, for the 'enefit of third 0arties- $on)co/0liance there&ith does not adversel" affect the validit" of the contract nor the contractual rights and o'ligations of the 0arties thereunder4. Ho('a +e or annu++a +e contracts ontracts that are voida'le or annulla'le, even though there /a" have 'een no da/age to the contracting 0arties are: (1) those &here one of the 0arties is inca0a'le of giving consent to a contractG and (*) those &here the consent is vitiated '" /ista@e, violence, inti/idation, undue influence or fraud- The contract can 'e voided in accordance &ith la& so as to co/0el the 0arties to restore to each other the things that have 'een the su'=ect of the contract &ith their fruits, and the 0rice &ith interest.a+es" /001 ( 1/: )
$.
%rau'3 No (n'ucement ma'e y t*e pr(vate respon'ents There is fraud &hen, through the insidious &ords or /achinations of one of the contracting 0arties, the other is induced to enter into a contract &hich, &ithout the/, he &ould not have agreed to- 5n the 0resent case, the records, are 'are of an" evidence /anifesting that 0rivate res0ondents e/0lo"ed such insidious &ords or /achinations to entice 0etitioner into entering the contract of 'arter- $either is there an" evidence sho&ing that Dr- ru2 induced 0etitioner to sell his Tana" 0ro0ert" or that she ca=oled hi/ to ta@e the earrings in e4change for said 0ro0ert"- %n the contrar", Dr- ru2 did not initiall" accede to 0etitioner;s 0ro0osal to 'u" the said =e&elr"- (ather, it a00ears that it &as 0etitioner, through his agents, &ho led Dr- ru2 to 'elieve that the Tana" 0ro0ert" &as &orth e4changing for her =e&elr" as he re0resented that its value &as P400,000-00 or /ore than dou'le that of the =e&elr" &hich &as valued onl" at P190,000-00- 5f indeed 0etitioner;s 0ro0ert" &as trul" &orth that /uch, it &as certainl" contrar" to the nature of a 'usiness/an)'an@er li@e hi/ to have 0arted &ith his real estate for half its 0rice- 5n short, it &as in fact 0etitioner &ho resorted to /achinations to convince Dr- ru2 to e4change her =e&elr" for the Tana" 0ro0ert":. 9(stake3 9(stake cause' y man(-est ne)+()ence cannot (nva+('ate a 8u'(c(a+ act To invalidate a contract, /ista@e /ust 7refer to the su'stance of the thing that is the o'=ect of the contract, or to those conditions &hich have 0rinci0all" /oved one or 'oth 0arties to enter into the contract-8 3n e4a/0le of /ista@e as to the o'=ect of the contract is the su'stitution of a s0ecific thing conte/0lated '" the 0arties &ith another- 5n the 0resent case, the 0etitioner failed to 0rove the fact that 0rior to the deliver" of the =e&elr" to hi/, 0rivate res0ondents endeavored to /a@e such su'stitution of an inferior one or one &ith (ussian dia/onds for the =e&elr" he &anted to e4change &ith his 10)hectare land- Further, on account of his &or@ as a 'an@er)=e&eler, it can 'e rightfull" assu/ed that he &as an e40ert on /atters regarding ge/s- #e had the intellectual ca0acit" and the 'usiness acu/en as a 'an@er to ta@e 0recautionar" /easures to avert such a /ista@e, considering the value of 'oth the =e&elr" and his land- 3 /ista@e caused '" /anifest negligence cannot invalidate a =uridical act- 3s the ivil ode 0rovides, 7(t)here is no /ista@e if the 0art" alleging it @ne& the dou't, contingenc" or ris@ affecting the o'=ect of the contract-8 !. Contract o- sa+e a so+ute (- no st(pu+at(on t*at t(t+e to property (s reserve' to se++er unt(+ -u++ payment3 >,ners*(p trans-erre' upon actua+ or construct(ve 'e+(very 3 contract of sale 'eing a'solute in nature, title 0assed to the vendee u0on deliver" of the thing sold since there &as no sti0ulation in the contract that title to the 0ro0ert" sold has 'een reserved in the seller until full 0a"/ent of the 0rice or that the vendor has the right to unilaterall" resolve the contract the /o/ent the 'u"er fails to 0a" &ithin a fi4ed 0eriod- !uch sti0ulations are not /anifest in the contract of sale- 5n the 0resent case, 'oth the trial and a00ellate courts, therefore, correctl" ruled that there &ere no legal 'ases for the nullification of the contract of sale- %&nershi0 over the 0arcel of land and the 0air of e/erald)cut dia/ond earrings had 'een transferred to Dr- ru2 and Fule, res0ectivel", u0on the actual and constructive deliver" thereof8. Contract s(+ent ,*en a+ance (s 'ue an' 'eman'a +e3 nonDpayment 'oes not (nva+('ate t*e contract :hile it is true that the a/ount of P40,000-00 for/ing 0art of the consideration &as still 0a"a'le to Fule, its non0a"/ent '" Dr- ru2 is not a sufficient cause to invalidate the contract or 'ar the transfer of o&nershi0 and 0ossession of the things e4changed considering the fact that their contract is silent as to &hen it 'eco/es due and de/anda'le#. No (nterest 'ue (- (t (s not st(pu+ate' Failure to 0a" the 'alance of the 0urchase 0rice does not result in the 0a"/ent of interest thereon3rticle 16<, of the ivil ode 0rescri'es the 0a"/ent of interest '" the vendee 7for the 0eriod 'et&een the deliver" of the thing and the 0a"/ent of the 0rice8 in cases 7(1) !hould it have 'een so sti0ulatedG (*) !hould the thing sold and delivered 0roduce fruits or inco/eG (3) !hould he 'e in default, fro/ the ti/e of =udicial or
.a+es" /001 ( 1/! )
e4tra=udicial de/and for the 0a"/ent of the 0rice-8 10. Case '(st(n)u(s*e' -rom 'e +a CruC v @e)asp( The 0resent case should 'e distinguished fro/ De la ru2 v- Legas0i, &here the court held that failure to 0a" the consideration after the notari2ation of the contract as 0reviousl" 0ro/ised resulted in the vendee;s lia'ilit" for 0a"/ent of interest- 5n the 0resent, there is no sti0ulation for the 0a"/ent of interest in the contract of sale nor 0roof that the Tana" 0ro0ert" 0roduced fruits or inco/e- $either did 0etitioner de/and 0a"/ent of the 0rice as in fact he filed an action to nullif" the contract of sale11. A,ar' o- mora+ an' e7emp+ary 'ama)es Aoral and e4e/0lar" da/ages /a" 'e a&arded &ithout 0roof of 0ecuniar" loss- 5n a&arding such da/ages, the court shall ta@e into account the circu/stances o'taining in the case and assess da/ages according to its discretion- To &arrant the a&ard of da/ages, it /ust 'e sho&n that the 0erson to &ho/ these are a&arded has sustained in=ur"- #e /ust li@e&ise esta'lish sufficient data u0on &hich the court can 0ro0erl" 'ase its esti/ate of the a/ount of da/ages- !tate/ents of facts should esta'lish such data rather than /ere conclusions or o0inions of &itnesses- Thus, for /oral da/ages to 'e a&arded, it is essential that the clai/ant /ust have satisfactoril" 0roved during the trial the e4istence of the factual 'asis of the da/ages and its causal connection &ith the adverse 0art";s acts- 5f the court has no 0roof or evidence u0on &hich the clai/ for /oral da/ages could 'e 'ased, such inde/nit" could not 'e outrightl" a&arded- The sa/e holds true &ith res0ect to the a&ard of e4e/0lar" da/ages &here it /ust 'e sho&n that the 0art" acted in a &anton, o00ressive or /alevolent /anner1/. Ru+e t*at mora+ 'ama)es cannot e recovere' -rom person ,*o -(+e' a comp+a(nt 'oes not app+y (n present case :hile, as a rule, /oral da/ages cannot 'e recovered fro/ a 0erson &ho has filed a co/0laint against another in good faith 'ecause it is not sound 0olic" to 0lace a 0enalt" on the right to litigate, the sa/e, ho&ever, cannot a00l" in the 0resent case- This is not a situation &here 0etitioner;s co/0laint &as si/0l" found later to 'e 'ased on an erroneous ground &hich, under settled =uris0rudence, &ould not have 'een a reason for a&arding /oral and e4e/0lar" da/ages- 5nstead, the cause of action of the instant case a00ears to have 'een contrived '" 0etitioner hi/self- The factual findings of the courts a .uo to the effect that 0etitioner filed this case 'ecause he &as the victi/ of fraudG that he could not have 'een such a victi/ 'ecause he should have e4a/ined the =e&elr" in .uestion 'efore acce0ting deliver" thereof, considering his e40osure to the 'an@ing and =e&elr" 'usinessesG and that he filed the action for the nullification of the contract of sale &ith unclean hands, all deserve full faith and credit to su00ort the conclusion that 0etitioner &as /otivated /ore '" ill &ill than a sincere atte/0t to 0rotect his rights in co//encing suit against res0ondents- 5t /ust 'e noted that 'efore 0etitioner &as a'le to convince Dr- ru2 to e4change her =e&elr" for the Tana" 0ro0ert", 0etitioner too@ 0ains to thoroughl" e4a/ine said =e&elr", even going to the e4tent of s@etching their a00earance- :h" at the 0recise /o/ent &hen he &as a'out to ta@e 0h"sical 0ossession thereof he failed to e4ert e4tra efforts to chec@ their genuineness des0ite the large consideration involved has never 'een e40lained at all '" 0etitioner- #is acts thus failed to accord &ith &hat an ordinar" 0rudent /an &ould have done in the sa/e situation[4!] Ga(te v. %onac(er [G.R. No. @D118/!. Fu+y 11" 1#:1.] >n Danc, (e"es JDL (J): , concur %acts& 5sa'elo Fonacier &as the o&ner andBor holder of 11 iron lode /ineral clai/s (Da&ahan Frou0), situated in Jose Pangani'an, a/arines $orte- D" a 7Deed of 3ssign/ent8 dated *, !e0te/'er 1,6*, Fonacier constituted and a00ointed Fernando 3- Faite as his true and la&ful attorne")in)fact to enter into a contract &ith an" individual or =uridical 0erson for the e40loration and develo0/ent of the /ining clai/s on a
.a+es" /001 ( 1/8 )
ro"alt" 'asis of not less than P0-60 0er ton of ore that /ight 'e e4tracted therefro/- %n 1, Aarch 1,64, Faite in turn e4ecuted a general assign/ent conve"ing the develo0/ent and e40loitation of said /ining clai/s unto the Lara0 5ron Aines, o&ned solel" '" hi/- Thereafter Faite e/'ar@ed u0on the develo0/ent and e40loitation of the /ining clai/s, o0ening and 0aving roads &ithin and outside their 'oundaries, /a@ing other i/0rove/ents and installing facilities therein for use in the develo0/ent of the /ines, and in ti/e e4tracted therefro/ &hat he clai/ed and esti/ated to 'e a00ro4i/atel" *4,000 /etric tons of iron oreFor so/e reason or another, 5sa'elo Fonacier decided to revo@e the authorit" granted '" hi/ to Faite, and Faite assented thereto su'=ect to certain conditions- 3s a result, a docu/ent entitled 7(evocation of Po&er of 3ttorne" and ontract8 &as e4ecuted on < Dece/'er 1,64, &herein Faite transferred to Fonacier, for the consideration of P*0,000, 0lus 10I of the ro"alties that Fonacier &ould receive fro/ the /ining clai/s, all his rights and interests on all the roads, i/0rove/ents, and facilities in or outside said clai/s, the right to use the 'usiness na/e 7Lara0 5ron Aines8 and its good&ill, and all the records and docu/ents relative to the /ines- 5n the sa/e docu/ent, Faite transferred to Fonacier all his rights and interests over the 7*4,000 tons of iron ore, /ore or less8 that the for/er had alread" e4tracted fro/ the /ineral clai/s, in consideration of the su/ of P+6,000, P10,000, of &hich &as 0aid u0on the signing of the agree/ent, and the 'alance to 'e 0aid out of the first letter of credit covering the first shi0/ent of iron ores or the first a/ount derived fro/ the local sale of iron ore /ade '" the Lara0 Aines Q !/elting o- To secure the 0a"/ent of the 'alance, Fonacier 0ro/ised to e4ecute in favor of Faite a suret" 'ondG delivered on < Dece/'er 1,64 &ith Fonacier as 0rinci0al and the Lara0 Aines and !/elting o- and its stoc@holders as sureties- 3 second 'ond &as e4ecuted '" the 0arties to the first 'ond, on the sa/e da", &ith the Far >astern !uret" and 5nsurance o- as additional suret", 'ut it 0rovided that the lia'ilit" of the suret" co/0an" &ould attach onl" &hen there had 'een an actual sale of iron ore '" the Lara0 Aines Q !/elting o- for an a/ount of not less than P96,000- Doth 'ond &ere attached and /ade integral 0arts of the 7(evocation of Po&er of 3ttorne" and ontract-8 %n the sa/e da" that Fonacier revo@ed the 0o&er of attorne", Fonacier entered into a 7 ontract of Aining %0eration8 &ith Lara0 Aines and !/elting o-, 5nc- to grant it the right to develo0, e40loit, and e40lore the /ining clai/s, together &ith the i/0rove/ents therein and the use of the na/e 7Lara0 5ron Aines8 and its good&ill, in consideration of certain ro"alties- Fonacier li@e&ise transferred, in the sa/e docu/ent, the co/0lete title to the a00ro4i/atel" *4,000 tons of iron ore &hich he ac.uired fro/ Faite, to the Lara0 Aines Q !/elting o-, in consideration for the signing '" the co/0an" and its stoc@holders of the suret" 'onds delivered '" Fonacier to Faite- %n < Dece/'er 1,66, the 'ond &ith res0ect to the Far >astern !uret" and 5nsurance o/0an" e40ired &ith no sale of the a00ro4i/atel" *4,000 tons of iron ore, nor had the 96,000 'alance of the 0rice of said ore 'een 0aid to Faite '" Fonacier and his sureties- :hereu0on, Faite de/anded fro/ Fonacier and his sureties 0a"/ent of said a/ount:hen Fonacier and his sureties failed to 0a" as de/anded '" Faite, the latter filed a co/0laint against the/ in the F5 Aanila ( ivil ase *,310) for the 0a"/ent of the P96,000 'alance of the 0rice of the ore, conse.uential da/ages, and attorne";s fees- Judg/ent &as, accordingl", rendered in favor of 0laintiff Faite ordering defendants to 0a" hi/, =ointl" and severall", P96,000 &ith interest at 9I 0er annu/ fro/ , Dece/'er 1,66 until full 0a"/ent, 0lus costs- Fro/ this =udg/ent, defendants =ointl" a00ealed to the !u0re/e ourt as the clai/s involved aggregate to /ore than P*00,000The !u0re/e ourt affir/ed the decision a00ealed fro/, &ith costs against a00ellants1. .*(pment or +oca+ sa+e o- ore not a con'(t(on prece'ent ut a suspens(ve per(o' or term The shi0/ent or local sale of the iron ore is not a condition 0recedent (or sus0ensive) to the 0a"/ent of the 'alance of P96,000, 'ut &as onl" a sus0ensive 0eriod or ter/- :hat characteri2es a conditional o'ligation is the fact that its efficac" or o'ligator" force (as distinguished fro/ its de/anda'ilit") is su'ordinated to the ha00ening of a future and uncertain eventG so that if the sus0ensive condition does not ta@e 0lace, the 0arties &ould stand as if the conditional o'ligation had never e4isted-
.a+es" /001 ( 1/# )
/.
;*e ,or's o- t*e contract e7press no cont(n)ency (n t*e uyer=s o +()at(on to pay. The contract sti0ulates that 7the 'alance of !i4t")Five Thousand Pesos (P96,000) &ill 'e 0aid out of the first letter of credit covering the first shi0/ent of iron ore - - -8 etc- There is no uncertaint" that the 0a"/ent &ill have to 'e /ade sooner or laterG &hat is undeter/ined is /erel" the e4act date at &hich it &ill 'e /ade- D" the ver" ter/s of the contract, therefore, the e4istence of the o'ligation to 0a" is recogni2edG onl" its /aturit" or de/anda'ilit" is deferred1. Contract o- sa+e commutat(ve an' onerous3 Eac* party assume corre+at(ve o +()at(on an' ant(c(pate per-ormance -rom t*e ot*er 3 contract of sale is nor/all" co//utative and onerous: not onl" does each one of the 0arties assu/e a correlative o'ligation (the seller to deliver and transfer o&nershi0 of the thing sold and the 'u"er to 0a" the 0rice), 'ut each 0art" antici0ates 0erfor/ance '" the other fro/ the ver" start- :hile in a sale the o'ligation of one 0art" can 'e la&full" su'ordinated to an uncertain event, so that the other understands that he assu/es the ris@ of receiving nothing for &hat he gives (as in the case of a sale of ho0es or e40ectations, e/0tio s0ei), it is not in the usual course of 'usiness to do soG hence, the contingent character of the o'ligation /ust clearl" a00ear- 5n the 0resent case, nothing is found in the record to evidence that Faite desired or assu/ed to run the ris@ of losing his rights over the ore &ithout getting 0aid for it, or that Fonacier understood that Faite assu/ed an" such ris@- The fact that a00ellants did 0ut u0 such 'onds indicates that the" ad/itted the definite e4istence of their o'ligation to 0a" the 'alance of P96,0004. ;o cons('er sa+e as a con'(t(on prece'ent +eaves t*e payment at t*e '(scret(on o -t*e 'e tor To su'ordinate the o'ligation to 0a" the re/aining P96,000 to the sale or shi0/ent of the ore as a condition 0recedent, &ould 'e tanta/ount to leaving the 0a"/ent at the discretion of the de'tor, for the sale or shi0/ent could not 'e /ade unless the a00ellants too@ ste0s to sell the ore- 300ellants &ould thus 'e a'le to 0ost0one 0a"/ent indefinitel"- !uch construction of the contract should 'e avoided$. Gnterpretat(on (nc+(ne (n -avor o- t*e 4)reatest rec(proc(ty o- (nterests6 3ssu/ing that there could 'e dou't &hether '" the &ording of the contract the 0arties intended a sus0ensive condition or a sus0ensive 0eriod (dies ad .ue/) for the 0a"/ent of the P96,000, the rules of inter0retation &ould incline the scales in favor of 7the greatest reci0rocit" of interests8, since sale is essentiall" onerous- The ivil ode of the Phili00ines, 3rticle 13+<, 0aragra0h 1, in fine, 0rovides 7if the contract is onerous, the dou't shall 'e settled in favor of the greatest reci0rocit" of interests8 and there can 'e no .uestion that greater reci0rocit" o'tains if the 'u"er;s o'ligation is dee/ed to 'e actuall" e4isting, &ith onl" its /aturit" (due date) 0ost0oned or deferred, than if such o'ligation &ere vie&ed as non)e4istent or not 'inding until the ore &as sold:. .a+e o- ore to %onac(er ,as a sa+e on cre'(t" not an a+eatory contract The sale of the ore to Fonacier &as a sale on credit, and not an aleator" contract &here the transferor, Faite, &ould assu/e the ris@ of not 'eing 0aid at allG and that the 0revious sale or shi0/ent of the ore &as not a sus0ensive condition for the 0a"/ent of the 'alance of the agreed 0rice, 'ut &as intended /erel" to fi4 the future date of the 0a"/ent!. NonDrene,a+ o- on' (mpa(re' t*e secur(t(es )(ven to t*e cre'(tor 300ellants have forfeited the right to co/0el Faite to &ait for the sale of the ore 'efore receiving 0a"/ent of the 'alance of P96,000, 'ecause of their failure to rene& the 'ond of the Far >astern !uret" o/0an" or else re0lace it &ith an e.uivalent guarantee- The e40iration of the 'onding co/0an";s underta@ing on < Dece/'er 1,66 su'stantiall" reduced the securit" of the vendor;s rights as creditor for the un0aid P96,000, a securit" that Faite considered essential and u0on &hich he had insisted &hen he e4ecuted the deed of sale of the ore to Fonacier- The case s.uarel" co/es under 0aragra0hs * and 3 of 3rticle 11,< of the ivil ode of the Phili00ines &hich 0rovides 7(*) :hen he does not furnish to the creditor the guaranties or securities &hich he has 0ro/ised- (3) :hen '" his o&n acts he has i/0aired said guaranties or securities
.a+es" /001 ( 110 )
after their esta'lish/ent, and &hen through fortuitous event the" disa00ear, unless he i//ediatel" gives ne& ones e.uall" satisfactor"-8 300ellants; failure to rene& or e4tend the suret" co/0an";s 'ond u0on its e40iration 0lainl" i/0aired the securities given to the creditor (a00ellee Faite), unless i//ediatel" rene&ed or re0laced8. No ,a(ver (nten'e' y cre'(tor Faite;s acce0tance of the suret" co/0an";s 'ond &ith full @no&ledge that on its face it &ould auto/aticall" e40ire &ithin one "ear &as not a &aiver of its rene&al after the e40iration date- $o such &aiver could have 'een intended, for Faite stood to lose and had nothing to gain there'"G and if there &as an", it could 'e rationall" e40lained onl" if the a00ellants had agreed to sell the ore and 0a" Faite 'efore the suret" co/0an";s 'ond e40ired on < Dece/'er 1,66- Dut in the latter case the defendants) a00ellants; o'ligation to 0a" 'eca/e a'solute after 1 "ear fro/ the transfer of the ore to Fonacier '" virtue of the deed#. No s*ortD'e+(very ma'e y Ga(te This is a case of a sale of a s0ecific /ass of fungi'le goods for a single 0rice or a lu/0 su/, the .uantit" of 7*4,000 tons of iron ore, /ore or less8, stated in the contract, 'eing a /ere esti/ate '" the 0arties of the total tonnage &eight of the /assG and second, that the evidence sho&s that neither of the 0arties had actuall" /easured or &eighed the /ass, so that the" 'oth tried to arrive at the total .uantit" '" /a@ing an esti/ate of the volu/e thereof in cu'ic /eters and then /ulti0l"ing it '" the esti/ated &eight 0er ton of each cu'ic /eter- The sale 'et&een the 0arties is a sale of a s0ecific /ass of iron ore 'ecause no 0rovision &as /ade in their contract for the /easuring or &eighing of the ore sold in order to co/0lete or 0erfect the sale, nor &as the 0rice of P+6,000 agreed u0on '" the 0arties 'ased u0on an" such /easure/ent (see 3rt- 14<0, second 0ar-, $e& ivil ode)- The su'=ect)/atter of the sale is, therefore, a deter/inate o'=ect, the /ass, and not the actual nu/'er of units or tons contained therein, so that all that &as re.uired of the seller Faite &as to deliver in good faith to his 'u"er all of the ore found in the /ass, not&ithstanding that the .uantit" delivered is less than the a/ount esti/ated '" the/ (MoAi"e Machiner, B Supp", Co., Inc. vs. Cor2 1i"fie"d Sa"va4e Co., Inc. / / So. 8 ., app",in4 art. .-$0 of the 9uisiana Civi" Code(. The contract e40ressl" stated the a/ount to 'e *4,000 tons, /ore or less- 300l"ing the tonnage factor 0rovided '" the chief of Aines and Aetallurgical Division of the Dureau of Aines &hich &as 'et&een 3 /etric tons /ini/u/ to 6 /etric tons /a4i/u/, &hich &as near the 3-3 /etric ton tonnage factor ado0ted '" >ngr- Fa/atero (at the re.uest of Cra@o&er, a stoc@holder of Lara0) , and if a00ellant;s &itness is correct in his esti/ate of 9,90, cu'ic /eters of ore, the 0roduct is *1,<0,-+ tons &hich is not far fro/ the *4,000 tons esti/ate- (cf. !ine 6iver 9o44in4 B Improvement Co. vs. D. S., /8' D.S. . 0, -', 9. 3d. //'-(. Thus, there &as no short)deliver" as &ould entitle a00ellants to the 0a"/ent of da/ages, nor could Faite have 'een guilt" of an" fraud in /a@ing an" /isre0resentation to a00ellants as to the total .uantit" of ore in the stoc@0iles of the /ining clai/s in .uestion since Faite;s esti/ate a00ears to 'e su'stantiall" correct[48] Go+'enro' Gnc. vs. CA [G.R. No. 1/:81/. Novem er /4" 1##8.] First Division, Dellosillo: 4 concur %acts& Pio Darreto and !ons, 5nc- o&ned 43 of registered land &ith a total area of 1<,600 s.- /s- located at arlos Palanca !t- Uuia0o, Aanila &hich &ere /ortgaged &ith the ?nited oconut Planters Dan@ (? PD)- 5n 1,<<, the o'ligation of the cor0oration &ith ? PD re/ained un0aid /a@ing foreclosure of the /ortgage i//inent- Foldenrod, 5nc- offered to 'u" the 0ro0ert" fro/ Darreto Q !ons- %n *6 Aa" 1,<<, through its 0resident !on"a F- Aatha", Foldenrod &rote 3nthon" Uue, President of Darreto Q !ons, confir/ing the latter;s acce0tance of for/er;s offer to 'u" the >chague 0ro0ert" (&ith the latter;s a/end/ents that the 0a"/ent of interest should 'e /onthl" instead of se/i)annuall" and the 0eriod to re/ove the trusses, steel fra/es etc- &hich shall 'e 1<0 da"s instead of ,0 da"s onl"), and enclosing the earnest /one" of P1 /illion-
.a+es" /001 ( 111 )
75arreto 1ealty8 A$$itional agree#ent9 :hen the ter/ of e4istence of Darreto Q !ons e40ired, all its assets and lia'ilities including the 0ro0ert" located in Uuia0o, &ere transferred to Pio Darreto (ealt" Develo0/ent, 5nc- Foldenrod;s offer to 'u" the 0ro0ert" resulted in its agree/ent &ith Darreto (ealt" that Foldenrod &ould 0a" the a/ounts of P*4-6 /illion re0resenting the outstanding o'ligations of Darreto (ealt" &ith ? PD on 30 June 1,<<, the deadline set '" the 'an@ for 0a"/entG and P*0 /illion &hich &as the 'alance of the 0urchase 0rice of the 0ro0ert" to 'e 0aid in install/ents &ithin a 3)"ear 0eriod &ith interest at 1<I 0er annu/- Foldenrod did not 0a" ? PD the P*4-6 /illion loan o'ligation of Darreto (ealt" on the deadline set for 0a"/entG instead, it as@ed for an e4tension of 1 /onth or u0 to 31 Jul" 1,<< to settle the o'ligation, &hich the 'an@ granted- %n 31 Jul" 1,<<, Foldenrod re.uested another e4tension of 90 da"s to 0a" the loan- This ti/e the 'an@ de/urred- 5n the /eanti/e Darreto (ealt" &as a'le to cause the reconsolidation of the 43 titles covering the 0ro0ert" su'=ect of the 0urchase into * titles covering Lots 1 and *, &hich &ere issued on 4 3ugust 1,<<- The reconsolidation of the titles &as /ade 0ursuant to the re.uest of Foldenrod in its letter to Darreto and !ons (or Darreto (ealt") on *6 Aa" 1,<<- Darreto (ealt" allegedl" incurred e40enses for the reconsolidation a/ounting to P*60,000- %n *6 3ugust 1,<< Foldenrod sought reconsideration of the denial '" the 'an@ of its re.uest for e4tension of 90 da"s '" as@ing for a shorter 0eriod of 30 da"s- This &as again denied '" ? PD- 71escission of agree#ent !y "ol$enro$9 %n 30 3ugust 1,<< 3licia P- Logarta, President of Logarta (ealt" and Develo0/ent or0oration, &hich acted as agent and 'ro@er of Foldenrod, &rote 3nthon" Uue infor/ing hi/ on 'ehalf of Foldenrod that it could not go through &ith the 0urchase of the 0ro0ert" due to circu/stances 'e"ond its fault, i-e-, the denial '" ? PD of its re.uest for e4tension of ti/e to 0a" the o'ligation- 5n the sa/e letter, Logarta also de/anded the refund of the earnest /one" of P1 /illion &hich Foldenrod gave to Darreto (ealt"- 7Lot : sol$ to Asia-orl$9 %n 31 3ugust 1,<< Darreto (ealt" sold to 3sia&orld Trade enter Phils-, 5nc-, Lot *, one of the * consolidated lots, for the 0rice of P*3 /illion- %n 13 %cto'er 1,<< Darreto (ealt" e4ecuted deed transferring '" &a" of 7dacion8 the 0ro0ert" reconsolidated as Lot 1 in favor of ? PD, &hich in turn sold the 0ro0ert" to 3sia&orld for P*4 /illion- 7De#an$ for rei#!urse#ent of earnest #oney9 %n 1* Dece/'er 1,<< Logarta again &rote Uue de/anding the return of the earnest /one" to Foldenrod- %n + Fe'ruar" 1,<, Foldenrod through its la&"er reiterated its de/and, 'ut the sa/e re/ained un)heeded '" Darreto (ealt"Foldenrod filed a co/0laint &ith the (T Aanila against Darreto (ealt", et-al- for the return of the a/ount of P1 /illion and the 0a"/ent of da/ages including lost interests or 0rofits- 5n their ans&er, Darreto (ealt", et-al- contended that it &as the agree/ent of the 0arties that the earnest /one" of P1 /illion &ould 'e forfeited to ans&er for losses and da/ages that /ight 'e suffered '" Darreto (ealt" in case of failure '" Foldenrod to co/0l" &ith the ter/s of their 0urchase agree/ent- %n 16 Aarch 1,,1 the trial court rendered a decision ordering Darreto (ealt", et-al- =ointl" and severall" to 0a" Foldenrod P1,000,000-00 &ith legal interest fro/ , Fe'ruar" 1,<, until full" 0aid, P60,000-00 re0resenting unreali2ed 0rofits and P10,000-00 as attorne";s fees- The trial court found that there &as no &ritten agree/ent 'et&een the 0arties concerning forfeiture of the earnest /one" if the sale did not 0ush through- 5t further declared that the earnest /one" given '" Foldenrod to Darreto (ealt" &as intended to for/ 0art of the 0urchase 0riceG thus, the refusal of the latter to return the /one" &hen the sale &as not consu//ated violated 3rts- ** and *3 of the ivil ode against un=ust enrich/ent%'viousl" dissatisfied &ith the decision of the trial court, Darreto (ealt" a00ealed to the ourt of 300eals &hich reversed the trial court and ordered the dis/issal of the co/0laintG hence, the 0etitionThe !u0re/e ourt granted the 0etition, reversed and set aside the decision of the ourt of 300eals, and ordered Darreto (ealt", its successors and assigns are ordered to return to Foldenrod, the a/ount of P1,000,000-00 &ith legal interest thereon fro/ 30 3ugust 1,<<, the date of notice of e4tra=udicial rescission, until the a/ount is full" 0aid, &ith costs against Darreto (ealt", et-al1. Burpose o- earnest money ?nder 3rticle 14<* of the ivil ode, &henever earnest /one" is given in a contract of sale, it shall
.a+es" /001 ( 11/ )
'e considered as 0art of the 0urchase 0rice and as 0roof of the 0erfection of the contract- 5n the 0resent case, Foldenrod clearl" stated &ithout an" o'=ection fro/ Darreto (ealt" that the earnest /one" &as intended to for/ 0art of the 0urchase 0rice- 5t &as an advance 0a"/ent &hich /ust 'e deducted fro/ the total 0rice#ence, the 0arties could not have intended that the earnest /one" or advance 0a"/ent &ould 'e forfeited &hen the 'u"er should fail to 0a" the 'alance of the 0rice, es0eciall" in the a'sence of a clear and e40ress agree/ent thereon/. R()*t to resc(n' not a so+ute" must e success-u++y (mpu)ne' (n court 5n University of the Philippines v. $e los Angeles , the right to rescind contracts is not a'solute and is su'=ect to scrutin" and revie& '" the 0ro0er court- 5n A$elfa Properties, .nc. v. Court of Appeals, that rescission of reci0rocal contracts /a" 'e e4tra=udiciall" rescinded unless successfull" i/0ugned in court1. @ack o- oppos(t(on to resc(ss(on an a'm(ss(on o- va+('(ty o- t*e c+a(m o- resc(n'(n) party 5f the 0art" does not o00ose the declaration of rescission of the other 0art", s0ecif"ing the grounds therefor, and it fails to re0l" or 0rotest against it, its silence thereon suggests an ad/ission of the veracit" and validit" of the rescinding 0art";s clai/- 5n the 0resent case, Darreto (ealt" did not inter0ose an" o'=ection to the rescission '" Foldenrod of the agree/ent- Darreto (ealt" even sold Lot * of the su'=ect consolidated lots to another 'u"er, 3sia&orld, one da" after its President 3nthon" Uue received the 'ro@er;s letter rescinding the sale- !u'se.uentl", on 13 %cto'er 1,<< res0ondent Darreto (ealt" also conve"ed o&nershi0 over Lot 1 to ? PD &hich, in turn, sold the sa/e to 3sia&orld4. Resc(ss(on creates o +()at(on to return t*(n)s su 8ect o- contract ,(t* -ru(ts an' (nterests 3rticle 13<6 of the ivil ode 0rovides that rescission creates the o'ligation to return the things &hich &ere the o'=ect of the contract together &ith their fruits and interest- The vendor is therefore o'liged to return the 0urchase 0rice 0aid to hi/ '" the 'u"er if the latter rescinds the sale, or &hen the transaction &as called off and the su'=ect 0ro0ert" had alread" 'een sold to a third 0erson, as &hat o'tained in this case- 5n the 0resent case, '" virtue of the e4tra=udicial rescission of the contract to sell, Darreto (ealt" as the vendor, had the o'ligation to return the earnest /one" of P1,000,000 0lus legal interest fro/ the date it received notice of rescission fro/ Foldenrod, i-e-, 30 3ugust 1,<<, u0 to the date of the return or 0a"/ent[4#] Gu(an) v. CA [G.R. No. 1/$1!/. Fune /:" 1##8.] First Division, Pangani'an (J): 4 concur %acts& Filda and Judie or0u2 &ere /arried civill" on *4 Dece/'er 1,9< in Dacolod it"- The cou0le have 3 children (Junie, #arriet, and Jodie or Jo=i- %n 14 Fe'ruar" 1,<3, the or0u2es, &ith Filda or0u2 as vendee, 'ought a 4*1 s.- /- lot (Lot <, Dloc@ ,, (L( ) Psd)19640,) located in Daranga" Fen- Paulino !antos (Do- 1), Coronadal, !outh ota'ato fro/ Aanuel alle=o &ho signed as vendor through a conditional deed of sale for a total consideration of P14,+36-00- The consideration &as 0a"a'le in install/ent, &ith right of cancellation in favor of vendor should vendee fail to 0a" 3 successive install/ents- %n ** 30ril 1,<<, the or0u2es sold P 0ortion of their lot to s0ouses 3ntonio and Lu2vi/inda Fuiang- The latter have since then occu0ied the P 0ortion and 'uilt their house thereon- The" are thus ad=oining neigh'ors of the or0u2es- %n June 1,<,, Filda or0u2 left for Aanila, &ith the consent of her hus'and, to loo@ for &or@ a'road- ?nfortunatel", she 'eca/e a victi/ of an unscru0ulous illegal recruiter, &as not a'le to go a'road, and sta"ed for so/eti/e in Aanila!o/eti/e in Januar" 1,,0, #arriet or0u2 learned that her father intended to sell the re/aining P 0ortion including their house, of their ho/elot to the Fuiangs- !he &rote a letter to her /other infor/ing her, &ho in turn re0lied that she &as o'=ecting to the sale- #arriet, ho&ever, did not infor/ her father a'out thisG 'ut instead gave the letter to Ars- Lu2vi/inda Fuiang so that Fuiang &ould advise her father- #o&ever, in the a'sence of his &ife Filda or0u2, and on 1 Aarch 1,,0, Judie or0u2 sold the re/aining P 0ortion of the lot and the house thereon to Lu2vi/inda Fuiang thru a docu/ent @no&n as HDeed of Transfer of (ights; (>4h.a+es" /001 ( 111 )
H3;) for a total consideration of P30,000-00 of &hich P6,000-00 &as to 'e 0aid in June 1,,0- Judie or0u2;s children Junie and #arriet signed the docu/ent as &itnesses- %n 6 Aarch 1,,0, o'viousl" to cure &hatever defect in Judie or0u2;s title over the lot transferred, Lu2vi/inda Fuiang as vendee e4ecuted another agree/ent over the lot &ith Aanuela Ji/ene2 alle=o, &ido& of Aanuel alle=o (the original registered o&ner), &ho signed as vendor for a consideration of P,,000-00- Judie or0u2 signed as a &itness to the saleThe ne& sale descri'es the lot sold as Lot <, Dloc@ ,, (L( ) Psd)19640<- 3s a conse.uence of the sale, the Fuiangs s0ent P900-00 for the 0re0aration of the Deed of Transfer of (ightsG P,,000-00 as the a/ount the" 0aid to Ars- Aanuela alle=o, having assu/ed the re/aining o'ligation of the or0u2es to Ars- alle=oG P100-00G a total of P+6,-9* 'asic ta4 and s0ecial educational fund on the lotG P1*+-60 as the total docu/entar" sta/0 ta4 on the various docu/entsG P636-+* for the ca0ital gains ta4G P**-60 as transfer ta4G a standard fee of P1+-00G certification fee of P6-00- These e40enses 0articularl" the ta4es and other e40enses to&ards the transfer of the title to the Fuiangs &ere incurred for the &hole Lot ,, Dloc@ <, (L( ) Psd)19640,%n 11 Aarch 1,,0, Filda or0u2 returned ho/e- !he gathered her children, &ho &ere sta"ing in different households, together and sta"ed at their house- #er hus'and &as no&here to 'e found- !he &as infor/ed '" her children that their father had a &ife alread"- For sta"ing in their house sold '" her hus'and, Filda &as co/0lained against '" the Fuiangs 'efore the Daranga" authorities of Daranga" Feneral Paulino !antos (Do1), Coronadal, !outh ota'ato, for tres0assing (Daranga" ase 3<)- %n 19 Aarch 1,,0, the 0arties thereat signed a docu/ent @no&n as Ha/ica'le settle/ent; re.uiring the or0u2es to leave the house voluntaril" on or 'efore + 30ril 1,,0, &ithout an" charge- Delieving that she had received the shorter end of the 'argain, Filda a00roached the Daranga" a0tain for the annul/ent of the settle/ent- 3nnul/ent not having 'een /ade, Filda sta"ed 0ut in her house and lot- The Fuiangs follo&ed thru the a/ica'le settle/ent &ith a /otion for the e4ecution of the a/ica'le settle/ent, filing the sa/e &ith the AT Coronadal, !outh ota'ato- The 0roceedings KareL still 0ending 'efore the said court, &ith the filing of the instant suit%n *< Aa" 1,,0, Filda or0u2 filed an 3/ended o/0laint against her hus'and Judie or0u2 and the Fuiangs- The said o/0laint sought the declaration of a certain deed of sale, &hich involved the con=ugal 0ro0ert" of 0rivate res0ondent and her hus'and, null and void- %n , !e0te/'er 1,,*, The (T Coronodal, !outh ota'ato (Dranch *6) rendered a decision in favor of Filda or0u2, recogni2ing her la&ful and valid o&nershi0 and 0ossession over the re/aining P 0ortion of the lot, declaring the deed of transfer of rights and the a/ica'le settle/ent null and void, and ordering Filda or0u2 to rei/'urse the Fuiangs the a/ount of P,,000 corres0onding to the 0a"/ent /ade '" the Fuiangs to alle=o for the un0aid 'alance and another P3+,-9* re0resenting P of the a/ount of realt" ta4es 0aid '" the Fuiangs, 'oth &ith legal interests thereon co/0uted fro/ the finalit" of the decisionG &ithout 0ronounce/ent as to costs- Dissatisfied, the Fuiangs filed an a00eal &ith the ourt of 300eals- %n 30 Januar" 1,,9, the a00ellate court affir/ed the decision of the lo&er court- Their /otion for reconsideration &as also denied- 3 0etition for revie& &as 'efore the !u0re/e ourtThe !u0re/e ourt denied the 0etition, and affir/ed the challenged decision and resolutionG &ith costs against the Fuiangs1. Ha+(' contract" e+ements To constitute a valid contract, the ivil ode re.uires the concurrence of the follo&ing ele/ents: (1) cause, (*) o'=ect, and (3) consent- The last ele/ent is indu'ita'l" a'sent in the 0resent case, thus the nullit" of the contract of sale is 0re/ised on the a'sence of 0rivate res0ondent;s consent/. Contract vo(' -or +ack o- consent y t*e ot*er spouse The consent of one s0ouse to the contract of sale of the con=ugal 0ro0ert" &as totall" ine4istent or a'sent- This 'eing the case, said contract 0ro0erl" falls &ithin the a/'it of 3rticle 1*4 of the Fa/il" ode3rticle 1*4 of the Fa/il" ode 0rovides that 7the ad/inistration and en=o"/ent of the con=ugal 0artnershi0 0ro0ert" shall 'elong to 'oth s0ouses =ointl"- 5n case of disagree/ent, the hus'and;s decision shall 0revail,
.a+es" /001 ( 114 )
su'=ect to recourse to the court '" the &ife for 0ro0er re/ed", &hich /ust 'e availed of &ithin five "ears fro/ the date of the contract i/0le/enting such decision8 and that 7in the event that one s0ouse is inca0acitated or other&ise una'le to 0artici0ate in the ad/inistration of the con=ugal 0ro0erties, the other s0ouse /a" assu/e sole 0o&ers of ad/inistration- These 0o&ers do not include the 0o&ers of dis0osition or encu/'rance &hich /ust have the authorit" of the court or the &ritten consent of the other s0ouse- 5n the a'sence of such authorit" or consent, the dis0osition or encu/'rance shall 'e void- #o&ever, the transaction shall 'e construed as a continuing offer on the 0art of the consenting s0ouse and the third 0erson, and /a" 'e 0erfected as a 'inding contract u0on the acce0tance '" the other s0ouse or authori2ation '" the court 'efore the offer is &ithdra&n '" either or 'oth offerors- (196a)8 1. Amen'atory e--ect o- Art(c+e 1/4 %C to Art(c+e 1:: NCC (n re+at(on to Art(c+e 1!1 NCC ?nder 3rticle 199 of the ivil ode, the hus'and cannot generall" alienate or encu/'er an" real 0ro0ert" of the con=ugal 0artnershi0 &ithout the &ife;s consent- The alienation or encu/'rance if so /ade ho&ever is not null and void- 5t is /erel" voida'le- The offended &ife /a" 'ring an action to annul the said alienation or encu/'rance- Thus, the 0rovision of 3rticle 1+3 of the ivil ode of the Phili00ines 0rovides that 7the &ife /a", during the /arriage and &ithin ten "ears fro/ the transaction .uestioned, as@ the courts for the annul/ent of an" contract of the hus'and entered into &ithout her consent, &hen such consent is re.uired, or an" act or contract of the hus'and &hich tends to defraud her or i/0air her interest in the con=ugal 0artnershi0 0ro0ert"- !hould the &ife fail to e4ercise this right, she or her heirs after the dissolution of the /arriage, /a" de/and the value of 0ro0ert" fraudulentl" alienated '" the hus'and-8 The 0articular 0rovision giving the &ife 10 "ears during the /arriage to annul the alienation or encu/'rance &as not carried over to the Fa/il" ode- 5t is thus clear that an" alienation or encu/'rance /ade after 3 3ugust 1,<< &hen the Fa/il" ode too@ effect '" the hus'and of the con=ugal 0artnershi0 0ro0ert" &ithout the consent of the &ife is null and void4. E7ecut(on o- 'ocument 4am(ca +e sett+ement6 'oes not a--ect vo(' c*aracter o- 'ee' o- sa+e The fraud and the inti/idation referred to '" 0etitioners &ere 0er0etrated in the e4ecution of the docu/ent e/'od"ing the a/ica'le settle/ent- Filda or0u2 alleged during trial that 'aranga" authorities /ade her sign said docu/ent through /isre0resentation and coercion- 5n an" event, its e4ecution does not alter the void character of the deed of sale 'et&een the hus'and and the Fuiangs- The fact re/ains that such contract &as entered into &ithout the &ife;s consent$. Ho(' contract cannot e rat(-(e' D" the s0ecific 0rovision of the la& K3rticle 13,0, ivil odeL, the Deed of Transfer of (ights cannot 'e ratified, even '" an Ha/ica'le settle/ent;- The 0artici0ation '" so/e 'aranga" authorities in the Ha/ica'le settle/ent; cannot other&ise validate an invalid act- Aoreover, it cannot 'e denied that the Ha/ica'le settle/ent; entered into '" Filda or0u2 and the Fuiangs is a contract- 5t is a direct offshoot of the Deed of Transfer of (ights- D" e40ress 0rovision of la& (3rticle 14**), such a contract is also void- 3rticle 14** of the ivil ode 0rovides that 7a contract &hich is the direct result of a 0revious illegal contract, is also void and ine4istent-8 :. Am(ca +e sett+ement cannot e cons('ere' a cont(nu(n) o--er $either can the 7a/ica'le settle/ent8 'e considered a continuing offer that &as acce0ted and 0erfected '" the 0arties, follo&ing the last sentence of 3rticle 1*4- The order of the 0ertinent events is clear: after the sale, the Fuiangs filed a co/0laint for tres0assing against Filda or0u2, after &hich the 'aranga" authorities secured an 7a/ica'le settle/ent8 and the Fuiangs filed 'efore the AT a /otion for its e4ecutionThe settle/ent, ho&ever, does not /ention a continuing offer to sell the 0ro0ert" or an acce0tance of such a continuing offer- 5ts tenor &as to the effect that the Fuiangs &ould vacate the 0ro0ert"- D" no stretch of the i/agination, can the ourt inter0ret this docu/ent as the acce0tance /entioned in 3rticle 1*4[$0]
.a+es" /001 ( 11$ )
F. .c*u ack N .ons v. CA [G.R. No. 10$18!. Novem er 11" 1##1.] Third Division, (o/ero (J): 4 concur %acts& 5n 1,<1, (a/on !an Jose (Phili00ine !J 5ndustrial Trading) esta'lished contact &ith Johannes !chu'ac@ Q !ons Phili00ine Trading or0oration through the Phili00ine onsulate Feneral in #a/'urg, :est Fer/an", 'ecause he &anted to 0urchase A3$ 'us s0are 0arts fro/ Fer/an"- !chu'ac@ co//unicated &ith its trading 0artner, Johannes !chu'ac@ and !ohne #andelsgesellschaft /-'-n- Q o- (!chu'ac@ #a/'urg) regarding the s0are 0arts !an Jose &anted to order- %n 19 %cto'er 1,<1, !an Jose su'/itted to !chu'ac@ a list of the 0arts he &anted to 0urchase &ith s0ecific 0art nu/'ers and descri0tion- !chu'ac@ referred the list to !chu'ac@ #a/'urg for .uotations- ?0on recei0t of the .uotations, !chu'ac@ sent to !an Jose a letter dated *6 $ove/'er 1,<1 enclosing its offer on the ite/s listed- %n 4 Dece/'er 1,<1, !an Jose infor/ed !chu'ac@ that he 0referred genuine to re0lace/ent 0arts, and re.uested that he 'e given a 16I discount on all ite/s- %n 1+ Dece/'er 1,<1, !chu'ac@ su'/itted its for/al offer containing the ite/ nu/'er, .uantit", 0art nu/'er, descri0tion, unit 0rice and total to !an Jose- %n *4 Dece/'er 1,<1, !an Jose infor/ed !chu'ac@ of his desire to avail of the 0rices of the 0arts at that ti/e and enclosed its Purchase %rder 0101 dated 14 Dece/'er 1,<1- %n *, Dece/'er 1,<1, !an Jose 0ersonall" su'/itted the .uantities he &anted to Ar- Dieter (eichert, Feneral Aanager of !chu'ac@, at the latter;s residence- The .uantities &ere &ritten in in@ '" !an Jose in the sa/e P% 0reviousl" su'/itted- 3t the 'otto/ of said P%, !an Jose &rote in in@ a'ove his signature: 7$%T>: 3'ove P% &ill include a 3I discount- The a'ove &ill serve as our initial P%-8 !chu'ac@ i//ediatel" ordered the ite/s needed '" !an Jose fro/ !chu'ac@ #a/'urg- !chu'ac@ #a/'urg in turn ordered the ite/s fro/ $DC, a su00lier of A3$ s0are 0arts in :est Fer/an"- %n 4 Januar" 1,<*, !chu'ac@ #a/'urg sent !chu'ac@ a 0rofor/a invoice to 'e used '" !an Jose in a00l"ing for a letter of credit- !aid invoice re.uired that the letter of credit 'e o0ened in favor of !chu'ac@ #a/'urg- !an Jose ac@no&ledged recei0t of the invoice- 3n order confir/ation &as later sent '" !chu'ac@ #a/'urg to !chu'ac@ &hich &as for&arded to and received '" !an Jose on 3 Fe'ruar" 1,<1- %n 19 Fe'ruar" 1,<*, !chu'ac@ re/inded !an Jose to o0en the letter of credit to avoid dela" in shi0/ent and 0a"/ent of interest5n the /eanti/e, !chu'ac@ #a/'urg received invoices fro/ $DC for 0artial deliveries on %rder 1**04- %n 19 Fe'ruar" 1,<4, !chu'ac@ #a/'urg 0aid $DC- %n 1< %cto'er 1,<*, !chu'ac@ again re/inded !an Jose of his order and advised that the case /a" 'e endorsed to its la&"ers- !an Jose re0lied that he did not /a@e an" valid P% and that there &as no definite contract 'et&een hi/ and !chu'ac@- !chu'ac@ sent a re=oinder e40laining that there is a valid P% and suggesting that !an Jose either 0roceed &ith the order and o0en a letter of credit or cancel the order and 0a" the cancellation fee of 30I F-%-D- value, or !chu'ac@ &ill endorse the case to its la&"ers- !chu'ac@ #a/'urg issued a !tate/ent of 3ccount to !chu'ac@ enclosing there&ith De'it $ote charging !chu'ac@ 30I cancellation fee, storage and interest charges in the total a/ount of DA 61,,1+-<1- !aid a/ount &as deducted fro/ !chu'ac@;s account &ith !chu'ac@ #a/'urg- De/and letters sent to !an Jose '" !chu'ac@;s counsel dated ** Aarch 1,<3 and , June 1,<3 &ere to no avail!chu'ac@ filed a co/0laint for recover" of actual or co/0ensator" da/ages, unearned 0rofits, interest, attorne";s fees and costs against !an Jose- 5n its decision dated 13 June 1,<<, the trial court ruled in favor of !chu'ac@ '" ordering !an Jose to 0a" it, a/ong others, actual co/0ensator" da/ages in the a/ount of DA 61,,1+-<1, unearned 0rofits in the a/ount of DA 14,091-0+, or their 0eso e.uivalent- !an Jose elevated his case 'efore the ourt of 300eals- %n 1< Fe'ruar" 1,,*, the a00ellate court reversed the decision of the trial court and dis/issed !chu'ac@;s co/0laint- 5t ruled that there &as no 0erfection of contract since there &as no /eeting of the /inds as to the 0rice 'et&een the last &ee@ of Dece/'er 1,<1 and the first &ee@ of Januar" 1,<*- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt granted the 0etition, and reinstated the decision of the trial court dated 13 June 1,<< &ith /odification1. Ber-ect(on o- a contract o- sa+e
.a+es" /001 ( 11: )
3 7contract of sale is 0erfected at the /o/ent there is a /eeting of /inds u0on the thing &hich is the o'=ect of the contract and u0on the 0rice-8 /. Consent man(-este'& >--er an' acceptance 3rticle 131, of the ivil ode 0rovides that 7consent is /anifested '" the /eeting of the offer and acce0tance u0on the thing and the cause &hich are to constitute the contract- The offer /ust 'e certain and the acce0tance a'solute- 3 .ualified acce0tance constitutes a counter offer-8 5n the 0resent case, the facts indicate that consent on 'oth sides has 'een /anifested- The offer &as /anifested on 1+ Dece/'er 1,<1 &hen !chu'ac@ su'/itted its 0ro0osal containing the ite/ nu/'er, .uantit", 0art nu/'er, descri0tion, the unit 0rice and total to !an Jose- %n *4 Dece/'er 1,<1, !an Jose infor/ed !chu'ac@ of his desire to avail of the 0rices of the 0arts at that ti/e and si/ultaneousl" enclosed its P% 0101 dated 14 Dece/'er 1,<1- 3t this stage, a /eeting of the /inds 'et&een vendor and vendee has occurred, the o'=ect of the contract 'eing the s0are 0arts and the consideration, the 0rice stated in !chu'ac@;s offer dated 1+ Dece/'er 1,<1 and acce0ted '" !an Jose on *4 Dece/'er 1,<11. Juant(ty (s (mmater(a+ to t*e per-ect(on o- a sa+es contract 3lthough the .uantit" to 'e ordered &as /ade deter/inate onl" on *, Dece/'er 1,<1, .uantit" is i//aterial in the 0erfection of a sales contract- :hat is of i/0ortance is the /eeting of the /inds as to the o'=ect and cause, &hich fro/ the facts disclosed, sho& that as of *4 Dece/'er 1,<1, these essential ele/ents had alread" concurred- Thus, 0erfection of the contract too@ 0lace, not on *, Dece/'er 1,<1, 'ut rather on *4 Dece/'er 1,<14. @etter o- cre'(t on+y a mo'e o- payment" not an essent(a+ re2u(rement o- sa+e The o0ening of a letter of credit in favor of a vendor is onl" a /ode of 0a"/ent- 5t is not a/ong the essential re.uire/ents of a contract of sale enu/erated in 3rticle 1306 and 14+4 of the ivil ode, the a'sence of an" of &hich &ill 0revent the 0erfection of the contract fro/ ta@ing 0lace- 5n the 0resent case, &hen !an Jose failed to o0en an irrevoca'le letter of credit &ithout recourse in favor of !chu'ac@ #a/'urg, such did not 0revent the 0erfection of the contract 'et&een the 0arties, for the o0ening of a letter of credit is not to 'e dee/ed a sus0ensive condition- !chu'ac@ did not reserve title to the goods until !an Juan had o0ened a letter of credit- !chu'ac@ did not incor0orate an" 0rovision declaring their contract of sale &ithout effect until after the fulfill/ent of the act of o0ening a letter of credit- To ado0t the ourt of 300eals; ruling that the contract of sale &as de0endent on the o0ening of a letter of credit &ould 'e untena'le fro/ a 0rag/atic 0oint of vie& 'ecause !an Jose &ould not 'e a'le to avail of the old 0rices &hich &ere o0en to hi/ onl" for a li/ited 0eriod of ti/e[$1] .pouses @a'an)a v. CA [G.R. No. @D$$###. Au)ust /4" 1#84.] !econd Division, 3.uino (J): 4 concur, 1 too@ no 0art, 1 reserved vote %acts& le/encia 3- 3seneta, a s0inster &ho retired as division su0erintendent of 0u'lic schools at 96 in 1,91, had a ne0he& na/ed Dernardo !- 3seneta, the child of her sister Floria, and a niece na/ed !alvacion, the daughter of her sister Flora- !he legall" ado0ted Dernardo in 1,91- %n a single date, 9 30ril 1,+4, she ,then +< "ears old) signed , deeds of sale in favor of !alvacion, for various real 0ro0erties- %ne deed of sale concerned the said Paco 0ro0ert" (199 s.- /- lot located at 1*3< !ison !treet Paco Aanila and ad/inistered '" the Ladanga s0ouses, 3gustin and !alvacion) &hich 0ur0ortedl" &as sold to !alvacion for P*9,000- The total 0rice involved in the , deeds of sale and in the 10th sale e4ecuted on < $ove/'er 1,+4 &as P,*,*00The deed of sale for the Paco 0ro0ert" &as signed in the office of the Uue2on it" registr" of deeds5n Aa" 1,+6, Dernardo, as guardian of le/encia, filed an action for reconve"ance of the Paco 0ro0ert", accounting of the rentals and da/ages, &ith the F5 Aanila- le/encia &as not /entall" inco/0etent 'ut she
.a+es" /001 ( 11! )
&as 0laced under guardianshi0 'ecause she &as an eas" 0re" for e40loitation and deceit- le/encia testified and denied having 7received even one centavo8 of the 0rice of P*9,000), /uch less the P,*,000- This testi/on" &as corro'orated '" !oledad L- Aaninang, 9,, a dentist &ith &ho/ le/encia had lived for /ore than 30 "ears in Ca/uning, Uue2on it"- The notar" 0u'lic stated that he did not see !alvacion hand an" /one" to le/encia for the 0ur0orted sale &hen the deed &as signed in the registr" of deeds- The trial court declared void the sale of the Paco 0ro0ert"le/encia died on *1 Aa" 1,++ at the age of <0- !he allegedl" 'e.ueathed her 0ro0erties in a hologra0hic &ill dated *3 $ove/'er 1,+3 to Doctor Aaninang- 5n that &ill she disinherited Dernardo- The &ill &as 0resented for 0ro'ate- The testate case &as consolidated &ith the intestate 0roceeding filed '" Dernardo in the sala of Judge (icardo L- Pronove at Pasig, (i2al- #e dis/issed the testate case- #e a00ointed Dernardo as ad/inistrator in the intestate case%n a00eal, the ourt of 300eals affir/ed the decision of the F5, ordered the register of deeds to issue a ne& title to le/encia, and ordered the s0ouses to 0a" le/encia;s estate P*1,000 as /oral and e4e/0lar" da/ages and attorne";s fees and to render to Dernardo an accounting of the rentals of the 0ro0ert" fro/ 9 30ril 1,+4- The s0ouses a00ealed to the !u0re/e ourtThe !u0re/e ourt affir/ed the =udg/ent of the 300ellate ourt &ith the /odification that the ad=udication for /oral and e4e/0lar" da/ages is discardedG :ithout costs1. >n+y +e)a+ (ssues may e ra(se' (n a rev(e, o- t*e 'ec(s(on o- t*e appe++ate court 3s a rule, onl" i/0ortant legal issues, as conte/0lated in section 4, (ule 46 of the (ules of ourt, /a" 'e raised in a revie& of the 300ellate ourt;s decision- The 0resent case does not fall &ithin an" of the e4ce0tions to that rule ( . MoranEs Comments on the 6u"es of Court, /0 0 3d. p. - $> 6amos vs. !epsi:Co"a )ott"in4 Co., /.$ !hi". %/(. /. Bur'en o- proole/encia herself testified that the 0rice of P*9,000 &as not 0aid to herG and thus, the 'urden of the evidence shifted to the Ladanga s0ouses- The" &ere not a'le to 0rove the 0a"/ent of that a/ount, thus the sale &as fictitious1. Ho(' contract (n t*e a sence o- pr(ce e(n) pa('3 .a+e (ne7(stent an' cannot e cons('ere' consummate' 3 contract of sale is void and 0roduces no effect &hatsoever &here the 0rice, &hich a00ears therein as 0aid, has in fact never 'een 0aid '" the 0urchaser to the vendor (Meneses ?da. de Catindi4 vs. #eirs of Cata"ina 6o5ue, 9:.$ , 8ovemAer .', /0 ', - SC6A 8&, 88> Mapa"o vs. Mapa"o, /.& !hi". 0 0, 08 > S,""aAus, 1ceFo, !ere= B Co. vs. F"ores and )as, -% !hi". 0./(. !uch a sale is ine4istent and cannot 'e considered consu//ated ()orromeo vs. )orromeo, 08 !hi". -&.> Cru=ado vs. )ustos and 3sca"er, &- !hi". / > 7arancian4 vs. 7arancian4, 9:..&$/, Ma, ./, /0'0, .8 SC6A ..0(. 4. No ev('ence o- (ntent(on o- ven'or to 'onate t*e property le/encia did not intended to donate the Paco 0ro0ert" to the Ladangas- #er testi/on" and the notar";s testi/on" destro"ed an" 0resu/0tion that the sale &as fair and regular and for a true consideration- 5t see/ed that the Ladangas a'used le/encia;s confidence and defrauded her of 0ro0erties &ith a /ar@et value of P3,3,66,-*6 &hen she &as alread" +< "ears old$. Bernar'o=s capac(ty to sue Dernardo &as le/encia;s ado0ted son- Aoreover, le/encia, '" testif"ing in this case, tacitl" a00roved the action 'rought in her 'ehalf- Dernardo had the right to institute the instant action-
.a+es" /001 ( 118 )
:.
A,ar' o- mora+ 'ama)es not sanct(one' The /oral da/ages a&arded '" the trial court is not sanctioned '" articles **1+ to ***0 of the ivil ode- le/encia;s o&n signature in the deed 'rought a'out the /ess &ithin &hich she &as entangled-
[$/] @e)ar'a Hermanos vs. .a+'ana [G.R. No. @D/:$!8. Fanuary /8" 1#!4.] First Division, Teehan@ee (J): 6 concur %acts& Feli0e !aldana had entered into t&o &ritten contracts &ith Legarda #er/anos as su'division o&ner, &here'" the latter agreed to sell to hi/ Lots + and < of 'loc@ 6$ of the su'division &ith an area of 160 s./s- each, for the su/ of P1,600-00 0er lot, 0a"a'le over the s0an of 10 "ears divided into 1*0 e.ual /onthl" install/ents of P1,-<3 &ith 10I interest 0er annu/, to co//ence on *9 Aa" 1,4<, date of e4ecution of the contracts- !aldana faithfull" 0aid for < continuous "ears a'out ,6 (of the sti0ulated 1*0) /onthl" install/ents totalling P3,6<*-09 u0 to the /onth of Fe'ruar" 1,69, &hich as 0er Legarda #er/anos; o&n state/ent of account, &as a00lied to !aldana;s account (&ithout distinguishing the t&o lots)- 3fter Fe'ruar" 1,69 u0 to the filing of the co/0laint, !aldana did not /a@e further 0a"/ents- The account sho&s that he o&ed Legarda #er/anos the su/ of P1,311-+* on account of the 'alance of the 0urchase 0rice (0rinci0al) of the t&o lots (in the total su/ of P3,000-00), although he had 0aid /ore than the sti0ulated 0urchase 0rice of P1,600-00 for one lot- 3l/ost 6 "ears later, on * Fe'ruar" 1,91 =ust 'efore the filing of the action, !aldana &rote Legarda #er/anos stating that his desire to 'uild a house on the lots &as 0revented '" their failure to introduce i/0rove/ents on the su'division as 7there is still no road to these lots,8 and re.uesting infor/ation of the a/ount o&ing to u0date his account as 75 intend to continue 0a"ing the 'alance due on said lots-8 Legarda #er/anos re0lied in their letter of 11 Fe'ruar" 1,91 that as !aldana had failed to co/0lete total 0a"/ent of the 1*0 install/ents '" Aa" 1,6< as sti0ulated in the contracts to sell, 70ursuant to the 0rovisions of 'oth contracts all the a/ounts 0aid in accordance &ith the agree/ent together &ith the i/0rove/ents on the 0re/ises have 'een considered as rents 0aid and as 0a"/ent for da/ages suffered '" "our failure,8 and 7!aid cancellation 'eing in order, is here'" confir/ed-8 !aldana filed an action in the F5 Aanila as a co/0laint for deliver" of t&o 0arcels of land in !a/0aloc, Aanila and for e4ecution of the corres0onding deed of conve"ance after 0a"/ent of the 'alance still due on their 0urchase 0rice- !u'se.uentl", Legarda #er/anos 0artitioned the su'division a/ong the 'rothers and sisters, and the t&o lots &ere a/ong those allotted to Jose Legarda, &ho &as included as co)res0ondent as a result thereof in the case- %n 1+ Jul" 1,93, the trial court sustained Legarda #er/anos; cancellation of the contracts and dis/issing !aldana;s co/0laint%n a00eal and on *+ Jul" 1,99, the a00ellate court rendered its =udg/ent reversing the lo&er court;s =udg/ent and ordering Legarda #er/anos to deliver to !aldana 0ossession of one of the t&o lots, at the choice of Legarda #er/anos, and to e4ecute the corres0onding deed of conve"ance to !aldana for the said lot- #ence, the 0resent 0etition for revie&The !u0re/e costs1. ourt affir/ed the a00ealed =udg/ent of the a00ellate courtG &ithout 0ronounce/ent as to
App+(cat(on o- roa' pr(nc(p+es o- e2u(ty an' 8ust(ce y Court o- Appea+s The ourt of 300eals elected to a00l" the 'road 0rinci0les of e.uit" and =ustice- !aldana has 0aid the total su/ of P3,6<*-09 including interests, &hich is even /ore than the value of the t&o lots- 3nd even if the su/ a00lied to the 0rinci0al alone &ere to 'e considered, &hich &as of the total of P1,9<*-*<, the sa/e &as alread" /ore than the value of one lot, &hich is P1,600-00- The onl" 'alance due on 'oth lots &as P1,31+-+*, &hich &as even less than the value of one lot- The ourt considered as full" 0aid '" !aldana at least one of the t&o lots, at the choice of Legarda #er/anos- This is /ore in line &ith good conscience than a total denial
.a+es" /001 ( 11# )
to !aldana of a little to@en of &hat he has 0aid Legarda #er/anos/. 1$#/ Court o- Appea+=s ru+(n) -a(r an' 8ust an' (n accor'ance ,(t* +a, an' e2u(ty3 Art(c+e 1/14 vs.
The a00ellate court;s =udg/ent finding that of the total su/ of P3,6<*-09 (including interests of P1,<<,-+<) alread" 0aid '" !aldana (&hich &as /ore than the value of t&o lots), the su/ a00lied '" 0etitioners to the 0rinci0al alone in the a/ount of P1,9<*-*< &as alread" /ore than the value of one lot of P1,600-00 and hence one of the t&o lots as chosen '" Legarda #er/anos &ould 'e considered as full" 0aid, is fair and =ust and in accordance &ith la& and e.uit"- >ven considering that !aldana as having defaulted after Fe'ruar" 1,69, &hen he sus0ended 0a"/ents after the ,6th install/ent, he had as of the alread" 0aid '" &a" of 0rinci0al (P1,9<*-*<) /ore than the full value of one lot (P1,600-00)- The =udg/ent recogni2ing this fact and ordering the conve"ance to hi/ of one lot of his choice &hile also recogni2ing Legarda #er/anos; right to retain the interests of P1,<<,-+< 0aid '" hi/ for eight "ears on 'oth lots, 'esides the cancellation of the contract for one lot &hich thus reverts to Legarda #er/anos, cannot 'e dee/ed to den" su'stantial =ustice to Legarda #er/anos nor to defeat their rights under the letter and s0irit of the contracts in .uestion- Further, regardless of the 0ro0riet" of a00l"ing 3rticle 16,* thereto, Legarda #er/anos has not 'een denied su'stantial =ustice, for, according to 3rticle 1*34 of the ode: 75f the o'ligation has 'een su'stantiall" 0erfor/ed in good faith, the o'ligor /a" recover as though there had 'een a strict and co/0lete fulfill/ent, less da/ages suffered '" the o'ligee,8 and 7that in the interest of =ustice and e.uit", the decision a00ealed fro/ /a" 'e u0held u0on the authorit" of 3rticle 1*34 of the ode-8 1. Doctr(ne (n F9 ;uason N Co. vs. Fav(er case -u++y app+(ca +e The doctrine in the case of J-A- Tuason Q o- 5nc- vs- Javier is full" a00lica'le to the 0resent case, &ith the 'u"er 'eing granted lesser 'enefits, since no rescission of contract &as therein 0er/itted- There, &here the 'u"er had li@e&ise defaulted in co/0leting the 0a"/ents after having religiousl" 0aid the sti0ulated /onthl" install/ents for al/ost < "ears and not&ithstanding that the seller had dul" notified the 'u"er of the rescission of the contract to sell, the ourt u0held the lo&er court;s =udg/ent den"ing =udicial confir/ation of the rescission and instead granting the 'u"er an additional grace 0eriod of 90 da"s fro/ notice of =udg/ent to 0a" all the install/ent 0a"/ents in arrears together &ith the sti0ulated 10I interest 0er annu/ fro/ the date of default, a0art fro/ reasona'le attorne";s fees and costs, &hich 0a"/ents, the ourt o'served, &ould have the seller 7recover ever"thing due thereto, 0ursuant to its contract &ith the defendant, including such da/ages as the for/er /a" have suffered in conse.uence of the latter;s default-8 [$1] @evy Hermanos vs. Gervac(o [G.R. No. 4:10:. >cto er /!" 1#1#.] >n Danc, Aoran (J): 6 concur %acts& %n 16 Aarch 1,3+, Lev" #er/anos, 5nc-, sold to La2aro Dlas Fervacio, a Pac@ard car- Fervacio, after /a@ing the initial 0a"/ent, e4ecuted a 0ro/issor" note for the 'alance of P*,400, 0a"a'le on or 'efore 16 June 1,3+, &ith interest at 1*I 0er annu/, and to secure the 0a"/ent of the note, he /ortgaged the car to Lev" #er/anos- Fervacio failed to 0a" the note at its /aturit"G &herefore, Lev" #er/anos foreclosed the /ortgage and the car &as sold at 0u'lic auction, at &hich 0laintiff &as the highest 'idder for P<00%n *4 Fe'ruar" 1,3<, Lev" #er/anos filed a co/0laint in the F5 Aanila for the collection of the 'alance of P1,900 and interest- Fervacio ad/itted the allegations of the co/0laint, and &ith this ad/ission, the 0arties su'/itted the case for decision- The lo&er court a00lied the 0rovisions of 3ct 41**, inserted as articles 1464) 3 of the ivil ode, and rendered =udg/ent in favor of Fervacio- Lev" #er/anos a00ealedThe !u0re/e ourt reversed the =udg/ent, and Fervacio is here'" sentenced to 0a" Lev" #er/anos the su/ of P1,900 interest at the rate of 1*I 0er annu/ fro/ 16 June 1,3+, and the su/ of P6*-0< &ith interest at the
.a+es" /001 ( 140 )
rate of 9I fro/ the date of the filing of the co/0laint, &ith costs in 'oth instances against Fervacio1. Art(c+e 14$4DA o- C(v(+ Co'e 3rticle 1464)3 of the ivil ode 0rovides that 75n a contract for the sale of 0ersonal 0ro0ert" 0a"a'le in install/ents, failure to 0a" t&o or /ore install/ents shall confer u0on the vendor the right to cancel the sale or foreclose the /ortgage if one has 'een given on the 0ro0ert", &ithout rei/'urse/ent to the 0urchaser of the install/ents alread" 0aid, if there 'e an agree/ent to this effect- #o&ever, if the vendor has chosen to foreclose the /ortgage he shall have no further action agaist the 0urchaser for the recover" of an" un0aid 'alance o&ing '" the sa/e, and an" agree/ent to the contrar" shall 'e null and void-8 /. App+(cat(on o- Art(c+e 14$4& Contract o- sa+e o- persona+ property (n (nsta++ment ,*ere t*ere (s -a(+ure to pay / or more (nsta++ments 5n /acon$ray ( Co. vs. De 'antos (33 %F *1+0), it &as held that 7in order to a00l" the 0rovisions of article 1464)3 of the ivil ode it /ust a00ear that there &as a contract for the sale of 0ersonal 0ro0ert" 0a"a'le in install/ents and that there has 'een a failure to 0a" t&o or /ore install/ents-8 The contract, in the 0resent case, &hile a sale of 0ersonal 0ro0ert", is not, ho&ever, one on install/ents, 'ut on straight ter/, in &hich the 'alance, after 0a"/ent of the initial su/, should 'e 0aid in its totalit" at the ti/e s0ecified in the 0ro/issor" note- The transaction is not, therefore, the one conte/0lated in 3ct 41** and accordingl" the /ortgagee is not 'ound '" the 0rohi'ition therein contained as to its right to the recover" of the un0aid 'alance1. Art(c+e 14$43 Br(ce paya +e (n severa+ (nsta++ments3 poss( +e m(sca+cu+at(on o- a (+(ty to pay The la& is ai/ed at those sales &here the 0rice is 0a"a'le in several install/ents, for, generall", it is in these cases that 0artial 0a"/ents consist in relativel" s/all a/ounts, constituting thus a great te/0tation for i/0rovident 0urchasers to 'u" 'e"ond their /eans- There is no such te/0tation &here the 0rice is to 'e 0aid in cash, or 0artl" in cash and 0artl" in one ter/, for, in the latter case, the 0artial 0a"/ents are not so s/all as to 0lace 0urchasers off their guard and delude the/ to a /iscalculation of their a'ilit" to 0a"4. D(--erence e7(sts (n actua+ pract(ce et,een pay(n) pr(ce (n / (nsta++ments an' pay(n) part+y (n cas* an' part+y (n an (nsta++ment Theoreticall", there is no difference 'et&een 0a"ing the 0rice in t&o install/ents and 0a"ing the sa/e 0artl" in cash and 0artl" in one install/ent, in so far as the si2e of each 0artial 0a"/ent is concernedG 'ut in actual 0ractice the difference e4ists, for, according to the regular course of 'usiness, in contracts 0roviding for 0a"/ent of the 0rice in t&o install/ents, there is generall" a 0rovision for initial 0a"/ent$. @a, c+ear" 'oes not re2u(re construct(on The considerations /ade in the discussion of the decision in the current case are i//aterial as the language of the la& 'eing so clear as to re.uire no construction at all:. Art(c+e 14$4 'oes not app+y3 cas* payment not a payment y (nsta++ment 3 cash 0a"/ent cannot 'e considered as a 0a"/ent '" install/ent, and even if it can 'e so considered, still the la& does not a00l", for it re.uires non)0a"/ent of t&o or /ore install/ents in order that its 0rovisions /a" 'e invo@ed- 5n the 0resent case, onl" one install/ent &as un0aid[$4] 9im v. CA, .'& SC6A $'0 (/00'( [$$] @(mketka( .ons 9(++(n) v. CA [G.R. No. 118$0#. Decem er 1" 1##$.]
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Third Division, Aelo (J): 4 concur %acts& %n 14 Aa" 1,+9, Phili00ine (e/nants o-, 5nc- constituted the Dan@ of the Phili00ine 5slands (DP5) as its trustee to /anage, ad/inister, and sell its real estate 0ro0ert"- %ne such 0iece of 0ro0ert" 0laced under trust &as the dis0uted lot, a 33,069)s.-/s- lot at Darrio Dagong 5log, Pasig (T T 4,31**)- %n *3 June 1,<<, Pedro (evilla, Jr-, a licensed real estate 'ro@er &as given for/al authorit" '" DP5 to sell the lot for P1,000-00 0er s.-/- This arrange/ent &as concurred in '" the o&ners of the Phili00ine (e/nants- Dro@er (evilla contacted 3lfonso Li/ of Li/@et@ai !ons Ailling (L!A) &ho agreed to 'u" the land- %n < Jul" 1,<<, L!A;s officials and (evilla &ere given 0er/ission to enter and vie& the 0ro0ert" the" &ere 'u"ing ('" (olando 13ro/in, DP5 3ssistant 1ice)President)- %n , Jul" 1,<<, (evilla for/all" infor/ed DP5 that he had 0rocured a 'u"er, L!A- %n 11 Jul" 1,<<, L!A;s officials, 3lfonso Li/ and 3l'ino Li/@et@ai, &ent to DP5 to confir/ the sale- The" &ere entertained '" 1ice)President Aerlin 3l'ano and 3sst- 1ice)President 3ro/in- L!A as@ed that the 0rice of P1,000-00 0er s.-/- 'e reduced to P,00-00 &hile 3l'ano stated the 0rice to 'e P1,100-00- The 0arties finall" agreed that the lot &ould 'e sold at P1,000-00 0er s.-/- to 'e 0aid in cash!ince the authorit" to sell &as on a first co/e, first served and non)e4clusive 'asis, it /a" 'e /entioned at this =uncture that there is no dis0ute over L!A;s 'eing the first co/er and the 'u"er to 'e first served$ot&ithstanding the final agree/ent to 0a" P1,000-00 0er s.-/- on a cash 'asis, 3lfonso Li/ as@ed if it &as 0ossi'le to 0a" on ter/s- The 'an@ officials stated that there &as no har/ in tr"ing to as@ for 0a"/ent on ter/s 'ecause in 0revious transactions, the sa/e had 'een allo&ed- 5t &as the understanding, ho&ever, that should the ter/ 0a"/ent 'e disa00roved, then the 0rice shall 'e 0aid in cash- 5t &as 3l'ano &ho dictated the ter/s under &hich the install/ent 0a"/ent /a" 'e a00roved, and acting thereon, 3lfonso Li/, on the sa/e date, 11 Jul" 1,<<, &rote DP5 through Aerlin 3l'ano e/'od"ing the 0a"/ent initiall" of 10I and the re/aining ,0I &ithin a 0eriod of ,0 da"s- * or 3 da"s later, L!A learned that its offer to 0a" on ter/s had 'een fro2en- 3lfonso Li/ &ent to DP5 on 1< Jul" 1,<< and tendered the full 0a"/ent of P33,069,000-00 to 3l'ano- The 0a"/ent &as refused 'ecause 3l'ano stated that the authorit" to sell that 0articular 0iece of 0ro0ert" in Pasig had 'een &ithdra&n fro/ his unit- The sa/e chec@ &as tendered to DP5 1ice)President $elson Dona &ho also refused to receive 0a"/ent3n action for s0ecific 0erfor/ance &ith da/ages &as thereu0on filed on *6 3ugust 1,<< '" L!A against DP5 &ith the (T Pasig (Dranch 161)- 5n the course of the trial, DP5 infor/ed the trial court that it had sold the 0ro0ert" under litigation to $ational Doo@ !tore ($D!) on 14 Jul" 1,<,- The co/0laint &as thus a/ended to include $D!- %n 10 June 1,,1, the trial court rendered =udg/ent in favor of L!AG holding that there &as a 0erfected contract 'et&een L!A and DP5, and thus declared the Deed of !ale involving the lot in Pasig in the na/e of DP5 and in favor of $D! as null and voidG ordered the (egister of Deeds of the Province of (i2al to cancel the T T &hich /a" have 'een issued in favor of $D! '" virtue of the said deedG ordered DP5 u0on recei0t '" it fro/ L!A of the su/ of P33,069,000,00 to e4ecute a Deed of !ale in favor of the latter of the said 0ro0ert" at the 0rice of P1,000-00 0er s.-/- and in default thereof, the ler@ of ourt is directed to e4ecute the deed dated 14 Jul" 1,<,G ordered the (egister of Deeds of Pasig, u0on registration of the said deed, &hether e4ecuted '" DP5 or the ler@ of ourt and 0a"/ent of the corres0onding fees and charges, to cancel said T T 4,31** and to issue, in lieu thereof, another transfer certificate of title in the na/e of L!AG ordered DP5 and $D! to 0a" in solidu/ to L!A the su/s of P10,000,000-00 as actual and conse.uential da/ages and P160,000-00 as attorne";s fees and litigation e40enses, 'oth &ith interest at 1*I 0er annu/ fro/ date of =udg/entG on the cross)clai/ '" the 'an@ against $D!, ordered $D! to inde/nif" the 'an@ of &hatever DP5 shall have 0aid to L!AG dis/issed the counterclai/ of 'oth DP5 and $D! against L!A and the cross)clai/ of $D! against DP5G &ith costs against DP5 and $D!?0on elevation of the case to the ourt of 300eals, the decision of the trial court &as reversed and the co/0laint dis/issed on 1* 3ugust 1,,4- 5t &as held that no contract of sale &as 0erfected 'ecause there &as no concurrence of the three re.uisites enu/erated in 3rticle 131< of the ivil ode- #ence, the 0etitionThe !u0re/e ourt reversed and set aside the .uestioned =udg/ent of the ourt of 300eals, and reinstated the
.a+es" /001 ( 14/ )
10 June 1,,1 =udg/ent of Dranch 161 of the (T of The $ational a0ital Judicial (egion stationed in Pasig, Aetro Aanila e4ce0t for the a&ard of P10,000,000-00 da/ages, &hich &as deleted1. Broker )(ven aut*or(ty to se++ an' not mere+y to +ook -or a uyer DP5 as trustee of the 0ro0ert" of Phili00ine (e/nant o- authori2ed a licensed 'ro@er, Pedro (evilla, to sell the lot for P1,000-00 0er s.-/- Phili00ine (e/nants confir/ed the authorit" to sell of (evilla and the 0rice at &hich he /a" sell the lot- L!A and (evilla agreed on the for/er 'u"ing the 0ro0ert"- DP5 3ssistant 1ice)President (olando 1- 3ro/in allo&ed the 'ro@er and the 'u"er to ins0ect the 0ro0ert"- DP5 &as for/all" infor/ed a'out the 'ro@er having 0rocured a 'u"er- 3t the start of the transactions, (evilla '" hi/self alread" had full authorit" to sell the dis0uted lot- The note dated *3 June 1,<< states, 7this &ill serve as "our authorit" to sell on an as is, &here is 'asis the 0ro0ert" located at Pasig Dlvd-, Dagong 5log-8 Thus, the authorit" given to (evilla &as to sell and not /erel" to loo@ for a 'u"er- (evilla testified that at the ti/e he 0erfected the agree/ent to sell the litigated 0ro0ert", he &as acting for and in 'ehalf of the DP5 as if he &ere the Dan@ itself- This not&ithstanding and to fir/ u0 the sale of the land, (evilla sa& it fit to 'ring DP5 officials into the transaction/. BBG H(ce Bres('ents *ave aut*or(ty to se++ The alleged lac@ of authorit" of the 'an@ officials acting in 'ehalf of DP5 is not sustained '" the record- 5f DP5 could give the authorit" to sell to a licensed 'ro@er, there is no reason to dou't the authorit" to sell of the t&o DP5 1ice)Presidents &hose 0recise =o' in the Dan@ &as to /anage and ad/inister real estate 0ro0ert"- (olando 3ro/in &as DP5 3ssistant 1ice)President and Trust %fficer- #e directl" su0ervised the DP5 (eal Pro0ert" Aanage/ent ?nit- #e had 'een in the (eal >state Division since 1,<6 and &as the head su0ervising officer of real estate /atters- #e had 'een &ith the DP5 Trust De0art/ent since 1,9< and had 'een involved in the handling of 0ro0erties of 'eneficial o&ners since 1,+6- #e &as in charge of Torrens titles, lease contracts, 0ro'le/s of tenants, insurance 0olicies, install/ent receiva'les, /anage/ent fees, .uitclai/s, and other /atters involving real estate transactions- #is i//ediate su0erior, 1ice)President Aerlin 3l'ano had 'een &ith the (eal >state Division for onl" 1 &ee@ 'ut he &as 0resent and =oined in the discussions &ith L!A- There is nothing to sho& that 3lfonso Li/ and 3l'ino Li/@et@ai @ne& 3ro/in 'efore the incident- (evilla 'rought the 'rothers directl" to 3ro/in u0on entering the DP5 0re/ises- 3ro/in acted in a 0erfectl" natural /anner on the transaction 'efore hi/ &ith not the slightest indication that he &as acting ultra vires- This sho&s that DP5 held 3ro/in out to the 0u'lic as the officer routinel" handling real estate transactions and, as Trust %fficer, entering into contracts to sell trust 0ro0erties- Further, it /ust 'e noted that the authorit" to 'u" and sell this 0articular trust 0ro0ert" &as later &ithdra&n fro/ Trust %fficer 3ro/in and his entire unit- 5f 3ro/in did not have an" authorit" to act as alleged, there &as no need to &ithdra& authorit" &hich he never 0ossessed- >ver"thing in the record 0oints to the full authorit" of 3ro/in to 'ind the 'an@, e4ce0t for the self)serving /e/oranda or letters later 0roduced '" DP5 that 3ro/in &as an inefficient and undesira'le officer and &ho, in fact, &as dis/issed after he testified in this case- Dut, of course, 3ro/in;s alleged inefficienc" is not 0roof that he &as not full" clothed &ith authorit" to 'ind DP51. ;rust Comm(ttee 'oes not *ave to pass on re)u+ar transact(ons %n the allegation that sales of trust 0ro0ert" need the a00roval of a Trust o//ittee /ade u0 of to0 'an@ officials, it a00ears fro/ the record that this trust co//ittee /eets rather infre.uentl" and it does not have to 0ass on regular transactions4. Bank +(a +e to (nnocent t*(r' persons ,*ere representat(on (s ma'e (n course o- (ts us(ness even (- a)ent a use' *(s aut*or(ty 5n Areola vs. Court of Appeals (*39 ! (3 943 K1,,4L) &hich cited Pru$ential 5an; vs. Court of Appeals (** ! (3 360 K1,,3L), &hich in turn relied u0on /c.ntosh vs. Da;ota +rust Co. (6* $D +6*, *04 $: <1<, 40 3L( 10*1), it &as stated that 7a 'an@ing cor0oration is lia'le to innocent third 0ersons &here the re0resentation is /ade in the course of its 'usiness '" an agent acting &ithin the general sco0e of his authorit" even though, in the 0articular case, the agent is secretl" a'using his authorit" and atte/0ting to
.a+es" /001 ( 141 )
0er0etrate a fraud u0on his 0rinci0al or so/e other 0erson for his o&n ulti/ate 'enefit-8 5n the present case, the 0osition and title of 3ro/in alone, not to /ention the testi/on" and docu/entar" evidence a'out his &or@, leave no dou't that he had full authorit" to act for DP5 in the .uestioned transaction- There is no allegation of fraud, nor is there the least indication that 3ro/in &as acting for his o&n ulti/ate 'enefit- DP5 later dis/issed 3ro/in 'ecause it a00eared that a to0 official of the 'an@ &as 0ersonall" interested in the sale of the Pasig 0ro0ert" and did not li@e 3ro/in;s testi/on"- 3ro/in &as charged &ith 0oor 0erfor/ance 'ut his dis/issal &as onl" so/eti/e after he testified in court- Aore than * long "ears after the dis0uted transaction, he &as still 3ssistant 1ice)President of DP5$. 9eet(n) o- t*e m(n's on t*e pr(ce3 9anner o- payment 3sst- 1ice)President 3ro/in ad/itted that there &as a /eeting of the /inds 'et&een the 'u"er and the 'an@ in res0ect to the 0rice of P1,000-00 0er s.-/- The re.uire/ents in the 0a"/ent of the 0urchase 0rice on ter/s instead of cash &ere suggested '" DP5 1ice)President 3l'ano- !ince the authorit" given to 'ro@er (evilla s0ecified cash 0a"/ent, the 0ossi'ilit" of 0a"ing on ter/s &as referred to the Trust o//ittee 'ut &ith the /utual agree/ent that 7if the 0ro0osed 0a"/ent on ter/s &ill not 'e a00roved '" our Trust o//ittee, Li/@et@ai should 0a" in cash, the a/ount &as no longer su'=ect to the a00roval or disa00roval of the o//ittee, it is onl" on the ter/s-8 The record sho&s that if 0a"/ent &as in cash, either 'ro@er (evilla or 3ro/in had full authorit"- Dut 'ecause L!A too@ advantage of the suggestion of 1ice)President 3l'ano, the /atter &as sent to higher officials- 5//ediatel" u0on learning that 0a"/ent on ter/s &as fro2en andBor denied, Li/@et@ai e4ercised his right &ithin the 0eriod given to hi/ and tendered 0a"/ent in full- The DP5 re=ected the 0a"/ent:. .ta)es o- t*e contract The stages of a contracts are (a) 0re0aration, conce0tion or generation, &hich is the 0eriod of negotiation and 'argaining, ending at the /o/ent of agree/ent of the 0artiesG (') 0erfection or 'irth of the contract, &hich is the /o/ent &hen the 0arties co/e to agree on the ter/s of the contractG and (c) consu//ation or death, &hich is the fulfill/ent or 0erfor/ance of the ter/s agreed u0on in the contract (To,ota Shaw Inc. vs. Court of Appea"s, 7.6. 8o. //''$%, Ma, .&, /00$(. !. An) ?u Asunc(on3 .ta)es (n or'(nary contracts (consensua+)3 Rea+ contract& 'e+(very re2u(re'3 .o+emn contract& comp+(ance ,(t* -orma+(t(es prescr( e y +a, 3 contract undergoes various stages that include its negotiation or 0re0aration, its 0erfection and, finall", its consu//ation- $egotiation covers the 0eriod fro/ the ti/e the 0ros0ective contracting 0arties indicate interest in the contract to the ti/e the contract is concluded (0erfected) The 0erfection of the contract ta@es 0lace u0on the concurrence of the essential ele/ents thereof- 3 contract &hich is consensual as to 0erfection is so esta'lished u0on a /ere /eeting of /inds, i-e-, the concurrence of offer and acce0tance, on the o'=ect and on the cause thereof- 3 contract &hich re.uires, in addition to the a'ove, the deliver" of the o'=ect of the agree/ent, as in a 0ledge or co//odatu/, is co//onl" referred to as a real contract- 5n a sole/n contract, co/0liance &ith certain for/alities 0rescri'ed '" la&, such as in a donation of real 0ro0ert", is essential in order to /a@e the act valid, the 0rescri'ed for/ 'eing there'" an essential ele/ent thereof- The stage of consu//ation 'egins &hen the 0arties 0erfor/ their res0ective underta@ings under the contract cul/inating in the e4tinguish/ent thereof8. An) ?u Asunc(on3 Ber-ecte' contract o- sa+e ?ntil the contract is 0erfected, it cannot, as an inde0endent source of o'ligation, serve as a 'inding =uridical relation- 5n sales, 0articularl", the contract is 0erfected &hen a 0erson, called the seller, o'ligates hi/self, for a 0rice certain, to deliver and to transfer o&nershi0 of a thing or right to another, called the 'u"er, over &hich the latter agrees (An4 Cu Asuncion(#. .ta)es o- t*e contract (n t*e present case The negotiation or preparation stage started &ith the authorit" given '" Phili00ine (e/nants to DP5
.a+es" /001 ( 144 )
to sell the lot, follo&ed '" the authorit" given '" DP5 and confir/ed '" Phili00ine (e/nants to 'ro@er (evilla to sell the 0ro0ert", the offer to sell to Li/@et@ai, the ins0ection of the 0ro0ert" and the negotiations &ith 3ro/in and 3l'ano at the DP5 officesThe perfection of the contract too@ 0lace &hen 3ro/in and 3l'ano, acting for DP5, agreed to sell and 3lfonso Li/ &ith 3l'ino Li/@et@ai, acting for L!A, agreed to 'u" the dis0uted lot at P1,000-00 0er s.-/-3side fro/ this there &as the earlier agree/ent 'et&een L!A and the authori2ed 'ro@er- There &as a concurrence of offer and acce0tance, on the o'=ect, and on the cause thereof10. H(++onco Rea+ty v. Borma*eco3 Ber-ecte' contract o- sa+e The contract of sale is 0erfected at the /o/ent there is a /eeting of /inds u0on the thing &hich is the o'=ect of the contract and u0on the 0rice- Fro/ that /o/ent, the 0arties /a" reci0rocall" de/and 0erfor/ance, su'=ect to the 0rovisions of the la& governing the for/ of contracts-8 (3rt- 14+6 5'id)11. H(++onco Rea+ty v. Borma*eco3 Consent onsent is /anifested '" the /eeting of the offer and the acce0tance u0on the thing and the cause &hich are to constitute the contract- The offer /ust 'e certain and the acce0tance a'solute- 3 .ualified acce0tance constitutes a counter)offer8 (3rt- 131,, ivil ode)- 73n acce0tance /a" 'e e40ress or i/0lied8 (3rt- 13*0, ivil ode)1/. H(++onco Rea+ty v. Borma*eco3 A contract (s -orme' (- o--er (s accepte'" ,*et*er re2uest -or c*an)es (n terms (s )rante' or not3 C*an)e 'oes not amount to re8ect(on o- o--er or a counterDo--er 3n acce0tance /a" contain a re.uest for certain changes in the ter/s of the offer and "et 'e a 'inding acce0tance- !o long as it is clear that the /eaning of the acce0tance is 0ositivel" and une.uivocall" to acce0t the offer- &hether such re.uest is granted or not, a contract is for/ed- (!tuart vs- Fran@lin Life 5ns- o-, 106 Fed- *nd ,96, citing !ec- +,, :illiston on ontracts)- The vendor;s change in a 0hrase of the offer to 0urchase, &hich change does not essentiall" change the ter/s of the offer, does not a/ount to a re=ection of the offer and the tender or a counter)offer-8 (!tuart vs- Fran@lin Life 5ns- o-, su0ra-) 11. Re2u(s(te -orm un'er Art(c+e 14$8 mere+y -or )reater e--(cacy or conven(ence The fact that the deed of sale still had to 'e signed and notari2ed does not /ean that no contract had alread" 'een 0erfected- 3 sale of land is valid regardless of the for/ it /a" have 'een entered into (C"aude" vs. Court of Appea"s, /00 SC6A //&, //0 */00/+(. The re.uisite for/ under 3rticle 146< of the ivil ode is /erel" for greater efficac" or convenience and the failure to co/0l" there&ith does not affect the validit" and 'inding effect of the act 'et&een the 0arties- 5f the la& re.uires a docu/ent or other s0ecial for/, as in the sale of real 0ro0ert", the contracting 0arties /a" co/0el each other to o'serve that for/, once the contract has 'een 0erfected- Their right /a" 'e e4ercised si/ultaneousl" &ith action u0on the contract (3rticle 136,, ivil ode)14. A ren(ca Ru+e& Contracts (n-r(n)(n) t*e .tatute o- %rau's rat(-(e' ,*en 'e-ense -a(+s to o 8ect or asks 2uest(ons on crossDe7am(nat(on 5n A!renica vs. "on$a (34 Phil- +3, K1,19L) it &as held that contracts infringing the !tatute of Frauds are ratified &hen the defense fails to o'=ect, or as@s .uestions on cross)e4a/ination- The reason for the rule is that 7if the ans&ers of those &itnesses &ere stric@en out, the cross)e4a/ination could have no o'=ect &hatsoever and if the .uestions &ere 0ut to the &itnesses and ans&ered '" the/, the" could onl" 'e ta@en into account '" connecting the/ &ith the ans&ers given '" those &itnesses on direct e4a/ination-8 ?nder said rule (reiterated in a nu/'er of cases, a/ong the/ Talosig vs- 1da- de $ie'a, 43 ! (3 4+* K1,+*L), even assu/ing that 0arol evidence &as initiall" inad/issi'le, the sa/e 'eca/e co/0etent and ad/issi'le 'ecause of the cross)e4a/ination, &hich elicited evidence 0roving the evidence of a 0erfected contract- The cross) e4a/ination on the contract is dee/ed a &aiver of the defense of the !tatute of Frauds- 5n the present case, counsel for res0ondents cross)e4a/ined 0etitioner;s &itnesses at length on the contract itself, the 0urchase 0rice, the tender of cash 0a"/ent, the authorit" of 3ro/in and (evilla, and other details of the litigated
.a+es" /001 ( 14$ )
contract1$. 5r(tten note or memoran'um an e7cept(on to t*e unen-orcea (+(ty o- contracts pursuant to .tatute o- %rau's ?nder 3rticle 1403 of the ivil ode, an e4ce0tion to the unenforcea'ilit" of contracts 0ursuant to the !tatute of Frauds is the e4istence of a &ritten note or /e/orandu/ evidencing the contract- The /e/orandu/ /a" 'e found in several &ritings, not necessaril" in one docu/ent- The /e/orandu/ or /e/oranda isBare &ritten evidence that such a contract &as entered into- Thus, the e4istence of a &ritten contract of the sale is not necessar" so long as the agree/ent to sell real 0ro0ert" is evidenced '" a &ritten note or /e/orandu/, e/'od"ing the essentials of the contract and signed '" the 0art" charged or his agent!uch note or /e/orandu/ suffices to /a@e the ver'al agree/ent enforcea'le, ta@ing it out of the o0eration of the statute- 5n the 0resent case, &hile there is no &ritten contract of sale of the Pasig 0ro0ert" e4ecuted '" DP5 in favor of L!A, there are a'undant notes and /e/oranda e4tant in the records of this case evidencing the ele/ents of a 0erfected contract1:. %orm o- memoran'um or note $o 0articular for/ of language or instru/ent is necessar" to constitute a /e/orandu/ or note in &riting under the statute of fraudsG an" docu/ent or &riting, for/al or infor/al, &ritten either for the 0ur0ose of furnishing evidence of the contract or for another 0ur0ose, &hich satisfies all the re.uire/ents of the statute as to contents and signature is a sufficient /e/orandu/ or note- 3 /e/orandu/ /a" 'e &ritten as &ell &ith lead 0encil as &ith 0en and in@- 5t /a" also 'e filled in on a 0rinted for/- (& C.;.S., '$&:'$-(. The note or /e/orandu/ re.uired '" the statute of frauds need not 'e contained in a single docu/ent, nor, &hen contained in t&o or /ore 0a0ers, need each 0a0er 'e sufficient as to contents and signature to satisf" the statute- T&o or /ore &ritings 0ro0erl" connected /a" 'e considered together, /atters /issing or uncertain in one /a" 'e su00lied or rendered certain '" another, and their sufficienc" &ill de0end on &hether, ta@en together, the" /eet the re.uire/ents of the statute as to contents and the re.uire/ents of the statutes as to signature1!. Demeanor o- ,(tnesses as -actor -or Court to (nc+(ne to t*e vers(on o- t*e case y one party The de/eanor of the &itnesses the 0arties 0resented is one i/0ortant factor that inclined the trial court to 'elieve in the version given '" L!A 'ecause its &itnesses, including hostile &itness (oland 13ro/in, an assistant vice)0resident of the 'an@, &ere straight for&ard, candid and unhesitating in giving their res0ective testi/onies- ?0on the other hand, the &itnesses of DP5 &ere evasive, less than candid and hesitant in giving their ans&ers to cross e4a/ination .uestions- Aoreover, the &itnesses for DP5 and $D! contradicted each other18. Cre'( (+(ty o- ,(tnesses ,*ere t*e -(n'(n)s o- t*e tr(a+ an' appe++ate courts are contrary to eac* ot*er3 ;r(a+ court=s -(n'(n)s )(ven )reat respect %n the /atter of credi'ilit" of &itnesses &here the findings or conclusions of the ourt of 300eals and the trial court are contrar" to each other, the 0ronounce/ent of the ourt in !errano vsourt of 300eals (1,9 ! (3 10+ K1,,1L) 'ears stressing 75t is a settled 0rinci0le of civil 0rocedure that the conclusions of the trial court regarding the credi'ilit" of &itnesses are entitled to great res0ect fro/ the a00ellate courts 'ecause the trial court had an o00ortunit" to o'serve the de/eanor of &itnesses &hile giving testi/on" &hich /a" indicate their candor or lac@ thereof- :hile the !u0re/e ourt ordinaril" does not rule on the issue of credi'ilit" of &itnesses, that 'eing a .uestion of fact not 0ro0ert" raised in a 0etition under (ule 46, the ourt has underta@en to do so in e4ce0tional situations &here, for instance, as here, the trial court and the ourt of 300eals arrived at divergent conclusions on .uestions of fact and the credi'ilit" of &itnesses-8 1#. NB. not an (nnocent purc*aser -or va+ue $ational Doo@store ($D!) is not an innocent 0urchaser for value, as it acted in 'ad faith- $D! ignored the notice of lis 0endens annotated on the title &hen it 'ought the lot- 5t &as the &illingness and
.a+es" /001 ( 14: )
design of $D! to 'u" 0ro0ert" alread" sold to another 0art" &hich led DP5 to dishonor the contract &ith L!A- 5t is the ver" nature of the deed of a'solute sale 'et&een DP5 and $D! &hich clearl" negates an" allegation of good faith on the 0art of the 'u"er- 5nstead of the vendee insisting that the vendor guarantee its title to the land and recogni2e the right of the vendee against the vendor if the title to the land turns out to 'e defective as &hen the land 'elongs to another 0erson, the reverse is found in the deed of sale 'et&een DP5 and $D!- 3n" losses &hich $D! /a" incur in the event the title turns out to 'e vested in another 0erson are to 'e 'orne '" $D! alone- DP5 is e40ressl" freed under the contract fro/ an" recourse of $D! against it should DP5;s title 'e found defective/0. Enumerat(on o- a')es o- -rau' -oun' (n >r(a v. 9c9(ck(n) cannot cover a++ (n'(cat(ons -rom 1#1/ to present an' -uture $D! si/0l" cited the 'adges of fraud /entioned in %ria vs- AcAic@ing (*1 Phil- *43 (1,1*L) in its /e/orandu/ and argues that the enu/eration there is e4clusive- The decision in said case 0lainl" states 7the follo&ing are so/e of the circu/stances attending sales &hich have 'een deno/inated '" courts (as) 'adges of fraud-8 There are innu/era'le situations &here fraud is /anifested- %ne enu/eration in a 1,1* decision cannot 0ossi'l" cover all indications of fraud fro/ that ti/e u0 to the 0resent and into the future/1. Dama)es3 @oss o- pro-(ts an' use o- +an' compensate' y apprec(at(on (n +an' va+ue The 0rofits and the use of the land &hich &ere denied to L!A 'ecause of the non)co/0liance or interference &ith a sole/n o'ligation '" DP5 and $D! is so/eho& /ade u0 '" the a00reciation in land values[$:] @oyo+a v. CA [G.R. No. 11$!14. %e ruary /1" /000.] !econd Division, Uuisu/'ing (J): 3 concur, 1 on leave %acts& 3 0arcel of land (Lot 116)3)1 of su'division 0lan KL( L Psd)3*11+, a 0ortion of Lot 116)3 descri'ed on Plan Psd)66**<, L( KFL(%L (ecord <3+4, located in Po'lacion, Dinan, Laguna, and containing +63 s.-/-, T T T)3*00+) &as originall" o&ned in co//on '" the si'lings Aariano and Faudencia Varraga, &ho inherited it fro/ their father- Aariano 0redeceased his sister &ho died single, &ithout offs0ring on 6 3ugust 1,<3, at the age of ,+- 1ictorina Varraga vdade Lo"ola and ecilia Varraga, are sisters of Faudencia and AarianoThe 0ro0ert" &as su'=ect of ivil ase D)10,4 'efore the then F5 Laguna (Dranch 1, !0ouses (o/ualdo Varraga, et al- v- Faudencia Varraga, et al-)- (o/ualdo Varraga &as the 0laintiff in ivil ase D)10,4- The defendants &ere his si'lings: $ieves, (o/ana, Fuiller/o, Purificacion, 3ngeles, (o'erto, >strella, and Jose, all surna/ed Varraga, as &ell as his aunt, Faudencia- The trial court decided ivil ase D)10,4 in favor of the defendants- Faudencia &as ad=udged o&ner of the 1B* 0ortion of Lot 116)3)1- (o/ualdo elevated the decision to the ourt of 300eals and later the !u0re/e ourt- The 0etition (F( 6,6*,) &as denied '" the ourt on 1+ Aarch 1,<*%n *4 3ugust 1,<0, nearl" 3 "ears 'efore the death of Faudencia &hile F( 6,6*, &as still 0ending 'efore the !u0re/e ourt- %n said date, Faudencia allegedl" sold to the children of Aariano Varraga ($ieves, (o/ana, (o/ualdo, Fuiller/o, Lucia, Purificacion, 3ngeles, (o'erto, >strella Varraga) and the heirs of Jose Varraga 3urora, Aarita, Jose, (onaldo, 1ictor, Lauriano, and 3riel VarragaG first cousins of the Lo"olas) her share in Lot 116)3) 1 for P34,000-00- The sale &as evidenced '" a notari2ed docu/ent deno/inated as 7Dilihang Tulu"an ng Calahati (1B*) ng 5sang Laga" na Lu0a-8 (o/ualdo, the 0etitioner in F( 6,6*,, &as a/ong the vendeesThe decision in ivil ase D)10,4 'eca/e final- The children of Aariano Varraga and the heirs of Jose
.a+es" /001 ( 14! )
Varraga (0rivate res0ondents) filed a /otion for e4ecution- %n 19 Fe'ruar" 1,<4, the sheriff e4ecuted the corres0onding deed of reconve"ance to Faudencia- %n *3 Jul" 1,<4, ho&ever, the (egister of Deeds of Laguna, ala/'a Dranch, issued in favor of 0rivate res0ondents, T T T)11909+, on the 'asis of the sale on *4 3ugust 1,<0 '" Faudencia to the/%n 31 Januar" 1,<6, 1ictorina and ecilia filed a co/0laint, doc@eted as ivil ase D)*1,4, &ith the (T of DiMan, Laguna, for the 0ur0ose of annulling the sale and the T T- 1ictorina died on 1< %cto'er 1,<,, &hile ivil ase D)*1,4 &as 0ending &ith the trial court- ecilia died on 4 3ugust 1,,0, un/arried and childless1ictorina and ecilia &ere su'stituted '" (u'en, andelaria, Loren2o, Flora, $icadro, (osario, Teresita and 1icente Lo"ola as 0laintiffs- The trial court rendered =udg/ent in favor of co/0lainantsG declaring the si/ulated deed of a'solute sale as &ell as the issuance of the corres0onding T T null and void, ordering the (egister of Deeds of Laguna to cancel T T T)1190<+ and to issue another one in favor of the 0laintiffs and the defendants as co)o&ners and legal heirs of the late Faudencia, ordering the defendants to reconve" and deliver the 0ossession of the shares of the 0laintiff on the su'=ect 0ro0ert", ordering the defendants to 0a" P*0,000 as attorne";s fees and cost of suit, dis/issing the 0etitioner;s clai/ for /oral and e4e/0lar" da/ages, and dis/issing the defendants; counterclai/ for lac@ of /erit%n a00eal, and on 31 3ugust 1,,3, the a00ellate court reversed the trial court ( 3)F( 1 390,0)- %n !e0te/'er 16, 1,,3, the 0etitioners (as su'stitute 0arties for 1ictorina and ecilia, the original 0laintiffs) filed a /otion for reconsideration, &hich &as denied on 9 June 1,,4- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt denied the 0etition, and affir/ed the assailed decision of the ourt of 300ealsG &ith costs against 0etitioners1. Bresumpt(on o- re)u+ar(ty o- notar(Ce' 'ocument 3 notari2ed docu/ent carries the evidentiar" &eight conferred u0on it &ith res0ect to its due e4ecution, and docu/ents ac@no&ledged 'efore a notar" 0u'lic have in their favor the 0resu/0tion of regularit"- 5n the 0resent case, the 0etitioners allege that since the notar" 0u'lic &ho 0re0ared and ac@no&ledged the .uestioned Dilihan did not 0ersonall" @no& Faudencia, the e4ecution of the deed &as sus0ect- #o&ever, the notar" 0u'lic testified that he intervie&ed Faudencia 0rior to 0re0aring the deed of sale- D" their failure to overco/e this 0resu/0tion, &ith clear and convincing evidence, 0etitioners are esto00ed fro/ .uestioning the regularit" of the e4ecution of the deed/. Fose Parra)a a+(ve ,*en t*e sa+e took p+ace Petitioners charge that one of the vendees, Jose Varraga, &as alread" dead at the ti/e of the sale#o&ever, the records reveal that Jose died on *, Jul" 1,<1- #e &as still alive on *4 3ugust 1,<0, &hen the sale too@ 0lace1. .(mu+at(on 'e-(ne' !i/ulation is 7the declaration of a fictitious &ill, deli'eratel" /ade '" agree/ent of the 0arties, in order to 0roduce, for the 0ur0oses of dece0tion, the a00earances of a =uridical act &hich does not e4ist or is different &hat that &hich &as reall" e4ecuted-8 haracteristic of si/ulation is that the a00arent contract is not reall" desired or intended to 0roduce legal effect or in an" &a" alter the =uridical situation of the 0artiesFurther, in a si/ulated contract, the 0arties have no intention to 'e 'ound '" the contract- 5n the 0resent case, 0erusal of the .uestioned deed sho&s that the sale of the 0ro0ert" &ould convert the co)o&ners to vendors and vendees, a clear alteration of the =uridical relationshi0s- This is contrar" to the re.uisite of si/ulation that the a00arent contract &as not reall" /eant to 0roduce an" legal effect- The 0arties clearl" intended to 'e 'ound '" the contract of sale, an intention the" did not den"4. .(mu+at(on" re2u(s(tes The re.uisites for si/ulation are: (a) an out&ard declaration of &ill different fro/ the &ill of the
.a+es" /001 ( 148 )
0artiesG (') the false a00earance /ust have 'een intended '" /utual agree/entG and (c) the 0ur0ose is to deceive third 0ersons- 5n the 0resent case, none of these are 0resent in the assailed transaction$. Contracts (n'(n) on+y upon part(es e7ecut(n) t*em ontracts are 'inding onl" u0on the 0arties &ho e4ecute the/- 3rticle 1311 of the ivil ode clearl" covers this situation- 5n the 0resent case (o/ualdo had no @no&ledge of the sale, and thus, he &as a stranger and not a 0art" to it- >ven if curiousl" (o/ualdo, one of those included as 'u"er in the deed of sale, &as the one &ho .uestioned Faudencia;s o&nershi0 in ivil ase D)10,4, (o/ana testified that (o/ualdo reall" had no @no&ledge of the transaction and he &as included as a 'u"er of the land onl" 'ecause he &as a 'rother:. %rau' (s never presume' Fraud is never 0resu/ed, 'ut /ust 'e 'oth alleged and 0roved- For a contract to 'e annulled on the ground of fraud, it /ust 'e sho&n that the vendor never gave consent to its e4ecution- 5f a co/0etent 0erson has assented to a contract freel" and fairl", said 0erson is 'ound- There also is a dis0uta'le 0resu/0tion, that 0rivate transactions have 'een fair and regular- 300lied to contracts, the 0resu/0tion is in favor of validit" and regularit"- 5n the 0resent case, the allegations of fraud &as unsu00orted, and the 0resu/0tion stands that the contract Faudencia entered into &as fair and regular!. Berson not (ncapac(tate' to contract mere+y ecause o- a'vance' a)e or 'ue to p*ys(ca+ (n-(m(t(es 3 0erson is not inca0acitated to contract /erel" 'ecause of advanced "ears or '" reason of 0h"sical infir/ities- %nl" &hen such age or infir/ities i/0air his /ental faculties to such e4tent as to 0revent hi/ fro/ 0ro0erl", intelligentl", and fairl" 0rotecting his 0ro0ert" rights, is he considered inca0acitated- 5n the 0resent case, 0etitioners sho& no 0roof that Faudencia had lost control of her /ental faculties at the ti/e of the sale- The notar" 0u'lic &ho intervie&ed her, testified that &hen he tal@ed to Faudencia 'efore 0re0aring the deed of sale, she ans&ered correctl" and he &as convinced that Faudencia &as /entall" fit and @ne& &hat she &as doing8. In'ue (n-+uence 'e-(ne'" c(rcumstances cons('ere'3 Art(c+e 111! 3rticle 133+ of the ivil ode 0rovides that 7there is undue influence &hen a 0erson ta@es i/0ro0er advantage of his 0o&er over the &ill of another, de0riving the latter of a reasona'le freedo/ of choice- The follo&ing circu/stances shall 'e considered: confidential, fa/il", s0iritual, and other relations 'et&een the 0arties, or the fact that the 0erson alleged to have 'een undul" influenced &as suffering fro/ /ental &ea@ness, or &as ignorant or in financial distress-8 #. In'ue (n-+uence caseDtoDcase as(s3 E+ements ?ndue influence de0ends u0on the circu/stances of each case and not on 'are acade/ic rules- For undue influence to 'e esta'lished to =ustif" the cancellation of an instru/ent, three ele/ents /ust 'e 0resent: (a) a 0erson &ho can 'e influencedG (') the fact that i/0ro0er influence &as e4ertedG (c) su'/ission to the over&hel/ing effect of such unla&ful conduct10. Con-('ent(a+ or -('uc(ary re+at(ons*(p 5n the a'sence of a confidential or fiduciar" relationshi0 'et&een the 0arties, the la& does not 0resu/e that one 0erson e4ercised undue influence u0on the other- 3 confidential or fiduciar" relationshi0 /a" include an" relation 'et&een 0ersons, &hich allo&s one to do/inate the other, &ith the o00ortunit" to use that su0eriorit" to the other;s disadvantage- 5ncluded are those of attorne" and client, 0h"sician and 0atient, nurse and invalid, 0arent and child, guardian and &ard, /e/'er of a church or sect and s0iritual adviser, a 0erson and his confidential adviser, or &henever a confidential relationshi0 e4ists as a fact- To 0rove a confidential relationshi0 fro/ &hich undue influence /a" arise, the relationshi0 /ust reflect a do/inant, over/astering influence &hich controls over the de0endent 0erson- 5n the 0resent case, that Faudencia loo@ed after (o/ana in her old age is not sufficient to sho& that the relationshi0 &as confidential.a+es" /001 ( 14# )
Petitioners failed to sho& that (o/ana used her aunt;s reliance u0on her to ta@e advantage or do/inate her and dictate that she sell her land11. In'ue (n-+uence cannot e (n-erre' -rom a)e" s(ckness" or 'e (+(ty o- o'y ?ndue influence is not to 'e inferred fro/ age, sic@ness, or de'ilit" of 'od", if sufficient intelligence re/ains- 5n the 0resent case- 0etitioners never re'utted the testi/on" of the notar" 0u'lic that he o'served Faudencia still alert and shar01/. .o+(c(tat(on" (mportun(ty" ar)ument" an' persuas(on not un'ue (n-+uence 5n 5a4e0 v. Court of Appeals, ($0 SC6A /$ */0 -+(, it &as held that solicitation, i/0ortunit", argu/ent, and 0ersuasion are not undue influence- 3 contract is not to 'e set aside /erel" 'ecause one 0art" used these /eans to o'tain the consent of the other- 5n /artine0 v. <ong;ong an$ 'hanghai 5an; (/$ !hi". .$. */0/%+(, that influence o'tained '" 0ersuasion, argu/ent, or '" a00eal to the affections is not 0rohi'ited either in la& or /orals, and is not o'no4ious even in courts of e.uit"- 5n the 0resent case, a'sent an" 0roof that (o/ana e4erted undue influence, the 0resu/0tion is that she did not11. Gssue cannot e ra(se' -or t*e -(rst t(me on appea+ Lesion &as not an issue raised 'efore the lo&er courts- 3n issue &hich &as neither averred in the co/0laint nor raised in the court 'elo&, cannot 'e raised for the first ti/e on a00eal- To do so &ould 'e offensive to the 'asic rules of fair 0la"14. Groun's o- s(mu+ate' sa+e an' (na'e2uacy o- t*e pr(ce not reconc(+a +e Petitioners see/ to 'e unsure &hether the" are assailing the sale of Lot 116)3)1 for 'eing a'solutel" si/ulated or for inade.uac" of the 0rice- These t&o grounds are irreconcila'le- 5f there e4ists an actual consideration for transfer evidenced '" the alleged act of sale, no /atter ho& inade.uate it 'e, the transaction could not 'e a 7si/ulated sale-8 $o reversi'le error &as thus co//itted '" the ourt of 300eals in refusing to annul the .uestioned sale for alleged inade.uac" of the 0rice[$!] 9u=on )ro2era4e v. Maritime, 8' SC6A &%$ (/0 8( [$8] 9acon'ray vs. Eusta2u(o [G.R. No. 41:81. Fu+y 1:" 1#1!.] First Division, 5/0erial (J): 9 concur %acts& Aacondra" Q o- 5nc- sold ?r'ano >usta.uio a De !oto car, !edan, for the 0rice of &hich, P6,6, he e4ecuted in its favor the note of ** Aa" 1,34- ?nder the note, >usta.uio undertoo@ to 0a" the car in 1* /onthl" install/ents &ith 1*I interest 0er annu/, li@e&ise agreed that, should he fail to 0a" an" /onthl" install/ent together &ith interest, the re/aining install/ents &ould 'eco/e due and 0a"a'le, and >usta.uio shall 0a" *0I u0on the 0rinci0al o&ing as attorne";s fees, e40enses of collection &hich the 0laintiff /ight incur, and the costs- To guarantee the 0erfor/ance of his o'ligations under the note, >usta.uio on the sa/e date /ortgaged the 0urchased car in favor of Aacondra", and 'ound hi/self under the sa/e condition sti0ulated in the note relative to the /onthl" install/ents, interest, attorne";s fees, e40enses of collection, and costs- The /ortgaged deed &as registered on 11 June 1,34, in the office of the register of deeds of the Province of (i2al- %n the **nd of the sa/e /onth, >usta.uio 0aid P43-+6 u0on the first install/ent, and thereafter failed to 0a" an" of the re/aining install/ents- 5n accordance &ith the ter/s of the /ortgage, Aacondra" called u0on the sheriff to ta@e 0ossession of the car, 'ut >usta.uio refused to "ield 0ossession thereof- :hereu0on, Aacondra" 'rought the re0levin sought and there'" succeeded in getting 0ossession of the car- The car &as sold at 0u'lic auction to Aacondra" for P*60, the latter incurring legal e40enses in the
.a+es" /001 ( 1$0 )
a/ount of P10-9<Aacondra" 'rought the action against >usta.uio to o'tain the 0ossession of an auto/o'ile /ortgaged '" the latter, and to recover the 'alance o&ing u0on a note e4ecuted '" hi/, the interest thereon, attorne";s fees, e40enses of collection, and the costs (3ccording to the li.uidation filed '" Aacondra", >usta.uio &as still inde'ted in the a/ount of P34*-*0, interest at 1*I fro/ *0 $ove/'er 1,34, P110-*6 as attorne";s fees, and the costs-)- >usta.uio &as dul" su//oned, 'ut he failed to a00ear or file his ans&er, &herefore, he &as declared in default- !till, the F5 Aanila dis/issed the co/0laint, &ithout costs- #ence, the a00eal '" Aacondra"The !u0re/e ourt affir/ed the a00ealed =udg/ent, &ith the costs against Aacondra" and o1. NonDappearance y 'e-en'ant 'oes not (mp+y a ,a(ver o- r()*ts e7cepts t*ose o- e(n) *ear' an' o- present(n) ev('ence (n *(s -avor3 Court '(' not err (n app+y(n) Act 41// ?nder section 1*< of the ode of ivil Procedure, the =udg/ent '" default against a defendant &ho has neither a00eared nor filed his ans&er does not i/0l" a &aiver of rights e4ce0t that of 'eing heard and of 0resenting evidence in his favor- 5t does not i/0l" ad/ission '" the defendant of the facts and causes of action of the 0laintiff, 'ecause the codal section re.uires the latter to adduce his evidence in su00ort of his allegations as an indis0ensa'le condition 'efore final =udg/ent could 'e given in his favor- $or could it 'e inter0reted as an ad/ission '" the defendant that the 0laintiff;s causes of action find su00ort in the la& or that the latter is entitled to the relief 0ra"ed for- (Chaffin vs. McFadden, -/ Ar2., -.> ;ohnson vs. !ierce, /. Ar2., $00> Ma,den vs. ;ohnson, $0 7a., /%$> !eo. vs. 6ust, .0. I""., -/.> Madison Count, vs. Smith, 0$ I""., &.8> Geen vs. 9eipo"d, .// I"". A., /'&> Chica4o etc. 3"ectric 6. Co. vs. Grempe", //' I"". A., .$&.( Thus, the defendant did not &aive the a00lication '" the court of 3ct 41**/. Act 41// va+('3 Conc+us(on (n 9an(+a ;ra'(n) vs. Reyes susta(ne' 5n Aanila Trading Q !u00l" o- vs- (e"es (9* Phil-, 491), the validit" of the 3ct 41** &as alread" 0assed u0on &hen it &as .uestioned for the sa/e reasons advanced, i-e- that it ta@es 0ro0ert" &ithout due 0rocess of la&, denies the e.ual 0rotection of the la&s, and i/0airs the o'ligations of contract, there'" violating the 0rovisions of section 3 of the 3ct of The ?nited !tates ongress of *, 3ugust 1,19, @no&n as the Jones La&- 3s Aacondra", through counsel, advanced no ne& argu/ents &hich have not alread" 'een considered in the (e"es case, there is no reason for reaching a different conclusion- The la& see@s to re/ed" an evil &hich the Legislature &ished to su00ressG this legislative 'od" has 0o&er to 0ro/ulgate the la&- The la& does not co/0letel" de0rive vendors on the install/ent 'asis of a re/ed", 'ut re.uires the/ to elect a/ong three alternative re/edies- The la&, on the other hand, does not co/0letel" e4onerate the 0urchasers, 'ut onl" li/its their lia'ilities- Finall", there is no vested right &hen a 0rocedural la& is involved, &herefore the Legislature could enact 3ct 41** &ithout violating the organic la&1. 9an(+a ;ra'(n) vs. Reyes3 Ha+('(ty o- act so+e+y one o- const(tut(ona+ po,er3 9ot(ve or resu+ts (rre+evant The .uestion of the validit" of an act is solel" one of constitutional 0o&er- Uuestions of e40edienc", of /otive, or of results are irrelevant- $evertheless it is not i/0ro0er to in.uire as to the occasion for the enact/ent of a la&- The legislative 0ur0ose thus disclosed can then serve as a fit 'ac@ground for constitutional in.uir"4. 9an(+a ;ra'(n) vs. Reyes3 Burpose o- Act 41// 3ct 41** ai/s to correct a social and econo/ic evil, the inordinate love for lu4ur" of those &ho, &ithout sufficient /eans, 0urchase 0ersonal effects, and the ruinous 0ractice of so/e co//ercial houses of 0urchasing 'ac@ the goods sold for a no/inal 0rice 'esides @ee0ing a 0art of the 0rice alread" 0aid and collecting the 'alance, &ith sti0ulated interest, costs, and attorne";s fees- 3s a conse.uence, the vendor does not onl" recover the goods sold, used hardl" * /onths 0erha0s &ith onl" slight &ear and tear, 'ut also collects
.a+es" /001 ( 1$1 )
the entire sti0ulated 0urchase 0rice, 0ro'a'l" s&elled u0 60I including interest, costs, and attorne";s feesThis 0ractice is &orse than usurious in /an" instances- 3nd although, of course, the 0urchaser /ust suffer the conse.uences of his i/0rudence and lac@ of foresight, the chastise/ent /ust not 'e to the e4tent of ruining hi/ co/0letel" and, on the other hand, enriching the vendor in a /anner &hich shoc@s the conscience- The o'=ect of the la& is highl" co//enda'le$. 9an(+a ;ra'(n) vs. Reyes" c(t(n) Bac*rac* 9otor vs. 9(++an3 Burpose o- amen'ment The 0rinci0al o'=ect of the a/end/ent &as to re/ed" the a'uses co//itted in connection &ith the foreclosure of chattel /ortgages- The a/end/ent 0revents /ortgagees fro/ sei2ing the /ortgaged 0ro0ert", 'u"ing it at foreclosure sale for a lo& 0rice and then 'ringing suit against the /ortgagor for a deficienc" =udg/ent- The al/ost invaria'le result of this 0rocedure &as that the /ortgagor found hi/self /inus the 0ro0ert" and still o&ing 0racticall" the full a/ount of his original inde'tedness- ?nder this a/end/ent the vendor of 0ersonal 0ro0ert", the 0urchase 0rice of &hich is 0a"a'le in install/ents, has the right to cancel the sale or foreclose the /ortgage if one has 'een given on the 0ro0ert"- :hichever right the vendor elects he need not return to the 0urchaser the a/ount of the install/ents alread" 0aid, 7if there 'e an agree/ent to that effect-8 Further/ore, if the vendor avails hi/self of the right to foreclose the /ortgage this a/end/ent 0rohi'its hi/ fro/ 'ringing an action against the 0urchaser for the un0aid 'alance- ?nder the a/end/ent, in, all 0roceedings for the foreclosure of chattel /ortgages, e4ecuted on chattels &hich have 'een sold on the install/ent 0lan, the /ortgagee is li/ited to the 0ro0ert" included in the /ortgage- (Dachrach Aotor o- vsAillan K1,36L, 91 Phil-, 40,-) :. 9an(+a ;ra'(n) vs. Reyes3 I. Fur(spru'ence" 18#! Act passe' (n .tate o- 5as*(n)ton not contro++(n) 5n 1<,+, an 3ct &as 0assed in the !tate of :ashington &hich 0rovided 7that in all 0roceedings for the foreclosure of /ortgages hereafter e4ecuted, or on =udg/ents rendered u0on the de't there'" secured, the /ortgagee or assignee shall 'e li/ited to the 0ro0ert" included in the /ortgage-8 5t &as held '" a divided court of three to t&o that the statute since li/iting the right to enforce a de't secured '" /ortgage to the 0ro0ert" /ortgaged, &hether realt" or chattels, &as an undue restraint u0on the li'ert" of a citi2en to contract &ith res0ect to his 0ro0ert" rights- Dut as is readil" a00arent, the :ashington la& and the Phili00ine la& are radicall" different in 0hraseolog" and in effect- (Dennis vs- Aoses K1<,<L, 40 L- (- 3-, 30*-) !. 9an(+a ;ra'(n) vs. Reyes3 I. Fur(spru'ence" Act passe' (n .tate o- >re)on not contro++(n) 5n %regon, in a decision of a later date, an 3ct a'olishing deficienc" =udg/ents u0on the foreclosure of /ortgages to secure the un0aid 'alance of the 0urchase 0rice of real 0ro0ert" &as unani/ousl" sustained '" the !u0re/e ourt of that !tate- The i/0ortance of the su'=ect /atter in that =urisdiction &as revealed '" the fact that four se0arate o0inions &ere 0re0ared '" the =ustices 0artici0ating, in one of &hich Ar- Justice Johns, shortl" thereafter to 'eco/e a /e/'er of this court, concurred- #o&ever, it is 'ut fair to state that one of the reasons 0ro/0ting the court to u0hold the la& &as the financial de0ression &hich had 0revailed in that !tate- :hile in the Phili00ines, the court can ta@e =udicial notice of the stringenc" of finances that 0resses u0on the 0eo0le, there is no reason to 'elieve that this &as the reason &hich /otivated the enact/ent of 3ct 41**- (:right vs- :i/'erle" K1,1,L, 1<4 Pac-, +40)8. 9an(+a ;ra'(n) vs. Reyes3 I. Fur(spru'ence" BronCon vs. A(nC(e 5n the case of Dron2on vs- Cin2ie K1<43L, 1 #o&-, 311), decided '" the !u0re/e ourt of the ?nited !tates, the ourt had under consideration a la& 0assed in the !tate of 5llinois, &hich 0rovided that the e.uita'le estate of the /ortgagor should not 'e e4tinguished for 1* /onths after sale on decree, and &hich 0revented an" sale of the /ortgaged 0ro0ert" unless *B3 of the a/ount at &hich the 0ro0ert" had 'een valued '" a00raisers should 'e 'id therefor- The court declared that 7Aortgages /ade since the 0assage of these la&s /ust undou'tedl" 'e governed '" the/G for ever" !tate has the 0o&er to descri'e the legal and e.uita'le o'ligations of a contract to 'e /ade and e4ecuted &ithin its =urisdiction- 5t /a" e4e/0t an" 0ro0ert" it thin@s 0ro0er fro/ sale for the 0a"/ent of a de'tG and /a" i/0ose such conditions and restrictions u0on the creditor
.a+es" /001 ( 1$/ )
as its =udg/ent and 0olic" /a" dictate- 3nd all future contracts &ould 'e su'=ect to such 0rovisionsG and the" &ould 'e o'ligator" u0on the 0arties in the courts of the ?nited !tates, as &ell as in those of the !tate-8 #. 9an(+a ;ra'(n) vs. Reyes3 I. Fur(spru'ence" Bart(es *ave no veste' r()*t (n part(cu+ar reme'(es or mo'es o- proce'ure Parties have no vested right in 0articular re/edies or /odes of 0rocedure, and the legislature /a" change e4isting re/edies or /odes of 0rocedure &ithout i/0airing the o'ligation of contracts, 0rovided an efficacious re/ed" re/ains for enforce/ent- Dut changes in the re/edies availa'le for the enforce/ent of a /ortgage /a" not, even &hen 0u'lic 0olic" is invo@ed as an e4cuse, 'e 0ressed so far as to cut do&n the securit" of a /ortgage &ithout /oderation or reason or in a s0irit of o00ression- (Drotherhood of 3/erican Eeo/an vs- Aan2 K1,**L, *09 Pac-, 403G %sh@osh :ater&or@s o- vs- %sh@osh K1,0<L, 1<+ ?- !-, 43+G :- D:orthen o- vs- Cavanaugh K1,36L, +, ?- !- !u0re/e ourt 3dvance %0inions, 93<-) 10. 9an(+a ;ra'(n) vs. Reyes3 C*atte+ 9ort)a)e @a, 'oes not prov('e -or 'e-(c(ency 8u')ment upon -orec+osure o- mort)a)e 5n the Phili00ines, the hattel Aortgage La& did not e40ressl" 0rovide for a deficienc" =udg/ent u0on the foreclosure of a /ortgage- 5ndeed, it re.uired decisions of the ourt to authori2e such a 0rocedure(Dan@ of the Phili00ine 5slands vs- %lutanga Lu/'er o- K1,*4L, 4+ Phil-, *0G Aanila Trading Q !u00l" ovs- Ta/ara& Plantation o-, su0ra-) Dut the 0ractice 'eca/e universal enough to ac.uire the force of direct legislative enact/ent regarding 0rocedure- To a certain e4tent the Legislature has no& disauthori2ed the 0ractice, 'ut has left a sufficient re/ed" re/aining11. 9an(+a ;ra'(n) vs. Reyes3 Reme'(es ava(+a +e to ven'or ,*o *as so+' persona+ property on (nsta++ment p+an3 Bas(s o- reme'(es Three re/edies are availa'le to the vendor &ho has sold 0ersonal 0ro0ert" on the install/ent 0lan- (1) #e /a" elect to e4act the fulfill/ent of the o'ligation- (Dachrach Aotor o- vs- Aillan, su0ra-) (*) 5f the vendee shall have failed to 0a" t&o or /ore install/ents, the vendor /a" cancel the sale- (3) 5f the vendee shall have failed to 0a" t&o or /ore install/ents, the vendor /a" foreclose the /ortgage, if one has 'een given on the 0ro0ert"- The 'asis of the first o0tion is the ivil ode- The 'asis of the last t&o o0tions is 3ct 41**, a/endator" of the ivil ode- 3nd the 0roviso to the right to foreclose is, that if the vendor has chosen this re/ed", he shall have no further action against the 0urchaser for the recover" of an" un0aid 'alance o&ing '" the sa/e- 5n other &ords, as &e see it, the 3ct does no /ore than .ualif" the re/ed"1/. 9an(+a ;ra'(n) vs. Reyes3 Determ(nat(on o- const(tut(ona+ (ssues" a++ 'ou ts reso+ve (n t*e presumpt(on to t*e(r va+('(ty Aost constitutional issues are deter/ined '" the court;s a00roach to the/- The 0ro0er a00roach in cases of this character should 'e to resolve all 0resu/0tions in favor of the validit" of an act in the a'sence of a clear conflict 'et&een it and the constitution- 3ll dou'ts should 'e resolved in its favor11. 9an(+a ;ra'(n) vs. Reyes3 Bu +(c po+(cy 'e-(ne' an' esta +(s*e' y +e)(s+ature" courts to perpetuate po+(cy The controlling 0ur0ose of 3ct 41** is revealed to 'e to close the door to a'uses co//itted in connection &ith the foreclosure of chattel /ortgages &hen sales &ere 0a"a'le in install/ents- That 0u'lic 0olic", o'vious fro/ the statute, &as defined and esta'lished '" legislative authorit"- 5t is for the courts to 0er0etuate it14. 9an(+a ;ra'(n) vs. Reyes3 @e)(s+ature may c*an)e 8u'(c(a+ met*o's an' reme'(es -or t*e en-orcement o- contracts The Legislature /a" change =udicial /ethods and re/edies for the enforce/ent of contracts, as it has done '" the enact/ent of 3ct 41**, &ithout undul" interfering &ith the o'ligation of the contract, &ithout sanctioning class legislation, and &ithout a denial of the e.ual 0rotection of the la&s.a+es" /001 ( 1$1 )
1$. Gnterpretat(on o- +a,s" Gntent o- +e)(s+ature3 Restr(ct(on o- mean(n) o- 4unpa(' a+ance6 s*ou+' e e7press+y state' The 0rovision 7#o&ever, if the vendor has chosen to foreclose the /ortgage he shall have no further action against the 0urchaser for the recover" of an" un0aid 'alance o&ing '" the sa/e, and an" agree/ent to the contrar" shall 'e null and void,8 is the su'=ect of the inter0retation- The 0aragra0h, as its language sho&s, refers to the /ortgage contract e4ecuted '" the 0arties, &here'" the 0urchaser /ortgages the chattel sold to hi/ on the install/ent 'asis in order to guarantee the 0a"/ent of its 0rice, and the &ords 7an" un0aid 'alance8 should 'e inter0reted as having reference to the deficienc" =udg/ent to &hich the /ortgagee /a" 'e entitled &here, after the /ortgaged chattel is sold at 0u'lic auction, the 0roceeds o'tained therefro/ are insufficient to cover the full a/ount of the secured o'ligations &hich, in the case at 'ar as sho&n '" the note and '" the /ortgage deed, include interest on the 0rinci0al, attorne";s fees, e40enses of collection, and the costs- The funda/ental rule &hich should govern the inter0retation of la&s is to ascertain the intention and /eaning of the Legislature and to give effect thereto- (!ec- *<<, ode of ivil ProcedureG ?- !- vs- Tori'io, 16 Phil-, <6G ?- !- vs- $avarro, 1, Phil-, 134G De Jesus vs- it" of Aanila, *, Phil-, +3G Dorro/eo vs- Aariano, 41 Phil-, 3**G Peo0le vs- once0cion, 44 Phil-, 1*9-) :ere it the intention of the Legislature to li/it its /eaning to the un0aid 'alance of the 0rinci0al, it &ould have so stated[$#] 9an(+a Rac(n) C+u vs. 9an(+a Fockey C+u [G.R. No. @D4:$11. >cto er /8" 1#1#.] >n Danc, 3vancena (J): 9 concur %acts& %n 1< !e0te/'er 1,39, (afael J- a/0os entered into a contract &ith the Aanila Joc@e" lu', an unregistered 0artnershi0, &here'" he 0urchased fro/ it the 0arcel of land descri'ed in T T <+*4 &ith its i/0rove/ents, the good)&ill, and certain 0ersonal 0ro0ert"- The 0rice agreed u0on in this transaction is P1,*00,000 (P60,000 u0on the signing of the contractG P60,000 on or 'efore *< !e0te/'er 1,39G P300,000 on or 'efore *4 Dece/'er 1,39G P*00,000 on or 'efore *4 Aarch 1,3+G and P900,000 on or 'efore *4 !e0te/'er 1,3+)- 5t &as agreed that should the 0urchaser fail to 0a" the a/ount corres0onding to each install/ent in due ti/e, the vendor /a" rescind the contract and @ee0 the a/ounts 0aid for itself- %ne of the clauses of the deed also states that the 0urchaser /a" for/ a cor0oration called the Aanila (acing lu', 5nc-, to &ho/ he /a" transfer all his rights and o'ligations under the contract- The 0urchaser a/0os /ade the do&n 0a"/ent of P60,000 u0on signing the contract and on *< !e0te/'er 1,3< 0aid the second install/ent of P60,000- %n ** %cto'er 1,39, the Aanila (acing lu', 5nc-, &as organi2ed and a/0os transferred to it all his rights and o'ligations under his contract &ith the Aanila Joc@e" lu'- 3s the third install/ent of P300,000 'eca/e due on *4 Dece/'er 1,39, and the 0urchaser could not 0a" it, the vendor, on 11 Januar" 1,3+, declared the contract cancelled and @e0t the a/ount of P100,000 alread" 0aid- The 0urchaser &as, ho&ever, granted an e4tension until ** Januar" 1,3+, to revive the contract '" 0a"ing the P300,000, 'ut having failed to do this, the 0artners of the vendor ratified on *3 Januar" 1,3+, the cancellation of the contract agreed u0on '" its 'oard of directors and the forfeiture of the P100,000 0aid '" the 0urchaser- %n *3 Aarch 1,3+ the Aanila Joc@e" lu', 5nc-, &as organi2ed and to it &ere transferred all the 0ro0erties, rights and actions of the Aanila Joc@e" lu'3n action &as filed '" the Aanila (acing lu' against the Aanila Joc@e" lu' and its 0artners for the recover" fro/ the/ of the forfeited a/ount of P100,000 and for the 0a"/ent of P60,000 as da/ages- The trial court rendered =udg/ent a'solving the Aanila Joc@e" lu' and its 0artnersThe !u0re/e ourt affir/ed the a00ealed =udg/ent, &ith the costs against the Aanila (acing lu'1. C+ause re-err(n) to -or-e(ture o- amounts pa(' va+('" not contrary to +a," mora+s or pu +(c or'er3 Burpose o- a pena+ c+ause
.a+es" /001 ( 1$4 )
The clause regarding the forfeiture of &hat has 'een 0artiall" 0aid is valid- 5t is in the nature of a 0enal clause &hich /a" 'e legall" esta'lished '" the 0arties (articles 116* and 1*66 of the ivil ode)- 5n its dou'le 0ur0ose of insuring co/0liance &ith the contract and of other&ise /easuring 'eforehand the da/ages &hich /a" result fro/ non)co/0liance, it is not contrar" to la&, /orals or 0u'lic order 'ecause it &as voluntaril" and @no&ingl" agreed u0on '" the 0arties- 1ie&ing concretel" the true effects thereof in the 0resent case, the a/ount forfeited constitutes onl" <I of the sti0ulated 0rice, &hich is not e4cessive if considered as the 0rofit &hich &ould have 'een o'tained had the contract 'een co/0lied &ith- There is evidence that the Aanila Joc@e" lu', 'ecause of the contract &ith a/0os, had to re=ect other 0ro0ositions to 'u" the sa/e 0ro0ert"- 3t an" rate, the 0enal clause does a&a" &ith the dut" to 0rove the e4istence and /easure of the da/ages caused '" the 'reach/. A++e)at(on t*at 9an(+a Fockey C+u respons( +e -or nonDcomp+(ance ,(t* contract not 8ust(-(e' The allegation that the Aanila Joc@e" lu' &as res0onsi'le for the non)co/0liance &ith the contract is not =ustified- There is no sufficient evidence that the /a=orit" of the /e/'ers of the Aanila Joc@e" lu' 0ro/ised to su'scri'e to one)half of the shares of Aanila (acing lu', and for failure to live u0 to this 0ro/ise, the /one" to 0a" the third install/ent of P300,000 could not 'e raised- a/0os hi/self attri'utes the failure to 0a" the third install/ent to the fact that the 0u'lic, due to the state of the stoc@ /ar@et, did not res0ond to the e40ectations of the incor0orators of the Aanila (acing lu'- Dut it see/s that even this is not the cause of the 'reach, for on the date the third install/ent 'eca/e due, the Aanila (acing lu' had su'scri'ed shares of its ca0ital stoc@ in the a/ount of P900,000, 0aid in 0art and the re/ainder 0a"a'le on de/and- The deduction fro/ all this is that the 'reach of the contract cannot 'e attri'uted to the Aanila Joc@e" lu' and, /uch less, to the co/0an" &hich, it is also alleged, the defendants 'rought into 'eing to defeat the organi2ation of the Aanila (acing lu'[:0] 9apa+o v. 9apa+o [G.R. No. @D/148# an' @D/1:/8. 9ay 1#" 1#::.] >n Danc, Deng2on JP (J): 10 concur %acts& !0ouses Aiguel Aa0alo and andida Uui'a, si/0le illiterate far/ers, &ere registered o&ners of a 1,936 s.-/s- residential land in Aanaoag, Pangasinan (% T 49603)- The s0ouses)o&ners, out of love and affection for Aa4i/o Aa0alo, 'rother of Aiguel &ho &as a'out to get /arried, decided to donate the eastern half of the land to hi/- % T 49603 &as delivered- 3s a result, ho&ever, the" &ere deceived into signing, on 16 %cto'er 1,39, a deed of a'solute sale over the entire land in his favor- Their signature thereto &ere 0rocured '" fraud, i-e- the" &ere /ade to 'elieve '" Aa4i/o Aa0alo and the attorne" &ho acted as notar" 0u'lic &ho 7translated8 the docu/ent, that the sa/e &as a deed of donation in Aa4i/o;s favor covering P (the eastern half) of their land- 3lthough the docu/ent of sale stated a consideration of P600, the s0ouses did not receive an"thing of value for the land- The attorne";s /is'ehavior &as the su'=ect of an investigation 'ut its result does not a00ear on record- Follo&ing the e4ecution of the docu/ent the s0ouses i//ediatel" 'uilt a fence of 0er/anent structure in the /iddle of their land segregating the eastern 0ortion fro/ its &estern 0ortion- !aid fence still e4ists- The s0ouses have al&a"s 'een in continued 0ossession over the &estern half of the land u0 to the 0resent- ?n@no&n to the/, Aa4i/o Aa0alo, on 16 Aarch 1,3<, registered the deed of sale in his favor and o'tained in his na/e T T 1*<*, over the entire land- 13 "ears later, on *0 %cto'er 1,61, he sold for P*,600-00 said entire land in favor >varisto, Petronila, Pacifico and Aiguel $arciso- The sale to the $arcisos &as in turn registered on 6 $ove/'er 1,61 and T T 11360 &as issued for the &hole land in their na/es- The $arcisos too@ 0ossession onl" of the eastern 0ortion of the land in 1,61, after the sale in their favor &as /ade%n + Fe'ruar" 1,6* the $arcisos filed suit in the F5 Pangasinan ( ivil ase 11,,1) to 'e declared o&ners of the entire landG for 0ossession of its &estern 0ortionG for da/agesG and for rentals- 5t &as 'rought against the Aa0alo s0ouses as &ell as against Floro Fuie' and (osalia Aa0alo Fuie' &ho had a house on the &estern
.a+es" /001 ( 1$$ )
0art of the land &ith the consent of the s0ouses Aa0alo and Uui'a- The Aa0alo s0ouses filed their ans&er &ith a counterclai/ on 1+ Aarch 1,6*, see@ing cancellation of the T T of the $arcisos as to the &estern half of the land, on the grounds that their signatures to the deed of sale of 1,39 &ere 0rocured '" fraud and that the $arcisos &ere 'u"ers in 'ad faith- The" as@ed for reconve"ance to the/ of the &estern 0ortion of the land and issuance of a T T in their na/es as to said 0ortion- 5n addition, the Aa0alo s0ouses filed on 19 Dece/'er 1,6+ their o&n co/0laint in the F5 Pangasinan ( ivil ase ?)133) against the the $arcisos and Aa4i/o Aa0alo- The" as@ed that the deeds of sale of 1,39 and of 1,61 over the land in .uestion declared null and void as to the &estern half of said land- Judge 3/ado !antiago of the F5 Pangasinan located in the /unici0alit" of ?rdaneta the t&o cases =ointl"- !aid court rendered =udg/ent on 1< Januar" 1,91 dis/issing the co/0laint in ivil ase 11,,1, declaring the deed as that of donation onl" over the eastern half 0ortion of the land, and as null and void &ith res0ect to the &estern half 0ortion thereof, declaring T T 1*<*, issued to Aa4i/o Aa0alo as regards the &estern 0ortion of the land null and void and &ithout legal force as &ell as T T 11360 su'se.uentl" issued to the $arcisos, ordering the Aa0alo s0ouses and the $arcisos to have the land su'divided '" a co/0etent land surve"or, the e40enses of &hich to 'e 'orne out '" the 0arties 0ro)rata, ordering the (egister of Deed to issue in lieu of T T 11360 t&o ne& titles u0on co/0letion of the su'division 0lan (one in favor of the Aa0alo s0ouses for the &estern 0ortion, and one for the $arcisos covering the eastern half), and ordering Aa4i/o Aa0alo and the $arcisos to 0a" the costsThe $arcisos a00ealed to the ourt of 300eals- 5n its decision on *< Aa" 1,93, the ourt of 300eals reversed the Judg/ent of the F5, solel" on the ground that the consent of the Aa0alo s0ouses to the deed of sale of 1,39 having 'een o'tained '" fraud, the sa/e &as voida'le, not void a' initio, and, therefore, the action to annul the sa/e, &ithin 4 "ears fro/ notice of the fraud, had long 0rescri'ed- 5t rec@oned said notice of the fraud fro/ the date of registration of the sale on 16 Aarch 1,3<- The F5 and the 3 are therefore unani/ous that the s0ouses Aa0alo and Uui'a &ere definitel" the victi/s of fraud- 5t &as onl" on 0rescri0tion that the" lost in the ourt of 300eals- Fro/ said decision of the ourt of 300eals, the Aa0alo s0ouses a00ealed to the ourtThe !u0re/e ourt reversed and set aside the decision of the ourt of 300eals, and rendered another affir/ing in toto the =udg/ent of the F5, &ith attorne"s; fees on a00eal in favor of the Aa0alo !0ouses in the a/ount of P1,000-00, 0lus the costs, 'oth against Aa4i/o Aa0alo and the $arcisos1. Contract3 Re2u(s(tes ?nder the ivil ode, either old or the ne&, for a contract to e4ist at all, three essential re.uisites /ust concur: (1) consentG (*) o'=ect, and (3) cause or consideration/. Eastern *a+- 'onate'3 %(n'(n) o- t*e +o,er court as to t*e 'onat(on not assa(+e' an' t*us (s -(na+ 3s regards the eastern 0ortion of the land, the Aa0alo s0ouses are not clai/ing the sa/e, it 'eing their stand that the" had donated and freel" given said half of their land to Aa4i/o Aa0alo- 3nd since the" did not a00eal fro/ the decision of the trial court finding that there &as a valid and effective donation of the eastern 0ortion of their land in favor of Aa4i/o Aa0alo, the sa/e 0ronounce/ent has 'eco/e final as to the/, rendering it no longer 0ro0er herein to e4a/ine the e4istence, validit" or efficac" of said donation as to said eastern 0ortion1. Contracts ,(t*out a cause vo(' ?nder the ivil ode, 'e it the old or the ne&, is that contracts &ithout a cause or consideration 0roduce no effect &hatsoever4. >+' C(v(+ Co'e3 Contracts ,(t* -a+se cons('erat(on vo('a +e3 Brescr(pt(on o- vo('a +e contracts ?nder the %ld ivil ode, the state/ent of a false consideration renders the contract voida'le, unless it is 0roven that it is su00orted '" another real and licit consideration- 3nd it is further 0rovided '" the %ld ivil ode that the action for annul/ent of a contract on the ground of falsit" of consideration shall last 4
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"ears, the ter/ to run fro/ the date of the consu//ation of the contract$. %a+se cons('erat(on a rea+ cons('erat(on ut not t*e one state' (n t*e 'ocument 3ccording to Aanresa, &hat is /eant '" a contract that states a false consideration is one that has in fact a real consideration 'ut the sa/e is not the one stated in the docu/ent- (7The difference 'et&een si/ulation and the contract &ith fraudulent intention (0ur0ose)- This, although illicit is realG 'ut the first is false in fact, although it a00ears to 'e real-8 KAanresa, ivil ode 1olu/e 1555, vol- 55, 0- 364L):. >n+y a '(stur e' man ,ou+' contract ,(t*out cause3 %a+se cause v(t(ates consent an' annu+s contract (.anc*eC Roman) The ins0ection of cause in the contract is necessar", and that &ithout it the" are nullG it can onl" 'e conceived that a distur'ed /an &ould, in his reason, contract &ithout cause- For the sa/e reason of the necessit" of ins0ection of cause in the contract, it is 0recise that such is real and not su00osed, as it 0retends or a00ears- The falsification of the cause vitiates the consent and annuls the contract, that is, not onl" as a doctrine undou'tedl" of scientific la&, 'ut also of old la&s of astile, that in /ultitude of la&s that declare it-8 (!anche2 (o/an, ivil (ight, 1olu/e 51, 0- *09-) !. No cons('erat(on 'oes not mean -a+se cons('erat(on -or Art(c+e 1/!: to e app+(e' :here there &as in fact no consideration, the state/ent of one in the deed &ill not suffice to 'ring it under the rule of 3rticle 1*+9 of the %ld ivil ode as stating a false consideration8. >ce(o BereC v. %+ores app+(es3 Contract nu++ an' vo(' (- ,(t*out cause or cons('erat(on The ruling of the ourt in %ce=o Pere2 Q o- vs- Flores (40 Phil- ,*1), is s.uarel" a00lica'le herein5n that case, it &as ruled that a contract of 0urchase and sale is null and void and 0roduces no effect &hatsoever &here the sa/e is &ithout cause or consideration in that the 0urchase 0rice &hich a00ears thereon as 0aid has in fact never 'een 0aid '" the 0urchaser to the vendor#. Ho(' contract (ncura +e an' cannot e su 8ect o- prescr(pt(on The ine4istence of a contract is 0er/anent and incura'le and cannot 'e the su'=ect of 0rescri0tionThe none4istence is 0er0etual and irre0lacea'le not 'eing a'le to 'e o'=ect of confir/ation nor 0rescri0tion3s held in )ugenio vs. Per$i$o (,+ Phil- 41, 4*)43 K1,3*L), it &as stated that 7under the e4isting classification, such contract &ould 'e Hine4istent; and Hthe action or defense for declaration; of such ine4istence Hdoes not 0rescri'e;- (3rt- 1410, $e& ivil ode-) :hile it is true that this is a ne& 0rovision of the $e& ivil ode, it is nevertheless a 0rinci0le recogni2ed since Tipton vs. ?e"asco (9 Phil- 9+) that H/ere a la0se of ti/e cannot give efficac" to contracts that are null and void;10. Narc(sos not purc*asers (n )oo' -a(t* 5t has 'een 0ositivel" sho&n '" the undis0uted testi/on" of andida Uui'a that Pacifico $arciso and >varisto $arciso sta"ed for so/e da"s on the &estern side of the land until their house &as re/oved in 1,40 '" the s0ouses Aa0alo- 3lso, Pacifico $arciso ad/itted in his testi/on" that &hen the" 'ought the 0ro0ert", Aiguel Aa0alo &as still in the 0re/ises in .uestion (&estern 0art) &hich he is occu0"ing and his house is still standing thereon- Aoreover, Pacifico $arciso &hen 0resented as a re'uttal and su')re'uttal &itness categoricall" declared that 'efore 'u"ing the land in .uestion he &ent to the house of s0ouses Aa0alo and as@ed the/ if the" &ill 0er/it Aa4i/o Aa0alo to sell the 0ro0ert"- Further, as the 0arties in the cases are neigh'ors (e4ce0t Aa4i/o Aa0alo), it is clear that the $arcisos &ere a&are of the e4tent of the interest of Aa4i/o Aa0alo over the land 'efore and after the e4ecution of the deed of sale- ?nder the situation, thus, the $arcisos /a" 'e considered in value 'ut certainl" not as 0urchasers in good faith11. No nee' to reman' case to tr(a+ court as -acts o- tr(a+ court susta(ne' y Court o- Appea+s 3s the ourt of 300eals declared that 7on the /erits, the a00ealed decision called have 'een u0held under 3rticle 133* of ivil ode and the follo&ing authorities: 3"ola vs- 1alderra/a Lu/'er Aanufacturers
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a-, 5nc-, 4, %F ,<0, ,<*G Tras0orte Deltran, 61 %F 1434, 1436G orte2 vs- orte2, 3) 1<461)(, 3ugust <, 1,91G astilllo vs- La'erinto, 3)F-(- $o- 1<11<)(, Dece/'er *0, 1,91G and 13 - J- 3+*)3+3, as &ell as the several facts and circu/stances a00reciated '" the trial court as su00orting the Aa0alo s0ouses; case,8 it thus sustained J 'arring onl" its ruling on 0rescri0tion J the =udg/ent and findings of the trial court, including that of 'ad faith on the 0art of the $arcisos in 0urchasing the land in .uestion- The !u0re/e ourt thus do not see the need to further re/and the case to the ourt of 300eals for a ruling on the 0oint in the event that the 1,39 contract is held to 'e ine4istent as regards the &estern 0ortion of the land1/. Ba' -a(t* 8ust(-(es a,ar' o- attorney=s -ees 5n vie& of the $arcisos; 'ad faith under the circu/stances &e dee/ it =ust and e.uita'le to a&ard, in the Aa0alo s0ouses; favor, attorne"s; fees on a00eal, in the a/ount of P1,000-00 as 0ra"ed for in the counterclai/[:1] 9ate v. CA [G.R. Nos. 1/0!/4D/$. 9ay /1" 1##8.] !econd Division, Aartine2 (J): 4 concur %acts& %n 9 %cto'er 1,<9 Josefina (- (e" and 5nocencio Tan &ent to the residence of Fernando Aate at Taclo'an it"- Josie &ho is a cousin of Aate;s &ife solicited his hel0 to stave off her and her fa/il";s 0rosecution '" Tan for violation of DP ** on account of the ru''er chec@s that she, her /other, sister and 'rother issued to Tan a/ounting to P4,43*,09+-00- !he re.uested Aate to cede to Tan his 3 lots in Taclo'an it" in order to 0lacate hi/- %n hearing Josie;s 0ro0osal, he i//ediatel" re=ected it as he o&ed Tan nothing and he &as under no o'ligation to conve" to hi/ his 0ro0erties- Further/ore, his lots &ere not for sale- Josie e40lained to hi/ that he &as in no danger of losing his 0ro0erties as he &ill /erel" e4ecute a si/ulated docu/ent transferring the/ to Tan 'ut the" &ill 'e redee/ed '" her &ith her o&n funds- 3fter a long discussion, he agreed to e4ecute a fictitious deed of sale &ith right to re0urchase covering his 3 lots, su'=ect to the conditions that the a/ount to 'e stated in the docu/ent is P1,400,000-00 &ith interest thereon at 6I a /onthG the 0ro0erties &ill 'e re0urchased &ithin 9 /onths or on or 'efore 4 30ril 1,<+G although it &ould a00ear in the docu/ent that Aate is the vendor, it is Josie &ho &ill 0rovide the /one" for the rede/0tion of the 0ro0erties &ith her o&n fundsG and the titles to the 0ro0erties &ill 'e delivered to Tan 'ut the sale &ill not 'e registered in the (egister of Deeds and annotated on the titles- Josie, to assure Aate that she &ill redee/ the 0ro0erties, issued hi/ * DP5 chec@s 'oth 0ostdated 16 Dece/'er 1,<9- %ne chec@ &as for P1,400,000-00 su00osedl" for the selling 0rice and the other &as for P4*0,000-00 corres0onding to the interests for 9 /onths- 5//ediatel" thereafter Aate 0re0ared the Deed of !ale &ith (ight to (e0urchase and after it has 'een signed and notari2ed, it &as given to Tan together &ith the titles of the 0ro0erties and the latter did not register the transaction in the (egister of Deeds as agreed u0on- %n 14 Januar" 1,<+, Aate de0osited the chec@ for P1,400,000-00 in his account at the ? PD and the other chec@ for P4*0,000-00 in his account at AetroDan@ 0re0arator" to the rede/0tion of his 0ro0erties- Doth of the/ &ere dishonored '" the dra&ee 'an@ for having 'een dra&n against a closed account- (eali2ing that he &as s&indled, he sent Josie a telegra/ a'out her chec@s and &hen she failed to res0ond, he &ent to Aanila to loo@ for her 'ut she could not 'e foundAate returned to Taclo'an it" and filed ri/inal ases <310 and <31* against her for violation of DP ** 'ut the cases &ere later archived as the accused (Josie) could not 'e found as she &ent into hiding- To 0rotect his interest, he filed ivil ase +3,9 of the (T Le"te (Dranch 155, Aate vs- (e" and Tan) for 3nnul/ent of ontract &ith Da/ages- Josie &as declared in default and the case 0roceeded against Tan- Dut during the trial the (T court as@ed Tan to file an action for consolidation of o&nershi0 of the 0ro0erties su'=ect of the sale and 0ursuant thereto he filed ivil ase +6<+ that &as consolidated &ith the case he filed earlier &hich &ere later decided =ointl" '" the trial court in favor of Tan and &as su'se.uentl" a00ealed to the ourt of 300ealsThe a00ellate court, on *, 3ugust 1,,4 ( 3)F( 1 *<**6)*9), affir/ed the decision &ith /odification that
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Aate is ordered to 0a" Tan the su/ of P140,000 for and as attorne";s feesG &ith costs against AateThereu0on, Aate filed a /otion to reconsider the decision 'ut it &as denied- #ence, the 0etition for revie&The !u0re/e ourt affir/ed the decision of the course to the 0etition for revie& for lac@ of /erit1. ourt of 300eals dated *, 3ugust 1,,4, and denied due
Cons('erat(on e7(st (n t*e Dee' o- .a+e ,(t* R()*t to Repurc*ase (.a+e ,(t* Bacto 'e Retro) To ensure that he could re0urchase his lots, Aate got a chec@ of P1,400,000-00 fro/ Josie- D" allo&ing his titles to 'e in 0ossession of Tan for a 0eriod of 9 /onths, Aate secured fro/ her another chec@ for P4*0,000-00- 5t is thus 0lain that consideration e4isted at the ti/e of the e4ecution of the deed of sale &ith right of re0urchase- 5t is not onl" Aate;s @indness to Josefina, 'eing his cousin, 'ut also his recei0t of P4*0,000-00 fro/ her &hich i/0elled hi/ to e4ecute such contract- :hile Aate did not receive the P1-4A 0urchase 0rice fro/ Tan, he had in his 0ossession a 0ostdated chec@ of Josie in an e.uivalent a/ount 0recisel" to re0urchase the * lots on or 'efore the 9th /onth/. No as(s to -(+e an act(on to annu+ t*e pacto 'e retro sa+e3 Broper cause o- act(on (s BB // a)a(nst Fos(e3 %(+(n) o- cr(m(na+ case a tac(t a'm(ss(on t*at t*ere (s cons('erat(on o- t*e pacto 'e retro sa+e There is a'solutel" no 'asis for Aate to file a co/0laint against Tan and Josie to annul the 0acto de retro sale on the ground of lac@ of consideration, invo@ing his failure to encash the t&o chec@s- Aate;s cause of action &as to file cri/inal actions against Josie under DP **, &hich he did- The filing of the cri/inal cases &as a tacit ad/ission '" 0etitioner that there &as a consideration of the 0acto de retro sale- Aate @ne& that he &as 'ound '" the deed of sale &ith right to re0urchase, as evidenced '" his filing cri/inal cases against Josie &hen the t&o chec@s 'ounced1. .(n)son v. Gsa e+a .a,m(++ 'oes not app+y Aate;s reliance on the doctrine in !ingson vs- 5sa'ela !a&/ill (88 SC6A '&&, '-&(, &here the ourt said that 7&here one or t&o innocent 0ersons /ust suffer, that 0erson &ho gave occasion for the da/ages to 'e caused /ust 'ear conse.uences8 is /is0laced- #e is not an innocent 0erson- 3s a /atter of fact, he gave occasion for the da/age caused '" virtue of the deed of sale &ith right to re0urchase &hich he 0re0ared and signed- Thus, there is the e.uita'le /a4i/ that 'et&een t&o innocent 0arties, the one &ho /ade it 0ossi'le for the &rong to 'e done should 'e the one to 'ear the resulting loss4. ;an (ncurre' no -a+se pretense3 9ate *as no one to +ame ut *(mse+- -or *(s m(s-ortune3 9ate a +a,yer Tan did not e/0lo" an" devious sche/e to /a@e the for/er sign the deed of sale- Tan &aived his right to collect fro/ Josie '" virtue of the 0acto de retro sale- 5n turn, Josie gave Aate a 0ostdated chec@ in the a/ount of P1-4A to ensure that the latter &ould not lose his t&o lots- Aate, a la&"er, should have @no&n that the transaction &as fraught &ith ris@s since Josie and fa/il" had a chec@ered histor" of issuing &orthless chec@s- Dut had Aate not agreed to the arrange/ent, Tan &ould not have agreed to &aive 0rosecution of Josie- 300arentl", it &as Aate;s greed for a huge 0rofit that i/0elled hi/ to accede to the sche/e of Josie even if he @ne& it &as a dangerous underta@ing- :hen he drafted the 0acto de retro docu/ent, he thre& caution to the &inds forgetting that 0rudence /ight have 'een the 'etter course of action- :hen Josie;s chec@s 'ounced, he should have re0urchased his lots &ith his o&n /one"- 5nstead, he sued not onl" Josie 'ut also Tan for annul/ent of contract on the ground of lac@ of consideration and false 0retenses on their 0art$. Contracts 3 contract is a contract- %nce agreed u0on, and 0rovided all the essential ele/ents are 0resent, it is valid and 'inding 'et&een the 0arties[:/]
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Mc"au4hin v. CA, /-- SC6A '0& (/08'( [:1] 9e'(na v. Co++ector o- Gnterna+ Revenue [G.R. No. @D1$111. Fanuary /8" 1#:1.] >n Danc, (e"es JDL (J): 9 concur %acts& %n *0 Aa" 1,44, 3ntonio Aedina /arried 3ntonia (odrigue2- Defore 1,49, the s0ouses had neither 0ro0ert" nor 'usiness of their o&n- Later, ho&ever, 3ntonio ac.uired forest concessions in the /unici0alities of !an Aariano and Palanan, 5sa'ela- Fro/ 1,49 to 1,4<, the logs cut and re/oved '" the 3ntonio fro/ his concessions &ere sold to different 0ersons in Aanila through his agent, Aariano %sorio- 5n 1,4,, 3ntonia started to engage in 'usiness as a lu/'er dealer, and u0 to around 1,6*, 3ntonio sold to her al/ost all the logs 0roduced in his !an Aariano concession- 3ntonia, in turn, sold in Aanila the logs 'ought fro/ her hus'and through the sa/e agent, Aariano %sorio- The 0roceeds &ere either received '" %sorio for 3ntonio or de0osited '" said agent in 3ntonio;s current account &ith the P$D%n the thesis that the sales /ade '" 3ntonio to his &ife &ere null and void 0ursuant to the 0rovisions of 3rticle 14,0 of the ivil ode of the Phili00ines, the ollector considered the sales /ade '" 3ntonia as 3ntonio;s original sales ta4a'le under !ection 1<9 of the $ational 5nternal (evenue ode and, therefore, i/0osed a ta4 assess/ent on 3ntonio- %n 30 $ove/'er 1,93, 3ntonio 0rotested the assess/entG ho&ever, the ollector insisted on his de/and- %n , Jul" 1,64, 3ntonio filed a 0etition for reconsideration, revealing for the first ti/e the e4istence of an alleged 0re/arital agree/ent of co/0lete se0aration of 0ro0erties 'et&een hi/ and his &ife, and contending that the assess/ent for the "ears 1,49 to 1,6* had alread" 0rescri'ed- 3fter one hearing, the onference !taff of the Dureau of 5nternal (evenue eli/inated the 60I fraud 0enalt" and held that the ta4es assessed against hi/ 'efore 1,4< had alread" 0rescri'ed- Dased on these findings, the ollector issued a /odified assess/ent, de/anding the 0a"/ent of onl" P3,3*6-9<- 3ntonio again re.uested for reconsideration, 'ut the ollector, in his letter of 4 30ril 1,66, denied the sa/e3ntonio a00ealed to the ourt of Ta4 300eals, &hich rendered =udg/ent u0holding a ta4 assess/ent of the ollector of 5nternal (evenue e4ce0t &ith res0ect to the i/0osition of so)called co/0ro/ise 0enalties, &hich &ere set aside- #ence a 0etition to revie& the decision of the T3The !u0re/e ourt affir/ed the a00ealed decision &ith cost against the 0etitioner1. No ev('ence prov(n) preDmar(ta+ a)reement o- a so+ute separat(on et,een t*e spouses 3side fro/ the /aterial inconsistencies in the testi/on" of 0etitioner;s &itnesses, the circu/stantial evidence is against 0etitioner;s clai/- (1) 5t a00ears that at the ti/e of the /arriage 'et&een the 0etitioner and his &ife, the" neither had an" 0ro0ert" nor 'usiness of their o&n, as to have reall" urged the/ to enter into the su00osed 0ro0ert" agree/ent- (*) The testi/on" that the se0aration of 0ro0ert" agree/ent &as recorded in the (egistr" of Pro0ert" 3 /onths 'efore the /arriage, is 0atentl" a'surd, since such a 0re)nu0tial agree/ent could not 'e effective 'efore /arriage is cele'rated- (3) Des0ite their insistence on the e4istence of the ante) nu0tial contract, the cou0le, strangel" enough, did not act in accordance &ith its alleged covenantsG 'ut that even during their ta4a'le "ears, the o&nershi0, usufruct, and ad/inistration of their 0ro0erties and 'usiness &ere in the hus'and- (4) 3lthough 0etitioner alread" @ne& that 3rticle 14,0 0rohi'its sales 'et&een s0ouses /arried under a co//unit" s"ste/, it &as not until Jul" 1,64 that the allege the e4istence of the alleged 0ro0ert" se0aration agree/ent- (6) The Da" Doo@ of the (egister of Deeds on &hich the agree/ent &ould have 'een entered, &hich &as saved fro/ the ravages of &ar, did not sho& that the docu/ent in .uestion &as a/ong those recorded therein/. ;r(a+ court=s 8u')ment on t*e 'e)ree o- cre'ence o- ,(tness cons('ere' ser(ous+y .upreme Court
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y t*e
:hen the credi'ilit" of &itnesses is the one at issue, the trial court;s =udg/ent as to their degree of credence deserves serious consideration '" this ourt (Co""ector vs. )autista, et a"., 7. 6. 8os. 9:/..$%, 9: /..$0, Ma, . , /0$0(. This is all the /ore true 'ecause not ever" co0" of the su00osed agree/ent, 0articularl" the one that &as said to have 'een filed &ith the ler@ of ourt of 5sa'ela, &as accounted for as lostG so that, a00l"ing the 7'est evidence rule8, the court did right in giving little or no credence to the secondar" evidence to 0rove the due e4ecution and contents of the alleged docu/ent (see Comments on the 6u"es of Court, Moran, /0$ 3d., ?o". &, pp. /%:/.(. 1. Art(c+e ! an' 10 o- Co'e o- Commerce 'oes not e7empt -rom t*e pro*( (t(on o- sa+e et,een spouses un'er Art(c+e 14#0 o- t*e C(v(+ Co'e 3rticle + and 10 of the ode of o//erce /erel" state, under certain conditions, a 0resu/0tion that the &ife is authori2ed to engage in 'usiness and for the incidents that flo& therefro/ &hen she so engages therein- The transactions 0er/itted therein ho&ever are those entered into &ith strangers, and do not constitute e4ce0tions to the 0rohi'itor" 0rovisions of 3rticle 14,0 against sales 'et&een s0ouses4. Government a+,ays an (ntereste' party (n ta7a +e transact(ons The govern/ent is al&a"s an interested 0art" to all /atters involving ta4a'le transactions and .ualified to .uestion their validit" or legiti/ac" &henever necessar" to 'loc@ ta4 evasion- 5t cannot 'e contended thus that the ollector cannot assail the .uestioned sales, he 'eing a stranger to said transactions$. Contracts v(o+at(ve o- Art(c+e 14#0 nu++ an' vo(' ontracts violative of the 0rovisions of 3rticle 14,0 of the ivil ode are null and void (D, Sui !in vs. Canto""as, % !hi". $$> D, Co5ue vs. Sioca, -$ !hi". -&(. 5n the 0resent case, 'eing void transactions, the sales /ade '" the 0etitioner to his &ife &ere correctl" disregarded '" the ollector in his ta4 assess/ents that considered as the ta4a'le sales those /ade '" the &ife through the s0ouses; co//on agent, Aariano %sorio:. (Q) G++e)a++y o ta(ne' 'ocuments an' papers a'm(ss( +e to ev('ence3 Revenue o--(cers can re2u(re pro'uct(on o- ooks o- accounts an' ot*er recor's -rom ta7payers 5llegall" o'tained docu/ents and 0a0ers are ad/issi'le in evidence, if the" are found to 'e co/0etent and relevant to the case (see Hon4 B 9ee vs. Co""ector of Interna" 6evenue, /%- !hi"., -'0( - Petitioner;s i/0utation, that the docu/entar" evidence is illegall" sei2ed, is vehe/entl" denied '" hi/, and rel"ing on !ections 3, ,, 33+ and 33< of the Ta4 ode and the 0ertinent 0ortions of (evenue (egulations $o- 1)1 and citing this ourt;s ruling in ?-!- vs- 3viado 3< Phil-, 10, the ollector /aintains that he and other internal revenue officers and agents could re.uire the 0roduction of 'oo@s of accounts and other records fro/ a ta40a"er[:4] 9e++(Ca v. G+o(+o C(ty [G.R. No. @D/4!1/. Apr(+ 10" 1#:8.] >n Danc, Deng2on JP (J): < concur, 1 on leave %acts& Juliana Aelli2a during her lifeti/e o&ned, a/ong other 0ro0erties, 3 0arcels of residential land in 5loilo it" (% T 349*)- !aid 0arcels of land &ere @no&n as Lots $os- *, 6 and 1*14- The total area of Lot 1*14 &as *,,0+3 s.- /- %n *+ $ove/'er 1,31 she donated to the then Aunici0alit" of 5loilo, ,,000 s.- /- of Lot 1*14, to serve as site for the /unici0al hall- The donation &as ho&ever revo@ed '" the 0arties for the reason that the area donated &as found inade.uate to /eet the re.uire/ents of the develo0/ent 0lan of the /unici0alit", the so) called 73rellano Plan-8 !u'se.uentl", Lot 1*14 &as divided '" erte2a !urve"ing o-, 5nc- into Lots 1*14)3 and 1*14)D- 3nd still later, Lot 1*14)D &as further divided into Lots 1*14)D)1, Lot 1*14)D)* and Lot 1*14)D)3- 3s a00roved '" the Dureau of Lands, Lot 1*14)D)1, &ith 4,69* s.- /-, 'eca/e @no&n as Lot 1*14)DG Lot 1*14)D)*, &ith 9,963 s.- /-, &as designated as Lot 1*14) G and Lot 1*14)D)3, &ith 4,136 s.- /-, 'eca/e Lot 1*14)D- %n 16 $ove/'er 1,3*, Juliana Aelli2a e4ecuted an instru/ent
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&ithout an" ca0tion 0roviding for the a'solute sale involving all of lot 6, +99, s.- /- of Lot * (su'lots *)D and *) ), and a 0ortion of 10,+<< s.- /- of Lot 1*14 (su'lots 1*14)D* and 1*14)D3) in favor of the Aunici0al Fovern/ent of 5loilo for the su/ of P9,4**G these lots and 0ortions 'eing the ones needed '" the /unici0al govern/ent for the construction of avenues, 0ar@s and it" hall site according the 73rellano 0lan-8 %n 14 Januar" 1,3<, Aelli2a sold her re/aining interest in Lot 1*14 to (e/edios !ian 1illanueva (thereafter T T 1<1+<)- (e/edios in turn on 4 $ove/'er 1,49 transferred her rights to said 0ortion of land to Pio !ian Aelli2a (thereafter T T *4,*)- 3nnotated at the 'ac@ of Pio !ian Aelli2a;s title certificate &as the follo&ing 7that a 0ortion of 10,+<< s.- /- of Lot 1*14 no& designated as Lots 141*)D)* and 1*14)D)3 of the su'division 0lan 'elongs to the Aunici0alit" of 5loilo as 0er instru/ent dated 16 $ove/'er 1,3*-8 %n *4 3ugust 1,4, the it" of 5loilo, &hich succeeded to the Aunici0alit" of 5loilo, donated the cit" hall site together &ith the 'uilding thereon, to the ?niversit" of the Phili00ines (5loilo 'ranch)- The site donated consisted of Lots 1*14)D, 1*14) and 1*14)D, &ith a total area of 16,360 s.- /-, /ore or less- !o/eti/e in 1,6*, the ?niversit" of the Phili00ines enclosed the site donated &ith a &ire fence- Pio !ian Aelli2a thereu0on /ade re0resentations, thru his la&"er, &ith the cit" authorities for 0a"/ent of the value of the lot (Lot 1*14)D)- $o recover" &as o'tained, 'ecause as alleged '" Pio !ian Aelli2a, the it" did not have fundsThe ?niversit" of the Phili00ines, /ean&hile, o'tained Transfer ertificate of Title $o- +16* covering the three lots, $os- 1*14)D, 1*14) and 1*14)D%n 10 Dece/'er 1,66 Pio !ian Aeli22a filed an action in the F5 5loilo against 5loilo it" and the ?niversit" of the Phili00ines for recover" of Lot 1*14)D or of its value- 3fter sti0ulation of facts and trial, the F5 rendered its decision on 16 3ugust 1,6+, dis/issing the co/0laint- !aid court ruled that the instru/ent e4ecuted '" Juliana Aelli2a in favor of 5loilo /unici0alit" included in the conve"ance Lot 1*14)D, and thus it held that 5loilo it" had the right to donate Lot 1*14)D to ?P- Pio !ian Aelli2a a00ealed to the ourt of 300eals- %n 1, Aa" 1,96, the 3 affir/ed the inter0retation of the F5 that the 0ortion of Lot 1*14 sold '" Juliana Aelli2a &as not li/ited to the 10,+<< s.uare /eters s0ecificall" /entioned 'ut included &hatever &as needed for the construction of avenues, 0ar@s and the cit" hall site- $onetheless, it ordered the re/and of the case for rece0tion of evidence to deter/ine the area actuall" ta@en '" 5loilo it" for the construction of avenues, 0ar@s and for cit" hall site- #ence, the a00eal '" Pio !an Aelli2a to the !u0re/e ourtThe !u0re/e ourt affir/ed the decision a00ealed fro/ insofar as it affir/s that of the F5, and dis/issed the co/0laintG &ithout costs1. Gnterpretat(on o- contract (nvo+ves 2uest(on o- +a, The inter0retation of the 0u'lic instru/ent dated 16 $ove/'er 1,3* involves a .uestion of la&, since the contract is in the nature of la& as 'et&een the 0arties and their successors in interest/. Gntent o- t*e part(es as to t*e o 8ect o- t*e pu +(c (nstrument The 0ara/ount intention of the 0arties &as to 0rovide 5loilo /unici0alit" &ith lots sufficient or ade.uate in area for the construction of the 5loilo it" hall site, &ith its avenues and 0ar@s- For this /atter, a 0revious donation for this 0ur0ose 'et&een the sa/e 0arties &as revo@ed '" the/, 'ecause of inade.uac" of the area of the lot donated- !aid instru/ent descri'ed 4 0arcels of land '" their lot nu/'ers and areaG and then it goes on to further descri'e, not onl" those lots alread" /entioned, 'ut the lots o'=ect of the sale, '" stating that said lots &ere the ones needed for the construction of the cit" hall site, avenues and 0ar@s according to the 3rellano 0lan- 5f the 0arties intended /erel" to cover the s0ecified lots (Lots *, 6, 1*14) and 1*14)D), there &ould scarcel" have 'een an" need for the ne4t 0aragra0h, since these lots &ere alread" 0lainl" and ver" clearl" descri'ed '" their res0ective lot nu/'er and areas- !aid ne4t 0aragra0h does not reall" add to the clear descri0tion that &as alread" given to the/ in the 0revious one- 5t is therefore the /ore reasona'le inter0retation to vie& it as descri'ing those other 0ortions of land contiguous to the lots that, '" reference to the 3rellano 0lan, &ill 'e found needed for the 0ur0ose at hand, the construction of the cit" hall site1. Re2u(rement" t*at sa+e must *ave a 'eterm(nate t*(n) as o 8ect" (s -u+-(++e' (- o 8ect o- sa+e (s
.a+es" /001 ( 1:/ )
capa +e o- e(n) ma'e 'eterm(nate at t*e t(me o- t*e contract The re.uire/ent of the la& that a sale /ust have for its o'=ect a deter/inate thing, is fulfilled as long as, at the ti/e the contract is entered into, the o'=ect of the sale is ca0a'le of 'eing /ade deter/inate &ithout the necessit" of a ne& or further agree/ent 'et&een the 0arties (3rt- 1*+3, old ivil odeG 3rt- 1490, $e& ivil ode)- The s0ecific /ention of so/e of the lots 0lus the state/ent that the lots o'=ect of the sale are the ones needed for cit" hall siteG avenues and 0ar@s, according to the 3rellano 0lan, sufficientl" 0rovides a 'asis, as of the ti/e of the e4ecution of the contract, for rendering deter/inate said lots &ithout the need of a ne& and further agree/ent of the 0arties4. Are++ano p+an (n e7(stence s(nce 1#/83 Area o- +an' nee'e' -or t*e c(ty *a++ s(te kno,n The 3rellano 0lan &as in e4istence as earl" as 1,*<- Tthe 0revious donation of land for cit" hall site on *+ $ove/'er 1,31 &as revo@ed on 9 Aarch 1,3* for 'eing inade.uate in area under said 3rellano 0lanThe area needed under that 0lan for cit" hall site &as then alread" @no&nG that the s0ecific /ention of so/e of the lots covered '" the sale in effect fi4ed the corres0onding location of the cit" hall site under the 0lanG that, therefore, considering the said lots s0ecificall" /entioned in the 0u'lic instru/ent, and the 0ro=ected cit" hall site, &ith its area, as then sho&n in the 3rellano 0lan (>4hi'it *), it could 'e deter/ined &hich, and ho& /uch of the 0ortions of land contiguous to those s0ecificall" na/ed, &ere needed for the construction of the cit" hall site$. @ot 1/14DB (s cont()uous to @ot 1/14DC an' 1/14DD" an' (s (n t*e *eart o- t*e c(ty *a++ s(te Lot 1*14)D is contiguous to Lots 1*14) and 1*14)D, ad/ittedl" covered '" the 0u'lic instru/ent- 5t is sti0ulated that, after e4ecution of the contract, the Aunici0alit" of 5loilo 0ossessed it together &ith the other lots sold- 5t sits 0racticall" in the heart of the cit" hall site:. B(o .(an 9e++(Ca a notary pu +(c an' t*us a,are o- t*e terms o- t*e pu +(c (nstrument Pio !ian Aelli2a, fro/ the sti0ulation of facts, &as the notar" 0u'lic of the 0u'lic instru/ent- 3s such, he &as a&are of its ter/s- !aid instru/ent &as also registered &ith the (egister of Deeds and such registration &as annotated at the 'ac@ of the corres0onding title certificate of Juliana Aelli2a- Fro/ these sti0ulated facts, it can 'e inferred that Pio !ian Aelli2a @ne& of the aforesaid ter/s of the instru/ent or is chargea'le &ith @no&ledge of the/G that @no&ing so, he should have e4a/ined the 3rellano 0lan in relation to the 0u'lic instru/entG that further/ore, he should have ta@en notice of the 0ossession first '" the Aunici0alit" of 5loilo, then '" the it" of 5loilo and later '" the ?niversit" of the Phili00ines of Lot 1*14)D as 0art of the cit" hall site conve"ed under that 0u'lic instru/ent, and raised 0ro0er o'=ections thereto if it &as his 0osition that the sa/e &as not included in the sa/e!. Br(nc(p+es o- c(v(+ +a," as ,e++ as +ac*es" estoppe+ an' e2u(ty app+(e'3 @ot (nc+u'e' (n conveyance For *0 long "ears, Pio !ian Aelli2a and his 0redecessors)in)interest, did not o'=ect to said 0ossession, nor e4ercise an" act of 0ossession over Lot 1*14)D- 300l"ing, therefore, 0rinci0les of civil la&, as &ell as laches, esto00el, and e.uit", said lot /ust necessaril" 'e dee/ed included in the conve"ance in favor of 5loilo /unici0alit", no& 5loilo it"[:$] 9en'oCa vs. Aa+a, [G.R. No. 1:4/0. >cto er 1/" 1#/1.] !econd Division, Johnson (J): 4 concur %acts& %n *4 !e0te/'er 1,1,, Federico aMet sold, under a conditional sale, the 0arcel of land in .uestion to the Pri/itivo Cala&- %n < $ove/'er 1,1,, aMet /ade an a'solute sale of said 0arcel of land to 3gri0ino Aendo2a- %n 1* $ove/'er 1,1,, Aendo2a entered u0on, and too@ actual 0ossession of, said 0arcel of land, enclosed it &ith a fence, and 'egan to clean the sa/e- 3fter doing so, a re0resentative of Cala& clai/ed and atte/0ted to o'tain 0ossession of said lot, 'ut Aendo2a, &ho &as then in 0ossession, refused to deliver the
.a+es" /001 ( 1:1 )
0ossession, u0on the ground that he &as the o&ner- %n 1+ $ove/'er (1< $ove/'er) 1,1,, Cala& atte/0ted to have his title registered in the registr" of deeds of the it" of Aanila, 'ut such registration &as denied '" the register of deeds for the reason that there e4isted so/e defect in the descri0tion of the 0ro0ert", and for the reason that the title of the vendor had not theretofore 'een registered- The register of deeds, ho&ever, did /a@e an 7anotacion 0reventiva-8 %n *9 $ove/'er 1,1,, 3gri0ino Aendo2a filed a 0etition in the F5 Aanila for the registration, under the Torrens s"ste/, of a 0iece or 0arcel of land, 0articularl" descri'ed in 0aragra0h 3 of the 0etition- The said lot is alleged to have an area of 3+1-9 s.uare /eters- Aendo2a alleged that he &as the o&ner in fee si/0le of said 0arcel of land for the reason that he had 0urchased the sa/e of Federico aMet on < $ove/'er 1,1,3cco/0an"ing the 0etition, there &as united a 0lan containing a technical descri0tion of the /etes and 'ounds of said 0arcel of land- To the registration of said 0arcel of land the o00ositor, Pri/itivo Cala&, 0resented his o00osition, alleging that he &as the o&ner of the sa/e and that he had ac.uired it fro/ the said Federico aMet- ?0on the issue thus 0resented '" the 0etition and o00osition, and on *3 Januar" 1,*0, the ourt reached the conclusion that Aendo2a &as the o&ner in fee si/0le of said 0arcel of land, and ordered it registered in his na/e in accordance &ith the 0rovisions of the Land (egistration 3ct- Fro/ that decree the o00ositor a00ealed to the !u0re/e ourtThe !u0re/e ourt affir/ed the =udg/ent ordering the registration of the 0arcel of land in .uestion in Aendo2a;s na/eG &ith costs1. @ot so+' to 9en'oCa (n a so+ute sa+e3 9en'oCa -(rst (n possess(on3 9en'oCa actua++y pa(' purc*ase pr(ce Federico aMet /ade t&o sales of the sa/e 0ro0ert" J one to Cala& and the other to Aendo2a- The first &as 'ut a conditional sale &hile the latter &as an a'solute sale- :hile the a'solute sale to Aendo2a &as su'se.uent to the conditional sale to Cala&, the for/er o'tained the actual 0ossession of the 0ro0ert" first(eading >4hi'its 1 and D, it /a" 'e found that Aendo2a actuall" 0aid to his vendor the 0urchase 0rice of the 0ro0ert" in .uestion, &hile the 0a"/ent '" Cala& de0ended u0on the 0erfor/ance of certain conditions /entioned in the contract of sale/. Con'(t(ona+ sa+e *ar'+y sa(' to e a sa+e o- property3 Art(c+e 14!1 o- t*e C(v(+ Co'e 'oes not app+y :hile there &ere t&o sales of the 0arcel of land in .uestion, that is hardl" the fact, 'ecause a conditional sale, 'efore the 0erfor/ance of the condition, can hardl" 'e said to 'e a sale of 0ro0ert", es0eciall" &here the condition has not 'een 0erfor/ed or co/0lied &ith- Thus, article 14+3 of the ivil ode can hardl" 'e said to 'e a00lica'le1. Anotac(on prevent(va creates no a'vanta)e3 protects r()*ts o- person secur(n) (t -or 10 'ays The 7anotacion 0reventiva8 o'tained '" Cala& does not created an" advantage in his favor, for the reason that a 0reventative 0recautionar" notice on the records of the registr" of deeds onl" 0rotects the rights of the 0erson securing it for a 0eriod of thirt" da"s- (Par- *, art- 1+, Aortgage La&-) 3 0reventative 0recautionar" notice onl" 0rotects the interests and rights of the 0erson &ho secures it against those &ho ac.uire an interest in the 0ro0ert" su'se.uent thereto, and then, onl" for a 0eriod of 30 da"s- 5t cannot affect the rights or interests of 0ersons &ho ac.uired an interest in the 0ro0ert" theretofore- (1eguillas vs- Jaucian, *6 Phil-, 316G !a/son vs- Farcia and Ecalina, 34 Phil-, <06-) 4. Anotac(on prevent(va 'oes not a--ect r()*t an' or (nterests o- persons Aendo2a had ac.uired an a'solute deed to the land in .uestion, and had actuall" entered into the 0ossession of the sa/e, 'efore the 0reventative 0recautionar" notice &as noted in the office of the registr" of deeds- Therefore, under the 0rovisions of the Aortgage La&, it could in no &a" affect the rights or interests of 0ersons, ac.uired theretofore.a+es" /001 ( 1:4 )
[::] 9(n'anao Aca'emy vs. ?ap [G.R. No. @D1!:81. %e ruary /:" 1#:$.] De $u.ui vs- Ea0 KF-(- $o- L)1+9<*- Fe'ruar" *9, 1,96L >n Danc, Aa@alintal (J): 9 concur, 4 too@ no 0art %acts& D" deed entitled 7Autual 3gree/ent,8 e4ecuted on 10 Aa" 1,94, (osenda 3- de $u.ui (&ido& of !otero Dionisio) and her son !otero Dionisio, Jr- sold 3 0arcels of residential land in %ro.uieta, Aisa/is %ccidental, and another 0arcel in %2a/is it" in favor of 5ldefonso D- Ea0- 5ncluded in the sale &ere certain 'uildings situated on said lands as &ell as la'orator" e.ui0/ent, 'oo@s, furniture and fi4tures used '" * schools esta'lished in the res0ective 0ro0erties: the Aindanao 3cade/" in %ro.uieta and the Aisa/is 3cade/" in %2a/is it"- The aggregate 0rice stated in the deed &as P100,+00-00, to 'e 0aid according to the ter/s and conditions s0ecified in the contract- Desides (osenda and her son !otero, Jr-, 'oth of &ho/ signed the instru/ent, 3delaida Dionisio $uesa (a daughter of (osenda, and /arried to :ilson $uesa) is also na/ed therein as co)vendor, 'ut actuall" did not ta@e 0art either 0ersonall" or through her uncle and su00osed attorne")in)fact, (estituto 3'uton- These three (/other and children) are referred to in the deed as the o&ners 0ro)indiviso of the 0ro0erties sold- The truth, ho&ever, &as that there &ere other co)o&ners of the lands, na/el", >rlinda D- Dia2 (and 3ntolin Dia2), >ster 3ida D- Das (and Aauricio %- Das), (osalinda D- Delle2a (and 30olinario Delle2a) and Lu2 Ainda D- Da=ao (and >lifio - Da=ao), children also of (osenda '" her deceased hus'and !otero Dionisio, !r-, and that as far as the school 'uildings, e.ui0/ent, 'oo@s, furniture and fi4tures &ere concerned, the" &ere o&ned '" the Aindanao 3cade/", 5nc-, a cor0oration o0erating 'oth the Aindanao 3cade/" in %ro.uieta and the Aisa/is 3cade/" in %2a/is it"- The 'u"er, 5ldefonso D- Ea0, o'tained 0ossession of the 0ro0erties '" virtue of the sale, too@ over the o0eration of the t&o schools and even changed their na/es to #arvardian ollegesT&o actions &ere co//enced in the F5 Aisa/is %ccidentalG one for annul/ent of the sale and recover" of rents and da/ages ( ivil ase 1++4, filed 3 Aa" 1,66) &ith the Aindanao 3cade/", 5nc-, the five children of (osenda $u.ui &ho did not ta@e 0art in the deed of sale, and several other 0ersons &ho &ere stoc@holders of the said cor0oration (Pedro $- 3'uton, !" Paoco, Josefa Dignu/ and Perfecto 1elas.ue2), as 0laintiffs, and the 0arties &ho signed the deed of sale as defendantsG and another for rescission ( ivil ase 1,0+, filed 1+ Jul" 1,69) &ith (osenda $u.ui, !otero Dionisio, Jr- and >rlinda D- Dia2 (and the latter;s hus'and 3ntolin Dia2) as 0laintiffs, and 5ldefonso D- Ea0 as lone defendant- The other 4 children of (osenda did not =oin, having 0reviousl" ceded and .uitclai/ed their shares in the litigated 0ro0erties in favor of their sister >rlinda D- Dia2- The actions &ere tried =ointl" and on 31 Aarch 1,90 the court rendered =udg/ent, declaring the Autual 3gree/ent null and void a' initio and ordering 5ldefonso Ea0 to 0a" the costs of the 0roceedings in 'oth cases- The ourt also ordered Ea0, in ivil ase 1,0+, to restore to the 0laintiffs in said case all the 'uildings and grounds descri'ed in the Autual 3gree/ent together &ith all the 0er/anent i/0rove/ents thereonG and to 0a" to the 0laintiffs therein the a/ount of P300-00 /onthl" fro/ 31 Jul" 1,69 u0 to the ti/e he shall have surrendered the 0ro0erties in .uestion to the 0laintiffs therein, 0lus P1,000-00 as attorne";s fees to 0laintiffs 3ntolin and >rlinda D- Dia2- The ourt ordered Ea0, in ivil ase 1++4, to restore to the Aindanao 3cade/", 5nc-, all the 'oo@s, la'orator" a00aratus, furniture and other e.ui0/ents descri'ed in the Autual 3gree/ent and s0ecified in the 5nventor" attached to the (ecords of this caseG or in default thereof, their value in the a/ount of P*3,600-00G to return all the (ecords of the Aindanao 3cade/" and Aisa/is 3cade/"G and to 0a" to the 0laintiffs stoc@holders of the Aindanao 3cade/", 5nc-, the a/ount of P10,000-00 as no/inal da/agesG P3,000-00 as e4e/0lar" da/agesG and P*,000-00 as attorne";s fees- These da/ages 'eing a00ortioned to each of the 0laintiff)stoc@holders in 0ro0ortion to their res0ective interests in the cor0oration- 5ldefonso D- Ea0 a00ealed fro/ the =udg/entThe !u0re/e ourt affir/ed the =udg/ent a00ealed fro/ 'ut /odified it '" eli/inating therefro/ the a&ard of attorne";s fees of P1,000-00 in favor of >rlinda D- Dia2 and her hus'and, and the a&ard of no/inal and
.a+es" /001 ( 1:$ )
e4e/0lar" da/ages in ivil ase 1++4G and /a@ing the a&ard of attorne";s fees in the su/ of P*,000-00 0a"a'le to counsel for the account of the Aindanao 3cade/", 5nc- instead of the 0laintiff stoc@holdersG &ithout 0ronounce/ent as to costs1. 9utua+ A)reement ent(re+y vo(' an' nonDe7(stent3 Juest(on on resc(ss(on not cate)or(ca++y ru+e' on The /utual agree/ent dated 10 Aa" 1,64 is entirel" void and legall" non)e4istent in that the vendors therein ceded to Ea0 not onl" their interest, rights, shares and 0artici0ation in the 0ro0ert" sold 'ut also those that 'elonged to 0ersons &ho &ere not 0arties thereto- This conclusion is 0re/ised on t&o grounds: (a) the contract 0ur0orted to sell 0ro0erties of &hich the sellers &ere not the onl" o&ners, since of the four 0arcels of land /entioned in the deed their shares consisted onl" of +B1*, (9B1*: (osenda $u.ui and 1B1* for !otero, Jr-), &hile in the 'uildings, la'orator" e.ui0/ent, 'oo@s, furniture and fi4tures the" had no 0artici0ation at all, the o&ner 'eing the Aindanao 3cade/", 5nc-G and (') the 0restation involved in the sale &as indivisi'le, and therefore inca0a'le of 0artial annul/ent, inas/uch as Ea0 &ould not have entered into the transaction e4ce0t to ac.uire all of the 0ro0erties 0urchased '" hi//. No a' -a(t* comm(tte' y coDo,ners ,*o '(' not take part (n sa+e The .uitclai/, in the for/ of an e4tra=udicial 0artition, &as /ade on 9 Aa" 1,69, after the action for annul/ent &as filed, &herein, the 0laintiffs &ere not onl" >rlinda 'ut also the other co)o&ners &ho too@ no 0art in the sale and to &ho/ there has 'een no i/0utation of 'ad faith- Further, the trial courts; finding of 'ad faith is an erroneous conclusion induced '" a /anifest oversight of an undis0uted fact, na/el", that on 10 June 1,64, =ust a /onth after the deed of sale in .uestion, >rlinda D- Dia2 did file an action against 5ldefonso D- Ea0 and (osenda $u.ui, a/ong others, asserting her rights as co)o&ner of the 0ro0erties ( ase 1949)Finall", 'ad faith on the 0art of >rlinda &ould not /ilitate against the nullit" of the sale, considering that it included not onl" the lands in co//on '" (osenda $u.ui and her si4 children 'ut also the 'uildings and school facilities o&ned '" the Aindanao 3cade/", 5nc-, an entit" &hich had nothing to do &ith the transaction and &hich could 'e re0resented solel" '" its Doard of Trustees1. Hen'or an' ven'ee ot* (n a' -a(t*3 treate' to *ave acte' (n )oo' -a(t* v(sDRDv(s eac* ot*er Doth vendors and vendee in the sale acted in 'ad faith and therefore /ust 'e treated, vis)a)vis each other, as having acted in good faith- The return of the 0ro0erties '" the vendee is a necessar" conse.uence of the decree of annul/ent- $o 0art of the 0urchase 0rice having 'een 0aid, as far as the record sho&s, the trial court correctl" /ade no corres0onding order for the restitution thereof- (osenda $u.ui and her son !otero, it is true, acted in 'ad faith &hen the" sold the 0ro0erties as theirs aloneG 'ut so did the defendant Ea0 &hen he 0urchased the/ &ith @no&ledge of the fact that there &ere other co)o&ners- 3lthough the 'ad faith of one 0art" neutrali2es that of the other and hence as 'et&een the/selves their rights &ould 'e as if 'oth of the/ had acted in good faith at the ti/e of the transaction, this legal fiction of Ea0;s good faith ceased &hen the" sold the 0ro0erties as theirs alone4. Er+(n'a D(aC ent(t+e' to recover s*are o- rents (n proport(on to *er o,n (nterest3 Bossessor (n )oo' -a(t* ent(t+e' to -ru(ts as +on) as possess(on (s not +e)a++y (nterrupte' Prior to the sale, the Aindanao 3cade/" 5nc- &as 0a"ing P300-00 /onthl" for its occu0anc" of the lands on &hich the 'uildings are situated- This is the a/ount the defendant has 'een ordered to 0a" to the 0laintiffs in ivil ase 1,0+, 'eginning 31 Jul" 1,69, &hen he filed his 7first 0leading8 in the case- There can 'e no dou't that >rlinda D- Dia2 is entitled to recover a share of the said rents in 0ro0ortion to her o&n interest in the lands and the interest of her four co)o&ners &hich she had ac.uired- 3 0ossessor in good faith is entitled to the fruits onl" so long as his 0ossession is not legall" interru0ted, and such interru0tion ta@es 0lace u0on service of =udicial su//ons (3rts- 644 and 11*3, ivil ode)$. A,ar' o- attorney=s -ees to Er+(n'a D(aC erroneous3 Er+(n'a *a' no cause o- act(on -or resc(ss(on (n C(v(+ Case 1#0! as s*e ,as not party to t*e a)reement
.a+es" /001 ( 1:: )
The a&ard of attorne";s fees to >rlinda D- Dia2 and her hus'and is erroneous- ivil ase 1,0+, in &hich said fees have 'een ad=udged, is for rescission (/ore 0ro0erl" resolution) of the so)called 7/utual agree/ent8 on the ground that Ea0 failed to co/0l" &ith certain underta@ings s0ecified therein relative to the 0a"/ent of the 0urchase 0rice- >rlinda Dia2 &as not a 0art" to that agree/ent and hence had no cause of action for rescission- The trial court did not decide the /atter of rescission 'ecause of the decree of annul/ent it rendered in the other case ( ivil ase 1++4), &herein the defendants are not onl" 5ldefonso D- Ea0 'ut also (osenda $u.ui and her son !otero- >rlinda D- Dia2 could =ust as &ell have refrained fro/ =oining as 0laintiff in the action for rescission, not 'eing a 0art to the contract sought to 'e rescinded and 'eing alread" one of the 0laintiffs in the other action- 5n other &ords, it cannot 'e said &ith =ustification that she &as constrained to litigate, in ivil ase 1,0+, 'ecause of so/e cause attri'uta'le to the a00ellant:. Bu(+'er (n a' -a(t* not ent(t+e' to re(m ursement (Ne, u(+'(n)) Ea0 clai/s rei/'urse/ent for the value of the i/0rove/ents he allegedl" introduced in the schools, consisting of ne& 'uilding &orth P<,000-00 and a toilet costing P<00-00, 'esides la'orator" e.ui0/ent, furniture, fi4tures and 'oo@s for the li'raries- 5t should 'e noted that the =udg/ent of the trial court s0ecifies, for deliver" to the 0laintiffs (in ivil ase 1,0+), onl" 7the 'uildings and grounds descri'ed in the /utual agree/ent together &ith all the 0er/anent i/0rove/ents thereon-8 5f Ea0 constructed a ne& 'uilding, he cannot recover its value 'ecause the construction &as done after the filing of the action for annul/ent, thus rendering hi/ a 'uilder in 'ad faith &ho is denied '" la& an" right of rei/'urse/ent!. E2u(pment" ooks" -urn(ture an' -(7ture rou)*t (n y *(m may e reta(ne' y *(m as t*ey are outs('e t*e scope o- t*e 8u')ment 5n connection &ith the e.ui0/ent, 'oo@s, furniture and fi4tures 'rought in '" hi/, he is not entitled to rei/'urse/ent either, 'ecause the =udg/ent does not a&ard the/ to an" of the 0laintiffs in the t&o actions:hat is ad=udged (in ivil ase 1++4) is for Ea0 to restore to the Aindanao 3cade/", 5nc- all the 'oo@s, la'orator" a00aratus, furniture and other e.ui0/ent 7descri'ed in the Autual 3gree/ent and s0ecified in the 5nventor" attached to the records of this caseG or in default thereof, their value in the a/ount of P*3,600-00-8 5n other &ords, &hatever has 'een 'rought in '" the defendant is outside the sco0e of the =udg/ent and /a" 'e retained '" hi/8. .tock*o+'ers not ent(t+e' to nom(na+ an' e7emp+ary 'ama)es 3ccording to the second a/ended co/0laint the stoc@holders &ere =oined /erel" 0ro for/a, and 7for the sole 0ur0ose of the /oral da/age &hich has 'een all the ti/e alleged in the original co/0laint-8 5ndeed the interests of the said stoc@holders, if an", &ere alread" re0resented '" the cor0oration itself, &hich &as the 0ro0er 0art" 0laintiffG and no cause of action accruing to the/ se0aratel" fro/ the cor0oration is alleged in the co/0laint, other than that for /oral da/ages due to 7e4tre/e /ental anguish, serious an4iet" and &ounded feelings-8 The trial court, ho&ever, ruled out the clai/ for /oral da/ages and no a00eal fro/ such ruling has ta@en- The a&ard for no/inal and e4e/0lar" da/ages should 'e eli/inated in toto#. A,ar' -or attorney=s -ees up*e+' -or t*e corporat(on ut not to stock*o+'ers The a&ard for attorne";s fees in the a/ount of P*,000-00 &as u0held, although the sa/e should 'e for the account of the cor0oration and not of the 0laintiff stoc@holders of the Aindanao 3cade/", 5nc-G and 0a"a'le to their co//on counsel as 0ra"ed for in the co/0laint10. Nu++(ty o- contract prec+u'es en-orcement o- (ts st(pu+at(on 3 &arrant" clause in the deeds 0rovides that if an" clai/ shall 'e filed against the 0ro0erties or an" right, share or interest &hich are in the 0ossession of the 0art" of the vendors &hich had 'een here'" transferred, ceded and conve"ed unto the vendee the vendor assu/es as it here'" holds itself ans&era'le- 5t is unnecessar" to 0ass u0on the .uestion in vie& of the total annul/ent of the sale on grounds concerning &hich 'oth 0arties thereto &ere at fault- The nullit" of the contract 0recludes enforce/ent of an" of its sti0ulations-
.a+es" /001 ( 1:! )
[:!] 9ont(++a vs. CA [G.R. No. @D4!#:8. 9ay #" 1#88.] First Division, $arvasa (J): 3 concur %acts& %n *+ 30ril 1,+*, >/ilio 3ragon Jr- filed an action 'efore the F5 5loilo to co/0el Lina Aontilla to co/0l" &ith a ver'al contract to sell to hi/ a 0iece of land situated at Po'lacion, 5loilo it", @no&n as Lot 4 of the onsolidated !u'division 0lan (L( ) Psc)11906- 5n his co/0laint, 3ragon clai/ed that in the last &ee@ of June 1,9,, Aontilla had orall" offered to sell the lot to hi/ at a 0rice of P6+,960-00 (at the rate of P60 0er s.- /-), the 0rice 'eing 0a"a'le at an" ti/e &ithin a 3)"ear 0eriod fro/ June, 1,9, 0rovided that 3ragon constructed on the lot a house of strong /aterials and 0aid a no/inal /onthl" rental in the /eanti/eG 'ut des0ite 3ragon;s acce0tance of the offer, fulfill/ent '" hi/ of the s0ecified conditions, and his seasona'le tender of the 0urchase 0rice, Aontilla had refused to co/0l" &ith her o'ligation- 5n her ans&er Aontilla categoricall" denied ever having entered into such an agree/ent, and set u0 the affir/ative defenses of (1) unenforcea'ilit" of the alleged agree/ent under the !tatute of FraudsG and (*) failure of the co/0laint to state a cause of action, no allegation having 'een /ade therein of an" consideration for the 0ro/ise to sell distinct and se0arate fro/ the 0rice, as re.uired '" 3rticle 14+, of the ivil ode- 3t Aontilla;s instance, a 0reli/inar" hearing &as had on her affir/ative defenses in accordance &ith !ection 9, (ule 19 of the (ules of ourt, 7as if a /otion to dis/iss had 'een filed-8 D" %rder dated 6 Dece/'er 1,+*, the ourt denied the i/0licit /otion to dis/iss- 3fter trial, the ourt rendered =udg/ent on ** 3ugust 1,+4 sentencing Aontilla 7to e4ecute the re.uisite deed of conve"ance of Lot 4, covered '" T T T)*,,+9 in favor of 3ragon u0on full 0a"/ent '" hi/ to Aontilla of the total consideration thereof in the aggregate su/ of P6+,960-00G to 0a" to Aontilla P*,000-00 as attorne";s fees, and to 0a" the costs-8 The decision &as affir/ed '" the ourt of 300eals- The latter;s ad=udg/ent has, in turn, 'een dul" 'rought u0 to the !u0re/e ourt '" Aontilla, on a00eal '" certiorari under (ule 46 of the (ules of ourtThe !u0re/e ourt reversed and set aside the Decision of the ourt of 300eals dated 1< Januar" 1,+< and that of the F5 dated ** 3ugust 1,+4 there'" affir/ed, and entered a ne& one dis/issing 3ragon;s co/0laint, &ith costs against hi/1. No a'm(ss(on y 9ont(++a on t*e c+a(me' ver a+ contract to se++3 A--(rmat(ve 'e-ense cou+' not e taken as uncon'(t(ona+ an' (rretr(eva +y (n'(n) -actua+ a'm(ss(on 5t is difficult to see '" &hat 0rocess of ratiocination the Trial ourt arrived at the conclusion that Aontilla;s ans&er had 7ad/itted the offer to sell8 as an" such ad/ission is a'solutel" 0recluded '" the s0ecific and une.uivocal denial '" Aontilla of the clai/ed ver'al contract to sell- !he in fact 'randed the allegations to that effect in the co/0laint as 7outrageousl" false, fantasticall" ridiculous and des0ica'le fa'rications of 0laintiff -8 $or /a" an" ad/ission 'e inferred fro/ the circu/stance that Aontilla, a0art fro/ un.ualifiedl" den"ing the contract to sell, had also asserted in her res0onsive 0leading that the contract &as unenforcea'le 'ecause violative of the !tatute of Frauds and 'ecause not su00orted '" an" consideration distinct fro/ the 0rice- For &hile those defenses i/0l" an acce0tance '" the 0leader of the truth of the agree/ent at &hich the defenses are directed, the acce0tance is at 'est h"0othetical, assu/ed onl" for 0ur0oses of deter/ining the validit" of the defenses, 'ut cannot in an" sense 'e ta@en as an unconditional and irretrieva'l" 'inding factual ad/ission- The i/0ort of the ans&er, couched in language that could not 'e /ade an" 0lainer, is that there &as no ver'al contract to sell ever agreed to '" Aontilla, 'ut that, even assu/ing h"0otheticall", or for the sa@e of argu/ent that there &as, the agree/ent &as unenforcea'le 'ecause in 'reach of the !tatute of Frauds/. Res 8u'(cata 'oes not app+y to (nter+ocutory or'ers as t*ese cannot ecome -(na+ an' e7ecutory The ourt;s interlocutor" order of 6 Dece/'er 1,+* cannot 'eco/e conclusive, i-e-, conclusive on
.a+es" /001 ( 1:8 )
Aontilla 7&ith res0ect to the /atter directl" ad=udged or as to an" other /atter that could have 'een raised in relation thereto, as the doctrine of res =udicata or 'ar '" 0rior =udg/ent (or, for that /atter, conclusiveness of =udg/ent or esto00el '" =udg/ent) has relevance to, and &ill 'eco/e o0erative onl" on the 'asis of a final =udg/ent or final order, the .ualif"ing ter/ 7final8 'eing used in the sense of 7final and e4ecutor",8 i-e-, not onl" final J 'ecause finall" dis0osing of the case and leaving nothing /ore to 'e done '" the ad=udging court relative to its /erits, 'ut also e4ecutor" J 'ecause the 0eriod for a00eal has e40ired &ithout an a00eal having 'een ta@en, or an a00eal having 'een 0erfected, the =udg/ent or order has other&ise attained finalit"3n order such as that rendered on 6 Dece/'er 1,+*, 'eing interlocutor", cannot 'eco/e final and e4ecutor" in the sense descri'ed, and cannot 'ring the doctrine of res ad=udicata into 0la" at all- 5ndeed, the correctness of such an interlocutor" order /a" su'se.uentl" 'e i/0ugned on a00eal '" an" 0art" adversel" affected there'", regardless of &hether or not he had 0resented a /otion for the reconsideration thereof, if he has other&ise /ade of record his 0osition thereon1. G'ent(-(cat(on o- ('ent(ty o- a++e)e' ven'or Aontilla;s ac@no&ledg/ent of 'eing the defendant in the case can not in an" /anner &hatsoever 'e considered an ad/ission that she had gone to see 3ragon to offer her 0ro0ert" for sale- $on se.uitur- 3ragon;s disconcerting failure to identif" Aontilla is cogent confutation of his allegation that he 0ersonall" @ne& Aontilla and had negotiated &ith her for his 0urchase of the 0ro0ert" in .uestion, and strongl" indicative of the inaccurac" of the testi/on" of the &itnesses &ho corro'orated his du'ious tale4. Bas(s o- '(sm(ssa+& .tatute o- %rau's (n re+at(on to Ru+e 1: o- t*e Ru+es o- Court There 'eing therefore no ad/ission &hatever on Aontilla;s 0art of the e4istence or ratification of the clai/ed contract to sell, and ta@ing account of her disavo&al in her 0leadings and in her evidence of that contract, and necessaril" of an" fulfill/ent of the ter/s thereof, it is clear that the action for its enforce/ent should have 'een dis/issed 0ursuant to the !tatute of Frauds, in relation to (ule 19 of the (ules of ourt$. Bas(s o- '(sm(ssa+& Art(c+e 14!# The action is also dis/issi'le u0on another legal ground- 3ssu/ing arguendo verita'ilit" of the oral 0ro/ise to sell '" Aontilla, the 0ro/ise &as nevertheless not 'inding u0on her in vie& of the a'sence of an" consideration therefor distinct fro/ the sti0ulated 0rice- This is the 0rinci0le laid do&n '" the second 0aragra0h of 3rticle 14+,: 73n acce0ted unilateral 0ro/ise to - - sell a deter/inate thing for a 0rice certain is 'inding u0on the 0ro/issor if the 0ro/ise is su00orted '" a consideration distinct fro/ the 0rice-8 :. Document e7ecute' y Ara)on as to +ease3 A sent any ment(on o- a++e)e' prom(se to se++ 3 docu/ent, e4ecuted '" 3ragon on , Jul" 1,9, (so/e , or 10 da"s after Aontilla had su00osedl" 0ro/ised to sell the lot in .uestion to hi/), reveals several things- For one, the lot on &hich 3ragon;s house &as 'eing 'uilt &as o'viousl" 0art of the 7Aontilla estate,8 and did not as "et 'elong to an" 0articular heir or 0erson entitled thereto- For another, 3ragon had 'een given 0er/ission '" the re0resentative of the estate, ArAanaloto, to sta" on the lot in consideration of a 0rescri'ed rental, and he &as i/0loring said Ar- Aanaloto and the o&ners for leave to sta" in the 0re/ises until his children could finish their schooling, 0ro/ising to 7/eet the 0rescri'ed rental o'ligations-8 3gain, and this is .uite significant as regards his clai/ of a 0ro/ise to sell '" one of the Aontillas, since that 0ro/ise is not referred to or even hinted at in an" /anner &hatsoever, the genuineness of the clai/ is strongl" sus0ectG for surel", 3ragon &ould never have 7i/0lored8 for 7consideration of the o&ners and Ar- Aanaloto8 to sta" in the 0re/ises until his children could finish their schooling, as lessee, if it 'e true that he had acce0ted a 0ro/ise for the sale thereof to hi/- The docu/ent cannot therefore 'e inter0reted other&ise than as denoting the concession to hi/ of the 0rivilege to 'uild a house on a lot 'elonging to the Aontillas, and a solicitation '" hi/ of the o&ners; 0er/ission to lease the lot to hi/ for a longer, and /ore or less deter/ina'le ter/, and as an i/0lied, though nonetheless clear, negation of an" right on his 0art to 0urchase the 0ro0ert"!. @ot 4 a'8u'(cate' to @(na 9ont(++a pursuant to sett+ement o- t*e 9ont(++a Estate / years a-ter
.a+es" /001 ( 1:# )
*er a++e)e' o--er to se++ 3 ourt %rder issued on 1+ June 1,+1 in the =udicial 0roceedings for the settle/ent of the Aontilla >state, o'viousl" the sa/e 7Aontilla estate8 referred to '" 3ragon in his certification of , Jul" 1,9, =ust descri'ed, a00roved the 0ro=ect of 0artition of said estate, 0resented on 6 Aa" 1,+1G and it states that Lot 4 &as ad=udicated to Lina Aontilla on 1+ June 1,+1, /ore than * "ears after she had su00osedl" offered to sell the 0ro0ert" to 3ragon- 3t the ti/e of the alleged 0ro/ise to sell, Lot 4 still for/ed 0art of the a/or0hous /ass of 0ro0ert" constituting the 7Aontilla estateG8 at an" rate, that 0articular lot had not 'een allotted to Lina Aontilla "et- The uncertaint" of the eventual o&nershi0 of said Lot 4, considered con=ointl" &ith the ostensi'le status of 3ragon as a /ere su00licant of favors fro/ 7the o&ners of the Aontilla estate,8 /a@e it ver" i/0ro'a'le indeed that Aontilla &ould 0ersonall" go to hi/ and 0ro/ise to sell the lot to hi/[:8] Nat(ona+ Gra(ns Aut*or(ty v. GAC [G.R. No. !44!0. 9arc* 8" 1#8#.] Third Division, Aedialdea (J): 4 concur %acts& $ational Frains 3uthorit" (no& $ational Food 3uthorit", $F3) is a govern/ent agenc" created under PD 4- %ne of its incidental functions is the 'u"ing of 0ala" grains fro/ .ualified far/ers- %n *3 3ugust 1,+,, Leon !oriano offered to sell 0ala" grains to the $F3, through the Provincial Aanager (:illia/ a'al) of $F3 in Tuguegarao, aga"an- #e su'/itted the docu/ents re.uired '" the $F3 for 0re).ualif"ing as a seller, &hich &ere 0rocessed and accordingl", he &as given a .uota of *,940 cavans of 0ala"- The .uota noted in the Far/er;s 5nfor/ation !heet re0resented the /a4i/u/ nu/'er of cavans of 0ala" that !oriano /a" sell to the $F3- %n *3 and *4 3ugust 1,+,, !oriano delivered 930 cavans of 0ala"- The 0ala" delivered &ere not re'agged, classified and &eighed- :hen !oriano de/anded 0a"/ent of the 930 cavans of 0ala", he &as infor/ed that its 0a"/ent &ill 'e held in a'e"ance since Ar- a'al &as still investigating on an infor/ation he received that !oriano &as not a 'ona fide far/er and the 0ala" delivered '" hi/ &as not 0roduced fro/ his far/land 'ut &as ta@en fro/ the &arehouse of a rice trader, Den de Fu2/an- %n *< 3ugust 1,+,, a'al &rote !oriano advising hi/ to &ithdra& fro/ the $F3 &arehouse the 930 cavans stating that $F3 cannot legall" acce0t the said deliver" on the 'asis of the su'se.uent certification of the D3>R technician ($a0oleon allangan) that !oriano is not a 'ona fide far/er5nstead of &ithdra&ing the 930 cavans of 0ala", !oriano insisted that the 0ala" grains delivered 'e 0aid- #e then filed a co/0laint for s0ecific 0erfor/ance andBor collection of /one" &ith da/ages on * $ove/'er 1,+,, against the $F3 and :illia/ a'al ( ivil ase *+64)- Aean&hile, '" agree/ent of the 0arties and u0on order of the trial court, the 930 cavans of 0ala" in .uestion &ere &ithdra&n fro/ the &arehouse of $F3%n 30 !e0te/'er 1,<*, the trial court found !oriano a 'ona fide far/er and rendered =udg/ent ordering the $F3, its officers and agents to 0a" !oriano the a/ount of P4+,*60-00 re0resenting the un0aid 0rice of the 930 cavans of 0ala" 0lus legal interest thereof (1*I 0er annu/, fro/ the filing of co/0laint on *0 $ove/'er 1,+, until full" 0aid)- $F3 and a'al filed a /otion for reconsideration, &hich &as denied '" the court on 9 Dece/'er 1,<*300eal &as filed &ith the 5nter/ediate 300ellate ourt- %n *3 Dece/'er 1,<9, the then 53 u0held the findings of the trial court and affir/ed the decision ordering $F3 and its officers to 0a" !oriano the 0rice of the 930 cavans of rice 0lus interest- The /otion for reconsideration of the a00ellate court;s decision &as denied in a resolution dated 1+ 30ril 1,<9- #ence, the 0resent 0etition for revie& &ith the sole issue of &hether or not there &as a contract of sale in the 0resent caseThe !u0re/e ourt dis/issed the instant 0etition for revie&, and affir/ed the assailed decision of the then 53 (no& ourt of 300eals) is affir/edG &ithout costs1. .a+e 'e-(ne'
.a+es" /001 ( 1!0 )
3rticle 146< of the ivil ode of the Phili00ines defines sale as a contract &here'" one of the contracting 0arties o'ligates hi/self to transfer the o&nershi0 of and to deliver a deter/inate thing, and the other 0art" to 0a" therefore a 0rice certain in /one" or its e.uivalent/. Contract 'e-(ne'3 re2u(s(tes 3 contract, on the other hand, is a /eeting of /inds 'et&een t&o (*) 0ersons &here'" one 'inds hi/self, &ith res0ect to the other, to give so/ething or to render so/e service (3rt- 1306, ivil ode of the Phili00ines)- The essential re.uisites of contracts are: (1) consent of the contracting 0arties, (*) o'=ect certain &hich is the su'=ect /atter of the contract, and (3) cause of the o'ligation &hich is esta'lished (3rt- 131<, ivil ode of the Phili00ines-) 1. Bresent case (nvo+ves a per-ecte' contract o- sa+e 5n the 0resent case, !oriano initiall" offered to sell 0ala" grains 0roduced in his far/land to $F3:hen the latter acce0ted the offer '" noting in !oriano;s Far/er;s 5nfor/ation !heet a .uota of *,940 cavans, there &as alread" a /eeting of the /inds 'et&een the 0arties- The o'=ect of the contract, 'eing the 0ala" grains 0roduced in !oriano;s far/land and the $F3 &as to 0a" the sa/e de0ending u0on its .ualit"- The contention that X since the deliver" &ere not re'agged, classified and &eighed in accordance &ith the 0ala" 0rocure/ent 0rogra/ of $F3, there &as no acce0tance of the offer thus X this is a clear case of 0olicitation or an unacce0ted offer to sell, is untena'le4. Juant(ty e(n) (n'eterm(nate 'oes not a--ect per-ect(on o- contract3 No nee' to create ne, contract The fact that the e4act nu/'er of cavans of 0ala" to 'e delivered has not 'een deter/ined does not affect the 0erfection of the contract- 3rticle 134, of the $e& ivil ode 0rovides that 7the fact that the .uantit" is not deter/inate shall not 'e an o'stacle to the e4istence of the contract, 0rovided it is 0ossi'le to deter/ine the sa/e, &ithout the need of a ne& contract 'et&een the 0arties-8 5n the 0resent case, there &as no need for $F3 and !oriano to enter into a ne& contract to deter/ine the e4act nu/'er of cavans of 0ala" to 'e sold- !oriano can deliver so /uch of his 0roduce as long as it does not e4ceed *,940 cavans$. .a+e a consensua+ contract3 Acceptance (s on t*e o--er an' not t*e )oo's 'e+(vere' !ale is a consensual contract, 7there is 0erfection &hen there is consent u0on the su'=ect /atter and 0rice, even if neither is delivered-8 (%'ana vs- -3-, L)39*4,, Aarch *,, 1,<6, 136 ! (3 66+, 690) 3rticle 14+6 of the ivil ode 0rovides that 7The contract of sale is 0erfected at the /o/ent there is a /eeting of /inds u0on the thing &hich is the o'=ect of the contract and u0on the 0rice-8 The acce0tance referred to &hich deter/ines consent is the acce0tance of the offer of one 0art" '" the other and not of the goods delivered:. Comp+(ance o- mutua+ o +()at(ons once a contract o- sa+e (s per-ecte' Fro/ the /o/ent the contract of sale is 0erfected, it is incu/'ent u0on the 0arties to co/0l" &ith their /utual o'ligations or 7the 0arties /a" reci0rocall" de/and 0erfor/ance8 thereof- (3rticle 14+6, ivil ode, *nd 0ar-) [:#] Navera vs. CA [G.R. No. @D$:818. Apr(+ /:" 1##0.] First Division, Aedialdea (J): 4 concur %acts& Leocadio $avera has 6 children, na/el": >lena, Aariano, Dasilio, >duarda and Feli4, all surna/ed $avera- Aariano $avera is the father of 0etitioner Fenaro $avera (/arried to >//a 3/ador)- >lena $avera, on the other hand has three children '" 3ntonio $ares- T&o of the/ are res0ondent 3rsenio $ares and Feli4 $ares- The other child, Dionisia is alread" deceased and has left children- Petitioner and res0ondents are
.a+es" /001 ( 1!1 )
therefore, first cousins- :a" 'ac@ in 1,19, Leocadio $avera donated to Fausto Austar in a 0rivate instru/ent a certain 0ro0ert" in consideration of the /arriage of the for/er;s son, Aariano $avera, to the daughter of Fausto Austar '" the na/e of (estituta Austar- %n 1, Jul" 1,*+, % T (%)164($3) &as issued in the na/e of 7>lena $avera, et al-8, covering the land in dis0ute, na/el" Lot 1490, situated in the Aunici0alit" of a/alig, 3l'a"- !o/eti/e in 1,*4, >lena $avera died- %n 14 Aa" 1,4+, >duarda $avera, '" /eans of a 0u'lic instru/ent, sold to her ne0he&, 3rsenio $ares, all of her share in Lot 1490, &hich is titled in the na/e of 7>lena $avera, et al-8- >duarda $avera;s share in the lot is 1B* of the total area of Lot 1490 (The other half allegedl" o&ned '" Lina $avera, the deceased /other of the 'u"er, &ho &as the ad/inistrator of said half3rsenio $ares thus ta@e care of the &hole 0ro0ert")- %n *9 June 1,4<, >duarda $avera sold for the second ti/e a 0ortion of Lot 1490 to Aariano $avera (60 /eters long and 6, /eters &ide)- %n 30 Januar" 1,63, 3rsenio $ares sold to Per0etua Dacillo a 0ortion of Lot 419+ containing an area of 6,+*9 s.- /s- Per0etua Dacillo thereafter donated the said 0ro0ert" to Francisco Dacillo- %n 13 3ugust 1,66, Aariano $avera, sold to his 'rother)in)la&, !era0io Austar, the lot &hich he 'ought fro/ >duarda $avera- %n 11 Fe'ruar" 1,69, a deed of sale &as su00le/ented '" the follo&ing sti0ulation 7(') as to the 0ro0ert" under 0aragra0h (*) thereof, the sa/e 0ertains to adastral Lot $o- 1490, containing an area of 1),,)9, s.uare /eters, /ore or less, (in the said docu/ent there &as clerical error of the area, as 0reviousl" stated in the total area of 00)0,) 19, &hich is hereto corrected as 1),0)+1 s.uare /eters, as the total area sold)-8 %n + 30ril 1,6,, !era0io Austar later sold to Fenaro $avera Lot 1490 &hich he 'ought fro/ the latter;s father, Aariano $avera, containing an area of 1,,,9, s.- /s- /ore or less- %n 3 !e0te/'er 1,+1, Francisco Dacillo sold to Fenaro $avera the land &hich the for/er received '" &a" of donation fro/ Per0etua Dacillo- 3ll of the foregoing transfers of Lot 1490 &ere not annotated and inscri'ed in the % T7=ares co#plaint9 5n their co/0laint dated 14 Aarch 1,+1 filed &ith the then F5 3l'a" (no& (T G ivil ase 436,), 3rsenio and Feli4 $ares, alleged inter alia: that the" are the a'solute o&ners of the &hole of Lot 1490 covered '" % T $o- (%)164($3), and are entitled to the 0ossession of the sa/eG that Lot 1490 is registered in the na/e of 7>lena $avera, et al-8, the 7et al-8 'eing >duarda $averaG that the" ac.uired the 0ro0ert" '" inheritance fro/ their deceased /other >lena $averaG that a 0ortion thereof &hich had 'een ad=udicated to >duarda $avera &as later sold to 3rsenio $aresG that so/eti/e in 3ugust, 1,66, Aariano $avera, &ithout an" legal right &hatsoever and under the 0retense of o&nershi0 sold the said 0ro0ert" to his 'rother)in)la& !era0io Austar, &ho in turn sold the sa/e to Fenaro $avera, son of Aariano- The" also clai/ed that all the foregoing sales &ere sha/ and /ani0ulated transactions and that Aariano $avera @ne& full" &ell that he had no right to sell the 0ro0ert"- The" ad/itted ho&ever, that the" sold a 0ortion of the 0ro0ert" containing 9,+*9 s.uare /eters to Per0etua Dacillo, so that the re/aining 0ortion still 'elongs to the/- The" further contended that Fenaro $avera entered the land after the sale to hi/ '" Austar and too@ 0ossession of the sa/e and ac.uired the 0roduce thereof since 1,6+ u0 to the 0resent ti/eG and that the" have e4erted earnest efforts to&ard a co/0ro/ise 'ut $avera instead challenged the/ to go to court- 7=avera>s counterclai#9 Fenaro $avera and >//a 3/ador filed their ans&er &ith counterclai/, den"ing $ares; clai/s, and alleging inter alia: that Leocadio $avera is the father of five children, na/el", >lena, Aariano, >duarda, Dasilio and Feli4G that after deducting 1*,416 s.uare /eters &hich Leocadio $avera donated to Fausto Austar in 1,19, the re/aining area of Lot 1490 &as divided in e.ual shares a/ong >lena, Aariano and >duarda, to the e4tent of 4,<90 s.uare /eters eachG that Dasilio and Feli4 &ere given their shares in other 0arcels of land- The" also su'/itted that the 7et al-8 a00earing in the title of the 0ro0ert" refers to Fausto Austar (1*,416 s.- /s-), >duarda $avera (4,<90 s.- /s-), Aariano $avera (4,<90 s.- /s-) and >lena $avera (4,<90 s.- /s-)G that >duarda $avera sold *,9,6 s.- /s- of her share to Aariano $avera &hile the re/aining *,199 s. s.- /s- of her share &as sold to 3rsenio $aresG that 3rsenio;s 0ro0ert" totalled +,0*9 s.- /s- &hich he later sold to Per0etua Dacillo- The" further contended that the" are 0resentl" in 0ossession of Lot 1490 and their 0ossession tac@ed to that of their 0redecessor)in)interest as earl" as 1,19G that the co/0laint states no cause of action and that if $ares had an", the sa/e has long 0rescri'ed- 7Court>s ruling9 %n *< Fe'ruar" 1,+<, the trial court rendered a decision declaring $ares o&ners of the lot descri'ed in the % T (%)164<0, e4ce0t 6,+*9 s.- /s- &hich rightfull" 'elongs to Fenaro $avera-
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$ot satisfied &ith the decision of the trial court, $avera a00ealed to the ourt of 300eals ( 3)F( 93,*9)()%n 19 Dece/'er 1,<0, the a00ellate court rendered =udg/ent affir/ing in toto the decision of the trial court#ence the 0etition for revie& on certiorariThe !u0re/e ourt denied the 0etition 'ut /odified the decision of the ourt of 300eals dated 19 Dece/'er 1,<0 to the effect that as against Fenaro $avera and >//a 3/ador, 3rsenio $ares and Feli4 $ares are declared the rightful o&ners of the dis0uted Lot 1490, e4ce0t &ith res0ect to 6,+*9 s.uare /eters thereof &hich 'elongs to Fenaro $avera, &ithout 0re=udice ho&ever, to &hatever rights and interests that the other co/0ulsor" heirs of >lena $avera /a" have in the one)half 0ortion of Lot 1490- The res0ective rights of res0ondents to Lot 1490 as 'et&een the/selves is a /atter outside of the controvers" and is therefore, 'e"ond the =urisdiction of the ourt to 0ass u0on1. 4Et. a+6 re-er on+y to E'uar'a3 %actua+ -(n'(n) o- courts conc+us(ve upon t*e .upreme Court The &hole of Lot 1490 is titled in the na/e of 7>lena $avera, et al-8, the 0hrase 7et al-8 referring onl" to >duarda, sister of >lena since the other 'rothers of >lena and >duarda na/el", Aariano, Dasilio and Feli4 had received their shares fro/ the other 0ro0erties of their father Leocadio $avera- These factual findings are conclusive u0on the !u0re/e ourt- Thus, &hen >lena $avera died so/eti/e in 1,*4, her co/0ulsor" heirs including 3rsenio $ares and Feli4 $ares ac.uired >lena;s shares in Lot 1490 '" inheritance, &hich is 1B*of Lot 1490- 3s to the other half of Lot 1490 o&ned '" >duarda $avera, the latter sold the sa/e to t&o vendees, one in favor of 3rsenio $ares and the other in favor of Aariano $avera, Fenaro $avera;s 0redecessor)in) interest/. Dou +e .a+e3 E'uar'a Navera *a' no e7(st(n) r()*t anymore to convey port(on o- property (n a su se2uent sa+e to 9ar(ano Navera %n this /atter of dou'le sale, all the transfers or conve"ances are not inscri'ed in the % T (%) 164<0($3)- 5t &ould not 'e a/iss to state that the sale of >duarda $avera to 3rsenio $ares, and the sale of >duarda $avera to Aariano $avera, the 0ro0ert" referred to in 'oth sales is the ver" sa/e 0ro0ert" covered '" reconstituted title- The sale of >duarda $avera to 3rsenio $ares covered all her 0ortion to the 0ro0ert", thus, she could not 0ossi'l" sell on *9 June 1,4<, another 0ortion of the sa/e 0ro0ert" to Aariano $averaThus, the 0ortion referred to in the sale to Aariano $avera '" >duarda $avera /a" not 'e validl" transferred '" Aariano $avera to !era0io Austar- 5t li@e&ise follo& that !era0io Austar /a" not effectivel" conve" the sa/e to Fenaro $avera- 5t is irre/issi'le to state that the alleged conve"ance /ade '" !era0io Austar in favor of Fenaro $avera have no legal effect &hatsoever, for the si/0le reason that !era0io Austar could not 0ro0erl" conve" the 0ortion referred to in the sale of *9 June 1,4<, '" >duarda $avera in favor of Aariano $avera- 5n the first 0lace, >duarda $avera has no e4isting right to conve" another 0ortion of the 0ro0ert" 'ecause she had alread" sold all her 0ortion to 3rsenio $ares- Thus at the ti/e >duarda $avera conve"ed a 0ortion of the 0ro0ert" &hich she alread" conve"ed to a00ellee 3rsenio $ares, she has no right on the 0ro0ert" and the 0o&er to dis0ose it- Aariano $avera therefore never ac.uired that 0ortion su'=ect of the sale on *9 June ,4<- #aving ac.uired that 0ortion of the 0ro0ert" su'=ect of the sale on *9 June 1,4< fro/ Aariano $avera, !era0io Austar has li@e&ise no e4isting right and 0o&er to dis0ose of that 0ortion of the 0ro0ert" to Fenaro $avera1. Navera not possessors (n )oo' -a(t*3 Ano,+e')e o- -+a, o- t(t+e 3rticle 6*9 of the $e& ivil ode 0rovides that a 0ossessor in good faith is one &ho is not a&are that there e4ists in his title or /ode of ac.uisition an" fla& &hich invalidates it and a 0ossessor in 'ad faith is one &ho 0ossesses in an" case contrar" to the foregoing- 7>ver" 0ossessor in good faith 'eco/es a 0ossessor in 'ad faith fro/ the /o/ent he 'eco/es a&are that &hat he 'elieved to 'e true is not so-8 #is 0ossession is legall" interru0ted &hen he is su//oned to trial according to 3rticle 11*3 of the $e& ivil ode (Tacas vTa'on, 63 Phil- 369)-8 4. Conc+us(ons an' -(n'(n) o- -acts y tr(a+ court )(ven )reat ,e()*t
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The conclusions and findings of facts '" the trial court are entitled to great &eight and &ill not 'e distur'ed on a00eal unless for strong and cogent reasons 'ecause the trial court is in a 'etter 0osition to e4a/ine real evidence as &ell as to o'serve the de/eanor of &itnesses &hile testif"ing on the ease- (Aacua vs- 5nter/ediate 300ellate ourt, $o- L)+0<10, %cto'er *9, 1,<+, 166 ! (3 *,)$. Art(c+e 1$44 o- t*e C(v(+ Co'e 3rticle 1644 of the ivil ode 0rovides that 75f the sa/e thing should have 'een sold to different vendees, the o&nershi0 shall 'e transferred to the 0erson &ho /a" have first ta@en 0ossession thereof in good faith, if it should 'e /ova'le 0ro0ert"- !hould it 'e i//ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"- !hould there 'e no inscri0tion, the o&nershi0 shall 0ertain to the 0erson &ho in good faith &as first in the 0ossessionG and, in the a'sence thereof, to the 0erson &ho 0resents the oldest title, 0rovided there is good faith-8 :. .a+es not re)(stere'3 >,ners*(p veste' upon -(rst possessor (n )oo' -a(t* The first sale of >duarda $avera;s share in the said lot to 3rsenio $ares &as /ade in a 0u'lic instru/ent on 14 Aa" 1,4+- The second sale of the sa/e 0ro0ert" &as e4ecuted also in a 0u'lic instru/ent in favor of Aariano $avera, &ho is the 0redecessor in interest of Fenaro $avera, on *9 June 1,4<, or /ore than a "ear after the first sale- !ince the records sho& that 'oth sales &ere not recorded in the (egistr" of Pro0ert", the la& clearl" vests the o&nershi0 u0on the 0erson &ho in good faith &as first in 0ossession of the dis0uted lot!. Bossess(on o- ven'or (nc+u'es not on+y t*e mater(a+ ut a+so sym o+(c possess(on3 Hen'or 'oes not transm(t anyt*(n) to secon' ven'ee The 0ossession /entioned in 3rticle 1644 for deter/ining &ho has 'etter right &hen the sa/e 0iece of land has 'een sold several ti/es '" the sa/e vendor includes not onl" the /aterial 'ut also the s"/'olic 0ossession, &hich is ac.uired '" the e4ecution of a 0u'lic instru/ent- This /eans that after the sale of a realt" '" /eans of a 0u'lic instru/ent, the vendor, &ho resells it to another, does not trans/it an"thing to the second vendee, and if the latter, '" virtue of this second sale, ta@es /aterial 0ossession of the thing, he does it as /ere detainer, and it &ould 'e un=ust to 0rotect this detention against the rights of the thing la&full" ac.uired '" the first vendee (Uui/son vs- (osete, <+ Phil- 16,G !anche2 vs- (a/os, 40 Phil- 914G Florendo vs- Fo2, *0 Phil- 3<<)8. Construct(ve 'e+(very (n t*e e7ecut(on o- pu +(c (nstrument The 0rior sale of the land to 3rsenio $ares '" /eans of a 0u'lic instru/ent is clearl" tanta/ount to a deliver" of the land resulting in the /aterial and s"/'olic 0ossession thereof '" the latter- Further, actual evidence 0oints to the 0rior actual 0ossession '" $ares 'efore he &as evicted fro/ the land '" $avera and their 0redecessors in 1,6+ &hen the latter entered the dis0uted 0ro0ert"- $o other evidence e4ists on record to sho& the contrar"#. Br(or est (n tempore" pot(or est (n 8ure Prior est in te/0ore, 0otior est in =ure (he &ho is first in ti/e is 0referred in right)- The 0riorit" of 0ossession stands good in favor of $ares- %&nershi0 should therefore 'e recogni2ed in favor of the first vendee, 3rsenio $ares10. Brescr(pt(on must e e7press+y re+(e' upon (n t*e p+ea'(n)s3 >ne assert(n) o,ners*(p t*rou)* a'verse possess(on must prove essent(a+ e+ements o- ac2u(s(t(ve prescr(pt(on $avera alleged that the" have 'een in 0ossession of the lot for /ore than 49 "ears- Prescri0tion, as a defense, /ust 'e e40ressl" relied u0on in the 0leadings- 5t cannot 'e availed of, unless it is s0eciall" 0leaded in the ans&erG and it /ust 'e 0roved or esta'lished &ith the sa/e degree of certaint" as an" essential allegation in the civil action (#odges vs- !alas, 93 Phil- 69+G or0oracion de PP- 3ugustinus (ecolectos vsrisosto/o, 3* Phil- 4*+)- 5n the 0resent case, $avera did not clai/ ac.uisitive 0rescri0tion in their ans&er in
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the lo&er court, and even if the" did, it cannot 'e given =udicial sanction on /ere allegations- The la& re.uires one &ho asserts o&nershi0 '" adverse 0ossession to 0rove the 0resence of the essential ele/ents of ac.uisitive 0rescri0tion (Aorales vs- F5, et al-, $o- L)6**+<, Aa" *,, 1,<0, ,+ ! (3 <+*)11. Nares ev(cte'" t*us Navera (s (n a' -a(t*3 10Dyear re2u(rement (n a'verse possess(on not met (su(t -(+e' 1#!1" 14 years a-ter '(spossess(on) There is lac@ of sufficient 0roof to esta'lish clearl" and 0ositivel" $avera;s clai/ of ac.uisitive 0rescri0tion- The ourt is /ore inclined to 'elieve $ares; version that he &as evicted fro/ the 0ro0ert" '" $avera so/eti/e in 1,6+, there'" sho&ing the latter;s 'ad faith in ac.uiring the 0ossession of the 0ro0ert" until 1,+1 &hen the action against $avera &as filed- Thus, the ordinar" ac.uisitive 0rescri0tion of 10 "ears cannot 'e considered in favor of $avera in the a'sence of good faith- $either is $avera entitled to e4traordinar" ac.uisitive 0rescri0tion, in the a'sence of sufficient 0roof of co/0liance &ith the thirt")"ear re.uire/ent of 0ossession in case of 'ad faith1/. Navera *as kno,+e')e o- r()*t an' (nterest o- cous(ns (n '(spute' +an' The la& clearl" states that 70ossession has to 'e in the conce0t of an o&ner, 0u'lic, 0eaceful and uninterru0ted8 (3rticle 111<, ivil ode)- 3 reading of the de/and letter fro/ $ares dated *+ Aa" 1,+0, su'/itted in evidence '" $avera, sho&s that the dis0ute over Lot 1490 had 'een going on for a nu/'er of "ears a/ong the/ and their fa/ilies- During the ti/e &hen $avera 'ought the land in 1,6, and the follo&ing "ears thereafter &hen the latter 0ossessed the 0ro0ert", the" have @no&n or should have @no&n of the rights and interests of their cousins over the dis0uted land11. Navera=s pre'ecessorD(nD(nterest '(' not 'ec+are t*emse+ves o,ner o- +an' -or ta7at(on purposes Aoreover, the ta4 declarations for the "ears 1,61 and 1,96 sho&ed that 3rsenio and Feli4 $ares &ere the declared o&ners- $avera;s 0redecessors in interest, na/el", Aariano $avera and the su'se.uent 0urchasers of the lot, had not 'othered to declare the land in their o&n na/es for 0ur0oses of ta4ation during the ti/e that the" &ere allegedl" in 0ossession of the land- 5t &as onl" in the "ear 1,99 &hen Fenaro $avera started to declare hi/self o&ner of the land for ta4ation 0ur0oses14. Nares not oun' y a++e)e' 'onat(on propter nupt(as (n -avor o- 9ustar3 No ev('ence t*at 'onate' property ,as trans-erre' to 9ar(ano Navera 3rsenio and Feli4 $ares are not 'ound '" their alleged @no&ledge of the 0revious donation 0ro0ter nu0tias '" their ancestor, Leocadio $avera in favor of Fausto Austar- The donation 0ro0ter nu0tias /ade '" Leocadio $avera so/eti/e in %cto'er 1,19, should have 'een at least recorded in the registr" of 0ro0ert" or inscri'ed in the %riginal ertificate of Title or the donee shall have titled the 0ro0ert" in his na/e- The alleged donee Fausto Austar is not a 0art" to the case nor had he transferred the said donated 0ro0ert" to the s0ouses Aariano $avera in a 0u'lic instru/ent or conve"ance- $o&here in the evidence on record &ould sho& that the said donated 0ro0ert" &as ever transferred to Aariano $avera, father of Fenaro $avera1$. Ano,+e')e o- a++e)e' 'onat(on (mmater(a+3 >C; c+ear ,(t*out ment(on o- any prev(ous 'onat(on o- any port(on o- t*e +an' The @no&ledge of $ares concerning the alleged 0revious donation is i//aterial- The facts are clear that the original certificate of title itself covers the &hole of *9,,,6 s.uare /eters of the dis0uted Lot 1490 in the na/e of 7>lena $avera, et al-8, &ithout an" /ention of an" 0revious donation of a 0ortion of the said lot to the alleged donee[!0] 8ietes v. CA, -' SC6A '$[!1]
.a+es" /001 ( 1!$ )
Noe+ v. CA [G.R. No. $#$$0. Fanuary 11" 1##$.] Aercado v- 3 KF-(- $o- 90939- Januar" 11, 1,,6-L First Division, Uuiason (J): 4 concur %acts& Fregorio $ana/an and #ilaria Ta'uclin &ere a childless, legall")/arried cou0le- Fregorio, ho&ever, had a child na/ed 1irgilio $ana/an '" another &o/an- 1irgilio &as reared '" the $ana/an s0ouses since he &as t&o "ears old- During their /arriage, Fregorio and #ilaria ac.uired certain 0ro0ert" including a 34-+) hectare land in Ta/'o, 5ligan it" on &hich the" 0lanted sugarcane, corn and 'ananasG &here the" lived &ith 1irgilio and 16 tenants- %n * %cto'er 1,46, Fregorio died- #ilaria then ad/inistered the 0ro0ert" &ith the hel0 of 1irgilio- Through their tenants, #ilaria and 1irgilio en=o"ed the 0roduce of the land to the e4clusion of Juan $ana/an, the 'rother of Fregorio, and >s0eran2a and aridad $ana/an, Fregorio;s daughters '" still another &o/an- 5n 1,63, 1irgilio declared the 0ro0ert" in his na/e for ta4ation 0ur0oses under Ta4 Declaration 6634- %n 1 $ove/'er 1,6*, #ilaria and 1irgilio, /ortgaged the 34-+)hectare land in favor of Jose - Deleste, in consideration of the a/ount of P4,<00-00- %n 19 Fe'ruar" 1,64, #ilaria and 1irgilio e4ecuted a deed of sale over the sa/e tract of land also in favor of Deleste in consideration of the su/ of P19,000-00- :itnesses to the sale &ere the &ife of 1irgilio, (osita !- $ana/an, (ufo - !alas (Deleste;s driver), and (e/edios Pilotan- The docu/ent &as notari2ed on 1+ Fe'ruar" 1,64 and &as registered &ith the (egister of Deeds of 5ligan it" on * Aarch 1,64- #aving discovered that the 0ro0ert" &as in arrears in the 0a"/ent of ta4es fro/ 1,6*, Deleste 0aid the ta4es for 1,6*, 1,63 and 1,64- Fro/ then on, Deleste has 0aid the ta4es on the 0ro0ert"%n 16 Aa" 1,64, #ilaria died- %n *+ %cto'er 1,64, >s0eran2a and aridad $ana/an filed intestate estate 0roceedings concerning the estate of their father, Fregorio- 3s onl" >s0eran2a, aridad and 1irgilio $ana/an &ere na/ed as heirs of Fregorio in the 0etition, Juan $ana/an o00osed it- %n *9 $ove/'er 1,64, the 0etition &as a/ended to include the estate of #ilaria &ith 3le=o Ta'uclin, #ilaria;s 'rother, and Julio Ta'uclin, a son of #ilaria;s deceased 'rother, Jose, as additional 0etitioners- #aving 'een a00ointed s0ecial ad/inistrator of the estate of the $ana/an cou0le, Juan $ana/an included the 34-+)hectare land in the list of the assets of the estate- %n 19 June 1,69, &hen >dil'erto $oel too@ over as regular ad/inistrator of the estate, he &as not a'le to ta@e 0ossession of the land in .uestion 'ecause it &as in the 0ossession of Deleste and so/e heirs of #ilaria- %n 1< Jul" 1,6+, Deleste and the heirs of the $ana/an s0ouses e4ecuted an a/ica'le settle/ent of the $ana/an estate- 5n the docu/ent, Deleste agreed 7to relin.uish his rights to P of the entire 0arcel of land in Ta/'o, 5ligan it" sold to hi/ '" #ilaria Ta'uclin, in favor of all the heirs of the intestate estate for the reason that not all of the heirs of Fregorio $ana/an have signed and agreed- The court a00roved the a/ica'le settle/ent 'ut &hen it &as .uestioned '" so/e heirs, the court set aside its a00roval and declared it null and voidThe court thereafter ordered $oel, as regular ad/inistrator, to file an action to recover the 34-+)hectare land fro/ Deleste- onse.uentl", on 30 30ril 1,93, $oel filed an action against Deleste for the reversion of title over the 34-+)hectare land to the $ana/an estate and to order Deleste to 0a" the rentals and attorne";s fees to the estate- %n 14 Dece/'er 1,+3, the trial court rendered a decision, holding that the action for annul/ent of the deed of sale had 0rescri'ed in 1,6< inas/uch as the sale &as registered in 1,64 and that Fregorio;s heirs had sle0t on their rights '" allo&ing #ilaria to e4ercise rights of o&nershi0 over Fregorio;s share of the con=ugal 0ro0ert" after his death in 1,46- $oel a00ealed to the ourt of 300eals- %n 1< Fe'ruar" 1,<0, the a00ellate court ruled that the transaction 'et&een #ilaria and 1irgilio, and Deleste, &as indeed a sale- 5t found that no fraud, /ista@e or /isre0resentation attended in the e4ecution of the deed of sale and that no 0roof &as sho&n that the contract &as /erel" a /ortgage- The a00ellate court, ho&ever, agreed &ith $oel that #ilaria could not validl" sell the 3+-+)hectare land 'ecause it &as con=ugal 0ro0ert", and #ilaria could sell onl" her P share thereof- The ourt also ruled that the 0rescri0tive 0eriod of 10 "ears had not "et ela0sed &hen the action to recover the 0ro0ert" &as filed in 1,93-G and held that in the a'sence of 0roof of adverse 0ossession '" #ilaria, she should 'e considered as holding the 0ro0ert" 0ursuant to her usufructuar" rights over the sa/e
.a+es" /001 ( 1!: )
under the 0rovisions of the !0anish ivil ode of 1<<,, the la& in force at the ti/e of the death of FregorioThe ourt further ordered Deleste to return the land in .uestion to the ad/inistrator of the estate, to 0a" the su/ of P*,600 as rental of the P interest of the estate fro/ 1,6+ until the land is returned, and to 0a" the e40enses of litigation and the su/ of P3,000 as attorne";s feesDeleste filed a /otion for the reconsideration of said decision 0ra"ing for the total affir/ance of the decision of the trial court- %n 14 Aa" 1,<1, the ourt of 300eals 0ro/ulgated an a/ended decision- 5t affir/ed its 0revious decision regarding the due e4ecution of the deed of sale adding that since no fraud attended its e4ecution, there &as no 'asis for the action to annul the sale and therefore there &as no starting 0oint in rec@oning the 0rescri0tive 0eriod of four "ears- 5t reconsidered the Decision of 1< Fe'ruar" 1,<0 insofar as it declared Deleste and the estate of Fregorio as co)o&ners of the 34-+)hectare landPinito :- Aercado, as ne& ad/inistrator of the estate, a00ealed to the !u0re/e ourt, .uestioning the ourt of 300eals; 3/ended Decision a00l"ing the doctrine of laches and e.uating the said doctrine &ith ac.uisitive 0rescri0tion (F( 6,660)- !u'se.uentl", another 0etition for certiorari to declare the sale to Deleste as an e.uita'le /ortgage, &as filed '" 3tt"- Donifacio Legas0i, re0resenting the heirs of #ilaria (F( 90939)- The t&o cases, arising fro/ the sa/e decision of the ourt of 300eals, &ere consolidated in the resolution of * !e0te/'er 1,,1 and &ere =ointl" consideredThe !u0re/e ourt reversed and set aside the a/ended decision dated 14 Aa" 1,<1 of the ourt of 300eals, and reinstated and affir/ed in toto the Decision dated 1< Fe'ruar" 1,<01. .eem(n)+y (na'e2uate cons('erat(on 'oes not ren'er a contract o- sa+e as one o- mort)a)e The contract involving the 34-+)hectare 0ro0ert" &as one of sale and not of /ortgage in the a'sence of a sho&ing that the findings co/0lained of are totall" devoid of su00ort in the record or that the" are so glaringl" erroneous as to constitute serious a'use of discretion (Andres v. Manufacturers #anover B Trust Corporation, / SC6A '/8 */080+(. 5t should 'e noted that t&o contracts had 'een e4ecuted involving said 0ro0ert" (the 1 $ove/'er 1,6* /ortgage and the 19 Fe'ruar" 1,64 sale)- 5n the a'sence of 0roof of gross inade.uac" of the 0rice, that the sale &as /ade &ith &hat /ight a00ear as an inade.uate consideration does not /a@e the contract one of /ortgage (As2a, v. Cosa"an, -' !hi". / 0 */0.-+(. /. .uccess(on (n t*e present case )overne' y t*e C(v(+ Co'e o- 188# Fregorio died in 1,46 long 'efore the effectivit" of the ivil ode of the Phili00ines on 30 3ugust 1,60- ?nder 3rticle **93 of the said ode, 7rights to the inheritance of a 0erson &ho died, &ith or &ithout a &ill, 'efore the effectivit" of this ode, shall 'e governed '" the ivil ode of 1<<,, '" other 0revious la&s, and '" the (ules of ourt-8 Thus, succession to the estate of Fregorio &as governed 0ri/aril" '" the 0rovisions of the !0anish ivil ode of 1<<,1. 188# C(v(+ Co'e3 5(-e *as -u++ o,ners*(p o- un'(v('e' *a+-D(nterest an' t*e usu-ruct over t*e ot*er3 R()*t to a+(enate *a+-D(nterest ?nder 3rticle ,63 thereof, a s0ouse li@e #ilaria, &ho is survived '" 'rothers or sisters or children of 'rothers or sisters of the decedent &as entitled to receive in usufruct the 0art of the inheritance 0ertaining to said heirs- #ilaria, ho&ever, had full o&nershi0, not /erel" usufruct, over the undivided half of the estate (!0anish ivil ode of 1<<,, 3rt- 4,3)- 5t is onl" this undivided half)interest that she could validl" alienate?nder the la& in force in 1,46, the surviving s0ouse &as given the /anage/ent of the con=ugal 0ro0ert" until the affairs of the con=ugal 0artnershi0 &ere ter/inated- The surviving s0ouse 'eca/e the o&ner of one)half interest of the con=ugal estate in his o&n right- #e also 'eca/e a trustee &ith res0ect to the other half for the 'enefit of &hoever /a" 'e legall" entitled to inherit the said 0ortion4. 188# C(v(+ Co'e3 H(r)(+(o (s not a *e(r o- Gre)or(o" o,ners*(p
.a+es" /001 ( 1!! )
e(n) (++e)(t(mate3 No r()*t to trans-er
1irgilio &as not an heir of Fregorio under the !0anish ivil ode of 1<<,- 3lthough he &as treated as a child '" the $ana/an s0ouses, illegiti/ate children &ho &ere not natural &ere dis.ualified to inherit under the said ode (Cid v. )urnaman, .- SC6A -&- */0'8+(. 3rticle ,,< of the ivil ode of the Phili00ines, &hich gave an illegiti/ate child certain hereditar" rights, could not 'enefit 1irgilio 'ecause the right of o&nershi0 of the collateral heirs of Fregorio had 'eco/e vested u0on his death (Civi" Code of the !hi"ippines, Art. ..$&> Dson v. @e" 6osario, 0. !hi". $&% */0$&+( - Therefore, 1irgilio had no right at all to transfer o&nershi0 over &hich he did not o&n$. Contract o- sa+e3 essent(a+ t*at se++er (s t*e o,ner o- t*e property 5n a contract of sale, it is essential that the seller is the o&ner of the 0ro0ert" he is selling- The 0rinci0al o'ligation of a seller is 7to transfer the o&nershi0 of8 the 0ro0ert" sold ( ivil ode of the Phili00ines, 3rt- 146<)- This la& ste/s fro/ the 0rinci0le that no'od" can dis0ose of that &hich does not 'elong to hi/ (A=cona v. 6e,es, $0 !hi". --' */0&-+> Corone" v. 1na, && !hi". -$' */0/'+( - $>A% D3T U?3D $%$ #3D>T :. 9(stake atten'e' sa+e o- un'(v('e' (nterest (n property e+on)(n) to t*e co++atera+ *e(rs oGre)or(o :hile it cannot 'e said that fraud attended the sale to Deleste, clearl" there &as a /ista@e on the 0art of #ilaria and 1irgilio in selling an undivided interest in the 0ro0ert" &hich 'elonged to the collateral heirs of Fregorio!. Burc*aser (s a trustee o- an (mp+(e' trust (- property (s ac2u(re' y m(stake or -rau' The sale, having 'een /ade in 1,64, &as governed '" the ivil ode of the Phili00ines- ?nder 3rticle 1469 of said ode, an i/0lied trust &as created on the one)half undivided interest over the 34-+) hectare land in favor of the real o&ners- !aid 3rticle 0rovides that 7if the 0ro0ert" is ac.uired through /ista@e or fraud, the 0erson o'taining it is, '" force of la&, considered a trustee of an i/0lied trust for the 'enefit of the 0erson fro/ &ho/ the 0ro0ert" co/es-8 5n Dia0 v. "orricho, 103 Phil- *91 (1,6<), the ourt said that 3rticle 1469 /erel" e40resses a rule recogni2ed in "ayon$ato v. .nsular +reasurer, 4, Phil- *44 (1,*9)300l"ing said rule, the Fa"ondato court held that the 'u"er of a 0arcel of land at a 0u'lic auction to satisf" a =udg/ent against a &ido& ac.uired onl" one)half interest on the land corres0onding to the share of the &ido& and the other half 'elonging to the heirs of her hus'and 'eca/e i/0ressed &ith a constructive trust in 'ehalf of said heirs8. .urv(v(n) spouse cannot ac2u(re a t(t+e y prescr(pt(on over sa(' a'm(n(stere' *a+Deing a trustee &ith res0ect to the other half for the 'enefit of &hoever /a" 'e legall" entitled to inherit the said 0ortion, the surviving s0ouse 7could therefore no /ore ac.uire a title '" 0rescri0tion against those for &ho/ he &as ad/inistering the con=ugal estate than could a guardian against his &ard or a =udicial ad/inistrator against the heirs of an estate- The surviving hus'and as the ad/inistrator and li.uidator of the con=ugal estate occu0ies the 0osition of a trustee of the highest order and is not 0er/itted '" the la& to hold that estate or an" 0ortion thereof adversel" to those for &hose 'enefit the la& i/0oses u0on hi/ the dut" of ad/inistration and li.uidation8 (!amittan v. 9asam, '% !hi". 0%8 */0&-+(. #. H(r)(+(o=s possess(on not un'er t*e c+a(m o- o,ners*(p The 0ossession of 1irgilio, his registration of the land in his na/e for ta4 0ur0oses, his hiring of tenants to till the land, and his en=o"/ent of the 0roduce of the tenants, a00ear /ore as acts done to hel0 #ilaria in /anaging the con=ugal 0ro0ert"- There is no evidence to 0rove indu'ita'l" that 1irgilio asserted a clai/ of o&nershi0 over the 0ro0ert" in his o&n right and adverse to all including #ilaria10. @ac*es 'o not app+y3 Doctr(ne cannot pre8u'(ce t*e r()*ts o- an o,ner or or()(na+ trans-eree The doctrine of laches does not a00l"- ?0on orders of the court in the intestate 0roceedings, $oel, the ad/inistrator of the estate of the $ana/an s0ouses, i//ediatel" filed an action to recover 0ossession and
.a+es" /001 ( 1!8 )
o&nershi0 of the 0ro0ert"- There is no evidence sho&ing an" failure or neglect on his 0art, for an unreasona'le and une40lained length of ti/e, to do that &hich, '" e4ercising due diligence, could or should have 'een done earlier (CristoAa" v. Me"chor, 8 SC6A / $ */0 +( - The doctrine of stale de/ands &ould a00l" onl" &here '" reason of the la0se of ti/e, 7KiLt &ould 'e ine.uita'le to allo& a 0art" to enforce his legal rights8 (I.3. 9otho, Inc. v. Ice and Co"d Stora4e Industries of the !hi"ippines, Inc., & SC6A -- */0'/+( Aoreover, this ourt, e4ce0t for ver" strong reasons, is not dis0osed to sanction the a00lication of the doctrine of laches to 0re=udice or defeat the rights of an o&ner or original transferee (6aneses v. Intermediate Appe""ate Court, /8 SC6A &0 */00%+(. 11. Brescr(pt(on (s ten years (n an act(on to recover t*e un'(v('e' *a+-D(nterest The action to recover the undivided half)interest of the collateral heirs of Fregorio 0rescri'es in 10 "ears- The cause of action is 'ased on 3rticle 1469 of the ivil ode of the Phili00ines, &hich /ade Deleste a trustee of an i/0lied trust in favor of the said heirs- ?nder 3rticle 1144 of the ivil ode of the Phili00ines, actions 'ased u0on an o'ligation created '" la&, can 'e 'rought &ithin ten "ears fro/ the ti/e the right of action accrues (6osario v. Auditor 7enera", /%& !hi". //&. */0$8+(. The 10)"ear 0rescri0tive 0eriod &ithin &hich the collateral heirs of Fregorio could file an action to recover their share in the 0ro0ert" sold to Deleste (0rescri0cion e4tintiva) accrued onl" on * Aarch 1,64, &hen the deed of sale &as registered &ith the (egister of Deeds (Cf. Arrada=a v. Court of Appea"s, / % SC6A /. */08 +( - Fro/ * Aarch 1,64 to 30 30ril 1,93, &hen the co/0laint for the recover" of the 0ro0ert" &as filed, less than 10 "ears had ela0sed- Therefore, the action had not 'een 'arred '" 0rescri0tion- The 10)"ear 0rescri0tive 0eriod 'efore title to real estate shall vest '" adverse 0ossession (0rescri0cion ad.uisitiva) is also rec@oned in the case of Deleste fro/ * Aarch 1,64 (Corporacion de !!. A4ustinos 6eco"etos v. Crisostomo, &. !hi". -. */0/$+(. [!/] .pouses Nonato vs. GAC [G.R. No. @D:!181. Novem er //" 1#8$.] !econd Division, >scolin (J): 4 concur %acts& %n *< June 1,+9, s0ouses (estituto $onato and >ster $onato 0urchased 1 unit of 1ol@s&agen !a@'a"an fro/ the Peo0le;s ar, 5nc-, on install/ent 'asis- To secure co/0lete 0a"/ent, the" e4ecuted a 0ro/issor" note and a chattel /ortgage in favor of Peo0le;s ar, 5nc- Peo0le;s ar, 5nc-, assigned its rights and interests over the note and /ortgage in favor of 5nvestor;s Finance or0oration (5F )- For failure of the s0ouses to 0a" t&o or /ore install/ents, des0ite de/ands, the car &as re0ossessed '" 5F on *0 Aarch 1,+<Des0ite re0ossession, 5F de/anded fro/ the s0ouses that the" 0a" the 'alance of the 0rice of the car%n , June 1,+<, 5F filed 'efore the F5 $egros %ccidental a co/0laint against the s0ouses for the latter to 0a" the 'alance of the 0rice of the car, &ith da/ages and attorne";s fees- 5n their ans&er, the s0ouses alleged '" &a" of defense that &hen the co/0an" re0ossessed the vehicle, it had, '" that act, effectivel" cancelled the sale of the vehicle- 5t is therefore 'arred fro/ e4acting recover" of the un0aid 'alance of the 0urchase 0rice, as /andated '" the 0rovisions of 3rticle 14<4 of the ivil ode- The trial court, ho&ever, after due hearing, rendered a decision in favor of 5F , ordering the s0ouses to 0a" 5F the a/ount of P1+,63+-90 &ith interest at the rate of 14I 0er annu/ fro/ *< Jul" 1,+9 until full" 0aid, 10I of the a/ount due as attorne";s fees, litigation e40enses in the a/ount of P133-06 0lus the costs of the suitG &ithout an" 0ronounce/ent as to other charges and da/ages, the sa/e not having 'een 0roven to the satisfaction of the ourt%n a00eal, the a00ellate court affir/ed the =udg/ent- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt set aside the =udg/ent of the a00ellate court in 3)F( 9,*+9)( and dis/issed the co/0laint filed '" 5nvestors Finance or0oration against the $onato s0ouses in ivil ase 13<6*G &ithout costs-
.a+es" /001 ( 1!# )
1. Art(c+e 1484 o- t*e C(v(+ Co'e3 Reme'(es ava(+a +e to ven'or o- persona+ property (n sa+e paya +e (n (nsta++ments 3rticle 14<4 of the ivil ode (on sale of 0ersonal 0ro0ert" on install/ent) 0rovides that 75n a contract of sale of 0ersonal 0ro0ert" the 0rice of &hich is 0a"a'le in install/ents, the vendor /a" e4ercise an" of the follo&ing re/edies: (1) >4act fulfill/ent of the o'ligation, should the vendee fail to 0a"G (*) ancel the sale, should the vendee;s failure to 0a" cover t&o or /ore install/entsG (3) Foreclose the chattel /ortgage on the thing sold, if one has 'een constituted, should the vendee;s failure to 0a" cover t&o or /ore install/ents- 5n this case, he shall have no further action against the 0urchaser to recover an" un0aid 'alance of the 0rice- 3n" agree/ent to the contrar" shall 'e void-8 /. 9ean(n) o- Art(c+e 1484 The /eaning of the 0rovision has 'een re0eatedl" enunciated in a long line of cases- ThusG 7!hould the vendee or 0urchaser of a 0ersonal 0ro0ert" default in the 0a"/ent of t&o or /ore of the agreed install/ents, the vendor or seller has the o0tion to avail of an" of these three re/edies J either to e4act fulfill/ent '" the 0urchaser of the o'ligation, or to cancel the sale, or to foreclose the /ortgage on the 0urchased 0ersonal 0ro0ert", if one &as constituted- These re/edies have 'een recogni2ed as alternative, not cu/ulative, that the e4ercise of one &ould 'ar the e4ercise of the others-8 1. Repossess(on an e7erc(se o- cance+(n) t*e contract o- sa+e not mere+y to appra(se t*e car=s va+ue 5t is not dis0uted that the co/0an" had ta@en 0ossession of the car 0urchased '" the $onatos on install/ents- :hile the $onatos /aintain that the co/0an" had, '" that act, e4ercised its o0tion to cancel the contract of sale, the co/0an" contends that the re0ossession of the vehicle &as onl" for the 0ur0ose of a00raising its value and for storage and safe@ee0ing 0ending full 0a"/ent '" the $onatos of the 0urchasing 0rice- The records sho& other&ise- The recei0t issued '" the co/0an" to the $onatos &hen it too@ 0ossession of the vehicle states that the vehicle could 'e redee/ed &ithin 16 da"s- This could onl" /ean that should the s0ouses fail to redee/ the car &ithin the 0eriod '" 0a"ing the 'alance of the 0urchase 0rice, the co/0an" &ould retain 0er/anent 0ossession of the vehicle- The assertion that the co/0an" re0ossessed the vehicle /erel" for the 0ur0ose of a00raising its current value is untena'le, for even after it had notified the $onatos that the value of the car &as not sufficient to cover the 'alance of the 0urchase 0rice, there &as no atte/0t at all on the 0art of the co/0an" to return the re0ossessed car4. Cance++at(on o- contract ars company -rom e7act(n) payment o- a+ance The acts 0erfor/ed '" the cor0oration are &holl" consistent &ith the conclusion that it had o0ted to cancel the contract of sale of the vehicle- 5t is thus 'arred fro/ e4acting 0a"/ent fro/ 0etitioners of the 'alance of the 0rice of the vehicle &hich it had alread" re0ossessed- 5t cannot have its ca@e and eat it too[!1] Noo+ v. CA [G.R. No. 11::1$. Fu+y /4" 1##!.] Third Division, Pangani'an (J): 4 concur %acts& %ne lot for/erl" o&ned '" 1ictorio $ool (T T T)+4,60) has an area of 1 hectare- 3nother lot 0reviousl" o&ned '" Francisco $ool (T T T)100,46) has an area of 3-0<<0 hectares- Doth 0arcels are situated in !an Aanuel, 5sa'ela- !0ouses onchita $ool and Faudencio 3l/o=era ( plaintiffs) allege$ that the" are the o&ners of the su'=ect land as the" 'ought the sa/e fro/ 1ictorio and Francisco $ool, and that as the" are in dire need of /one", the" o'tained a loan fro/ the 5lagan Dranch of the DDP (5lagan, 5sa'ela), secured '" a real estate /ortgage on said 0arcels of land, &hich &ere still registered in the na/es of 1ictorino and Francisco $ool, at the ti/e, and for the failure of the 0laintiffs to 0a" the said loan, including interest and surcharges, totaling P69,000-00, the /ortgage &as foreclosedG that &ithin the 0eriod of rede/0tion, the 0laintiffs contacted 3nacleto $ool for the latter to redee/ the foreclosed 0ro0erties fro/ DDP, &hich the latter didG and as a result, the titles of the * 0arcels of land in .uestion &ere transferred to 3nacletoG that as
.a+es" /001 ( 180 )
0art of their arrange/ent or understanding, 3nacleto agreed to 'u" fro/ onchita the * 0arcels of land under controvers", for a total 0rice of P100,000-00, P30,000-00 of &hich 0rice &as 0aid to onchita, and u0on 0a"/ent of the 'alance of P14,000-00, the 0laintiffs &ere to regain 0ossession of the * hectares of land, &hich a/ounts s0ouses 3nacleto $ool and >/ilia $e're (defendants) failed to 0a", and the sa/e da" the said arrange/ent &as /adeG another covenant &as entered into '" the 0arties, &here'" the defendants agreed to return to 0laintiffs the lands in .uestion, at an"ti/e the latter have the necessar" a/ountG that latter as@ed the defendants to return the sa/e 'ut des0ite the intervention of the Daranga" a0tain of their 0lace, defendants refused to return the said 0arcels of land to 0laintiffsG there'" i/0elling the 0laintiffs to co/e to court for relief- %n the other hand, $efen$ants theori0e$ that the" ac.uired the lands in .uestion fro/ the DDP, through negotiated sale, and &ere /isled '" 0laintiffs &hen defendant 3nacleto $ool signed the 0rivate &riting, agreeing to return su'=ect lands &hen 0laintiffs have the /one" to redee/ the sa/eG defendant 3nacleto having 'een /ade to 'elieve, then, that his sister, onchita, still had the right to redee/ the said 0ro0erties5t should 'e stressed that Aanuel !- Aallorca, authori2ed officer of DDP, certified that the 1)"ear rede/0tion 0eriod (fro/ 19 Aarch 1,<* u0 to 16 Aarch 1,<3) and that the /ortgagors; right of rede/0tion &as not e4ercised &ithin this 0eriod- #ence, DDP 'eca/e the a'solute o&ner of said 0arcels of land for &hich it &as issued ne& certificates of title, 'oth entered on *3 Aa" 1,<3 '" the (egistr" of Deeds for the Province of 5sa'ela- 3'out * "ears thereafter, on 1 30ril 1,<6, DDP entered into a Deed of onditional !ale involving the sa/e 0arcels of land &ith 3nacleto $ool as vendee- !u'se.uentl", the latter &as issued ne& certificates of title on < Fe'ruar" 1,<<The trial court ruled in favor of the defendants, declaring the 0rivate &riting to 'e an o0tion to sell, not 'inding and considered validl" &ithdra&n '" the defendants for &ant of considerationG ordering the 0laintiffs to return to the defendants the su/ of P30,000-00 0lus interest thereon at the legal rate, fro/ the ti/e of filing of defendants; counterclai/ until the sa/e is full" 0aidG to deliver 0eaceful 0ossession of the * hectaresG and to 0a" reasona'le rents on said * hectares at P6,000-00 0er annu/ or at P*,600-00 0er cro00ing fro/ the ti/e of =udicial de/and until the said lots shall have 'een delivered to the defendantsG and to 0a" the costs- The 0laintiffs a00ealed to the ourt of 300eals ( 3 F( 1 394+3), &hich affir/ed the a00ealed =udg/ent in toto on *0 Januar" 1,,3- #ence, the 0etition 'efore the !u0re/e ourtThe !u0re/e ourt denied the 0etition, and affir/ed the assailed decision of the ourt of 300eals1. va+(' Contract o- repurc*ase ar(s(n) out o- a contract o- sa+e ,*ere t*e se++er 'oes not *ave t(t+e not
3 contract of re0urchase arising out of a contract of sale &here the seller did not have an" title to the 0ro0ert" 7sold8 is not valid- !ince nothing &as sold, then there is also nothing to re0urchase/. Art(c+e 11!0 NCC app+(ca +e on+y to va+(' an' en-orcement contracts 3rticle 13+0 of the ivil ode, &hich 0rovides that 7if the ter/s of a contract are clear and leave no dou't u0on the intention of the contracting 0arties, the literal /eaning of its sti0ulations shall control,8 is a00lica'le onl" to valid and enforcea'le contracts1. A vo(' contract cannot )(ve r(se to a va+(' one 3 void contract cannot give rise to a valid one- 3rticle 14** of the ivil ode 0rovides that 7a contract &hich is the direct result of a 0revious illegal contract, is also void and ine4istent-8 5n the 0resent case- the alleged contract of re0urchase 'eing de0endent on the validit" of the contract of sale, it is itself voidThus, the 0rinci0al contract of sale and the au4iliar" contract of re0urchase are 'oth void4. C+ar(-(cat(on o- 4sa+e o- property" ,*en se++er (s no +on)er t*e o,ner" nu++ an' vo('63 .a+e poss( +e even (- o,ner (s not o,ner at t(me o- sa+e" prov('e' t*at *e ac2u(res t(t+e to t*e property at t(me o- 'e+(very
.a+es" /001 ( 181 )
5n the case of Dignos v- 3, the ourt did not cite its 'asis for ruling that a 7sale is null and void8 &here the sellers 7&ere no longer the o&ners8 of the 0ro0ert"- !uch a situation (&here the sellers &ere no longer o&ners) does not a00ear to 'e one of the void contracts enu/erated in 3rticle 140, of the ivil odeAoreover, the ivil ode itself recogni2es a sale &here the goods are to 'e 7ac.uired '" the seller after the 0erfection of the contract of sale,8 clearl" i/0l"ing that a sale is 0ossi'le even if the seller &as not the o&ner at the ti/e of sale, 0rovided he ac.uires title to the 0ro0ert" later on$. Ho(' contracts (Art(c+e 140# [$])3 t*ose ,*(c* contemp+ates an (mposs( +e serv(ce 3rticle 146, of the ivil ode 0rovides that 7the vendor /ust have a right to transfer the o&nershi0 thereof Ko'=ect of the saleL at the ti/e it is delivered-8 #ere, deliver" of o&nershi0 is no longer 0ossi'le- The sellers can no longer deliver the o'=ect of the sale to the 'u"ers, as the 'u"ers the/selves have alread" ac.uired title and deliver" thereof fro/ the rightful o&ner, the DDP- Thus, such contract /a" 'e dee/ed to 'e ino0erative and /a" thus fall, '" analog", under ite/ 6 of 3rticle 140, of the ivil ode: 7Those &hich conte/0late an i/0ossi'le service-8 :. Nono 'at 2uo' non *a et" No one can )(ve ,*at *e 'oes not *ave3 Contract o- repurc*ase (noperat(ve t*us vo(' 3rticle 1606 of the ivil ode 0rovides that 7&here goods are sold '" a 0erson &ho is not the o&ner thereof, and &ho does not sell the/ under authorit" or &ith consent of the o&ner, the 'u"er ac.uires no 'etter title to the goods than the seller had, unless the o&ner of the goods is '" his conduct 0recluded fro/ den"ing the seller;s authorit" to sell-8 Juris0rudence, on the other hand, teaches us that 7a 0erson can sell onl" &hat he o&ns or is authori2ed to sellG the 'u"er can as a conse.uence ac.uire no /ore than &hat the seller can legall" transfer-8 $o one can give &hat he does not have J nono dat .uod non ha'et- 5n the 0resent case, there is no allegation at all that 0etitioners &ere authori2ed '" DDP to sell the 0ro0ert" to the 0rivate res0ondentsFurther, the contract of re0urchase that the 0arties entered into 0resu00oses that 0etitioners could re0urchase the 0ro0ert" that the" 7sold8 to 0rivate res0ondents- 3s 0etitioners 7sold8 nothing, it follo&s that the" can also 7re0urchase8 nothing- 5n this light, the contract of re0urchase is also ino0erative and '" the sa/e analog", void!. R()*t to repurc*ase presupposes a va+(' contract o- sa+e %ne 7re0urchases8 onl" &hat one has 0reviousl" sold- 5n other &ords, the right to re0urchase 0resu00oses a valid contract of sale 'et&een the sa/e 0arties- ?ndis0utedl", 0rivate res0ondents ac.uired title to the 0ro0ert" fro/ DDP, and not fro/ 0etitioners8. Ar)uen'o" .cenar(o ,*ere t*e Contract o- repurc*ase '(st(nct -rom t*at o- sa+e3 Bet(t(ons st(++ 'o not ac2u(re a r()*t to repurc*ase t*e property3 In(+atera+ prom(se to pay on+y (n'(n) (- supporte' y cons('erat(on '(st(nct -rom pr(ce 3ssu/ing arguendo that the contract of re0urchase is se0arate and distinct fro/ the contract of sale and is not affected '" the nullit" of the latter, still 0etitioners do not there'" ac.uire a right to re0urchase the 0ro0ert"- 5n that scenario, the contract of re0urchase ceases to 'e a 7right to re0urchase8 ancillar" and incidental to the contract of saleG rather, it 'eco/es an acce0ted unilateral 0ro/ise to sell- 3rticle 14+, of the ivil ode, ho&ever, 0rovides that 7an acce0ted unilateral 0ro/ise to 'u" or sell a deter/inate thing for a 0rice certain is 'inding u0on the 0ro/issor if the 0ro/ise is su00orted '" a consideration distinct fro/ the 0rice-8 5n the 0resent case, the alleged &ritten contract of re0urchase is 'ereft of an" consideration distinct fro/ the 0rice- 3ccordingl", as an inde0endent contract, it cannot 'ind 0rivate res0ondents#. Convent(ona+ re'empt(on3 Comp+(ance ,(t* Art(c+e 1:1: an' ot*er a)ree' st(pu+at(ons 3rticle 1901 of the ivil ode 0rovides that 7conventional rede/0tion shall ta@e 0lace &hen the vendor reserves the right to re0urchase the thing sold, &ith the o'ligation to co/0l" &ith the 0rovisions of 3rticle 1919 and other sti0ulations &hich /a" have 'een agreed u0on-;8
.a+es" /001 ( 18/ )
10. R()*t o- repurc*ase a r()*t )rante' y ven'or (n t*e same (nstrument o- sa+e" not (n a su se2uent (nstrument 5n 2illarica v. CA (.0 8ovemAer /0'8(, the ourt ruled that the right of re0urchase is not a right granted the vendor '" the vendee is a su'se.uent instru/ent, 'ut is a right reserved '" the vendor in the sa/e instru/ent of sale as one of the sti0ulations of the contract- %nce the instru/ent of a'solute sale is e4ecuted, the vendor can no longer reserve the right to re0urchase, and an" right thereafter granted the vendor '" the vendee in a se0arate instru/ent cannot 'e a right of re0urchase 'ut so/e other right (li@e the o0tion to 'u")11. .a+e" ,(t*out a)reement to repurc*ase" a so+ute 5n 1a#os, et al. vs. .casiano, et al. (1,*+) the ourt ruled that 7an agree/ent to re0urchase 'eco/es a 0ro/ise to sell &hen /ade after the sale, 'ecause &hen the sale is /ade &ithout such an agree/ent, the 0urchaser ac.uires the thing sold a'solutel"- and if he after&ards grants the vendor the right to re0urchase, it is a ne& contract entered into '" the 0urchaser, as a'solute o&ner alread" of the o'=ect- 5n that case the vendor has not reserved to hi/self the right to re0urchase1/. >pt(on to repurc*ase a prom(se to se++" )overne' y Art(c+e 14!# The %0tion to (e0urchase e4ecuted '" 0rivate res0ondent in the 0resent case, &as /erel" a 0ro/ise to sell, &hich /ust 'e governed '" 3rticle 14+, of the ivil ode &hich 0rovides that 7a 0ro/ise to 'u" and sell a deter/inate thing for a 0rice certain is reci0rocall" de/anda'le- 3n acce0ted unilateral 0ro/ise to 'u" or to sell a deter/inate thing for a 0rice certain is 'inding u0on the 0ro/issor if the 0ro/ise is su00orted '" a consideration distinct fro/ the 0rice-8 11. Ar)uen'o" .ect(on 11# o- Bu +(c @an' Act The 'rothers 1ictorino and Francisco $oel, together &ith onchita $ool and 3nacleto $ool, &ere all si'lings and heirs .ualified to re0urchase the t&o 0arcels of land under !ection 11, of the Pu'lic Land 3ct &hich 0rovides that 7(e)ver" conve"ance of land ac.uired under the free 0atent or ho/estead 0rovisions, &hen 0ro0er, shall 'e su'=ect to re0urchase '" the a00licant, his &ido& or legal heirs, &ithin a 0eriod of 6 "ears fro/ the date of conve"ance-8 3ssu/ing the a00lica'ilit" of this statutor" 0rovision to the 0resent case, it is indis0uta'le that 3nacleto $ool alread" re0urchased fro/ DDP the contested 0ro0erties- #ence, there &as no /ore right of re0urchase that his sister onchita or 'rothers 1ictorino and Francisco could e4ercise- The 0ro0erties &ere alread" o&ned '" an heir of the ho/estead grantee and the rationale of the 0rovision to @ee0 ho/estead lands &ithin the fa/il" of the grantee &as thus fulfilled14. Act(on<De-ense -or t*e 'ec+arat(on o- an (ne7(stent contract 'oes not prescr( e3 Ha+('(ty o- a contract cannot e ac2u(re' t*rou)* estoppe+ The 0rivate res0ondents cannot 'e esto00ed fro/ raising the defense of nullit" of contract, s0eciall" in this case &here the" acted in good faith, 'elieving that indeed 0etitioners could sell the t&o 0arcels of land in .uestion- 3rticle 1410 of the ivil ode /andates that 7the action or defense for the declaration of the ine4istence of a contract does not 0rescri'e-8 5t is a &ell)settled doctrine that 7as 'et&een 0arties to a contract, validit" cannot 'e given to it '" esto00el if it is 0rohi'ited '" la& or it is against 0u'lic 0olic"- 5t is not &ithin the co/0etence of an" citi2en to 'arter a&a" &hat 0u'lic 0olic" '" la& see@s to 0reserve-8 Thus, it is i//aterial that 0rivate res0ondents initiall" acted to i/0le/ent the contract of sale, 'elieving in good faith that the sa/e &as valid- 3 contract void at ince0tion cannot 'e validated '" ratification or 0rescri0tion and certainl" cannot 'e 'inding on or enforcea'le against 0rivate res0ondents1$. Bet(t(oners re2u(re' to return sum o- B10"000 ,(t* (nterest an' to pay rent The 'alance of P14,000-00 under the void contract of sale /a" not 'e enforced- Petitioners are the ones &ho have an o'ligation to return &hat the" undul" and i/0ro0erl" received '" reason of the invalid contract of sale- !ince the" cannot legall" give title to &hat the" 7sold,8 the" cannot @ee0 the /one" 0aid for the o'=ect of the sale- 5t is 'asic that 7ever" 0erson &ho through an act of 0erfor/ance '" another, or an" other /eans, ac.uires or co/es into 0ossession of so/ething at the e40ense of the latter &ithout =ust or legal
.a+es" /001 ( 181 )
ground, shall return the sa/e-8 Thus, if a void contract has alread" 7'een 0erfor/ed, the restoration of &hat has 'een given is in order-8 1:. Gnterest runs -rom t*e t(me to+erance cease' upon counterc+a(m 5nterest to the a/ount &ill run onl" fro/ the ti/e of 0rivate res0ondents; de/and for the return of this a/ount in their counterclai/, for the 0etitioners; 0ossession and cultivation of the t&o hectares are anchored on 0rivate res0ondents; tolerance- The latter;s tolerance ceased u0on their counterclai/ and de/and on the for/er to vacate- #ence, their right to 0osses and cultivate the land i0so facto ceased[!4] Nort*ern 9otors vs. .ap(noso [G.R. No. @D/80!4. 9ay /#" 1#!0.] >n Danc, 1illa/or (J): + concur, 1 concur in result, 1 on leave of a'sence %acts& %n 4 June 1,96, asiano !a0inoso 0urchased fro/ $orthern Aotors, 5nc- an %0el Cadett car for the 0rice of P1*,1+1-00, /a@ing a do&n 0a"/ent and e4ecuting a 0ro/issor" note for the 'alance of P10,640-00 0a"a'le in install/ents &ith interest at 1*I 0er annu/, as follo&s: P391-00 on 6 Jul" 1,96, and P361-00 on the 6th da" of each /onth 'eginning 3ugust 1,96, u0 to and including Dece/'er, 1,9+- To secure the 0a"/ent of the 0ro/issor" note, !a0inoso e4ecuted in favor of $orthern Aotors, 5nc- a chattel /ortgage on the car- The /ortgage contract 0rovided, a/ong others, that u0on default '" the /ortgagor in the 0a"/ent of an" 0art of the 0rinci0al or interest due, the /ortgagee /a" elect an" of the follo&ing re/edies: (a) sale of the car '" the /ortgageeG (') cancellation of the contract of saleG (c) e4tra=udicial foreclosureG (d) =udicial foreclosureG (e) ordinar" civil action to e4act fulfill/ent of the /ortgage contract- 5t &as further sti0ulated that 7K&Lhichever re/ed" is elected '" the /ortgagee, the /ortgagor e40ressl" &aives his right to rei/'urse/ent '" the /ortgagee of an" and all a/ounts on the 0rinci0al and interest alread" 0aid '" hi/-8 !a0inoso failed to 0a" the first install/ent of P391-00 due on 6 Jul" 1,96, and the second, third, fourth and fifth install/ents of P361-00 each due on the 6th da" of 3ugust, !e0te/'er, %cto'er and $ove/'er, 1,96, res0ectivel"- !everal 0a"/ents &ere, ho&ever, /ade '" !a0inoso, to &it: P630-6* on *1 $ove/'er 1,96, P4<0-00 on *1 Dece/'er 1,96, and P400-00 on 30 30ril 1,99- The first and third 0a"/ents aforesaid &ere a00lied to accrued interest u0 to 1+ 30ril 1,99, &hile the second 0a"/ent &as a00lied 0artl" (P16<-10) to interest, and 0artl" (P3*1-,0) to the 0rinci0al, there'" reducing the 'alance un0aid to P10,*1<-10!a0inoso having failed to /a@e further 0a"/ents, $orthern Aotors, 5nc- filed a co/0laint on ** Jul" 1,99, against !a0inoso and a certain 0erson &hose na/e, identit" and address &ere still un@no&n to $orthern Aotors, hence deno/inated in the co/0laint as 7John Doe-8 5n its co/0laint, $orthern Aotors, 5nc- stated that it &as availing itself of the o0tion given it under the /ortgage contract of e4tra=udiciall" foreclosing the /ortgage, and 0ra"ed that a &rit of re0levin 'e issued u0on its filing of a 'ond for the sei2ure of the car and for its deliver" to itG that after hearing, it 'e ad=udged to have the rightful 0ossession and o&nershi0 of the carG that in default of deliver", !a0inoso and 7Doe8 'e ordered to 0a" $orthern Aotors the su/ of P10,*1<-10 &ith interest at 1*I 0er annu/ fro/ 1< 30ril 1,99, until full 0a"/ent of the said su/, as &ell as an a/ount e.uivalent to *6I of the su/ due as and for attorne";s fees and e40enses of collection, and the costs of the suit- $orthern Aotors also 0ra"ed for such other re/ed" as /ight 'e dee/ed =ust and e.uita'le in the 0re/ises- !u'se.uent to the co//ence/ent of the action, 'ut 'efore the filing of his ans&er, !a0inoso /ade * 0a"/ents on the 0ro/issor" note, the first on ** 3ugust 1,99, for P600-00, and the second on *+ !e0te/'er 1,99, for P+60-00- 5n the /eanti/e, on , 3ugust 1,99, u0on $orthern Aotor;s filing of a 'ond, a &rit of re0levin &as issued '" the court- %n *0 %cto'er 1,99, co0ies of the su//ons, co/0laint and anne4es thereto &ere served on !a0inoso '" the sheriff &ho e4ecuted the sei2ure &arrant '" sei2ing the car fro/ !a0inoso on the sa/e date, and turning over its 0ossession to the 0laintiff on *6 %cto'er 1,99- 3fter trial and on 4 30ril 1,9+, the trial court held that !a0inoso having failed to 0a" /ore than * install/ents, $orthern Aotors ac.uired the right to foreclose the chattel /ortgage, &hich it could avail of '" filing an action of re0levin to secure 0ossession of the /ortgaged car as a 0reli/inar" ste0 to the foreclosure sale conte/0lated in the
.a+es" /001 ( 184 )
hattel Aortgage La&G and that the foreclosure of the chattel /ortgage and the recover" of the un0aid 'alance of the 0rice are alternative re/edies &hich /a" not 'e 0ursued con=unctivel", so that in availing itself of its right to foreclose the chattel /ortgage, $orthern Aortors there'" renounced &hatever clai/ it /a" have had on the 0ro/issor" note, and, therefore, it has no /ore right to the collection of the attorne";s fees sti0ulated in the 0ro/issor" note, and should return to !a0inoso the su/ of P1,*60-00 &hich $orthern Aotors had received fro/ the latter after having filed the 0resent case on ** Jul" 1,99, and elected to foreclose the chattel /ortgageDirect a00eal &as /ade '" $orthern Aotors on .uestions of la& fro/ the 0ortion of the =udg/ent of the F5 Aanila, Dranch RR55 ( ivil ase 991,,), ordering $orthern Aotors to 0a" !a0inoso the su/ of P1,*60-00The !u0re/e ourt /odified the =udg/ent a00ealed fro/ '" setting aside the 0ortion thereof &hich orders $orthern Aotors to 0a" !a0inoso the su/ of P1,*60-00, &ith costs in this instance against !a0inoso1. Rep+ev(n as a pre+(m(nary step to t*e -orec+osure sa+e 5n issuing a &rit of re0levin, and, after trial, in u0holding $orthern Aotors; right to the 0ossession of the car, and ratif"ing and confir/ing its deliver" to the afore/entioned, the trial court correctl" considered the action as one of re0levin to secure 0ossession of the /ortgaged vehicle as a 0reli/inar" ste0 to the foreclosure sale conte/0lated in !ection 14 of 3ct 160< (Dachrach Aotor o- vs- !u//ers, 4* Phil-, 3G !eMo vs- Pestolante, F-(- $o- L)11+66, 30ril *3, 1,6<)/. Rep+ev(n 'oes not ar se++er -rom accept(n) -urt*er payments on t*e prom(ssory note The trial court erred in concluding that the legal effect of the filing of the action &as to 'ar $orthern Aotors fro/ acce0ting further 0a"/ents on the 0ro/issor" note1. %act o- -orec+osure an' actua+ sa+e o- mort)a)e c*atte+ one t*at ars recovery o- outstan'(n) a+ance That the ulti/ate o'=ect of the action is the foreclosure of the chattel /ortgage, is of no /o/ent, for it is the fact of foreclosure and actual sale of the /ortgaged chattel that 'ar further recover" '" the vendor of an" 'alance on the 0urchaser;s outstanding o'ligation not satisfied '" the sale (Aanila Aotor o-, 5nc- vsFernande2, ,, Phil-, +<*, +<9G Dachrach Aotor o- vs- Aillan, 91 Phil-, 40,G Aanila Trading Q !u00" o- vs(e"es, 9* Phil- 491, 4+1G ru2 et al- vs- Fili0inas 5nvest/ent Q Finance or0oration, F-(- $o- L)*4++*, Aa" *+, 1,9< K*3 ! (3 +,1, +,9L-) 4. Art(c+e 1484 (1)3 4%urt*er act(on6 to recover unpa(' a+ance pro*( (te'3 Bro*( (t(on 'oes not prec+u'e vo+untary payments :hat 3rticle 14<4(3) 0rohi'its is 7further action against the 0urchaser to recover an" un0aid 'alance of the 0rice-8 3lthough the ourt has construed the &ord 7action8 in said 3rticle 14<4 to /ean 7an" =udicial or e4tra=udicial 0roceeding '" virtue of &hich the vendor /a" la&full" 'e ena'led to e4act recover" of the su00osed unsatisfied 'alance of the 0urchase 0rice fro/ the 0urchaser or his 0riv"8 ( ru2, et al- vs- Fili0inas 5nvest/ent Q Finance or0oration, su0ra), there is no occasion at this stage to a00l" the restrictive 0rovision of the said article, 'ecause there has not "et 'een a foreclosure sale resulting in a deficienc"- The 0a"/ent of the su/ of P1,*60-00 '" !a0inoso &as a voluntar" act on his 0art and did not result fro/ a 7further action8 instituted '" $orthern Aotors- 5f the /ortgage creditor, 'efore the actual foreclosure sale, is not 0recluded fro/ recovering the un0aid 'alance of the 0rice although he has filed an action of re0levin for the 0ur0ose of e4tra)=udicial foreclosure, or if a /ortgage creditor &ho has elected to foreclose 'ut &ho su'se.uentl" desists fro/ 0roceeding &ith the auction sale, &ithout gaining an" advantage or 'enefit, and &ithout causing an" disadvantage or har/ to the vendee)/ortgagor, is not 'arred fro/ suing on the un0aid account ((adio&ealth, 5nc- vs- Lavin, et al-, F-(- $o- L)1<693, 30ril *+, 1,93 K+ ! (3 <04, <0+L), there is no reason &h" a /ortgage creditor should 'e 'arred fro/ acce0ting, 'efore a foreclosure sale, 0a"/ents voluntaril" tendered '" the de'tor)/ortgagor &ho ad/its a su'sisting inde'tedness.a+es" /001 ( 18$ )
[!$] 1d,sse, !ar2 Inc. v. CA, .8% SC6A .$& (/00 ( [!:] >n) v. CA [G.R. No. #!14!. Fu+y :" 1###.] First division, Enares)!antiago (J): 4 concur %acts& %n 10 Aa" 1,<3, Jai/e %ng and s0ouses Aiguel and 3le=andra (o'les e4ecuted an 73gree/ent of Purchase and !ale8 res0ecting * 0arcels of land situated at Darrio Puri, !an 3ntonio, Uue2on (agricultural including rice /ill, 0igger") for P*A (initial 0a"/ent of P900,000 'ro@en into P103,4,,-,1 directl" 0aid to seller on ** Aarch 1,<3 and P4,9,600-0, directl" 0aid to DP5 to ans&er for 0art of seller;s loan &ith the 'an@G and 'alance of 1-4A to 'e 0aid in 4 e.ual .uarterl" install/ents of P360,000 the first of &hich due and de/anda'le on 16 June 1,<3)G 'inding the/selves that u0on the 0a"/ent of the total 0urchase 0rice the seller delivers a good and sufficient deed of sale and conve"ance for the 0arcels of land free and clear fro/ liens and encu/'rances, that seller delivers, surrenders and transfers the 0arcels of land including all i/0rove/ents thereon and to transfer the o0erations of the 0igger" and rice /ill to the 'u"erG and that all 0a"/ents due and de/anda'le under the contract effected in the residence of the seller unless other&ise designated '" the 0arties in &riting- %n 16 Aa" 1,<3, %ng too@ 0ossession of the su'=ect 0arcels of land together &ith the 0igger", 'uilding, rice/ill, residential house and other i/0rove/ents thereon- Pursuant to the contract, %ng 0aid the s0ouses the su/ of P103,4,,-,1 * '" de0ositing it &ith the ?? PD- !u'se.uentl", %ng de0osited su/s of /one" &ith the DP5, in accordance &ith their sti0ulation that 0etitioner 0a" the loan of the s0ouses &ith DP5- To ans&er for his 'alance of P 1-4A, %ng issued 4 0ost)dated Aetro Dan@ chec@s 0a"a'le to the s0ouses in the a/ount of P360,000-00 each ( hec@ 13++0<)16++11)- :hen 0resented for 0a"/ent, ho&ever, the chec@s &ere dishonored due to insufficient funds- %ng 0ro/ised to re0lace the chec@s 'ut failed to do soTo /a@e /atters &orse, out of the P4,9,600-00 loan of the s0ouses &ith DP5, &hich ong, as 0er agree/ent, should have 0aid, %ng onl" /anaged to dole out no /ore than P3,3,9+,-90- :hen the 'an@ threatened to foreclose the s0ouses; /ortgage, the" sold 3 transfor/ers of the rice /ill &orth P61,411-00 to 0a" off their outstanding o'ligation &ith said 'an@, &ith the @no&ledge and confor/it" of %ng- %ng, in return, voluntaril" gave the s0ouses authorit" to o0erate the rice /ill- #e, ho&ever, continued to 'e in 0ossession of the t&o 0arcels of land &hile the s0ouses &ere forced to use the rice /ill for residential 0ur0oses%n * 3ugust 1,<6, the s0ouses, through counsel, sent %ng a de/and letter as@ing for the return of the 0ro0erties- Their de/and &as left unheeded, so, on * !e0te/'er 1,<6, the" filed &ith the (T Lucena it", Dranch 90, a co/0laint for rescission of contract and recover" of 0ro0erties &ith da/ages- Later, &hile the case &as still 0ending &ith the trial court, %ng introduced /a=or i/0rove/ents on the su'=ect 0ro0erties '" constructing a co/0lete fence /ade of hollo& 'loc@s and e40anding the 0igger"- These 0ro/0ted the s0ouses to as@ for a &rit of 0reli/inar" in=unctionG &hich the trial court granted, and thus en=oined %ng fro/ introducing i/0rove/ents on the 0ro0erties e4ce0t for re0airs- %n 1 June 1,<,, the trial court rendered a decision in favor of the s0ouses: ordering the contract entered into '" the 0arties set aside, ordering the deliver" of the 0arcels of land and the i/0rove/ents thereon to the s0ouses, ordering the return of the su/ of P4,+,1+,-61 to %ng '" the s0ouses, ordering %ng to 0a" the s0ouses P100,000 for e4e/0lar" da/ages and P*0,000 as attorne";s fees and litigation e40enses- Fro/ this decision, 0etitioner a00ealed to the ourt of 300eals, &hich affir/ed the decision of the (T 'ut deleted the a&ard of e4e/0lar" da/ages- 5n affir/ing the decision of the trial court, the ourt of 300eals noted that the failure of 0etitioner to co/0letel" 0a" the 0urchase 0rice is a su'stantial 'reach of his o'ligation &hich entitles the 0rivate res0ondents to rescind their contract under 3rticle 11,1 of the $e& ivil ode- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt affir/ed the decision rendered '" the ourt of 300eals &ith the /odification that the
.a+es" /001 ( 18: )
s0ouses are ordered to return to %ng the su/ P4<,9<0-00 in addition to the a/ounts alread" a&ardedG &ith costs against 0etitioner %ng1. Reeva+uat(on o- ev('ence not t*e -unct(on o- t*e .upreme Court 5t is not the function of the !u0re/e ourt to assess and evaluate all over again the evidence, testi/onial and docu/entar", adduced '" the 0arties to an a00eal, 0articularl" &here the findings of 'oth the trial court and the a00ellate court on the /atter coincide- There is no cogent reason sho&n that &ould =ustif" the court to discard the factual findings of the t&o courts 'elo& and to su0eri/0ose its o&n/. Resc(ss(on as a reme'y to secure t*e reparat(on o- 'ama)es cause' y a contract3 Art(c+e 1180 (escission, as conte/0lated in 3rticles 13<0, et se.-, of the $e& ivil ode, is a re/ed" granted '" la& to the contracting 0arties and even to third 0ersons, to secure the re0aration of da/ages caused to the/ '" a contract, even if this should 'e valid, '" restoration of things to their condition at the /o/ent 0rior to the cele'ration of the contract- 5t i/0lies a contract, &hich even if initiall" valid, 0roduces a lesion or a 0ecuniar" da/age to so/eone1. Resc(ss(on app+(ca +e to rec(proca+ o +()at(ons un'er Art(c+e 11#1 3rticle 11,1 of the $e& ivil ode refers to rescission a00lica'le to reci0rocal o'ligations(eci0rocal o'ligations are those &hich arise fro/ the sa/e cause, and in &hich each 0art" is a de'tor and a creditor of the other, such that the o'ligation of one is de0endent u0on the o'ligation of the other- The" are to 'e 0erfor/ed si/ultaneousl" such that the 0erfor/ance of one is conditioned u0on the si/ultaneous fulfill/ent of the other4. Resc(ss(on o- rec(proca+ o +()at(ons un'er Art(c+e 11#1 '(st(n)u(s*e' -rom resc(ss(on o- contract un'er Art(c+e 1181 (escission of reci0rocal o'ligations under 3rticle 11,1 of the $e& ivil ode should 'e distinguished fro/ rescission of contracts under 3rticle 13<3- 3lthough 'oth 0resu00ose contracts validl" entered into and su'sisting and 'oth re.uire /utual restitution &hen 0ro0er, the" are not entirel" identical:hile 3rticle 11,1 uses the ter/ 7rescission,8 the original ter/ &hich &as used in the old ivil ode, fro/ &hich the article &as 'ased, &as 7resolution-8 (esolution is a 0rinci0al action &hich is 'ased on 'reach of a 0art", &hile rescission under 3rticle 13<3 is a su'sidiar" action li/ited to cases of rescission for lesion under 3rticle 13<1 of the $e& ivil ode$. Resc(ss( +e contract un'er Art(c+e 1181 3rticle 13<1 of the $e& ivil ode enu/erates rescissi'le contracts as 7(1) those &hich are entered into '" guardians &henever the &ards &ho/ the" re0resent suffer lesion '" /ore than one fourth of the value of the things &hich are the o'=ect thereofG (*) those agreed u0on in re0resentation of a'sentees, if the latter suffer the lesion stated in the 0receding nu/'erG (3) those underta@en in fraud of creditors &hen the latter cannot in an" /anner collect the clai/s due the/G (4) those &hich refer to things under litigation if the" have 'een entered into '" the defendant &ithout the @no&ledge and a00roval of the litigants or of co/0etent =udicial authorit"G (6) all other contracts s0eciall" declared '" la& to 'e su'=ect to rescission-8 5n the 0resent case, the contract entered into '" the 0arties o'viousl" does not fall under an" of those /entioned '" 3rticle 13<1- onse.uentl", 3rticle 13<3 is ina00lica'le:. Contract to se++ '(st(n)u(s*e' -rom contract o- sa+e 5n a contract of sale, the title to the 0ro0ert" 0asses to the vendee u0on the deliver" of the thing soldG &hile in a contract to sell, o&nershi0 is, '" agree/ent, reserved in the vendor and is not to 0ass to the vendee until full 0a"/ent of the 0urchase 0rice- 5n a contract to sell, the 0a"/ent of the 0urchase 0rice is a 0ositive sus0ensive condition, the failure of &hich is not a 'reach, casual or serious, 'ut a situation that 0revents the o'ligation of the vendor to conve" title fro/ ac.uiring an o'ligator" force-
.a+es" /001 ( 18! )
!.
4A)reement o- Burc*ase an' .a+e6 (s (n t*e nature o- contract to se++ 3 careful reading of the 0arties; 73gree/ent of Purchase and !ale8 sho&s that it is in the nature of a contract to sell- The s0ouses 'ound the/selves to deliver a deed of a'solute sale and clean title covering the t&o 0arcels of land u0on full 0a"/ent '" the 'u"er of the 0urchase 0rice of P*A- This 0ro/ise to sell &as su'=ect to the fulfill/ent of the sus0ensive condition of full 0a"/ent of the 0urchase 0rice '" the %ng- The non)fulfill/ent of the condition of full 0a"/ent rendered the contract to sell ineffective and &ithout force and effect- 5t /ust 'e stressed that the 'reach conte/0lated in 3rticle 11,1 of the $e& ivil ode is the o'ligor;s failure to co/0l" &ith an o'ligation alread" e4tant, not a failure of a condition to render 'inding that o'ligation- Failure to 0a", in this instance, is not even a 'reach 'ut /erel" an event &hich 0revents the vendor;s o'ligation to conve" title fro/ ac.uiring 'inding force- #ence, the agree/ent of the 0arties the 0resent case /a" 'e set aside, 'ut not 'ecause of a 'reach on the 0art of %ng for failure to co/0lete 0a"/ent of the 0urchase 0rice- (ather, his failure to do so 'rought a'out a situation &hich 0revented the o'ligation of the s0ouses to conve" title fro/ ac.uiring an o'ligator" force8. Contract ,as not novate' as to t*e manner an' t(me o- payment3 Novat(on not presume' 3rticle 1*,* of the $e& ivil ode states that, 75n order that an o'ligation /a" 'e e4tinguished '" another &hich su'stitutes the sa/e, it is i/0erative that it 'e so declared in une.uivocal ter/s, or that the old and the ne& o'ligations 'e on ever" 0oint inco/0ati'le &ith each other-8 $ovation is never 0resu/ed, it /ust 'e 0roven as a fact either '" e40ress sti0ulation of the 0arties or '" i/0lication derived fro/ an irreconcila'le inco/0ati'ilit" 'et&een the old and the ne& o'ligation- In the present case, the 0arties never even intended to novate their 0revious agree/ent- 5t is true that %ng 0aid the s0ouses s/all su/s of /one" a/ounting to P4<,9<0-00, in contravention of the /anner of 0a"/ent sti0ulated in their contract- These install/ents &ere, ho&ever, o'=ected to '" the s0ouses, and ong re0lied that these re0resented the interest of the 0rinci0al a/ount &hich he o&ed the/- (ecords further sho& that %ng agreed to the sale of A>(3L % transfor/ers '" the s0ousess to 0a" for the 'alance of their su'sisting loan &ith DP5- 3lthough the 0arties agreed to credit the 0roceeds fro/ the sale of the transfor/ers to 0etitioner;s o'ligation, he &as su00osed to rei/'urse the sa/e later to res0ondent s0ouses- This can onl" /ean that there &as never an intention on the 0art of either of the 0arties to novate 0etitioner;s /anner of 0a"/ent#. Re2u(s(tes o- novat(on 5n order for novation to ta@e 0lace, the concurrence of the follo&ing re.uisites is indis0ensa'le: (1) there /ust 'e a 0revious valid o'ligationG (*) there /ust 'e an agree/ent of the 0arties concerned to a ne& contractG (3) there /ust 'e the e4tinguish/ent of the old contractG and (4) there /ust 'e the validit" of the ne& contract- 5n the 0resent case, the re.uisites are not found- The su'se.uent acts of the 0arties hardl" de/onstrate their intent to dissolve the old o'ligation as a consideration for the e/ergence of the ne& one$ovation is never 0resu/ed, there /ust 'e an e40ress intention to novate10. Bu(+'er (n a' -a(t* 3s regards the i/0rove/ents introduced '" %ng to the 0re/ises and for &hich he clai/s rei/'urse/ent, the ourt found no reason to de0art fro/ the ruling of the trial court and the a00ellate court that 0etitioner is a 'uilder in 'ad faith- #e introduced the i/0rove/ents on the 0re/ises @no&ing full" &ell that he has not 0aid the consideration of the contract in full and over the vigorous o'=ections of res0ondent s0ouses- Aoreover, %ng introduced /a=or i/0rove/ents on the 0re/ises even &hile the case against hi/ &as 0ending 'efore the trial court11. De+et(on o- a,ar' o- e7emp+ary 'ama)es correct The a&ard of e4e/0lar" da/ages &as correctl" deleted '" the ourt of 300eals inas/uch as no /oral, te/0erate, li.uidated or co/0ensator" da/ages in addition to e4e/0lar" da/ages &ere a&arded[!!]
.a+es" /001 ( 188 )
>n) v. >n) [G.R. No. @D:!888. >cto er 8" 1#8$.] First Division, (elova (J): 6 concur, 1 concur in result %acts& %n *6 Fe'ruar" 1,+9, 5/elda %ng for and in consideration of P1 and other valua'le considerations, e4ecuted in favor of !andra Aaru22o, then a /inor, a Uuitclai/ Deed &here'" she transferred, released, assigned and forever .uitclai/ed to !andra Aaru22o, her heirs and assigns, all her rights, title, interest and 0artici0ation in 1B* undivided 0ortion of a 0arcel of land (Lot 10)D of the su'division 0lan (L( ) Psd) 16+<41, a 0ortion of lot 10 Dloc@ 1< of P!D)13*<< L ( (FL( ) (ecord *0*,, situated in Aa@ati, containing 1*6 s.uare /eters- %n 1, $ove/'er 1,<0, 5/elda %ng revo@ed the aforesaid Deed of Uuitclai/ and, thereafter, on *0 Januar" 1,<* donated the &hole 0ro0ert" to her son, (e4 %ng Ji/ene2%n *0 June 1,<3, !andra Aaru22o, through her guardian ad lite/ 3lfredo %ng, filed &ith the (T Aa@ati an action against 5/elda %ng, for the recover" of o&nershi0B0ossession and nullification of the Deed of Donation over the 0ortion 'elonging to her and for accounting- 5/elda %ng clai/ed that the Uuitclai/ Deed is null and void inas/uch as it is e.uivalent to a Deed of Donation, acce0tance of &hich '" the donee is necessar" to give it validit"- Further, it is averred that the donee, !andra Aaru22o, 'eing a /inor, had no legal 0ersonalit" and therefore inca0a'le of acce0ting the donation- ?0on ad/ission of the docu/ents involved, the 0arties filed their res0onsive /e/oranda and su'/itted the case for decision- %n 1* Dece/'er 1,<3, the trial court rendered =udg/ent in favor of Aaru22o and held that the Uuitclai/ Deed is e.uivalent to a Deed of !ale and, hence, there &as a valid conve"ance in favor of the latter5/elda %ng a00ealed to the 5nter/ediate 300ellate ourt- %n *0 June 1,<4, 53 0ro/ulgated its Decision affir/ing the a00ealed =udg/ent and held that the Uuitclai/ Deed is a conve"ance of 0ro0ert" &ith a valid cause or considerationG that the consideration is P1 &hich is clearl" stated in the deed itselfG that the a00arent inade.uac" is of no /o/ent since it is the usual 0ractice in deeds of conve"ance to 0lace a no/inal a/ount although there is a /ore valua'le consideration given- #ence, the 0etition for revie& on certiorari%n 16 Aarch 1,<6, !andra Aaru22o, through her guardian ad lite/ 3lfredo %ng, filed an %/ni'us Aotion infor/ing this ourt that she has reached the age of /a=orit" as evidenced '" her Dirth ertificate and she 0ra"s that she 'e su'stituted as 0rivate res0ondent in 0lace of her guardian ad lite/- %n 16 30ril 1,<6, the ourt issued a resolution granting the sa/eThe !u0re/e ourt affir/ed the a00ealed decision of the 53 , &ith costs against 5/elda %ng1. Cons('erat(on or cause (s not B1 a+one ut a+so ot*er va+ua +e cons('erat(ons The su'=ect deed reveals that the conve"ance of the 1B* undivided 0ortion of the 0ro0ert" &as for and in consideration of P1 and the other valua'le considerations 0aid '" !andra Aaru22o, through her re0resentative, 3lfredo %ng, to 0etitioner 5/elda %ng- !tated differentl", the cause or consideration is not P1 alone 'ut also the other valua'le considerations/. Cause not state' (n contract (s presume' e7(st(n) un+ess proven to t*e contrary3 E7ecut(on o'ee' a pr(ma -ac(e ev('ence o- e7(stence o- va+ua +e cons('erat(on 3lthough the cause is not stated in the contract it is 0resu/ed that it is e4isting unless the de'tor 0roves the contrar" (Artic"e /&$- of the Civi" Code(. %ne of the dis0uta'le 0resu/0tions is that there is a sufficient cause of the contract (Section $, (r(, 6u"e /&/, 6u"es of Court(. 5t is a legal 0resu/0tion of sufficient cause or consideration su00orting a contract even if such cause is not stated therein (Artic"e /&$-, 8ew Civi" Code( This 0resu/0tion cannot 'e overco/e '" a si/0le assertion of lac@ of consideration es0eciall" &hen the contract itself states that consideration &as given, and the sa/e has 'een reduced into a 0u'lic instru/ent &ith all due for/alities and sole/nities- To overco/e the 0resu/0tion of consideration the alleged lac@ of consideration /ust 'e sho&n '" 0re0onderance of evidence in a 0ro0er action- (Samani""a vs. CaFucom, et a"., /% !hi". -&.(. The e4ecution of a deed 0ur0orting to conve" o&nershi0 of a realt" is in itself 0ri/a facie
.a+es" /001 ( 18# )
evidence of the e4istence of a valua'le consideration, the 0art" alleging lac@ of consideration has the 'urden of 0roving such allegation- (CaAa""ero, et a". vs. CaAa""ero, et a"., (CA(, -$ 1.7. .$&'(. 1. Acceptance y +e)a+ representat(ves o- m(nor app+(es to onerous an' con'(t(ona+ 'onat(ons Franting that the Uuitclai/ deed is a donation, 3rticle +41 of the ivil ode 0rovides that the re.uire/ent of the acce0tance of the donation in favor of /inor '" 0arents of legal re0resentatives a00lies onl" to onerous and conditional donations &here the donation /a" have to assu/e certain charges or 'urdens (Artic"e .', Civi" Code(. The acce0tance '" a legal guardian of a si/0le or 0ure donation does not see/ to 'e necessar" (!ere= vs. Ca"in4o, CA:-% 1.7. $&(. Thus, !u0re/e ourt ruled in Ca0unan vs- asilan and 3 (/%0 !hi". 880( that the donation to an inca0acitated donee does not need the acce0tance '" the la&ful re0resentative if said donation does not contain an" condition- 5n si/0le and 0ure donation, the for/al acce0tance is not i/0ortant for the donor re.uires no right to 'e 0rotected and the donee neither underta@es to do an"thing nor assu/es an" o'ligation- The Uuitclai/ in .uestion does not i/0ose an" condition4. Ba' -a(t* an' (na'e2uacy o- monetary cons('erat(on 'oes not ren'er conveyance (ne7(stent" ass()nor=s +( era+(ty may e su--(c(ent cause -or a va+(' contract 5t is not unusual in deeds of conve"ance adhering to the 3nglo)!a4on 0ractice of stating that the consideration given is the su/ of P1, although the actual consideration /a" have 'een /uch /ore- Aoreover, assu/ing that said consideration of P1 is sus0icious, this circu/stance, alone, does not necessaril" =ustif" the inference that the vendees &ere not 0urchasers in good faith and for value- $either does this inference &arrant the conclusion that the sales &ere null and void a' initio- 5ndeed, 'ad faith and inade.uac" of the /onetar" consideration do not render a conve"ance ine4istent, for the assignor;s li'eralit" /a" 'e sufficient cause for a valid contract (Artic"e /&$%, Civi" Code(, &hereas fraud or 'ad faith /a" render either rescissi'le or voida'le, although valid until annulled, a contract concerning an o'=ect certain entered into &ith a cause and &ith the consent of the contracting 0arties(See Mora"es @eve"opment v. CA, . SC6A -8-(. [!8] !an4i"inan v. CA, . 0 SC6A $0% (/00 ( [!#] Basa)u( vs. H(++a +anca [G.R. No. @D/1##8. Novem er 10" 1#!$.] !econd Division, 3ntonio (J): 4 concur, 1 on leave, 1 designated to sit in the !econd Division %acts& %n 4 Fe'ruar" 1,93, ali4to Pasagui and Fausta Aosar filed a co/0laint &ith the F5 Taclo'an it", alleging that on 16 $ove/'er 1,9*, for and in consideration of P*,<00, the" 'ought fro/ >usta.uia Docar and atalina Docar a 0arcel of agricultural land &ith an area of *-9<14 hectares, situated in #a/indangon, Pastrana, Le"teG that the corres0onding docu/ent of sale &as e4ecuted, notari2ed on the sa/e date, and recorded in the (egistr" of Deeds of Taclo'an, Le"te on 19 $ove/'er 1,9*G that during the first &ee@ of Fe'ruar" 1,93, s0ouses >ster T- 1illa'lanca and Vosi/o 1illa'lanca, 7illegall" and &ithout an" right, &hatsoever, too@ 0ossession of the 0ro0ert" harvesting coconuts fro/ the coconut 0lantation thereon, thus de0riving Pasa.ui and Aosar of its 0ossessionG that des0ite de/ands /ade '" Pasagui and Aosar u0on the 1illa'lancas 7to surrender to the/ the 0ro0ert" and its 0ossession8 the latter failed or refused to return said 0arcel of land to the for/er, causing the/ da/ageG and that >usta.uia and atalina Docar, vendors of the 0ro0ert", are included defendants in the co/0laint '" virtue of the &arrant" clause contained in the docu/ent of sale%n 13 Aa" 1,93, the trial court issued an order dis/issing the co/0laint for lac@ of =urisdiction, it a00earing fro/ the allegations in the co/0laint that the case is one for forci'le entr", &hich 'elongs to the e4clusive =urisdiction of the Justice of the Peace (no& Aunici0al ourt) of Pastrana, Le"te- The first Aotion for
.a+es" /001 ( 1#0 )
(econsideration &as denied on *+ Aa" 1,93 and the second &as li@e&ise denied on 6 Jul" 1,93- Fro/ the orders, a00eal on a 0ure .uestion of la& &as inter0osed to the !u0re/e ourtThe !u0re/e ourt set aside the order of dis/issal, and re/anded the case to the court a .uo for further 0roceedingsG &ith costs against the 1illa'lancas and the Docars1. Averments o- comp+a(nt an' c*aracter o- re+(e- 'eterm(nes 8ur(s'(ct(on o- mun(c(pa+ court (n a -orc( +e entry case :hat deter/ines the =urisdiction of the /unici0al court in a forci'le entr" case is the nature of the action 0leaded as a00ears fro/ the allegations in the co/0laint- 5n ascertaining &hether or not the action is one of forci'le entr" &ithin the original e4clusive =urisdiction of the /unici0al court, the aver/ents of the co/0laint and the character of the relief sought are the ones to 'e consulted- 5n the 0resent case, the co/0laint does not allege that Pasagui and Aosar &ere in 0h"sical 0ossession of the land and have 'een de0rived of that 0ossession through force, inti/idation, threat, strateg", or stealth5n order that an action /a" 'e considered as one for forci'le entr", it is not onl" necessar" that the 0laintiff should allege his 0rior 0h"sical 0ossession of the 0ro0ert" 'ut also that he &as de0rived of his 0ossession '" an" of the /eans 0rovided in section 1, (ule +0 of the (evised (ules of ourt, na/el": force, inti/idation, threats, strateg" and stealth- For, if the dis0ossession did not ta@e 0lace '" an" of these /eans, the courts of first instance, not the /unici0al courts, have =urisdiction- The 'are allegation in the co/0laint that the 0laintiff has 'een 7de0rived8 of the land of &hich he is and has 'een the legal o&ner for a long 0eriod has 'een held to 'e insufficient- Though it is true that the /ere act of a tres0asser in unla&full" entering the land, 0lanting hi/self on the ground and e4cluding therefro/ the 0rior 0ossessor &ould i/0l" the use of force, no such inference could 'e /ade as Pasagui and Aosar had not clai/ed that the" &ere in actual 0h"sical 0ossession of the 0ro0ert" 0rior to the entr" of the 1illa'lancas/. E7ecut(on o- 'ee' o- a so+ute sa+e (n pu +(c (nstrument e2u(va+ent to 'e+(very o- +an'" un+ess t*ere (s (mpe'(ment The e4ecution of the deed of a'solute sale in a 0u'lic instru/ent is e.uivalent to deliver" of the land su'=ect of the sale- This 0resu/0tive deliver" onl" holds true &hen there is no i/0edi/ent that /a" 0revent the 0assing of the 0ro0ert" fro/ the hands of the vendor into those of the vendee- 5t can 'e negated '" the realit" that the vendees actuall" failed to o'tain /aterial 0ossession of the land su'=ect of the sale- 5n the 0resent case, Pasagui and Aosar had not ac.uired 0h"sical 0ossession of the land since its 0urchase on 1* $ove/'er 1,9*- 3s a /atter of fact, their 0ur0ose in filing the co/0laint in ivil ase 3*<6 is 0recisel" to 7get the 0ossession of the 0ro0ert"-8 1. Case (s not an act(on o- -orc( +y entry The case is, not the su//ar" action of forci'le entr" &ithin the conte4t of the (ulesG as Pasagui and Aosar are not onl" see@ing to get the 0ossession of the 0ro0ert", 'ut as an alternative cause of action, the" see@ the return of the 0rice and 0a"/ent of da/ages '" the vendors 7in case of eviction or loss of o&nershi08 of the said 0ro0ert"[80] Bau+m(tan vs. CA [G.R. No. :1$84. Novem er /$" 1##/.] Third Division, (o/ero (J): 4 concur %acts& Fro/ her /arriage &ith iriaco Paul/itan, deceased, 3gatona !agario Paul/itan 'egot t&o legiti/ate children, Pascual and Donato Paul/itan- 3gatona !agario Paul/itan died so/eti/e in 1,63 and left the * 0arcels of land located in the Province of $egros %ccidental (Lot +6+ &ith an area of 1,,49 s.-/s-, % T (%) <3+9G and Lot 10,1 &ith an area of 9,,0<0 s.-/s-, % T (%)11963)- Pascual Paul/itan also died in 1,63, a00arentl" shortl" after his /other 0assed a&a", leaving his children, na/el": 3licio, >lena, 3'elino, 3delina,
.a+es" /001 ( 1#1 )
3nita, Da@ing and 3nito, all surna/ed Paul/itan- ?ntil 1,93, the estate of 3gatona !agario Paul/itan re/ained unsettled and the titles to the t&o lots re/ained in the na/e of 3gatona- #o&ever, on 11 3ugust 1,93, Donato Paul/itan e4ecuted an 3ffidavit of Declaration of #eirshi0, e4tra=udiciall" ad=udicating unto hi/self Lot +6+ 'ased on the clai/ that he is the onl" surviving heir of 3gatona !agario- The affidavit &as filed &ith the (egister of Deeds of $egros %ccidental &ho, on *0 3ugust 1,93, cancelled % T (%)<3+9 in the na/e of 3gatona !agario and issued T T 36,+, in Donato;s na/e- 3s regards Lot 10,1, Donato e4ecuted on *< Aa" 1,+4 a Deed of !ale over the sa/e in favor of Juliana P- Fanesa, his daughter (/arried to (odolfo Fanesa)- 5n the /eanti/e, so/eti/e in 1,6*, for non)0a"/ent of ta4es, Lot 10,1 &as forfeited and sold at a 0u'lic auction, &ith the Provincial Fovern/ent of $egros %ccidental 'eing the 'u"er- 3 ertificate of !ale over the land &as e4ecuted '" the Provincial Treasurer in favor of the Provincial Doard of $egros %ccidental%n *, Aa" 1,+4, Juliana P- Fanesa redee/ed the 0ro0ert" fro/ the Provincial Fovern/ent of $egros %ccidental for the a/ount of P*,,6,-0,%n learning of these transactions, the children of the Late Pascual Paul/itan filed on 1< Januar" 1,+6 &ith th the F5 $egros %ccidental (1* Judicial District, Dranch 51, Dacolod it", ivil ase 11++0) a o/0laint against Donato and Juliana to 0artition the 0ro0erties 0lus da/ages- Donato and Juliana set u0 the affir/ative defense of 0rescri0tion (co/0laint 'eing filed 11 "ears after the issuance of the title) &ith res0ect to Lot +6+The trial court issued an order dated ** 30ril 1,+9 dis/issing the co/0laint as to the said 0ro0ert" u0on finding /erit in Donato;s and Juliana;s affir/ative defense- This order 'eca/e final after Pascual;s children failed to a00eal therefro/Trial 0roceeded &ith res0ect to Lot 10,1- 5n a decision dated *0 Aa" 1,++, the trial court decided in favor of Pascual;s children as to Lot 10,1- 3ccording to the trial court, the res0ondents, as descendants of 3gatona !agario Paul/itan &ere entitled to P of Lot 10,1, 0ro indiviso- The sale '" Donato Paul/itan to his daughter, Juliana Fanesa, did not 0re=udice their rightsG and the re0urchase '" Juliana of the land fro/ the Provincial Fovern/ent of $egros %ccidental did not vest in Juliana e4clusive o&nershi0 over the entire land 'ut onl" gave her the right to 'e rei/'ursed for the a/ount 0aid to redee/ the 0ro0ert"- The trial court ordered the 0artition of the land and directed Donato and Juliana to 0a" 0ascual;s hildren certain a/ounts re0resenting the latter;s share in the fruits of the land- %n the other hand, the children &ere directed to 0a" P1,4+,-66 to Juliana as their share in the rede/0tion 0rice 0aid '" Fanesa to the Provincial Fovern/ent of $egros %ccidental%n a00eal and on 14 Jul" 1,<* ( 3)F( 9**66)(), the ourt of 300eals affir/ed the trial court;s decision#ence the 0etition for revie& on certiorariThe !u0re/e ourt denied the 0etition and affir/ed the decision of the ourt of 300eals1. Bascua+ pre'ecease mot*er" prec+u'es operat(on o- prov(s(ons on r()*t o- representat(on Pascual did not 0redecease his /other, decedent 3gatona !agario Paul/itan, thus 0recluding the o0eration of the 0rovisions in the ivil ode on the right of re0resentation &ith res0ect to his seven children/. R()*ts o- success(on transm(tte' at t*e moment o- t*e 'ece'ent=s 'eat*3 Bot* Bascua+ an' Donato ent(t+e' to o,ners*(p :hen 3gatona !agario Paul/itan died intestate in 1,6*, her t&o (*) sons Donato and Pascual &ere still alive- !ince it is &ell)settled '" virtue of 3rticle +++ of the ivil ode that 7KtLhe rights to the succession are trans/itted fro/ the /o/ent of the death of the decedent,8 the right of o&nershi0, not onl" of Donato 'ut also of Pascual, over their res0ective shares in the inheritance &as auto/aticall" and '" o0eration of la& vested in the/ in 1,63 &hen their /other died intestate- 3t that stage, the children of Donato and Pascual did not "et have an" right over the inheritance since 7KiLn ever" inheritance the relative nearest in degree e4cludes the /ore distant ones-8 Donato and Pascual e4cluded their children as to the right to inherit fro/ 3gatona
.a+es" /001 ( 1#/ )
!agario Paul/itan, their /other1. He(rs o,n (n common t*e estate o- t*e 'ece'ent e-ore (ts part(t(on Fro/ the ti/e of the death of 3gatona !agario Paul/itan to the su'se.uent 0assing a&a" of her son Pascual in 1,63, the estate re/ained un0artitioned- Donato and Pascual Paul/itan &ere co)o&ners of the estate left '" their /other as no 0artition &as ever /ade, 0ursuant to 3rticle 10+< of the ivil ode, &hich 0rovides that 7&here there are t&o or /ore heirs, the &hole estate of the decedent is, 'efore its 0artition, o&ned in co//on '" such heirs, su'=ect to the 0a"/ent of de'ts of the deceased-8 4. Bascua+=s c*(+'ren succee'e' *(m (n t*e coDo,ners*(p o- t*e property ,*en *e '(e' (ntestate :hen Pascual Paul/itan died intestate in 1,63, his children succeeded hi/ in the co)o&nershi0 of the dis0uted 0ro0ert"- Pascual Paul/itan;s right of o&nershi0 over an undivided 0ortion of the 0ro0ert" 0assed on to his children, &ho, fro/ the ti/e of Pascual;s death, 'eca/e co)o&ners &ith their uncle Donato over the dis0uted decedent estate$. %anesa=s c+a(m o- o,ners*(p Juliana P- Fanesa, Donato;s daughter, clai/s o&nershi0 over Lot 10,1 '" virtue of t&o transactions, na/el": (a) the sale /ade in her favor '" her father Donato Paul/itanG and (') her rede/0tion of the land fro/ the Provincial Fovern/ent of $egros %ccidental after it &as forfeited for non)0a"/ent of ta4es:. .a+e o- @ot 10#1 y Donato to Fu+(ana '(' not pre8u'(ce r()*ts o- Bascua+=s c*(+'ren over t*e L un'(v('e' s*are :hen Donato Paul/itan sold on *< Aa" 1,+4 Lot 10,1 to his daughter Juliana P- Fanesa, he &as onl" a co)o&ner &ith Pascual;s children and as such, he could onl" sell that 0ortion &hich /a" 'e allotted to hi/ u0on ter/ination of the co)o&nershi0- The sale did not 0re=udice the rights of the children to P undivided share of the land &hich the" inherited fro/ their father- 5t did not vest o&nershi0 in the entire land &ith the 'u"er 'ut transferred onl" the seller;s 0ro indiviso share in the 0ro0ert" and conse.uentl" /ade the 'u"er a co)o&ner of the land until it is 0artitioned!. E--ect o- sa+e o- property y one coDo,ner ,(t*out t*e consent o- a++ coDo,ners3 Art(c+e 4#1& >n+y t*e r()*ts o- t*e se++er are trans-erre'" uyer ecomes coDo,ner 5n 5ailon?Casilao v. Court of Appeals , the ourt outlined the effects of a sale '" one co)o&ner &ithout the content of all the co)o&ners- The rights of a co)o&ner of a certain 0ro0ert" are clearl" s0ecified in 3rticle 4,3 of the ivil ode &hich 0rovides that 7each co)o&ner shall have the full o&nershi0 of his 0art and of the fruits and 'enefits 0ertaining thereto, and he /a" therefore alienate, assign or /ortgage it and even su'stitute another 0erson in its en=o"/ent, e4ce0t &hen 0ersonal rights are involved- Dut the effect of the alienation or /ortgage, &ith res0ect to the co o&ners, shall 'e li/ited to the 0ortion &hich /a" 'e allotted to hi/ in the division u0on the ter/ination of the co)o&nershi0-8 >ven if a co)o&ner sells the &hole 0ro0ert" as his, the sale &ill affect onl" his o&n share 'ut not those of the other co)o&ners &ho did not consent to the sale KPunsalan v- Doon Liat, 44 Phil- 3*0 (1,*3)L- This is 'ecause under the codal 0rovision, the sale or other dis0osition affects onl" his undivided share and the transferee gets onl" &hat &ould corres0ond to his grantor in the 0artition of the thing o&ned in co//on- K(a/ire2 v- Dautista, 14 Phil- 6*< (1,0,)L- Thus, it /a" 'e deduced that since a co)o&ner is entitled to sell his undivided share, a sale of the entire 0ro0ert" '" one co) o&ner &ithout the consent of the other co)o&ners is not null and void- #o&ever, onl" the rights of the co) o&ner)seller are transferred, there'" /a@ing the 'u"er a co)o&ner of the 0ro0ert"-8 Thus, in the 0resent case, the sale '" Donato Paul/itan of the land to his daughter did not give to the latter o&nershi0 over the entire land 'ut /erel" transferred to her the P undivided share of her father, thus /a@ing her the co)o&ner of the land in .uestion &ith her first cousins8. Re'empt(on 'oes not term(nate t*e coDo,ners*(p nor )(ve *er t(t+e to t*e ent(re +an' The rede/0tion of the land /ade '" Fanesa did not ter/inate the co)o&nershi0 nor give her title to
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the entire land su'=ect of the co)o&nershi0- !0ea@ing on the sa/e issue, the ourt, in A$ille v. Court of Appeals, resolved the sa/e '" holding that the right of re0urchase /a" 'e e4ercised '" a co)o&ner &ith res0ect to his share alone ( 515L %D>, art- 191*G 515L %D> (1<<,), art- 1614-)- :hile the records sho& that the 0ro0ert" &as redee/ed in its entiret", the 0laintiff shouldering the e40enses therefor, that did not /a@e hi/ the o&ner of all of it- 5n other &ords, it did not 0ut to end the e4isting state of co)o&nershi0 (!u0ra, art- 4<,)- There is no dou't that rede/0tion of 0ro0ert" entails a necessar" e40ense#. R()*t to compe+ ot*er coDo,ners to contr( ute to e7penses o- preservat(on o- t*(n) o,ne' (n common3 Bayer (n re'empt(on *o+'s +(en upon t*e su 8ect property unt(+ re(m urse' 3rticle 4<< of the ivil ode 0rovides that 7each co)o&ner shall have a right to co/0el the other co) o&ners to contri'ute to the e40enses of 0reservation of the thing or right o&ned in co//on and to the ta4es3n" one of the latter /a" e4e/0t hi/self fro/ this o'ligation '" renouncing so /uch of his undivided interest as /a" 'e e.uivalent to his share of the e40enses and ta4es- $o such &aiver shall 'e /ade if it is 0re=udicial to the co)o&nershi0-8 Thus, although Fanesa did not ac.uire o&nershi0 over the entire lot '" virtue of the rede/0tion she /ade, nevertheless, she did ac.uire the right to 'e rei/'ursed for half of the rede/0tion 0rice she 0aid to the Provincial Fovern/ent of $egros %ccidental on 'ehalf of her co)o&ners?ntil rei/'ursed, Fanesa holds a lien u0on the su'=ect 0ro0ert" for the a/ount due her10. @ease (ssue not passe' on as (t (s a -actua+ (ssue3 %actua+ -(n'(n)s o- +o,er courts -(na+ an' conc+us(ve upon t*e .upreme Court Donato and Juliana dis0ute the order of the trial court, &hich the ourt of 300eals affir/ed, for the/ to 0a" Pascual;s children P6,000-00 0er "ear fro/ 1,99 until the 0artition of the estate &hich re0resents the latter;s share in the fruits of the land- 3ccording to the for/er, the land is 'eing leased for P*,000-00 0er "ear onl"- This assigned error, ho&ever, raises a factual .uestion- The settled rule is that onl" .uestions of la& /a" 'e raised in a 0etition for revie&- 3s a general rule, findings of fact /ade '" the trial court and the ourt of 300eals are final and conclusive and cannot 'e revie&ed on a00eal[81] B*(+(pp(ne ;rust Company vs. BNB [G.R. No. 1:481. Decem er !" 1#/1.] First Division, Johns (J): + concur %acts& The Phili00ine Trust co/0an" and the Phili00ine $ational Dan@s are cor0orations organi2ed under the la&s of the Phili00ine 5slands and do/iciled in the cit" of Aanila- !alvador #er/anos &as a co0artnershi0 and during the /onth of Januar" 1,1,, e4ecuted to P$D < 0ro/issor" notes aggregating P169,000, 0a"a'le on de/and, and each secured '" a .uedan, or &arehouse recei0t, issued '" the fir/ of $ieva, (ui2 Q o/0an"- >ach note recites that it is 0a"a'le on de/and after date, for value received, and that the fir/ has de0osited 7&ith the said 'an@ as collateral securit" for the 0a"/ent of this note, or an" note given in e4tension or rene&al thereof, as &ell as for the 0a"/ent of an" other lia'ilit" or lia'ilities of the undersigned to the said 'an@, due or to 'eco/e due, &hether no& e4isting or hereafter arising, the follo&ing 0ro0ert" o&ned '" the undersigned-8 The note then s0ecifies the nu/'er of the .uedan and the a/ount of co0ra in 0iculs, and states that the .uedan &as issued '" $ieva, (ui2 Q o/0an"- The note for P<,000, dated 1< Januar" 1,1,, &as secured '" &arehouse (ecei0t 30G for P*0,000, dated ** Januar" 1,1,, &as secured '" (ecei0t 36G for P*0,000, dated *4 Januar" 1,1,, &as secured '" (ecei0t 3<G for P*0,000, dated *+ Januar" 1,1,, &as secured '" (ecei0t 41G for P14,000, dated *< Januar" 1,1,, &as secured '" (ecei0t 4*G for P1<,000, dated *1 Januar" 1,1,, &as secured '" (ecei0t 33G for P1<,000, dated *3 Januar" 1,1,, &as secured '" (ecei0t 39G and for P1<,000, dated *6 Januar" 1,1,, &as secured '" (ecei0t 3,, /a@ing a total of 19,061-10 0iculs of co0ra, covered '" the &arehouse recei0ts of the fir/ of $ieva, (ui2 Q o/0an" issued to the fir/ of !alvador #er/anos, and '" that fir/ 0ledged as collateral to P$D to secure the 0a"/ent of the eight notes- >ach of the/ further recites that 7on the non0erfor/ance of this 0ro/ise, or u0on the non) 0a"/ent of an" of the lia'ilities a'ove)/entioned, or u0on the failure of the undersigned forth&ith, &ith or
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&ithout notice, to furnish satisfactor" additional securities in case of decline, as aforesaid, then and in either such case, this note and all lia'ilities of the undersigned, or an" of the/, shall forth&ith 'eco/e due and 0a"a'le, &ithout de/and or notice, and full 0o&er and authorit" are here'" given to said 'an@ to sell, assign transfer and deliver the &hole of the said securities, or an" 0art thereof, or an" su'stitutes therefor or an" additions thereto, or an" other securities or 0ro0ert" given unto or left in the 0ossession of or hereafter given unto or left in the 0ossession of the said 'an@ '" the undersigned for safe @ee0ing or other&ise, at an" 'ro@ers; 'oard or at 0u'lic or 0rivate sale, at the o0tion of said 'an@ or of its 0resident or secretar", &ithout either de/and, advertise /entor notice of an" @ind, &hich are here'" e40ressl" &aived- 3t an" such sale, the said 'an@ /a" itself 0urchase the &hole or an" 0art of the 0ro0ert" sold, free fro/ an" right of rede/0tion on the 0art of the undersigned, &hich is here'" &aived and released-8 !ta/0ed in red in@ across the face of each .uedan are the &ords 7$egotia'le :arrant,8 and each of the/ &as in the usual for/ of &arehouse recei0ts%n 10 Fe'ruar" 1,1,, the fir/ of !alvador #er/anos &ithdre& fro/ the 'an@, '" and &ith its consent, &arehouse recei0ts 33, 39, and 3,, &hich the 'an@ &as holding as collateral securit" for each of the 3 1<,000) 0eso notes a/ounting to P64,000- The total a/ount of co0ra evidenced '" the recei0ts &ithdra&n &as 9,0*4-66 0iculs, the declared value of &hich, sho&n on the face of such recei0ts, &as P,0,39<-*6- 3t the ti/e of the &ithdra&al, the fir/ e4ecuted a &riting, 0ro/ising to return to the 'an@ the &arehouse recei0ts on or 'efore the *+ Januar", the recei0ts 'eing guaranteed '" the attached certificate of e4istence of the effects issued '" the fir/ on < Fe'ruar" 1,1,- $either &riting &as in an" /anner authenticated '" a notar" or '" a co/0etent 0u'lic official- The &riting of Fe'ruar" 10 is in for/ a recei0t fro/ the fir/ of !alvador #er/anos to the P$D of the .uedans, or &arehouse recei0ts, for the co0ra- The one of Fe'ruar" < is, in legal effect, the certificate of !alvador #er/anos 7that there e4ist the follo&ing articles in our 'odegas as follo&s:8 That is to sa", that the fir/ certifies that the 0ro0ert" descri'ed is in the &arehouse of the fir/%n *1 30ril 1,1,, !alvador #er/anos filed a 0etition of insolvenc" in the F5 Aanila- %n 3 Aa" 1,1,, Fregorio !alvador, a /e/'er of the fir/ of !alvador #er/anos, delivered certain goods, &ares, and /erchandise to and in the &arehouse of $ieva, (ui2 Q o/0an", and re.uested that fir/ to issue its recei0t therefor to and in favor of the P$D, and that, 0ursuant to such re.uest, that fir/ did issue < .uedans to the 'an@ (191 for 3* 'ales of he/0G 19* for ,63 'undles of rattanG 196 for +* 'undles of e/0t" sac@sG 19+ for 139 sac@s of gu/G 19< for 1,491 'ales of @a0o@G 1+6 for *<< 0ac@ages of Talcu/ Po&derG 1+9 for 36 0ac@ages of card'oardG and 1<6 for 134 'undles of e/0t" sac@s)- %n and 'et&een 9 Aa" 1,1, and + 3ugust 1,1,, acting under the ter/s and 0rovisions of its res0ective notes, the 'an@ sold all of the 0ersonal 0ro0ert" for &hich it held &arehouse recei0ts, or &hich had 'een surrendered to it '" the #er/anos fir/, save and e4ce0t the 0ro0ert" descri'ed in the three &arehouse recei0ts, &hich &ere released and surrendered to that fir/ on 10 Fe'ruar" 1,1,- Dased u0on its insolvenc" 0etition, and in the ordinar" course of 'usiness, the fir/ of !alvador #er/anos &as ad=udged insolvent, and on 1, Jul" 1,1,, the Phili00ine Trust o/0an" &as elected assignee of said fir/ and dul" .ualified- %n 13 !e0te/'er 1,1,, as such assignee, it /ade a de/and u0on the 'an@ for the surrender and deliver" of the 0ro0ert" descri'ed in all of the a'ove recei0ts?0on the 'an@;s refusal, Phili00ine Trust o/0an" co//enced this action to recover its value alleged to 'e P*4*,6+,-91, clai/ing that on *1 30ril 1,1,, the fir/ of !alvador #er/anos &as the sole and e4clusive o&ner of the 0ro0ert", and that, as to the co0ra, a'out *< June 1,1,, and after the filing of the insolvenc" 0etition, the 'an@ unla&full" sei2ed and converted the co0ra to its o&n use, the value of &hich &as P1,*,*90For a second cause of action, Phili00ine Trust alleged that, as such assignee, it &as the o&ner of the re/aining 0ersonal 0ro0ert", and that, after the insolvenc" 0etition &as filed, the 'an@ unla&full" sei2ed and converted such 0ro0ert" to its o&n use, and that it &as of the value of P60,31,-91- For ans&er, the 'an@ /a@es a general denial, as to each cause of action, of all of the /aterial allegations of the co/0laintThe !u0re/e ourt, on the first cause of action, held that in Januar" 1,1,, the 'an@ 'eca/e and re/ained the o&ner of the 6 .uedans 30, 36, 3<, 41, and 4*G that the" &ere in for/ negotia'le, and that, as such o&ner, it &as legall" entitled to the 0ossession and control of the 0ro0ert" therein descri'ed at the ti/e the insolvenc" 0etition &as filed and had a right to sell it and a00l" the 0roceeds of the sale to its 0ro/issor" notes, including
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the 3 notes of P1<,000 each, &hich &ere for/erl" secured '" the 3 .uedans 33, 39, and 3,, &hich the 'an@ surrendered to the fir/- That is to sa", the 'an@ had a legal right to a00l" the Proceeds fro/ the 0ro0ert" descri'ed in the five re/aining .uedans to the 0a"/ent of its eight 0ro/issor" notes- The ourt, ho&ever reversed the =udg/ent of the lo&er court as to the second cause of action, and one entered in favor of the Phili00ine Trust o/0an" and against the P$D, for P40,+4*-9*, the declared value of the 0ro0ert" descri'ed in .uedans $os- 191 to 1<6, inclusive, and for the further su/ of P+,931-40, the value of the gasoline sold in Aa", 1,1,, or a total of P4<,3+4-0*, &ith interest thereon fro/ !e0te/'er **, 1,1,, at the rate of 9 0er cent 0er annu/, and for the costs and dis'urse/ents in the ourts1. Burpose o- Act 1#$: or t*e Gnso+vency @a, 3ct 1,69 of the Phili00ine Legislature 0rovides for the sus0ension of 0a"/ents, the relief of insolvent de'tors, the 0rotection of creditors, and the 0unish/ent of fraudulent de'tors/. .ect(on 1 o- Act 1#$: !ection 1 0rovides that 7this 3ct shall 'e @no&n and /a" 'e cited as The 5nsolvenc" La&, and in accordance &ith its 0rovisions ever" insolvent de'tor /a" 'e 0er/itted to sus0end 0a"/ents or 'e discharged fro/ his de'ts and lia'ilities-8 1. .ect(on / o- Act 1#$: !ection * 0rovides that de'tor &ho 0ossesses sufficient 0ro0ert" to cover the de'ts, 'e it an individual, fir/ or cor0oration, and &ho is una'le to /eet the/ at /aturit", 7/a" 0etition that he 'e declared in the state of sus0ension of 0a"/ents '" the court, or the =udge thereof in vacation-8 4. .ect(on 1 o- Act 1#$: !ection 3 enacts that u0on the filing of the 0etition, the court shall /a@e an order calling a /eeting of creditors s0ecif"ing the ti/e and 0laceG that notice thereof shall 'e 0u'lished in a ne&s0a0er, and that 7said order shall further contain an a'solute in=unction for'idding the 0etitioning de'tor fro/ dis0osing in an" /anner of his 0ro0ert", e4ce0t in so far as concerns the ordinar" o0erations of co//erce or of industr" in &hich the 0etitioner is engaged, and, further/ore, fro/ /a@ing an" 0a"/ents outside of the necessar" or legiti/ate e40enses of his 'usiness or industr", so long as the 0roceedings relative to the sus0ension of 0a"/ents are 0ending, and said 0roceedings for the 0ur0oses of this 3ct shall 'e considered to have 'een instituted fro/ the date of the filing of the 0etition-8 $. .ect(on 14 o- Act 1#$: !ection 14, cha0ter 3, 0rovides that an" 0erson o&ing de'ts e4ceeding P1,000 /a" a00l" to 'e discharged fro/ his de'ts and lia'ilities '" 0etition to the ourt of First 5nstance in &hich he has resided for si4 /onths 0receding the filing of the 0etition:. .ect(on 18 o- Act 1#$: !ection 1< enacts that u0on receiving and filing of the 0etition, schedule, and inventor", the court, or the =udge, shall /a@e an order declaring the 0etitioner insolvent, and 7shall further for'id the 0a"/ent to the de'tor of an" de'ts due to hi/ and the deliver" to the de'tor, or to an" 0erson for hi/, of an" 0ro0ert" 'elonging to hi/, and the transfer of an" 0ro0ert" '" hi/, and shall further a00oint a ti/e and 0lace for a /eeting of the creditors to choose an assignee of the estate-8 !. Jue'ans reco)n(Ce' to e o,ne' y BNB 3t the ti/e the eight 0ro/issor" notes &ere e4ecuted, a given .uedan, or &arehouse recei0t, &as descri'ed and incor0orated in the note as to its nu/'er, &hen and '" &ho/ issued, and the 0ro0ert" it re0resented, and each recei0t &as then delivered '" the fir/ to the defendant 'an@, all of &hich &as during the /onth of Januar", 1,1,- The 'an@ never had the /anual 0ossession or the 0h"sical control of an" of this 0ro0ert" until after the insolvenc" 0etition &as filed, and it is for such reason that the 0laintiff clai/s that it
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&as the 0ro0ert" of the fir/, and that the defendant should account to the assignee- >ach .uedan, or &arehouse recei0t, &as s0ecificall" descri'ed in a given note, and &as /ade a 0art of it, and the note recites that, for an" 'reach of its ter/s or conditions, the 'an@ has full 0o&er and authorit" 7to sell, assign, transfer and deliver the &hole of the said securit", or an" 0art thereof, etc-,8 and that 7at an" such sale, the said 'an@ /a" itself 0urchase the &hole or an" 0art of the 0ro0ert" sold, free fro/ an" right of rede/0tion on the 0art of the undersigned, &hich is here'" &aived and released-8 5n addition, the .uedan itself &as delivered to and held '" the 'an@, and the &arehouse/an recogni2ed the 'an@ as the o&ner of the 0ro0ert"- Legall" s0ea@ing, the o&ner of the .uedans, or &arehouse recei0ts, &as the o&ner of the 0ro0ert" descri'ed in the/, and the .uedans &ere given as collateral to secure 0ro/issor" notes, &hich, for value received, &ere e4ecuted to the 'an@8. ;*e e7ecut(on o- t*e notes" t*e p*ys(ca+ possess(on o- t*e ne)ot(a +e 2ue'an" or ,are*ouse rece(pt" an' t*e reco)n(t(on o- o,ners*(p y t*e ,are*ouseman" +e)a++y carr(es ,(t* (t ot* t*e t(t+e to" an' t*e possess(on o-" t*e property The e4ecution of the notes, the 0h"sical 0ossession of the negotia'le .uedan, or &arehouse recei0t, and the recognition of o&nershi0 '" the &arehouse/an, legall" carries &ith it 'oth the title to, and the 0ossession of, the 0ro0ert"- 5n such a case, title is not founded on a 0u'lic instru/ent &hich should 'e authenticated '" a notar" or '" a co/0etent 0u'lic official- Legall" s0ea@ing, the e4ecution of the 0ro/issor" notes and the 0ledging of the .uedans, or &arehouse recei0ts, as collateral, and the descri'ing of the/ in the notes, and the /anual deliver" of the .uedan, or &arehouse recei0t itself, carries &ith it not onl" the title, 'ut the legal 0ossession of the 0ro0ert"- 5n other &ords, as to the 0ro0ert" descri'ed in the .uedans, or &arehouse recei0ts, &hich &ere 0ledged, as collateral, in Januar", 1,1,, to secure the eight res0ective 0ro/issor" notes, 'oth the title and the 0ossession of that 0ro0ert" &ere delivered to and vested in P$D in Januar" 31,1,Three of those .uedans, or &arehouse recei0ts, &ere returned to the fir/ '" the 'an@ on 10 Fe'ruar" 1,1,, 'ut the 'an@ still o&ned and held the notes, &hich &ere secured 'ut those &arehouse recei0ts, and no 0art of the de't itself &as 0aid '" or through the surrender of the recei0ts#. @e)a+ e--ect o- t*e 10 %e ruary rece(pt3 .tatement o- 8 %e ruary mere+y a representat(on oproperty (ns('e (ts ,are*ouse3 5r(t(n) 'oes not vest o,ners*(p o- ,are*ouse' (tems to BNB The legal effect of this recei0t is a 0ro/ise on the 0art of the fir/ to return the three .uedans on or 'efore *+ Januar" 1,1,, and a state/ent that such recei0ts are guaranteed '" the attached certificate of the e4istence in the &arehouse of the 0ro0ert" descri'ed in the certificate- The state/ent of Fe'ruar" <, recites 7&e here'" certif" that there e4ist the follo&ing articles in our 'odegas-8 Then follo&s a descri0tion of the 0ro0ert"- This is nothing 'ut a state/ent or re0resentation to the effect that the fir/ has the 0ro0ert" in its &arehouse- $othing /ore- 3fter descri'ing the 0ro0ert", the certificate then sa"s: 73nd 0ro/ise that none of the a'ove articles &ould 'e re/oved &ithout consulting first &ith the Phili00ine $ational Dan@-8 There is no state/ent or re0resentation of an" @ind sho&ing &hen or fro/ &ho/ the 0ro0ert" &as received, or ho& it &as held, or &ho &as the o&ner, or &hen or to &ho/ it &ould 'e delivered- :hen anal"2ed, this &riting is nothing /ore than a certificate of the fir/ that the descri'ed 0ro0ert" &as then in its &arehouse, and a 0ro/ise that none of the 7articles &ould 'e re/oved &ithout consulting first &ith the Phili00ine $ational Dan@-8 !uch a &riting &ould not transfer the title of the 0ro0ert" to the 'an@, or give it 0ossession, either actual or constructive- 5t &ill 'e noted that 'oth the recei0t of Fe'ruar" 10 and the certificate and 0ro/ise of Fe'ruar" <, are signed '" the fir/ of !alvador #er/anos, and that the certificate sa"s that the 0ro0ert" &as then in the fir/;s &arehouse, and that neither instru/ent &as in an" /anner authenticated '" a notar" or a co/0etent 0u'lic official, as 0rovided '" article 1*19 of the ivil ode, and that the 0ro0ert" &as in the &arehouse of the fir/10. Art(c+e 18:1 o- t*e C(v(+ Co'e3 Broperty not +e-t to t*e possess(on o- t*e ank3 t*us (t cannot se++" trans-er an' 'e+(ver t*e ,*o+e or part o- sa(' secur(t(es 3rticle 1<93 of the ivil ode 0rovides 75n addition to the re.uisites /entioned in article 1<6+, it shall 'e necessar", in order to constitute the contract of 0ledge, that the 0ledge 'e 0laced in the 0ossession of
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the creditor or of a third 0erson a00ointed '" co//on consent-8 5t a00ears in the 0resent case ho&ever that fro/ the certificate that the 0ro0ert" &as then in the 0ossession of the fir/, &ho /ade the certificate, and that it &as in the 0ossession of that fir/ &hen its insolvenc" 0etition &as filed on *1 30ril 1,1,- 5t &ill 'e noted that the 0ro/issor" notes e4ecuted '" the fir/ to the 'an@ recite that 7Full 0o&er and authorit" are here'" given to said 'an@ to sell, assign, transfer and deliver the &hole of the said securities, or an" 0art thereof, or an" su'stitutes therefor or an" additions thereto, or an" other securities or 0ro0ert" given unto or left in the 0ossession of or hereafter given unto or left in the 0ossession of the said Dan@ '" the undersigned-8 Thus, the 0o&er and authorit" of the 'an@ to sell, assign, or transfer is confined to 0ro0ert" &hich &as given unto or left in its 0ossession- $one of the 0ro0ert" descri'ed in the certificate of Fe'ruar" < &as ever given unto or left in the 0ossession of the 'an@11. Capac(ty o- B*(+(pp(ne ;rust Company3 A+t*ou)* appo(nte' Fu+y 1#" po,er an' aut*or(ty ,as veste' on (t /1 Apr(+ 1#1# ,*en t*e (nso+vency pet(t(on ,as -(+e' The insolvenc" 0etition &as filed *1 30ril 1,1,, and the Phili00ine Trust o &as dul" elected and .ualified, as assignee, on 1, Jul" 1,1,, and, as such, it re0resents 'oth the creditors and the fir/- 3lthough it &as not a00ointed until Jul" 1,1,, "et &hen it did .ualif" its right and title to all the 0ro0ert" of the fir/ related 'ac@ and 'eca/e vested as of *1 30ril 1,1,, &hen the insolvenc" 0etition &as filed, and fro/ that ti/e it alone had the 0o&er and authorit" to act for and re0resent the fir/- ?nder the ter/s and 0rovisions of 3ct 1,69 of the Phili00ine Legislature, after it &as filed, the 0o&er of the fir/ or an" /e/'er of it to deliver 0ossession of the 0ro0ert" to secure a 0ree4isting de't &as sus0ended 0ending final ad=udication- That is to sa", if the de't &as not legall" secured 'efore the insolvenc" 0etition &as filed, no /e/'er of the fir/ had an" legal right to secure it after the 0etition &as filed, and an" atte/0t to do so &ould 'e null and void[8/] B*(+(pp(ne ;rust Co. v. Ro+'an [G.R. No. @D84!!. 9ay 11" 1#$:.] >n Danc, Deng2on (J): < concur %acts& 1+ 0arcels located in Fuiguinto, Dulacan, &ere 0art of the 0ro0erties inherited '" Aariano L- Dernardo fro/ his father, the late Aarcelo Dernardo- 5n vie& of his /inorit", guardianshi0 0roceedings &ere instituted, &herein !ocorro (oldan, surviving s0ouse of Dernardo and ste0/other to Aariano, &as a00ointed his guardian- %n *+ Jul" 1,4+, (oldan filed in said guardianshi0 0roceedings (!0ecial Proceeding *4<6, Aanila), a /otion as@ing for authorit" to sell as guardian the 1+ 0arcels for the su/ of P14,+00 to Dr- Fidel - (a/os, her 'rother)in)la&, the 0ur0ose of the sale 'eing allegedl" to invest the /one" in a residential house, &hich the /inor desired to have on Tindalo !treet, Aanila- The /otion &as granted- %n 6 3ugust 1,4+, (oldan, as guardian, e4ecuted the 0ro0er deed of sale in favor of (a/os, and on 1* 3ugust 1,4+ o'tained a =udicial confir/ation of the sale- %n 13 3ugust 1,4+, (a/os e4ecuted in favor of (oldan, a deed of conve"ance covering the sa/e 1+ 0arcels, for the su/ of P16,000- %n *1 %cto'er 1,4+, (oldan sold 4 0arcels out of the 1+ to >/ilio ru2 for P3,000, reserving to herself the right to re0urchaseThe Phili00ine Trust o/0an" re0laced (oldan as guardian on 10 3ugust 1,4<- T&o /onths later, the o/0an", as guardian, filed 'efore the F5 Aanila a co/0laint against (oldan to annul * contracts regarding 1+ 0arcels of land clai/ing that the ste0)/other in effect, sold to herself, the 0ro0erties of her &ard, and the sale should 'e annulled for violating 3rticle 146, of the ivil ode 0rohi'iting the guardian fro/ 0urchasing the 0ro0ert" of her &ard- The trial court u0held the contracts 'ut allo&ing the /inor to re0urchase all the 0arcels '" 0a"ing P16,000, &ithin 1 "ear- The 3 affir/ed the =udg/ent- #ence, the a00ealThe !u0re/e ourt annulled the 3 contracts of sale in .uestionG declared the /inor as the o&ner of the 1+ 0arcels of land, &ith the o'ligation to return to (oldan the 0rice of P14,+00 &ith legal interest fro/ 1* 3ugust 1,4+G ordered (oldan and >/ilio ru2 to deliver said 0arcels of land to the /inorG re.uired (oldan to 0a" hi/ 'eginning &ith 1,4+ the fruits, &hich her attorne" ad/its, a/ounted to P1,6** a "earG authori2ed the
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/inor to deliver directl" to >/ilio ru2, out of the 0rice of P14,+00 a'ove /entioned, the su/ of P3,000G and charged a00ellees &ith the costs1. Guar'(ans*(p (s a trust o- t*e *()*est or'er3 Art(c+e 14$# app+(es (e/e/'ering the general doctrine that guardianshi0 is a trust of the highest order, and the trustee cannot 'e allo&ed to have an" induce/ent to neglect his &ard;s interest and in line &ith the court;s sus0icion &henever the guardian ac.uires the &ard;s 0ro0ert", the ourt has no hesitation to declare that, in the e"es of the la&, the guardian ((oldan) too@ '" 0urchase her &ard;s 0arcels (thru Dr- (a/os), and that 3rticle 146, of the ivil ode a00lies/. Annu+ment o- t*e transact(on" even (- no co++us(on (s prove'" ,ou+' up*o+' e2u(ty an' 8ust(ce The guardian /a" have acted &ithout /aliceG there /a" have 'een no 0revious agree/ent 'et&een her and Dr- (a/os to the effect that the latter &ould 'u" the lands for her 'ut the fact re/ains that she ac.uired her 0rotege;s 0ro0erties, through her 'rother)in)la&- That she 0lanned to get the/ for herself at the ti/e of selling the/ to Dr- (a/os, /a" 'e deduced fro/ the ver" short ti/e 'et&een the t&o sales- The te/0tation &hich naturall" 'esets a guardian so circu/stanced, necessitates the annul/ent of the transaction, even if no actual collusion is 0roved (so hard to 0rove) 'et&een such guardian and the inter/ediate 0urchaserThis &ould u0hold a sound 0rinci0le of e.uit" and =ustice1. Ro'r()ueC v. 9acta+ 'oes not app+y3 +en)t* o- t(me '(--erent" su--(c(ent to '(spe+ susp(c(on 5n (odrigues v- Aactal, &here the guardian Aactal sold in Januar" 1,*9 the 0ro0ert" of her &ard to !ilverio hioco, and in Aarch 1,*< she 'ought it fro/ hioco, the ourt declared the 7in order to 'ring the sale in this case &ithin the 0art of 3rticle 146,, .uoted a'ove, it is essential that the 0roof su'/itted esta'lish so/e agree/ent 'et&een !ilverio hioco and Trinidad Aactal to the effect that hioco should 'u" the 0ro0ert" for the 'enefit of Aactal- 5f there &as no such agree/ent, either e40ress or i/0lied, then the sale cannot 'e set aside-8 The su'se.uent 0urchase of Aactal, in said case, cannot 'e annulled as there &as no 0roof of a 0revious agree/ent 'et&een hioco and her- T&o "ears had ela0sed 'et&een the sales, and such 0eriod of ti/e &as sufficient to dis0el the natural sus0icion of the guardian;s /otives or actions- 5n the 0resent case, onl" 1 &ee@ had ela0sed- 3nd if &e &ere technical, onl" 1 da" had ela0sed fro/ the =udicial a00roval of the sale (3ugust 1*), to the 0urchase '" the guardian (3ugust 13)4. 9(nor on +os(n) en' (n t*e transact(on The calculation, that the invest/ent in the Tindalo !treet house 0roduces to the /inor the rentals of P*,400 "earl" &hile the 0arcels of land "ield for the ste0/other an average o P1,6** "earl", does not include the 0rice of the lot on &hich the house &as erected- >sti/ating such lot at P14,+00 onl", (ordinaril" the cit" lot is /ore valua'le than the 'uilding) the result is that the 0rice 0aid for the 1+ 0arcels gave the /inor an inco/e of onl" P1,*00 a "ear, &hereas the harvest fro/ the seventeen 0arcels netted his ste0)/other a "earl" 0rofit of P1,6**-00- The /inor &as on the losing end$. ;*ree .a+es vo(' Fro/ 'oth the legal and e.uita'le stand0oints these three sales should not 'e sustained: the first t&o for violation of article 146, of the ivil odeG and the third 'ecause (oldan could 0ass no title to >/ilio ru2- The annul/ent carries &ith is (3rticle 1303 ivil ode) the o'ligation of (oldan to return the 1+ 0arcels together &ith their fruits and the dut" of the /inor, through his guardian to re0a" P14,+00 &ith legal interest[81] B(c*e+ v. A+onCo [G.R. No. @D1:#0/. Fanuary 10" 1#8/.] First Division, Fuerrero (J): 6 concur
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%acts& Prudencio 3lon2o &as a&arded '" the Fovern/ent that 0arcel of land designated as Lot *1 of !u'division Plan Psd)3*496 of Dalactasan, La/itan, Dasilan it" in accordance &ith (3 4++- The a&ard &as cancelled '" the Doard of Li.uidators on *+ Januar" 1,96 on the ground that, 0revious thereto, 3lon2o &as 0roved to have alienated the land to another, in violation of la&- 5n 1,+*, 3lon2o;s rights to the land &ere reinstated- %n 14 3ugust 1,9<, 3lon2o and his &ife sold to Pichel through a 7deed of sale8 all the fruits of the coconut trees &hich /a" 'e harvested in the land for the 0eriod, fro/ 16 !e0te/'er 1,9< to 1 Januar" 1,+9, in consideration of P4,*00-00- 5t &as further sti0ulated that the vendor;s right, title, interest and 0artici0ation herein conve"ed is of his o&n e4clusive and a'solute 0ro0ert", free fro/ an" liens and encu/'rances and he &arrants to the 1endee good title thereto and to defend the sa/e against an" and all clai/s of all 0ersons &ho/soever- >ven as of the date of sale, ho&ever, the land &as still under lease to one (a/on !ua, and it &as the agree/ent that 0art of the consideration of the sale, in the su/ of P3,960-00, &as to 'e 0aid '" Pichel directl" to (a/on !ua so as to release the land fro/ the clutches of the latter- Pending said 0a"/ent 3lon2o refused to allo& the Pichel to /a@e an" harvest- 5n Jul" 1,+*, Pichel for the first ti/e since the e4ecution of the deed of sale in his favor, caused the harvest of the fruit of the coconut trees in the land3lon2o filed an action for the annul/ent of a 7Deed of !ale8 'efore the F5 Dasilan it"- %n 6 Januar" 1,+3, the lo&er court rendered its decision holding that although the agree/ent in .uestion is deno/inated '" the 0arties as a deed of sale of fruits of the coconut trees found in the vendor;s land, it actuall" is, for all legal intents and 0ur0oses, a contract of lease of the land itselfG an encu/'rance 0rohi'ited under (3 4++- The court thus held that the deed of sale is null and void, and ordered 3lon2o to 0a" 'ac@ Pichel the consideration of the sale in the su/ of P4,*00 &ith interests fro/ the date of the filing of the co/0laint until 0aid, and Pichel to 0a" the su/ of P600-00 as attorne";s feesG &ith costs against Pichel- #ence, the 0etition to revie& on certiorari &as raised 'efore the !u0re/e ourtThe !u0re/e ourt set aside the =udg/ent of the lo&er court and entered another dis/issing the co/0laintG &ithout costs1. Hen'or )rantee un'er RA 4!!" an' cou+' e7erc(se a++ t*e r()*ts perta(n(n) t*ereto" -o++o,(n) ru+(n) (n Ras v. .ua 5n (as vs- !ua, it &as categoricall" stated that a cancellation of an a&ard granted 0ursuant to the 0rovisions of (3 4++ does not auto/aticall" divest the a&ardee of his rights to the land- !uch cancellation does not result in the i//ediate reversion of the 0ro0ert" su'=ect of the a&ard, to the !tate- ?ntil and unless an a00ro0riate 0roceeding for reversion is instituted '" the !tate, and its reac.uisition of the o&nershi0 and 0ossession of the land decreed '" a co/0etent court, the grantee cannot 'e said to have 'een divested of &hatever right that he /a" have over the sa/e 0ro0ert"- 5n the 0resent case, there is nothing in the record to sho& that at an" ti/e after the su00osed cancellation of the a&ard on *+ Januar" 1,96, reversion 0roceedings against Lot *1 &ere instituted '" the !tate- 5nstead, the ad/itted fact is that the a&ard &as reinstated in 1,+*300l"ing the doctrine announced in the (as case, therefore, 3lon2o is not dee/ed to have lost an" of his rights as grantee of Lot *1 under (3 4++ during the 0eriod /aterial to the 0resent case, i-e-, fro/ the cancellation of the a&ard in 1,96 to its reinstate/ent in 1,+*- :ithin said 0eriod, 3lon2o could e4ercise all the rights 0ertaining to a grantee &ith res0ect to Lot *1/. Court to app+y t*e contract accor'(n) to (ts e7press terms The first and funda/ental dut" of the courts is the a00lication of the contract according to its e40ress ter/s, inter0retation 'eing resorted to onl" &hen such literal a00lication is i/0ossi'le1. Contract c+ear an' une2u(voca+3 Construct(on or (nterpretat(on o- 'ocument not ca++e' -or onstruction or inter0retation of the docu/ent in .uestion is not called for- 3 0erusal of the deed fails to disclose an" a/'iguit" or o'scurit" in its 0rovisions, nor is there dou't as to the real intention of the contracting 0arties- The ter/s of the agree/ent are clear and une.uivocal, hence the literal and 0lain /eaning thereof should 'e o'served- !uch is the /andate of the ivil ode of the Phili00ines &hich 0rovides that 7if
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the ter/s of a contract are clear and leave no dou't u0on the intention of the contracting 0arties, the literal /eaning of its sti0ulation shall control-8 5n the 0resent case, the 7Deed of !ale8 dated 14 3ugust 1,9< is 0recisel" &hat it 0ur0orts to 'e- 5t is a docu/ent evidencing the agree/ent of herein 0arties for the sale of coconut fruits of Lot *1, and not for the lease of the land itself- 5n clear and e40ress ter/s, the docu/ent defines the o'=ect of the contract thus: 7the herein sale of coconut fruits are for all the fruits on the afore/entioned 0arcel of land during the "ears fro/ 16 !e0te/'er 1,9<G u0 to 1 Januar" 1,+9-8 4. Contract o- sa+e va+('" essent(a+ e+ements va+(' The docu/ent in .uestion e40resses a valid contract of sale as it has the essential ele/ents of a contract of sale as defined under 3rticle 146< of the $e& ivil ode- 3rticle 146< 0rovides that 7'" the contract of sale one of the contracting 0arties o'ligates hi/self to transfer the o&nershi0 of and to deliver a deter/inate thing, and the other to 0a" therefor a 0rice certain in /one" or its e.uivalent,8 and that 7a contract of sale /a" 'e a'solute or conditional-8 The su'=ect /atter of the contract of sale are the fruits of the coconut trees on the land during the "ears fro/ 16 !e0te/'er 1,9< u0 to 1 Januar" 1,+9, &hich su'=ect /atter is a deter/inate thing$. ;*(n)s *av(n) potent(a+ e7(stence may e t*e o 8ect o- t*e contract o- sa+e ?nder 3rticle 1491 of the $e& ivil ode, things having a 0otential e4istence /a" 'e the o'=ect of the contract of sale- 3 valid sale /a" 'e /ade of a thing, &hich though not "et actuall" in e4istence, is reasona'l" certain to co/e into e4istence as the natural incre/ent or usual incident of so/ething alread" in e4istence, and then 'elonging to the vendor, and the title &ill vest in the 'u"er the /o/ent the thing co/es into e4istence (3merson vs. 3uropean 6ai"wa, Co., ' Me., &8 > Cuttin4 vs. !ac2ers 3Jchan4e, ./ Am. St. 6ep., '&(. Things of this nature are said to have a 0otential e4istence- 3 /an /a" sell 0ro0ert" of &hich he is 0otentiall" and not actuall" 0ossessed- #e /a" /a@e a valid sale of the &ine that a vine"ard is e40ected to 0roduceG or the grain a field/a" gro& in a given ti/eG or the /il@ a co& /a" "ield during the co/ing "earG or the &ool that shall thereafter gro& u0on shee0G or &hat /a" 'e ta@en at the ne4t case of a fisher/an;s netG or fruits to gro&G or "oung ani/als not "et in e4istenceG or the good &ill of a trade and the li@e- The thing sold, ho&ever, /ust 'e s0ecific and identified- The" /ust 'e also o&ned at the ti/e '" the vendor (#u"" vs. #u"", -8 Conn., .$%> -% Am. 6ep., /'$(K pp. $..:$.&(. Thus, 0ending cro0s &hich have 0otential e4istence /a" 'e the su'=ect /atter of sale (SiAa" vs. ?a"de=, $% !hi". $/.(. :. Contract o- sa+e an' +ease o- t*(n)s '(st(n)u(s*e' The essential difference 'et&een a contract of sale and a lease of things is that the deliver" of the thing sold transfers o&nershi0, &hile in lease no such transfer of o&nershi0 results as the rights of the lessee are li/ited to the use and en=o"/ent of the thing leased- 5n the 0resent case, the lo&er court;s holding that the contract in .uestion fits the definition of a lease of things &herein one of the 0arties 'inds hi/self to give to another the en=o"/ent or use of a thing for a 0rice certain and for a 0eriod &hich /a" 'e definite or indefinite (3rt- 1943, ivil ode of the Phili00ines) is erroneous!. Contract o- +ease" en8oyment o- property 3rticle 1643 of the ivil ode defines the contract of lease as the giving or the concession of the en=o"/ent or use of a thing for a s0ecified ti/e and fi4ed 0rice, and since such contract is a for/ of en=o"/ent of the 0ro0ert", it is evident that it /ust 'e regarded as one of the /eans of en=o"/ent referred to in said 3rticle 3,<, inas/uch as the ter/s en=o"/ent, use, and 'enefit involve the sa/e and analogous /eaning relative to the general utilit" of &hich a given thing is ca0a'le- (/%- ;urisprudencia Civi", --&> 6odri4ue= vs. )orromeo, -& !hi". - 0, -0%(. 8. ;rans-er o- accessory 'oes not trans-er pr(nc(pa+ The 0ossession and en=o"/ent of the coconut trees cannot 'e said to 'e the 0ossession and en=o"/ent of the land itself 'ecause these rights are distinct and se0arate fro/ each other, the first 0ertaining to the accessor" or i/0rove/ents (coconut trees) &hile the second, to the 0rinci0al (the land)- 3 transfer of the
.a+es" /001 ( /01 )
accessor" or i/0rove/ent is not a transfer of the 0rinci0al- 5t is the other &a" around, the accessor" follo&s the 0rinci0al- 5n the 0resent case, the sale of the nuts cannot 'e inter0reted nor construed to 'e a lease of the trees, /uch less e4tended further to include the lease of the land itself- 5n cannot 'e said that the 0ossession and en=o"/ent of the coconut trees to 'e the 0ossession and en=o"/ent of the land itself 'ecause the lessee in order to en=o" his right under the contract, he actuall" ta@es 0ossession of the land, at least during harvest ti/e, gathers all of the fruits of the coconut trees in the land, and gains e4clusive use thereof &ithout the interference or intervention of the lessor#. *(m Grantee un'er RA 4!! not pro*( (te' to se++ t*e natura+<(n'ustr(a+ -ru(ts o- t*e +an' a,ar'e' to
The grantee of a 0arcel of land under (3 4++ is not 0rohi'ited fro/ alienating or dis0osing of the natural andBor industrial fruits of the land a&arded to hi/, 0ursuant to the ter/s of the first 0aragra0h of !ection <- :hat the la& e40ressl" disallo&s is the encu/'rance or alienation of the land itself or an" of the 0er/anent i/0rove/ents thereon- Per/anent i/0rove/ents on a 0arcel of land are things incor0orated or attached to the 0ro0ert" in a fi4ed /anner, naturall" or artificiall"- The" include &hatever is 'uilt, 0lanted or so&n on the land &hich is characteri2ed '" fi4it", i//uta'ilit" or i//ova'ilit"- #ouses, 'uildings, /achiner", ani/al houses, trees and 0lants &ould fall under the categor" of 0er/anent i/0rove/ents, the alienation or encu/'rance of &hich is 0rohi'ited '" (3 4++- :hile coconut trees are 0er/anent i/0rove/ents of a land, their nuts are natural or industrial fruits &hich are /eant to 'e gathered or severed fro/ the trees, to 'e used, en=o"ed, sold or other&ise dis0osed of '" the o&ner of the land- #ence, the grantee of Lot *1 had the right and 0rerogative to sell the coconut fruits of the trees gro&ing on the 0ro0ert"10. Burpose o- RA 4!!" an' .ect(on 8 t*ereoD" virtue of (3 4++, 'ona fide occu0ants, veterans, /e/'ers of guerilla organi2ations and other .ualified 0ersons &ere given the o00ortunit" to ac.uire govern/ent lands '" 0urchase, ta@ing into account their li/ited /eans- 5t &as intended for these 0ersons to /a@e good and 0roductive use of the lands a&arded to the/, not onl" to ena'le the/ to i/0rove their standard of living, 'ut li@e&ise to hel0 0rovide for the annual 0a"/ents to the Fovern/ent of the 0urchase 0rice of the lots a&arded to the/- !ection < &as included to 0rotect the grantees 7fro/ the/selves and the incursions of o00ortunists &ho 0re" on their /iser" and 0overt"-8 5t is there to insure that the grantees the/selves 'enefit fro/ their res0ective lots, to the e4clusion of other 0ersons11. @e)(s+ature 'oes not (nten' to pro*( (t t*e )rantee -rom se++(n) natura+ an' (n'ustr(a+ -ru(ts o*(s +an' The 0ur0ose of the la& is not violated &hen a grantee sells the 0roduce or fruits of his land- %n the contrar", the ai/ of the la& is there'" achieved, for the grantee is encouraged and induced to 'e /ore industrious and 0roductive, thus /a@ing it 0ossi'le for hi/ and his fa/il" to 'e econo/icall" self)sufficient and to lead a res0ecta'le life- 3t the sa/e ti/e, the Fovern/ent is assured of 0a"/ent on the annual install/ents on the land- 5t could not have 'een the intention of the legislature to 0rohi'it the grantee fro/ selling the natural and industrial fruits of his land, for other&ise, it &ould lead to an a'surd situation &herein the grantee &ould not 'e a'le to receive and en=o" the fruits of the 0ro0ert" in the real and co/0lete sense1/. Barty cannot (mpu)n t*e va+('(ty o- t*e contract a-ter rece(v(n) t*e cons('erat(on -or t*e sa+e The vendor)grantee, after having received the consideration for the sale of his coconut fruits, cannot 'e allo&ed to i/0ugn the validit" of the contracts he entered into, to the 0re=udice of 0etitioner &ho contracted in good faith and for a consideration- The vendor cannot clai/ that he has the 70rivilege to change his /ind and clai/ it as (an) i/0lied lease,8 and he has the 7legiti/ate right8 to file an action for annul/ent 7&hich no la& can sto08 as there is a 0erfected and valid contract11. Grant o- attorney=s -ees not 8ust(-(e' 3rticle **0< of the ivil ode 0rovides that 7in the a'sence of sti0ulation, attorne";s fees and
.a+es" /001 ( /0/ )
e40enses of litigation, other than =udicial costs, cannot 'e recovered, e4ce0t (1) :hen e4e/0lar" da/ages are a&ardedG (*) :hen the defendant;s act or o/ission has co/0elled the 0laintiff to litigate &ith third 0ersons or to incur e40enses to 0rotect his interestG (3) 5n cri/inal cases of /alicious 0rosecution against the 0laintiffG (4) 5n case of a clearl" unfounded civil action or 0roceeding against the 0laintiffG (6) :here the defendant acted in gross and evident 'ad faith in refusing to satisf" the 0laintiff;s 0lainl" valid, =ust and de/anda'le clai/G (9) 5n actions for legal su00ortG (+) 5n actions for the recover" of &ages of household hel0ers, la'orers and s@illed &or@ersG (<) 5n actions for inde/nit" under &or@/en;s co/0ensation and e/0lo"er;s lia'ilit" la&sG (,) 5n a se0arate civil action to recover civil lia'ilit" arising fro/ a cri/eG (10) :hen at least dou'le =udicial costs are a&ardedG (11) 5n an" other case &here the court dee/s it =ust and e.uita'le that attorne";s fees and e40enses of litigation should 'e recovered- 5n all cases, the attorne";s fees and e40enses of litigation /ust 'e reasona'le-8 $one of the legal grounds enu/erated e4ists to =ustif" or &arrant the grant of attorne";s fees[84] !8) v. CA, .'. SC6A -'- (/00$( [8$] Bo,er Commerc(a+ an' Gn'ustr(a+ Corp. vs. CA [G.R. No. 11#!4$. Fune /0" 1##!.] Third Division, Pangani'an (J): 3 concur, 1 on leave %acts& Po&er o//ercial Q 5ndustrial Develo0/ent or0oration (P 5D), an industrial as'estos /anufacturer, needed a 'igger office s0ace and &arehouse for its 0roducts- For this 0ur0ose, on 31 Januar" 1,+,, it entered into a contract of sale &ith the s0ouses (e"naldo and 3ngelita (- Uuia/'ao- The contract involved a 91* s.- /- 0arcel of land covered '" T T !)99<9 located at the corner of Dagtican and !t Paul !treets, !an 3ntonio 1illage, Aa@ati it"- The 0arties agreed that P 5D &ould 0a" the s0ouses P10<,000-00 as do&n 0a"/ent, and the 'alance of P*,6,000-00 u0on the e4ecution of the deed of transfer of the title over the 0ro0ert"- Further, P 5D assu/ed, as 0art of the 0urchase 0rice, the e4isting /ortgage on the land- 5n full satisfaction thereof, he 0aid P+,,146-++ to P$D, the /ortgagee- %n 1 June 1,+,, the s0ouses /ortgaged again said land to P$D to guarantee a loan of P146,000-00, P<0,000-00 of &hich &as 0aid to the s0ouses- P 5D agreed to assu/e 0a"/ent of the loan- %n *9 June 1,+,, the 0arties e4ecuted a Deed of 3'solute !ale :ith 3ssu/0tion of Aortgage (P*,6,000 0a"/ent, &ith assu/0tion of P$D /ortgage &orth P146,000, 0ending consent '" P$D- The Deed of !ale also 0rovides a clause stating that 7:e here'" also &arrant that &e are the la&ful and a'solute o&ners of the a'ove descri'ed 0ro0ert", free fro/ an" lien andBor encu/'rance, and &e here'" agree and &arrant to defend its title and 0eaceful 0ossession thereof in favor of the said Po&er o//ercial and 5ndustrial Develo0/ent or0oration, its successors and assigns, against an" clai/s &hatsoever of an" and all third 0ersonsG su'=ect, ho&ever, to the 0rovisions hereunder 0rovided to &it-8)- %n the sa/e date, Ars- -D- onstantino, then P 5D;s Feneral Aanager, su'/itted to P$D said deed &ith a for/al a00lication for assu/0tion of /ortgage- %n 16 Fe'ruar" 1,<0, P$D infor/ed the s0ouses that, for P 5D;s failure to su'/it the 0a0ers necessar" for a00roval 0ursuant to the the s0ouses; letter dated 16 Januar" 1,<0, the a00lication for assu/0tion of /ortgage &as considered &ithdra&nG that the outstanding 'alance of P146,000-00 &as dee/ed full" due and de/anda'leG and that said loan &as to 'e 0aid in full &ithin 16 da"s fro/ notice- P 5D 0aid P$D P41,<<0-46 on *4 June 1,<0 and P*0,*<3-14 on *3 Dece/'er 1,<0, 0a"/ents &hich &ere to 'e a00lied to the outstanding loan- %n *3 Dece/'er 1,<0, P$D received a letter fro/ P 5D re.uesting that its assu/0tion of /ortgage 'e given favora'le consideration, and that the title 'e transferred to its na/e so that it /a" underta@e the necessar" 0rocedures to /a@e use of the lot, in e4clusion of 0eo0le currentl" in 0h"sical occu0ation of the lot- %n 1, Fe'ruar" 1,<*, P$D sent P 5D a letter infor/ing P 5D that the loan is 0ast due fro/ last /aturit" &ith interest arrearages a/ounting to P*6,<*9-0< as of 1, Fe'ruar" 1,<*, and re.uesting P 5D to re/it 0a"/ents to cover interest, charges, and at least 0art of the 0rinci0al in order to 0lace P 5D;s account in current for/-
.a+es" /001 ( /01 )
%n 1+ Aarch 1,<*, P 5D filed ivil ase 46*1+ against the s0ouses for rescission and da/ages 'efore the (T Pasig, Dranch 16,- Then, in its re0l" to P$D;s letter of 1, Fe'ruar" 1,<*, P 5D de/anded the return of the 0a"/ents it /ade on the ground that its assu/0tion of /ortgage &as never a00roved- %n 31 Aa" 1,<3, &hile the case &as 0ending, the /ortgage &as foreclosed- The 0ro0ert" &as su'se.uentl" 'ought '" P$D during the 0u'lic auction- Thus, an a/ended co/0laint &as filed i/0leading P$D as 0art" defendant- %n 1* Jul" 1,,0, the trial court ruled that the failure of res0ondent s0ouses to deliver actual 0ossession to 0etitioner entitled the latter to rescind the sale, and in vie& of such failure and of the denial of the latter;s assu/0tion of /ortgage, the s0ouses and P$D &as o'liged to return the 0a"/ents /ade '" P 5D (P1<+,144-++ &ith legal interest of 1*I 0er annu/ fro/ the date of the filing of the co/0laint until full" 0aid '" the s0ousesG and P9*,193-6, &ith 1*I fro/ date of =udg/ent until full" 0aid '" the 'an@)- $o a&ard of other da/ages and attorne";s fees &ere /ade- The counterclai/ of the s0ouses and P$D &ere dis/issed for lac@ of /erit%n a00eal '" the s0ouses and P$D, and on *+ Aarch 1,,6, the ourt of 300eals (in 3)F( 1 3**,<) reversed the trial court- 5t held that the deed of sale 'et&een the s0ouses and P 5D did not o'ligate the for/er to e=ect the lessees fro/ the land in .uestion as a condition of the sale, nor &as the occu0ation thereof '" said lessees a violation of the &arrant" against eviction- #ence, there &as no su'stantial 'reach to =ustif" the rescission of said contract or the return of the 0a"/ents /ade- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt denied the 0etition, and affir/ed the assailed decision1. A++e)e' -a(+ure to e8ect +essee -rom +ot not su stant(a+ reac* The alleged 7failure8 of the s0ouses to e=ect the lessees fro/ the lot in .uestion and to deliver actual and 0h"sical 0ossession thereof cannot 'e considered a su'stantial 'reach of a condition for t&o reasons: first, such 7failure8 &as not sti0ulated as a condition J &hether resolutor" or sus0ensive J in the contractG and second, its effects and conse.uences &ere not s0ecified either- The 0rovision adverted to does not i/0ose a condition or an o'ligation to e=ect the lessees fro/ the lot- D" his o&n ad/ission, 3nthon" Po&ers, P 5D;s Feneral Aanager, did not as@ its la&"ers to sti0ulate in the contract that the s0ouses &ere guaranteeing the e=ect/ent of the occu0ants, 'ecause there &as alread" a 0roviso in said deed of sale that the sellers &ere guaranteeing the 0eaceful 0ossession '" the 'u"er of the land/. > scur(ty (n a contract construe' a)a(nst party caus(n) (t 3n" of o'scurit" in a contract, if the a'ove).uoted 0rovision can 'e descri'ed, /ust 'e construed against the 0art" &ho caused it- P 5D itself caused the o'scurit" 'ecause it o/itted this alleged condition &hen its la&"er drafted said contract1. .t(pu+at(on s(m(+ar to Romero vs. CA re2u(re' (n e8ect(n) tenants3 5*at ,as not (nten'e' y part(es cannot e a )roun' -or resc(ss(on 5f the 0arties intended to i/0ose on the s0ouses the o'ligation to e=ect the tenants fro/ the lot sold, it should have included in the contract a 0rovision si/ilar to that referred to in 1o#ero vs. Court of Appeals , &here the e=ect/ent of the occu0ants of the lot sold &as the o0erative act &hich set into /otion the 0eriod of 'u"er;s co/0liance &ith his o&n o'ligation, i-e-, to 0a" the 'alance of the 0urchase 0rice- Failure to re/ove the s.uatters &ithin the sti0ulated 0eriod gave the other 0art" the right to either refuse to 0roceed &ith the agree/ent or to &aive that condition of e=ect/ent in consonance &ith 3rticle 1646 of the ivil ode- 5n the case cited, the contract s0ecificall" sti0ulated that the e=ect/ent &as a condition to 'e fulfilledG other&ise, the o'ligation to 0a" the 'alance &ould not arise- This is not so in the 0resent case- 3'sent a sti0ulation therefor, the 0arties could not have intended to /a@e its nonfulfill/ent a ground for rescission- 5f the" did intend this, their contract should have e40ressl" sti0ulated so4. Resc(ss(on a+so not a++o,e' (- reac* (s not su stant(a+ an' -un'ament to -u+-(++ment oo +()at(on to se++ 5n Ang vs. C.A-, rescission &as sought on the ground that the seller had failed to fulfill their
.a+es" /001 ( /04 )
o'ligation 7to re/ove and clear8 the lot sold, the 0erfor/ance of &hich &ould have given rise to the 0a"/ent of the consideration '" 'u"er- (escission &as not allo&ed, ho&ever, 'ecause the 'reach &as not su'stantial and funda/ental to the fulfill/ent '" the 0etitioners of the o'ligation to sell$. 5arranty an' not con'(t(on3 ;erms o- contract c+ear The 0rovision adverted to in the contract 0ertains to the usual &arrant" against eviction, and not to a condition that &as not /et- The ter/s of the contract are so clear as to leave no roo/ for an" other inter0retation:. De+(very an (n'(spensa +e re2u(s(te3 Actua+ or construct(ve3 .ym o+(c 'e+(very 3lthough /ost authorities consider transfer of o&nershi0 as the 0ri/ar" 0ur0ose of saleG deliver" re/ains an indis0ensa'le re.uisite as the la& does not ad/it the doctrine of transfer of 0ro0ert" '" /ere consent- The ivil ode 0rovides that deliver" can either 'e (1) actual (3rticle 14,+) or (*) constructive (3rticles 14,<)1601)- !"/'olic deliver" (3rticle 14,<), as s0ecies of constructive deliver", effects the transfer of o&nershi0 through the e4ecution of a 0u'lic docu/ent- 5ts efficac" can, ho&ever, 'e 0revented if the vendor does not 0ossess control over the thing sold, in &hich case this legal fiction /ust "ield to realit"!. Re2u(s(tes -or sym o+(c 'e+(very to pro'uce e--ect o- tra'(t(on 5n order that this s"/'olic deliver" /a" 0roduce the effect of tradition, it is necessar" that the vendor shall have had such control over the thing sold that - - - its /aterial deliver" could have 'een /ade- 5t is not enough to confer u0on the 0urchaser the o&nershi0 and the right of 0ossession- The thing sold /ust 'e 0laced in his control- :hen there is no i/0edi/ent &hatever to 0revent the thing sold 0assing into the tenanc" of the 0urchaser '" the sole &ill of the vendor, s"/'olic deliver" through the e4ecution of a 0u'lic instru/ent is sufficient- Dut if, not&ithstanding the e4ecution of the instru/ent, the 0urchaser cannot have the en=o"/ent and /aterial tenanc" of the thing and /a@e use of it hi/self or through another in his na/e, 'ecause such tenanc" and en=o"/ent are o00osed '" the inter0osition of another &ill, then fiction "ields to realit" J the deliver" has not 'een effected8. De+(very e--ecte' t*rou)* e7ecut(on o- 'ee'" a++o,(n) BCGD to -(+e e8ectment su(t a)a(nst occupants onsidering that the deed of sale 'et&een the 0arties did not sti0ulate or infer other&ise, deliver" &as effected through the e4ecution of said deed- The lot sold had 'een 0laced under the control of P 5DG thus, the filing of the e=ect/ent suit &as su'se.uentl" done- 5t signified that its ne& o&ner intended to o'tain for itself and to ter/inate said occu0ants; actual 0ossession thereof- Prior 0h"sical deliver" or 0ossession is not legall" re.uired and the e4ecution of the deed of sale is dee/ed e.uivalent to deliver"- This deed o0erates as a for/al or s"/'olic deliver" of the 0ro0ert" sold and authori2es the 'u"er to use the docu/ent as 0roof of o&nershi0$othing /ore is re.uired#. Re2u(s(tes o- Breac* o- 5arranty A)a(nst Ev(ct(on 3 'reach of this &arrant" re.uires the concurrence of the follo&ing circu/stances: (1) The 0urchaser has 'een de0rived of the &hole or 0art of the thing soldG (*) This eviction is '" a final =udg/entG (3) The 'asis thereof is '" virtue of a right 0rior to the sale /ade '" the vendorG and (4) The vendor has 'een su//oned and /ade co)defendant in the suit for eviction at the instance of the vendee- 5n the a'sence of these re.uisites, a 'reach of the &arrant" against eviction under 3rticle 164+ cannot 'e declared10. Bresence o- +essee 'oes not const(tute encum rance o- +an' nor 'epr(ves contro+ t*ereoThe 0resence of lessees does not constitute an encu/'rance of the land, nor does it de0rive P 5D of its control thereof- 5t should 'e noted that P 5D;s de0rivation of o&nershi0 and control finall" occurred &hen it failed andBor discontinued 0a"ing the a/orti2ations on the /ortgage, causing the lot to 'e foreclosed and sold at 0u'lic auction- Dut this de0rivation is due to P 5D;s fault, and not to an" act attri'uta'le to the s0ouses.a+es" /001 ( /0$ )
11.
Contract presume' to e va+(' an' su s(st(n) Decause P 5D failed to i/0ugn its integrit", the contract is 0resu/ed, under the la&, to 'e valid and su'sisting1/. App+(cat(on o- .o+ut(o Gn'e (t( The doctrine of !olutio 5nde'iti a00lies &here: (1) a 0a"/ent is /ade &hen there e4ists no 'inding relation 'et&een the 0a"or, &ho has no dut" to 0a", and the 0erson &ho received the 0a"/ent, and (*) the 0a"/ent is /ade through /ista@e, and not through li'eralit" or so/e other cause- !olutio inde'iti does not a00l" in the 0resent case11. BCGD *as 'uty to pay amort(Cat(ons P 5D &as under o'ligation to 0a" the a/orti2ations on the /ortgage under the contract of sale and the deed of real estate /ortgage- ?nder the deed of sale, 'oth 0arties agreed to a'ide '" an" and all the re.uire/ents of P$D in connection &ith the real estate /ortgage- P 5D &as a&are that the deed of /ortgage /ade it solidaril", and, therefore, 0ri/aril" lia'le for the /ortgage o'ligation- 5t &as sti0ulated that 7 the Mort4a4or sha"" neither "ease the mort4a4ed propert, nor se"" or dispose of the same in an, manner, without the written consent of the Mort4a4ee. #owever, if not withstandin4 this stipu"ation and durin4 the eJistence of this mort4a4e, the propert, herein mort4a4ed, or an, portion thereof, is so"d, it sha"" Ae the oA"i4ation of the Mort4a4or to impose as a condition of the sa"e, a"ienation or encumArance that the vendee, or the part, in whose favor the a"ienation or encumArance is to Ae made, shou"d ta2e the propert, suAFect to the oA"i4ation of this mort4a4e in the same terms and condition under which it is constituted, it Aein4 understood that the Mort4a4or is not in an, manner re"ieved of his oA"i4ation to the Mort4a4ee under this mort4a4e A, such sa"e, a"ienation or encumArance> on the contrar, Aoth the vendor and the vendee, or the part, in whose favor the a"ienation or encumArance is made sha"" Ae Foint", and severa"", "iaA"e for said mort4a4e oA"i4ations. 8 14. No m(stake (n t*e payment o- amort(Cat(on to BNB >ven if P 5D &as a third 0art" in regard to the /ortgage of the land 0urchased (on the insistence that P$D disa00roved P 5D;s assu/0tion of /ortgage after it failed to su'/it the necessar" 0a0ers for the a00roval of such assu/0tion), the 0a"/ent of the loan '" P 5D &as a condition clearl" i/0osed '" the contract of sale- This fact alone dis0roves P 5D;s insistence that there &as a 7/ista@e8 in 0a"/ent- %n the contrar", such 0a"/ents &ere necessar" to 0rotect its interest as a 7the 'u"er(s) and ne& o&ner(s) of the lot-8 1$. No un8ust enr(c*ment The .uasi)contract of solutio inde'iti is one of the concrete /anifestations of the ancient 0rinci0le that no one shall enrich hi/self un=ustl" at the e40ense of another- The 0a"/ent of the /ortgage &as an o'ligation P 5D assu/ed under the contract of sale- There is no un=ust enrich/ent &here the transaction, as in the 0resent case, is .uid 0ro .uo, value for value[8:] Buyat N .ons v. Arco Amusement [G.R. No. 4!$18. Fune /0" 1#41.] First Division, Laurel (J): 4 concur %acts& 5n the "ear 1,*,, the HTeatro 3rco;, &as engaged in the 'usiness of o0erating cine/atogra0hs- 5n 1,30, its na/e &as changed to 3rco 3/use/ent o/0an"- 3'out the sa/e ti/e, Fon2alo Pu"at Q !ons, 5nc-, in addition to its other 'usiness, &as acting as e4clusive agents in the Phili00ines for the !tarr Piano o/0an" of (ich/ond, 5ndiana, ?!3, &hich dealt in cine/atogra0h e.ui0/ent and /achiner"- 3rco, desiring to e.ui0 its cine/atogra0h &ith sound re0roducing devices, a00roached Pu"at- 3fter so/e negotiations, it &as agreed 'et&een the 0arties, Pu"at &ould, on 'ehalf of 3rco 3/use/ent, order sound re0roducing e.ui0/ent fro/ the !tar Piano o/0an" and that 3rco 3/use/ent &ould 0a" Pu"at, in addition to the 0rice of the
.a+es" /001 ( /0: )
e.ui0/ent, 10I co//ission, 0lus all e40enses, such as, freight, insurance, 'an@ing charges, ca'les, etc- 3t the e40ense of the 3rco, Pu"at sent a ca'le to the !tarr Piano o/0an", in.uiring a'out the e.ui0/ent desired and /a@ing the said co/0an" to .uote its 0rice of T1,+00 F%D factor" (ich/ond, 5ndiana- Pu"at infor/ed the 0laintiff of the 0rice of T1,+00, and 'eing agreea'le to the 0rice, 3rco, in a letter dated 1, $ove/'er 1,*,, for/all" authori2ed the order- The e.ui0/ent arrived a'out the end of the "ear 1,*,, and u0on deliver" of the sa/e to 3rco and the 0resentation of necessar" 0a0ers, the 0rice of T1,+00, 0lus the 10I co//ission agreed u0on the 0lus all the e40enses and charges, &as dul" 0aid '" the 3rco to Pu"athe follo&ing "ear, another order for sound re0roducing e.ui0/ent &as 0laced '" 3rco &ith Pu"at, on the sa/e ter/s as the first orderThe e.ui0/ent under the second order arrived in due ti/e, and the defendant &as dul" 0aid the 0rice of T1,900 &ith its 10 0er cent co//ission, and T190, for all e40enses and charges- This a/ount of T190 does not re0resent actual out)of)0oc@et e40enses 0aid '" Pu"at, 'ut a /ere flat charge and rough esti/ate /ade '" Pu"at e.uivalent to 10I of the 0rice of T1,900 of the e.ui0/entThree "ears later, in connection &ith a civil case in 1igan, filed '" one Fidel (e"es against Pu"at, the officials of the 3rco discovered that the 0rice .uoted to the/ '" Pu"at &ith regard to their t&o orders &as not the net 0rice 'ut rather the list 0rice, and that the defendant had o'tained a discount fro/ the !tarr Piano o/0an"Aoreover, '" reading revie&s and literature on 0rices of /achiner" and cine/atogra0h e.ui0/ent, said officials of 3rco &ere convinced that the 0rices charged the/ '" the defendant &ere /uch too high including the charges for out)of)0oc@et e40enses- For these reasons, the" sought to o'tain a reduction fro/ Pu"at or rather a rei/'urse/ent- Failing in this the" 'rought an action &ith the F5 AanilaThe trial court held that the contract 'et&een the 0arties &as one of the outright 0urchase and sale, and a'solved Pu"at fro/ the co/0laint- The a00ellate court, ho&ever, held that the relation 'et&een the 0arties &as that of agent and 0rinci0al, Pu"at acting as agent of 3rco in the 0urchase of the e.ui0/ent in .uestion, and sentenced Pu"at to 0a" 3rco alleged over0a"/ents in the total su/ of T1,336-6* or P*,9+1-04, together &ith legal interest thereon fro/ the date of the filing of the co/0laint until said a/ount is full" 0aid, as &ell as to 0a" the costs of the suit in 'oth instances- #ence, the 0etition for the issuance of a &rit of certiorari to the ourt of 300eals for the 0ur0osed of revie&ing its decision in civil case F( 10*3The !u0re/e ourt granted the &rit of certiorari, reversed the decision of the a00ellate court, and a'solved Pu"at Q !ons fro/ the co/0laint in F( 10*3, &ithout 0ronounce/ent regarding costs1. Contract" an' t*ose a)ree' upon" (s t*e +a, et,een t*e part(es3 5*at 'oes not appear are re)ar'e' as 'ea+er=s or tra'er=s not (n'(n) t*e part(es The contract is the la& 'et&een the 0arties and should include all the things the" are su00osed to have 'een agreed u0on- :hat does not a00ear on the face of the contract should 'e regarded /erel" as 7dealer;s8 or 7trader;s tal@8, &hich can not 'ind either 0art"- (8o"Aroo2 v. Conner, $' So., $ ', // Am. 6ep., ./.> )an2 v. )rossce"", /.% I""., /'/> )an2 v. !a"mer, - I""., 0.> #osser v. Copper, 8 A""en, &&-> @o"es v. Merri"", / & Mass., -//.( The letters &hich 3rco acce0ted the 0rices of T1,+00 and T1,900, res0ectivel", for the sound re0roducing e.ui0/ent su'=ect of its contract &ith Pu"at, are clear in their ter/s and ad/it of no other inter0retation than that 3rco agreed to 0urchase fro/ Pu"at the e.ui0/ent in .uestion at the 0rices indicated &hich are fi4ed and deter/inate/. A)ency3 A)ent e7empt -rom a++ +(a (+(ty (n '(sc*ar)e o- comm(ss(on (- (n accor'ance ,(t* (nstruct(ons rece(ve' -rom pr(nc(pa+ 5n agenc", the agent is e4e/0ted fro/ all lia'ilit" in the discharge of his co//ission 0rovided he acts in accordance &ith the instructions received fro/ his 0rinci0al (section *64, ode of o//erce), and the 0rinci0al /ust inde/nif" the agent for all da/ages &hich the latter /a" incur in carr"ing out the agenc" &ithout fault or i/0rudence on his 0art (article 1+*,, ivil ode)- The fact that 7&hatever unforseen events /ight have ta@en 0lace unfavora'le to the defendant (0etitioner), such as change in 0rices, /ista@e in their .uotation, loss of the goods not covered '" insurance or failure of the !tarr Piano o/0an" to 0ro0erl" fill
.a+es" /001 ( /0! )
the orders as 0er s0ecifications, the 0laintiff (res0ondent) /ight still legall" hold the defendant (0etitioner) to the 0rices fi4ed of T1,+00 and T1,9008 is inco/0ati'le &ith the 0retended relation of agenc" 'et&een the 0arties1. Comm(ss(on 'oes not necessar(+y make one t*e a)ent o- t*e ot*er :hile the letters state that Pu"at &as to receive 10I co//ission, this does not necessaril" /a@e the 0etitioner an agent of the res0ondent, as this 0rovision is onl" an additional 0rice &hich the res0ondent 'ound itself to 0a", and &hich sti0ulation is not inco/0ati'le &ith the contract of 0urchase and sale- (!ee Uuiroga vs- Parsons #ard&are o-, 3< Phil-, 601-) 4. Buyat N .ons a+rea'y t*e a)ent o- .tarr B(ano Company o- R(c*mon'" Gn'(ana" (n t*e B*(+(pp(nes To hold the 0etitioner an agent of 3rco in the 0urchase of e.ui0/ent and /achiner" fro/ the !tarr Piano o/0an" of (ich/ond, 5ndiana, is inco/0ati'le &ith the ad/itted fact that Pu"at is the e4clusive agent of !tarr Piano in the Phili00ines- 5t is out of the ordinar" for one to 'e the agent of 'oth the vendor and the 0urchaser- The facts and circu/stances indicated to not 0oint to an"thing 'ut 0lain ordinar" transaction &here 3rco enters into a contract transaction, a contract of 0urchase and sale, &ith Pu"at, the latter as e4clusive agent of the !tarr Piano o/0an" in the ?nited !tates$. Hen'or not oun' to re(m urse '(--erence o- cost an' sa+es pr(ce 3 vendor is not 'ound to the vendee for an" difference 'et&een the cost 0rice and the sales 0rice &hich re0resents the 0rofit reali2ed '" the vendor out of the transaction- This is the ver" essence of co//erce &ithout &hich /erchants or /iddle/an &ould not e4ist:. Not every concea+ment (s -rau'" may e us(ness acumen3 Buyer estoppe' ,*en (t a)ree' to con'(t(ons an' pr(ce 5t is &ell @no&n that local dealers acting as agents of foreign /anufacturers, aside fro/ o'taining a discount fro/ the ho/e office, so/eti/es add to the list 0rice &hen the" resell to local 0urchasers- 5t &as a00arentl" to guard against an e4hor'itant additional 0rice that 3rco sought to li/it it to 10It- 3rco is esto00ed fro/ .uestioning that additional 0rice- 5f the res0ondent later on discovers itself at the short end of a 'ad 'argain- it alone /ust 'ear the 'la/e, and it cannot rescind the contract, /uch less co/0el a rei/'urse/ent of the e4cess 0rice, on that ground alone- The fact that Pu"at o'tained /ore or less 0rofit than 3rco calculated 'efore entering into the contract of 0urchase and sale, is no ground for rescinding the contract of 0urchase and sale, is no ground for rescinding the contract or reducing the 0rice agreed u0on 'et&een the 0arties- Pu"at &as not dut" 'ound to reveal the 0rivate arrange/ent it had &ith the !tarr Piano o/0an" relative to such discount to its 0ros0ective custo/ers- $ot ever" conceal/ent is fraudG and short of fraud, it &ere 'etter that, &ithin certain li/its, 'usiness acu/en 0er/it of the loosening of the sleeves and of the shar0ening of the intellect of /en and &o/en in the 'usiness &orld[8!] Ju(8a'a v. CA [G.R. No. 1/:444. Decem er 4" 1##8.] !econd Division, Aartine2 (J): 3 concur %acts& Petitioners (3lfonso, resente, (e"nalda, De/etrio, >liuteria, >ulalio, and :arlito) are the children of the late Trinidad orvera 1da- de Uui=ada- Trinidad &as one of the heirs of the late Pedro orvera and inherited fro/ the latter the *)hectare 0arcel of land su'=ect of the case, situated in the 'arrio of !an 3gustin, Talacogon, 3gusan del !ur- %n 6 30ril 1,69, Trinidad Uui=ada together &ith her sisters Leonila orvera 1dade !e.ueMa and Pa2 orvera a'iltes and 'rother >0a0iadito orvera e4ecuted a conditional deed of donation of the *)hectare 0arcel of land in favor of the Aunici0alit" of Talacogon, the condition 'eing that the 0arcel of land shall 'e used solel" and e4clusivel" as 0art of the ca/0us of the 0ro0osed 0rovincial high school in
.a+es" /001 ( /08 )
Talacogon- 300arentl", Trinidad re/ained in 0ossession of the 0arcel of land des0ite the donation- %n *, Jul" 1,9*, Trinidad sold 1 hectare of the su'=ect 0arcel of land to (egalado Aonde=ar- !u'se.uentl", Trinidad ver'all" sold the re/aining 1 hectare to Aonde=ar &ithout the 'enefit of a &ritten deed of sale and evidenced solel" '" recei0ts of 0a"/ent- 5n 1,<0, the heirs of Trinidad, &ho at that ti/e &as alread" dead, filed a co/0laint for forci'le entr" against Aonde=ar, &hich co/0laint &as, ho&ever, dis/issed for failure to 0rosecute- 5n 1,<+, the 0ro0osed 0rovincial high school having failed to /ateriali2e, the !angguniang Da"an of the /unici0alit" of Talacogon enacted a resolution reverting the * hectares of land donated 'ac@ to the donors- 5n the /eanti/e, Aonde=ar sold 0ortions of the land to Fernando Dautista, (odolfo Foloran, >fren Fuden, and >rnesto Foloran%n 6 Jul" 1,<<, the 0etitioners filed a co/0laint against 0rivate res0ondents (Aonde=ar, (odulfo and >rnesto Foloran, 3sis, (as, 3'iso, Dautista, Aacasero and Aaguisa") for .uieting of title, recover" of 0ossession and o&nershi0 of 0arcels of land &ith clai/ for attorne";s fees and da/ages- The trial court rendered =udg/ent in favor of the 0etitioners, holding that Trinidad Uui=ada did not have legal title or right to sell the land to Aonde=ar as it 'elongs to the Aunici0alit" of Talacogon at that ti/e, and that the deed of sale in favor of Aonde=ar did not carr" the confor/it" and ac.uiescence of her children considering that Trinidad &as alread" 93 "ears old and a &ido&- The trial court ordered the defendants (0rivate res0ondents), and an" 0erson acting in defendants; 'ehalf to return and vacate the * hectares of land to the 0laintiff, and to re/ove their i/0rove/ents constructed on the lotG ordered the cancellation of the deed of sale e4ecuted '" Trinidad to Aonde=ar, as &ell as the deeds of saleBrelin.uish/ents e4ecuted '" Aonde=ar to the other defendantsG and ordered the defendants to 0a" the 0laintiffs, in solidu/, the a/ount of P10,000, P<,000, and P30,000 as attorne";s fees, e40enses of litigation and /oral da/ages, res0ectivel"%n a00eal, the ourt of 300eals reversed and set aside the =udg/ent a .uo ruling that the sale /ade '" Trinidad Uui=ada to res0ondent Aonde=ar &as valid as the for/er retained an inchoate interest on the lots '" virtue of the auto/atic reversion clause in the deed of donation- Thereafter, 0etitioners filed a /otion for reconsideration- :hen the 3 denied their /otion, 0etitioners instituted a 0etition for revie& to the !u0re/e ourtThe !u0re/e ourt affir/ed the assailed decision of the ourt of 300eals1. Con'(t(on va+(' (n 'onat(on (- not contrary to +a," mora+s" )oo' customs" pu +(c or'er or pu +(c po+(cy The donation /ade on 30ril 6, 1,69 '" Trinidad Uui=ada and her 'rother and sisters &as su'=ect to the condition that the donated 0ro0ert" shall 'e 7used solel" and e4clusivel" as a 0art of the ca/0us of the 0ro0osed Provincial #igh !chool in Talacogon-8 The donation further 0rovides that should 7the 0ro0osed Provincial #igh !chool 'e discontinued or if the sa/e shall 'e o0ened 'ut for so/e reason or another, the sa/e /a" in the future 'e closed8 the donated 0ro0ert" shall auto/aticall" revert to the donor- !uch condition, not 'eing contrar" to la&, /orals, good custo/s, 0u'lic order or 0u'lic 0olic" &as validl" i/0osed in the donation/. Donat(on as mo'e o- ac2u(r(n) o,ners*(p :hen the Aunici0alit";s acce0tance of the donation &as /ade @no&n to the donor, the for/er 'eca/e the ne& o&ner of the donated 0ro0ert", donation 'eing a /ode of ac.uiring and trans/itting o&nershi0, not&ithstanding the condition i/0osed '" the donee- The donation is 0erfected once the acce0tance '" the donee is /ade @no&n to the donor- 3ccordingl", o&nershi0 is i//ediatel" transferred to the latter and that o&nershi0 &ill onl" revert to the donor if the resolutor" condition is not fulfilled1. Con'(t(on to construct sc*oo+ (s a reso+utory con'(t(on The resolutor" condition, in the 0resent case, is the construction of the school- 5t has 'een ruled that &hen a 0erson donates land to another on the condition that the latter &ould 'uild u0on the land a school, the
.a+es" /001 ( /0# )
condition i/0osed is not a condition 0recedent or a sus0ensive condition 'ut a resolutor" one- !o long as the resolutor" condition su'sists and is ca0a'le of fulfill/ent, the donation re/ains effective and the donee continues to 'e the o&ner su'=ect onl" to the rights of the donor or his successors)in)interest under the deed of donation- !ince no 0eriod &as i/0osed '" the donor on &hen /ust the donee co/0l" &ith the condition, the latter re/ains the o&ner so long as he has tried to co/0l" &ith the condition &ithin a reasona'le 0eriod- !uch 0eriod, ho&ever, 'eca/e irrelevant herein &hen the donee /anifested that it cannot co/0l" &ith the condition and the sa/e &as /ade @no&n to the donor- %nl" then, &hen the non)fulfill/ent of the resolutor" condition &as 'rought to the donor;s @no&ledge, that o&nershi0 of the donated 0ro0ert" reverted to the donor as 0rovided in the auto/atic reversion clause of the deed of donation4. Gnc*oate (nterest may e su 8ect o- contract (nc+u'(n) a contract o- sa+e3 Gnterest over property un'er con'(t(ona+ 'ee' o- 'onat(on" not t*e +an' (tse+The donor /a" have an inchoate interest in the donated 0ro0ert" during the ti/e that o&nershi0 of the land has not reverted to her- !uch inchoate interest /a" 'e the su'=ect of contracts including a contract of sale- 5n the 0resent case, ho&ever, &hat the donor sold &as the land itself &hich she no longer o&ns- 5t &ould have 'een different if the donor)seller sold her interests over the 0ro0ert" under the deed of donation &hich is su'=ect to the 0ossi'ilit" of reversion of o&nershi0 arising fro/ the non)fulfill/ent of the resolutor" condition$. @ac*es" e+ements Laches 0resu00oses failure or neglect for an unreasona'le and une40lained length of ti/e, to do that &hich, '" e4ercising due diligence, could or should have 'een done earlierG 7it is negligence or o/ission to assert a right &ithin a reasona'le ti/e, thus, giving rise to a 0resu/0tion that the 0art" entitled to assert it either has a'andoned or declined to assert it-8 5ts essential ele/ents of (a) onduct on the 0art of the defendant, or of one under &ho/ he clai/s, giving rise to the situation co/0lained ofG (') Dela" in asserting co/0lainant;s right after he had @no&ledge of the defendant;s conduct and after he has an o00ortunit" to sueG (c) Lac@ of @no&ledge or notice on the 0art of the defendant that the co/0lainant &ould assert the right on &hich he 'ases his suitG and, (d) 5n=ur" or 0re=udice to the defendant in the event relief is accorded to the co/0lainant8 are a'sent in this case- 5n the 0resent case, 0etitioners; cause of action to .uiet title co//enced onl" &hen the 0ro0ert" reverted to the donor andBor his successors)in)interest in 1,<+, not in the 1,90;s &hen the" had no interest over the 0ro0ert" at that ti/e e4ce0t under the deed of donation to &hich 0rivate res0ondents &ere not 0riv"- Aoreover, 0etitioners had 0reviousl" filed an e=ect/ent suit against 0rivate res0ondents onl" that it did not 0ros0er on a technicalit":. .a+e" e(n) a consensua+ contract" (s per-ecte' y mere consent3 .e++er nee' not o,n property ,*en so+' ut ,*en 'e+(vere' !ale, 'eing a consensual contract, is 0erfected '" /ere consent, &hich is /anifested the /o/ent there is a /eeting of the /inds as to the offer and acce0tance thereof on three (3) ele/ents: su'=ect /atter, 0rice and ter/s of 0a"/ent of the 0rice- %&nershi0 '" the seller on the thing sold at the ti/e of the 0erfection of the contract of sale is not an ele/ent for its 0erfection- :hat the la& re.uires is that the seller has the right to transfer o&nershi0 at the ti/e the thing sold is delivered- Perfection 0er se does not transfer o&nershi0 &hich occurs u0on the actual or constructive deliver" of the thing sold- 3 0erfected contract of sale cannot 'e challenged on the ground of non)o&nershi0 on the 0art of the seller at the ti/e of its 0erfectionG hence, the sale is still valid!. .e++er=s t(t+e passes y operat(on o- +a, to t*e uyer The consu//ation of the 0erfected contract is another /atter- 5t occurs u0on the constructive or actual deliver" of the su'=ect /atter to the 'u"er &hen the seller or her successors)in)interest su'se.uentl" ac.uires o&nershi0 thereof- 5n the 0resent case, such circu/stance ha00ened in this case &hen 0etitioners (Trinidad;s heirs) 'eca/e the o&ners of the su'=ect 0ro0ert" u0on the reversion of the o&nershi0 of the land to the/- onse.uentl", o&nershi0 is transferred to Aonde=ar and those &ho clai/ their right fro/ hi/.a+es" /001 ( /10 )
3rticle 1434 of the $e& ivil ode su00orts the ruling that the seller;s 7title 0asses '" o0eration of la& to the 'u"er-8 This rule a00lies not onl" &hen the su'=ect /atter of the contract of sale is goods, 'ut also to other @inds of 0ro0ert", including real 0ro0ert"8. Art(c+e 140# (4) 'oes not prov('e t*at t*e propert(es o- a mun(c(pa+(ty are outs('e t*e commerce o- man3 > 8ects outs('e o- t*e commerce o- man are t*ose ,*(c* cannot e appropr(ate' $o&here in 3rticle 140, (4) is it 0rovided that the 0ro0erties of a /unici0alit", &hether it 'e those for 0u'lic use or its 0atri/onial 0ro0ert", are outside the co//erce of /enG so as to render the contract involving the sa/e ine4istent and void fro/ the 'eginning &hen sold- 5n the 0resent case, the lots &ere conditionall" o&ned '" the /unici0alit"- To rule that the donated 0ro0erties are outside the co//erce of /en &ould render nugator" the unchallenged reasona'leness and =ustness of the condition &hich the donor has the right to i/0ose as o&ner thereof- Aoreover, the o'=ects referred to as outside the co//erce of /an are those &hich cannot 'e a00ro0riated, such as the o0en seas and the heavenl" 'odies#. No -actua+ or +e)a+ as(s -or t*e a,ar' o- -ees an' 'ama)es There is neither factual nor legal 'asis for the trial court;s a&ard of attorne";s fees, litigation e40enses and /oral da/ages- 3ttorne";s fees and e40enses of litigation cannot, follo&ing the general rule in 3rticle **0< of the $e& ivil ode, 'e recovered in the 0resent case, there 'eing no sti0ulation to that effect and the case does not fall under an" of the e4ce0tions- 5t cannot 'e said that 0rivate res0ondents had co/0elled 0etitioners to litigate &ith third 0ersons- $either can it 'e ruled that the for/er acted in 7gross and evident 'ad faith8 in refusing to satisf" the latter;s clai/s considering that 0rivate res0ondents &ere under an honest 'elief that the" have a legal right over the 0ro0ert" '" virtue of the deed of sale- Aoral da/ages cannot li@e&ise 'e =ustified as none of the circu/stances enu/erated under 3rticles **1, *+ and ***0 *< of the $e& ivil ode concur in this case[88] Ju(mson v. Rosete [G.R. No. @D/1#!. Au)ust #" 1#$0.] >n Danc, Tuason (J): 6 concur %acts& The 0ro0ert", i-e- the land, originall" 'elonged to the late Dionisio Uui/son, &ho, on + June 1,3*, e4ecuted a deed >4hi'it 3 transferring the sa/e in favor of his daughter To/asa Uui/son, 'ut re/aining in continuous 0ossession and en=o"/ent- 5t &as sold to the s0ouses Aagno 3gustin and Paulina Aan2ano on 3 Aa" 1,36, &ith right to re0urchase &ithin the ter/ of si4 "earsG and t&o "ears after, on 6 30ril 1,3+, again &as sold to Francisco (osete, also &ith 0acto de retro &ithin five "ears, thereafter having verified its re0urchase of 3gustin and Aan2ano, &ith /one" furnished to hi/ '" (osete, e4ecuting in the end the deed >4hi'it 1- !ince then, (osete &as the one in 0ossession and &ho en=o"s, in a 0eaceful /anner even after the death of Dionisio Uui/son, &hich occurred on 9 June 1,3,, until Januar" 1,43, &hen To/asa Uui/son filed &ith the Justice of Peace of !an Aarcelino, Va/'ales, intervening in the agree/ent &ith (osete over the said 0ro0ert", &hose failure &as the reason for the race to&ard 5'a, the ca0ital of Va/'ales, to ac.uire 0riorit" in the registration and inscri0tion of the deeds of sale >4hi'its 3 and 1 &hich Dionisio Uui/son e4ecuted in favor of To/asa Uui/son and Francisco (osete, res0ectivel", the for/er arriving one hour earlier, at ,:30 a-/- of 1+ Fe'ruar" 1,43, &hereas the latter arrived at 10:30 a-/- of the sa/e da"The ourt of First instance of Va/'ales ruled in favor of To/asa Uui/son and Aarcos !antosG the decision 'eing reversed later '" the ourt of 300eals- #ence, the a00eal '" certiorariThe !u0re/e ourt set aside the decision of the ourt of 300eals, and acce0ted the trial court;s a00raisal of the da/ages (assessed da/ages of P1<0 for the occu0ation of the land for the agricultural "ears 1,43)44, 1,44)46 and 1,46)49, and P90 a "ear thereafter until the 0ossession of the 0ro0ert" &as restituted)G &ith costs against (osete.a+es" /001 ( /11 )
1.
Art(c+e 14:/ an' 14!1 o- t*e C(v(+ Co'e 3rticles 149* of the ivil ode 0rovides that 7The thing sold shall 'e dee/ed delivered, &hen it is 0laced in the control and 0ossession of the vendee- :hen the sale is /ade '" /eans of a 0u'lic instru/ent, the e4ecution thereof shall 'e e.uivalent to the deliver" of the thing &hich is the o'=ect of the contract, if fro/ the said instru/ent the contrar" does not a00ear or /a" not 'e clearl" inferred-8 3rticle 14+3 0rovides, on the other hand, that 75f the sa/e thing should have 'een sold to different vendees, the o&nershi0 shall 'e transferred to the 0erson &ho /a" have first ta@en 0ossession thereof in good faith, if it should 'e /ova'le 0ro0ert"- !hould it 'e i//ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho first recorded it in the registr"- !hould there 'e no inscri0tion, the o&nershi0 shall 'elong to the 0erson &ho in good faith &as first in the 0ossessionG and, in the a'sence of this, to the 0erson &ho 0resents the oldest title, 0rovided there is good faith-8 /. Buencam(no vs. H(ceo3 E7ecut(on o- notar(a+ 'ocument o- sa+e su--(c(ent 'e+(very 5n the case of Duenca/ino vs- 1iceo (13 Phil-, ,+), 3rticle 149* &as cited- The 0rovision 0rovides that 7?0on a sale of real estate the e4ecution of a notarial docu/ent of sale is a sufficient deliver" of the 0ro0ert" sold-8 1. %+oren'o vs. %oC& E7ecut(on o- sa+e t*ru pu +(c (nstrument tantamount to conveyance 5n the case of Florendo vs- Fo2 (*0 Phil-, 3<<), it &as ruled that 7:hen the sale is /ade '" /eans of a 0u'lic instru/ent, the e4ecution thereof is tanta/ount to conve"ance of the su'=ect /atter, unless the contrar" clearl" follo&s or 'e deduced fro/ such instru/ent itself, and in the a'sence of this condition such e4ecution '" the vendor is 0er se a for/al or s"/'olical conve"ance of the 0ro0ert" sold, that is, the vendor in the instru/ent itself authori2es the 0urchaser to use the title of o&nershi0 as 0roof that the latter is thenceforth the o&ner of the 0ro0ert"-8 4. .anc*eC vs. Ramos a+most on a++ -ours 5n the case of !anche2 vs- (a/os (40 Phil-, 914), it a00eared that one Fernande2 sold a 0iece of land to Aarcelino Fo/e2 and $arcisa !anche2 under 0acto de retro in a 0u'lic instru/ent- The 0urchasers neither recorded their deed in the registr" of 0ro0ert" nor ever too@ /aterial 0ossession of the land- Later, Fernande2 sold the sa/e 0ro0ert" '" /eans of a 0rivate docu/ent to (a/os &ho i//ediatel" entered u0on the 0ossession of it- 5t &as held that, according to article 14+3 of the ivil ode, Fo/e2 and !anche2 &ere the first in 0ossession and, conse.uentl", that the sale in their favor &as su0erior$. Gnterpretat(on o- Art(c+e 14!13 9ater(a+ an' sym o+(c possess(on Possession is ac.uired '" the /aterial occu0anc" of the thing or right 0ossessed, or '" the fact that the latter is su'=ected to the action of our &ill, or '" the a00ro0riate acts and legal for/alities esta'lished for ac.uiring 0ossession (art- 43<, ivil ode)- D" a si/0le reasoning, it a00ears that, 'ecause the la& does not /ention to &hich of these @inds of 0ossession the article (14+3) refers, it /ust 'e understood that it refers to all of these @inds- The 0ossession /entioned in article 14+3 (for deter/ining &ho has 'etter right &hen the sa/e 0iece of land has 'een sold several ti/es '" the vendor) includes not onl" the /aterial 'ut also the s"/'olic 0ossession, &hich is ac.uired '" the e4ecution of a 0u'lic instru/ent:. Gnterpretat(on o- Art(c+e 14!1& (n consonance ,(t* t*e pr(nc(p+es o- 8ust(ce The ourt;s inter0retation of article 14+3 is /ore in consonance &ith the 0rinci0les of =ustice- The e4ecution of a 0u'lic instru/ent is e.uivalent to the deliver" of the realt" sold (art-149*, ivil ode) and its 0ossession '" the vendee (art- 43<)- ?nder these conditions the sale is considered consu//ated and co/0letel" transfers to the vendee all of the vendor;s rights of o&nershi0 including his real right over the thing- The vendee '" virtue of this sale has ac.uired ever"thing and nothing, a'solutel" nothing, is left to the vendor- Fro/ this /o/ent the vendor is a stranger to the thing sold li@e an" other &ho has never 'een its o&ner- 3s the thing is considered delivered, the vendor has no longer the o'ligation of even delivering it- 5f he
.a+es" /001 ( /1/ )
continues ta@ing /aterial 0ossession of it, is si/0l" on account of vendee;s tolerance and, in this sense, his 0ossession is vendor;s 0ossession- 3nd if the latter should have to as@ hi/ for the deliver" of this /aterial 0ossession, it &ould not 'e '" virtue of the sale, 'ecause this has 'een alread" consu//ated and has 0roduced all its effects, 'ut '" virtue of the vendee;s o&nershi0, in the sa/e &a" as said vendee could re.uire of another 0erson although sa/e &ere not the vendor- This /eans that after the sale of a realt" '" /eans of a 0u'lic instru/ent, the vendor, &ho resells it to another, does not trans/it an"thing to the second vendee and if the latter, '" virtue of this second sale, ta@es /aterial 0ossession of the thing, he does it as /ere detainer, and it &ould 'e un=ust to 0rotect this detention against the rights to the thing la&full" ac.uired '" the first vendee!. .p(r(t or (ntent o- +a, preva(+s over (ts +etter The state/ent of !r- Aanresa (00- 16+, 16<, 1ol- R, of his treatise on the !0anish ivil ode) e40resses the literal /eaning of article 14+3, for the decision of *4 $ove/'er 1<,4 reflects, according to the learned author, the intention of the la&/a@er and is in confor/it" &ith the 0rinci0les of =ustice- $o&, under 'oth the !0anish and the Phili00ine rules of inter0retation, the s0irit, the intent, of the la& 0revails over its letter8. Dee' o- conveyance means +an' ,as so+'" (n a sence o- any 2ua+(-y(n) statement The finding that a deed of conve"ance &as /ade '" Dionisio Uui/son in favor of his daughter could have no other /eaning, in the a'sence of an" .ualif"ing state/ent, than that the land &as sold '" the father to his daughter- The trial court;s e40licit finding &hich &as not reversed '" the ourt of 300eals and stands as the fact of the case- Loo@ing into the docu/ent itself, >4hi'it 3 states categoricall" that the vendor received fro/ the vendee the consideration of sale, P*60, and ac@no&ledged 'efore the notar" 0u'lic having e4ecuted the instru/ent of his o&n free &ill#. CruCa'o vs. Esca+er" o (ter '(ctum3 Brescr(pt(on The e40ression in thedecision in the case of ru2ado vs- >scaler (34 Phil-, 1+), a00arentl" to the effect that 0h"sical 0ossession '" the 0urchaser is essential to the consu//ation of a sale of real estate, is at 'est o'iter dictu/G for the court distinctl" found that the sale to ru2ado;s father &as a sha/, e4ecuted &ith the sole 0ur0ose of ena'ling the senior ru2ado to /ortgage the 0ro0ert" and 'eco/e 0rocurador- 3nd &ith reference to the failure of the second vendee, >scaler, to register his 0urchase, the court disregarded the o/ission as &ell as the entr" of the first sale in the registr" 'ecause that entr" &as /ade '" the son and heir of the first su00osed vendee, /ore than a score "ears after the alleged transaction, &hen ru2ado 7&as no longer or had an" right therein (in the land), 'ecause it alread" 'elonged to the >scaler, its la&ful o&ner-8 :hen >scaler, the second 0urchaser &as sued, he had 'eco/e the o&ner of the land '" 0rescri0tion- 5n the 0resent case, (osete;s 0ossession fell far short of having ri0ened into title '" 0rescri0tion &hen the Uui/son co//enced her action[8#] Ju(ro)a v. Barsons Har',are [G.R. No. 114#1. Au)ust /1" 1#18.] >n Danc, 3vancena (J): 6 concur %acts& %n *4 Januar" 1,11, in Aanila, a contract &as entered into '" and 'et&een the Uuiroga and J- Parsons (to &hose rights and o'ligations Parsons #ard&are later su'rogated itself) for the e4clusive sale of Uuiroga Deds in the 1isa"an 5slands- Uuiroga &as to furnish the Parson &ith the 'eds (&hich the latter /ight order, at the 0rice sti0ulated) and that Parson &as to 0a" the 0rice in the /anner sti0ulated- The 0rice agreed u0on &as the one deter/ined '" Uuiroga for the sale of these 'eds in Aanila, &ith a discount of fro/ *0 to *6 0er cent, according to their class- Pa"/ent &as to 'e /ade at the end of si4t" da"s, or 'efore, at Uuiroga;s re.uest, or in cash, if Parson so 0referred, and in these last t&o cases an additional discount &as to 'e allo&ed for 0ro/0t 0a"/ent-
.a+es" /001 ( /11 )
<The case facts are Aereft of detai"s re4ardin4 the event that "ed to the controvers, of the case, the "iti4ation in the "ower courts, up to appea"> Uuiroga alleges that Parson violated its o'ligation not to sell the 'eds at higher 0rices than those of the invoicesG to have an o0en esta'lish/ent in 5loiloG itself to conduct the agenc"G to @ee0 the 'eds on 0u'lic e4hi'ition, and to 0a" for the advertise/ent e40enses for the sa/eG and to order the 'eds '" the do2en and in no other /anner- $one of these, e4ce0t the o'ligation to order the 'eds '" the do2en and in no other /anner, are e40ressl" set forth in the contract- Uuiroga /aintains that Parsons is his agent for the sale of his 'ed in 5loilo, and such o'ligations i/0lied in a contract of co//ercial agenc"The !u0re/e ourt held that the contract '" and 'et&een the 0laintiff and the defendant &as one of 0urchase and sale, and that the o'ligations the 'reach of &hich is alleged as a cause of action are not i/0osed u0on the defendant, either '" agree/ent or '" la&- The ourt thus affir/ed the =udg/ent a00ealed fro/, &ith costs against the a00ellant1. Essent(a+ c+auses )(ven 'ue re)ar' to c+ass(-y a contract3 Contract o- purc*ase an' sa+e 5n order to classif" a contract, due regard /ust 'e given to its essential clauses- 5n the contract in .uestion, the clauses, constituting its cause and su'=ect /atter, are 0recisel" the essential features of a contract of 0urchase and sale- There &as the o'ligation on the 0art of Uuiroga to su00l" the 'eds, and, on the 0art of Parson, to 0a" their 0rice- These features e4clude the legal conce0tion of an agenc" or order to sell &here'" the /andator" or agent received the thing to sell it, and does not 0a" its 0rice, 'ut delivers to the 0rinci0al the 0rice he o'tains fro/ the sale of the thing to a third 0erson, and if he does not succeed in selling it, he returns it- D" virtue of the contract 'et&een Uuiroga and Parson, the latter, on receiving the 'eds, &as necessaril" o'liged to 0a" their 0rice &ithin the ter/ fi4ed, &ithout an" other consideration and regardless as to &hether he had or had not sold the 'eds/. Comm(ss(on on sa+e mere+y a '(scount" ot*er c+auses are not (ncompat( +e ,(t* contract opurc*ase an' sa+e The contract '" and 'et&een the defendant and the 0laintiff is one of 0urchase and sale- Desides the clause /ade in the 'asis of a co//ission on sales, none of the other clauses of the contract is found to su'stantiall" su00ort Uuiroga;s contention- $one of these conve"s the idea of an agenc"- The &ords co//ission on sales used in clause (3) of article 1 /ean nothing else than a /ere discount on the invoice 0rice- The &ord agenc", also used in articles * and 3, onl" e40resses that the defendant &as the onl" one that could sell Uuiroga;s 'eds in the 1isa"an 5slands- :ith regard to the re/aining clauses, the least that can 'e said is that the" are not inco/0ati'le &ith the contract of 0urchase and sale1. C+ass(-(cat(on o- a contract 'e-(ne' y +a," an' not one ca++e' y t*e part(es The agree/ents contained in the docu/ent that has 'een drafted, constitute a contract of 0urchase and sale, and not one of co//ercial agenc"- 5n the classification of the contract, it /ust 'e understood that a contract is &hat the la& defines it to 'e, and not &hat it is called '" the contracting 0arties4. Acts su se2uent to contract supp+etory" not cons('ere' ,*en essent(a+ a)reements are set -ort* (n t*e contract The acts of the 0arties /erel" sho& that, on the 0art of each of the/, there &as /utual tolerance in the 0erfor/ance of the contract in disregard of its ter/sG and it gives no right to have the contract considered, not as the 0arties sti0ulated it, 'ut as the" 0erfor/ed it- %nl" the acts of the contracting 0arties, su'se.uent to, and in connection &ith, the e4ecution of the contract, /ust 'e considered for the 0ur0ose inter0reting the contract, &hen such inter0retation is necessar", 'ut not &hen, as in the instant case, its essential agree/ents are clearl" set forth and 0lainl" sho& that the contract 'elongs to a certain @ind and not to another$. E--ect o- reac*" an' e--ect o- su se2uent consent to suc* reac*
.a+es" /001 ( /14 )
5n res0ect to the defendant;s o'ligation to order '" the do2en, the onl" one e40ressl" i/0osed '" the contract, the effect of its 'reach &ould onl" entitle the 0laintiff to disregard the orders &hich the defendant /ight 0lace under other conditionsG 'ut if the 0laintiff consents to fill the/, he &aives his right and cannot co/0lain for having acted thus at his o&n free &ill[#0] Ra'(o,ea+t* %(nance vs. Ba+(+eo [G.R. No. 8141/. 9ay /0" 1##1.] First Division, Fanca"co (J): 4 concur %acts& %n 13 30ril 1,+0, s0ouses >nri.ue astro and #er/inia (- astro sold to Aanuelito Palileo, a 0arcel of unregistered coconut land situated in andiis, Aansa"a&, Aainit, !urigao del $orte- The sale is evidenced '" a notari2ed Deed of 3'solute !ale- The deed &as not registered in the (egistr" of Pro0ert" for unregistered lands in the 0rovince of !urigao del $orte- !ince the e4ecution of the deed of sale, Aanuelito Palileo &ho &as then e/0lo"ed at Lianga, !urigao del !ur, e4ercised acts of o&nershi0 over the land through his /other (afaela Palileo, as ad/inistratri4 or overseer- #e has continuousl" 0aid the real estate ta4es on said land fro/ 1,+1 until the 0resent%n *, $ove/'er 1,+9, a =udg/ent &as rendered against >nri.ue T- astro, in ivil ase 0103146 '" the then F5 Aanila, Dranch R5R, to 0a" (adio&ealth Finance o/0an", the su/ of P**,360-36 &ith interest thereon at the rate of 19I 0er annu/ fro/ * $ove/'er 1,+6 until full" 0aid, and the for the su/ of P*,*36-03 as attorne";s fees, and to 0a" the costs- ?0on the finalit" of the =udg/ent, a &rit of e4ecution &as issued- Pursuant to said &rit, the 0rovincial !heriff Aarietta >- >viota, through De0ut" Provincial !heriff Leo0oldo (is/a, levied u0on and finall" sold at 0u'lic auction the su'=ect land that astro had sold to Palileo- 3 certificate of sale &as e4ecuted '" the Provincial !heriff in favor of (adio&ealth Finance o/0an", 'eing the onl" 'idder- 3fter the 0eriod of rede/0tion had e40ired, a deed of final sale &as also e4ecuted '" the sa/e Provincial !heriff- Doth the certificate of sale and the deed of final sale &ere registered &ith the (egistr" of DeedsLearning of &hat ha00ened to the land, Palileo filed an action for .uieting of title over the sa/e- 3fter a trial on the /erits, the court a .uo rendered a decision in his favor- %n a00eal ( 3)F( 1 10+<<), the decision of the trial court &as affir/ed- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt affir/ed the decision of the ourt of 300ealsG &ithout costs1. Art(c+e 1$443 No am ()u(ty ,(t* respect to +an's re)(stere' un'er t*e ;orrens .ystem 3rticle 1644 of the ivil ode 0rovides that in case of dou'le sale of an i//ova'le 0ro0ert", o&nershi0 shall 'e transferred: (1) to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"G (*) in default thereof, to the 0erson &ho in good faith &as first in 0ossessionG and (3) in default thereof, to the 0erson &ho 0resents the oldest title, 0rovided there is good faith- There is no a/'iguit" regarding the a00lication of the la& &ith res0ect to lands registered under the Torrens !"ste//. .ect(on $1 o- BD 1$/#3 Re)(strat(on an operat(ve act to convey or a--ect re)(stere' +an's (nso-ar as t*(r' persons are concerne' !ection 61 of Presidential Decree $o- 16*, (a/ending !ection 60 of 3ct $o- 4,9 clearl" 0rovides that the act of registration is the o0erative act to conve" or affect registered lands insofar as third 0ersons are concerned- Thus, a 0erson dealing &ith registered land is not re.uired to go 'ehind the register to deter/ine the condition of the 0ro0ert"- #e is onl" charged &ith notice of the 'urdens on the 0ro0ert" &hich are noted on the face of the register or certificate of title1. Burc*aser (n )oo' -a(t* o- re)(stere' +an' un'er t*e ;orrens system ac2u(res )oo' t(t+e
.a+es" /001 ( /1$ )
3 0urchaser in good faith of registered land (covered '" a Torrens Title) ac.uires a good title as against all the transferees thereof &hose right is not recorded in the registr" of deeds at the ti/e of the sale4. %(n'(n) o- -act y Court o- Appea+s conc+us(ve upon t*e .upreme Court3 Notar(Ce' 'ee' o- sa+e presume' aut*ent(c The findings of fact of the ourt of 300eals are conclusive on this ourt and &ill not 'e distur'ed unless there is grave a'use of discretion- The finding of the ourt of 300eals that the 0ro0ert" in .uestion &as alread" sold to Palileo '" its 0revious o&ner 'efore the e4ecution sale is evidenced '" a deed of sale- !aid deed of sale is notari2ed and is 0resu/ed authentic- There is no su'stantive 0roof to su00ort 0etitioner;s allegation that the docu/ent is fictitious or si/ulated- There is no reason to re=ect the conclusion of the ourt of 300eals that Palileo &as not a /ere ad/inistrator of the 0ro0ert"- 5t is undis0uted that he e4ercised acts of o&nershi0 through his /other$. @evy on +an' prev(ous+y so+' to Ba+(+eo contrary to '(rect(ve (n ,r(t o- e7ecut(on The e4ecution is contrar" to the directive contained in the &rit of e4ecution &hich co//anded that the lands and 'uildings 'elonging to >nri.ue astro 'e sold to satisf" the e4ecution- :hat the Provincial !heriff levied u0on and sold to (adio&ealth Finance is a 0arcel of land that does not 'elong to >nri.ue astro, the =udg/ent de'tor:. Bona -('e purc*aser o- re)(stere' +an' at auct(on sa+e ac2u(res )oo' t(t+e There is no dou't that had the 0ro0ert" in .uestion 'een a registered land, this case &ould have 'een decided in favor of (adio&ealth Finance since it &as (adio&ealth that had its clai/ first recorded in the (egistr" of Deeds- Therefore, a 'ona fide 0urchaser of a registered land at an e4ecution sale ac.uires a good title as against a 0rior transferee, if such transfer &as unrecorded!. Re)(strat(on a--ect(n) unre)(stere' +an's ,(t*out pre8u'(ce to t*(r' party ,(t* a etter r()*t ?nder 3ct 3344, registration of instru/ents affecting unregistered lands is 7&ithout 0re=udice to a third 0art" &ith a 'etter right8- The /ere registration of a sale in one;s favor does not give hi/ an" right over the land if the vendor &as not an"/ore the o&ner of the land having 0reviousl" sold the sa/e to so/e'od" else even if the earlier sale &as unrecorded8. Carum a vs. CA a case (n po(nt The case of aru/'a vsourt of 300eals 9 is a case in 0oint- 5t &as held therein that 3rticle 1644 of the ivil ode has no a00lication to land not registered under 3ct 4,9- !i/ilar to the 0resent case, aru/'a dealt &ith a dou'le sale of the sa/e unregistered land- The first sale &as /ade '" the original o&ners and &as unrecorded &hile the second &as an e4ecution sale that resulted fro/ a co/0laint for a su/ of /one" filed against the said original o&ners- 300l"ing !ection 36, (ule 3, of the (evised (ules of ourt, it &as held that 3rticle 1644 of the ivil ode cannot 'e invo@ed to 'enefit the 0urchaser at the e4ecution sale though the latter &as a 'u"er in good faith and even if this second sale &as registered- 5t &as e40lained that this is 'ecause the 0urchaser of unregistered land at a sheriff s e4ecution sale onl" ste0s into the shoes of the =udg/ent de'tor, and /erel" ac.uires the latter;s interest in the 0ro0ert" sold as of the ti/e the 0ro0ert" &as levied u0on- 300l"ing the 0rinci0le to the 0resent case, the ourt of 300eals correctl" held that the e4ecution sale of the unregistered land in favor of 0etitioner is of no effect 'ecause the land no longer 'elonged to the =udg/ent de'tor as of the ti/e of the said e4ecution sale[#1] Repu +(c v. B*(+(pp(ne Deve+opment Corp. [G.R. No. @D10141. Fanuary 11" 1#$8.] >n Danc, Padilla (J): 10 concur %acts& %n 9 Aa" 1,66, the (e0u'lic of the Phili00ines in re0resentation of the Dureau of Prisons instituted
.a+es" /001 ( /1: )
against Aacario 30ostol and the >/0ire 5nsurance o- a co/0laint &ith the F5 Aanila ( ivil ase *9199)The co/0laint alleges that 30ostol su'/itted the highest 'id in the a/ount of P460-00 0er ton for the 0urchase of 100 tons of Pala&an 3l/aciga fro/ the Dureau of PrisonsG that a contract therefor &as dra&n and '" virtue of &hich, 30ostol o'tained goods fro/ the Dureau of Prisons valued P16,<+<-6,G that of said account, 30ostol 0aid onl" P9,1-10 leaving a 'alance o'ligation of P16, 1<+-4,- The co/0laint further avers that 30ostol su'/itted the 'est 'id &ith the Dureau of Prisons for the 0urchase of 3 /illion 'oard feet of logs at P<<-00 0er 1,000 'oard feetG that a contract &as e4ecuted 'et&een the Director of Prisons and 30ostol 0ursuant to &hich contract 30ostol o'tained deliveries of logs valued at P96,<30-00G and that 30ostol failed to 0a" a 'alance account of P1<,<*+-6+- 3ll told, the total de/and set forth in co/0laint against 30ostol is for P34,016-09 &ith legal interests thereon fro/ < Januar" 1,6*- The >/0ire 5nsurance o/0an" &as included in the co/0laint having e4ecuted a 0erfor/ance 'ond of P10,000-00 in favor of 30ostol5n his ans&er, 30ostol inter0osed 0a"/ent as a defense and sought the dis/issal of the co/0laint- %n 1, Jul" 1,66, the Phili00ine (esources Develo0/ent or0- /oved to intervene, a00ending to its /otion, the co/0laint in intervention of even date- The co/0laint recites that for so/eti/e 0rior to 30ostol;s transactions the cor0orate had so/e goods de0osited in a &arehouse at 1*01 #erran, AanilaG that 30ostol, then the 0resident of the cor0oration 'ut &ithout the @no&ledge or consent of the stoc@holders thereof, dis0osed of said goods '" delivering the sa/e to the Dureau of Prisons in an atte/0t to settle his 0ersonal de'ts &ith the latter entit"G that u0on discover" of 30ostol;s act, the cor0oration too@ ste0s to recover said goods '" de/anding fro/ the Dureau of Prisons the return thereofG and that u0on the refusal of the Dureau to return said goods, the cor0oration sought leave to intervene in ivil ase *9199- The Judge (Aagno Fat/aitan) denied the /otion for intervention and there'" issued an order to this effect on *3 Jul" 1,66- 3 /otion for the reconsideration of said order &as filed '" the cor0oration and the sa/e &as li@e&ise denied on 1< 3ugust 1,66%n 3 !e0te/'er 1,66, the cor0oration filed a 0etition for a &rit of certiorari &ith the ourt of 300eals '"- %n 1* Dece/'er 1,66 the ourt of 300eals set aside the order den"ing the /otion to intervene and ordered the trial court to ad/it the cor0oration;s co/0laint)in)intervention, &ith costs against Aacario 30ostol- %n , Januar" 1,69 the Fovern/ent filed a 0etition under (ule 49 to revie& the =udg/ent rendered '" the a00ellate court ( 3)F( 16+9+)() &ith the !u0re/e ourt- The Fovern/ent contends that the intervenor has no legal interest in the /atter in litigation, 'ecause the action 'rought in the F5 Aanila against Aacario 30ostol and the >/0ire 5nsurance o/0an" ( ivil ase *9199) is =ust for the collection fro/ the defendant 30ostol of a su/ of /one", the un0aid 'alance of the 0urchase 0rice of logs and al/aciga 'ought '" hi/ fro/ the Dureau of Prisons, &hereas the intervenor see@s to recover o&nershi0 and 0ossession of F-5- sheets, 'lac@ sheets, A-!- 0lates, round 'ars and F-5- 0i0es that it clai/s it o&ns J an intervention &hich &ould change a 0ersonal action into one ad re/ and &ould undul" dela" the dis0osition of the caseThe !u0re/e ourt affir/ed the =udg/ent under revie&, &ithout 0ronounce/ent as to costs1. Gntervenor *as +e)a+ capac(ty as (t stan's to e a'verse+y a--ecte' y t*e 8u')ment o- t*e court 5t is true that the ver" su'=ect /atter of the original case is a su/ of /one", 'ut it is li@e&ise true as 'orne out '" the records, that the /aterials 0ur0ortedl" 'elonging to the cor0oration have 'een assessed and evaluated and their 0rice e.uivalent in ter/s of /one" have 'een deter/inedG and that said /aterials for &hatever 0rice the" have 'een assessed, have 'een assigned '" 30ostol as to@ens of 0a"/ent of his 0rivate de'ts &ith the Dureau of Prisons- 5n vie& of these considerations, it 'eco/es enor/ousl" 0lain in the event the =udge decides to credit Aacario 30ostol &ith the value of the goods delivered '" the latter to the Dureau of Prisons, the cor0oration stands to 'e adversel" affected '" such =udg/ent- The conclusion is inesca0a'le that the cor0oration 0ossesses a legal interest in the /atter in litigation and that such interest is of an actual, /aterial, direct and i//ediate nature as to entitle the cor0oration to intervene/. @o,er court *as '(scret(on to a++o, or '(sapprove a mot(on -or (ntervent(on3 Br(nc(p+e
.a+es" /001 ( /1! )
!ection 3 of (ule 13 of the (ules of ourt endo&s the lo&er court &ith discretion to allo& or disa00rove a /otion for intervention (Santarromana et a". vs. )arrios, '& !hi". -$'( G and that in the e4ercise of such discretion, the court shall consider &hether or not the intervention &ill undul" dela" or 0re=udice the ad=udication of the rights of the original 0arties and &hether or not the intervenor;s rights /a" 'e full" 0rotected in a se0arate 0roceeding- 5n the 0resent case, the cor0oration is 0ositivel" authori2ed to file a se0arate action against an" of all the res0ondentsG 'ut considering that the resolution of the issues raised in and =oined '" the 0leadings in the /ain case, &ould vitall" affect the rights not onl" of the original 0arties 'ut also of the cor0orationG that far fro/ undul" dela"ing or 0re=udicing the ad=udication of the rights of the original 0arties or 'ringing a'out confusion in the original case, the ad/ission of the co/0laint in intervention &ould hel0 clarif" the vital issue of the true and real o&nershi0 of the /aterials involved, 'esides 0reventing an a'horrent /ulti0licit" of suits- The /otion to intervene should 'e given due course1. Art(c+e 14$8 a'm(ts purc*aser may pay a pr(ce certa(n (n money or (ts e2u(va+ent The Fovern/ent argues that 7Price is al&a"s 0aid in ter/s of /one" and the su00osed 0a"/ent 'eing in @ind, it is no 0a"/ent at all,8 citing article 146< of the ne& ivil ode- #o&ever, the sa/e article 0rovides that the 0urchaser /a" 0a" 7a 0rice certain in /one" or its e.uivalent,8 &hich /eans that 0a"/ent of the 0rice need not 'e in /one"- :hether the F-5- sheets, 'lac@ sheets, A-!- 0lates, round 'ars and F-50i0es clai/ed '" the cor0oration to 'elong to it and delivered to the Dureau of Prisons '" 30ostol in 0a"/ent of his account is sufficient 0a"/ent therefor, is for the ourt to 0ass u0on and decide after hearing all the 0arties in the case- !hould the trial court hold that it is as to credit 30ostol &ith the value or 0rice of the /aterials delivered '" hi/, certainl" the cor0oration &ould 'e affected adversel" if its clai/ of o&nershi0 of such sheets, 0lates, 'ars and 0i0es is true4. Aut*or(ty o- corporate counse+ presume' D" virtue of !ection *0 of (ule 1*+, the authorit" of cor0oration;s counsel is 0resu/ed- :ithal, the clai/ of the counsel for the 0etitioner that a resolution to 0roceed against 30ostol, had 'een unani/ousl" ado0ted '" the stoc@holders of the cor0oration, has not 'een refuted- 5t cannot 'e said that the counsel is acting /erel" in an individual ca0acit" &ithout the 'enefit of a cor0orate act authori2ing hi/ to 'ring suit- 3s counsel;s authorit" to a00ear for the cor0oration &as never .uestioned in the F5, it is to 'e 0resu/ed that he &as 0ro0erl" authori2ed to file the co/0laint)in intervention and a00ear for his client- 5t &as onl" in the ourt of 300eals &here his authorit" to a00ear &as .uestioned- 3s the ourt of 300eals &as satisfied that counsel &as dul" authori2ed '" his client to file the co/0laint)in)intervention and to a00ear in its 'ehalf, the resolution of the ourt of 300eals should not 'e distur'ed$. Corporat(on *as separate persona+(ty -rom pres('ent or stock*o+'er3 Bo,er to sue +o')e' (n t*e oar' o- '(rectors an' not t*e pres('ent Phili00ine (esource or0oration is a dul" organi2ed cor0oration &ith offices at the !a/anillo Duilding and that as such, it is endo&ed &ith a 0ersonalit" distinct and se0arate fro/ that of its 0resident or stoc@holders- 5t has the right to 'ring suit to safeguard its interests and ordinaril", such right is e4ercised at the instance of the 0resident- #o&ever, under the circu/stance, such right 0ro0erl" devolves u0on the other officers of the cor0oration as said right is sought to 'e e4ercised against the 0resident hi/self &ho is the ver" o'=ect of the intended suit- The 0o&er of a cor0oration to sue and 'e sued in an" court is lodged in the 'oard of directors &hich e4ercises its cor0orate 0o&ers, and not in the 0resident:. Counse+ (s t*e secretaryDtreasurer o- t*e corporat(on Franting that counsel has not 'een actuall" authori2ed '" the 'oard of directors to a00ear for and in 'ehalf of the cor0oration, the fact that counsel is the secretar")treasurer of the cor0oration and a /e/'er of the 'oard of directorsG and that the other /e/'ers of the 'oard, na/el", Aacario 30ostol, the 0resident, and his &ife Pacita (- 30ostol, &ho should nor/all" initiate the action to 0rotect the cor0orate 0ro0erties and interests are the ones to 'e adversel" affected there'", a single stoc@holder under such circu/tances /a" sue in 'ehalf of the cor0oration- ounsel as a stoc@holder and director of the cor0oration /a" sue in its 'ehalf and
.a+es" /001 ( /18 )
file the co/0laint)in)intervention in the 0ro0er court[#/] R('a' vs. %(+(p(nas Gnvestment [G.R. No. @D1#80:. Fanuary /!" 1#81.] !econd Division, de astro (J): 9 concur %acts& %n 14 30ril 1,94, Luis and Lourdes (idad 0urchased fro/ the !u0re/e !ales and Develo0/ent or0oration * 'rand ne& Ford onsul !edans co/0lete &ith accessories, for P*9,<<+ 0a"a'le in *4 /onthl" install/ents- To secure 0a"/ent thereof, the (idads e4ecuted on the sa/e date a 0ro/issor" note covering the 0urchase 0rice and a deed of chattel /ortgage not onl" on the * vehicles 0urchased 'ut also on another car ( hevrolet) and their franchise or certificate of 0u'lic convenience granted '" the defunct Pu'lic !ervice o//ission for the o0eration of a ta4i fleet- Then, &ith the confor/it" of the (idads, the vendor assigned its rights, title and interest to the 0ro/issor" note and chattel /ortgage to Fili0inas 5nvest/ent and Finance or0oration- Due to the failure of the (idads to 0a" their /onthl" install/ents as 0er 0ro/issor" note, the cor0oration foreclosed the chattel /ortgage e4tra=udiciall", and at the 0u'lic auction sale of the * Ford onsul cars, of &hich the (idads &ere not notified, the cor0oration &as the highest 'idder and 0urchaser- 3nother auction sale &as held on 19 $ove/'er 1,96, involving the re/aining 0ro0erties su'=ect of the deed of chattel /ortgage since the (idads; o'ligation &as not full" satisfied '" the sale of the aforesaid vehicles, and at the 0u'lic auction sale, the franchise of the (idads to o0erate 6 units of ta4ica' service &as sold for P<,000 to the highest 'idder, the cor0oration, &hich su'se.uentl" sold and conve"ed the sa/e to Jose D- !e'astian, &ho then filed &ith the Pu'lic !ervice o//ission an a00lication for a00roval of said sale in his favor%n *1 Fe'ruar" 1,99, 0laintiffs filed an action for annul/ent of contract 'efore the F5 (i2al (Dranch 5, ivil ase ,140) &ith Fili0inas 5nvest/ent and Finance or0oration, Jose D- !e'astian and !heriff Jose !an 3gustin, as 0art")defendants- D" agree/ent of the 0arties, the case &as su'/itted for decision in the lo&er court on the 'asis of the docu/entar" evidence adduced '" the 0arties during the 0re)trial conferenceThereafter, the lo&er court rendered =udg/ent declaring the chattel /ortgage null and void insofar as the ta4ica' franchise and the used hevrolet car of the 0laintiffs are concerned, that the 0u'lic auction conducted concerning said franchise to 'e of no legal effect, that the certificate of sale issued '" the sheriff concerning the franchise is cancelled and set aside, and that the assign/ent /ade '" Fili0inas 5nvest/ent in favor of !e'astian &as declared void and of no legal effect300eal &as filed &ith the ourt of 300eals 'ut &as su'se.uentl" certified to the !u0re/e ourt 0ursuant to !ection 3 of (ule 60 of the (ules of ourt, there 'eing no issue of fact involved in the a00ealThe !u0re/e ourt affir/ed the =udg/ent a00ealed fro/, &ith costs against Fili0inas 5nvest/ent, et- al1. Art(c+e 1484 o- t*e C(v(+ Co'e 3rticle 14<4 of the ivil ode 0rovides that 75n a contract of sale of 0ersonal 0ro0ert" the 0rice of &hich is 0a"a'le in install/ents, the vendor /a" e4ercise an" of the follo&ing re/edies: (1) >4act fulfill/ent of the o'ligation, should the vendee fail to 0a"G (*) ancel the sale, should the vendee;s failure to 0a" cover t&o or /ore install/entsG (3) Foreclose the chattel /ortgage on the thing sold, if one has 'een constituted, should the vendee;s failure to 0a" cover t&o or /ore install/ents- 5n this case, he shall have no further action against the 0urchaser to recover an" un0aid 'alance of the 0rice- 3n" agree/ent to the contrar" shall 'e void-8 /. Reme'(es o- ven'or a+ternat(ve" not cumu+at(ve3 G- ven'or e+ects t()*t to -orec+ose mort)a)e" +a, pro*( (ts *(m -rom r(n)(n) -urt*er act(on to recover a+ance o- 'e t ?nder 3rticle 14<4 of the ivil ode, the vendor of 0ersonal 0ro0ert" the 0urchase 0rice of &hich is 0a"a'le in install/ents, has the right, should the vendee default in the 0a"/ent of t&o or /ore of the agreed
.a+es" /001 ( /1# )
install/ents, to e4act fulfill/ent '" the 0urchaser of the o'ligation, or to cancel the sale, or to foreclose the /ortgage on the 0urchased 0ersonal 0ro0ert", if one &as constituted- :hichever right the vendor elects, he cannot avail of the other, these re/edies 'eing alternative, not cu/ulative- Further/ore, if the vendor avails hi/self of the right to foreclose his /ortgage, the la& 0rohi'its hi/ fro/ further 'ringing an action against the vendee for the 0ur0ose of recovering &hatever 'alance of the de't secured not satisfied '" the foreclosure sale- The 0recise 0ur0ose of the la& is to 0revent /ortgagees fro/ sei2ing the /ortgaged 0ro0ert", 'u"ing it at foreclosure sale for a lo& 0rice and then 'ringing suit against the /ortgagor for a deficienc" =udg/ent, other&ise, the /ortgagor)'u"er &ould find hi/self &ithout the 0ro0ert" and still o&ing 0racticall" the full a/ount of his original inde'tedness1. %G%C arre' -rom -urt*er act(on as to payment o- unpa(' a+ance F5F elected to foreclose its /ortgage u0on default '" the 0laintiffs in the 0a"/ent of the agreed install/ents- #aving chosen to foreclose the chattel /ortgage, and 'ought the 0urchased vehicles at the 0u'lic auction as the highest 'idder, it su'/itted itself to the conse.uences of the la& as s0ecificall" /entioned, '" &hich it is dee/ed to have renounced an" and all rights &hich it /ight other&ise have under the 0ro/issor" note and the chattel /ortgage as &ell as the 0a"/ent of the un0aid 'alance4. Hen'or=s r()*t to -orec+ose c*atte+ mort)a)e on+y o- t*e t*(n) so+'3 not ot*er mort)a)es3 @evy Hermanos case app+(es The chattel /ortgage in .uestion is a nullit" insofar as the ta4ica' franchise and the used hevrolet car of the (idads are concerned, under the authorit" of the ruling in the case of Lev" #er/anos, 5nc- vsPacific o//ercial o-, et al-, +1 Phil- 6<+, the facts of &hich are si/ilar to those in the 0resent case- There, the sa/e situation occurred &herein the vendees offered as securit" for the 0a"/ent of the 0urchase 0rice not onl" the /otor vehicles &hich &ere 'ought on install/ent, 'ut also a residential lot and a house of strong /aterials- This ourt sustained the 0ronounce/ent /ade '" the lo&er court on the nullit" of the /ortgage in so far as it included the house and lot of the vendees, holding that under the la&, should the vendor choose to foreclose the /ortgage, he has to content hi/self &ith the 0roceeds of the sale at the 0u'lic auction of the chattels &hich &ere sold on install/ent and /ortgaged to hi/, and having chosen the re/ed" of foreclosure, he cannot nor should he 'e allo&ed to insist on the sale of the house and lot of the vendees, for to do so &ould 'e e.uivalent to o'taining a &rit of e4ecution against the/ concerning other 0ro0erties &hich are se0arate and distinct fro/ those &hich &ere sold on install/ent- This &ould indeed 'e contrar" to 0u'lic 0olic" and the ver" s0irit and 0ur0ose of the la&, li/iting the vendor;s right to foreclose the chattel /ortgage onl" on the thing sold$. CruC vs. %G%C3 A''(t(ona+ mort)a)e' cance++e' as (t (n'(rect+y su verts protect(on )(ven y Art(c+e 1484 5n the case of ru2 v- Fili0inas 5nvest/ent Q Finance or0oration, *3 ! (3 +,1, the ourt ruled that the vendor of 0ersonal 0ro0ert" sold on the install/ent 'asis is 0recluded, after foreclosing the chattel /ortgage on the thing sold, fro/ having a recourse against the additional securit" 0ut u0 '" a third 0art" to guarantee the 0urchaser;s 0erfor/ance of his o'ligation on the theor" that to sustain the sa/e &ould overloo@ the fact that if the guarantor should 'e co/0elled to 0a" the 'alance of the 0urchase 0rice, said guarantor &ill in turn 'e entitled to recover &hat he has 0aid fro/ the de'tor)vendee, and ulti/atel" it &ill 'e the latter &ho &ill 'e /ade to 'ear the 0a"/ent of the 'alance of the 0rice, des0ite the earlier foreclosure of the chattel /ortgage given '" hi/, there'" indirectl" su'verting the 0rotection given the latter- onse.uentl", the additional /ortgage &as ordered cancelled:. Ru+(n) (n CruC vs. %G%C re(terate' (n Bascua+ vs. In(te' 9otors3 Hen'or prec+u'e' -rom -urt*er e7tra8u'(c(a+ -orec+ose o- a''(t(ona+ secur(ty The ruling in ru2 vs- F5F &as reiterated in the case of Pascual v- ?niversal Aotors or0oration, 91 ! (3 1*1- 5f the vendor under such circu/stance is 0rohi'ited fro/ having a recourse against the additional securit" for reasons therein stated, there is no ground &h" such vendor should not li@e&ise 'e 0recluded fro/
.a+es" /001 ( //0 )
further e4tra=udiciall" foreclosing the additional securit" 0ut u0 '" the vendees the/selves, it 'eing tanta/ount to a further action that &ould violate 3rticle 14<4 of the ivil ode, for there is actuall" no difference 'et&een an additional securit" 0ut u0 '" the vendee hi/self and such securit" 0ut u0 '" a third 0art" insofar as ho& the 'urden &ould ulti/atel" fall on the vendee hi/self is concerned!. .out*ern 9otors vs. 9oscoso 'oes not app+y as reme'y ava(+e' o- (- t*at case (s t*e -u+-(++ment o- t*e o +()at(on an' not t*e -orec+osure o- t*e c*atte+ mort)a)e The ruling in !outhern Aotors, 5nc- v- Aoscoso, * ! (3 19< X that in sales on install/ents, &here the action instituted is for s0ecific 0erfor/ance and the /ortgaged 0ro0ert" is su'se.uentl" attached and sold, the sale thereof does not a/ount to a foreclosure of the /ortgage, hence, the seller)creditor is entitled to a deficienc" =udg/ent X does not fortif" the stand of the a00ellants for that case is entirel" different fro/ the 0resent case- 5n that case, the vendor has availed of the first re/ed" 0rovided '" 3rticle 14<4 of the ivil ode, i-e-, to e4act fulfill/ent of the o'ligationG &hereas in the 0resent case, the re/ed" availed of &as foreclosure of the chattel /ortgage8. Gssue on t*e va+('(ty o- auct(on sa+e super-+uous The dis0osition of the ourt renders su0erfluous a deter/ination of the other issue raised '" the 0arties as to the validit" of the auction sale, insofar as the (idads; franchise is concerned, &hich sale had 'een ad/ittedl" held &ithout an" notice to the/[#1] R(++o vs. CA [G.R. No. 1/$14!. Fune 1#" 1##!.] !econd Division, Puno (J): 4 concur %acts& %n 1< June 1,<6, >/iliano (illo signed a 7 ontract To !ell of ondo/iniu/ ?nit8 &ith or' (ealt" 5nvest/ent or0oration- ?nder the contract, or' (ealt" agreed to sell to (illo a 91-6 s.- /- condo/iniu/ unit located in Aandalu"ong, Aetro Aanila- The contract 0rice &as P160,000-00, P of &hich &as 0aid u0on its e4ecution, &hile the 'alance of P+6,000-00 &as to 'e 0aid in 1* e.ual /onthl" install/ents of P+,0,*-00 'eginning 1< Jul" 1,<6- 5t &as also sti0ulated that all outstanding 'alance &ould 'ear an interest of *4I 0er annu/G the install/ent in arrears &ould 'e su'=ect to li.uidated 0enalt" of 1-6I for ever" /onth of default fro/ due date- 5t &as further agreed that should the 'u"er default in the 0a"/ent of 3 or 4 /onthl" install/ents, forfeiture 0roceedings &ould 'e governed '" e4isting la&s, 0articularl" the ondo/iniu/ 3ct%n 1< Jul" 1,<6, (illo failed to 0a" the initial /onthl" a/orti2ation- %n 1< 3ugust 1,<6, he again defaulted in his 0a"/ent- %n *0 !e0te/'er 1,<6, he 0aid the first /onthl" install/ent of P+,0,*-00- %n * %cto'er 1,<6, he 0aid the second /onthl" install/ent of P+,0,*-00- #is third 0a"/ent &as on * Fe'ruar" 1,<9 'ut he 0aid onl" P6,000-00 instead of the sti0ulated P+,0,*-00- %n *0 Jul" 1,<+ or 1+ /onths after (illo;s last 0a"/ent, or' (ealt" infor/ed hi/ '" letter that it is cancelling their contract due to his failure to settle his accounts on ti/e- or' (ealt" also e40ressed its &illingness to refund (illo;s /one"- or' (ealt", ho&ever, did not cancel the contract for on *< !e0te/'er 1,<+, it received P90,000-00 fro/ (illo- (illo defaulted again in his /onthl" install/ent 0a"/ent- onse.uentl", or' (ealt" infor/ed (illo through letter that it &as 0roceeding to rescind their contract- 5n a letter dated *, 3ugust 1,<<, it re.uested (illo to co/e to its office and &ithdra& P10*,46,-36 less the rentals of the unit fro/ 1 Jul" 1,<6 to *< Fe'ruar" 1,<,- 3gain the threatened rescission did not /ateriali2e- 3 7co/0ro/ise8 &as entered into '" the 0arties on 1* Aarch 1,<, ((estructure %utstanding Dalance Do&n to P60,000-00G Pa"/ent Z P*,000-00BAonth Z 1<I )Aonthl") To o/0ute $o- of 5nstall/entsG To Pa" Titling Plus 3n" (eal >state Ta4 DueG 5nstall/ents to start 16 30ril 1,<,)- (illo once /ore failed to honor their agree/ent- (illo &as a'le to 0a" P*,000-00 on *6 30ril 1,<, and P*,000-00 on 16 Aa" 1,<,- %n 3 30ril 1,,0, or' (ealt" sent (illo a state/ent of accounts &hich fi4ed his total arrears, including interests and 0enalties, to P166,1*,-00:hen (illo failed to 0a" the a/ount, or' (ealt" filed a co/0laint for cancellation of the contract to sell
.a+es" /001 ( //1 )
&ith the (T Pasig- 5n his ans&er to the co/0laint, (illo averred, a/ong others, that &hile he had alread" 0aid a total of P14,,000-00, or' (ealt" could not deliver to hi/ his individual title to the su'=ect 0ro0ert"G that or' (ealt" could not clai/ an" right under their 0revious agree/ent as the sa/e &as alread" novated '" their ne& agree/ent for hi/ to 0a" P60,000-00 re0resenting interest charges and other 0enalties s0read through *6 /onths 'eginning 30ril 1,<,G and that or' (ealt";s clai/ of P166,1*,-,, over and a'ove the a/ount he alread" 0aid has no legal 'asis- 3fter trial, the (T held that or' (ealt" cannot rescind the 7 ontract to !ell8 'ecause (illo did not co//it a su'stantial 'reach of its ter/s- 5t found that (illo su'stantiall" co/0lied &ith the 7 ontract to !ell8 '" 0a"ing a total of P164,1<4-00- 5t ruled that the re/ed" of or' (ealt" is to file a case for s0ecific 0erfor/ance to collect the outstanding 'alance of the 0urchase 0riceor' (ealt" a00ealed the decision to the ourt of 300eals ( 3 F( 1 3,10<), &hich reversed the decision5t ruled that rescission does not a00l" as the contract 'et&een the 0arties is not an a'solute conve"ance of real 0ro0ert" 'ut is a contract to sellG that the ondo/iniu/ 3ct ((3 4+*9, as a/ended '" (3 +<,,) does not 0rovide an"thing on forfeiture 0roceedings in cases involving install/ent sales of condo/iniu/ units, hence, it is PD ,6+ (!u'division and ondo/iniu/ Du"ers Protective Decree) &hich should 'e a00lied to the 0resent case- ?nder PD ,6+, the rights of a 'u"er in the event of failure to 0a" install/ent due, other than the failure of the o&ner or develo0er to develo0 the 0ro=ect, shall 'e governed '" (3 966* or the (ealt" 5nstall/ent Du"er Protection 3ct also @no&n as the Aaceda La& (enacted on 14 !e0te/'er 1,+*)- The ourt thus declared the contract to sell cancelled and rendered ineffective and ordered or' (ealt" to return 60I of P16<,1<4-00 (or P+,,0,*-00) to (illo &ho &as ordered to vacate the su'=ect 0re/ises- (illo a00ealed 0ursuant to (ule 46 of the (ules of ourtThe !u0re/e ourt affir/ed &ith /odification the decision a00ealed fro/, in the sense that the refund of 60I P16<,1<4-00 or P+,,0,*-00 /ade in favor of (illo is deletedG &ithout costs1. Art(c+e 11#1 an' 1$#/ 'o not app+y as contract (s not an a so+ute conveyance o- rea+ property ut a contract to se++3 Bayment (s a pos(t(ve suspens(ve con'(t(on an' not a reac*3 No resc(ss(on o- an o +()at(on ,*(c* (s st(++ not e7(stent The a00ellate court did not err &hen it did not a00l" 3rticles 11,1 and 16,* of the ivil ode on rescission to the 0resent case- The contract 'et&een the 0arties is not an a'solute conve"ance of real 0ro0ert" 'ut a contract to sell- 5n a contract to sell real 0ro0ert" on install/ents, the full 0a"/ent of the 0urchase 0rice is a 0ositive sus0ensive condition, the failure of &hich is not considered a 'reach, casual or serious, 'ut si/0l" an event &hich 0revented the o'ligation of the vendor to conve" title fro/ ac.uiring an" o'ligator" force-8 The transfer of o&nershi0 and title &ould occur after full 0a"/ent of the 0urchase 0rice- 5t &as held in Lu2on Dro@erage o-, 5nc- v- Aariti/e Duilding o-, 5nc- that there can 'e no rescission of an o'ligation that is still non)e4istent, the sus0ensive condition not having ha00ened/. RA :$$/" or 9ace'a @a," app+(es Fiven the nature of the contract of the 0arties, the a00ellate court correctl" a00lied (3 966*, also @no&n as the Aaceda La&- T3 966* recogni2es in conditional sales of all @inds of real estate (industrial, co//ercial, residential) the right of the seller to cancel the contract u0on non)0a"/ent of an install/ent '" the 'u"er, &hich is si/0l" an event that 0revents the o'ligation of the vendor to conve" title fro/ ac.uiring 'inding force- 5t also 0rovides the right of the 'u"er on install/ents in case he defaults in the 0a"/ent of succeeding install/ents, i-e- 7(1) :here he has 0aid at least * "ears of install/ents, (a) To 0a", &ithout additional interest, the un0aid install/ents due &ithin the total grace 0eriod earned '" hi/, &hich is here'" fi4ed at the rate of 1 /onth grace 0eriod for ever" "ear of install/ent 0a"/ents /ade: Provided, That this right shall 'e e4ercised '" the 'u"er onl" once in ever" 6 "ears of the life of the contract and its e4tensions, if an"G or (') 5f the contract is cancelled, the seller shall refund to the 'u"er the cash surrender value of the 0a"/ents on the 0ro0ert" e.uivalent to 60I of the total 0a"/ents /ade and, after 6 "ears of install/ents, an additional 6I ever" "ear 'ut not to e4ceed ,0I of the total 0a"/ents /ade: Provided, That the actual
.a+es" /001 ( /// )
cancellation of the contract shall ta@e 0lace after cancellation or the de/and for rescission of the contract '" a notarial act and u0on full 0a"/ent of the cash surrender value to the 'u"er- Do&n 0a"/ents, de0osits or o0tions on the contract shall 'e included in the co/0utation of the total nu/'er of install/ents /ade8G 7(*) :here he has 0aid less than t&o "ears in install/ents, (!ec- 4) the seller shall give the 'u"er a grace 0eriod of not less than 90 da"s fro/ the date the install/ent 'eca/e due- 5f the 'u"er fails to 0a" the install/ents due at the e40iration of the grace 0eriod, the seller /a" cancel the contract after 30 da"s fro/ recei0t '" the 'u"er of the notice of cancellation or the de/and for rescission of the contract '" a notarial act-8 1. R(++o not ent(t+e' to )race per(o' o- :0 'ays3 Cor Rea+ty *as r()*t to cance+ contract a-ter 10 'ays o- R(++o=s rece(pt o- cance++at(on (illo 0aid less than t&o "ears in install/ent 0a"/ents, hence, he is onl" entitled to a grace 0eriod of not less than 90 da"s fro/ the due date &ithin &hich to /a@e his install/ent 0a"/ent- or' (ealt", on the other hand, has the right to cancel the contract after 30 da"s fro/ recei0t '" (illo of the notice of cancellation- The a00ellate court did not err &hen it u0held or' (ealt";s right to cancel the su'=ect contract u0on re0eated defaults in 0a"/ent '" (illo4. Novat(on not presume'3 Gn a sence o- e7press a)reement" novat(on occurs ,*en o+' an' ne, o +()at(ons are (ncompat( +e on every po(nt3 Contract (n present case not novate' 3rticle 1*,* of the ivil ode 0rovides that 75n order that an o'ligation /a" 'e e4tinguished '" another &hich su'stitutes the sa/e, it is i/0erative that it 'e so declared in une.uivocal ter/s, or that the old and the ne& o'ligations 'e on ever" 0oint inco/0ati'le &ith each other-8 $ovation is never 0resu/ed- Parties to a contract /ust e40ressl" agree that the" are a'rogating their old contract in favor of a ne& one- 5n the a'sence of an e40ress agree/ent, novation ta@es 0lace onl" &hen the old and the ne& o'ligations are inco/0ati'le on ever" 0oint- 5n the 0resent case, the 0arties e4ecuted their 1* Aa" 1,<, 7co/0ro/ise agree/ent8 0recisel" to give life to their 7 ontract to !ell8- 5t /erel" clarified the total su/ o&ed '" (illo to or' (ealt" &ith the vie& that the for/er &ould find it easier to co/0l" &ith his o'ligations under the ontract to !ell- 5n fine, the 7co/0ro/ise agree/ent8 can stand together &ith the ontract to !ell$. R(++o not ent(t+e' to re-un' o- $0K o- payments ?nder (3 966*, the right of the 'u"er to a refund accrues onl" &hen he has 0aid at least * "ears of install/ents- 5n the 0resent case, (illo has 0aid less than * "ears in install/ents, hence, he is not entitled to a refund[#4] Romero v. CA [G.R. No. 101$!!. >cto er !" 1##:.] Third division, 1itug (J): 4 concur %acts& 1irgilio (- (o/ero, a civil engineer, &as engaged in the 'usiness of 0roduction, /anufacture and e40ortation of 0erlite filter aids, 0er/alite insulation and 0rocess 0erlite ore- 5n 1,<<, (o/ero and his foreign 0artners decided to 0ut u0 a central &arehouse in Aetro Aanila on a land area of a00ro4i/atel" *,000 s.- /The 0ro=ect &as /ade @no&n to several freelance real estate 'ro@ers- 3 da" or so after the announce/ent, 3lfonso Flores and his &ife, acco/0anied '" a 'ro@er, offered a 0arcel of land /easuring 1,,6* s.- /Located in Daranga" !an Dionisio, ParaMa.ue, Aetro Aanila, the lot &as covered '" T T 39140* in the na/e of >nri.ueta hua 1da- de %ngsiong- (o/ero visited the 0ro0ert" and, e4ce0t for the 0resence of s.uatters in the area, he found the 0lace suita'le for a central &arehouse- Later, the Flores s0ouses called on (o/ero &ith a 0ro0osal that should he advance the a/ount of P60,000-00 &hich could 'e used in ta@ing u0 an e=ect/ent case against the s.uatters, %ngsiong &ould agree to sell the 0ro0ert" for onl" P<00-00 0er s.- /(o/ero e40ressed his concurrence- %n 0, June 1,<<, a contract, deno/inated 7Deed of onditional !ale,8 &as e4ecuted 'et&een (o/ero and %ngsiong- Flores, in 'ehalf of %ngsiong, forth&ith received and ac@no&ledge a chec@ for P60,000-00 fro/ (o/ero.a+es" /001 ( //1 )
Pursuant to this agree/ent, %ngsiong filed a co/0laint for e=ect/ent ( ivil ase +6+,) against Aelchor Ausa and *, other s.uatter fa/ilies &ith the AT ParaMa.ue- 3 fe& /onths later, or on *1 Fe'ruar" 1,<,, =udg/ent &as rendered ordering the defendants to vacate the 0re/ises- The decision &as handed do&n 'e"ond the 90)da" 0eriod (e40iring 0, 3ugust 1,<<) sti0ulated in the contract- The &rit of e4ecution of the =udg/ent &as issued, still later, on 30 Aarch 1,<,5n a letter, dated 0+ 30ril 1,<,, %ngsiong sought to return the P60,000-00 she received fro/ (o/ero since, she said, she could not 7get rid of the s.uatters8 on the lot- 3tt"- !ergio 3-F- 30ostol, counsel for (o/ero, refused the tender, citing the favora'le decision and the &rit of e4ecution issued 0ursuant thereto, and e40ressed (o/ero;s &illingness to under&rite the e40enses for the e4ecution of the =udg/ent and e=ect/ent of the occu0ants chargea'le to the 0urchase 0rice of the landAean&hile, the Presidential o//ission for the ?r'an Poor (7P ?D8), through its (egional Director for Lu2on (1iloria), as@ed the AT ParaMa.ue for a grace 0eriod of 46 da"s fro/ *1 30ril 1,<, &ithin &hich to relocate and transfer the s.uatter fa/ilies- 3cting favora'l" on the re.uest, the court sus0ended the enforce/ent of the &rit of e4ecution accordingl"%n 0< June 1,<,, 3tt"- 30ostol re/inded %ngsiong on the e40ir" of the 46)da" grace 0eriod and reiterated his client;s &illingness to under&rite the e40enses for the e4ecution of the =udg/ent and e=ect/ent of the occu0ants- %n 1, June 1,<,, 3tt"- Joa.uin Euseco, Jr-, counsel for %ngsion, advised 3tt"- 30ostol that the Deed of onditional !ale had 'een rendered null and void '" virtue of his client;s failure to evict the s.uatters fro/ the 0re/ises &ithin the agreed 90)da" 0eriod- #e added that 0rivate res0ondent had 7decided to retain the 0ro0ert"-8 Aean&hile, on *6 3ugust 1,<,, the AT issued an alias &rit of e4ecution in ivil ase +6+, on /otion of %ngsiong 'ut the s.uatters a00arentl" still sta"ed on%n *+ June 1,<,, %ngsiong 0ro/0ted '" (o/ero;s continued refusal to acce0t the return of the P60,000-00 advance 0a"/ent, filed &ith the (T Aa@ati (Dranch 133, ivil ase <,)43,4) for a rescission of the deed of 7conditional8 sale, 0lus da/ages, and for the consignation of P60,000-00 cash- %n *9 June 1,,0, the (T rendered decision holding that %ngsiong had no right to rescind the contract since it &as she &ho 7violated her o'ligation to e=ect the s.uatters fro/ the su'=ect 0ro0ert"8 and that (o/ero, 'eing the in=ured 0art", &as the 0art" &ho could, under 3rticle 11,1 of the ivil ode, rescind the agree/ent- The lo&er court, thus dis/issed the co/0laint and ordered %ngsiong to e=ect or cause the e=ect/ent of the s.uatters fro/ the 0ro0ert" and to e4ecute the a'solute deed of conve"ance u0on 0a"/ent of the full 0urchase 0rice '" (o/ero%ngsiong a00ealed to the ourt of 300eals- %n *, Aa" 1,,*, the a00ellate court rendered its decision, reversed and set aside the decision a00ealed fro/ and entered another declaring he contract of conditional sale of , June 1,<< cancelled and ordering (o/ero to acce0t the return of the do&n0a"/ent in the a/ount of P60,000 de0osited &ith the trial courtG &ithout 0ronounce/ent as to cost- Failing to o'tain a reconsideration, (o/ero filed his 0etition for revie& on certiorari 'efore the !u0re/e ourtThe !u0re/e ourt reversed and set aside the .uestioned decision of the ourt of 300eals, and entered another ordering (o/ero to 0a" %ngsiong the 'alance of the 0urchase 0rice and the latter to e4ecute the deed of a'solute sale in favor of 0etitionerG &ithout costs1. Ber-ecte' contract o- sa+e" a so+ute or con'(t(ona+ 3 0erfected contract of sale /a" either 'e a'solute or conditional de0ending on &hether the agree/ent is devoid of, or su'=ect to, an" condition i/0osed on the 0assing of title of the thing to 'e conve"ed or on the o'ligation of 0art" thereto- :hen o&nershi0 is retained until the fulfill/ent of a 0ositive
.a+es" /001 ( //4 )
condition the 'reach of the condition &ill si/0l" 0revent the dut" to conve" title fro/ ac.uiring an o'ligator" force- 5f the condition is i/0osed on an o'ligation of a 0art" &hich is not co/0lied &ith, the other 0art" /a" either refuse to 0roceed or &aive said condition (3rt- 1646, ivil ode)- :here, of course, the condition is i/0osed u0on the 0erfection of the contract itself, the failure of such condition &ould 0revent the =uridical relation itself fro/ co/ing into e4istence/. Rea+ c*aracter o- a contract" su stance more s()n(-(cant t*an t(t+e )(ven to (t y part(es 5n deter/ining the real character of the contract, the title given to it '" the 0arties is not as /uch as significant as its su'stance- For e4a/0le, a deed of sale, although deno/inated as a deed of conditional sale, /a" 'e treated as a'solute in nature, if title to the 0ro0ert" sold is not reserved in the vendor or if the vendor is not granted the right to unilaterall" rescind the contract 0redicated on the fulfill/ent or non)fulfill/ent, as the case /a" 'e, of the 0rescri'ed condition1. Con'(t(on (n t*e conte7t o- a per-ecte' contract o- sa+e The ter/ 7condition8 in the conte4t of a 0erfected contract of sale 0ertains, in realit", to the co/0liance '" one 0art" of an underta@ing the fulfill/ent of &hich &ould 'ec@on, in turn, the de/anda'ilit" of the reci0rocal 0restation of the other 0art"- The reci0rocal o'ligations referred to &ould nor/all" 'e, in the case of vendee, the 0a"/ent of the agreed 0urchase 0rice and, in the case of the vendor, the fulfill/ent of certain e40ress &arranties (&hich, in the 0resent case is the ti/el" eviction of the s.uatters on the 0ro0ert")4. Ber-ect(on o- a sa+e3 Bart(es oun' to -u+-(++ ,*at (s e7press+y st(pu+ate' an' a++ conse2uences (n keep(n) ,(t* )oo' -a(t*" usa)e an' +a, 3 sale is at once 0erfected &here a 0erson (the seller) o'ligates hi/self, for a 0rice certain, to deliver and to transfer o&nershi0 of a s0ecified thing or right to another (the 'u"er) over &hich the latter agreesFro/ the /o/ent the contract is 0erfected, the 0arties are 'ound not onl" to the fulfill/ent of &hat has 'een e40ressl" sti0ulated 'ut also to all the conse.uences &hich, according to their nature, /a" 'e in @ee0ing &ith good faith, usage and la&- 5n the 0resent cas, under the agree/ent, %ngsiong is o'ligated to evict the s.uatters on the 0ro0ert"- The e=ect/ent of the s.uatters is a condition the o0erative act of &hich sets into /otion the 0eriod of co/0liance '" (o/ero of his o&n o'ligation, i-e-, to 0a" the 'alance of the 0urchase 0rice$. >pt(ons ava(+a +e un'er Art(c+e 1$4$ e+on)s to (n8ure' party %ngsiong;s failure to 7re/ove the s.uatters fro/ the 0ro0ert"8 &ithin the sti0ulated 0eriod gives (o/ero the right to either refuse to 0roceed &ith the agree/ent or &aive that condition in consonance &ith 3rticle 1646 of the ivil ode- This o0tion clearl" 'elongs to 0etitioner ((o/ero) and not to 0rivate res0ondent (%ngsiong)5n contracts of sale 0articularl", 3rticle 1646 of the ivil ode allo&s the o'ligee to choose 'et&een 0roceeding &ith the agree/ent or &aiving the 0erfor/ance of the condition- >videntl", (o/ero has &aived the 0erfor/ance of the condition i/0osed on %ngsiong to free the 0ro0ert" fro/ s.uatters:. Botestat(ve con'(t(on (s m(7e'" an' not 'epen'ent on t*e so+e ,(++ o- t*e 'e tor3 G- con'(t(on (s (mpose' on t*e -u+-(++ment o- t*e o +()at(on an' not t*e (rt* t*ereo-" on+y t*e con'(t(on (s avo('e' an' 'oes not a--ect o +()at(on (tse+The underta@ing re.uired of 0rivate res0ondent does not constitute a 70otestative condition de0endent solel" on his &ill8 that /ight, other&ise, 'e void in accordance &ith 3rticle 11<* of the ivil ode 'ut a 7/i4ed8 condition 7de0endent not on the &ill of the vendor alone 'ut also of third 0ersons li@e the s.uatters and govern/ent agencies and 0ersonnel concerned-8 #o&ever, &here the so)called 70otestative condition8 is i/0osed not on the 'irth of the o'ligation 'ut on its fulfill/ent, onl" the condition is avoided, leaving unaffected o'ligation itself!. Resc(ss(on y nonD(n8ure' party not ,arrante'3 Art(c+e 11#1 The right of resolution of a 0art" to an o'ligation under 3rticle 11,1 of the ivil ode is 0redicated
.a+es" /001 ( //$ )
on a 'reach of faith '" the other 0art" violates the reci0rocit" 'et&een the/- 5n the 0resent case, %ngsiong;s action for rescission &as not &arranted as she &as not the in=ured 0art"- 5t &as %ngsiong &ho has failed in her o'ligation under the contract- (o/ero did not 'reach the agree/ent- #e has agreed, in fact, to shoulder the e40enses of the e4ecution of the =udg/ent in the e=ect/ent case and to /a@e arrange/ent &ith the sheriff to effect such e4ecution- Parentheticall", this offer to 0a", hiring 'een /ade 0rior to the de/and for rescission, assu/ing for the sa@e of argu/ent that such a de/and is 0ro0er under 3rticle 16,* of the ivil ode, &ould li@e&ise suffice to defeat %ngsiong;s 0rerogative to rescind thereunder8. Bet(t(oner" opt(n) to procee' ,(t* sa+e" may not 'eman' t*e re(m ursement o- t*e a'vance payment :hen 0etitioner having o0ted to 0roceed &ith the sale, neither /a" 0etitioner de/and its rei/'urse/ent fro/ 0rivate res0ondent- Further, 0rivate res0ondent /a" not su'=ect it to forfeiture[#$] 6o5ue v. 9apu=, 0' SC6A -/ (/08%( [#:] Ru (as v. Bat(++er [G.R. No. @D1$!0/. 9ay /#" 1#!1.] First Division, Teehan@ee (J): < concur %acts& Francisco Ailitante clai/ed o&nershi0 of a 0arcel of land located in the Darrio Feneral Luna, Darotac 1ie=o, 5loilo, &hich he caused to 'e surve"ed on 1<)31 Jul" 1,34, &here'" he &as issued a 0lan Psu),,+,1 (containing an area of 1+1-3691 hectares-) Defore the &ar &ith Ja0an, Ailitante filed &ith the F5 5loilo an a00lication for the registration of title of the land technicall" descri'ed in Psu),,+,1 o00osed '" the Director of Lands, the Director of Forestr" and other o00ositors- #o&ever, during the &ar &ith Ja0an, the record of the case &as lost 'efore it &as heard, so after the &ar Ailitante 0etitioned the ourt to reconstitute the record of the case- The record &as reconstituted in the F5 5loilo (Land ase ()9,6, FL(% (ec- 64<6*)- The F5 heard the land registration case on 11 $ove/'er 1,6*, and after trial the ourt dis/issed the a00lication for registration- Ailitante a00ealed to the ourt of 300eals ( 3)F( 134,+)()- Pending the dis0osal of the a00eal or on 1< June 1,69, Ailitante sold to Do/ingo (u'ias, his son)in)la& and a la&"er '" 0rofession, the land technicall" descri'ed in Psu),,+,1- The sale &as dul" recorded in the %ffice of the (egister of Deeds for the Province of 5loilo (>ntr" 1390,) on 14 Jul" 1,90- %n ** !e0te/'er 1,6<, the 3 0ro/ulgated its =udg/ent confir/ing the decision of the trial court dis/issing the 300lication for (egistration filed '" AilitanteDo/ingo (u'ias declared the land for ta4ation 0ur0oses under Ta4 Declaration (TD) <6<6 for 1,6+G TD ,633 and TD 1001, for 1,91G TD ,<9< for 1,94, 0a"ing the land ta4es under TD <6<6 and TD ,633- Ailitante has also declared the land for ta4ation 0ur0oses under TD 61+* in 1,40, under TD T)<9 for 1,46, under TD +1** for 1,4<, and 0aid the land ta4es for 1,40, for 1,46)49, for 1,4+, for 1,4+ Q 1,4<, for 1,4<, and for 1,4< and 1,4,- TD *434 in the na/e of Li'erato De/ontaMo for the land descri'ed therein &as cancelled '" TD 61+* of Ailitante- De/ontaMo 0aid the land ta4 under TD *434 on *0 Dece/'er 1,3, for the "ears 1,3< and 1,6,- 5saias Datiller had declared for ta4ation 0ur0oses Lot * of Psu)144*41 under TD <6<3 for 1,6+ and a 0ortion of Lot * under TD <6<4 for 1,46- TD <4<3 &as revised '" TD ,4,< &hile TD ,6<4 &as cancelled '" TD ,6<4 'oth in the na/e of Datiller- Datiller 0aid the land ta4es for Lot * on , $ove/'er 1,90 for the "ear 1,46 and 1,49, 1,60 and 1,90 as sho&n '" the certificate of the treasurer-The land clai/ed '" Datiller as his o&n &as surve"ed on 9)+ June 1,69, and a 0lan a00roved '" Director of Lands on 16 $ove/'er 1,69 &as issued, identified as Psu 166*41%n ** 30ril 1,90, (u'ias filed a forci'le >ntr" and Detainer case against Datiller in the Justice of the Peace ourt of Darotac 1ie=o, 5loilo- %n Aa" 1,91 and after trial, the Aunici0al ourt of Darotac 1ie=o decided the
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case in favor of the Datiller- (u'ias a00ealed fro/ the decision of the Aunici0al ourt of Darotac 1ie=o to the F5 5loilo- %n *9 $ove/'er 1,94 and after the trial, the F5 decided the case li@e&ise in favor of Datiller, holding that he has 7'etter right to 0ossess the land in .uestion having 'een in the actual 0ossession thereof under a clai/ of title /an" "ears 'efore Ailitante sold the land to (u'ias%n 31 3ugust 1,94, (u'ias filed a suit to recover the o&nershi0 and 0ossession of certain 0ortions of lot under Psu),,+,1, 'ought fro/ his father)in)la&, Francisco Ailitante in 1,69, against its 0resent occu0ant Datiller, &ho allegedl" entered said 0ortions of the lot in 1,46 and in 1,6,- (u'ias 0ra"ed also for da/ages and attorne";s fees- %n 1+ 3ugust 1,96, the F5 dis/issed the case, the court therein 0racticall" agreeing that the contract 'et&een (u'ias and Ailitante &as null and void- (u'ias filed a /otion for reconsideration, &hich &as li@e&ise denied '" the lo&er court on 14 Januar" 1,99- Thereafter, (u'ias filed an a00eal 'efore the ourt of 300eals, &hich certified said a00eal to the !u0re/e as involving 0urel" legal .uestionsThe !u0re/e ourt affir/ed the order of dis/issal a00ealed, &ith costs against (u'ias1. BreDtr(a+ pract(ca++y amounte' to a -u++ 'ress tr(a+ ,*en part(es a)ree' an' st(pu+ate' on -acts an' su m(tte' t*e(r respect(ve 'ocumentary e7*( (ts The 0re)trial conference held '" the trial court at &hich the 0arties &ith their counsel agreed and sti0ulated on the /aterial and relevant facts and su'/itted their res0ective docu/entar" e4hi'its as referred to in the 0re)trial order, 0racticall" a/ounted to a full dress trial &hich 0laced on record all the facts and e4hi'its necessar" for ad=udication of the case- (u'ias; evidence dealing &ith the source of the alleged right and title of Ailitante;s 0redecessors are alread" /ade of record- The chain of Ailitante;s alleged title and right to the land allegedl" tracing 'ac@ to De/ontano in the land registration case and &as re=ected '" the 5loilo land registration court, the decision of &hich &as affir/ed '" final =udg/ent '" the ourt of 300eals- Datiller;s evidence dealing &ith his and his ancestors; continuous, o0en, 0u'lic and 0eaceful 0ossession in the conce0t of o&ner of the land and the Director of Lands; a00roval of his surve" 0lan thereof, are li@e&ise alread" dul" esta'lished facts of record, in the land registration case as &ell as in the e=ect/ent case &herein the 5loilo F5 recogni2ed the su0eriorit" of Datiller;s right to the land as against (u'ias- Therefore, the lo&er court did not err in dis/issing (u'ias; co/0laint u0on Datiller;s /otion after the 0re)trial/. Ru (as *a' no cause o- act(on (u'ias co/0laint, to 'e declared a'solute o&ner of the land and to 'e restored to 0ossession thereof &ith da/ages, &as 'ereft of an" factual or legal 'asis- The 3;s final =udg/ent affir/ing the dis/issal of Ailitante;s a00lication of registration /ade it conclusive that Ailitante lac@ rightful clai/ or title to the landThere &as no right or title to the land that could 'e transferred or sold '" Ailitante;s 0ur0orted sale in favor of (u'ias in 1,691. Burc*ase o- a +a,yer o- a property (n +(t()at(on pro*( (te'3 Contract vo(' an' cannot e rat(-(e' The 0urchase '" a la&"er of the 0ro0ert" in litigation fro/ his client is categoricall" 0rohi'ited '" 3rticle 14,1, 0aragra0h (6) of the Phili00ine ivil ode (7The follo&ing 0ersons cannot ac.uire an" 0urchase, even at a 0u'lic or =udicial auction, either in 0erson or through the /ediation of another 444 K6L Justices, =udges, 0rosecuting attorne"s, cler@s of su0erior and inferior courts, and other officers and e/0lo"ees connected &ith the ad/inistration of =ustice, the 0ro0ert" and rights in litigation or levied u0on an e4ecution 'efore the court &ithin &hose =urisdiction or territor" their e4ercise their res0ective functionsG this 0rohi'ition includes the act of ac.uiring '" assign/ent and shall a00l" to la&"ers, &ith res0ect to the 0ro0ert" and rights &hich /a" 'e the o'=ect of an" litigation in &hich the" /a" ta@e 0art '" virtue of their 0rofession-8) and that conse.uentl", (u'ias; 0urchase of the 0ro0ert" in litigation fro/ his client(and father) in)la&) &as void and could 0roduce no legal effect, '" virtue of 3rticle 140,, 0aragra0h (+) of our ivil ode &hich 0rovides that contracts 7e40ressl" 0rohi'ited or declared void '" la&8 are 7ine4istent and void fro/ the 'eginning8 and that 7(T)hese contracts cannot 'e ratified- $either can the right to set u0 the defense of illegalit" 'e &aived-8
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4.
5o+-son v. Estate o- 9art(neC superce'e' y case o- D(rector o- @an's v. A a)at The 1,11 case of :olfson v- >state of Aartine2 &hich held that a sale of 0ro0ert" in litigation to the 0art" litigant;s la&"er 7its not void 'ut voida'le at the election of the vendor8 has 'een su0erseded '" the 1,*, case of Director of Lands vs- 3'agat- 5n this later case of 3'agat, the ourt e40ressl" cited t&o antecedent cases involving the sa/e transaction of 0urchase of 0ro0ert" in litigation '" the la&"er &hich &as e40ressl" declared invalid under 3rticle 146, of the ivil ode of !0ain (of &hich 3rticle 14,1 of our ivil ode of the Phili00ines is the counter0art) u0on challenge thereof not '" the vendor)client 'ut '" the adverse 0arties against &ho/ the la&"er &as see@ing to enforce his rights as vendee thus ac.uired- Thus, the ourt in 3'agat affir/ed the invalidit" and nullit" of the la&"er;s 0urchase of the land in litigation fro/ his client, ordered the issuance of a &rit of 0ossession for the return of the land '" the la&"er to the adverse 0arties &ithout rei/'urse/ent of the 0rice 0aid '" hi/ and other e40enses, and ruled that the 0urchaser)la&"er is a la&"er and is 0resu/ed to @no& the la&- #e /ust, therefore, fro/ the 'eginning, have 'een &ell a&are of the defect in his title and is, conse.uentl", a 0ossessor in 'ad faith$. Bro*( (t(ons un'er Art(c+e 14#1 NCC (Art(c+e 14$# .pan(s* C(v(+ Co'e) 3rticle 14,1 of our ivil ode (li@e 3rticle 146, of the !0anish ivil ode) 0rohi'its in its si4 0aragra0hs certain 0ersons, '" reason of the relation of trust or their 0eculiar control over the 0ro0ert", fro/ ac.uiring such 0ro0ert" in their trust or control either directl" or indirectl" and 7even at a 0u'lic or =udicial auction,8 as follo&s: (1) guardiansG (*) agentsG (3) ad/inistratorsG (4) 0u'lic officers and e/0lo"eesG =udicial officers and e/0lo"ees, 0rosecuting attorne"s, and la&"ersG and (9) others es0eciall" dis.ualified '" la&:. 5o+-son case 'ec('e' (n +(ne ,(t* 9anresa=s v(e, 5n :olfson, the ourt e40ressl" reserved decision on 7&hether or not the =udg/ent in .uestion actuall" falls &ithin the 0rohi'ition of the article8 and held onl" that the sale;s 7voida'ilit" can not 'e asserted '" one not a 0ro0ert" to the transaction or his re0resentative,8 citing fro/ Aanresa that 7( )onsidering the .uestion fro/ the 0oint of vie& of the civil la&, the vie& ta@en '" the code, the ourt /ust li/it ourselves to classif"ing as void all acts done contrar" to the e40ress 0rohi'ition of the statute- $o& then: 3s the code does not recogni2e such nullit" '" the /ere o0eration of la&, the nullit" of the acts herein'efore referred to /ust 'e asserted '" the 0erson having the necessar" legal ca0acit" to do so and decreed '" a co/0etent court-8 !. 9anresa=s v(e, not app+(ca +e un'er t*e NCC3 .pan(s* .upreme Court an' mo'ern aut*ors *ave veere' a,ay -rom 9anresa on t*(s po(nt The reason given '" Aanresa in considering such 0rohi'ited ac.uisitions under 3rticle 146, of the !0anish ivil ode as /erel" voida'le at the instance and o0tion of the vendor and not void is 7that the ode does not recogni2e such nullit" de 0leno derecho-8 This is no longer true and a00lica'le to the Phili00ine ivil ode &hich does recogni2e the a'solute nullit" of contracts 7&hose cause, o'=ect, or 0ur0ose is contrar" to la&, /orals, good custo/s, 0u'lic order or 0u'lic 0olic"8 or &hich are 7e40ressl" 0rohi'ited or declared void '" la&8 and declares such contracts 7ine4istent and void fro/ the 'eginning-8 The !u0re/e ourt of !0ain and /odern authors have li@e&ise veered fro/ Aanresa;s vie& of the !0anish codal 0rovision itself- 5n its sentencia of 11 June 1,99, the !u0re/e ourt of !0ain ruled that the 0rohi'ition of 3rticle 146, of the !0anish ivil ode is 'ased on 0u'lic 0olic", that violation of the 0rohi'ition contract cannot 'e validated '" confir/ation or ratification- The criterion of nullit" of such 0rohi'ited contracts under 3rticle 146, of the !0anish ivil ode (3rticle 14,1 of our ivil ode) as a /atter of 0u'lic order and 0olic" as a00lied '" the !u0re/e ourt of !0ain to ad/inistrators and agents should certainl" a00l" &ith greater reason to =udges, =udicial officers, fiscals and la&"ers under 0aragra0h 6 of the codal article- Kalso see vie&0oints of Fullon Dallesteros in urso de Derecho ivil ( ontratos >s0eciales 1,9<), of Pere2 Fon2ales, and of astanL 8. Nu++(ty o- pro*( (te' contracts 'e-(n(te an' permanent an' cannot e cure' y rat(-(cat(on3 Go 8ect *as su se2uent+y ecome +e)a+" suc* may e su 8ect to secon' contract
.a+es" /001 ( //8 )
The nullit" of 0rohi'ited contracts is definite and 0er/anent and cannot 'e cured '" ratification- The 0u'lic interest and 0u'lic 0olic" re/ain 0ara/ount and do not 0er/it of co/0ro/ise or ratification- 5n this as0ect, the 0er/anent dis.ualification of 0u'lic and =udicial officers and la&"ers grounded on 0u'lic 0olic" differs fro/ the first three cases of guardians, agents and ad/inistrators (3rticle 14,1, ivil ode), as to &hose transactions, it has 'een o0ined that the" /a" 'e 7ratified8 '" /eans of and in 7the for/ of a ne& contract, in &hich case its validit" shall 'e deter/ined onl" '" the circu/stances at the ti/e of e4ecution of such ne& contract- The causes of nullit" &hich have ceased to e4ist cannot i/0air the validit" of the ne& contract- Thus, the o'=ect &hich &as illegal at the ti/e of the first contract, /a" have alread" 'eco/e la&ful at the ti/e of the ratification or second contractG or the service &hich &as i/0ossi'le /a" have 'eco/e 0ossi'leG or the intention &hich could not 'e ascertained /a" have 'een clarified '" the 0arties- The ratification or second contract &ould then 'e valid fro/ its e4ecutionG ho&ever, it does not retroact to the date of the first contract#. 5*o may (nvoke t*e (ne7(stence o- contract3 Broper act(on to e -(+e' Tolentino, in his treaties on the ivil ode, stated that (as to 0ersons affected) 7an" 0erson /a" invo@e the ine4istence of the contract &henever =uridical effects founded thereon are asserted against hi/Thus, if there has 'een a void transfer of 0ro0ert", the transferor can recover it '" the accion reivindicatoriaG and an" 0ossessor /a" refuse to deliver it to the transferee, &ho cannot enforce the contract- reditors /a" attach 0ro0ert" of the de'tor &hich has 'een alienated '" the latter under a void contractG a /ortgagee can allege the ine4istence of a 0rior encu/'ranceG a de'tor can assert the nullit" of an assign/ent of credit as a defense to an action '" the assignee-8 #e further stated that (as to action on contract) 7even &hen the contract is void or ine4istent, an action is necessar" to declare its ine4istence, &hen it has alread" 'een fulfilled- $o'od" can ta@e the la& into his o&n handsG hence, the intervention of the co/0etent court is necessar" to declare the a'solute nullit" of the contract and to decree the restitution of &hat has 'een given under it- The =udg/ent, ho&ever, &ill retroact to the ver" da" &hen the contract &as entered into- 5f the void contract is still full" e4ecutor", no 0art" need 'ring an action to declare its nullit"G 'ut if an" 0art" should 'ring an action to enforce it, the other 0art" can si/0l" set u0 the nullit" as a defense-8 [#!] .anc*eC vs. R()os [G.R. No. @D/$4#4. Fune 14" 1#!/.] >n Danc, once0cion (J): + concur, 1 too@ no 0art, 1 concurs in se0arate o0inion %acts& %n 3 30ril 1,91, $icolas !anche2 and !everina (igos e4ecuted an instru/ent, entitled 7%0tion to Purchase,8 &here'" Ars- (igos 7agreed, 0ro/ised and co//itted - - - to sell8 to !anche2, for the su/ of P1,610-00, a 0arcel of land situated in the 'arrios of 3'ar and !i'ot, /unici0alit" of !an Jose, 0rovince of $ueva >ci=a, and /ore 0articularl" descri'ed in T T $T)1*6*< of said 0rovince, &ithin t&o (*) "ears fro/ said date &ith the understanding that said o0tion shall 'e dee/ed 7ter/inated and ela0sed,8 if 7!anche2 shall fail to e4ercise his right to 'u" the 0ro0ert"8 &ithin the sti0ulated 0eriod- 5nas/uch as several tenders of 0a"/ent of the su/ of P1,610-00, /ade '" !anche2 &ithin said 0eriod, &ere re=ected '" Ars- (igos, on 1* Aarch 1,93, the for/er de0osited said a/ount &ith the F5 $ueva >ci=a and co//enced against the latter the 0resent action, for s0ecific 0erfor/ance and da/ages- %n 11 Fe'ruar" 1,94, after the filing of defendant;s ans&er, 'oth 0arties, assisted '" their res0ective counsel, =ointl" /oved for a =udg/ent on the 0leadings- 3ccordingl", on *< Fe'ruar" 1,94, the lo&er court rendered =udg/ent for !anche2, ordering Ars(igos to acce0t the su/ =udiciall" consigned '" hi/ and to e4ecute, in his favor, the re.uisite deed of conve"ance- Ars- (igos &as, li@e&ise, sentenced to 0a" P*00-00, as attorne";s fees, and the costs- #ence, the a00eal '" Ars- (igos to the ourt of 300eals, &hich case &as the certified '" the latter court to the !u0re/e ourt u0on the ground that it involves a .uestion 0urel" of la&The !u0re/e ourt affir/ed the decision a00ealed fro/, &ith costs against !everina (igos.a+es" /001 ( //# )
1.
>pt(on to purc*ase not a contract to uy an' se++ The o0tion did not i/0ose u0on !anche2 the o'ligation to 0urchase (igos; 0ro0ert"- The contract deno/inated as 7%0tion to Purchase8 is not a 7contract to 'u" and sell,8 it /erel" granted !anche2 an 7o0tion8 to 'u", and 'oth 0arties so understood it, as indicated '" the ca0tion given '" the/ to said instru/ent- ?nder the 0rovisions thereof, (igos 7agreed, 0ro/ised and co//itted8 herself to sell the land therein descri'ed to !anche2 for P1,610-00, 'ut there is nothing in the contract to indicate that her afore/entioned agree/ent, 0ro/ise and underta@ing is su00orted '" a consideration 7distinct fro/ the 0rice8 sti0ulated for the sale of the land/. Art(c+e 11$4 app+(ca +e to contracts (n )enera+" Art(c+e 14!# re-ers to sa+es (n part(cu+ar (el"ing u0on 3rticle 1364 of the ivil ode, &hich 0rovides that 7&hen the offerer has allo&ed the offeree a certain 0eriod to acce0t, the offer /a" 'e &ithdra&n at an" ti/e 'efore acce0tance '" co//unicating such &ithdra&al, e4ce0t &hen the o0tion is founded u0on consideration, as so/ething 0aid or 0ro/ised,8 the lo&er court 0resu/ed the e4istence of a consideration distinct fro/ the 0rice- 5t /ust 'e noted ho&ever that 3rticle 1364 a00lies to contracts in general, &hereas the second 0aragra0h of 3rticle 14+, refers to 7sales8 in 0articular, and, /ore s0ecificall", to 7an acce0ted unilateral 0ro/ise to 'u" or to sell-8 5n other &ords, 3rticle 14+, is controlling in the 0resent case- 3rticle 14+, 0rovides that 73 0ro/ise to 'u" and sell a deter/inate thing for a 0rice certain is reci0rocall" de/anda'le- 3n acce0ted unilateral 0ro/ise to 'u" or to sell a deter/inate thing for a 0rice certain is 'inding u0on the 0ro/issor if the 0ro/ise is su00orted '" a consideration distinct fro/ the 0rice-8 1. Art(c+e 14!# (mposes con'(t(on -or a un(+atera+ prom(se to e (n'(n)3 Bur'en o- proo5n order that a unilateral 0ro/ise /a" 'e 7'inding8 u0on the 0ro/isor, 3rticle 14+, re.uires the concurrence of a condition, na/el", that the 0ro/ise 'e 7su00orted '" a consideration distinct fro/ the 0rice-8 3ccordingl", the 0ro/isee can not co/0el the 0ro/isor to co/0l" &ith the 0ro/ise, unless the for/er esta'lishes the e4istence of said distinct consideration- 5n other &ords, the 0ro/isee has the 'urden of 0roving such consideration- 5n the 0resent case, !anche2 has not even alleged the e4istence thereof in his co/0laint4. Gmp+(e' a'm(ss(on o- t*e trut* o- t*e ot*er party=s averment (- party 8o(ns (n t*e pet(t(on -or a 8u')ment ase' on t*e p+ea'(n)s ,(t*out (ntro'uc(n) ev('ence 5n the case of 5auer#ann v. Casas (14 Aarch 1,0<), it &as held that 7one &ho 0ra"s for =udg/ent on the 0leadings &ithout offering 0roof as to the truth of hie o&n allegations, and &ithout giving the o00osing 0art" an o00ortunit" to introduce evidence, /ust 'e understood to ad/it the truth of all the /aterial and relevant allegations of the o00osing 0art", and to rest his /otion for =udg/ent on those allegations ta@en together &ith such of his o&n as are ad/itted in the 0leading- ( La @e!ana Co#pany vs. 'evilla, , Phil- *10)-8 This vie& &as reiterated in )vangelista 2. De la 1osa and /ercy>s .ncorporate$ v. <er#inia 2er$e- 5n the 0resent case, (igos e40licitl" averred in her ans&er, and 0leaded as a s0ecial defense, the a'sence of said consideration for her 0ro/ise to sell and, '" =oining in the 0etition for a =udg/ent on the 0leadings, !anche2 has i/0liedl" ad/itted the truth of said aver/ent in (igos; ans&er$. .out*,estern .u)ar N 9o+asses Co. v. At+ant(c Gu+- N Bac(-(c Co. case The ourt in the !outh&estern !ugar case held that 7under article 14+, of the ne& ivil ode Han o0tion to sell,; or Ha 0ro/ise to 'u" or to sell,; as used in said article, to 'e valid /ust 'e Hsu00orted '" a consideration distinct fro/ the 0rice-; This is clearl" inferred fro/ the conte4t of said article that a unilateral 0ro/ise to 'u" or to sell, even if acce0ted, is onl" 'inding if su00orted '" a consideration- 5n other &ords, Han acce0ted unilateral 0ro/ise; can onl" have a 'inding effect if su00orted '" a consideration, &hich /eans that the o0tion can still 'e &ithdra&n, even if acce0ted, if the sa/e is not su00orted '" an" consideration- #ere it is not dis0uted that the o0tion is &ithout consideration- 5t can therefore 'e &ithdra&n not&ithstanding the acce0tance /ade of it '" a00ellee- The ourt held that the general rule regarding offer and acce0tance under 3rticle 13*4 /ust 'e inter0reted as /odified '" the 0rovision of article 14+,, &hich a00lies to Ha 0ro/ise to
.a+es" /001 ( /10 )
'u" and sell; s0ecificall"- 5n short, the rule re.uires that a 0ro/ise to sell to 'e valid /ust 'e su00orted '" a consideration distinct fro/ the 0rice:. Atk(ns" Aro++ an' Co. v. Cua H(an ;ek 5n the case of 3t@ins, Croll and o-, 5nc- v- ua #ian Te@, decided later than !outh&estern !ugar Q Aolasses o- v- 3tlantic Fulf Q Pacific o-, the ourt sa& no distinction 'et&een 3rticles 13*4 and 14+, of the ivil ode and a00lied the for/er &here a unilateral 0ro/ise to sell si/ilar to the one sued u0on here &as involved, treating such 0ro/ise as an o0tion &hich, although not 'inding as a contract in itself for lac@ of a se0arate consideration, nevertheless generated a 'ilateral contract of 0urchase and sale u0on acce0tance!. >pt(on (s un(+atera+ Further/ore, an o0tion is unilateral: a 0ro/ise to sell at the 0rice fi4ed &henever the offeree should decide to e4ercise his o0tion &ithin the s0ecified ti/e- 3fter acce0ting the 0ro/ise and 'efore he e4ercises his o0tion, the holder of the o0tion is not 'ound to 'u"- #e is free either to 'u" or not to 'u" later- 5n the 0resent case, ho&ever, u0on acce0ting (igos; offer a 'ilateral 0ro/ise to sell and to 'u" ensued, and !anche2 i0so facto assu/ed the o'ligation of a 0urchaser- #e did not =ust get the right su'se.uentl" to 'u" or not to 'u"- 5t &as not a /ere o0tion thenG it &as 'ilateral contract of sale8. >pt(on ,(t*out cons('erat(on (s a mere o--er o- a contract o- sa+e" ,*(c* (s not (n'(n) unt(+ accepte' 5f the o0tion is given &ithout a consideration, it is a /ere offer of a contract of sale, &hich is not 'inding until acce0ted- 5f, ho&ever, acce0tance is /ade 'efore a &ithdra&al, it constitutes a 'inding contract of sale, even though the o0tion &as not su00orted '" a sufficient consideration- - - - ( Corpus ;uris Secundum p. '$.. See a"so . 6u"in4 Case 9aw &&0 and cases cited.( 5t can 'e ta@en for granted that the o0tion contract &as not valid for lac@ of consideration- Dut it &as, at least, an offer to sell, &hich &as acce0ted '" latter, and of the acce0tance the offerer had @no&ledge 'efore said offer &as &ithdra&n- The concurrence of 'oth acts J the offer and the acce0tance J could at all events have generated a contract, if none there &as 'efore (arts- 1*64 and 1*9* of the ivil odeG Va"co vs- !erra, 44 Phil- 331-) 5n other &ords, since there /a" 'e no valid contract &ithout a cause or consideration, the 0ro/isor is not 'ound '" his 0ro/ise and /a", accordingl", &ithdra& it- Pending notice of its &ithdra&al, his acce0ted 0ro/ise 0arta@es, ho&ever, of the nature of an offer to sell &hich, if acce0ted, results in a 0erfected contract of sale#. Broper construct(on o- con-+(ct(n) prov(s(ons o- t*e same +a,3 Harmon(Ce to (mp+ement t*e same pr(nc(p+e rat*er t*an to create e7cept(ons 5n line &ith the cardinal rule of statutor" construction that, in construing different 0rovisions of one and the sa/e la& or code, such inter0retation should 'e favored as &ill reconcile or har/oni2e said 0rovisions and avoid a conflict 'et&een the sa/e- 5ndeed, the 0resu/0tion is that, in the 0rocess of drafting the ode, its author has /aintained a consistent 0hiloso0h" or 0osition- Aoreover, the decision in !outh&estern !ugar Q Aolasses o- v- 3tlantic Fulf Q 0acific o-, holding that 3rt- 13*4 (on the general 0rinci0les on contracts) is /odified '" 3rt- 14+, (on sales) of the ivil ode, in effect, considers the latter as an e4ce0tion to the for/er, and e4ce0tions are not favored, unless the intention to the contrar" is clear, and it is not so, insofar as said * articles are concerned- :hat is /ore, the reference, in 'oth the second 0aragra0h of 3rt- 14+, and 3rt- 13*4, to an o0tion or 0ro/ise su00orted '" or founded u0on a consideration, strongl" suggests that the * 0rovisions intended to enforce or i/0le/ent the sa/e 0rinci0le10. Atk(ns" Aro++ N Co. case mo'(-(es or a an'ons .out*,estern .u)ar case (nso-ar as to (ncons(stenc(es ?0on /ature deli'eration, the ourt is of the considered o0inion that it should, as it here'" reiterates the doctrine laid do&n in the 3t@ins, Croll Q o- case, and that, insofar all inconsistent there&ith, the vie& adhered to in the !outh &estern !ugar Q Aolasses o- case should 'e dee/ed a'andoned or /odified-
.a+es" /001 ( /11 )
[#8] .(y Con) B(en) an' Co. vs. Hon)kon) an' .*an)*a( Bank(n) Corp. [G.R. No. 14:$$. 9arc* $" 1#1/.] >n Danc, %strand (J): 9 concur %acts& !i" ong Dieng Q o-, a cor0oration engaged in 'usiness generall", and #ong@ong Q !hanghai Dan@ing or0oration, a foreign 'an@ authori2ed to engage in the 'an@ing 'usiness in the Phili00ines, are do/iciled in the it" of Aanila- %n *6 June 1,*9, certain negotia'le &arehouse recei0ts &ere 0ledged '" %tto (anft to the 'an@ to secure the 0a"/ent of his 0ree4isting de'ts to the latter (!i" ong Dieng as de0ositor: 1+0+, Pu'lic :arehouse o-, *+ 'alesG 133, :-F- !tevenson o, 9+ 'alesG 1+**, Pu'lic :arehouse o-, 90 'alesG 1+*3, :-F- !tevenson o, 4 'alesG 1934, The Phili00ine :arehouse o/0an", ,, 'alesG 1+0*, The Phili00ine :arehouse o/0an", 3, 'ales- %- (anft as de0ositor: 1,1<, Pu'lic :arehouse o, 199 'alesG *, !i" ong Dieng Q o- 5nc-, * 'ales)- The 'aled he/0 covered '" the &arehouse recei0ts &as &orth P31,936G recei0ts nu/'ers 1+0+, 133, 1+**, 1+*3, 1934, and 1+0* 'eing endorsed in 'lan@ '" !i" ong Dieng and %tto (anft, and nu/'ers 1,1< and *, '" %tto (anft alone- %n *6 June 1,*9, (anft called at the office of !i" ong Dieng to 0urchase he/0 (a'aca), and he &as offered the 'ales of he/0 as descri'ed in the .uedans- The 0arties agreed to the 0rice (P31,946), and on the sa/e date the .uedans, together &ith the covering invoice, &ere sent to (anft, &ithout having 'een 0aid for the he/0, 'ut !i" ong Dieng;s understanding &as that the 0a"/ent &ould 'e /ade against the sa/e .uedans, and it a00ears that in 0revious transactions of the sa/e @ind 'et&een the 'an@ and !i" ong Dieng, .uedans &ere 0aid one or t&o da"s after their deliver" to the/- 5n the evening of the da" u0on &hich the .uedans in .uestion &ere delivered to the 'an@, (anft died suddenl" at his ho/e in the cit" of Aanila, and &hen !i" ong Dieng found that such &as the case, it i//ediatel" de/anded the return of the .uedans, or the 0a"/ent of the value, 'ut &as told that the .uedans had 'een sent to the 'an@ as soon as the" &ere received '" (anft!i" ong Dieng filed a clai/ for the su/ of P31,946 (the value of 494 'ales of he/0 de0osited in certain 'onded &arehouses) in the intestate 0roceedings of the estate of the deceased %tto (anft, &hich on an a00eal fro/ the decision of the co//ittee on clai/s, &as allo&ed '" the F5 in case 313+* ( it" of Aanila)- 5n the /eanti/e, de/and had 'een /ade '" !i" ong Dieng on the 'an@ for the return of the .uedans (&arehouse recei0ts), or their value, &hich de/and &as refused '" the 'an@ on the ground that it &as a holder of the .uedans in due course- Thereu0on !i" ong Dieng filed its first co/0laint against the 'an@, &herein it alleged that it had 7sold8 the .uedans in .uestion to the deceased (anft for cash, 'ut that the said (anft had not fulfilled the conditions of the sale- Later on, !i" ong Dieng filed an a/ended co/0laint, &herein the" changed the &ord 7sold8 referred to in the first co/0laint to the &ords 7atte/0ted to sell8- ?0on trial the =udge of the lo&er court rendered =udg/ent in favor of !i" ong DiengThe !u0re/e ourt reversed the a00ealed =udg/ent and a'solved the 'an@ fro/ the co/0laintG :ithout costs1. C(rcumstances (nvo+v(n) t*e 2ue'ans The .uedans in .uestion &ere negotia'le in for/- The" &ere 0ledged '" %tto (anft to the 'an@ to secure the 0a"/ent of his 0ree4isting de'ts to said 'an@- !uch of the .uedans as &ere issued in the na/e of !i" ong Dieng &ere dul" endorsed in 'lan@ '" !i" ong Dieng and '" %tto (anft- The t&o re/aining .uedans &hich &ere issued directl" in the na/e of %tto (anft &ere also dul" endorsed in 'lan@ '" hi//. Jue'ans ,ere rece(ve' y t*e ank to secure t*e payment o- Ran-t=s pree7(st(n) 'e ts :hen the .uedans &ere negotiated, %tto (anft &as inde'ted to the #ong@ong Q !hanghai Dan@ing or0oration in the su/ of P9**,+63-**, &hich inde'tedness &as 0artl" covered '" .uedans- #e &as also 'eing 0ressed to de0osit additional 0a"/ents as a further securit" to the 'an@1. No ev('ence t*at ank (s oun' to pay ack Ran-t t*e amount o- t*e 2ue'ans3 >n t*e 'e+(very o- t*e 2ue'ans" (n'orser 'oes not o,n property anymore un+ess *e +(2u('ate' *(s 'e t ,(t* t*e ank
.a+es" /001 ( /1/ )
5t has 'een the 0ractice of the 'an@ in its transactions &ith (anft that the value of the .uedans has 'een entered in the current accounts 'et&een (anft and the 'an@, 'ut there is no evidence to the effect that the 'an@ &as at an" ti/e 'ound to 0a" 'ac@ to (anft the a/ount of an" of the .uedans- There is also nothing in the record to sho& that the 'an@ has 0ro/ised to 0a" the value of the .uedans neither to (anft nor to !i" ong Dieng- %n the contrar", as stated in the sti0ulation of facts, the 7negotia'le &arehouse recei0ts J &ere 0ledged '" %tto (anft to the #ong@ong Q !hanghai Dan@ing or0oration to secure the 0a"/ent of his 0ree4isting de'ts to the latter8, and ta@ing into consideration that the .uedans &ere negotia'le in for/ and dul" endorsed in 'lan@ '" !i" ong Dieng and '" %tto (anft, it follo&s that on the deliver" of the .uedans to the 'an@ the" &ere no longer the 0ro0ert" of the indorser unless he li.uidated his de't &ith the 'an@4. No compe++(n) reason to compe+ ank to (nvest()ate (n'orser There is nothing in the record &hich in an" /anner &ould have co/0elled the 'an@ to investigate the indorser, es0eciall" as to his authorit" to negotiate the .uedans- The 'an@ had a 0erfect right to act as it did, and its action is in accordance &ith sections 4+, 3<, and 40 of the :arehouse (ecei0ts 3ct (3ct *13+)$. .ect(on 4! o- t*e 5are*ouse Rece(pts Act3 5*en ne)ot(at(on not (mpa(re' y -rau'" m(stake or 'uress !ection 4+ (:hen negotiation not i/0aired '" fraud, /ista@e, or duress) 0rovides that 7the validit" of the negotiation of a recei0t is not i/0aired '" the fact that such negotiation &as a 'reach of dut" on the 0art of the 0erson /a@ing the negotiation, or '" the fact that the o&ner of the recei0t &as induced '" fraud, /ista@e, or duress to intrust the 0ossession or custod" of the recei0t to such 0erson, if the 0erson to &ho/ the recei0t &as negotiated, or a 0erson to &ho/ the recei0t &as su'se.uentl" negotiated, 0aid value therefor, &ithout notice of the 'reach of dut", or fraud, /ista@e, or duress-8 :. .ect(on 18 o- t*e 5are*ouse Rece(pts Act3 Ne)ot(at(on o- ne)ot(a +e rece(pts y (n'orsement !ection 3< ($egotiation of negotia'le recei0ts '" indorse/ent) 0rovides that 7a negotia'le recei0t /a" 'e negotiated '" the indorse/ent of the 0erson to &hose order the goods are, '" the ter/s of the recei0t, delivera'le- !uch indorse/ent /a" 'e in 'lan@, to 'earer or to a s0ecified 0erson- - - !u'se.uent negotiation /a" 'e /ade in li@e /anner-8 !. .ect(on 40 o- t*e 5are*ouse Rece(pts Act3 5*o may ne)ot(ate a rece(pt !ection 40 (:ho /a" negotiate a recei0t) 0rovides that 7a negotia'le recei0t /a" 'e negotiated 7(a) D" the o&ner thereof, or (') D" an" 0erson to &ho/ the 0ossession or custod" of the recei0t has 'een entrusted '" the o&ner, if, '" the ter/s of the recei0t, the &arehouse/an underta@es to deliver the goods to the order of the 0erson to &ho/ the 0ossession or custod" of the recei0t has 'een entrusted, or if at the ti/e of such entrusting the recei0t is in such for/ that it /a" 'e negotiated '" deliver"-8 8. R()*ts o- ank over t*e 2ue'ans a-ter (n'orsement3 .ect(on 41 o- t*e 5are*ouse Rece(pts Act The rights the 'an@ ac.uired over the .uedans after indorse/ent and deliver" to it '" (anft are covered '" !ection 41 of the :arehouse (ecei0t 3ct- !ection 41 ((ights of 0erson to &ho/ a recei0t has 'een negotiated) 0rovides that 7a 0erson to &ho/ a negotia'le recei0t has 'een dul" negotiated ac.uires there'": (a) !uch title to the goods as the 0erson negotiating the recei0t to hi/ had or had a'ilit" to conve" to a 0urchaser in good faith for value, and also such title to the goods as the de0ositor of 0erson to &hose order the goods &ere to 'e delivered '" the ter/s of the recei0t had or had a'ilit" to conve" to a 0urchaser in good faith for value-8 #. Ise o- ,are*ouse rece(pts as 'ocuments o- t(t+e3 Gntrust(n) rece(pts more t*an 'e+(very" (t (s to (ntrust t(t+e to t*e )oo's3 Burc*asers -or va+ue ent(t+e' to re+y on representat(on 'esp(te reac* o- trust an' a)reement 5n the case of the Co##ercial =ational 5an; of =e- Arleans vs. Canal?Louisiana 5an; ( +rust Co. (*3, ?- !-, 6*0), it &as o'served that 7one &ho ta@es '" tres0ass or a finder is not included &ithin the
.a+es" /001 ( /11 )
descri0tion of those &ho /a" negotiate-8 ((e0ort of o//issioner on ?nifor/ !tate La&s, Januar" 1, 1,10, 0- *04-) 3side fro/ this, the intention is 0lain to facilitate the use of &arehouse recei0ts as docu/ents of title?nder !ection 40, the 0erson &ho /a" negotiate the recei0t is either the 7o&ner thereof8, or a 70erson to &ho/ the 0ossession or custod" of the recei0t has 'een intrusted '" the o&ner8 if the recei0t is in the for/ descri'ed- The &arehouse recei0t re0resents the goods, 'ut the intrusting of the recei0t, as stated, is /ore than the /ere deliver" of the goodsG it is a re0resentation that the one to &ho/ the 0ossession of the recei0t has 'een so intrusted has the title to the goods- D" !ection 4+, the negotiation of the recei0t to a 0urchaser for value &ithout notice is not i/0aired '" the fact that it is a 'reach of dut", or that the o&ner of the recei0t &as induced 7'" fraud, /ista@e, or duress8 to intrust the recei0t to the 0erson &ho negotiated it- 3nd, under !ection 41, one to &ho/ the negotia'le recei0t has 'een dul" negotiated ac.uires such title to the goods as the 0erson negotiating the recei0t to hi/, or the de0ositor or 0erson to &hose order the goods &ere delivera'le '" the ter/s of the recei0t, either had or 7had a'ilit" to conve" to a 0urchaser in good faith for value-8 The clear i/0ort of these 0rovisions is that if the o&ner of the goods 0er/its another to have the 0ossession or custod" of negotia'le &arehouse recei0ts running to the order of the latter, or to 'earer, it is a re0resentation of title u0on &hich 'ona fide 0urchasers for value are entitled to rel", des0ite 'reaches of trust or violations of agree/ent on the 0art of the a00arent o&ner10. .(y Con) B(en) estoppe' to 'eny ank *a' va+(' t(t+e to t*e 2ue'ans !i" ong Dieng is esto00ed to den" that the 'an@ had a valid title to the .uedans for the reason that !i" ong Dieng had voluntaril" clothed (anft &ith all the attri'utes of o&nershi0 and u0on &hich the 'an@ relied11. E2u(ta +e estoppe+3 5*ere one or t,o (nnocent persons must su--er a +oss" *e ,*o y *(s con'uct ma'e t*e +oss poss( +e must ear (t 5n the =ational 'afe Deposit vs. <i!!s (**, ?- !-, 3,1), certain certificates of stoc@ &ere 0ledged as collateral '" the defendant in error to the 'an@, &hich certificates &ere converted '" one of the trusted e/0lo"ees of the 'an@ to his o&n use and sold '" hi/- The stoc@ certificates &ere un.ualifiedl" endorsed in 'lan@ '" the defendant &hen delivered to the 'an@- The !u0re/e ourt of the ?nited !tates a00lied the fa/iliar rule of e.uita'le esto00el that &here one of t&o innocent 0ersons /ust suffer a loss he &ho '" his conduct /ade the loss 0ossi'le /ust 'ear it- Thus, &hen the 'ro@er o'tained the stoc@ certificates, containing all the indicia of o&nershi0 and 0ossi'le of read" transfer, fro/ one &ho had 0ossession &ith the 'an@;s consent, and &ho 'rought the certificates to hi/, a00arentl" clothed &ith the full o&nershi0 thereof '" all the tests usuall" a00lied '" 'usiness /en to gain @no&ledge u0on the su'=ect 'efore /a@ing a 0urchase of such 0ro0ert"- %n the other hand, the 'an@, for a legiti/ate 0ur0ose, &ith confidence in one of its o&n e/0lo"ees, instrusted the certificates to hi/, &ith ever" evidence of title and transfera'ilit" u0on the/- The 'an@;s trusted agent, in gross 'reach of his dut", &hether &ith technical cri/inalit" or not is uni/0ortant, too@ such certificates, thus authenticated &ith evidence of title, to one &ho, in the ordinar" course of 'usiness, sold the/ to 0arties &ho 0aid full value for the/- 5n such case &e thin@ the 0rinci0les &hich underlie e.uita'le esto00el 0lace the loss u0on hi/ &hose /is0laced confidence has /ade the &rong 0ossi'le1/. No reme'y ava(+a +e to .(y Con) B(en) !i" ong Dieng has suffered the loss of the .uedans, 'ut there is no& no re/ed" availa'le to it- The 'an@ is not res0onsi'le for the lossG the negotia'le .uedans &ee dul" negotiated to the 'an@ and as far as the record sho&s, there has 'een no fraud on the 0art of the 'an@[##] .or(ano" et. a+. v. Baut(sta" et. a+. [G.R. No. @D1$!$/. Decem er /#" 1#:/.] Dautista, et- al- v- !oriano, et- al- KF-(- $o- L)1+46+- Dece/'er *,, 1,9*-L >n Danc, Aa@alintal (J): , concur
.a+es" /001 ( /14 )
%acts& !0ouses Dasilio Dautista and !ofia de (osas are the a'solute and registered o&ners of a 0arcel of land, situated in Teresa, (i2al (% T 3,06, (egister of Deeds of (i2al)- %n 30 Aa" 1,69, the said s0ouses for and in consideration on the su/ of P1,<00, signed a docu/ent entitled 7Casulatan $g !anglaan8 in favor of (u0erto !oriano and %li/0ia de Jesus- !i/ultaneousl" &ith the signing of the deed, the s0ouses Dautista and de (osas transferred the 0ossession of the said land to !oriano and de Jesus &ho have 'een and are still in 0ossession of the said 0ro0ert" and have since that date 'een and are cultivating the said land and have en=o"ed and are still en=o"ing the 0roduce thereof to the e4clusion of all other 0ersons- !o/eti/es after 30 Aa" 1,69, the s0ouses Dautista and de (osas received fro/ !oriano and de Jesus, the su/ of P460-00 0ursuant to the conditions agreed u0on in the docu/ent for &hich no recei0t &as issued and &hich &as returned '" the s0ouses so/eti/e on 31 Aa" 1,6<- %n 13 Aa" 1,6<, a certain 3tt"- 3ngel %- 1er &rote a letter to the s0ouses Dautista infor/ing the said s0ouses that his clients !oriano and de Jesus have decided to 'u" the 0arcel of land in .uestion 0ursuant to 0aragra0h 6 of the docu/ent in .uestion (7That it has li@e&ise 'een agreed that if the financial condition of the /ortgagees &ill 0er/it, the" /a" 0urchase said land a'solutel" on an" date &ithin the t&o)"ear ter/ of this /ortgage at the agreed 0rice of P3,,00-00-8)- The s0ouses in s0ite of the recei0t of the letter refused to co/0l" &ith the de/and contained therein%n 31 Aa" 1,6<, !oriano and de Jesus filed 'efore the Trial ourt ivil ase 60*3, 0ra"ing that the" 'e allo&ed to consign or de0osit &ith the ler@ of ourt the su/ of P1,960-00 as the 'alance of the 0urchase 0rice of the 0arcel of land in .uestion- 3fter due hearing, =udg/ent 'e rendered ordering Dautista and de (osas to e4ecute an a'solute deed of sale of the said 0ro0ert" in their favor, 0lus da/ages%n , June 1,6<, s0ouses Dautista and de (osas filed a co/0laint against !oriano and de Jesus, &hich case after hearing &as dis/issed for lac@ of =urisdiction- %n 6 3ugust 1,6,, the s0ouses Dautista and de (osas again filed a case in the F5 against !oriano and de Jesus as@ing the ourt to order !oriano and de Jesus to acce0t the 0a"/ent of the 0rinci0al o'ligation and release the /ortgage and to /a@e an accounting of the harvest for the t&o harvest seasons (1,69)1,6+)- The t&o cases, &ere '" agree/ent of the 0arties assigned to one 'ranch so that the" can 'e tried =ointl"- %n 10 Aarch 1,6,, the F5 (i2al, after a =oint trial of 'oth cases, ordered Dautista and de (osas to e4ecute a deed of sale covering the 0ro0ert" in .uestion in favor of !oriano and de Jesus u0on 0a"/ent '" the latter of P1,960-00 &hich is the 'alance of the 0rice agreed u0on, i-eP3,,00-00, and the a/ount 0reviousl" received '" &a" of loan '" the said s0ouses fro/ !oriano and de Jesus, to 0a" the su/ of P600-00 '" &a" of attorne";s fees, and to 0a" the costsThe !u0re/e ourt affir/ed the =udg/ent a00ealed fro/, &ith costs1. 9ort)a)ors= r()*t to re'eem 'e-eas( +e 'ue to st(pu+at(on on opt(on to uy :hile the transaction is undou'tedl" a /ortgage and contains the custo/ar" sti0ulation concerning rede/0tion, it carries the added s0ecial 0rovision, &hich renders the /ortgagors; right to redee/ defeasi'le at the election of the /ortgagees- There is nothing illegal or i//oral in this- 5t is si/0l" an o0tion to 'u", sanctioned '" 3rticle 14+, of the ivil ode, &hich states: 73 0ro/ise to 'u" and sell a deter/inate thing for a 0rice certain is reci0rocall" de/anda'le- 3n acce0ted unilateral 0ro/ise to 'u" or to sell a deter/inate thing for a 0rice certain is 'inding u0on the 0ro/isor if the 0ro/ise is su00orted '" a consideration distinct fro/ the 0rice-8 /. Brom(se to se++ supporte' y same cons('erat(on o- t*e mort)a)e" ,*(c* (s '(st(nct -rom ,*(c* ,ou+' support t*e sa+e3 Cont(nu(n) o--er 5n the 0resent case, the /ortgagors; 0ro/ise to sell is su00orted '" the sa/e consideration as that of the /ortgage itself, &hich is distinct fro/ that &hich &ould su00ort the sale, an additional a/ount having 'een agreed u0on, to /a@e u0 the entire 0rice of P3,,00-00, should the o0tion 'e e4ercised- The /ortgagors; 0ro/ise &as in the nature of a continuing offer, non)&ithdra&a'le during a 0eriod of t&o "ears, &hich u0on acce0tance '" the /ortgagees gave rise to a 0erfected contract of 0urchase and sale-
.a+es" /001 ( /1$ )
1. sa+e
Gn()o vs. CA case a--(rms r()*t o- appe++ees -or spec(-(c per-ormance -or t*e e7ecut(on o- 'ee' o-
5n the case of 5Migo vsourt of 300eals (,9 Phil-, 3+G 60 %-F- 11 6*<1), it &as held that a sti0ulation in a contract of /ortgage to sell the 0ro0ert" to the /ortgagee does not 'ind the sa/e 'ut creates onl" a 0ersonal o'ligation on the 0art of the /ortgagor- The citation, confir/s the 0osition of the a00ellees, &ho are not enforcing an" real right to the dis0uted land 'ut are rather see@ing to o'tain s0ecific 0erfor/ance of a 0ersonal o'ligation, na/el", the e4ecution of a deed of sale for the 0rice agreed u0on, the corres0onding a/ount to cover &hich &as dul" de0osited in court u0on the filing of the co/0laint4. ;en'er (ne--ect(ve as preempt(ve r()*t to purc*ase y ot*er party *as een e7erc(se' The tender of the su/ of P1,<00 to redee/ the /ortgage '" Dautista and de (osas &as ineffective for other 0ur0ose intended- !uch tender /ust have 'een /ade after the o0tion to 0urchase had 'een e4ercised '" !oriano and de Jesus ( ivil ase ,, &as filed on , June 1,6<, onl" to 'e dis/issed for lac@ of =urisdiction)Dautista;s and de (osas; offer to redee/ could 'e defeated '" !oriano;s and de Jesus; 0ree/0tive right to 0urchase &ithin the 0eriod of * "ears fro/ 30 Aa" 1,69- !uch right &as availed of and Dautista and de (osas &ere accordingl" notified '" letter dated 13 Aa" 1,6<, &hich &as received '" the/ on the follo&ing Aa" **%ffer and acce0tance converged and gave rise to a 0erfected and 'inding contract of 0urchase and sale[100] .ta. Ana vs. Hernan'eC [G.R. No. @D1:1#4. Decem er 1!" 1#::.] >n Danc, (e"es JDL (J): < concur, 1 too@ no 0art %acts& !0ouses Jose !anta 3na, Jr- and Lourdes !to- Do/ingo, o&ned a 116,<60)s.-/- 0arcel of land situated in 'arrio Dalasing, !ta- Aaria, Dulacan, and covered '" T T T)36,<- %n *< Aa" 1,64, the" sold t&o (*) se0arate 0ortions of the land for P11,000-00 to (osa #ernande2- These 0ortions &ere descri'ed in the deed of sale as the northern lot ($: Aaria Pere2 and 3urelio Pere2, !: ad=oining lot K!ta- 3naL, >: Aariano Flores and >/ilio 5gnacio, :: ornelio 5gnacioG 1*,600 s.-/-) and eastern lot ($: (osa #ernande2, >: Do/ingo and 3ntonio #ernande2, !: !ta- Aaria)Tig'i (oadG :: ad=oining lot K!ta- 3naLG *9,600 s.-/-) 3fter the sale (there &ere * other 0revious sales to different vendees of other 0ortions of the land), the s0ouses caused the 0re0aration of a su'division 0lan, of the entire land '" a surve"or, &hole su'division 0lan Psd)431<+, &as a00roved on 13 Januar" 1,66 '" the Director of Lands- (osa #ernande2, ho&ever, unli@e the 0revious vendees, did not confor/ to the 0lan and refused to e4ecute an agree/ent of su'division and 0artition for registration &ith the (egister of Deeds of DulacanG and she, li@e&ise, refused to vacate the areas that she had occu0ied- 5nstead, she caused the 0re0aration of a different su'division 0lan, &hich &as a00roved '" the Director of Lands on *4 Fe'ruar" 1,66- This 0lan, Psd)4*<44, tallied &ith the areas that (osa #ernande2 had actuall" occu0ied%n *< Fe'ruar" 1,66, the s0ouses filed suit against (osa #ernande2 in the F5 Dulacan ( ivil ase 1039), clai/ing that #ernande2 &as occu0"ing an e4cess of 1+,000 s.- /- in area of &hat she had 'ought fro/ the/#ernande2, on the other hand, clai/ed that the alleged e4cess &as 0art of the areas that she 'ought- The onl" .uestion deter/ined is &hether or not the s0ouses had sold t&o 0ortions &ithout clear 'oundaries 'ut &ith e4act areas (1*,600 s.- /- and *9-000 s.- /-) at the rate of P0-*, 0er s.uare /eter or t&o 0ortions, the areas of &hich &ere not definite 'ut &hich &ere &ell defined on the land and &ith definite 'oundaries and sold for the lu/0 su/ of P11,000-00- Finding for the s0ouses, the said court ordered #ernande2, a/ong other things, to vacate 7the e4cess 0artitions actuall" occu0ied '" her and to confine her occu0ation onl" to Lots 4)a and 4) ' as sho&n in the 0lan of the s0ouses$ot satisfied &ith the =udg/ent, #ernande2 a00ealed to the ourt of 300eals- The ourt of 300eals ( 3)F( *06<*)() dis/issed the co/0laint and declared (osa #ernande2 the o&ner of lots 4)a and 4)' in her 0lan, Psd)4*<44G in effect reversing the decision of the F5 Dulacan- #ence, the a00eal.a+es" /001 ( /1: )
The !u0re/e ourt affir/ed the decision of the ourt of 300eals, &ith costs against Jose !anta 3na, Jr- and Lourdes !to- Do/ingo1. 5(tness= test(mony& Boun'ar(es preva(+ over area Fon2alo 1- 5gnacio, the notarial officer 'efore &ho/ the contract of sale &as e4ecuted, testified that #ernande2 co/0lained to hi/ and !ta- 3na to the effect that the areas stated in the contract &ere less than the actual areas of the 0arcels of land 'eing sold- 5gnacio assured her that 7the area stated in the docu/ent &ill not 'e the one to 0revail 'ut the one to 0revail is the 'oundar" of the land &hich "ou alread" @no&-8 !ta- 3na 'eing the ne0he& of #ernande2, and the for/er;s assurance 0ro'a'l" a00eased the latter against insisting in the correction of the areas stated in the contract of sale/. 5(tness= test(mony& Burc*ase pr(ce a+,ays +ump sums T&o &itnesses testified for #ernande2- Jesus Policar0io divulged that the sa/e 0arcels of land involved in this case &ere 0reviousl" offered to hi/ '" !ta- 3na for the single 0urchase 0rice of P1*,000-00Julio #ernande2 stated that his sister, (osa #ernande2, had offered P10,000-00 as against !ta- 3na;s 0rice of P1*,000-00, end that he &as a'le to 0ersuade the 0arties to /eet half&a" on the 0rice- Further/ore, the 0revious conve"ances /ade '" !ta- 3na for other 0ortions of the sa/e 0ro0ert" are also for lu/0 su/s1. Barce+s o- +an' so+' are ('ent(-(e' y consp(cuous oun'ar(es !ta- 3na ad/itted the lands in .uestion &ere se0arated fro/ the rest of their 0ro0ert" '" a long and continuous H0ila0il; or di@e, and there is convincing 0roof to sho& that the 'igger lot (Lot 4)a) &as &holl" tenanted for !ta- 3na '" iriaco $icolas and !antiago astillo and the s/aller lot (Lot 4)') &as &holl" tenanted for !ta- 3na '" Fregorio Fatchalian- These facts su00ort the theor" that the t&o 0arcels of land sold to #ernande2 &ere identified '" the cons0icuous 'oundaries and the e4tent or area each tenant used to till or the vendors- !ta- 3na should not 'e heard to co/0lain a'out the deficienc" in the area (1+,000 s.- /- or P total are of t&o 0arcels of land) 'ecause registered o&ners and 0ossessors of the entire land since 1,4, the" can rightl" 'e 0resu/ed to have ac.uired a good esti/ate of the value and areas of the 0ortions the" su'se.uentl" sold- Fro/ the facts, the difference in the lot area does not infer gross /ista@e on the 0art of !ta3na4. Art(c+e 1$4/ app+(e' 3rticle 164* of the ne& ivil ode 0rovides that 75n the sale of real estate, /ade for a lu/0 su/ and not at the rate of a certain su/ for a unit of /easure or nu/'er, there shall 'e no increase or decrease of the 0rice, although there 'e greater or less area or nu/'er than that stated in the contract- The sa/e rule shall 'e a00lied &hen t&o or /ore i//ova'les are sold for a single 0riceG 'ut if, 'esides /entioning the 'oundaries, &hich is indis0ensa'le in ever" conve"ance of real estate, its area or nu/'er should 'e designated in the contract, the vendor shall 'e 'ound to deliver all that is included &ithin said 'oundaries, even &hen it e4ceeds the area or nu/'er s0ecified in the contractG and, should he not 'e a'le to do so, he shall suffer a reduction in the 0rice, in 0ro0ortion to &hat is lac@ing in the area or nu/'er, unless the contract is rescinded 'ecause the vendee does not accede to the failure to deliver &hat has 'een sti0ulated-8 $. Fur(s'(ct(on o- t*e Courts The credi'ilit" of &itnesses and the &eighing of conflicting evidence are /atters &ithin the e4clusive authorit" of the ourt of 300eals, and it is not necessaril" 'ound '" the conclusions of the trial court- Doth the Judiciar" 3ct ((-3- *,9, section *,) and the (ules of ourt ((ule 46, section *) onl" allo& a revie& of decisions of the ourt of 300eals on .uestion of la&G and nu/erous decisions of this ourt have invaria'l" and re0eatedl" held that findings of fact '" the ourt of 300eals are conclusive and not revie&a'le '" the !u0re/e ourt (Falang vsourt of 300eals, L)1+*4<, *, Januar" 1,9*G Fonnacier vsourt of 300eals, ,9 Phil- 41<, 4*1G and cases therein citedG %nglengco vs- %2aeta, +0 Phil- 43G $a2areno vs- Aag&agi, +1 Phil101)- Darring, therefore, a sho&ing that the findings co/0lained of are totall" devoid of su00ort in the record,
.a+es" /001 ( /1! )
or that the" are so glaringl" erroneous as to constitute serious a'use of discretion, such findings /ust stand, for the !u0re/e ourt is not e40ected or re.uired to e4a/ine and correct the oral and docu/entar" evidence su'/itted '" the 0arties- 3s 0ointed out '" for/er hief Justice Aoran in his o//ents on the (ules of ourt (1,93 >d-, 1ol- *, 0- 41*), the la& creating the ourt of 300eals &as intended /ainl" to ta@e a&a" fro/ the !u0re/e ourt the &or@ of e4a/ining the evidence, and confine its tas@ for the deter/ination of .uestions &hich do not call for the reading and stud" of transcri0ts containing the testi/on" of &itnesses:. Corpus centum The t&o 0arcels of land sold to (osa #ernande2 &ere identified '" the cons0icuous 'oundaries, consisting in a long and continuous 0ila0il or di@e that se0arated the lands in .uestion fro/ the rest of the 0ro0ert"- %n the 'asis of such findings, it is un.uestiona'le that the sale /ade &as of a definite and identified tract, a cor0us certu/, that o'ligated the vendors to deliver to the 'u"er all the land &ithin the 'oundaries, irres0ective of &hether its real area should 'e greater or s/aller than &hat is recited in the deed (Fo"ena vsTa/'unting, 5 Phil- 4,0G Teran vs- 1illanueva, 69 Phil- 9++G 32arraga vs- Fa", 6* Phil- 6,,G Aondragon vs!antos, <+ Phil- 4+1)- 3nd this is 0articularl" true &here the area given is .ualified to 'e a00ro4i/ate onl" 7hu/igit @u/ulang8, i-e-, /ore or less- 5t cannot 'e said that the 'oundaries are indefinite =ust 'ecause the deed of sale 0rovides 'oundaries given as 7lu0ang @asani'-8 !. Re2u(s(tes to *o+' uyer to no more t*an t*e area rec(te' To hold the 'u"er to no /ore than the area recited on the area, it /ust 'e /ade clear therein that the sale &as /ade '" unit of /easure at a definite 0rice for each unit- 5f the defendant intended to 'u" '" the /eter he should have so stated in the contract8 (Fo"ena vs- Ta/'unting, su0ra)8. @a venta a cuerpo c(erto3 .a+e o- a certa(n t*(n) The ruling of the !u0re/e ourt of !0ain, in construing 3rticle 14+1 of the !0anish ivil ode (co0ied ver'ati/ in 3rticle 164* of the ivil ode) is highl" 0ersuasive that as 'et&een the a'sence of a recital of a given 0rice 0er unit of /easure/ent, and the s0ecification of the total area sold, the for/er /ust 0revail and deter/ines the a00lica'ilit" of the nor/s concerning sales for a lu/0 su/O The sale of a certain thing is dou'tlessl" verified &hen in the contract there is no single nor 0recise 0rice '" unit of /easure/ent, &ithout neither indicating the glo'al di/ensions of the i//ova'le, 'ut it also verified &hen even having not indicated a singular 0rice '" unit of /easure/ent, nevertheless the total di/ension of i//ova'le, in &hich ulti/atel" entered contrasting indices, constituted a K'"L the lac@ of a singular 0rice for a unit of /easure, and another '" the concretion of the glo'al di/ensions of the i//ova'le, the 0revailing la& is the first, and 0resu/es that the individuali2ation does not s0ea@ of the 0arts of essential value that constitutes an over0rice, and does not /ean that the 0arts have 'een agreed that the glo'al 0rice of the i//ova'le is for the total di/ensions, considering that this is an a'solute 0resu/0tion, against an" 0roof 0resented '" either the 'u"er or the sellerO Therefore, neither the 'u"er nor the seller can tr" to reduce or 0rovide a 0rice su00le/ent, &hen the glo'al di/ensions of a larger or s/aller i//ova'le results therefro/ fro/ the ones indicated in the contract, unless it can 'e adduced that the" have agreed u0on 0recisel" are the di/ensions of the thing in the contract-8 (!u0re/e ourt of !0ain, Decision of *9, June 1,69G (e0- Juris0- 3ran2adi, *+*,) #. .ect(on $8 o- Act 4#: mere+y a proce'ure '(rect(ve to Re)(sters o- Dee's an' 'oes not mo'(-y C(v(+ Co'e Ru+e as to sa+es 4a cuerpo c(erto6 The ivil ode;s rule as to sales 7a cuer0o cierto8 &as not /odified '" 3ct 4,9, section 6< 0rohi'iting the issuance of a certificate of title to a grantee of 0art of a registered tract until a su'division 0lan and technical descri0tion are dul" a00roved '" the Director of Lands, and authori2ing onl" the entr" of a /e/orandu/ on the grantor;s certificate of title in default of such 0lan- The latter 0rovision is 0urel" a 0rocedural directive to (egisters of Deeds that does not atte/0t to govern the rights of vendor and vendee inter se, that re/ain controlled '" the ivil ode of the Phili00ines- 5t does not even 'ar the registration of the contract itself to 'ind the land.a+es" /001 ( /18 )
[101] Suria v. IAC, /$/ SC6A ''/(/08 ( [10/] Ta4atac v. ;imene=, $& 17 & 0. (/0$ ( [101] ;a8an+an)(t vs. .out*ern 9otors [G.R. No. @D10!8#. 9ay /8" 1#$!.] !econd Division, Deng2on (J): < concur %acts& 5n 30ril 1,63 3/ador Ta=anlangit and his &ife 3ngeles, 'ought fro/ the !outhern Aotors 5nc- of 5loilo t&o tractors and a thresher- 5n 0a"/ent for the sa/e, the" e4ecuted the 0ro/issor" note &here'" the" undertoo@ to satisf" the total 0urchase 0rice of P*4,+66-+6 in several install/ents (&ith interest) 0a"a'le on stated dates fro/ 1< Aa" 1,63 to 10 Dece/'er 1,66- The note sti0ulated that if default 'e /ade in the 0a"/ent of interest or of an" install/ent, then the total 0rinci0al su/ still un0aid &ith interest shall at once 'eco/e de/anda'le etc- The s0ouses failed to /eet an" install/entThe s0ouses &ere sued ( ivil ase *,4*), for the a/ount of the 0ro/issor" note- The s0ouses defaulted, and the court, after listening to the !outhern Aotors; evidence entered =udg/ent for it in the total su/ of P*4,+66-+6 together &ith interest at 1*I, 0lus 10I of the total a/ount due as attorne";s fees and costs of collection- arr"ing out the order of e4ecution, the sheriff levied on the sa/e /achineries and far/ i/0le/ents &hich had 'een 'ought '" the s0ousesG and later sold the/ at 0u'lic auction to the highest 'idder, &hich turned out to 'e the !outhern Aotors itself, for the total su/ of P10,000- 3s its =udg/ent called for /uch /ore, the !outhern Aotors su'se.uentl" as@ed and o'tained, an alias &rit of e4ecutionG and 0ursuant thereto, the 0rovincial sheriff levied attach/ent on the Ta=anlangits; rights and interests in certain real 0ro0erties, &ith a vie& to another sale on e4ecutionTo 0revent such sale, the Ta=anlangits instituted the action in the F5 5loilo for the 0ur0ose a/ong others, of annulling the alias &rit of e4ecution and all 0roceedings su'se.uent thereto- The" alleged that (1) the" had returned the /achineries and far/ i/0le/ents to the !outhern Aotors 5nc-, the latter acce0ted the/, and had there'" settled their accountsG for that reason, said s0ouses did not contest the action in ivil ase *,4*G and (*) as the !outhern Aotors 5nc- had re0ossessed the /achines 0urchased on install/ent (and /ortgaged) the 'u"ers &ere there'" relieved fro/ further res0onsi'ilit", in vie& of the (ecto La&, no& article 14<4 of the $e& ivil ode- For ans&er, the co/0an" denied the alleged 7settle/ent and understanding8 during the 0endenc" of ivil ase *,4*- 5t also denied having re0ossessed the /achineries, the truth 'eing that the" &ere attached '" the sheriff and then de0osited '" the latter in its sho0 for safe@ee0ing, 'efore the sale at 0u'lic auction- The case &as su'/itted for decision /ostl" u0on a sti0ulation of facts- 3dditional testi/on" &as offered together &ith docu/entar" evidence- The lo&er court dis/issed the co/0laint, holding that it has no authorit" and =urisdiction to declare null and void the order directing the issuance of alias &rit of e4ecution 'ecause it &as /ade '" another court of e.ual ran@ and categor"The s0ouses reasona'l" 'rought the /atter to the ourt of 300eals, 'ut the latter for&arded the e40ediente, 'eing of the o0inion that the a00eal involved .uestions of =urisdiction andBor la&The !u0re/e ourt affir/ed the decision dis/issing the co/0laint, &ith costs against the a00ellants1. Art(c+e 1484 o- t*e C(v(+ Co'e
.a+es" /001 ( /1# )
3rticle 14<4 of the ivil ode 0rovides that 7in a contract of sale of 0ersonal 0ro0ert" the 0rice of &hich is 0a"a'le in install/ents, the vendor /a" e4ercise an" of the follo&ing re/edies: (1) >4act fulfill/ent of the o'ligation, should the vendee fail to 0a"G (*) ancel the sale, should the vendee;s failure to 0a" cover t&o or /ore install/entsG (3) Foreclose the chattel /ortgage on the thing sold, if one has 'een constituted, should the vendee;s failure to 0a" cover t&o or /ore install/ents- 5n this case, he shall have no further action against the 0urchaser to recover an" un0aid 'alance of the 0rice- 3n" agree/ent to the contrar" shall 'e void-8 /. Art(c+e 1484 (1) 'oes not app+y The s0ouses invo@ed the last 0aragra0h of 3rticle 14<4, 'ut there has 'een no foreclosure of the chattel /ortgage nor a foreclosure sale in the 0resent case- Therefore the 0rohi'ition against further collection does not a00l"1. .a+e o- mort)a)e c*atte+ 5t is the actual sale of the /ortgaged chattel in accordance &ith section 14 3ct 160< that &ould 'ar the creditor (&ho chooses to foreclose) fro/ recovering an" un0aid 'alance- (Pacific o/- o- vs- De la (a/a, +* Phil- 3<0G Aanila Aotor o- vs- Fernande2, ,, Phil-, +<*-) 4. >pt(on e7erc(se' y .out*ern 9otors 5t is true that there &as a chattel /ortgage on the goods sold, 'ut the !outhern Aotors elected to sue on the note e4clusivel", i-e- to e4act fulfill/ent of the o'ligation to 0a"- 5t had a right to select a/ong the three re/edies esta'lished in 3rticle 14<4- 5n choosing to sue on the note, it &as not there'" li/ited to the 0roceeds of the sale, on e4ecution, of the /ortgaged good$. .(m(+ar s(tuat(on (n .out*ern 9otors vs. 9a) anua 5n !outhern Aotors 5nc- vs- Aag'anua, (100 Phil-, 166) a si/ilar situation arose in connection &ith the 0urchase on install/ent of a hevrolet truc@ '" Aag'anua- ?0on the latter;s default, suit on the note &as filed, and the truc@ levied on together &ith other 0ro0erties of the de'tor- ontending that the seller &as li/ited to the truc@, the de'tor o'tained a discharge of the other 0ro0erties- This court said that 7'" 0ra"ing that the defendant 'e ordered to 0a" the su/ of P4,9,0 together &ith the sti0ulated interest at 1*I 0er annu/ fro/ 1+ Aarch 1,64 until full" 0aid, 0lus 10I of the total a/ount due as attorne";s fees and cost of collection, the 0laintiff elected to e4act the fulfill/ent of the o'ligation and not to foreclose the /ortgage on the truc@-3s the 0laintiff has chosen to e4act the fulfill/ent of the defendant;s o'ligation, the for/er /a" enforce e4ecution of the =udg/ent rendered in its favor on the 0ersonal and real 0ro0erties of the latter not e4e/0t fro/ e4ecution sufficient to satisf" the =udg/ent- That 0art of the =udg/ent de0riving the 0laintiff of its right to enforce =udg/ent against the 0ro0erties of the defendant e4ce0t the /ortgaged truc@ and discharging the &rit of attach/ent on his other 0ro0erties is erroneous-8 :. Cance++at(on an' sett+ement t*eory o- spouses not *ee'e' as (t ,ou+' contravene 'ec(s(on (n C(v(+ Case /#4/ The argu/ent of the s0ouses (that 7u0on the return of the sa/e chattels and due acce0tance of the sa/e '" the vendor)/ortgagee, the conditional sale is i0so facto cancelled, &ith the right of the vendor) /ortgagee to a00ro0riate &hatever do&n)0a"/ent and 0osterior /onthl" install/ents /ade '" the 0urchaser8) assu/es that acce0tance of the goods '" the !outhern Aotors o- &ith a vie& to 7cancellation8 of the sale- The co/0an" denies such acce0tance and cancellation, asserting the goods &ere de0osited in its sho0 &hen the sheriff attached the/ in 0ursuance of the e4ecution- 5ts assertion is 'ac@ed u0 '" the sheriff, of &hose credi'ilit" there is no reason to dou't- The cancellation or settle/ent theor" /a" not 'e heeded, 'ecause it &ould contravene the decision in ivil ase *,4* (it &ould sho& the Ta=anlangits o&ned nothing to !outhern Aotors 5nc-)- !uch decision is 'inding u0on the/, unless and until the" /anage to set it aside in a 0ro0er 0roceeding, &hich is not the 0resent case-
.a+es" /001 ( /40 )
!.
Broce'ura+ aspect not necessary to 'ea+ ,(t* as spouses are not ent(t+e' to re+(e- 'eman'e' The ourt dee/ed it unnecessar" to deal &ith the 0rocedural as0ect, such as the authorit" of the =udge of one 'ranch of the F5 to en=oin 0roceedings in another 'ranch of the sa/e court, inas/uch as that, on the /erits, the s0ouses are not entitled to the relief de/anded[104] ;ane'o vs. CA [G.R. No. 10448/. Fanuary //" 1##:.] Third Division, Pangani'an (J): 4 concur %acts& %n *0 %cto'er 1,9*, La2ardo TaMedo e4ecuted a notari2ed deed of a'solute sale in favor of his eldest 'rother, (icardo TaMedo, and the latter;s &ife, Teresita Darera, &here'" he conve"ed to the latter in consideration of P1,600, 1 hectare of &hatever share he shall have over Lot 1,1 of the cadastral surve" of Ferona, Tarlac (T T T)13<, of the (egister of Deeds of Tarlac), the said 0ro0ert" 'eing his 7future inheritance8 fro/ his 0arents- ?0on the death of his father Aatias, La2aro e4ecuted an 73ffidavit of onfor/it"8 dated *< Fe'ruar" 1,<0 to re)affir/ res0ect, ac@no&ledge and validate the sale he /ade in 1,9*%n 13 Januar" 1,<1, La2aro e4ecuted another notari2ed deed of sale in favor of (icardo Tanedo and his &ife covering his undivided 1B1* of a 0arcel of land @no&n as Lot 1,1- #e ac@no&ledged therein his recei0t of P10,000 as consideration therefor- 5n Fe'ruar" 1,<1, (icardo learned that La2aro sold the sa/e 0ro0ert" to his children, through a deed of sale dated *, Dece/'er 1,<0- %n + June 1,<*, (icardo Tanedo and his &ife recorded the Deed of !ale in their favor in the (egistr" of Deeds and the corres0onding entr" &as /ade in T T19946Delinda Tanedo, for herself and in re0resentation of her 'rothers and sisters, and Teofila or0u2 Tanedo, re0resenting her /inor daughter, 1erna Tanedo, on 19 Jul" 1,<* filed a co/0laint for rescission (0lus da/ages) of the deeds of sale e4ecuted '" La2aro in favor of (icardo Tanedo and his &ife covering the 0ro0ert" inherited '" La2aro fro/ his father &ith the (egional Trial ourt Tarlac (Dranch 93, Third Judicial (egion, Tarlac, TarlacG ivil ase 93*<)- The" clai/ed that their father, La2aro, e4ecuted an 73'solute Deed of !ale8 dated *, Dece/'er 1,<0, conve"ing to his 10 children his allotted 0ortion under the e4tra=udicial 0artition e4ecuted '" the heirs of Aatias, &hich deed included the land in litigation (Lot 1,1)- (icardo Tanedo, on the other hand, 0resented in evidence a 7Deed of (evocation of a Deed of !ale8 dated 1* Aarch 1,<1, &herein La2aro revo@ed the sale in favor of 0etitioners for the reason that it &as 7si/ulated or fictitious J &ithout an" consideration &hatsoever8- La2aro ho&ever e4ecuted a s&orn state/ent &hich virtuall" re0udiated the contents of the Deed of (evocation of a Deed of !ale and the Deed of !ale in favor of (icardo Tenedo, 'ut testified that he sold the 0ro0ert" to (icardo, and that it &as a la&"er &ho induced hi/ to e4ecute a deed of sale in favor of his children after giving hi/ P6 to 'u" a 7drin@-8 The trial court decided in favor of (icardo Tanedo and his &ife, holding that his children failed 7to adduce a 0re0onderance of evidence to su00ort (their) clai/-8 %n a00eal and on *9 !e0te/'er 1,,1, the ourt of 300eals ( 3)F( 1 *4,<+) affir/ed the decision of the trial court, ruling that the Deed of !ale dated 13 Januar" 1,<1 &as valid and that its registration in good faith vested title in (icardo Tanedo and his &ife- The /otion for reconsideration &as denied on *+ Aa" 1,,*#ence, the 0etition for revie& on certiorari under (ule 46 of the (ules of ourt '" the childrenThe !u0re/e costsourt denied the 0etition and affir/ed the assailed Decision of the ourt of 300ealsG &ithout
1. Errors rev(e,a +e y .upreme Court are t*ose comm(tte' y t*e Court o- Appea+s3 Gssues 'e+ve' (nto to )(ve part(es su stant(a+ 8ust(ce The 7errors8 &hich are revie&a'le '" the ourt in the 0etition for revie& on certiorari are onl" those allegedl" co//itted '" the ourt of 300eals and not directl" those of the trial court, &hich is not a 0art"- The
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7assign/ent of errors8 in the 0etition are totall" /is0laced, and for that reason, the 0etition should 'e dis/issed- Dut in order to give the 0arties su'stantial =ustice, the ourt decided to delve into the issues as re0hrased- The errors attri'uted to the trial court &ould 'e discussed onl" insofar as the" are relevant to the a00ellate court;s assailed Decision and (esolution/. Contract upon a -uture (n*er(tance vo(' un+ess aut*or(Ce' y +a, Pursuant to 3rticle 134+ of the ivil ode, 7(n)o contract /a" 'e entered into u0on a future inheritance e4ce0t in cases e40ressl" authori2ed '" la&-8 The contract /ade in 1,9* is not valid and cannot 'e the source of an" right nor the creator of an" o'ligation 'et&een the 0arties1. Ha+('at(n) contract a+so use+ess The 7affidavit of confor/it"8 dated *< Fe'ruar" 1,<0, insofar as it sought to validate or ratif" the 1,9* sale, is also useless and 7suffers fro/ the sa/e infir/it"-8 4. sa+e Cr(t(ca+ 'ocuments (n t*e reso+ut(on o- t*e case3 'ocuments not (n-ecte' ,(t* (n-(rm(t(es o- 1#:/
The docu/ents that are critical to the resolution of this case are: (a) the deed of sale of 13 Januar" 1,<1 in favor of (icardo Tanedo covering La2aro;s undivided inheritance of 1B1* share in Lot 1,1, &hich &as su'se.uentl" registered on + June 1,<*G and (') the deed of sale dated *, Dece/'er 1,<0 in favor of La2aro;s children covering the sa/e 0ro0ert"- These t&o docu/ents &ere e4ecuted after the death of Aatias (and his s0ouse) and after a deed of e4tra)=udicial settle/ent of his (Aatias;) estate &as e4ecuted, thus vesting in La2aro actual title over said 0ro0ert"- These dis0ositions, though conflicting, &ere no longer infected &ith the infir/ities of the 1,9* sale$. .u 8ect matter o- sa+e (s t*e @aCaro=s ent(re un'(v('e' 1<1/ s*are (n @ot 1#1 The su'=ect /atter of the 13 Januar" 1,<1 sale to 'e the entire undivided 1B1* share of La2aro in Lot 1,1 and &hich is the sa/e 0ro0ert" dis0osed of on *, Dece/'er 1,<0 in favor of La2aro;s children:. Dou +e sa+e3 Art(c+e 1$44 3rticle 1644 of the ivil ode governs the 0referential rights of vendees in cases of /ulti0le sales- 5t 0rovides that 75f the sa/e thing should have 'een sold to different vendees, the o&nershi0 shall 'e transferred to the 0erson &ho /a" have first ta@en 0ossession thereof in good faith, if it should 'e /ova'le 0ro0ert"!hould it 'e i//ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"- !hould there 'e no inscri0tion, the o&nershi0 shall 0ertain to the 0erson &ho in good faith &as first in the 0ossessionG and, in the a'sence thereof, to the 0erson &ho 0resents the oldest title, 0rovided there is good faith-8 !. Gmmova +e property3 %(rst to re)(ster *as etter r()*t The 0ro0ert" in .uestion is land, an i//ova'le- %&nershi0 therefore shall 'elong to the 'u"er &ho in good faith registers it first in the registr" of 0ro0ert"- Thus, although the deed of sale in favor of (icardo Tanedo &as later than the one in favor of the children, o&nershi0 &ould vest in the for/er 'ecause of the undis0uted fact of registration- %n the other hand, the hildren have not registered the sale to the/ at all8. Re)(strat(on pre-erre'" even (- one ,(t*out *(s t(t+e re)(stere' actua++y possesses t*e property 3s 'et&een t&o 0urchasers, the one &ho registered the sale in his favor has a 0referred right over the other &ho has not registered his title, even if the latter is in actual 0ossession of the i//ova'le 0ro0ert"#. A++e)at(on o- a' -a(t* a 2uest(on o- -act3 .upreme Court not tr(er o- -acts La2aro;s children (0etitioners) alleged that 7the res0ondent ourt allegedl" ignored the clai/ed fact that res0ondent (icardo 7'" fraud and deceit and &ith fore@no&ledge8 that the 0ro0ert" in .uestion had alread" 'een sold to 0etitioners, /ade La2aro e4ecute the deed of 13 Januar" 1,<1G that there is allegedl"
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ade.uate evidence to sho& that onl" 1B* of the 0urchase 0rice of P10,000 &as 0aid at the ti/e of the e4ecution of the deed of sale, contrar" to the &ritten ac@no&ledg/ent, thus sho&ing 'ad faithG that there is allegedl" sufficient evidence sho&ing that the deed of revocation of the sale in favor of 0etitioners 7&as tainted &ith fraud or deceit8G that there is allegedl" enough evidence to sho& that 0rivate res0ondents 7too@ undue advantage over the &ea@ness and unschooled and 0itiful situation of La2aro TaMedo8 and that (icardo TaMedo 7e4ercised /oral ascendanc" over his "ounger 'rother he 'eing the eldest 'rother and &ho reached fourth "ear college of la& and at one ti/e a for/er 1ice)Fovernor of Tarlac, &hile his "ounger 'rother onl" attained first "ear high school8G and that the res0ondent ourt erred in not giving credence to 0etitioners; evidence, es0eciall" La2aro TaMedo;s !inu/0aang !ala"sa" dated *+ Jul" 1,<* stating that (icardo TaMedo deceived the for/er in e4ecuting the deed of sale in favor of 0rivate res0ondents-8 There are indeed /an" conflicting docu/ents and testi/onies as &ell as argu/ents over their 0ro'ative value and significance- 3ll the contentions involve .uestions of fact, a00reciation of evidence and credi'ilit" of &itnesses, &hich are not 0ro0er in the 0resent revie&- The !u0re/e ourt is not a trier of facts- !uffice that the a00ellate court, in revie&ing the trial court;s findings, refused to overturn the latter;s assess/ent of the testi/onial evidence, declaring that it &as not 0re0ared to set aside the finding of the lo&er court u0holding (icardo TaMedo;s testi/on", as it involves a /atter of credi'ilit" of &itnesses &hich the trial =udge, &ho 0resided at the hearing, &as in a 'etter 0osition to resolve10. >n+y 2uest(ons o- +a, may e ra(se' (n pet(t(on -or rev(e, un'er Ru+e 4$ 5n 0etitions for revie& under (ule 46 of the (evised (ules of ourt, onl" .uestions of la& /a" 'e raised and 0assed u0on- 3'sent an" &hi/sical or ca0ricious e4ercise of =udg/ent, and unless the lac@ of an" 'asis for the conclusions /ade '" the lo&er courts 'e a/0l" de/onstrated, the !u0re/e ourt &ill not distur' their findings- 3t /ost, it a00ears that La2aro;s children have sho&n that their evidence &as not 'elieved '" 'oth the trial and the a00ellate courts, and that the said courts tended to give /ore credence to the evidence 0resented '" (icardo Tanedo- Dut this in itself is not a reason for setting aside such findings- The ourt is far fro/ convinced that 'oth courts gravel" a'used their res0ective authorities and =udicial 0rerogatives11. %actua+ -(n'(n)s o- tr(a+ court as ,e++ as Court o- Appea+s are -(na+ an' conc+us(ve3 E7cept(ons 3s held in Chua +iong +ay vs. Court of Appeals an$ "ol$roc; Construction an$ Develop#ent Corp.: 7the ourt has consistentl" held that the factual findings of the trial court, as &ell as the ourt of 300eals, are final and conclusive and /a" not 'e revie&ed on a00eal- 3/ong the e4ce0tional circu/stances &here a reassess/ent of facts found '" the lo&er courts is allo&ed are &hen the conclusion is a finding grounded entirel" on s0eculation, sur/ises or con=ecturesG &hen the inference /ade is /anifestl" a'surd, /ista@en or i/0ossi'leG &hen there is grave a'use of discretion in the a00reciation of factsG &hen the =udg/ent is 0re/ised on a /isa00rehension of factsG &hen the findings &ent 'e"ond the issues of the case and the sa/e are contrar" to the ad/issions of 'oth a00ellant and a00ellee-8 1/. Reassessment an' reeva+uat(on o- ev('ence not t*e -unct(on o- t*e .upreme Court 5n !outh !ea !uret" and 5nsurance o/0an", 5nc- vs- #on- ourt of 300eals, et al-, it &as held that 5t is not the function of the !u0re/e ourt to assess and evaluate all over again the evidence, testi/onial and docu/entar", adduced '" the 0arties, 0articularl" &here the findings of 'oth the trial court and the a00ellate court on the /atter coincide[10$] ;orres v. CA [G.R. No. 114$$#. Decem er #" 1###.] Third division, Pangani'an (J): 4 concur %acts& !isters 3ntonia Torres and >/eteria Daring entered into a 7=oint venture agree/ent8 &ith Aanuel Torres for the develo0/ent of a 0arcel of land into a su'division- Pursuant to the contract, the" e4ecuted a
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Deed of !ale covering the said 0arcel of land in favor of Aanuel, &ho then had it registered in his na/e- D" /ortgaging the 0ro0ert", Aanuel o'tained fro/ >.uita'le Dan@ a loan of P40,000 &hich, under the Joint 1enture 3gree/ent, &as to 'e used for the develo0/ent of the su'division- 3ll 3 of the/ also agreed to share the 0roceeds fro/ the sale of the su'divided lots- The 0ro=ect did not 0ush through, and the land &as su'se.uentl" foreclosed '" the 'an@- Antonia an$ )#eteria allege$ that the 0ro=ect failed 'ecause of 7Aanuel;s lac@ of funds or /eans and s@ills-8 The" add that Aanuel used the loan not for the develo0/ent of the su'division, 'ut in furtherance of his o&n co/0an", ?niversal ?/'rella o/0an"-%n the other hand, /anuel allege$ that he used the loan to i/0le/ent the 3gree/ent- :ith the said a/ount, he &as a'le to effect the surve" and the su'division of the lots- #e secured the La0u La0u it" ouncil;s a00roval of the su'division 0ro=ect &hich he advertised in a local ne&s0a0er- #e also caused the construction of roads, cur's and gutters- Li@e&ise, he entered into a contract &ith an engineering fir/ for the 'uilding of 90 lo&)cost housing units and actuall" even set u0 a /odel house on one of the su'division lots- #e did all of these for a total e40ense of P<6,000- #e further clai/ed that the su'division 0ro=ect failed 'ecause 3ntonia and >/eteria and their relatives had se0aratel" caused the annotations of adverse clai/s on the title to the land, &hich eventuall" scared a&a" 0ros0ective 'u"ers- Des0ite his re.uests, 3ntonia and >/eteria refused to cause the clearing of the clai/s, there'" forcing hi/ to give u0 on the 0ro=ect3ntonia and >/eteria filed a cri/inal case for estafa against Aanuel and his &ife, &ho &ere ho&ever ac.uitted- Thereafter, the" filed the 0resent civil case &hich, u0on Aanuel;s /otion, &as later dis/issed '" the trial court in an %rder dated 9 !e0te/'er 1,<*- %n a00eal, ho&ever, the a00ellate court re/anded the case for further 0roceedings- Thereafter, the (T e'u it" ( ivil ase ()*1*0<) issued its assailed Decision, &hich &as affir/ed '" the 3 on 6 Aarch 1,,< ( 3)F( 1 4*3+<)- (econsideration &as denied '" the ourt of 300eals through its (esolution of 6 Aarch 1,,<- #ence, the 0etition for revie& on certiorariThe !u0re/e ourt denied the 0etition and affir/ed the challenged decisionG &ith costs against 3ntonia and >/eteria1. Bartners*(p e7(sts 3 reading of the ter/s e/'odied in the 3gree/ent indu'ita'l" sho&s the e4istence of a 0artnershi0 0ursuant to 3rticle 1+9+ of the ivil ode, &hich 0rovides that 7D" the contract of 0artnershi0 t&o or /ore 0ersons 'ind the/selves to contri'ute /one", 0ro0ert", or industr" to a co//on fund, &ith the intention of dividing the 0rofits a/ong the/selves-8 5n the 0resent case, 3ntonia and >/eteria &ould contri'ute 0ro0ert" to the 0artnershi0 in the for/ of land &hich &as to 'e develo0ed into a su'divisionG &hile Aanuel &ould give, in addition to his industr", the a/ount needed for general e40enses and other costs- Further/ore, the inco/e fro/ the said 0ro=ect &ould 'e divided according to the sti0ulated 0ercentage- learl", the contract /anifested the intention of the 0arties to for/ a 0artnershi0/. Bart(es (mp+emente' contract3 Bartners may contr( ute not on+y money or property ut a+so (n'ustry The 0arties i/0le/ented the contract- 3ntonia and >/eteria transferred the title to the land to facilitate its use in the na/e of Aanuel- %n the other hand, Aanuel caused the su'=ect land to 'e /ortgaged, the 0roceeds of &hich &ere used for the surve" and the su'division of the land- #e develo0ed the roads, the cur's and the gutters of the su'division and entered into a contract to construct lo&)cost housing units on the 0ro0ert"- Aanuel;s actions clearl" 'elie 3ntonia;s and >/eteria;s contention that he /ade no contri'ution to the 0artnershi0- ?nder 3rticle 1+9+ of the ivil ode, a 0artner /a" contri'ute not onl" /one" or 0ro0ert", 'ut also industr"1. Contract (n's party to st(pu+at(ons an' a++ necessary conse2uences t*ereo?nder 3rticle 1316 of the ivil ode, contracts 'ind the 0arties not onl" to &hat has 'een e40ressl" sti0ulated, 'ut also to all necessar" conse.uences thereof- 3rticle 1316 0rovides that 7 ontracts are 0erfected '" /ere consent, and fro/ that /o/ent the 0arties are 'ound not onl" to the fulfill/ent of &hat has 'een
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e40ressl" sti0ulated 'ut also to all the conse.uences &hich, according to their nature, /a" 'e in @ee0ing &ith good faith, usage and la&-8 5t is undis0uted that 3ntonia and >/eteria are educated and are thus 0resu/ed to have understood the ter/s of the contract the" voluntaril" signed- 5f it &as not in consonance &ith their e40ectations, the" should have o'=ected to it and insisted on the 0rovisions the" &anted4. Courts may not e7tr(cate part(es -rom t*e necessary conse2uences o- t*e(r acts ourts /a" not e4tricate 0arties fro/ the necessar" conse.uences of their acts, and the fact that the ter/s of a contract turn out to 'e financiall" disadvantageous to the/ &ill not relieve the/ of their o'ligations therein- The" cannot no& disavo& the relationshi0 for/ed fro/ such agree/ent due to their su00osed /isunderstanding of its ter/s$. Art(c+e 1!!1 must e (nterprete' (n re+at(on to Art(c+e 1!!13 Bresent case 'oes not pre8u'(ce t*(r' part(es The lac@ of an inventor" of real 0ro0ert" &ill not i0so facto release the contracting 0artners fro/ their res0ective o'ligations to each other arising fro/ acts e4ecuted in accordance &ith their agree/ent- 3rticle 1++3 0roviding that 7a contract of 0artnershi0 is void, &henever i//ova'le 0ro0ert" is contri'uted thereto, if an inventor" of said 0ro0ert" is not /ade, signed '" the 0arties, and attached to the 0u'lic instru/ent8 &as intended 0ri/aril" to 0rotect third 0ersons- Tolentino states that under the 0rovision &hich is a co/0le/ent of 3rticle 1++1, 7the e4ecution of a 0u'lic instru/ent &ould 'e useless if there is no inventor" of the 0ro0ert" contri'uted, 'ecause &ithout its designation and descri0tion, the" cannot 'e su'=ect to inscri0tion in the (egistr" of Pro0ert", and their contri'ution cannot 0re=udice third 0ersons- This &ill result in fraud to those &ho contract &ith the 0artnershi0 in the 'elief KinL the efficac" of the guarant" in &hich the i//ova'les /a" consist- Thus, the contract is declared void '" the la& &hen no such inventor" is /ade-8 The 0resent case does not involve third 0arties &ho /a" 'e 0re=udiced:. Bart(es cannot a'opt (ncons(stent pos(t(ons (n re)ar' to a contract 3ntonia and >/eteria invo@e the allegedl" void contract as 'asis for their clai/ that Aanuel should 0a" the/ 90I of the value of the 0ro0ert"- The" cannot in one 'reath den" the contract and in another recogni2e it, de0ending on &hat /o/entaril" suits their 0ur0ose- Parties cannot ado0t inconsistent 0ositions in regard to a contract and courts &ill not tolerate, /uch less a00rove, such 0ractice!. Nu++(ty o- partners*(p 'oes not prevent courts -rom cons('er(n) Fo(nt Henture A)reement as an or'(nary contract The alleged nullit" of the 0artnershi0 &ill not 0revent courts fro/ considering the Joint 1enture 3gree/ent an ordinar" contract fro/ &hich the 0arties; rights and o'ligations to each other /a" 'e inferred and enforced8. Fo(nt Henture A)reement states cons('erat(on The Joint 1enture 3gree/ent clearl" states that the consideration for the sale &as the e40ectation of 0rofits fro/ the su'division 0ro=ect- 5ts first sti0ulation states that 3ntonia and >/eteria did not actuall" receive 0a"/ent for the 0arcel of land sold to Aanuel- Thus, it cannot 'e contended that the Joint 1enture 3gree/ent is void under 3rticle 14** of the ivil ode, 'ecause it is the direct result of an earlier illegal contract, &hich &as for the sale of the land &ithout valid consideration#. Cons('erat(on or cause may take many -orms onsideration, /ore 0ro0erl" deno/inated as cause, can ta@e different for/s, such as the 0restation or 0ro/ise of a thing or service '" another- 5n the 0resent case, the cause of the contract of sale consisted not in the stated 0eso value of the land, 'ut in the e40ectation of 0rofits fro/ the su'division 0ro=ect, for &hich the land &as intended to 'e used- The land &as in effect given to the 0artnershi0 as 3ntonia;s and >/eteria;s 0artici0ation therein- There &as therefore a consideration for the sale, 3ntonia and >/eteria acting in the e40ectation that, should the venture co/e into fruition, the" &ould get 90I of the net 0rofits.a+es" /001 ( /4$ )
10.
%actua+ (ssues cannot e reso+ve' on a pet(t(on o- rev(e, un'er Ru+e 4$3 Dama)es not 'ue Factual issues cannot 'e resolved in a 0etition for revie& under (ule 46, as in the 0resent case3ntonia and >/eteria have not alleged, not to sa" sho&n, that their 0etition constitutes one of the e4ce0tions to this doctrine- The ourt of 300eals held that the acts of 3ntonia and >/eteria did not cause the failure of the 0ro=ect, nor &as Aanuel res0onsi'le therefore- 5n i/0uting the 'la/e solel" to hi/, 3ntonia and >/eteria failed to give an" reason &h" the ourt should disregard the factual findings of the a00ellate court relieving hi/ of fault- 3ntonia and >/eteria, thus, are not entitled to da/ages[10:] ;oyota .*a, v. CA [G.R. No. 11::$0. 9ay /1" 1##$.] First Division, Davide Jr (J): 3 concur, 1 on leave %acts& !o/eti/e in June 1,<,, Luna L- !osa &anted to 0urchase a To"ota Lite 3ce- 5t &as then a seller;s /ar@et and !osa had difficult" finding a dealer &ith an availa'le unit for sale- Dut u0on contracting To"ota !ha&, 5nc-, he &as told that there &as an availa'le unit- !o on 14 June 1,<,, !osa and his son, Fil'ert, &ent to the To"ota !ha& Doulevard, Pasig, Aetro Aanila- The" /et Po0ong Dernardo, a sales re0resentative of To"ota- !osa e/0hasi2ed to Dernardo that he needed the Lite 3ce not later than 1+ June 1,<, 'ecause he, his fa/il", and a 'ali@'a"an guest &ould use it on 1< June 1,<, to go Aarindu.ue, his ho/e 0rovince, &here he &ould cele'rate his 'irthda" on 1, June- #e added that if he does not arrive in his ho/eto&n &ith the ne& car, he &ould 'eco/e a 7laughing stoc@-8 Dernardo assured !osa that a unit &ould 'e read" for 0ic@ u0 at 10:00 a-/- on 1+ June 1,<,- Dernardo then signed a docu/ent entitled 73gree/ents Det&een Ar- !osa Q Po0ong Dernardo of To"ota !ha&, 5nc,8 sti0ulating that all necessar" docu/ents &ill 'e su'/itted to To"ota !ha& (Po0ong Dernardo) a &ee@ after, u0on arrival of Ar- !osa fro/ the Province (Aarindu.ue) &here the unit &ill 'e used on the 1, JuneG that the do&n0a"/ent of P100,000-00 &ill 'e 0aid '" Ar- !osa on 16 June 1,<,G and that the To"ota !ha&, 5nc- &ill 'e released a "ello& Lite 3ce unit- 5t &as also agreed u0on '" the 0arties that the 'alance of the 0urchase 0rice &ould 'e 0aid '" credit financing through D-3- Finance, and for this Fil'ert, on 'ehalf of his father, signed the docu/ents of To"ota and D-3- Finance 0ertaining to the a00lication for financing- The ne4t da", !osa and Fil'ert &ent to To"ota to deliver the do&n0a"/ent of P100,000-00- The" /et Dernardo &ho then acco/0lished a 0rinted 1ehicle !ales Pro0osal (1!P) ,*<, on &hich Fil'ert signed under the su'heading 7confor/e8- This docu/ent sho&s that the custo/er;s na/e is 7Ar- Luna !osa8 &ith ho/e address at *319 Fui=o !treet, ?nited ParaMa.ue 55G that the /odel series of the vehicle is a 7Lite 3ce 16008 descri'ed as 74 Dr /ini'us8G that 0a"/ent is '" 7install/ent,8 to 'e financed '" 7D-3-,8 &ith the initial cash outla" of P100,000-00 (do&n0a"/ent: P63,14<-00G insurance: P13,,+0-00G DLT registration fee: P1,09+-00G #A% fee: P*,+16-00G !ervice fee: P600-00G and accessories: P*,,000-00) and the 'alance to 'e financed is P*+4,13+-00- The s0aces 0rovided for 7deliver" ter/s8 &ere not filled)u0- 5t also contains conditions of sales 0roviding that the sale is su'=ect to the availa'ilit" of the unit, and that the stated 0rice is su'=ect to change &ithout 0rior notice, and that the 0rice 0revailing and in effect at ti/e of selling &ill a00l"- (odrigo Uuirante, the !ales !u0ervisor of Dernardo, chec@ed and a00roved the 1!P%n 1+ June (,:30 a-/-), Dernardo called Fil'ert to infor/ hi/ that the vehicle &ould not 'e read" for 0ic@ u0 at 10:00 a-/- as 0reviousl" agreed u0on 'ut at *:00 0-/- that sa/e da"- 3t *:00 0-/-, !osa and Fil'ert /et Dernardo at the latter;s office- 3ccording to !osa, Dernardo infor/ed the/ that the Lite 3ce &as 'eing readied for deliver"- 3fter &aiting for a'out an hour, Dernardo told the/ that the car could not 'e delivered 'ecause it &as ac.uired '" a /ore influential 0erson- To"ota contends, ho&ever, that the Lite 3ce &as not delivered to !osa 'ecause of the disa00roval of D-3- Finance of the credit financing a00lication of !osa- 5t further alleged that a 0articular unit had alread" 'een reversed and ear/ar@ed for !osa 'ut could not 'e released due to the uncertaint" of 0a"/ent of the 'alance of the 0urchase 0rice- To"ota then gave !osa the o0tion to 0urchase the unit '" 0a"ing the full 0urchase 0rice in cash 'ut !osa refused- 3fter it 'eca/e clear that the Lite 3ce &ould not 'e delivered to hi/, !osa as@ed that his do&n0a"/ent 'e refunded- To"ota did so
.a+es" /001 ( /4: )
on the ver" sa/e da" '" issuing a Far >ast Dan@ chec@ for the full a/ount of P100,000-00, the recei0t of &hich &as sho&n '" a chec@ voucher of To"ota, &hich !osa signed &ith the reservation, 7&ithout 0re=udice to our future clai/s for da/ages-8 Thereafter, !osa sent t&o letters to To"ota: one on *+ June 1,<, de/anding the refund, &ithin 6 da"s fro/ recei0t, of the do&n0a"/ent of P100,000-00 0lus interest fro/ the ti/e he 0aid it and the 0a"/ent of da/ages &ith a &arning that in case of To"ota;s failure to do so he &ould 'e constrained to ta@e legal actionG and the other on 4 $ove/'er 1,<, (signed '" A-%- a'alles, !osa;s counsel) de/anding P1A re0resenting interest and da/ages, again, &ith a &arning that legal action &ould 'e ta@en if 0a"/ent &as not /ade &ithin 3 da"s- To"ota;s counsel ans&ered through as letter dated *+ $ove/'er 1,<, < refusing to accede to the de/ands of !osaDut even 'efore the ans&er &as /ade and received '" !osa, the latter filed on *0 $ove/'er 1,<, &ith the (T Aarindu.ue (Dranch 3<) a co/0laint against To"ota for da/ages under 3rticles 1, and *1 of the ivil ode in the total a/ount of P1,*30,000-00- 3fter trial on the issue agreed u0on during the 0re)trial session, the trial court rendered on 1< Fe'ruar" 1,,* a decision in favor of !osa- 5t ruled that the 73gree/ent 'et&een Ar- !osa and Po0ong Dernardo,8 &as a valid 0erfected and contract of sale 'et&een !osa and To"ota &hich 'ound To"ota to deliver the vehicle to !osa, and further agreed &ith !osa that To"ota acted in 'ad faith in selling to another the unit alread" reserved for hi/G that Dernardo, as an authori2ed sales e4ecutive of To"ota !ha&, &as the latter;s agent and thus 'ound To"ota !ha&G that Luna !osa 0roved his social standing in the co//unit" and suffered 'es/irched re0utation, &ounded feelings and slee0less nights for &hich he ought to 'e co/0ensatedG and thus rendered =udg/ent ordering To"ota !ha& to 0a" !osa the su/ of P+6,000 as /oral da/ages, P10,000 as e4e/0lar" da/ages, P30,000 as attorne";s fees 0lus P*,000 la&"er;s trans0ortation fare 0er tri0 in attending to the hearing of the case, P*,000 for !osa;s trans0ortation fare 0er tri0 in attending the hearing of the case, and to 0a" the cost of the suitDissatisfied &ith the trial court;s =udg/ent, To"ota a00ealed to the ourt of 300eals ( 3)F( 1 40043)- 5n its decision 0ro/ulgated on *, Jul" 1,,4, the ourt of 300eals affir/ed in toto the a00ealed decision- #ence the 0etition for revie& '" certiorari '" To"ota !ha&The !u0re/e ourt granted the 0etition, and dis/issed the challenged decision of the ourt of 300eals and that of Dranch 3< of the (egional Trial ourt of Aarindu.ue, and the counterclai/ thereinG &ithout 0ronounce/ent as to costs1. Contract o- sa+e 'e-(ne'3 A(n's 3rticle 146< of the ivil ode defines a contract of sale as 7D" the contract of the sale one of the contracting 0arties o'ligates hi/self to transfer the o&nershi0 of and to deliver a deter/inate thing, and the other to 0a" therefor a 0rice certain in /one" or its e.uivalent- 3 contract of sale /a" 'e a'solute or conditional/. Contract o- sa+e" ,*en per-ecte'3 E--ect 3rticle 14+6 of the ivil ode s0ecificall" 0rovides &hen the contract of sale is dee/ed 0erfected, i-e- 7The contract of sale is 0erfected at the /o/ent there is a /eeting of /inds u0on the thing &hich is the o'=ect of the contract and u0on the 0rice- Fro/ that /o/ent, the 0arties /a" reci0rocall" de/and 0erfor/ance, su'=ect to the 0rovisions of the la& governing the for/ of contracts1. 4A)reement et,een 9r. .osa N Bopon) Bernar'o o- ;oyota .*a," Gnc.6 not a contract o- sa+e The 73gree/ents 'et&een Ar- !osa Q Po0ong Dernardo of To"ota !ha&, 5nc-8 e4ecuted on 4 June 1,<,, is not a contract of sale- $o o'ligation on the 0art of To"ota to transfer o&nershi0 of a deter/inate thing to !osa and no correlative o'ligation on the 0art of the latter to 0a" therefor a 0rice certain a00ears therein- The 0rovision on the do&n0a"/ent of P100,000-00 /ade no s0ecific reference to a sale, it could onl" refer to a sale on install/ent 'asis, as the 1!P e4ecuted the follo&ing da" confir/ed- Dut nothing &as /entioned a'out the full 0urchase 0rice and the /anner the install/ents &ere to 'e 0aid- $either logic nor
.a+es" /001 ( /4! )
recourse to one;s i/agination can lead to the conclusion that such agree/ent is a 0erfected contract of sale4. sa+e De-(n(t(ve pr(ce (s an essent(a+ e+ement (n t*e -ormat(on o- a (n'(n) an' en-orcea +e contract o-
3 definite agree/ent on the /anner of 0a"/ent of the 0rice is an essential ele/ent in the for/ation of a 'inding and enforcea'le contract of sale- This is so 'ecause the agree/ent as to the /anner of 0a"/ent goes into the 0rice such that a disagree/ent on the /anner of 0a"/ent is tanta/ount to a failure to agree on the 0rice- Definiteness as to the 0rice is an essential ele/ent of a 'inding agree/ent to sell 0ersonal 0ro0ert"$. No meet(n) o- t*e m(n's The 73gree/ents 'et&een Ar- !osa Q Po0ong Dernardo of To"ota !ha&, 5nc-8 sho&s the a'sence of a /eeting of /inds 'et&een To"ota and !osa- !osa did not even sign it- Further, !osa &as &ell a&are fro/ its title, &ritten in 'old letters, and thus @ne& that he &as not dealing &ith To"ota 'ut &ith Po0ong Dernardo and that the latter did not /isre0resent that he had the authorit" to sell an" To"ota vehicle:. Bru'ence an' reasona +e '(+()ence (n (n2u(r(n) aut*or(ty o- a)ent !osa @ne& that Dernardo &as onl" a sales re0resentative of To"ota and hence a /ere agent of the latter- 5t &as incu/'ent u0on !osa to act &ith ordinar" 0rudence and reasona'le diligence to @no& the e4tent of Dernardo;s authorit" as an agent in res0ect of contracts to sell To"ota;s vehicles- 3 0erson dealing &ith an agent is 0ut u0on in.uir" and /ust discover u0on his 0eril the authorit" of the agent!. ;*ree sta)es (n t*e contract o- sa+e There are three stages in the contract of sale, na/el" (a) 0re0aration, conce0tion, or generation, &hich is the 0eriod of negotiation and 'argaining, ending at the /o/ent of agree/ent of the 0artiesG (') 0erfection of 'irth of the contract, &hich is the /o/ent &hen the 0arties co/e to agree on the ter/s of the contractG and (c) consu//ation or death, &hich is the fulfill/ent or 0erfor/ance of the ter/s agreed u0on in the contract5n the 0resent case, the 73gree/ents 'et&een Ar- !osa Q Po0ong Dernardo of To"ota !ha&, 5nc-8 /a" 'e considered as 0art of the initial 0hase of the generation of negotiation stage of a contract sale- The second 0hase of the generation or negotiation stage &as the e4ecution of the 1!P (the do&n0a"/ent of the 0urchase 0rice &as P63,14<-00 &hile the 'alance to 'e 0aid on install/ent should 'e financed '" D-3- Finance- 5t is assu/ed that D-3 Finance &as acce0ta'le to To"ota)8. %(nanc(n) compan(es 'e-(ne' Financing co/0anies are defined in !ection 3(a) of (3 6,<0, as a/ended '" PDs 1464 and 1+,3, as 7cor0orations or 0artnershi0s, e4ce0t those regulated '" the entral Dan@ of the Phili00ines, the 5nsurance o//ission and the and the oo0eratives 3d/inistration %ffice, &hich are 0ri/aril" organi2ed for the 0ur0ose of e4tending credit facilities to consu/ers and to industrial, co//ercial, or agricultural enter0rises, either '" discounting or factoring co//ercial 0a0ers or accounts receiva'le, or '" 'u"ing and selling contracts, leases, chattel /ortgages, or other evidence of inde'tedness, or '" leasing of /otor vehicles, heav" e.ui0/ent and industrial /achiner", 'usiness and office /achines and e.ui0/ent, a00liances and other /ova'le 0ro0ert"-8 #. Bart(es (n a sa+e on (nsta++ment as(s -(nance' y a -(nanc(n) company3 No meet(n) o- m(n's as -(nanc(n) app+(cat(on ,as '(sapprove' 5n a sale on install/ent 'asis &hich is financed '" a financing co/0an", 3 0arties are thus involved: (1) the 'u"er &ho e4ecutes a note or notes for the un0aid 'alance of the 0rice of the thing 0urchased on install/ent, (*) the seller &ho assigns the notes or discounts the/ &ith a financing co/0an", and (3) the financing co/0an" &hich is su'rogated in the 0lace of the seller, as the creditor of the install/ent 'u"er!ince D-3- Finance did not a00rove !osa;s a00lication, there &as then no /eeting of /inds on the sale on install/ent 'asis-
.a+es" /001 ( /48 )
10.
;oyota=s vers(on o- c(rcumstances +ea'(n) to nonDre+ease o- ve*(c+e more cre'( +e To"ota;s version that D-3- Finance disa00roved !osa;s a00lication for &hich reason it suggested to !osa that he 0a" the full 0urchase 0rice is /ore credi'le- :hen the latter refused, To"ota cancelled the 1!P and returned to hi/ his P100,000-00- !osa;s version, that the 1!P &as cancelled 'ecause the vehicle &as delivered to another 'ecause of a /ore influential client, is contradicted '" 0aragra0h + of his co/0laint &hich states that Dernardo 7for reasons @no&n onl" to its re0resentatives, refused andBor failed to release the vehicle to the 0laintiff - Plaintiff de/anded for an e40lanation, 'ut nothing &as given-8 11. H.B mere proposa+ an' '(' not create 'eman'a +e r()*t (n -avor o- .osa ,*en (t ,as a orte' The 1!P &as a /ere 0ro0osal &hich &as a'orted in lieu of su'se.uent events- Thus, the 1!P created no de/anda'le right in favor of !osa for the deliver" of the vehicle to hi/, and its non)deliver" did not cause an" legall" inde/nifia'le in=ur"1/. A,ar' o- mora+ 'ama)es ,(t*out +e)a+ as(s The a&ard of /oral da/ages is &ithout legal 'asis- The onl" ground u0on &hich !osa clai/ed /oral da/ages is that since it &as @no&n to his friends, to&n/ates, and relatives that he &as 'u"ing a To"ota Lite 3ce &hich the" e40ected to see on his 'irthda", he suffered hu/iliation, sha/e, and slee0less nights &hen the van &as not delivered- The van 'eca/e the su'=ect /atter of tal@s during his cele'ration that he /a" not have 0aid for it, and this created an i/0ression against his 'usiness standing and re0utation created an i/0ression against his 'usiness standing and re0utation- 3t the 'otto/ of this clai/ is nothing 'ut /is0laced 0ride and ego- #e should not have announced his 0lan to 'u" To"ota Lite 3ce @no&ing that he /ight not 'e a'le to 0a" the full 0urchase 0rice- 5t &as he &ho 'rought e/'arrass/ent u0on hi/self '" 'ragging a'out a thing &hich he did not o&n "et11. A,ar' o- e7emp+ary 'ama)es ,(t*out as(s3 Burpose o- e7emp+ary 'ama)es !ince !osa is not entitled to /oral da/ages and there 'eing no a&ard for te/0erate, li.uidated, or co/0ensator" da/ages, he is li@e&ise not entitled to e4e/0lar" da/ages- ?nder 3rticle ***, of the ivil ode, e4e/0lar" or corrective da/ages are i/0osed '" &a" of e4a/0le or correction for the 0u'lic good, in addition to /oral, te/0erate, li.uidated, or co/0ensator" da/ages14. A,ar' o- attorney=s -ees ,(t*out as(s For attorne";s fees to 'e granted the court /ust e40licitl" state in the 'od" of the decision, and not onl" in the dis0ositive 0ortion thereof, the legal reason for the a&ard of attorne";s fees- $o such e40licit deter/ination thereon &as /ade in the 'od" of the decision of the trial court- Thus, no reason e4ists for such a&ard[10!] Dniversa" Food Corp. v. CA, && SC6A / (/0 %( [108] Iy v. CA [G.R. No. 1/04:$. .eptem er #" 1###.] First Division, Ca0unan (J): 3 concur, 1 on leave %acts& :illia/ ?" and (odel (o4as are agents authori2ed to sell < 0arcels of land '" the o&ners thereof- D" virtue of such authorit", the" offered to sell the lands, located in Tu'a, Tadiangan, Denguet to $ational #ousing 3uthorit" ($#3) to 'e utili2ed and develo0ed as a housing 0ro=ect- %n 14 Fe'ruar" 1,<,, the $#3 Doard 0assed (esolution 193* a00roving the ac.uisition of said lands, &ith an area of 31-<*31 hectares, at the cost of P*3-<9+ /illion, 0ursuant to &hich the 0arties e4ecuted a series of Deeds of 3'solute !ale covering the su'=ect lands- %f the < 0arcels of land, ho&ever, onl" 6 &ere 0aid for '" the $#3 'ecause of the re0ort it
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received fro/ the Land Feosciences Dureau of the De0art/ent of >nviron/ent and $atural (esources (D>$() that the re/aining area is located at an active landslide area and therefore, not suita'le for develo0/ent into a housing 0ro=ect- %n ** $ove/'er 1,,1, the $#3 issued (esolution *36* cancelling the sale over the 3 0arcels of land- The $#3, through (esolution *3,4, su'se.uentl" offered the a/ount of P1-**6 /illion to the lando&ners as daMos 0er=uicios%n , Aarch 1,,*, 0etitioners ?" and (o4as filed 'efore the (T Uue2on it" a o/0laint for Da/ages against $#3 and its Feneral Aanager (o'ert Dalao- 3fter trial, the (T rendered a decision declaring the cancellation of the contract to 'e =ustified- The trial court nevertheless a&arded da/ages to 0laintiffs in the su/ of P1-*66 /illion, the sa/e a/ount initiall" offered '" $#3 to 0etitioners as da/ages?0on a00eal '" 0etitioners, the ourt of 300eals reversed the decision of the trial court and entered a ne& one dis/issing the co/0laint- 5t held that since there &as 7sufficient =ustifia'le 'asis8 in cancelling the sale, 7it sa& no reason8 for the a&ard of da/ages- The ourt of 300eals also noted that 0etitioners &ere /ere attorne"s)in)fact and, therefore, not the real 0arties)in)interest in the action 'efore the trial court- Their /otion for reconsideration having 'een denied, 0etitioners see@ relief fro/ the !u0re/e ourtThe !u0re/e ourt denied the 0etition1. Rea+ partyD(nD(nterest 'e-(ne'3 Act(on to e prosecute' (n t*e name o- a party ,*ose r()*t (s sou)*t to e en-orce' !ection *, (ule 3 of the (ules of ourt re.uires that ever" action /ust 'e 0rosecuted and defended in the na/e of the real 0art")in)interest- The real 0art")in)interest is the 0art" &ho stands to 'e 'enefited or in=ured '" the =udg/ent or the 0art" entitled to the avails of the suit- 75nterest,8 &ithin the /eaning of the rule, /eans /aterial interest, an interest in the issue and to 'e affected '" the decree, as distinguished fro/ /ere interest in the .uestion involved, or a /ere incidental interest- ases construing the real 0art")in)interest 0rovision can 'e /ore easil" understood if it is 'orne in /ind that the true /eaning of real 0art")in)interest /a" 'e su//ari2ed as follo&s: 3n action shall 'e 0rosecuted in the na/e of the 0art" &ho, '" the su'stantive la&, has the right sought to 'e enforced/. Act(on rou)*t y an attorneyD(nD-act (n *(s name an' not (n t*e name o- *(s pr(nc(pa+ '(sm(sse' :here the action is 'rought '" an attorne")in)fact of a land o&ner in his na/e, (as in our 0resent action) and not in the na/e of his 0rinci0al, the action &as 0ro0erl" dis/issed (Ferrer vs. ?i""amor, '% SC6A -%' */0 -+> Marce"o vs. de 9eon, /%$ !hi". // $( 'ecause the rule is that ever" action /ust 'e 0rosecuted in the na/e of the real 0arties)in)interest (Section ., 6u"e &, 6u"es of Court(. 1. Art(c+e 1111 o- t*e C(v(+ Co'e 3rticle 1311 of the ivil ode, 0rovides that 7 ontracts ta@e effect onl" 'et&een the 0arties, their assigns, and heirs, e4ce0t in case &here the rights and o'ligations arising fro/ the contract are not trans/issi'le '" their nature, or '" sti0ulation, or '" 0rovision of la&- 5f a contract should contain so/e sti0ulation in favor of a third 0erson, he /a" de/and its fulfill/ent 0rovided he co//unicated his acce0tance to the o'ligor 'efore its revocation- 3 /ere incidental 'enefit or interest of a 0erson is not sufficient- The contracting 0arties /ust have clearl" and deli'eratel" conferred a favor u0on a third 0erson-8 4. A)ents ren'er(n) serv(ce (n e*a+- o- part(es 'o not ren'er t*em part(es to t*e contract o- sa+e Petitioners are not 0arties to the contract of sale 'et&een their 0rinci0als and $#3- The" are /ere agents of the o&ners of the land su'=ect of the sale- 3s agents, the" onl" render so/e service or do so/ething in re0resentation or on 'ehalf of their 0rinci0als- The rendering of such service did not /a@e the/ 0arties to the contracts of sale e4ecuted in 'ehalf of the latter- !ince a contract /a" 'e violated onl" '" the 0arties thereto as against each other, the real 0arties)in)interest, either as 0laintiff or defendant, in an action u0on that
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contract /ust, generall", either 'e 0arties to said contract- $either has there 'een an" allegation, /uch less 0roof, that 0etitioners are the heirs of their 0rinci0als$. Ass()nment o- r()*ts 5n /c/ic;ing vs. 5anco )spa4ol?%ilipino, it &as held that the rule re.uiring ever" action to 'e 0rosecuted in the na/e of the real 0art")in)interest recogni2es the assign/ents of rights of action and also recogni2es that &hen one has a right of action assigned to hi/ he is then the real 0art" in interest and /a" /aintain an action u0on such clai/ or right- The 0ur0ose is to re.uire the 0laintiff to 'e the real 0art" in interest, or, in other &ords, he /ust 'e the 0erson to &ho/ the 0roceeds of the action shall 'elong, and to 0revent actions '" 0ersons &ho have no interest in the result of the sa/e- Thus, an agent, in his o&n 'ehalf, /a" 'ring an action founded on a contract /ade for his 0rinci0al, as an assignee of such contract:. .ect(on 1!/ (1) o- t*e Restatement o- t*e @a, on A)ency !ection 3+* (1) of the (estate/ent of the La& on 3genc" K3gent as %&ner of ontract (ightL declares that 7?nless other&ise agreed, an agent &ho has or &ho ac.uires an interest in a contract &hich he /a@es on 'ehalf of his 0rinci0al can, although not a 0ro/isee, /aintain such action thereon as /ight a transferee having a si/ilar interest-8 !. A)entDtrans-eree3 .ect(on 1!/ (1) e7p+a(ne' %ne &ho has /ade a contract on 'ehalf of another /a" 'eco/e an assignee of the contract and 'ring suit against the other 0art" to it, as an" other transferee- The custo/s of 'usiness or the course of conduct 'et&een the 0rinci0al and the agent /a" indicate that an agent &ho ordinaril" has /erel" a securit" interest is a transferee of the 0rinci0al;s rights under the contract and as such is 0er/itted to 'ring suit- 5f the agent has settled &ith his 0rinci0al &ith the understanding that he is to collect the clai/ against the o'ligor '" &a" of rei/'ursing hi/self for his advances and co//issions, the agent is in the 0osition of an assignee &ho is the 'eneficial o&ner of the chose in action- #e has an irrevoca'le 0o&er to sue in his 0rinci0al;s na/e- 3nd, under the statutes &hich 0er/it the real 0art" in interest to sue, he can /aintain an action in his o&n na/eThis 0o&er to sue is not affected '" a settle/ent 'et&een the 0rinci0al and the o'ligor if the latter has notice of the agent;s interest- >ven though the agent has not settled &ith his 0rinci0al, he /a", '" agree/ent &ith the 0rinci0al, have a right to receive 0a"/ent and out of the 0roceeds to rei/'urse hi/self for advances and co//issions 'efore turning the 'alance over to the 0rinci0al- 5n such a case, although there is no for/al assign/ent, the agent is in the 0osition of a transferee of the &hole clai/ for securit"G he has an irrevoca'le 0o&er to sue in his 0rinci0al;s na/e and, under statutes &hich 0er/it the real 0art" in interest to sue, he can /aintain an action in his o&n na/e8. Bet(t(oners not ass()nees Petitioners have not sho&n that the" are assignees of their 0rinci0als to the su'=ect contracts- :hile the" alleged that the" /ade advances and that the" suffered loss of co//issions, the" have not esta'lished an" agree/ent granting the/ 7the right to receive 0a"/ent and out of the 0roceeds to rei/'urse the/selves for advances and co//issions 'efore turning the 'alance over to the 0rinci0als-8 Further, it does not a00ear that 0etitioners are 'eneficiaries of a sti0ulation 0our autrui under the second 0aragra0h of 3rticle 1311 of the ivil ode- 5ndeed, there is no sti0ulation in an" of the Deeds of 3'solute !ale 7clearl" and deli'eratel"8 conferring a favor to an" third 0erson#. .ect(on 1!/ (/) o- t*e Restatement o- t*e @a, on A)ency !ection 3+* (*) of the (estate/ent of the La& on 3genc" (!econd) 0rovides that 73n agent does not have such an interest in a contract as to entitle hi/ to /aintain an action at la& u0on it in his o&n na/e /erel" 'ecause he is entitled to a 0ortion of the 0roceeds as co/0ensation for /a@ing it or 'ecause he is lia'le for its 'reach-8 The fact that an agent &ho /a@es a contract for his 0rinci0al &ill gain or suffer loss '" the 0erfor/ance or non0erfor/ance of the contract '" the 0rinci0al or '" the other 0art" thereto does not entitle hi/ to /aintain an action on his o&n 'ehalf against the other 0art" for its 'reach- 3n agent entitled to
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receive a co//ission fro/ his 0rinci0al u0on the 0erfor/ance of a contract &hich he has /ade on his 0rinci0al;s account does not, fro/ this fact alone, have an" clai/ against the other 0art" for 'reach of the contract, either in an action on the contract or other&ise- 3n agent &ho is not a 0ro/isee cannot /aintain an action at la& against a 0urchaser /erel" 'ecause he is entitled to have his co/0ensation or advances 0aid out of the 0urchase 0rice 'efore 0a"/ent to the 0rinci0al10. %a(+ure to o ta(n comm(ss(ons 'ue nonDper-ormance o- contract 'oes not ent(t+e pet(t(oners to -(+e act(on a)a(nst NHA 5n <op;ins vs. .ves, the !u0re/e ourt of 3r@ansas, citing !ection 3+* (*) a'ove, denied the clai/ of a real estate 'ro@er to recover his alleged co//ission against the 0urchaser in an agree/ent to 0urchase 0ro0ert"- 5n "o$uco vs. Court of Appeals, it &as held that 7granting that a00ellant had the authorit" to sell the 0ro0ert", the sa/e did not /a@e the 'u"er lia'le for the co//ission she clai/ed- 3t /ost, the o&ner of the 0ro0ert" and the one &ho 0ro/ised to give her a co//ission should 'e the one lia'le to 0a" the sa/e and to &ho/ the clai/ should have 'een directed-8 !i/ilarl", in the 0resent case, that 0etitioners did not o'tain their co//issions or recou0 their advances 'ecause of the non)0erfor/ance of the contract did not entitle the/ to file the action 'elo& against $#3- 3s 0etitioners are not 0arties, heirs, assignees, or 'eneficiaries of a sti0ulation 0our autrui under the contracts of sale, the" do not, under su'stantive la&, 0ossess the right the" see@ to enforce11. Dec(s(on po(nt+ess (- pet(t(oners are not rea+ part(esD(nD(nterest Petitioners not 'eing the real 0arties)in)interest, an" decision rendered &ould 'e 0ointless since the sa/e &ould not 'ind the real 0arties)in)interest1/. Cance++at(on o- contract (n present case not resc(ss(on un'er Art(c+e 11#1 The right of rescission or, /ore accuratel", resolution, of a 0art" to an o'ligation under 3rticle 11,1 is 0redicated on a 'reach of faith '" the other 0art" that violates the reci0rocit" 'et&een the/- The 0o&er to rescind, therefore, is given to the in=ured 0art"- 3rticle 11,1 states that 7the 0o&er to rescind o'ligations is i/0lied in reci0rocal ones, in case one of the o'ligors should not co/0l" &ith &hat is incu/'ent u0on hi/The in=ured 0art" /a" choose 'et&een the fulfill/ent and the rescission of the o'ligation, &ith the 0a"/ent of da/ages in either case- #e /a" also see@ rescission, even after he has chosen fulfill/ent, if the latter should 'eco/e i/0ossi'le-8 5n the 0resent case, the $#3 did not rescind the contract- 5ndeed, it did not have the right to do so for the other 0arties to the contract, the vendors, did not co//it an" 'reach, /uch less a su'stantial 'reach, of their o'ligation- Their o'ligation &as /erel" to deliver the 0arcels of land to the $#3, an o'ligation that the" fulfilled- The $#3 did not suffer an" in=ur" '" the 0erfor/ance thereof11. Cance++at(on ase' on t*e ne)at(on o- cause The cancellation &as 'ased on the negation of the cause arising fro/ the reali2ation that the lands, &hich &ere the o'=ect of the sale, &ere not suita'le for housing14. Cause 'e-(ne'3 D(st(n)u(s*e' -rom mot(ve ause is the essential reason &hich /oves the contracting 0arties to enter into it- The cause is the i//ediate, direct and 0ro4i/ate reason &hich =ustifies the creation of an o'ligation through the &ill of the contracting 0arties- ause, &hich is the essential reason for the contract, should 'e distinguished fro/ /otive, &hich is the 0articular reason of a contracting 0art" &hich does not affect the other 0art"- For e4a/0le, in a contract of sale of a 0iece of land, such as in this case, the cause of the vendor in entering into the contract is to o'tain the 0rice- For the vendee, it is the ac.uisition of the land- The /otive of the $#3, on the other hand, is to use said lands for housing1$. 9ot(ves or'(nar(+y a--ects t*e contract" un+ess (- (t pre'eterm(nes t*e cause3 mot(ve t*us may e re)ar'e' as t*e cause %rdinaril", a 0art";s /otives for entering into the contract do not affect the contract- #o&ever, &hen
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the /otive 0redeter/ines the cause, the /otive /a" 'e regarded as the cause- 5n Ligue0 vs. Court of Appeals, it &as noted that 7Aanresa hi/self (1ol- <, 00- 941)94*), &hile /aintaining the distinction and u0holding the ino0erativeness of the /otives of the 0arties to deter/ine the validit" of the contract, e40ressl" e4ce0ts fro/ the rule those contracts that are conditioned u0on the attain/ent of the /otives of either 0art"-8 The sa/e vie& is held '" the !u0re/e ourt of !0ain, in its decisions of 4 Fe'ruar" 1,41, and 4 Dece/'er 1,49, holding that the /otive /a" 'e regarded as causa &hen it 0redeter/ines the 0ur0ose of the contract- 5n the 0resent case, it is clear that $#3 &ould not have entered into the contract &ere the lands not suita'le for housing- The .ualit" of the land &as an i/0lied condition for the $#3 to enter into the contract- %n the 0art of the $#3, therefore, the /otive &as the cause for its 'eing a 0art" to the sale1:. Report o- @an' Geosc(ences Bureau (s su--(c(ent as(s -or t*e cance++at(on o- t*e sa+e The findings contained in the re0ort of the Land Feosciences Dureau dated 16 Jul" 1,,1 sufficient 'asis for the cancellation of the sale- The re0ort stated that 75n Tadiangan, Tu'a, the housing site is situated in an area of /oderate to0ogra0h"- There are /ore areas of less slo0ing ground a00arentl" ha'ita'le- The site is underlain '" thic@ slide de0osits (4)46/) consisting of huge conglo/erate 'oulders /i4ed &ith silt" cla" /aterials- These cla" 0articles &hen saturated have so/e s&elling characteristics &hich is dangerous for an" civil structures es0eciall" /ass housing develo0/ent1!. Assessment pre+(m(nary on+y (nso-ar as to t*e ascerta(nment o- )eo+o)(ca+ attr( utes3 ot*er,(se conc+us(ve The 0ortion stating that 7there is a need to conduct further geottechnical KsicL studies in the $#3 0ro0ert"- !tandard Penetration Test (!PT) /ust 'e carried out to give an esti/ate of the degree of co/0action (the relative densit") of the slide de0osit and also the 'earing ca0acit" of the soil /aterials- 3nother thing to consider is the vulnera'ilit" of the area to landslides and other /ass /ove/ents due to thic@ soil coverPreventive 0h"sical /itigation /ethods such as surface and su'surface drainage and regrading of the slo0e /ust 'e done in the area8 /ean onl" that further tests are re.uired to deter/ine the 7degree of co/0action,8 7the 'earing ca0acit" of the soil /aterials,8 and the 7vulnera'ilit" of the area to landslides,8 since the tests alread" conducted &ere inade.uate to ascertain such geological attri'utes- 5t is onl" in this sense that the assess/ent &as 70reli/inar"-8 18. Hen'ee 8ust(-(e' (n cance+(n) contract3 Re2u(s(tes o- contract $#3 &as =ustified in cancelling the contract- The reali2ation of the /ista@e as regards the .ualit" of the land resulted in the negation of the /otiveBcause thus rendering the contract ine4istent- 3rticle 131< of the ivil ode states that 7There is no contract unless the follo&ing re.uisites concur: (1) onsent of the contracting 0artiesG (*) %'=ect certain &hich is the su'=ect /atter of the contractG and (3) ause of the o'ligation &hich is esta'lished1#. Bet(t(oners not ent(t+e' to 'ama)es 3ssu/ing that 0etitioners are 0arties, assignees or 'eneficiaries to the contract of sale, the" &ould not 'e entitled to an" a&ard of da/ages, as the cancellation of the contract is =ustified[10#] Ha++arta vs. CA [G.R. No. @D401#$. 9ay /#" 1#8!.] >n Danc, ortes (J): 11 concur, 1 on leave %acts& (osalinda ru2 and 1ictoria 1allarta are long ti/e friends and 'usiness ac.uaintances- %n *0 $ove/'er 1,9<, ru2 entrusted to 1allarta + 0ieces of =e&elr"- 5n Dece/'er 1,9<, 1allarta decided to 'u" so/e ite/s, e4changed one ite/ &ith another, and issued a 0ost)dated chec@ in the a/ount of P6,000 dated 30 Januar" 1,9,- ru2 de0osited said chec@ &ith the 'an@- #o&ever, u0on 0resent/ent, the chec@ &as dishonored and ru2 &as infor/ed that 1allarta;s account had 'een closed- ru2 a00rised 1allarta of the
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dishonor and the latter 0ro/ised to give another chec@- Later, 1allarta 0leaded for /ore ti/e- !till later, she started avoiding ru2- #ence, the cri/inal action &as institutedDased on the foregoing facts, 'oth the trial court and the ourt of 300eals found 1allarta guilt" 'e"ond reasona'le dou't of the cri/e of estafa- 1allarta see@s reversal of the 3;s decision of 13 Dece/'er 1,+4The !u0re/e ourt denied the 0etition initiall" 'ut granted a /otion for reconsideration and gave the 0etition due courseThe !u0re/e ourt affir/ed the assailed decision of the ourt of 300eals, &ith costs against 1allarta1. Esta-a& Art(c+e 11$ (/') as amen'e' y RA 488$ 1allarta is charged under 3rt- 316 (*) (d) as a/ended '" (3 4<<6, of the (evised Penal ode, &hich 0enali2es an" 0erson &ho shall defraud another 7'" 0ostdating a chec@, or issuing a chec@ in 0a"/ent of an o'ligation &hen the offender had no funds in the 'an@, or his funds de0osited therein &ere not sufficient to cover the a/ount of the chec@-8 D" virtue of (3 4<<6, 7the failure of the dra&er of the chec@ to de0osit the a/ount necessar" to cover his chec@ &ithin 3 da"s fro/ recei0t of notice fro/ the 'an@ and or the 0a"ee or holder that said chec@ has 'een dishonored for lac@ or insufficienc" of funds8 is dee/ed 0ri/a facie evidence of deceit constituting false 0retense or fraudulent act- To constitute estafa under this 0rovision the act of 0ostdating or issuing a chec@ in 0a"/ent of an o'ligation /ust 'e the efficient cause of defraudation, and as such it should 'e either 0rior to, or si/ultaneous &ith the act of fraud- The offender /ust 'e a'le to o'tain /one" or 0ro0ert" fro/ the offended 0art" 'ecause of the issuance of a chec@ &hether 0ostdated or not- That is, the latter &ould not have 0arted &ith his /one" or other 0ro0ert" &ere it not for the issuance of the chec@Li@e&ise, the chec@ should not 'e, issued in 0a"/ent of a 0re)e4isting o'ligation (Peo0le v- Lilius, 6, Phil33, K1,33L)/. .a+e per-ecte' Decem er 1#:8 an' not /0 Novem er 1#:8 1allarta changed the ru'" ring 'ecause it &as not acce0ta'le to her, and chose another ring- Li@e&ise, the 0rice to 'e 0aid for the =e&elr" &as finall" agreed u0on onl" in Dece/'er 1,9<- Thus, there &as a /eeting of the /inds 'et&een the 0arties as to the o'=ect of the contract and the consideration therefore onl" in Dece/'er 1,9<, the sa/e ti/e that the chec@ &as issued- The deliver" /ade on *0 $ove/'er 1,9< &as onl" for the 0ur0ose of ena'ling 1allarta to select &hat =e&elr" she &anted1. 4.a+e on approva+6 an' not a 4sa+e or return6 The transaction entered into '" ru2 and 1allarta &as not a 7sale or return8 'ut a 7sale on a00roval8 (also called 7sale on acce0tance,8 7sale on trial,8 or 7sale on satisfaction8 K 515L %D>, art- 160*L)- 5n a 7sale or return,8 the o&nershi0 0asses to the 'u"er on deliver" ( 515L %D>, art- 160*)- (The su'se.uent return of the goods reverts o&nershi0 in the seller K 515L %D>, art- 160*L)- Deliver", or tradition, as a /ode of ac.uiring o&nershi0 /ust 'e in conse.uence of a contract ( 515L %D>, art, +1*), e-g- sale- 5t &as a 7sale on a00roval8 since o&nershi0 0assed to the 'u"er on Dece/'er 1,9+, the date &hen the chec@ &as issued, &hen 1allarta signified her a00roval or acce0tance to the seller, ru2, and the 0rice &as agreed u0on4. C*eck ,as not payment o- a preDe7(st(n) o +()at(on :hen the chec@ &hich later 'ounced &as issued, it &as not in 0a"/ent of a 0re)e4isting o'ligation5nstead the issuance of the chec@ &as si/ultaneous &ith the transfer of o&nershi0 over the =e&elr"- There &as no /eeting of the /inds on *0 $ove/'er 1,9<, and thus, as of that date, there &as "et no contract of sale &hich could 'e the 'asis of deliver" or tradition- The deliver" /ade on *0 $ove/'er 1,9< &as not a deliver" for 0ur0oses of transferring o&nershi0 J the 0restation incu/'ent on the vendor- %&nershi0 0assed to the 'u"er on Dece/'er 1,9+, the date &hen the chec@ &as issued, &hen 1allarta signified her a00roval or acce0tance to the seller, ru2, and the 0rice &as agreed u0on6Pri/a facie evidence of deceit esta'lished in (3 4<<6
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(3 4<<6, a/ending 3rt- 316 (*) (d), (evised Penal ode, esta'lishes a 0ri/a facie evidence of deceit u0on 0roof that the dra&er of the chec@ failed to de0osit the a/ount necessar" to cover his chec@ &ithin three (3) da"s fro/ recei0t of notice of dishonor for lac@ or insufficienc" of funds- 3d/ittedl", (1) the chec@ &as dishonored as 1allarta;s account had 'een earlier closedG (*) she &as notified '" ru2 of the dishonor: and, (3) 1allarta failed to /a@e it good &ithin three da"s- Deceit is therefore 0resu/ed:. A sence o- 'ece(t cannot e ase' on soc(a+ pos(t(on 5t cannot 'e suggested that in light of a 0erson;s social standing, he or she cannot 'e guilt" of deceit, at least in so far as issuing 'ouncing chec@s is concerned- This reasoning does not /erit serious consideration for if acce0ted, it could result in a la& that falls une.uall" on 0ersons de0ending on their social 0osition!. Fe,e+ry o ta(ne' ecause o- (ssuance o- c*eck 1allarta &as a'le to o'tain the =e&elr" 'ecause she issued the chec@, not solel" 'ecause ru2 @ne& 1allarta to 'e rich- #er failure to de0osit the necessar" a/ount to cover it &ithin three da"s fro/ notice of dishonor created the 0ri/a facie 0resu/0tion esta'lished '" the a/endator" la&, (3 4<<6, &hich she failed to re'ut8. Bresumpt(on o- 'ece(t un'er RA 488$ re utta +e The 0resu/0tion of deceit under (3 4<<6 is not conclusive- 5t is re'utta'le- For instance, in the case of People v. 2illapan$o (69 Phil- 31K1,31L), good faith is a defense to a charge of estafa '" 0ostdating a chec@, as &hen the dra&er, foreseeing his ina'ilit" to 0a" the chec@ at /aturit", /ade an arrange/ent &ith his creditor as to the /anner of 0a"/ent of the de't- (3 4<<6 is not unconstitutional as it does not violate the constitutional 0resu/0tion of innocence#. Const(tut(ona+(ty o- +a,s prov('(n) contrary presumpt(on on (nnocence 7There is no constitutional o'=ection to the 0assage of a la& 0roviding that the 0resu/0tion of innocence /a" 'e overco/e '" a contrar" 0resu/0tion founded u0on the e40erience of hu/an conduct, and enacting &hat evidence shall 'e sufficient to overco/e such 0resu/0tion of innocence8 (Peo0le v- Aingoa, ,* Phil- <69 K1,63L at <6<)6,, citing 5 oole", 3 Treatise on the onstitutional Li/itations, 93,)941)- The 7legislature /a" enact that &hen certain facts have 'een 0roved the" shall 'e 0ri/a facie evidence of the e4istence of the guilt of the accused and shift the 'urden of 0roof 0rovided there 'e a rational connection 'et&een the facts 0roved and the ulti/ate fact 0resu/ed so that the inference of the one fro/ 0roof of the others is not unreasona'le and ar'itrar" 'ecause of lac@ of connection 'et&een the t&o in co//on e40erience8 (Peo0le v- Aingoa, su0ra- !ee also ?! v- Luling, 34 Phil- +*6 K1,19L)10. Art. 11$ (/') c*aracter(Ce -rau'u+ent act or -a+se pretense 7Postdating or issuing of a chec@ in 0a"/ent of an o'ligation &hen the offender had no funds in the 'an@, or his funds de0osited therein &ere not sufficient to cover the a/ount of the chec@, 7 is a false 0retense or a fraudulent act- 5t is so characteri2ed '" 3rt- 316 (*) (d), (evised Penal ode- (3 4<<6 does nothing /ore than li/it the 0eriod &ithin &hich the dra&erBissuer /ust 0a" the creditor11. RA 488$ st(++ pursues cr(m(na+ -rau' or 'ece(t (n t*e (ssuance o- a c*eck an' not t*e nonD payment o- t*e 'e t 5n People v. 'a!io ($o- L)464,0, $ove/'er *0, 1,+<, <9 ! (3 69<), the ourt ruled that (3 4<<6 has not changed the rule esta'lished in 3rt- 316 (*) (d) 0rior to the a/end/entG that (3 4<<6 /erel" esta'lished the 0ri/a facie evidence of deceit, and eli/inated the re.uire/ent that the dra&er infor/ the 0a"ee that he had no funds in the 'an@ or the funds de0osited '" hi/ &ere not sufficient to cover the a/ount of the chec@- Thus, even &ith the a/end/ent introduced '" (3 4<<6 it is still cri/inal fraud or deceit in the issuance of a chec@ &hich is /ade 0unisha'le under the (evised Penal ode, and not the non)0a"/ent of the de't-
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[110] Has2ueC vs. CA [G.R. No. 81!$#. Fu+y 1/" 1##1.] Third Division, Futierre2 Jr- (J): 4 concur %acts& %n *1 !e0te/'er 1,94, 1alle=era and %lea sold the lot to 1as.ue2 and Fa"aleno under a Deed of !ale for the a/ount of P,,000-00- The Deed of !ale &as dul" ratified and notari2ed- %n the sa/e da" and along &ith the e4ecution of the Deed of !ale, a se0arate instru/ent, deno/inated as (ight to (e0urchase, &as e4ecuted '" the 0arties granting the 1alle=era and %lea the right to re0urchase the lot for P1*,000-00, said docu/ent &as li@e&ise dul" ratified and notari2ed- D" virtue of the sale, the 1as.ue2 and Fa"aleno secured T T T)6<<,< in their na/e- %n * Januar" 1,9,, 1alle=era and %lea sold the sa/e lot to Denito Derra/a, Jr-, after securing 1as.ue2 and Fa"aleno;s title, for the su/ of P1*,000-00- ?0on the 0rotestations of 1as.ue2 and Fa"aleno, assisted '" counsel, the said second sale &as cancelled after the 0a"/ent of P1*,000-00 '" 1as.ue2 and Fa"aleno to Derra/a%n 16 Januar" 1,+6, !0ouses Aartin 1alle=era and 30olonia %lea filed an action against !0ouses ir0riano 1as.ue2 and 1aleriana Fa"aleno see@ing to redee/ Lot 1<90 of the #i/a/a"lan adastre &hich &as 0reviousl" sold '" the for/er to the latter on *1 !e0te/'er 1,94- !aid lot &as registered in the na/e of 1alle=era and %lea- %n %cto'er 1,6,, the sa/e &as leased '" the/ to 1as.ue2 and Fa"alleno u0 to cro0 "ear 1,99)9+, &hich &as e4tended to cro0 "ear 1,9<)9,- 3fter the e4ecution of the lease, 1as.ue2 and Fa"aleno too@ 0ossession of the lot, u0 to no& and devoted the sa/e to the cultivation of sugar- 1as.ue2 and Fa"eleno resisted the action for rede/0tion on the 0re/ise that the (ight to (e0urchase is =ust an o0tion to 'u" since it is not e/'odied in the sa/e docu/ent of sale 'ut in a se0arate docu/ent, and since such o0tion is not su00orted '" a consideration distinct fro/ the 0rice, said deed for right to re0urchase is not 'inding u0on th the/- 3fter trial, the (T #i/a/a"lan, $egros %ccidental (9 Judicial (egion, Dranch 69, ivil ase <3,) rendered =udg/ent against 1as.ue2 and Fa"eleno, ordering the/ to resell lot 1<90 of the #i/a/a"lan adastre to 1alle=era and %lea for the re0urchase 0rice of P*4,000-00, &hich a/ount co/'ines the 0rice 0aid for the first sale and the 0rice 0aid '" the for/er to Denito Derra/a, Jr- 1alle=era and Fa"eleno /oved for, 'ut &ere denied reconsideration- >4ce0ting thereto, the" a00ealedThe ourt of 300eals affir/ed the decision of the (T #i/a/a"lan, $egros %ccidental in ivil ase <3,- 5n addition, the a00ellate court ordered 1as.ue2 and Fa"eleno to 0a" the a/ount of P6,000-00 as necessar" and useful e40enses in accordance &ith 3rticle 1919 of the ivil ode- #ence, the 0etitionThe !u0re/e ourt granted the 0etition, reversed and set aside the .uestioned decision and resolution of the ourt of 300eals , and dis/issed the co/0laint in ivil ase <3, of the then F5 $egros %ccidental 1*th Judicial District Dranch 9G &ithout costs1. R()*t o- repurc*ase not supporte' y a cons('erat(on '(st(nct -rom t*e pr(ce3 Bur'en o- proo5n the 0resent case, it is clear that the right to re0urchase &as not su00orted '" a consideration distinct fro/ the 0rice- The rule is that the 0ro/isee has the 'urden of 0roving such consideration- ?nfortunatel", the 0ro/ises (1alle=era) in the right to re0urchase failed to 0rove such consideration- The" did not even allege the e4istence thereof in their co/0laint- (!ee !anche2 v- (igos su0ra)/. App+(cat(on o- .anc*eC vs. R()os case 5n order that the !anche2 case can 'e a00lied, the evidence /ust sho& that the 1alle=era and %lea acce0ted the right to re0urchase- The record, ho&ever, does not sho& that the" acce0ted the 7(ight to (e0urchase8 the land in .uestion1. Annotat(on an' re)(strat(on o- r()*t to repurc*ase not an acceptance ut -or t*e purpose o.a+es" /001 ( /$: )
(n'(n) purc*asers o- suc* re)(stere' +an' The annotation and registration of the right to re0urchase at the 'ac@ of the certificate of title of 1as.ue2 and Fa"eleno can not 'e considered as acce0tance of the right to re0urchase- 3nnotation at the 'ac@ of the certificate of title of registered land is for the 0ur0ose of 'inding 0urchasers of such registered land- 5n the case of Del 3ir 1illage 3ssociation, 5nc- v- Dionisio (1+4 ! (3 6<, K1,<,L), citing Tanchoco v- 3.uino (164 ! (3 1 K1,<+L), and onstantino v- >s0iritu (46 ! (3 66+ K1,+*L), it &as ruled that 0urchasers of a registered land are 'ound '" the annotations found at the 'ac@ of the certificate of title covering the su'=ect 0arcel of land- 5n effect, the annotation of the right to re0urchase found at the 'ac@ of the certificate of title over the su'=ect 0arcel of land of 1as.ue2 and Fa"eleno onl" served as notice of the e4istence of such unilateral 0ro/ise of 1as.ue2 and Fa"eleno to resell the sa/e to 1alle=era and %lea- This, ho&ever, can not 'e e.uated &ith acce0tance of such right to re0urchase4. .()nature (n t*e 'ocument ca++e' 4r()*t to repurc*ase6 'oes not s()n(-y acceptance o- r()*t to repurc*ase $either can the signature of 1as.ue2 and Fa"eleno in the docu/ent called 7right to re0urchase8 signif" acce0tance of the right to re0urchase, as 1alle=era and %lea did not sign the offer- 3cce0tance should 'e /ade '" the 0ro/isee and not the 0ro/isors- 5t &ould 'e a'surd to re.uire the 0ro/isor of an o0tion to 'u" to acce0t his o&n offer instead of the 0ro/isee to &ho/ the o0tion to 'u" is given4. Act(ons o- Ha++e8era an' >+ea cannot e cons('ere' as acceptance3 .en'(n) o- +etters ,(t*out ten'er o- re'empt(on pr(ce -a++s s*ort o- re2u(rement to repurc*ase The actions of the 0rivate res0ondents J (a) filing a co/0laint to co/0el re)sale and their de/ands for resale 0rior to filing of the co/0laint cannot 'e considered acce0tance- 3s stated in 1da- de Vulueta v%ctaviano (1*1 ! (3 314 K1,<3L), /ere sending of letters '" the vendor e40ressing his desire to re0urchase the 0ro0ert" &ithout acco/0an"ing tender of the rede/0tion 0rice fell short of the re.uire/ents of la&- (Lee v- ourt of 300eals, 9< ! (3 1,+ K1,+*L)- $either did a =udicial consignation of the re0urchase 0rice /ade &ithin the agreed 0eriod$. Contract o- sa+e ,(t* r()*t o- repurc*ase 5n a contract of sale &ith a right of re0urchase, the rede/0tioner &ho /a" offer to /a@e the re0urchase on the o0tion date of rede/0tion should de0osit the full a/ount in court - - - ((u/'aoa v- 3r2aga, <4 Phil- <1* K1,4,L)-; :. R()*t o- ven'or a retro to repurc*ase To effectivel" e4ercise the right to re0urchase the vendor a retro /ust /a@e an actual and si/ultaneous tender of 0a"/ent or consignation-; ( atangcatang v- Lega"ada, <4 ! (3 61 K1,+<L)!. Re-usa+ to se++ parce+ o- +an' a ,(t*'ra,a+ o- t*e opt(on to uy The ineffectual acce0tance of the o0tion to 'u" validated the vendor;s refusal to sell the 0arcel &hich can 'e considered as a &ithdra&al of the o0tion to 'u"8. Convent(ona+ re'empt(on" ,*en occurs onventional rede/0tion ta@es 0lace &hen the vendor reserves the right to re0urchase the thing sold, &ith the o'ligation to co/0l" &ith the 0rovisions of 3rticle 1919 and other sti0ulations &hich /a" have 'een agreed u0on- (3rticle 1901, ivil ode)#. R()*t o- repurc*ase not )rante' (n a su se2uent 'ocument ut (n t*e same (nstrument o- sa+e 3s held in 1illarica v- ourt of 300eals (*9 ! (3 1<, K1,9<L), HThe right of re0urchase is not a right granted the vendor '" the vendee in a su'se.uent instru/ent, 'ut is a right reserved '" the vendor in the sa/e instru/ent of sale as one of the sti0ulations of the contract- %nce the instru/ent of a'solute sale is e4ecuted, the vendor can no longer reserve the right to re0urchase, and an" right thereafter granted the vendor '" the
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vendee in a se0arate instru/ent cannot 'e a right of re0urchase 'ut so/e other right li@e the o0tion to 'u"10. App+(ca (+(ty o- t*e Pu+ueta case as to t*e transact(on e(n) not a opt(on to repurc*ase ut an opt(on to uy 3s in the 0resent case, the o0tion to re0urchase involved in the Vulueta case &as e4ecuted in a se0arate docu/ent 'ut on the sa/e date that the deed of definite sale &as e4ecuted- :hile it is true that the ourt in the Vulueta case found Vulueta guilt" of laches, this, ho&ever, &as not the 0ri/ar" reason &h" the ourt disallo&ed the rede/0tion of the 0ro0ert" '" Vulueta- 5t is clear fro/ the decision that the ruling in the Vulueta case &as 'ased /ainl" on the finding that the transaction 'et&een Vulueta and %ctaviano &as not a sale &ith right to re0urchase and that the 7o0tion to re0urchase &as 'ut an o0tion to 'u" or a /ere 0ro/ise on the 0art of %ctaviano to resell the 0ro0ert" to Vulueta- 5n the 0resent case, since the transaction 'et&een the 0etitioners and 0rivate res0ondents &as not a sale &ith right to re0urchase, the 0rivate res0ondents cannot avail of 3rticle 1901 of the ivil ode &hich 0rovides for conventional rede/0tion[111] H'a. De Gor'on v. CA [G.R. No. @D1!811. Novem er /1" 1#81.] First Division, Teehan@ee (J): 4 concur, 1 too@ no 0art %acts& T&o 0arcels of land 'elong to (estituta 1- 1da- De Fordon (covered '" T T 1**04 and 1**06)- For the "ears 1,63 to 1,93, inclusive, the ta4es against said 0arcels of land re/ained un0aid- The co/'ined assessed value of the 0arcels of land is P19,<00 and the residential house on the land &as assessed at P46,6<0The it" Treasurer of Uue2on it", u0on &arrant of a certified co0" of the record of such delin.uenc", advertised for sale the 0arcels of land to satisf" the ta4es, 0enalties and costs for a 0eriod of 30 da"s 0rior to the sale on 3 Dece/'er 1,94, '" @ee0ing a notice of sale 0osted at the /ain entrance on the it" #all and in a 0u'lic and cons0icuous 0lace in the district &here the sa/e is located and '" 0u'lication of said notice once a &ee@ for 3 &ee@s in the 7Dail" Airror8, a ne&s0a0er of general circulation in Uue2on it", the advertise/ent stating the a/ount of ta4es and 0enalties due, ti/e and 0lace of sale, na/e of the ta40a"er against &ho/ the ta4es are levied, a00ro4i/ate area, lot and 'loc@ nu/'er, location '" district, street and street nu/'er of the 0ro0ert"- The 0u'lic sale on 3 Dece/'er 1,94, the 0arcels of land &ere sold to (osario Dua2o for the a/ount of P10,600-00 re0resenting the ta4, 0enalt" and costs- The certificate of sale e4ecuted '" the it" Treasurer &as dul" registered on *< Dece/'er 1,94 in the office of the (egister of Deeds of Uue2on it"- ?0on the failure of the registered o&ner to redee/ the 0arcels of land &ithin the 1)"ear 0eriod 0rescri'ed '" la&, the it" Treasurer of Uue2on it" e4ecuted on 4 Januar" 1,99 a final deed of sale of said lands and the i/0rove/ents thereon- !aid final deed of sale &as also registered in the %ffice of the (egister of Deeds of Uue2on it" on 1< Januar" 1,99Later on, Dua2o filed a 0etition for consolidation of o&nershi0- <Case facts invo"vin4 proceedin4s in "ower court aAsent> It ma, Ae imp"ied however that "ower court denied the petition as it cited the case of @irector of 9ands v. AAarca in its decision> The a00ellate court u0held the ta4 sale of the real 0ro0erties at &hich Dua2o ac.uired the sa/e and her o&nershi0 u0on vdade Fordon;s failure to redee/ the sa/e, having found the sale to have 'een conducted 7under the direction and su0ervision of the it" Treasurer of Uue2on it" after the 0ro0er 0rocedure and legal for/alities had 'een dul" acco/0lished-8 <It appears that the appe""ate court reversed the "ower courtEs decision, with 7ordon appea"in4 therefrom> The !u0re/e ourt affir/ed the a00ellate court;s decision under revie&G :ithout costs1. (CA Dec(s(on) 9ater(a+ averments a'm(tte' The o00osition Kto Dua2o;s 0etition for consolidation of o&nershi0L has not controverted '" s0ecific
.a+es" /001 ( /$8 )
denials the /aterial aver/ents in the 0etition- #ence, the /aterial aver/ents in the 0etition are dee/ed ad/itted- (!ection 1, (ule ,, (evised (ules of ourt) /. (CA Dec(s(on) Gssue on t*e (rre)u+ar(ty o- pu +(c sa+e o- parce+s o- +an' ,a(ve' The o00osition has not raised the issue of irregularit" in the 0u'lic sale of the t&o 0arcels of land in .uestion- This defense is dee/ed &aived- (!ection *, (ule ,, id-) 1. court (CA Dec(s(on) Br(ce (n auct(on sa+e not )ross+y (na'e2uate to e s*ock(n) to t*e consc(ence o-
$oting that the 1,91 assess/ent of the co/'ined value of the t&o 0arcels of land is P19,<00, and the residential house on the land is P46,6<0G that the 0resent value of the house &ould 'e /uch less considering the de0reciation for over 10 "earsG and that &hile the 0rice of P10,600 is less than the total assessed value of the land and the i/0rove/ent thereon, said 0rice cannot 'e considered so grossl" inade.uate as to 'e shoc@ing to the conscience of the court4. (CA Dec(s(on) D(rector o- @an's v. A arca& Br(ce (na'e2uate to s*ock consc(ence o- court 5n Director of Lands vs- 3'arca (91 Phil- +0), the !u0re/e ourt considered the 0rice of P<++-*6 as so inade.uate to shoc@ the conscience of the court 'ecause the assessed value of the 0ro0ert" in .uestion &as P90,000-00- The assessed value of the land &as /ore than 90 ti/es the 0rice 0aid at the auction sale- 5n the 0resent case, the 0rice of P10,600-00 is a'out 1B9 of the total assessed value of the t&o 0arcels of land in .uestion and the residential house thereon- The finding of the lo&er court that the house and land in .uestion have a fair /ar@et value of not less than P*00,000-00 has no factual 'asis- 5t cannot 'e said, therefore, that the 0rice of P10,600-00 is so inade.uate as to 'e shoc@ing to the conscience of the court$. (CA Dec(s(on) 9ere (na'e2uacy o- pr(ce not )roun' to annu+ pu +(c sa+e" un+(ke (n or'(nary sa+e3 Gna'e2uacy o- pr(ce an a'vanta)e (n re+at(on to o,ner=s r()*t to re'eem Aere inade.uac" of the 0rice alone is not sufficient ground to annul the 0u'lic sale- (Darro2o vsAacaraeg, <3 Phil- 3+<) 5n 2elasBue0 vs. Coronel (6 ! (3 ,<6, ,<<), it &as held that 7&hile in ordinar" sales for reasons of e.uit" a transaction /a" 'e invalidated on the ground of inade.uac" of 0rice, or &hen such inade.uac" shoc@s one;s conscience as to =ustif" the courts to interfere, such does not follo& &hen the la& gives to the o&ner the right to redee/, as &hen a sale is /ade at 0u'lic auction, u0on the theor" that the lesser the 0rice the easier it is for the o&ner to effect the rede/0tion- 3nd so it &as a0tl" said: H:hen there is the right to redee/, inade.uac" of 0rice should not 'e /aterial, 'ecause the =udg/ent de'tor /a" reac.uire the 0ro0ert" or also sell his right to redee/ and thus recover the loss he clai/s to have suffered '" reason of the 0rice o'tained at the auction sale-8 :. (CA Dec(s(on) Bu +(c .a+e )overne' y .ect(on 40 o- CA 4!0 The 0u'lic sale is governed '" !ection 40 of o//on&ealth 3ct 4+0 &hich gives the delin.uent ta40a"er a 0eriod of 1 "ear fro/ the date of the sale &ithin &hich to re0urchase the 0ro0ert" sold- 5n case the delin.uent ta40a"er does not re0urchase the 0ro0ert" sold &ithin the 0eriod of 1 "ear fro/ the date of the sale, it 'eco/es a /andator" dut" of the 0rovincial treasurer to issue in favor of the 0urchaser a final deed of sale- (1elas.ue2 vs- oronel) !. No +ack o- persona+ not(ce o- ta7 sa+e The alleged lac@ of 0ersonal notice of the ta4 sale is negated '" her o&n aver/ents in her o&n o00osition filed in the lo&er court a .uo that 7the %00ositor in the 0etition is a &o/an <0 "ears of age- !he &as not a&are of the auction sale conducted '" the it" Treasurer of Uue2on it" on 3 Dece/'er 1,94 or if there &as an" notice sent to her, the sa/e did not reach her or it /ust have esca0ed her /ind considering her age- 7 8. JueCon C(ty C*arter (CA $0/)" not RA 1/!$" contro++(n) on +en)t* o- re'empt(on per(o'3
.a+es" /001 ( /$# )
.pec(a+ +a, preva(+s over )enera+ +a, The 0eriod for rede/0tion is not the *)"ear 0eriod 0rovided in (3 1*+6, since the s0ecific la& governing ta4 sales of 0ro0erties in Uue2on it" is the Uue2on it" harter, o//on&ealth 3ct 60* &hich 0rovides in section 31 thereof for a 1)"ear rede/0tion 0eriod- The s0ecial la& covering Uue2on it" necessaril" 0revails over the general la&- 5n the 0resent case, since the filing of Dua2o;s 'rief in 1,+4, 1daDe Fordon had not sought to e4ercise her alleged right of rede/0tion or /a@e an actual tender thereof#. Gross (na'e2uacy o- purc*ase pr(ce not mater(a+ (- o,ner *as r()*t to re'eem 3s held in 1elas.ue2 vs- oronel, alleged gross inade.uac" of 0rice is not /aterial 7&hen the la& gives the o&ner the right to redee/ as &hen a sale is /ade at 0u'lic auction, u0on the theor" that the lesser the 0rice the easier it is for the o&ner to effect the rede/0tion-8 10. @a,s on ta7 sa+es -or 'e+(n2uent ta7es necessary as ta7es essent(a+ to +(-e o- Government 3s stressed in Ta=onera vsourt of 300eals, the la& governing ta4 sales for delin.uent ta4es /a" 'e 7harsh and drastic, 'ut it is a necessar" /eans of insuring the 0ro/0t collection of ta4es so essential to the life of the Fovern/ent-8 [11/] H'a. De Fomoc vs. CA [G.R. No. #/8!1. Au)ust /" 1##1.] Li/ Leong #ong vs- !o KF-(- $o- ,*<90- 3ugust *, 1,,1-L Third Division, Futierre2 Jr- (J): 4 concur %acts& The su'=ect lot in aga"an de %ro it" for/s 0art of the estate of the late Pantaleon Jo/oc- Decause it &as fictiousl" sold and transferred to third 0ersons, Aaria P- 1da- Jo/oc, as ad/inistratri4 of the estate and in 'ehalf of all the heirs, filed suit to recover the 0ro0ert" 'efore the trial court of Aisa/is %riental in ivil ase 4+60- Aariano !o, the last of the transferees and the hus'and of Aaria !o, intervened- The case &as decided in favor of Jo/oc and &as accordingl" a00ealed '" Aariano !o and one Fa& !ur heng to the ourt of 300eals- 5n Fe'ruar" 1,+,, 0ending the a00eal, Jo/oc e4ecuted a Deed of >4tra=udicial !ettle/ent and !ale of Land &ith Aaria !o for P300,000- The docu/ent &as not "et signed '" all the 0arties nor notari2ed 'ut in the /eanti/e, Aaura !o had /ade 0artial 0a"/ents a/ounting to P4,,000- 5n 1,<3, Aariano !o, the a00ellant in the recover" 0roceeding, agreed to settle the case '" e4ecuting a Deed of (econve"ance of the land in favor of the heirs of Pantaleon Jo/oc- The reconve"ance &as in co/0liance &ith the decision in the recover" case and resulted in the dis/issal of his a00eal- %n *< Fe'ruar" 1,<3, the heirs of Jo/oc e4ecuted another e4tra=udicial settle/ent &ith a'solute sale in favor of intervenors Li/ Leong Cang and Li/ Pue Cing- Later, Aaura !o de/anded fro/ the Jo/oc fa/il" the e4ecution of a final deed of conve"ance- The" ignored the de/andAaria !o sued the heirs for s0ecific 0erfor/ance to co/0el the/ to e4ecute and deliver the 0ro0er registra'le deed of sale over the lot ( ivil ase <,<3)- !o then filed a notice of lis 0endens &ith the (egister of Deeds on *< Fe'ruar" 1,<3- 5t &as on the sa/e date, allegedl" u0on the Jo/ocs; 'elief that Aaura !o had 'ac@ed out fro/ the transaction that the Jo/ocs e4ecuted the other e4tra=udicial settle/ent &ith sale of registered land in favor of the s0ouses Li/ for a consideration of P*00,000-00 0art of &hich a/ount &as allegedl" intended to 'e returned to Aaura !o as rei/'urse/ent- The s0ouses Li/, ho&ever, registered their settle/ent and sale onl" on *+ 30ril 1,<3- The lo&er court, finding that there &as no sufficient evidence to sho& co/0lainant) res0ondents; &ithdra&al fro/ the sale, concluded that: (1) the case is one of dou'le saleG (*) the s0ouses) intervenors are registrants in 'ad faith &ho registered their .uestioned deed of sale long after the notice of lis 0endens of ivil ase <,<3 &as recorded%n a00eal, the trial court decision &as affir/ed e4ce0t for the a&ard of /oral and e4e/0lar" da/ages and attorne";s fees and e40enses for litigation- #ence, the 0etitions.a+es" /001 ( /:0 )
The !u0re/e ourt dis/issed the 0etitions, and affir/ed the decision of the !e0te/'er 1,<, and its resolution dated * 30ril 1,,01.
ourt of 300eals dated 13
Ha+(' an' e7(stent" an' part(a++y e7ecute' (t*us en-orcea +e) contract The heirs do not den" the e4istence of >4hi'it 738G including its ter/s and contents, not&ithstanding the inco/0leteness in for/- The /eeting of the /inds and the deliver" of su/s as 0artial 0a"/ent is clear and this is ad/itted '" 'oth 0arties to the agree/ent- #ence, there &as alread" a valid and e4isting contract, not /erel" 0erfected as the trial court sa& it, 'ut 0artl" e4ecuted- 5t is of no /o/ent &hether or not it is enforcea'le under the !tatute of Frauds, &hich rule is not a00lica'le 'ecause of 0artial 0a"/ent of the vendee;s o'ligation and its acce0tance '" the vendors)heirs- The contract of sale of real 0ro0ert" even if not co/0lete in for/, so long as the essential re.uisites of consent of the contracting 0arties, o'=ect, and cause of the o'ligation concur and the" &ere clearl" esta'lished to 'e 0resent, is valid and effective as 'et&een the 0arties- ?nder 3rticle 136+ of the ivil ode, its enforcea'ilit" is recogni2ed as each contracting 0art" is granted the right to co/0el the other to e4ecute the 0ro0er 0u'lic instru/ent so that the valid contract of sale of registered land can 'e dul" registered and can 'ind third 0ersons- The co/0lainant)res0ondent correctl" e4ercised such right si/ultaneousl" &ith a 0ra"er for the enforce/ent of the contract in one co/0laint/. Cont(nu(n) (nterest y 9aura .o3 Baro+e ev('ence cannot re-orm (ntent(on o- part(es Aaura !o did not su'se.uentl" a'andon her intention of 0urchasing the su'=ect lot- The facts reveal an agree/ent 'et&een the contracting 0arties to >4hi'it 738 to the effect that 7the consideration of P300,000 or &hatever 'alance re/ains after deducting the advanced 0a"/ents thereon, shall 'e 0aid u0on the ter/ination of (Aariano !o;s) a00eal in the case involving the 0ro0ert" in .uestion-8 (F( ,*<+1)- >ven if the su/s 0aid '" Aaura !o &ere allegedl" intended to e40edite the dis/issal of the a00eal of Aariano !o, such 0a"/ent onl" indicates interest in ac.uiring the su'=ect lot- 5n addition, the clai/ '" the defendants) 0etitioners that the 0a"/ents &ere for the gathering of the several heirs fro/ far 0laces to sign >4hi'it 738 confir/s Aaura !o;s continuing interest- The ter/s of >4hi'it 738 and the actual intention of the 0arties are clear and no refor/ re.uiring 0arole evidence is 'eing sought to elucidate the intention further- The oral evidence offered '" defendants)0etitioners to sho& a su'se.uent refusal to 0roceed &ith the sale cannot 'e considered to reverse the e40ress intention in the contract1. Gssue o- 'ou +e sa+e mater(a+ to 'eterm(nat(on ,*et*er .o (s ent(t+e' to re+(e-s praye' -or The issue of dou'le sale had to 'e resolved to deter/ine &hether or not co/0lainant Aaura !o &as entitled to the reliefs 0ra"ed for- There &as no hard evidence to sho& that the vinculu/ or contractual relation 'et&een 0etitioners)heirs and Aaura !o had 'een cut)off- Eet, 0etitioners)heirs sold the sa/e lot to s0ouses Li/- The case re.uires the discern/ent of &ho has the 'etter right to the 0ro0ert"4. Art(c+e 1$44" NCC3 .o *as etter r()*t o- o,ners*(p 3rticle 1644 of the ivil ode 0rovides that 7should it 'e i//ova'le 0ro0ert", the o&nershi0 shall 'elong to the 0erson ac.uiring it &ho in good faith first recorded it in the (egistr" of Pro0ert"-8 5n vie& of this 0rovision, the s0ouses Li/ do not have a 'etter right- The" 0urchased the land &ith full @no&ledge of a 0revious sale to Aaura !o and &ithout re.uiring fro/ the vendors)heirs an" 0roof of the 0rior vendee;s revocation of her 0urchase$. @(m spouses not uyers (n )oo' -a(t* The s0ouses Li/ cannot 'e said to 'e 'u"ers in good faith as the" should have e4ercised e4tra caution in their 0urchase es0eciall" if at the ti/e of the sale, the land &as still covered '" T T 1,94< 'earing the na/e of Aariano !o and &as not "et registered in the na/e of the heirs of Pantaleon Jo/oc, although it had 'een reconve"ed to said heirs- :hen the" registered the sale on *+ 30ril 1,<3 after having 'een charged &ith notice of lis 0endens annotated as earl" as *< Fe'ruar" 1,<3, the" did so in 'ad faith or on the 'elief that a registration /a" i/0rove their 0osition 'eing su'se.uent 'u"ers of the sa/e lot- ?nder 3rticle 1644, /ere
.a+es" /001 ( /:1 )
registration is not enough to ac.uire ne& title- Food faith /ust concur- (Dergado v- ourt of 300eals, 1+3 ! (3 4,+ K1,<,LG once0cion v- ourt of 300eals, F-(- $o- <3*0<, Fe'ruar" 9, 1,,1) [111] H'a. De Ju(am ao vs. 9an(+a 9otor Company [G.R. No. @D1!184. >cto er 11" 1#:1.] >n Danc, (e"es JDL (J): < concur, 1 too@ no 0art %acts& %n + Aarch 1,40, Faudencio (- Uuia/'ao, deceased hus'and of $estora (igor 1da- de Uuia/'ao and father of the other 0etitioners, 'ought fro/ Aanila Aotor o/0an", 5nc- 1 !tude'a@er car on the install/ent 0lan- ?0on default in the 0a"/ent of a nu/'er of install/ents, the co/0an" sued Faudencio Uuia/'ao in ivil ase 6<043 of the F5 Aanila- %n 4 Dece/'er 1,40, =udg/ent &as entered in said case, a&arding in favor of the co/0an" the su/ of P3,064-3*, &ith interest thereon at 1*I 0er annu/, and P300-00 attorne"s; fees- %n 14 Jul" 1,41, the court issued a &rit of e4ecution directed to the Provincial !heriff of Tarlac, &ho thereu0on levied on and attached t&o 0arcels of land covered '" T T 1<3,0 of the %ffice of the (egister of Deeds for Tarlac- %n *+ 3ugust 1,41, 3ttorne" Feli4 P- David, then counsel for the Aanila Aotor o/0an", acco/0anied '" the sheriff, 0ersonall" a00rised Faudencio Uuia/'ao of the lev"- The latter 0leaded to have the e4ecution sale sus0ended and 'egged for ti/e &ithin &hich to satisf" the =udg/ent de't, 0ro0osing that in the /ean&hile, he &ould surrender to the co/0an" the !tude'a@er car- This 0ro0osition &as acce0tedG accordingl", Faudencio Uuia/'ao delivered the car to the co/0an", and 3ttorne" David issued a recei0t therefore- %n 19 %cto'er 1,41, Faudencio Uuia/'ao re/itted to the co/0an", on account of the =udg/ent, the su/ of P600-00G he, ho&ever, failed to /a@e further 0a"/ents, thus leaving a 'alance still unsettled of P1,,6*-4+, &ith interest thereon at 1*I 0er annu/ fro/ 9 Aarch 1,405n the /eanti/e, the Pacific &ar 'ro@e out, and &hen the Ja0anese forces occu0ied the countr" shortl" thereafter, the invaders sei2ed all the assets of the Aanila Aotor o/0an", 5nc- as ene/" 0ro0ert"- 3fter the &ar, the co/0an" filed &ith the Phili00ine :ar Da/age o//ission, a/ong other things, a clai/ for its /ortgage lien on the car of Faudencio Uuia/'ao and &as a&arded the su/ of P+<0-4+, P40,-+6 of &hich a/ount had alread" 'een 0aid- %n 1* %cto'er 1,4,, the co/0an" addressed a letter to Faudencio Uuia/'ao as@ing hi/ to fill a 'lan@ for/ relative to the lost car- Uuia/'ao having since died, his &ido&, $estora (igor 1da- de Uuia/'ao, returned the for/ &ith the state/ent that the .uestioned car &as surrendered to the co/0an" for storage- %n 1< Aa" 1,63, a de/and &as /ade on the &ido& to settle the deceased;s un0aid accounts, 'ut in vie& of her refusal, the co/0an" urged the Provincial !heriff of Tarlac to carr" out the 0re) &ar &rit of e4ecution issued in ivil ase 6<043- 3lthough the records of that case had 'een lost during the &ar, and have not 'een reconstituted, a co0" of said &rit of e4ecution @e0t on file '" the 0rovincial sheriff &as saved- 3ccordingl", the latter advertised for sale at 0u'lic auction the 0ro0erties levied u0on$otified of the sheriff;s action, the heirs of the deceased Uuia/'ao filed the suit to annul and set aside the &rit of e4ecution and to recover da/ages- Judg/ent &as rendered '" the F5 in favor of the Uuia/'aos, 'ut on a00eal to the ourt of 300eals ( 3)F( 1+031)(), the decision &as reversed and another entered dis/issing the co/0laint- #ence, the a00eal '" &rit of certiorariThe !u0re/e Uuia/'aosourt affir/ed the =udg/ent of the ourt of 300eals a00ealed fro/, &ith costs against the
1. Heacock case 'oes not app+y3 De+(very o- car to company '(' not pro'uce e--ect o- resc(n'(n) or annu++(n) t*e contract o- sa+e3 Buyer surren'ere' car to postpone sat(s-act(on o- t*e 8u')ment amount ?nli@e the situation that arose in the #- >- #eacoc@ o/0an" case (99 P#5L *46)*49) &herein the vendor de/anded the return of the thing sold, and there'" indicated an une.uivocal desire on its 0art to rescind its contract &ith the vendee, here it &as the 'u"er (deceased Faudencio Uuia/'ao) &ho offered indeed 0leaded, to surrender his car onl" in order that he /ight 'e given /ore ti/e &ithin &hich to satisf" the
.a+es" /001 ( /:/ )
=udg/ent de't, and sus0end the i/0ending e4ecution sale of the 0ro0erties levied u0on- The ver" recei0t issued then '" the co/0an", and acce0ted &ithout o'=ection '" the deceased (Faudencio Uuia/'ao), indicated that the car &as received 70ending settle/ent of the =udg/ent in ivil ase 6<043-8 %ther circu/stances that /ilitate against the Uuia/'aos; theor" of rescission or annul/ent of the contract of sale and &aiver of the =udg/ent de't and, conversel", strengthen the 0ro0osition that the deliver" of the car to the co/0an" &as /erel" to 0ost0one the satisfaction of the =udg/ent a/ount, are that the deceased still 0aid the further su/ of P600-00 on account of his inde'tedness a'out t&o /onths after the car &as surrendered, and that des0ite the co/0an";s acce0tance of the car, the co/0an" /ade re0eated de/ands against the 0etitioners to settle the deceased;s un0aid accounts/. Rece(pt o- car not -or appropr(at(on ut as secur(ty to sat(s-act(on o- 8u')ment cre'(t3 Does not amount to -orec+osure o- c*atte+ mort)a)e !ince the co/0an" did not receive the car for the 0ur0ose of a00ro0riating the sa/e, 'ut /erel" as securit" for the ulti/ate satisfaction of its =udg/ent credit, the situation under consideration could not have a/ounted to a foreclosure of the chattel /ortgage1. Bayment o- ,ar 'ama)e compensat(on 'oes not pro'uce same an' e2ua+ +e)a+ e--ect as -orma+ -orec+osure #aving 'een the 0art" &ho &as last in 0ossession of the lost car, the co/0an" &as &ell &ithin its rights, or 'etter still, under o'ligation, to 0rotect the interest of the car o&ner, as &ell as its o&n, '" clai/ing, as it did, the corres0onding &ar da/age co/0ensation for the car- !uch action of the co/0an" cannot reasona'l" 'e construed as a constriction of its rights under the 0re)&ar =udg/ent4. .cenar(o arr(n) recovery o- any unpa(' a+ance 5n Aanila Aotor o/0an", 5nc-, vs- Fernande2 (6* %F 19, 9<<3, 9<<6), it &as held that 7it is the actual sale of the /ortgaged chattel in accordance &ith section 14 of 3ct 160< that &ould 'ar the creditor (&ho chooses to foreclose) fro/ recovering an" un0aid 'alance (Pacific o//ercial o/0an" vs- De la (a/a, +* Phil, 3<0)-8 $. .u(t -(+e' ,as -or spec(-(c per-ormance an' not -or resc(ss(on or cance++at(on o- contract o- sa+e The 'est reason &h" res0ondent co/0an" /a" not 'e construed as having rescinded or cancelled the contract of sale or foreclosed the /ortgage on the auto/o'ile is 0recisel" 'ecause it 'rought suit for s0ecific 0erfor/ance, and &on, in the 0re)&ar ivil ase 6<043:. BreD,ar 8u')ment *as not prescr( e'3 Ber(o' covere' y morator(um +a, an' c+osure ore)u+ar courts at t*e out reak o- ,ar 'e'ucte' The 0re)&ar =udg/ent &as entered on 4 Dece/'er 1,40, and on 14 Jul" 1,41, a &rit of e4ecution &as issued- The co/0an" too@ no further ste0 to enforce the =udg/ent until 1, Aa" 1,64, on &hich date, Aanila Aotors scheduled * 0arcels of land o&ned '" the Uuia/'aos for sale at 0u'lic auction 0ursuant to the &rit of 14 Jul" 1,41- Fro/ the entr" of the =udg/ent to 1, Aa" 1,64, a 0eriod of 13 "ears, 6 /onths and 16 da"s had ela0sedFro/ this ter/, the 0eriod covered '" the de't /oratoriu/ under >4ecutive %rder 3* (&hich a00lied to all de'ts 0a"a'le &ithin the Phili00ines), fro/ the ti/e the order too@ effect on 10 Aarch 1,46, until it &as 0artiall" lifted '" (3 34* on *9 Jul" 1,4< /ust 'e deducted- Deducting the 0eriod during &hich >% 3* &as in force, &hich is 3 "ears, 4 /onths and 19 da"s, fro/ 13 "ears, 6 /onths and 16 da"s, the 0eriod covered fro/ the entr" of the 0re)&ar =udg/ent to the ti/e the co/0an" atte/0ted to sell the levied 0ro0erties at auction, there is still left a 0eriod of 10 "ears and *, da"sDut as held in +alens vs. Chua;ay ( Co., F-(- $o- L)101*+, June 30, 1,6<, the ourt too@ =udicial notice of the fact that regular courts in Lu2on &ere closed for /onths during the earl" 0art of the Ja0anese occu0ation until the" &ere reconstituted '" order of the hair/an of the >4ecutive o//ission on 30 Januar" 1,4*- This interru0tion in the functions of the courts has also 'een held to interru0t the running of the
.a+es" /001 ( /:1 )
0rescri0tive 0eriod (see also Pal/a vs- elda, <1 Phil- 419)- That 'eing the case, res0ondent co/0an" could not 'e 'arred '" 0rescri0tion fro/ 0roceeding &ith the e4ecution sale 0ursuant to the lev" and &rit of e4ecution issued under the 0re)&ar =udg/ent, considering that even the /ini/u/ 0eriod of fro/ < Dece/'er 1,41, the out'rea@ of the Pacific :ar, to 30 Januar" 1,4* is alread" a ter/ of 1 /onth and *3 da"s!. BreD,ar ,r(t o- e7ecut(on an' +evy may st(++ e en-orce' y sa+e o- t*e +ev(e' property a-ter t*e +apse o- t*e $Dyear per(o' ,(t*(n ,*(c* a 8u')ment may e e7ecute' y mot(on 3 valid e4ecution issued and lev" /ade &ithin the 0eriod 0rovided '" la& /a" 'e enforced '" a sale thereafter- The sale of the 0ro0ert" '" the sheriff and the a00lication of the 0roceeds are si/0l" the carr"ing out of the &rit of e4ecution and lev" &hich &hen issued &ere valid- This rests u0on the 0rinci0le that the lev" is the essential act '" &hich the 0ro0ert" is set a0art for the satisfaction of the =udg/ent and ta@en into custod" of the la&, and that after it has 'een ta@en fro/ the defendant, his interest is li/ited to its a00lication to the =udg/ent, irres0ective of the ti/e &hen it /a" 'e sold (!outhern al- L- o- vs- #otel o-, ,4 al- *1+, ***G Fovern/ent of P-5- vs- >chaus, +1 Phil- 31<)- Thus, a valid =udg/ent /a" 'e enforced '" /otion &ithin 6 "ears after its entr", and '" action after the la0se of said 0eriod 'ut 'efore the sa/e shall have 'een 'arred '" an" statute of li/itations, and that a valid e4ecution issued and lev" /ade &ithin the 6)"ear 0eriod after entr" of the =udg/ent /a" 'e enforced '" sale of the 0ro0ert" levied u0on thereafter, 0rovided the sale is /ade &ithin 10 "ears after the entr" of the =udg/ent8. Ansa+'o vs. %('e+(ty not (n po(nt The case of 3nsaldo vs- Fidelit" and !uret" o/0an" of the Phili00ine 5slands, F-(- $o- L)*3+<, 30ril *+, 1,61, is not in 0oint, for there the =udg/ent creditor atte/0ted to carr" out the &rit of e4ecution 10 "ears after the entr" of =udg/ent#. Amount rece(ve' -rom t*e B*(+(pp(ne 5ar Dama)e Comm(ss(on must e cre'(te' to t*e Ju(am aos= account The Uuia/'aos should 'e credited the a/ount of P40,-+6 &hich the Aanila Aotors actuall" received fro/ the Phili00ine :ar Da/age o//ission on account of the car of Faudencio Uuia/'ao that had 'een sei2ed fro/ it '" the ene/" occu0ant during the &ar- This should reduce the 0rinci0al a/ount still due Aanila Aotors fro/ the Uuia/'aos to the su/ of P1,64*-+*[114] He+asco v. CA [G.R. No. @D11018. Fune /#" 1#!1.] First Division, astro (J):3 concur, 1 concurs &ith reservation, * dissents, 1 concurring &ith a dissent, 1 too@ no 0art %acts& 3 suit for s0ecific 0erfor/ance filed '" Loren2o 1elasco against the Aagdalena >state ( ivil ase ++91) on the allegation that on *, $ove/'er 1,9*, 1elasco and the Aagdalena >state had entered into a contract of sale '" virtue of &hich Aagdalena >state offered to sell 1elasco, to &hich the latter agreed to 'u", a 0arcel of land &ith an area of *,06, s.-/s- (Lot 16, Dloc@ +, Psd)91*,,) located at $o- 3, corner 9th !treet and Pacific 3venue, $e& Aanila, Uue2on it", for the total 0urchase 0rice of P100,000-00- 2elasco allege$ that he &as to give a do&n 0a"/ent of P10,000-00 to 'e follo&ed '" P*0,000-00 and the 'alance of P+0,000-00 &ould 'e 0aid in install/ents, the e.ual /onthl" a/orti2ation of &hich &as to 'e deter/ined as soon as the P30,000-00 do&n 0a"/ent had 'een co/0leted- #e further alleged that he 0aid the do&n0a"/ent on *, $ove/'er 1,9* ((ecei0t *0+<4<) and that &hen on < Januar" 1,94 he tendered to the 0a"/ent of the additional P*0,000-00 to co/0lete the P30,000-00, Aagdalena >state refused to acce0t and that eventuall" it li@e&ise refused to e4ecute a for/al deed of sale o'viousl" agreed u0on- 1elasco de/anded P*6,000-00 e4e/0lar" da/ages, P*,000-00 actual da/ages and P+,000-00 attorne";s fees- /ag$alena )state $enie$ that it has had an" direct)dealings, /uch less, contractual relations &ith the Loren2o 1elasco regarding the 0ro0ert" in .uestion, and contends that the alleged contract descri'ed in the docu/ent attached to the
.a+es" /001 ( /:4 )
co/0laint is entirel" unenforcea'le under the !tatute of FraudsG that the truth of the /atter is that a 0ortion of the 0ro0ert" in .uestion &as 'eing leased '" a certain !ocorro 1elasco &ho, on *, $ove/'er 1,9*, &ent to the office of Aagdalena >state indicated her desire to 0urchase the lotG that the latter indicated its &illingness to sell the 0ro0ert" to her at the 0rice of P100,000-00 under the condition that a do&n 0a"/ent of P30,000-00 'e /ade, P*0,000-00 of &hich &as to 'e 0aid on 31 $ove/'er 1,9*, and that the 'alance of P+0,000-00 including interest at ,I 0er annu/ &as to 'e 0aid on install/ents for a 0eriod of 10 "ears at the rate of P6,3<1-3* on June 30 and Dece/'er of ever" "ear until the sa/e shall have 'een full" 0aidG that on *, $ove/'er 1,9*, !ocorro 1elasco offered to 0a" P10,000-00 as initial 0a"/ent instead of the agreed P*0,000-00 'ut 'ecause the a/ount &as short of the alleged P*0,000-00 the sa/e &as acce0ted /erel" as de0osit and u0on re.uest of !ocorro 1elasco the recei0t &as /ade in the na/e of her 'rother)in)la& ,Loren2o 1elascoG that !ocorro 1elasco failed to co/0lete the do&n 0a"/ent of P30,000-00 and neither has she 0aid an" install/ents on the 'alance of P+0,000-00 u0 to the 0resent ti/eG that it &as onl" on < Januar" 1,94 that !ocorro 1elasco tendered 0a"/ent of P*0,000-00, &hich offer Aagdalena >state refused to acce0t 'ecause it had considered the offer to sell rescinded on account of her failure to co/0lete the do&n 0a"/ent on or 'efore 31 Dece/'er 1,9*- %n 3 $ove/'er 1,9<, the C%. 3ue0on City ren$ere$ a $ecision, dis/issing the co/0laint filed '" Loren2o and !ocorro 1elasco against the Aagdalena >state, 5nc- for the 0ur0ose of co/0elling s0ecific 0erfor/ance '" Aagdalena >state of an alleged deed of sale of a 0arcel of residential land in favor of the 1elascos- The 'asis for the dis/issal of the co/0laint &as that the alleged 0urchase and sale agree/ent 7&as not 0erfected-8 %n 1< $ove/'er 1,9<, after the 0erfection of their a00eal to the ourt of 300eals, the 1elascos received a notice fro/ the said court re.uiring the/ to file their 0rinted record on a00eal &ithin 90 da"s fro/ recei0t of said notice- This 90)da" ter/ &as to e40ire on 1+ Januar" 1,9,- 3llegedl" on 16 Januar" 1,9,, the 1elascos allegedl" sent to the 3 and to counsel for Aagdalena >state, '" registered /ail allegedl" de0osited 0ersonall" '" its /ailing cler@, one Juanito D- Uuiachon, at the Aa@ati Post %ffice, a 7Aotion For >4tension of Ti/e To File Printed (ecord on 300eal-8 The e4tension of ti/e &as sought on the ground 7of /echanical failures of the 0rinting /achines, and the volu/inous 0rinting =o' no& 0ending &ith the 1era Printing Press-8 %n 10 Fe'ruar" 1,9,, the 1elascos filed their 0rinted record on a00eal in the 3- Thereafter, the 1elascos received fro/ Aagdalena >state a /otion filed on < Fe'ruar" 1,9, 0ra"ing for the dis/issal of the a00eal on the ground that the 1elascos had failed to file their 0rinted record on a00eal on ti/e- The 3, on *6 Fe'ruar" 1,9,, denied the Aagdalena >state;s /otion to dis/iss, granted the 1elasco;s /otion for 30)da" e4tension fro/ 16 Januar" 1,9,, and ad/itted the latter;s 0rinted record on a00eal- %n 11 Aarch 1,9,, Aagdalena >state 0ra"ed for a reconsideration of said resolution- The 1elascos o00osed the /otion for reconsideration and su'/itted to the 3 the registr" recei0ts (0*16 and 0*19), 'oth sta/0ed 16 Januar" 1,9,, &hich &ere issued '" the receiving cler@ of the registr" section of the Aa@ati Post %ffice covering the /ails for the dis0uted /otion for e4tension of ti/e to file their 0rinted record on a00eal and the affidavit of its /ailing cler@- 3fter several other 0leadings and /anifestations relative to the /otion for reconsideration and on *< June 1,9,, the 3 0ro/ulgated a resolution granting the /otion for reconsideration and ordered 3tt"Patrocinio or0u2 (1elasco;s counsel) to sho& cause &ithin 10 da"s fro/ notice &h" he should not 'e sus0ended fro/ the 0ractice of his 0rofession for deceit, falsehood and violation of his s&orn dut" to the ourt, and directed the Provincial Fiscal of (i2al to conduct the necessar" investigation against Juanito DUuiachon of the !alonga, %rdoMe2, Ea0, !icat Q 3ssociates La& %ffice and Flaviano %- Aalindog, a letter carrier at the Aa@ati Post %ffice, and to file the a00ro0riate cri/inal action against the/ (it a00ears that Aalindog 0ost/ar@ the letters 16 Januar" 1,9, on + Fe'ruar" 1,9, at the re.uest of Uuiachon)- %n 6 !e0te/'er 1,9,, the 3 0ro/ulgated another resolution, den"ing the /otion for reconsideration of the 1elascos 'ut, at the sa/e ti/e, acce0ting as satisfactor" the e40lanation of 3tt"- or0u2 &h" he should not 'e sus0ended fro/ the 0ractice of the legal 0rofession%n *0 !e0te/'er 1,9,, the First 3ssistant Fiscal of (i2al notified the ourt of 300eals that he had found a 0ri/a facie case against Aalindog and &ould file the corres0onding infor/ation for falsification of 0u'lic docu/ents against hi/, 'ut dis/issed the co/0laint against Uuiachon for lac@ of sufficient evidence.a+es" /001 ( /:$ )
3 0etition for certiorari and /anda/us &as filed '" the 1elascos against the resolution of the ourt of 300eals dated *< June 1,9, in 3)F( 4*3+9, &hich ordered the dis/issal of the a00eal inter0osed '" the/ fro/ a decision of the F5 Uue2on it" on the ground that the" had failed seasona'l" to file their 0rinted record on a00ealThe !u0re/e ourt denied the instant 0etitionG &ithout 0ronounce/ent as to costs1. Gssues ra(se' y He+ascos3 .ome (ssues are su 8ect o- appea+ on cert(orar( un'er Ru+e 4$ rat*er t*an t*at o- cert(orar( un'er Ru+e :$ The 1elascos contend that the ourt of 300eals acted &ithout or in e4cess of =urisdiction, or &ith such &hi/sical and grave a'use of discretion as to a/ount to lac@ of =urisdiction, 'ecause (a) it declared that the /otion for e4tension of ti/e to file the 0rinted record on a00eal &as not /ailed on 16 Januar" 1,9,, &hen, in fact, it &as /ailed on the said date as evidenced '" the registr" recei0ts and the 0ost office sta/0 of the Aa@ati Post %fficeG (') it declared that the record on a00eal &as filed onl" on 10 Fe'ruar" 1,9,, 'e"ond the ti/e authori2ed '" the a00ellate court, &hen the truth is that the said date of filing &as &ithin the 30)da" e4tension granted '" itG (c) the adverse conclusions of the a00ellate court &ere not su00orted '" the records of the case, 'ecause the said court ignored the affidavit of the /ailing cler@ of the 0etitioners; counsel, the registr" recei0ts and 0ost/ar@ed envelo0es and, instead, chose to rel" u0on the affidavit of the /ail carrier Aalindog, &hich affidavit &as 0re0ared '" counsel for Aagdalena >state at the affiant hi/self so declared at the 0reli/inar" investigation at the Fiscal;s office &hich a'solved the 1elascos; counsel /ailing cler@ Uuiachon fro/ an" cri/inal lia'ilit"G (d) section 1, (ule 60 of the (ules of ourt, &hich enu/erates the grounds u0on &hich the ourt of 300eals /a" dis/iss an a00eal, does not include as a ground the failure to file a 0rinted record on a00ealG (e) the said section does not state either that the /is/ailing of a /otion to e4tend the ti/e to file the 0rinted record on a00eal, assu/ing this to 'e the case, /a" 'e a 'asis for the dis/issal of the a00ealG (f) the ourt of 300eals has no =urisdiction to revo@e the e4tension of ti/e to file the 0rinted record on a00eal it had granted to the 0etitioners 'ased on a ground not s0ecified in section 1, (ule 60 of the (ules of ourtG and (g) the o'=ection to an a00eal /a" 'e &aived as &hen the a00ellee has allo&ed the record on a00eal to 'e 0rinted and a00roved- !o/e of the o'=ections raised '" the 1elascos to the .uestioned resolution of the ourt of 300eals are o'viousl" /atters involving the correct construction of our rules of 0rocedure and, conse.uentl", are 0ro0er su'=ects of an a00eal '" &a" of certiorari under (ule 46 of the (ules of ourt, rather than a s0ecial civil action for certiorari under (ule 96- The 0etitioners, ho&ever, have correctl" a00reciated the nature of its o'=ections and have as@ed this ourt to treat the instant 0etition as an a00eal '" &a" of certiorari under (ule 46 7in the event that the !u0re/e ourt should dee/ that an a00eal is an ade.uate re/ed"8 The nature of the 0resent case 0er/its a dis.uisition of 'oth t"0es of assign/ents/. Date stampe' on rece(pts an' enve+opes3 Henn(n) an' Ca+te7 cases 'o not app+y :hile it is true that sta/0ed on the registr" recei0ts 0*16 and 0*19 as &ell as on the envelo0es covering the /ails in .uestion is the date 16 Januar" 1,9,, this, '" itself, does not esta'lish an unre'utta'le 0resu/0tion of the fact or date of /ailing- The #enning and alte4 cases are not in 0oint 'ecause the s0ecific ad=ective issue resolved in those cases &as &hether or not the date of /ailing a 0leading is to 'e considered as the date of its filing, The issue in the 0resent case is &hether or not the /otion of the 0etitioners for e4tension of ti/e to file the 0rinted record on a00eal &as, in 0oint of fact, /ailed (and, therefore, filed) on 16 Januar" 1,9,1. Cert(-(cat(on o- postmasters an' 9a+(n'o)=s s,orn 'ec+arat(on e+(eva +e3 9a+(n'o) (n'uce' to (ssue -a+se re)(stry rece(pts -or t*e He+asco=s counse+ The certifications issued '" the t&o 0ost/asters of Aa@ati, (i2al and the s&orn declaration of the /ail carrier Aalindog descri'ing ho& the said registr" recei0ts ca/e to 'e issued, are &orth" of 'elief- 5t &ill 'e o'served that the said certifications e40lain clearl" and in detail ho& it &as i/0ro'a'le that the registr" recei0ts in .uestion could have 'een issued to 1elascos; counsel in the ordinar" course of official 'usiness,
.a+es" /001 ( /:: )
&hile Aalindog;s s&orn state/ent, &hich constitutes a ver" grave ad/ission against his o&n interest, 0rovides a/0le 'asis for a finding that &here official dut" &as not 0erfor/ed it &as at the 'ehest of a 0erson interested in the 1elascos; side of the action 'elo&- That at the 0reli/inar" investigation at the Fiscal;s office, Aalindog failed to identif" Uuiachon as the 0erson &ho induced hi/ to issue falsified recei0ts, contrar" to &hat he declared in his affidavit, is of no /o/ent since the findings of the in.uest fiscal as reflected in the infor/ation for falsification filed against Aalindog indicate that so/eone did induce Aalindog to /a@e and issue false registr" recei0ts to the counsel for the 1elascos4. R()*t to appea+ a statutory pr(v(+e)e an' not a natura+ r()*t nor a part o- 'ue process 5n Dello vs- Fernando, it &as held that the right to a00eal is not a natural right nor a 0art of due 0rocessG it is /erel" a statutor" 0rivilege- and /a" he e4ercised onl" in the /anner 0rovided '" la&$. Duty o- appe++ant to -(+e pr(nte' recor' on appea+ ,(t* CA ,(t*(n :0 'ays -rom rece(pt o- not(ce The (ules of ourt e40ressl" /a@es it the dut" of an a00ellant to file a 0rinted record on a00eal &ith the ourt of 300eals &ithin 90 da"s fro/ recei0t of notice fro/ the cler@ of that court that the record on a00eal a00roved '" the trial court has alread" 'een received '" the said court- !ection 6 of (ule 49 (Dut" of a00ellant u0on recei0t of notice) states that 75t shall 'e the dut" of the a00ellant &ithin 16 da"s fro/ the date of the notice referred to in the 0receding section, to 0a" the cler@ of the ourt of 300eals the fee for the doc@eting of the a00eal, and &ithin 90 da"s fro/ such notice to su'/it to the court 40 0rinted co0ies of the record on a00eal, together &ith 0roof of service of 16 0rinted co0ies thereof u0on the a00ellee-8 :. Appe++ate court '(' not a use (ts '(scret(on 3fter a careful stud" and a00raisal of the 0leadings, ad/issions and denials res0ectivel" adduced and /ade '" the 0arties, it is clear that the ourt of 300eals did not gravel" a'use its discretion and did not act &ithout or in e4cess of its =urisdiction- 3s the 1elascos failed to co/0l" &ith the dut" to file the 0rinted record on a00eal &ithin 90 da"s fro/ recei0t of notice &hich the (ules of ourt en=oins, and considering that there &as a deli'erate effort on their 0art to /islead the said ourt in granting the/ an e4tension of ti/e &ithin &hich to file their 0rinted record on a00eal, it stands to reason that the a00ellate court cannot 'e said to have a'used its discretion or to have acted &ithout or in e4cess of its =urisdiction in ordering the dis/issal of their a00eal!. Fur(spru'ence rep+ete ,(t* cases ,*ere Court '(sm(sse' appea+ on )roun's not ment(one' spec(-(ca++y (n Ru+e $0" .ect(on 1 Juris0rudence is re0lete &ith cases in &hich this ourt dis/issed an a00eal on grounds not /entioned s0ecificall" in !ection 1, (ule 60 of the (ules of ourt- (!ee, for e4a/0le, De la ru2 vs- Dlanco, +3 Phil6,9 (1,4*)G Fovern/ent of the Phili00ines vsourt of 300eals- 10< Phil- <9 (1,90)G Ferinion vs- !ta(o/ana, L)*66*1, Fe'ruar" *<, 99, 19 ! (3 3+0, 3+6)8. 9ot(on -or e7tens(on o- per(o' must e ma'e e-ore t*e e7p(rat(on o- t*e per(o' to e e7ten'e' 5nas/uch as the /otion for e4tension of the 0eriod to file the 0rinted record on a00eal &as 'elatedl" filed, then, it is as though the sa/e &ere non)e4istent- 5n 5aBuiran vs. Court of Appeals , it &as stated that 7the /otion for e4tension of the 0eriod for filing 0leadings and 0a0ers in court /ust 'e /ade 'efore the e40iration of the 0eriod to 'e e4tended-8 The soundness of this dictu/ in /atters of 0rocedure is self)evidentFor, &ere the doctrine other&ise, the uncertainties that &ould follo& &hen litigants are left to deter/ine and redeter/ine for the/selves &hether to see@ further redress in court forth&ith or ta@e their o&n s&eet ti/e &ill result in litigations 'eco/ing /ore un'eara'le than the ver" grievances the" are intended to redress#. > 8ect(on to appea+ not ,a(ve' Aagdalena >state did file a /otion in the ourt of 300eals on < Fe'ruar" 1,9, 0ra"ing for the dis/issal of the a00eal on the ground that u0 to the said date the 1elascos had not "et filed their record on a00eal and, therefore, /ust 'e considered to have a'andoned their a00eal- The o'=ection to an a00eal &as thus
.a+es" /001 ( /:! )
not &aived, contrar" to 1elasco;s argu/ent that it &as &aived &hen the a00ellee allo&s the record on a00eal to 'e 0rinted and a00rovedB 10. No contract o- sa+e per-ecte' ecause t*e m(n's o- t*e part(es '(' not meet (n re)ar' to t*e manner o- payment $o contract of sale &as 0erfected 'ecause the /inds of the 0arties did not /eet 7in regard to the /anner of 0a"/ent-8 The /aterial aver/ents contained in 1elasco;s co/0laint the/selves disclose a lac@ of co/0lete 7agree/ent in regard to the /anner of 0a"/ent8 of the lot in .uestion- The co/0laint states 0ertinentl" 7that 0laintiff and defendant further agreed that the total do&n 0a"/ent shall 'e P30,000-00, including the P10,000-00 0artial 0a"/ent /entioned in 0aragra0h 3 hereof, and that u0on co/0letion of the said do&n 0a"/ent of P30,000-00, the 'alance of P+0,000-00 shall 'e 0aid '" the 0laintiff to the defendant in 10 "ears fro/ $ove/'er *,, 1,9*G and that the ti/e &ithin &hich the full do&n 0a"/ent of the P30,000-00 &as to 'e co/0leted &as not s0ecified '" the 0arties 'ut the defendant &as dul" co/0ensated during the said ti/e 0rior to co/0letion of the do&n 0a"/ent of P30,000-00 '" &a" of lease rentals on the house e4isting thereon &hich &as earlier leased '" defendant to the 0laintiff;s sister)in)la&, !ocorro J- 1elasco, and &hich &ere dul" 0aid to the defendant '" chec@s dra&n '" 0laintiff-8 The 1elascos the/selves ad/it that the" and Aagdalena >state still had to /eet and agree on ho& and &hen the do&n 0a"/ent and the install/ent 0a"/ents &ere to 'e 0aid- !uch 'eing the situation, it cannot 'e said that a definite and fir/ sales agree/ent 'et&een the 0arties had 'een 0erfected over the lot in .uestion11. De-(n(te a)reement on t*e matter o- payment o- purc*ase pr(ce an essent(a+ e+ement to -orm (n'(n) an' en-orcea +e contract o- sa+e 3 definite agree/ent on the /anner of 0a"/ent of the 0urchase 0rice is an essential ele/ent in the for/ation of a 'inding and enforcea'le contract of sale- 5n the 0resent case, the 1elascos delivered to Aagdalena >state the su/ of P10,000 as 0art of the do&n0a"/ent that the" had to 0a" cannot 'e considered as sufficient 0roof of the 0erfection of an" 0urchase and sale agree/ent 'et&een the 0arties under article 14<* of the ne& ivil ode, as the 1elascos the/selves ad/it that so/e essential /atter (the ter/s of 0a"/ent) still had to 'e /utuall" covenanted[11$] H(++a-+or v. CA [G.R. No. #$:#4. >cto er #" 1##!.] Third Division, Pangani'an (J): 3 concur, 1 too@ no 0art %acts& %n 19 Januar" 1,40, irilo Piencenaves, in a Deed of 3'solute !ale, sold to 1icente 1illafor, a 0arcel of agricultural land (0lanted to 3'aca) containing an area of 60 hectares, /ore or less- The deed states that the land &as sold to 1illaflor on ** June 1,3+, 'ut no for/al docu/ent &as then e4ecuted, and since then until the 0resent ti/e, 1illaflor has 'een in 0ossession and occu0ation of the sa/e- Defore the sale of said 0ro0ert", Piencenaves inherited said 0ro0ert" for/ his 0arents and &as in adverse 0ossession of such &ithout interru0tion for /ore than 60 "ears- %n the sa/e da", laudio %tero, in a Deed of 3'solute !ale sold to 1illaflor a 0arcel of agricultural land (0lanted to corn), containing an area of *4 hectares, /ore or lessG #er/ogenes Patete, in a Deed of 3'solute !ale sold to 1illaflor, a 0arcel of agricultural land (0lanted to a'aca and corn), containing an area of *0 hectares, /ore or less- Doth deed state the sa/e details or circu/stances as that of Piencenaves;- %n 16 Fe'ruar" 1,40, Fer/in Doco'o, in a Deed of 3'solute !ale sold to 1illaflor, a 0arcel of agricultural land (0lanted &ith a'aca), containing an area of 1< hectares, /ore or less%n < $ove/'er 1,49, 1illaflor leased to $asi0it Lu/'er o-, 5nc- a 0arcel of land, containing an area of * hectares, together &ith all the i/0rove/ents e4isting thereon, for a 0eriod of 6 "ears (fro/ 1 June 1,49) at a rental of P*00-00 0er annu/ to cover the annual rental of house and 'uilding sites for 33 houses or 'uildingsThe lease agree/ent allo&ed the lessee to su'lease the 0re/ises to an" 0erson, fir/ or cor0orationG and to 'uild and construct additional houses &ith the condition the lessee shall 0a" to the lessor the a/ount of 60
.a+es" /001 ( /:8 )
centavos 0er /onth for ever" house and 'uildingG 0rovided that said constructions and i/0rove/ents 'eco/e the 0ro0ert" of the lessor at the end of the lease &ithout o'ligation on the 0art of the latter for e40enses incurred in the construction of the sa/e- %n + Jul" 1,4<, in an 73gree/ent to !ell8 1illaflor conve"ed to $asi0it Lu/'er, * 0arcels of land- Parcel 1 contains an area of 11*,000 hectares /ore or less, divided into lots 641*, 6413, 64<<, 64,0, 64,1, 64,*, 6<60, 6<4,, 6<90, 6<66, 6<61, 6<64, 6<66, 6<6,, 6<6<, 6<6+, 6<63, and 6<6*G and containing a'aca, fruit trees, coconuts and thirt" houses of /i4ed /aterials 'elonging to the $asi0it Lu/'er o/0an"- Parcel * contains an area of 4<,000 /ore or less, divided into lots 6411, 6410, 640,, and 63,,, and containing 100 coconut trees, 0roductive, and 300 cacao trees- Fro/ said da", the 0arties agreed that $asi0it Lu/'er shall continue to occu0" the 0ro0ert" not an"/ore in conce0t of lessee 'ut as 0ros0ective o&ners%n * Dece/'er 1,4<, 1illaflor filed !ales 300lication 1)<0+ &ith the Dureau of Lands, Aanila, to 0urchase under the 0rovisions of ha0ter 1, R5 or 5R of 3 141 (The Pu'lic Lands 3ct), as a/ended, the tract of 0u'lic lands- Paragra0h 9 of the 300lication, states: H5 understand that this a00lication conve"s no right to occu0" the land 0rior to its a00roval, and 5 recogni2e that the land covered '" the sa/e is of 0u'lic do/ain and an" and all rights 5 /a" have &ith res0ect thereto '" virtue of continuous occu0ation and cultivation are here'" relin.uished to the Fovern/ent- %n + Dece/'er 1,4<, 1illaflor and $asi0it Lu/'er e4ecuted an 73gree/ent,8 confir/ing the 3gree/ent to !ell of + Jul" 1,4<, 'ut &ith reference to the !ales 300lication filed &ith the Dureau of Land- %n 31 Dece/'er 1,4,, the (e0ort '" the 0u'lic land ins0ector (District Land %ffice, Dureau of Lands, in Dutuan) contained an endorse/ent of the said officer reco//ending re=ection of the !ales 300lication of 1illaflor for having leased the 0ro0ert" to another even 'efore he had ac.uired trans/issi'le rights thereto- 5n a letter of 1illaflor dated *3 Januar" 1,60, addressed to the Dureau of Lands, he infor/ed the Dureau Director that he &as alread" occu0"ing the 0ro0ert" &hen the Dureau;s 3gusan (iver 1alle" !u'division Pro=ect &as inaugurated, that the 0ro0ert" &as for/erl" clai/ed as 0rivate 0ro0ert", and that therefore, the 0ro0ert" &as segregated or e4cluded fro/ dis0osition 'ecause of the clai/ of 0rivate o&nershi0- Li@e&ise, in a letter of $asi0it Lu/'er dated ** Fe'ruar" 1,60 addressed to the Director of Lands, the cor0oration infor/ed the Dureau that it recogni2ed 1illaflor as the real o&ner, clai/ant and occu0ant of the landG that since June 1,49, 1illaflor leased * hectares inside the land to the co/0an"G that it has no other interest on the landG and that the !ales 300lication of 1illaflor should 'e given favora'le consideration- %n *4 Jul" 1,60, the scheduled date of auction of the 0ro0ert" covered '" the !ales 300lication, $asi0it Lu/'er offered the highest 'id of P41-00 0er hectare, 'ut since an a00licant under 3 141, is allo&ed to e.ual the 'id of the highest 'idder, 1illaflor tendered an e.ual 'id, de0osited the e.uivalent of 10I of the 'id 0rice and then 0aid the assess/ent in full%n 19 3ugust 1,60, 1illaflor e4ecuted a docu/ent, deno/inated as a 7Deed of (elin.uish/ent of (ights,8 in favor on $asi0it Lu/'er, in consideration of the a/ount of P6,000 that &as to 'e rei/'ursed to the for/er re0resenting 0art of the 0urchase 0rice of the land, the value of the i/0rove/ents 1illaflor introduced thereon, and the e40enses incurred in the 0u'lication of the $otice of !aleG in light of his difficult" to develo0 the sa/e as 1illaflor has /oved to Aanila- Pursuant thereto, on 19 3ugust 1,60, $asi0it Lu/'er filed a !ales 300lication over the * 0arcels of land, covering an area of 140 hectares, /ore or less- This a00lication &as also nu/'ered 1)<0+- %n 1+ 3ugust 1,60 the Director of Lands issued an 7%rder of 3&ard8 in favor of $asi0it Lu/'erG and its a00lication &as entered in the record as !ales >ntr" 1)40+%n *+ $ove/'er 1,+3, 1illafor &rote a letter to $asi0it Lu/'er, re/inding the latter of their ver'al agree/ent in 1,66G 'ut the ne& set of cor0orate officers refused to recogni2e 1illaflor;s clai/- 5n a for/al 0rotest dated 31 Januar" 1,+4 &hich 1illaflor filed &ith the Dureau of Lands, he 0rotested the !ales 300lication of $asi0it Lu/'er, clai/ing that the co/0an" has not 0aid hi/ P6,000-00 as 0rovided in the Deed of (elin.uish/ent of (ights dated 19 3ugust 1,60- %n < 3ugust 1,++, the Director of Lands found that the 0a"/ent of the a/ount of P6,000-00 in the Deed and the consideration in the 3gree/ent to !ell &ere dul" 0roven, and ordered the dis/issal of 1illaflor;s 0rotest-
.a+es" /001 ( /:# )
%n 9 Jul" 1,+<, 1illaflor filed a co/0laint in the trial court for 7Declaration of $ullit" of ontract (Deed of (elin.uish/ent of (ights), (ecover" of Possession (of t&o 0arcels of land su'=ect of the contract), and Da/ages8 at a'out the sa/e ti/e that he a00ealed the decision of the Ainister of $atural (esources to the %ffice of the President- %n *< Januar" 1,<3, he died- The trial court ordered his &ido&, Lourdes D- 1illaflor, to 'e su'stituted as 0etitioner- 3fter trial in due course, the then F5 3gusan del $orte and Dutuan it", Dranch 555, dis/issed the co/0laint on the grounds that: (1) 0etitioner ad/itted the due e4ecution and genuineness of the contract and &as esto00ed fro/ 0roving its nullit", (*) the ver'al lease agree/ents &ere unenforcea'le under 3rticle 1403 (*)(e) of the ivil ode, and (3) his causes of action &ere 'arred '" e4tinctive 0rescri0tion andBor laches- 5t ruled that there &as 0rescri0tion andBor laches 'ecause the alleged ver'al lease ended in 1,99, 'ut the action &as filed onl" on 9 Januar" 1,+<- The 9)"ear 0eriod &ithin &hich to file an action on an oral contract 0er 3rticle 1146 (1) of the ivil ode e40ired in 1,+*- $asi0it Lu/'er &as declared the la&ful o&ner and actual 0h"sical 0ossessor of the * 0arcels of land (containing a total area of 190 hectares)- The 3gree/ents to !ell (eal (ights and the Deed of (elin.uish/ent of (ights over the * 0arcels &ere li@e&ise declared 'inding 'et&een the 0arties, their successors and assignsG &ith dou'le costs against 1illaflorThe heirs of 0etitioner a00ealed to the ourt of 300eals &hich, ho&ever, rendered =udg/ent against the/ via the assailed Decision dated *+ !e0te/'er 1,,0 finding 0etitioner;s 0ra"ers J (1) for the declaration of nullit" of the deed of relin.uish/ent, (*) for the eviction of 0rivate res0ondent fro/ the 0ro0ert" and (3) for the declaration of 0etitioner;s heirs as o&ners J to 'e &ithout 'asis- $ot satisfied, 0etitioner;s heirs filed the 0etition for revie& dated + Dece/'er 1,,0- 5n a (esolution dated *3 June 1,,1, the ourt denied this 0etition 7for 'eing late-8 %n reconsideration, the ourt reinstated the 0etitionThe !u0re/e ourt dis/issed the 0etition1. Doctr(ne o- pr(mary 8ur(s'(ct(on3 Court 'oes not (nter-ere (- 2uest(on (s ,(t*(n 8ur(s'(ct(on o- an a'm(n(strat(ve tr( una+ ?nderl"ing the rulings of the trial and a00ellate courts is the doctrine of 0ri/ar" =urisdictionG i-e-, courts cannot and &ill not resolve a controvers" involving a .uestion &hich is &ithin the =urisdiction of an ad/inistrative tri'unal, es0eciall" &here the .uestion de/ands the e4ercise of sound ad/inistrative discretion re.uiring the s0ecial @no&ledge, e40erience and services of the ad/inistrative tri'unal to deter/ine technical and intricate /atters of fact- 5n cases &here the doctrine of 0ri/ar" =urisdiction is clearl" a00lica'le, the court cannot arrogate unto itself the authorit" to resolve a controvers", the =urisdiction over &hich is initiall" lodged &ith an ad/inistrative 'od" of s0ecial co/0etence/. Doctr(ne o- pr(mary 8ur(s'(ct(on3 may app+y even to 2uest(ons ,*(c* are 8u'(c(a+ c*aracter 5t has 'een the =uris0rudential trend to a00l" the doctrine to cases involving /atters that de/and the s0ecial co/0etence of ad/inistrative agencies even if the .uestion involved is also =udicial in character- 5t a00lies 7&here a clai/ is originall" cogni2a'le in the courts, and co/es into 0la" &henever enforce/ent of the clai/ re.uires the resolution of issues &hich, under a regulator" sche/e, have 'een 0laced &ithin the s0ecial co/0etence of an ad/inistrative 'od"G in such case, the =udicial 0rocess is sus0ended 0ending referral of such issues to the ad/inistrative 'od" for its vie&-8 1. Doctr(ne o- pr(mary 8ur(s'(ct(on3 cases 5n /achete vs. Court of Appeals, the ourt u0held the 0ri/ar" =urisdiction of the De0art/ent of 3grarian (efor/ 3d=udicator" Doard (D3(3D) in an agrarian dis0ute over the 0a"/ent of 'ac@ rentals under a leasehold contract- 5n Concerne$ Afficials of the /etropolitan &ater-or;s an$ 'e-erage 'yste# vs. 2asBue0, the ourt recogni2ed that the A:!! &as in the 'est 0osition to evaluate and to decide &hich 'id for a &ater&or@s 0ro=ect &as co/0ati'le &ith its develo0/ent 0lan- 5n the 0resent case, the .uestions on the identit" of the land in dis0ute and the factual .ualification of 0rivate res0ondent as an a&ardee of a sales a00lication re.uire a technical deter/ination '" the Dureau of Lands as the ad/inistrative agenc" &ith the
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e40ertise to deter/ine such /atters- Decause these issues 0reclude 0rior =udicial deter/ination, it 'ehooves the courts to stand aside even &hen the" a00arentl" have statutor" 0o&er to 0roceed, in recognition of the 0ri/ar" =urisdiction of the ad/inistrative agenc"4. Gnterpretat(on o- contracts an' 'eterm(nat(on o- pr(vate r()*ts no +on)er un(2ue+y 8u'(c(a+ -unct(on %ne thrust of the /ulti0lication of ad/inistrative agencies is that the inter0retation of contracts and the deter/ination of 0rivate rights thereunder is no longer a uni.uel" =udicial function, e4ercisa'le onl" '" our regular courts$. Br(mary 8ur(s'(ct(on o- '(rector o- +an's an' m(n(ster or natura+ resources re)ar'(n) ('ent(ty o'(spute' +an' an' 2ua+(-(cat(on o- a,ar'ee o- a sa+es patent The 0ri/ar" =urisdiction of the director of lands and the /inister of natural resources over the issues regarding the identit" of the dis0uted land and the .ualification of an a&ardee of a sales 0atent is esta'lished '" !ections 3 and 4 of 3 141, also @no&n as the Pu'lic Land 3ct- !ection 3 of said act 0rovides that 7the !ecretar" of 3griculture and o//erce (no& !ecretar" of $atural (esources) shall 'e the e4ecutive officer charged &ith carr"ing out the 0rovisions of this 3ct through the Director of Lands, &ho shall act under his i//ediate control-8 !ection 4 0rovides that 7su'=ect to said control, the Director of Lands shall have direct e4ecutive control of the surve", classification, lease, sale or an" other for/ of concession or dis0osition and /anage/ent of the lands of the 0u'lic do/ain, and his decision as to .uestions of fact shall 'e conclusive &hen a00roved '" the !ecretar" of 3griculture and o//erce-8 !ections 3 and 4 of the Pu'lic Land La& /ean that the !ecretar" of 3griculture and $atural (esources shall 'e the final ar'iter on .uestions of fact in 0u'lic land conflicts (#eirs of ?are"a vs. A5uino, / !hi" '0> ;u"ian vs. Aposto", $. !hi" --.(. The !u0re/e ourt has recogni2ed that the Director of Lands is a .uasi)=udicial officer &ho 0asses on issues of /i4ed facts and la& (1rtua vs. )in4son 3ncarnacion, $0 !hi" --%(. :. %(n'(n) o- -act y a'm(n(strat(ve a)ency accor'e' )reat respect (eliance '" the trial and the a00ellate courts on the factual findings of the Director of Lands and the Ainister of $atural (esources is not /is0laced- D" reason of the s0ecial @no&ledge and e40ertise of said ad/inistrative agencies over /atters falling under their =urisdiction, the" are in a 'etter 0osition to 0ass =udg/ent thereonG thus, their findings of fact in that regard are generall" accorded great res0ect, if not finalit", '" the courts- The findings of fact of an ad/inistrative agenc" /ust 'e res0ected as long as the" are su00orted '" su'stantial evidence, even if such evidence /ight not 'e over&hel/ing or even 0re0onderant- 5t is not the tas@ of an a00ellate court to &eigh once /ore the evidence su'/itted 'efore the ad/inistrative 'od" and to su'stitute its o&n =udg/ent for that of the ad/inistrative agenc" in res0ect of sufficienc" of evidence!. %(n'(n) o- -act y a'm(n(strat(ve a)ency accor'e' )reat respect 3 E7cept(on to t*e ru+e The rule that factual findings of an ad/inistrative agenc" are accorded res0ect and even finalit" '" courts ad/its of e4ce0tions- This is true also in assessing factual findings of lo&er courts- 5t is incu/'ent on the 0etitioner to sho& that the resolution of the factual issues '" the ad/inistrative agenc" andBor '" the trial court falls under an" of the e4ce0tions- %ther&ise, this ourt &ill not distur' such findings8. Bu +(c +an'3 @ack o- ;ec*n(ca+ 'escr(pt(on 'oes not prove t*at t*e -(n'(n)s +acke' su stant(a+ ev('ence The lac@ of technical descri0tion did not 0rove that the finding of the Director of Lands lac@ed su'stantial evidence- The evidence adduced '" 0etitioner to esta'lish his clai/ of o&nershi0 over the su'=ect area consists of deeds of a'solute sale e4ecuted in his favor- #o&ever, an e4a/ination of the technical descri0tions of the tracts of land su'=ect of the deeds of sale &ill disclose that said 0arcels are not identical to, and do not tall" &ith, the area in controvers"#. Bu +(c +an'3 Broperty a'm(tte' to e pu +(c" cannot no, e c+a(me' ot*er,(se
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The 0rovision of the la& is s0ecific that 0u'lic lands can onl" 'e ac.uired in the /anner 0rovided for therein and not other&ise (!ec- 11, 3- $o- 141, as a/ended)- 5n his sales a00lication, 0etitioner e40ressl" ad/itted that said 0ro0ert" &as 0u'lic land- This is for/ida'le evidence as it a/ounts to an ad/ission against interest- The records sho& that 1illaflor had a00lied for the 0urchase of lands in .uestion &ith this %ffice (!ales 300lication 1)<0+) on * Dece/'er ,4<- There is a condition in the sales a00lication to the effect that he recogni2es that the land covered '" the sa/e is of 0u'lic do/ain and an" and all rights he /a" have &ith res0ect thereto '" virtue of continuous occu0ation and cultivation are relin.uished to the Fovern/ent of &hich 1illaflor is ver" /uch a&are- 5t also a00ears that 1illaflor had 0aid for the 0u'lication fees a00urtenant to the sale of the land- #e 0artici0ated in the 0u'lic auction &here he &as declared the successful 'idder- #e had full" 0aid the 0urchase 0rice thereof- 5t &ould 'e a height of a'surdit" for 1illaflor to 'e 'u"ing that &hich is o&ned '" hi/ if his clai/ of 0rivate o&nershi0 thereof is to 'e 'elieved- The area in dis0ute is not the 0rivate 0ro0ert" of the 0etitioner10. @an's e+on) to t*e state" un+ess a+(enate' 5t is a 'asic assu/0tion of 0u'lic 0olic" that lands of &hatever classification 'elong to the state?nless alienated in accordance &ith la&, it retains its rights over the sa/e as do/inus- (Santia4o vs. de "os Santos, 9:.%.-/, 8ovemAer .., /0 -, '/ SC6A /$.( - $o 0u'lic land can 'e ac.uired '" 0rivate 0ersons &ithout an" grant, e40ress or i/0lied fro/ the govern/ent- 5t is indis0ensa'le then that there 'e sho&ing of title fro/ the state or an" other /ode of ac.uisition recogni2ed '" la&- (9ee #on4 #o2, et a". vs. @avid, et a"., 9:&%&80, @ecemAer . , /0 ., -8 SC6A & 0(. 11. %(+(n) o- sa+es app+(cat(on ackno,+e')es t*at t*e +an' (s not t*e pr(vate property o- t*e app+(cant 3s such sales a00licant /anifestl" ac@no&ledged that he does not o&n the land and that the sa/e is a 0u'lic land under the ad/inistration of the Dureau of Lands, to &hich the a00lication &as su'/itted, all of its acts 0rior thereof, including its real estate ta4 declarations, characteri2ed its 0ossessions of the land as that of a 7sales a00licant8- 3nd conse.uentl", as one &ho e40ects to 'u" it, 'ut has not as "et done so, and is not, therefore, its o&ner- (!a"awan A4ricu"tura" and Industria" Co., Inc. vs. @irector of 9ands, 9:.$0/-, March ./, /0 ., -- SC6A /$(1/. Ru+e on t*e (nterpretat(on o- contracts (s use' (n a--(rm(n)" not ne)at(n)" t*e(r va+('(ty The rule on the inter0retation of contracts (3rticle 13+1) is used in affir/ing, not negating, their validit"- 3rticle 13+3, &hich is a con=unct of 3rticle 13+1, 0rovides that, if the instru/ent is susce0ti'le of t&o or /ore inter0retations, the inter0retation &hich &ill /a@e it valid and effectual should 'e ado0ted- 5n this light, it is not difficult to understand that the legal 'asis urged '" 0etitioner does not su00ort his allegation that the contracts to sell and the deed of relin.uish/ent are si/ulated and fictitious11. .(mu+at(on not e7(st(n) (n t*e present case !i/ulation occurs &hen an a00arent contract is a declaration of a fictitious &ill, deli'eratel" /ade '" agree/ent of the 0arties, in order to 0roduce, for the 0ur0ose of dece0tion, the a00earance of a =uridical act &hich does not e4ist or is different fro/ that &hich &as reall" e4ecuted- !uch an intention is not a00arent in the agree/ents- The intent to sell, on the other hand, is as clear as da"light- The fact, that the agree/ent to sell (+ Dece/'er 1,4<) did not a'solutel" transfer o&nershi0 of the land to 0rivate res0ondent, does not sho& that the agree/ent &as si/ulated- Petitioner;s deliver" of the ertificate of %&nershi0 and e4ecution of the deed of a'solute sale &ere sus0ensive conditions, &hich gave rise to a corres0onding o'ligation on the 0art of the 0rivate res0ondent, i-e-, the 0a"/ent of the last install/ent of the consideration /entioned in the 3gree/ent!uch conditions did not affect the 0erfection of the contract or 0rove si/ulation14. Nonpayment o- t*e cons('erat(on 'oes not prove s(mu+at(on $on0a"/ent, at /ost, gives the vendor onl" the right to sue for collection- Fenerall", in a contract of sale, 0a"/ent of the 0rice is a resolutor" condition and the re/ed" of the seller is to e4act fulfill/ent or, in
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case of a su'stantial 'reach, to rescind the contract under 3rticle 11,1 of the ivil ode- #o&ever, failure to 0a" is not even a 'reach, 'ut /erel" an event &hich 0revents the vendor;s o'ligation to conve" title fro/ ac.uiring 'inding force1$. Bur'en o- proo- rests upon t*e party ,*o asserts t*e a--(rmat(ve o- an (ssue Prior to the a/end/ent of the rules on evidence on Aarch 14, 1,<,, !ection 1, (ule 131, states that each 0art" /ust 0rove his or her o&n affir/ative allegations- Thus, the 'urden of 0roof in an" cause rested u0on the 0art" &ho, as deter/ined '" the 0leadings or the nature of the case, asserts the affir/ative of an issue and re/ains there until the ter/ination of the action- 3lthough non0a"/ent is a negative fact &hich need not 'e 0roved, the 0art" see@ing 0a"/ent is still re.uired to 0rove the e4istence of the de't and the fact that it is alread" due- Petitioner sho&ed the e4istence of the o'ligation &ith the 0resentation of the contracts, 'ut did not 0resent an" evidence that he de/anded 0a"/ent fro/ 0rivate res0ondent- The de/and letters dated Januar" * and 6, 1,+4, adduced in evidence '" 0etitioner, &ere for the 0a"/ent of 'ac@ rentals, da/ages to i/0rove/ents and rei/'urse/ent of ac.uisition costs and realt" ta4es, not 0a"/ent arising fro/ the contract to sell1:. @ack o- Not(ce o- t*e A,ar' not a suppress(on o- ev('ence The lac@ of notice for 0etitioner (not listed as one of the 0arties to furnished a co0" '" the Director of Lands) can 'e easil" e40lained- Petitioner &as not entitled to said notice of a&ard fro/ the Director of Lands, 'ecause '" then, he had alread" relin.uished his rights to the dis0uted land in favor of 0rivate res0ondent- 5n the heading of the order, he &as referred to as sales a00licant)assignor- 5n 0aragra0h nu/'er 4, the order stated that, on 19 3ugust 1,60, he relin.uished his rights to the land su'=ect of the a&ard to 0rivate res0ondent- Fro/ such date, the sales a00lication &as considered to 'e a /atter 'et&een the Dureau of Lands and 0rivate res0ondent onl"- onsidering these facts, the failure to give 0etitioner a co0" of the notice of the a&ard cannot 'e considered as su00ression of evidence- Further/ore, this order &as in fact availa'le to 0etitioner and had 'een referred to '" hi/ since 31 Januar" 1,+4 &hen he filed his 0rotest &ith the Dureau of Lands1!. Re2u(rement -or a sa+es app+(cat(on un'er CA 141 The re.uire/ents for a sales a00lication under the Pu'lic Land 3ct are: (1) the 0ossession of the .ualifications re.uired '" said 3ct (under !ection *,) and (*) the lac@ of the dis.ualifications /entioned therein (under !ections 1*1, 1**, and 1*3)- !ection 1*1 of the 3ct 0ertains to ac.uisitions of 0u'lic land '" a cor0oration fro/ a grantee: The 0rivate res0ondent, not the 0etitioner, &as the direct grantee of the dis0uted land- !ections 1** and 1*3 dis.ualif" cor0orations, &hich are not authori2ed '" their charter, fro/ ac.uiring 0u'lic landG the records do not sho& that 0rivate res0ondent &as not so authori2ed under its charter18. Determ(nat(on o- 2ua+(-(cat(on o- app+(cant (nc+u'e' (n t*e po,ers to '(spose pu +(c +an's 5n >s0inosa vs- Aa@alintal, the ourt ruled that, '" la&, the 0o&ers of the !ecretar" of 3griculture and $atural (esources regarding the dis0osition of 0u'lic lands J including the a00roval, re=ection, and reinstate/ent of a00lications J are of e4ecutive and ad/inistrative nature- (!uch 0o&ers, ho&ever, do not include the =udicial 0o&er to decide controversies arising fro/ disagree/ents in civil or contractual relations 'et&een the litigants-) onse.uentl", the deter/ination of &hether 0rivate res0ondent is .ualified to 'eco/e an a&ardee of 0u'lic land under 3 141 '" sales a00lication is included therein1#. Bro*( (t(on o- 1#!1 Const(tut(on a)a(nst t*e *o+'(n) o- pu +(c a+(ena +e +an's y corporat(on not retroact(ve 5n Ayog vs. Cusi, Cr., the ourt ruled that the constitutional 0rohi'ition of the 1,+3 onstitution against the holding of aliena'le lands of the 0u'lic do/ain '" cor0orations had no retroactive effect and could not 0revail over a vested right to the land- 1ested rights have to 'e res0ected- 5t could not 'e a'rogated '" the ne& onstitution- !ection *, 3rticle R555 of the 1,36 onstitution allo&ed 0rivate cor0orations to 0urchase 0u'lic agricultural lands not e4ceeding 1,0*4 hectares- 3ction for 0rohi'ition is 'arred '" the doctrine of
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vested rights in constitutional la&/0. Heste' r()*t 3 right is vested &hen the right to en=o"/ent has 'eco/e the 0ro0ert" of so/e 0articular 0erson or 0ersons as a 0resent interest- 5t is the 0rivilege to en=o" 0ro0ert" legall" vested, to enforce contracts, and en=o" the rights of 0ro0ert" conferred '" e4isting la& or so/e right or interest in 0ro0ert" &hich has 'eco/e fi4ed and esta'lished and is no longer o0en to dou't or controvers" (@owns vs. )"ount, / % Fed. /$, .%, cited in )a"Aoa vs. Farra"es, $/ !hi", -08, $%.(. Fenerall", the ter/ 7vested right8 e40resses the conce0t of 0resent fi4ed interest, &hich in right reason and natural =ustice should 'e 0rotected against ar'itrar" !tate action, or an innatel" =ust and i/0erative right &hich an enlightened free societ", sensitive to inherent and irrefraga'le individual rights, cannot den" (/' C.;.S. // -, 8ote /, 8o. $, citin4 !enns,"vania 7re,hound 9ines, Inc. vs. 6osentha", /0. At. .nd $8 (. /1. Due process pro*( (ts ann(*(+at(on o- veste' r()*ts The due 0rocess clause 0rohi'its the annihilation of vested rights- 3 state /a" not i/0air vested rights '" legislative enact/ent, '" the enact/ent or '" the su'se.uent re0eal of a /unici0al ordinance, or '" a change in the constitution of the !tate, e4ce0t in a legiti/ate e4ercise of the 0olice 0o&er//. Heste' (nterest (n sa+es app+(cat(on3 >p(n(ons o- t*e .ecretary o- Fust(ce 5n %0inion 94, series of 1,+3, the !ecretar" of Justice held that &here the a00licant, 'efore the onstitution too@ effect, had full" co/0lied &ith all his o'ligations under the Pu'lic Land 3ct in order to entitle hi/ to a sales 0atent, there &ould see/ to 'e no legal or e.uita'le =ustification for refusing to issue or release the sales 0atent- 5n %0inion 140, series of 1,+4, the !ecretar" of Justice held that as soon as the a00licant had fulfilled the construction or cultivation re.uire/ents and has full" 0aid the 0urchase 0rice, he should 'e dee/ed to have ac.uired '" 0urchase the 0articular tract of land and to hi/ the area li/itation in the ne& onstitution &ould not a00l"- 5n %0inion 1<6, series of 1,+9, the !ecretar" of Justice held that &here the cultivation re.uire/ents &ere fulfilled 'efore the ne& onstitution too@ effect 'ut the full 0a"/ent of the 0rice &as co/0leted after 1+ Januar" 1,+3, the a00licant &as, nevertheless, entitled to a sales 0atent/1. E7ecut(ve construct(on )(ven )reat respect 3 conte/0oraneous construction of the constitutional 0rohi'ition '" a high e4ecutive official carries great &eight and should 'e accorded /uch res0ect- 5t is a correct inter0retation of section 11 of 3rticle R51/4. Gmp+ementat(on o- D>F >p(n(on :4" s. 1#!13 .a+es app+(cat(on -or -(s*pon's an' -or a)r(cu+tura+ use 5/0le/enting %0inion 94, the then !ecretar" of 3griculture and $atural (esources issued a /e/orandu/, dated 1< Fe'ruar" 1,+4, 0roviding that sales a00lication of 0rivate individuals covering areas in e4cess of *4 hectares and those of cor0orations, associations, or 0artnershi0 &hich fall under an" of the follo&ing categories shall 'e given due course and issued 0atents, to &it: !ales a00lication for fish0onds and for agricultural 0ur0oses (!F3, !3 and 5FP!3) &herein 0rior to 1+ Januar" 1,+3, the land covered there'" &as a&ardedG cultivation re.uire/ents of la& &ere co/0lied &ith as sho&n '" investigation re0orts su'/itted 0rior to 1+ Januar" 1,+3G land &as surve"ed and surve" returns alread" su'/itted to the Director of Lands for verification and a00rovalG and 0urchase 0rice &as full" 0aid[11:] H(++amor vs. CA [G.R. No. #!11/. >cto er 10" 1##1.] First Division, Aedialdea (J): * concur, 1 too@ no 0art %acts& Aacaria La'ingisa (e"es &as the o&ner of a 900)s.uare /eter lot located at Daesa, aloocan it" (T T K1<431L 1<,3<, (egister of Deeds of (i2al)- 5n Jul" 1,+1, Aacaria sold a 0ortion of 300 s.- /s- of the
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lot to the !0ouses Julio and Aarina 1illa/or for the total a/ount of P*1,000-00- >arlier, Aacaria 'orro&ed P*,000-00 fro/ the s0ouses &hich a/ount &as deducted fro/ the total 0urchase 0rice of the 300 s.- /- lot sold- The 0ortion sold to the 1illa/or s0ouses is no& covered '" T T 3,,36 &hile the re/aining 0ortion &hich is still in the na/e of Aacaria La'ingisa) is covered '" T T 3,,34- %n 11 $ove/'er 1,+1, Aacaria e4ecuted a 7Deed of o0tion8 in favor of 1illa/or in &hich the re/aining 300 s.- /- 0ortion (T T $o- 3,,34) of the lot &ould 'e sold to 1illa/or under the conditions stated therein- 3ccording to Aacaria, &hen her hus'and, (o'erto (e"es, retired in 1,<4, the" offered to re0urchase the lot sold '" the/ to the 1illa/or s0ouses 'ut Aarina 1illa/or refused and re/inded the/ instead that the Deed of %0tion in fact gave the/ the o0tion to 0urchase the re/aining 0ortion of the lot- The 1illa/ors, on the other hand, clai/ed that the" had e40ressed their desire to 0urchase the re/aining 300 s.- /- 0ortion of the lot 'ut the (e"es had 'een ignoring the/%n 13 Jul" 1,<+, after conciliation 0roceedings in the 'aranga" level failed, the 1illa/ors filed a co/0laint for s0ecific 0erfor/ance against the (e"es 'efore the (T aloocan it" (Dranch 1*1, ivil ase )1*,4*)%n *9 Jul" 1,<,, =udg/ent &as rendered '" the trial court in favor of the 1illa/or s0ouses, ordering the (e"eses to sell the land to the 1illa/ors, to 0a" the the latter the su/ of P3,000 as attorne";s fees, and to 0a" the cost of suit- The court dis/issed the counterclai/ for lac@ of /erit$ot satisfied &ith the decision of the trial court, the (e"es s0ouses a00ealed to the ourt of 300eals ( 3)F( 1 *41+9)- %n 1* Fe'ruar" 1,,1, the ourt of 300eals rendered a decision reversing the decision of the trial court and dis/issing the co/0laint- The reversal of the trial court;s decision &as 0re/ised on the finding of res0ondent court that the Deed of %0tion is void for lac@ of consideration- The 1illa/or s0ouses 'rought the 0etition for revie& on certiorari 'efore the !u0re/e ourtThe !u0re/e ourt denied the 0etition, affir/ed the decision of the a00ellate court for reasons cited in the decision, and dis/issed the co/0laint in ivil ase )1*,4* on the ground of 0rescri0tion and laches1. Cons('erat(on 'e-(ne' 3s e40ressed in "on0ales v. +rini$a$ (9+ Phil- 9<*), consideration is 7the &h" of the contracts, the essential reason &hich /oves the contracting 0arties to enter into the contract-8 5n the 0resent case, the cause or the i/0elling reason on the 0art of 0rivate res0ondent in e4ecuting the deed of o0tion as a00earing in the deed itself is the 1illa/ors; having agreed to 'u" the 300 s.- /- 0ortion of (e"es s0ouses; land at P+0-00 0er s.- /- 7&hich &as greatl" higher than the actual reasona'le 0revailing 0rice-8 This cause or consideration is clear fro/ the deed &hich stated 7that the onl" reason &h" the s0ouses)vendees Julio 1illa/or and Aarina 1 1illa/or agreed to 'u" the said one)half 0ortion at the a'ove stated 0rice of a'out P+0-00 0er s.uare /eter, is 'ecause 5, and /" hus'and (o'erto (e"es, have agreed to sell and conve" to the/ the re/aining one)half 0ortion still o&ned '" /e - - -8 5t /ust 'e noted that in 1,9, the 1illa/or s0ouses 'ought an ad=acent lot fro/ the 'rother of Aacaria La'ing)isa for onl" P1<-00 0er s.uare /eter, such fact not 'eing re'utted '" AacariaThus, e40ressed in ter/s of /one", the consideration for the deed of o0tion is the difference 'et&een the 0urchase 0rice of the 300 s.- /- 0ortion of the lot in 1,+1 (P+0-00 0er s.- /-) and the 0revailing reasona'le 0rice of the sa/e lot in 1,+1- :hatever it is, (P*6-00 or P1<-00) though not s0ecificall" stated in the deed of o0tion, &as ascertaina'le- 1illa/ors; allegedl" 0a"ing P6*-00 0er s.uare /eter for the o0tion /a", as o0ined '" the a00ellate court, 'e i/0ro'a'le 'ut i/0ro'a'ilities does not invalidate a contract freel" entered into '" the 0arties/. >pt(on contract 'e-(ne' 3n o0tional contract is a 0rivilege e4isting in one 0erson, for &hich he had 0aid a consideration and &hich gives hi/ the right to 'u", for e4a/0le, certain /erchandise or certain s0ecified 0ro0ert", fro/ another 0erson, if he chooses, at an" ti/e &ithin the agreed 0eriod at a fi4ed 0rice (>nri.ue2 de la avada v- Dia2, 3+ Phil- ,<*)-
.a+es" /001 ( /!$ )
1.
Dee' o- opt(on un(2ue3 )rants opt(on to se++ to ot* t*e H(++amors an' t*e Reyeses The 7deed of o0tion8 entered into '" the 0arties in the 0resent case had uni.ue features- The first 0art covered the state/ent on the sale of the 300 s.- /- 0ortion of the lot to !0ouses 1illa/or at the 0rice of P+0 0er s.- /- H&hich &as higher than the actual reasona'le 0revailing value of the lands in that 0lace at that ti/e (of sale)-8 The second 0art stated that the onl" reason &h" the 1illa/or s0ouses agreed to 'u" the said lot at a /uch higher 0rice is 'ecause the vendor ((e"es) also agreed to sell to the 1illa/ors the other half)0ortion of 300 s.uare /eters of the land- #ad the deed sto00ed there, there &ould 'e no dis0ute that the deed is reall" an ordinar" deed of o0tion granting the 1illa/ors the o0tion to 'u" the re/aining 300 s.- /-)half 0ortion of the lot in consideration for their having agreed to 'u" the other half of the land for a /uch higher 0rice- Dut, the 7deed of o0tion8 &ent on and stated that the sale of the other half &ould 'e /ade 7&henever the need of such sale arises, either on our ((e"es) 0art or on the 0art of the !0ouses Julio 1illa/or and Aarina 1- 1illa/or- 5t &as not onl" the 1illa/ors &ho &ere granted an o0tion to 'u" for &hich the" 0aid a consideration- The (e"es as &ell &ere granted an o0tion to sell should the need for such sale on their 0art arise4. >--er an' Acceptance 5n the 0resent case, the o0tion offered '" the (e"eses had 'een acce0ted '" the 1illa/ors, the 0ro/ises, in the sa/e docu/ent- The acce0tance of an offer to sell for a 0rice certain created a 'ilateral contract to sell and 'u" and u0on acce0tance, the offered, i0so facto assu/es o'ligations of a vendee (!ee 3t@ins, Croll Q o- v- ua Aian Te@, 10* Phil- ,4<)$. Ber-ect(on o- contract o- sa+e3 Deman'a (+(ty 3 contract of sale is, under 3rticle 14+6 of the ivil ode, 70erfected at the /o/ent there is a /eeting of /inds u0on the thing &hich is the o'=ect of the contract and u0on the 0rice- Fro/ that /o/ent, the 0arties /a" reci0rocall" de/and 0erfor/ance, su'=ect to the 0rovisions of the la& governing the for/ of contracts-8 !ince there &as, 'et&een the 0arties, a /eeting of /inds u0on the o'=ect and the 0rice, there &as alread" a 0erfected contract of sale- :hat &as, ho&ever, left to 'e done &as for either 0art" to de/and fro/ the other their res0ective underta@ings under the contract- 5n !anche2 v- (igos, $o- L)*64,4, June 14, 1,+*, 46 ! (3 39<, 3+9, it &as held that 7 since there /a" 'e no valid contract &ithout a cause of consideration, the 0ro/isor is not 'ound '" his 0ro/ise and /a", accordingl" &ithdra& it- Pending notice of its &ithdra&al, his acce0ted 0ro/ise 0arta@es, ho&ever, of the nature of an offer to sell &hich, if acce0ted, results in a 0erfected contract of sale-8 5n the 0resent case, de/anda'ilit" /a" 'e e4ercised at an" ti/e after the e4ecution of the deed- The (e"eses /a" co/0el the 1illa/ors to 0a" for the 0ro0ert" or that the latter /a" co/0el the for/er to deliver the 0ro0ert":. Dee' o- >pt(on 'oes not prov('e -or per(o' -or ot* part(es to 'eman' per-ormance oun'ertak(n)" ren'ers contract (ne--ect(ve The Deed of %0tion did not 0rovide for the 0eriod &ithin &hich the 0arties /a" de/and the 0erfor/ance of their res0ective underta@ings in the instru/ent- The 0arties could not have conte/0lated that the deliver" of the 0ro0ert" and the 0a"/ent thereof could 'e /ade indefinitel" and render uncertain the status of the land- The failure of either 0arties to de/and 0erfor/ance of the o'ligation of the other for an unreasona'le length of ti/e renders the contract ineffective!. Brescr(pt(on o- act(ons upon ,r(tten contracts ?nder 3rticle 1144 (1) of the ivil ode, actions u0on a &ritten contract /ust 'e 'rought &ithin 10 "ears- The Deed of %0tion &as e4ecuted on 11 $ove/'er 1,+1- The acce0tance, as alread" /entioned, &as also acce0ted in the sa/e instru/ent- The co/0laint in this case &as filed '" the 1illa/ors on 13 Jul" 1,<+, 1+ "ears fro/ the ti/e of the e4ecution of the contract- #ence, the right of action had 0rescri'ed- There &ere allegations '" the 1illa/ors that the" de/anded fro/ the (e"eses as earl" as 1,<4 the enforce/ent of their rights under the contract- !till, it &as 'e"ond the 10 "ear 0eriod 0rescri'ed '" the ivil ode- (!ee also !antos vs- Fena"o, L)31<64, , !e0te/'er 1,<*, 119 ! (3 431: 'ar '" laches)
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8.
Court (n e7erc(se o- (ts e2u(ty 8ur(s'(ct(on 5t is of =udicial notice that the 0rice of real estate in Aetro Aanila is continuousl" on the rise- To allo& the 0etitioner to de/and the deliver" of the 0ro0ert" su'=ect 13 "ears or 1+ "ears after the e4ecution of the deed at the 0rice of onl" P+0 0er s.- /- is ine.uitous- For reasons also of e.uit" and in consideration of the fact that the (e"eses have no other decent 0lace to live, the ourt, in the e4ercise of its e.uit" =urisdiction is not inclined to grant 1illa/or;s 0ra"er[11!] H(++onco Rea+ty vs. Borma*eco Gnc. [G.R. No. @D/:8!/. Fu+y /$" 1#!$.] >n Danc, 3.uino (J): , concur, 1 on leave %acts& Francisco $- ervantes and his &ife, (osario P- $avarra) ervantes, are the o&ners of Lots 3, 16 and 19 located at *46 Duendia 3venue, Aa@ati, (i2al &ith a total area of 3,600 s.-/s- (T Ts 43630, 43631 and 4363*)- The lots &ere /ortgaged to the Develo0/ent Dan@ of the Phili00ines (DDP) on *1 30ril 1,6, as securit" for a loan of P441,000- The /ortgage de't &as full" 0aid on 10 Jul" 1,9,- ervantes is the 0resident of Dor/aheco, 5nc-, a dealer and i/0orter of industrial and agricultural /achiner"- The entire three lots are occu0ied '" the 'uilding, /achiner" and e.ui0/ent of Dor/aheco, 5nc- and are ad=acent to the 0ro0ert" of 1illonco (ealt" o/0an" situated at *1, Duendia 3venue- 7=egotiations9 5n the earl" 0art of Fe'ruar" 1,94 there &ere negotiations for the sale of the said lots and the i/0rove/ents thereon 'et&een (o/eo 1illonco of 1illonco (ealt" o/0an" 7and Dor/aheco, 5nc-, re0resented '" its 0resident, Francisco $- ervantes, through the intervention of >dith Pere2 de Tagle, a real estate)'ro@er8- 5n the course of the negotiations, the 'rothers (o/eo and Teofilo 1illonco conferred &ith ervantes in his office to discuss the 0rice and ter/s of the sale- Later, ervantes 7&ent to see 1illonco for the sa/e reason until so/e agree/ent8 &as arrived at- %n a su'se.uent occasion, ervantes, acco/0anied '" >dith Pere2 de Tagle, discussed again the ter/s of the sale &ith 1illonco- During the negotiations, 1illonco (ealt" o/0an" assu/ed that the lots 'elonged to Dor/aheco and that ervantes &as dul" authori2ed to sell the sa/e- ervantes did not disclose to the 'ro@er and to 1illonco (ealt" that the lots &ere con=ugal 0ro0erties of hi/self and his &ife and that the" &ere /ortgaged to the DDP- Dor/aheco, through ervantes, /ade a &ritten offer dated 1* Fe'ruar" 1,94, to (o/eo 1illonco for the sale of the 0ro0ert" (sti0ulating 0rice at P400Bs.-/-, de0osit of P100,000 in earnest /one", consu//ation 0ending Dor/aheco;s 0urchase of 0ro0ert" in !ta- 3na Aanila, the final negotiations on 'oth 0ro0erties @no&n after 46 da"s)- The 0ro0ert" /entioned in Dor/aheco;s letter &as the land of the $ational !hi0"ards Q !teel or0oration ($assco), &ith an area of *0,000 s.-/s-, located at Punta, !ta- 3na, Aanila- 3t the 'idding held on 1+ Januar" 1,94 that land &as a&arded to Dor/aheco, the highest 'idder, for the 0rice of P66*,000- The $assco Doard of Directors in its resolution of 1< Fe'ruar" 1,94 authori2ed the Feneral Aanager to sign the necessar" contract- %n *< Fe'ruar" 1,94, the $assco 3cting Feneral Aanager &rote a letter to the >cono/ic oordinator, re.uesting a00roval of that resolution- The 3cting >cono/ic oordinator a00roved the resolution on *4 Aarch 1,94- Aean&hile, Dor/aheco and 1illonco (ealt" continued their negotiations for the sale of the Duendia 3venue 0ro0ert"- ervantes and Teofilo 1illonco had a final conference on *+ Fe'ruar" 1,94- 3s a result of that conference 1illonco (ealt", in its letter of 4 Aarch 1,94 /ade a revised counter)offer ((o/eo 1illonco;s first counter)offer &as dated *4 Fe'ruar" 1,94) for the 0urchase of the 0ro0ert"- 7Perfection9 The counter)offer &as acce0ted '" ervantes (sti0ulating interest of 10I of the a/ount tendered in case the !ta- 3na 0urchase does not 0ush through, do&n0a"/ent at P960,000 and the 'alance 0a"a'le ever" 3 /onths in 4 0a"/ents KP100,000, P1*6,000, P*1*,600, and P*1*,600L)>nclosed to it &as a ADT hec@ &orth P100,000 as earnest /one"- The chec@ for P100,000 &as delivered '" Pere2 de Tagle to Dor/aheco on 4 Aarch 1,94 and &as received '" ervantes- 5n the voucher)recei0t evidencing the deliver" the 'ro@er indicated in her hand&riting that the earnest /one" &as 7su'=ect to the ter/s and conditions e/'odied in Dor/aheco;s letter8 of Fe'ruar" 1* and 1illonco (ealt" o/0an";s letter of 4 Aarch 1,94- 71escission9 ?ne40ectedl", in a letter dated 30 Aarch 1,94, ervantes returned the earnest /one", &ith interest a/ounting to P9,4-*4 (at 10I 0er annu/)- ervantes cited as an e4cuse the circu/stance that 7des0ite the la0se of 46 da"s fro/ 1* Fe'ruar" 1,94 there is no certaint" "et8 for the
.a+es" /001 ( /!! )
ac.uisition of the Punta 0ro0ert"- 1illonco (ealt" o/0an" refused to acce0t the letter and the chec@s of Dor/aheco- ervantes sent the/ '" registered /ail- :hen he rescinded the contract, he &as alread" a&are that the Punta lot had 'een a&arded to Dor/aheco- >dith Pere2 de Tagle, the 'ro@er, in a letter to ervantes dated 31 Aarch 1,94 articulated her shoc@ and sur0rise at Dor/aheco;s turna'out- ervantes in his letter of 9 30ril 1,94, a re0l" to Aiss Tagle;s letter, alleged that the 46 da" 0eriod had alread" e40ired and the sale to Dor/aheco, 5nc- of the Punta 0ro0ert" had not 'een consu//ated- ervantes said that his letter &as a 7/anifestation that &e are no longer interested to sell8 the Duendia 3venue 0ro0ert" to 1illonco (ealt"- The latter &as furnished &ith a co0" of that letter- 5n a letter dated + 30ril 1,94 1illonco (ealt" o/0an" returned the t&o chec@s to Dor/aheco, 5nc-, stating that the condition for the cancellation of the contract had not arisen and at the sa/e ti/e announcing that an action for 'reach of contract &ould 'e filed against Dor/aheco%n that sa/e date, + 30ril 1,94 1illonco (ealt" filed the co/0laint (dated 30ril 9) for s0ecific 0erfor/ance against Dor/aheco- 3 notice of lis 0endens &as annotated on the titles of the said lots- Dor/aheco in its ans&ers dated 6 Aa" and *6 Aa" 1,94 0leaded the defense that the 0erfection of the contract of sale &as su'=ect to the conditions 7that final acce0tance or not shall 'e /ade after 46 da"s8 and that Dor/aheco 7ac.uires the !ta- 3na 0ro0ert"8%n * June 1,94 or during the 0endenc" of this case, the $assco 3cting Feneral Aanager &rote to Dor/aheco, 5nc-, advising it that the Doard of Directors and the >cono/ic oordinator had a00roved the sale of the Punta lot to Dor/aheco and re.uesting the latter to send its dul" authori2ed re0resentative to the $assco for the signing of the deed of sale- The deed of sale for the Punta land &as e4ecuted on *9 June 1,94Dor/aheco &as re0resented '" ervantes5n vie& of the disclosure in Dor/aheco;s a/ended ans&er that the 3 lots &ere registered in the na/es of the ervantes s0ouses and not in the na/e of Dor/aheco, 1illonco (ealt" on *1 Jul" 1,94 filed an a/ended co/0laint i/0leading the said s0ouses as defendants- Dor/aheco and the ervantes s0ouses filed se0arate ans&ers- 3s of 16 Januar" 1,96 1illonco (ealt" had 0aid to the Aanufacturers; Dan@ Q Trust o/0an" the su/ of P<,+1*-*6 as interests on the overdraft line of P100,000 and the su/ of P*+-3, as interests dail" on the sa/e loan since 19 Januar" 1,96- (That overdraft line &as later settled '" 1illonco (ealt" on a date not /entioned in its /anifestation of 1, Fe'ruar" 1,+6)- 1illonco (ealt" had o'ligated itself to 0a" the su/ of P*0,000 as attorne";s fees to its la&"ers- 5t clai/ed that it &as da/aged in the su/ of P10,000 a /onth fro/ *4 Aarch 1,94 &hen the a&ard of the Punta lot to Dor/aheco &as a00roved- %n the other hand, Dor/aheco clai/ed that it had sustained da/ages of P*00,000 annuall" due to the notice of lis 0endens &hich had 0revented it fro/ constructing a /ultistor" 'uilding on the 3 lots- Aiss Tagle testified that for her services Dor/aheco, through ervantes, o'ligated itself to 0a" her a 3I co//ission on the 0rice of P1,400,000 or the a/ount of P4*,000- 3fter trial, the lo&er court rendered a decision ordering the ervantes s0ouses to e4ecute in favor of Dor/aheco a deed of conve"ance for the 3 lots and directing Dor/aheco to conve" the sa/e lots to 1illonco (ealt", to 0a" the latter, as conse.uential da/ages, the su/ of P10,000 /onthl" fro/ *4 Aarch 1,94 u0 to the consu//ation of the sale, to 0a" >dith Pere2 de Tagle the su/ of P4*,000 as 'ro@er;s co//ission and to 0a" P*0,000 as attorne";s fees Dor/aheco, 5nc- and the ervantes s0ouses a00ealed- The !u0re/e ourt too@ cogni2ance of the a00eal 'ecause the a/ount involved is /ore than P*00,000 and the a00eal &as 0erfected 'efore (3 6440 too@ effect on , !e0te/'er 1,9<The !u0re/e court /odified the trial court;s decision '" ordering the s0ouses ervantes, &ithin 10 da"s fro/ the date the" receive notice fro/ the cler@ of the lo&er court that the records of the case have 'een received fro/ the !u0re/e ourt, to e4ecute a deed conve"ing to Dor/aheco their 3 lots covered '" T T 43630, 43631 and 4363* of the (egistr" of Deeds of (i2alG ordering Dor/aheco, &ithin 6 da"s fro/ the e4ecution of such deed of conve"ance, to e4ecute in favor of 1illonco (ealt" a registera'le deed of sale for the said 3 lots
.a+es" /001 ( /!8 )
and all the i/0rove/ents thereon, free fro/ all lien and encu/'rances, at the 0rice of P400 0er s.-/-, deducting fro/ the total 0urchase 0rice the su/ of P100,000 0reviousl" 0aid '" 1illonco (ealt" o/0an" to Dor/aheco, 5nc-G and o'ligating 1illonco (ealt", u0on the e4ecution of such deed of sale, to 0a" Dor/aheco the 'alance of the 0rice in the su/ of P1,300,000G and ordering Dor/aheco to 0a" 1illonco (ealt" P*0,000 as attorne";s fees and to 0a" >dith Pere2 de Tagle the su/ of P4*,000 as co//issionG &ith costs against 1illonco (ealt"1. Contract o- sa+e D" the contract of sale one of the contracting 0arties o'ligates hi/self to transfer the o&nershi0 of and to deliver a deter/ining thing, and the other to 0a" therefor a 0rice certain in /one" or its e.uivalent- 3 contract of sale /a" 'e a'solute or conditional (3rt- 146<, ivil ode)/. Ber-ect(on o- a contract o- sa+e3 Bresent case The contract of sale is 0erfected at the /o/ent there is a /eeting of /inds u0on the thing &hich is the o'=ect of the contract and u0on the 0rice- Fro/ that /o/ent, the 0arties /a" reci0rocall" de/and 0erfor/ance, su'=ect to the 0rovisions of the la& governing the for/ of contracts (3rt- 14+6, 5'id-)- 5n the 0resent case, Dor/aheco;s acce0tance of 1illonco (ealt";s offer to 0urchase the Duendia 3venue 0ro0ert", as sho&n in Teofilo 1illonco;s letter dated 4 Aarch 1,94 indu'ita'l" 0roves that there &as a /eeting of /inds u0on the su'=ect /atter and consideration of the sale- Therefore, on that date the sale &as 0erfected( o/0are &ith Ac ullough vs- 3enlle Q o-, 3 Phil- *<6G Fo"ena vs- Ta/'unting, 1 Phil- 4,0) 1. Ber-ect(on o- contracts3 E--ect ontracts are 0erfected '" /ere consent, and fro/ that /o/ent the 0arties are 'ound not onl" to the fulfill/ent of &hat has 'een e40ressl" sti0ulated 'ut also to all the conse.uences &hich, according to their nature, /a" 'e in @ee0ing &ith good faith, usage and la& (3rt- 1316, ivil ode)4. Consent& >--er" counterDo--er" acceptance onsent is /anifested '" the /eeting of the offer and the acce0tance u0on the thing and the cause &hich are to constitute the contract- The offer /ust 'e certain and the acce0tance a'solute- 3 .ualified acce0tance constitutes a counter)offer (3rt- 131,, ivil ode)- 3n acce0tance /a" 'e e40ress or i/0lied8 (3rt- 13*0, ivil ode)$. Bresent contract con'(t(ona++y consummate' or part+y e7ecute' Dor/aheco;s acce0tance of the 0art 0a"/ent of P100,000 sho&s that the sale &as conditionall" consu//ated or 0artl" e4ecuted su'=ect to the 0urchase '" Dor/aheco, 5nc- of the Punta 0ro0ert"- The non) consu//ation of that 0urchase &ould 'e a negative resolutor" condition (Ta"lor vs- ?" Tieng Piao, 43 Phil<+3):. Bor*ameco=s (' a+rea'y accepte' y Nassco %n 1< Fe'ruar" 1,94 Dor/aheco;s 'id for the Punta 0ro0ert" as alread" acce0ted '" the $assco &hich had authori2ed its Feneral Aanager to sign the corres0onding deed of sale- :hat &as necessar" onl" &as the a00roval of the sale '" the >cono/ic oordinator and a re.uest for that a00roval &as alread" 0ending in the office of that functionar" on 4 Aarch 1,94!. Rev(se' counter o--er not mater(a+ ut are mere+y c+ar(-(cat(ons o- ,*at ,as a)ree' upon There is no evidence as to &hat changes &ere /ade '" ervantes in 1illonco;s revised offer, and there is no evidence that 1illonco (ealt" did not assent to the su00osed changes and that such assent &as never /ade @no&n to ervantes- The alleged changes or .ualifications /ade '" ervantes &ere a00roved '" 1illonco (ealt" and that such a00roval &as dul" co//unicated to ervantes or Dor/aheco '" the 'ro@er as sho&n '" the fact that 1illonco (ealt" 0aid, and Dor/aheco acce0ted, the su/ of P100,000 as earnest /one" or do&n 0a"/ent- That crucial fact i/0lies that ervantes &as a&are that 1illonco (ealt" had acce0ted the
.a+es" /001 ( /!# )
/odifications &hich he had /ade in 1illonco;s counter)offer- #ad 1illonco (ealt" not asserted to those insertions and annotations, then it &ould have sto00ed 0a"/ent on its chec@ for P100,000- The fact that 1illonco (ealt" allo&ed its chec@ to 'e cashed '" Dor/aheco signifies that the co/0an" &as in confor/it" &ith the changes /ade '" ervantes and that Dor/aheco &as a&are of that confor/it"- #ad those insertions not 'een 'inding, then Dor/aheco &ould not have 0aid interest at the rate of 10I 0er annu/ on the earnest /one" of P100,000- The truth is that the alleged changes or .ualifications in the revised counter)offer are not /aterial or are /ere clarifications of &hat the 0arties had 0reviousl" agreed u0on8. Amen'ment o- 4anot*er6 (nstea' o- 4Nassco6 (n para)rap* 1 o- counterDo--er (s tr(v(a+ ervantes allegedl" crossed out the &ord 7$assco8 in 0aragra0h 3 of 1illonco;s revised counter)offer and su'stituted for it the &ord 7another8 so that the original 0hrase 7$assco;s 0ro0ert" in !ta- 3na8, &as /ade to read as 7another 0ro0ert" in !ta- 3na8- That change is trivial- :hat ervantes did &as /erel" to adhere to the &ording of 0aragra0h 3 of Dor/aheco;s original offer &hich /entions 7another 0ro0ert" located at !ta- 3na8 #is o'vious 0ur0ose &as to avoid =eo0ardi2ing his negotiation &ith the $assco for the 0urchase of its !ta- 3na 0ro0ert" '" undul" 0u'lici2ing it- 5t is note&orth" that ervantes, in his letter to the 'ro@er dated 9 30ril 1,94 or after the $assco 0ro0ert" had 'een a&arded to Dor/aheco alluded to the 7$assco 0ro0ert"8- 3t that ti/e, there &as no /ore need of concealing fro/ the 0u'lic that Dor/aheco &as interested in the $assco 0ro0ert"#. Gnsert(on o- +etters 4BA6 not a ma8or a+terat(on" a+ternat(ve contemp+at(on to e mont*+y or sem(Dannua++y ,ou+' e usur(ous ervantes; alleged insertion of the letters 7P38 (0er annu/) after the &ord 7interest8 in that sa/e 0aragra0h 3 of the revised counter)offer could not 'e categori2ed as a /a=or alteration of that counter)offer that 0revented a /eeting of the /inds of the 0arties- 5t &as understood that the 0arties had conte/0lated a rate of 10I 0er annu/ since 10I a /onth or se/i)annuall" &ould 'e usurious10. Rev(se' counterDo--er mere+y amp+(-(es or()(na+ o--er3 acceptance (s not 2ua+(-(e' an' con'(t(ona+ The sti0ulation 7su'=ect to the ter/s and conditions e/'odied in Dor/aheco;s letter of Fe'ruar" 1*, 1,94 and "our (1illonco;s) letter of Aarch 4, 1,94[ does not /a@e Dor/aheco;s acce0tance 7.ualified and conditional8- There is no inco/0ati'ilit" 'et&een Dor/aheco;s offer of Fe'ruar" 1*, 1,94 and 1illonco;s counter)offer of Aarch 4, 1,94 (>4h- D)- The revised counter)offer /erel" a/0lified Dor/aheco;s original offer11. Bayment o- earnest money proo- o- per-ect(on o- contract The controlling fact is that there &as agree/ent 'et&een the 0arties on the su'=ect /atter, the 0rice and the /ode of 0a"/ent and that 0art of the 0rice &as 0aid- 7:henever earnest /one" is given in a contract of sale, it shall 'e considered as 0art of the 0rice and as 0roof of the 0erfection of the contract8 (3rt- 14<*, ivil ode)1/. NonDessent(a+ c*an)es (n terms 'oes not re8ect o--er nor ten'er a counter o--er 5t is true that an acce0tance /a" contain a re.uest for certain changes in the ter/s of the offer and "et 'e a 'inding acce0tance- 7!o long as it is clear that the /eaning of the acce0tance is 0ositivel" and une.uivocall" to acce0t the offer, &hether such re.uest is granted or not, a contract is for/ed-8 (!tuart vsFran@lin Life 5ns- o-, 196 Fed- *nd ,96, citing !ec- +,, :illiston on ontracts)- Thus, it &as held that the vendor;s change in a 0hrase of the offer to 0urchase, &hich change does not essentiall" change the ter/s of the offer, does not a/ount to a re=ection of the offer, and the tender of a counter)offer (!tuart vs- Fran@lin Life 5ns- o-, su0ra)11. Beaumont vs. Br(eto an' Payco vs. .erra 'o not app+y The 0resent case is not governed '" the rulings laid do&n in Deau/ont vs- Prieto, 41 Phil- 9+0, ,<6,
.a+es" /001 ( /80 )
93 L- >d- ++0, and Va"co vs- !erra, 44 Phil- 3*9- 5n those t&o cases the acce0tance radicall" altered the offer and, conse.uentl", there &as no /eeting of the /inds of the 0arties14. Payco Case& %acts 5n the Va"co case, !alvador !erra offered to sell to Loren2o Va"co his sugar central for P1,000,000 on condition that the 0rice 'e 0aid in cash, or, if not 0aid in cash, the 0rice &ould 'e 0a"a'le &ithin 3 "ears 0rovided securit" is given for the 0a"/ent of the 'alance &ithin three "ears &ith interest- Va"co, instead of unconditionall" acce0ting those ter/s, countered that he &as going to /a@e a do&n 0a"/ent of P100,000, that !erra;s /ortgage o'ligation to the P$D of P900,000 could 'e transferred to Va"co;s account and that he (0laintiff) &ould give a 'ond to secure the 0a"/ent of the 'alance of the 0rice- 5t &as held that the acce0tance &as conditional or &as a counter)offer &hich had to 'e acce0ted '" !erra- There &as no such acce0tance!erra revo@ed his offer- #ence, there &as no 0erfected contract1$. Beaumont case& %acts 5n the Deau/ont case, Denito 1aldes offered to sell to : Dorc@ the $agtahan #acienda o&ned '" Denito Legarda, &ho had e/0o&ered 1aldes to sell it- Dorc@ &as given three /onths fro/ Dece/'er 4, 1,11 to 'u" the hacienda for P30+,000- %n 1+ Januar" 1,1* Dorc@ &rote to 1aldes, offering to 0urchase the hacienda for P30+,000 0a"a'le on 1 Aa" 1,1*- $o re0l" &as /ade to that letter- Dorc@ &rote other letters /odif"ing his 0ro0osal- Legarda refused to conve" the 0ro0ert"- 5t &as held that Dorc@;s Januar" 1+th letter 0lainl" de0arted fro/ the ter/s of the offer as to the ti/e of 0a"/ent and &as a counter)offer &hich a/ounted to a re=ection of 1aldes; original offer- 3 su'se.uent unconditional acce0tance could not revive that offer1:. @au'(co an' Har'en vs. Ar(as Ro'r()ueC 'oes not app+y The 0resent case is different fro/ Laudico and #arden vs- 3rias (odrigue2, 43 Phil- *+0 &here the &ritten offer to sell &as revo@ed '" the offeror 'efore the offeree;s acce0tance ca/e to the offeror;s @no&ledge1!. 4$D'ay per(o' merre+y an est(mate an' -orecast" not a con'(t(on or 'ea'+(ne set -or corporat(on to 'ec('e to pursue transact(on The 46)da" 0eriod &as /erel" an esti/ate or a forecast of ho& long it &ould ta@e Dor/aheco to ac.uire the $assco 0ro0ert" and it &as not 7a condition or a deadline set for the defendant cor0oration to decide &hether or not to go through &ith the sale of its Duendia 0ro0ert"8- The state/ent 7that final negotiations on 'oth 0ro0ert" can 'e definitel" @no&n after 46 da"s8 does not and cannot /ean that Dor/aheco should ac.uire the $assco 0ro0ert" &ithin 46 da"s fro/ 1* Fe'ruar" 1,94 as 0retended '" ervantes- 5t is si/0l" a sur/ise that after 46 da"s (in fact &hen the 46 da" 0eriod should 'e co/0uted is not clear) it &ould 'e @no&n &hether Dor/aheco &ould 'e a'le to ac.uire the $assco 0ro0ert" and &hether it &ould 'e a'le to sell the Duendia 0ro0ert"- Paragra0h 6 does not even s0ecif" ho& long after the 46 da"s the outco/e of the final negotiations &ould 'e @no&n- !till, the condition that Dor/aheco should ac.uire the $assco 0ro0ert" &as fulfilled- 3ssu/ing that had ervantes 'een /ore assiduous in follo&ing u0 the transaction, the $assco 0ro0ert" could have 'een transferred to Dor/aheco '" *< Aarch 1,94, the su00osed last da" of the 46)da" 0eriod18. Cervantes m(s+e' part(es as to o,ners*(p o- t*e +ots3 >ppos(t(on o- ,(-e ,as not ra(se' 'ur(n) resc(ss(on ervantes, in rescinding the contract of sale and in returning the earnest /one", cited as an e4cuse the circu/stance that there &as no certaint" in Dor/aheco;s ac.uisition of the $assco 0ro0ert"- #e did not sa" that Ars- ervantes &as o00osed to the sale of the three lots- #e did not tell 1illonco (ealt" that he could not 'ind the con=ugal 0artnershi0- 5n truth, he concealed the fact that the three lots &ere registered 7in the na/e of Francisco ervantes, Fili0ino, of legal age, /arried to (osario P- $avarra, as o&ner thereof in fee si/0le8- #e certainl" led the 1illonco 'rothers to 'elieve that as 0resident of Dor/aheco he could dis0ose of the said lots.a+es" /001 ( /81 )
#e inveigled the 1illoncos into 'elieving that he had untra//elled control of Dor/aheco, that Dor/aheco o&ned the lots and that he &as invested &ith ade.uate authorit" to sell the sa/e- The 0leadings disclose that Dor/aheco and ervantes deli'eratel" and studiousl" avoided /a@ing the allegation that ervantes &as not authori2ed '" his &ife to sell the 3 lots or that he acted /erel" as 0resident of Dor/aheco- That defense &as not inter0osed so as not to 0lace ervantes in the ridiculous 0osition of having acted under false 0retenses &hen he negotiated &ith the 1illoncos for the sale of the 3 lots- Dor/aheco in its 3 ans&ers, &hich &ere verified '" ervantes, never 0leaded as an affir/ative defense that Ars- ervantes o00osed the sale of the 3 lots or that she did not authori2e her hus'and to sell those lots- Li@e&ise, it should he noted that in their se0arate ans&er the ervantes s0ouses never 0leaded as a defense that Ars- ervantes &as o00osed to the sale of 3 lots or that ervantes could not 'ind the con=ugal 0artnershi0- The a00ellants &ere at first hesitant to /a@e it a00ear that ervantes had co//itted the s@ulldugger" of tr"ing to sell 0ro0ert" &hich he had no authorit" to alienate1#. De-ense ,a(ve' -or not *av(n) p+ea'e' The defense, that Ars- ervantes o00osed to the sale, /ust have 'een an afterthought or &as evolved 0ost lite/ /ota/ since it &as never disclosed in ervantes; letter of rescission and in his letter to Aiss TagleAoreover, Ars- ervantes did not testif" at the trial to fortif" that defense &hich had alread" 'een &aived for not having 'een 0leaded (!ee sec- *, (ule ,, (ules of ourt)/0. B+ea t*at Cervantes *as no aut*or(ty to se++ t*e +ots stra(n t*e r(ves o- cre'( (+(ty Ta@ing into account the situation of ervantes vis)a)vis Dor/aheco, 5nc- and his &ife and the fact that the three lots &ere entirel" occu0ied '" Dor/aheco;s 'uilding, /achiner" and e.ui0/ent and &ere /ortgaged to the DDP as securit" for its o'ligation, and considering that a00ellants; vague affir/ative defenses do not include Ars- ervantes; alleged o00osition to the sale, the 0lea that ervantes had no authorit" to sell the lots strains the rivets of credi'ilit" ( f- Pa0a and Delgado vs- Aontenegro, 64 Phil- 331G (io'o vs- #ontiveros, *1 Phil- 31)/1. Contract (s t*e +a, et,een part(es 7%'ligations arising fro/ contracts have the force of la& 'et&een the contracting 0arties and should 'e co/0lied &ith in good faith8 (3rt- 116,, ivil ode)- 5nas/uch as the sale &as 0erfected and even 0artl" e4ecuted, Dor/aheco, 5nc- and the ervantes s0ouses, as a /atter of =ustice and good faith, are 'ound to co/0l" &ith their contractual co//it/ents//. ;*e necess(ty o- a +a,yer (n 'ra-t(n) contract to se++ Auch /isunderstanding could have 'een avoided had the 'ro@er and the 'u"er ta@en the trou'le of /a@ing so/e research in the (egistr" of Deeds and availing the/selves of the services of a co/0etent la&"er in drafting the contract to sell/1. Dama)es not spec(-(ca++y p+ea'e' an' proven !ti0ulation of facts si/0l" /eans that 1illonco (ealt" o/0an" s0eculates that it has suffered da/ages 'ut it does not /ean that the 0arties have agreed that 1illonco (ealt" o/0an" is entitled to those da/ages- The da/ages in .uestion &ere not s0ecificall" 0leaded and 0roven and &ere 7clearl" con=ectural and s0eculative8/4. Attorney=s -ees 'ue ?nder the facts of the case, it is evident that Dor/aheco acted in gross and evident 'ad faith in refusing to satisf" the valid and =ust de/and of 1illonco (ealt" for s0ecific 0erfor/ance- 5t co/0elled 1illonco (ealt" to insure e40enses to 0rotect its interest- Aoreover, this is a case &here it is =ust and e.uita'le that the 1illonco (ealt" should recover attorne";s fees (3rt- **0<, ivil ode)/$. ;a)+e (s ent(t+e' to roker=s comm(ss(on
.a+es" /001 ( /8/ )
Paragra0h 3 of the sti0ulation of facts and '" the docu/entar" evidence 0roves that Dor/aheco engaged Tagle;s services as a 'ro@er in the 0ro=ected sale of the 3 lots and the i/0rove/ents thereon- 5t &as sti0ulated that Aiss Tagle intervened in the negotiations for the sale of the 3 lots- ervantes in his original offer of 1* Fe'ruar" 1,94 a00rised 1illonco (ealt" that the earnest /one" should 'e delivered to Aiss Tagle, the 'earer of the letter)offer[118] Cao Ga Sin Tradin4 v. CA, .%0 SC6A '& [11#] ?u ;ek v. GonCa+es [G.R. No. ##1$. %e ruary 1" 1#1$.] First Division, Trent (J): 4 concur, 1 dissents %acts& 3 &ritten contract &as e4ecuted 'et&een Dasilio Fon2ale2 and Eu Te@ and o-, &here Fon2ales &as st nd o'ligated to deliver 900 0iculs of sugar of the 1 and * grade to Eu Te@, &ithin the 0eriod of 3 /onths (1 Januar")31 Aarch 1,1*) at an" 0lace &ithin the /unici0alit" of !ta- (osa, &hich Eu Te@ Q o- or its re0resentative /a" designateG and in case, Fonn2ales does not deliver, the contract &ill 'e rescinded and Fon2ales shall 'e o'ligated to return the P3,000 received and also the su/ of P1,*00 '" &a" of inde/nit" for loss and da/ages- $o sugar had 'een delivered to Eu Te@ Q o- under this contract nor had it 'een a'le to recover the P3,000- Eu Te@ Q o- filed a co/0laint against Fon2ales, and 0ra"ed for =udg/ent for the P3,000 and the additional P1,*00- Judg/ent &as rendered for P3,000 onl", and fro/ this =udg/ent 'oth 0arties a00ealedThe !u0re/e ourt affir/ed the =udg/ent a00ealed fro/ &ith the /odification allo&ing the recover" of P1,*00 under 0aragra0h 4 of the contract, &ithout costs1. R()*ts 'eterm(ne' y t*e ,r(t(n) (tse+Parties are 0resu/ed to have reduced to &riting all the essential conditions of their contract- The rights of the 0arties /ust 'e deter/ined '" the &riting itself/. Baro+ ev('ence not a'm(ss( +e as (t s*ou+' not serve to (ncorporate a''(t(ona+ con'(t(ons (nto a contract :hile 0arol evidence is ad/issi'le in a variet" of &a"s to e40lain the /eaning of &ritten contracts, it cannot serve the 0ur0ose of incor0orating into the contract additional conte/0oraneous conditions &hich are not /entioned at all in the &riting, unless there has 'een fraud or /ista@e- 5n the 0resent case, Fon2ales alleged that the court erred in refusing to 0er/it 0arol evidence sho&ing that the 0arties intended that the sugar &as to 'e secured fro/ the cro0 &hich the defendant raised on his 0lantation, and that he &as una'le to fulfill the contract '" reason of the al/ost total failure of his cro0- The case a00ears to 'e one to &hich the rule &hich e4cludes 0arol evidence to add to or var" the ter/s of a &ritten contract is decidedl" a00lica'leThere is not the slightest inti/ation in the contract that the sugar &as to 'e raised '" Fon2ales- 5n the contract, Fon2ales undertoo@ to deliver a s0ecified .uantit" of sugar &ithin a s0ecified ti/e- The contract 0laced no restriction u0on hi/ in the /atter of o'taining the sugar, as he &as at li'ert" to 0urchase it on the /ar@et or raise it hi/self, not&ithstanding that he o&ned a 0lantation hi/self1. Cases ,*ere paro+ ev('ence ,as 'en(e' y t*e Court 5n Pastor v. "aspar (* Phil 6,*) the ourt declined to allo& 0arol evidence sho&ing that a 0art" to a &ritten contract &as to 'eco/e a 0artner in a fir/ instead of a creditor of the fir/- 5n )velan$ vs. )astern /ining Co. (14 Phil 60,) a contract of e/0lo"/ent 0rovided that the 0laintiff should receive fro/ the
.a+es" /001 ( /81 )
defendant a sti0ulated salar" and e40enses The defendant in said case sought to inter0ose as a defense to recover" that the 0a"/ent of the salar" &as contingent u0on the 0laintiff;s e/0lo"/ent redounding to the 'enefit of the defendant co/0an"- The contract contained no such condition and the court declined to receive 0arol evidence thereof4. Ber-ecte' contract o- sa+e 'e-(ne'3 Re+(e- -or nonD'e+(very 3rticle 1460 defines a 0erfected sale as follo&s: 7The sale shall 'e 0erfected 'et&een vendor and vendee and shall 'e 'inding on 'oth of the/, if the" have agreed u0on the thing &hich is the o'=ect of the contract and u0on the 0rice, even &hen neither has 'een delivered-8 3rticle 146* 0rovides that 7the in=ur" to or the 0rofit of the thing sold shall, after the contract has 'een 0erfected, 'e governed '" the 0rovisions of articles 10,9 and 11<*-8 There is a 0erfected sale &ith regard to the 7thing8 &henever the article of sale has 'een 0h"sicall" segregated fro/ all other articles$. Ber-ecte' sa+e3 Cases 5n /cCullough vs. Aenlle ( Co. (3 Phil *<6), a 0articular to'acco factor" &ith its contents &as held sold under a contract &hich did not 0rovide for either deliver" of the 0rice or of the thing until a future ti/e5n 5arretto vs. 'anta /arina (*9 Phil *00), s0ecified shares of stoc@ in a to'acco factor" &ere held sold '" a contract &hich deferred deliver" of 'oth the 0rice and the stoc@ until the latter had 'een a00raised '" an inventor" of the entire assets of the co/0an"- 5n 5orro#eo vs. %ranco (6 Phil- (e0-, 4,) a sale of a s0ecific house &as held 0erfected 'et&een the vendor and vendee, although the deliver" of the 0rice &as &ithheld until the necessar" docu/ents of o&nershi0 &ere 0re0ared '" the vendee- 5n +an Leonco vs. "o .nBui (< Phil- (e0-, 631) the 0laintiff had delivered a .uantit" of he/0 into the &arehouse of the defendant- The defendant dre& a 'ill of e4change in the su/ of P<00, re0resenting the 0rice &hich had 'een agreed u0on for the he/0 thus delivered- Prior to the 0resentation of the 'ill for 0a"/ent, in said case, the he/0 &as destro"ed- :hereu0on, the defendant sus0ended 0a"/ent of the 'ill- 5t &as held that the he/0 having 'een alread" delivered, the title had 0assed and the loss &as the vendee;s- 5t is our 0ur0ose to distinguish the case at 'ar fro/ all these cases:. Contract (n present case mere+y an e7ecutory a)reement& a prom(se o- sa+e an' not a sa+e The contract in the 0resent case &as /erel" an e4ecutor" agree/entG a 0ro/ise of sale and not a sale3s there &as no 0erfected sale, it is clear that articles 146*, 10,9, and 11<* are not a00lica'le- The agree/ent u0on the 7thing8 &hich &as the o'=ect of the contract &as not &ithin the /eaning of article 1460!ugar is one of the sta0le co//odities of this countr"- For the 0ur0ose of sale its 'ul@ is &eighed, the custo/ar" unit of &eight 'eing deno/inated a H;0icul-;; There &as no deliver" under the contract- 5f called u0on to designate the article sold, it is clear that Fon2ales could onl" sa" that it &as 7sugar-8 #e could onl" use this generic na/e for the thing sold- There &as no 7a00ro0riation8 of an" 0articular lot of sugar- $either 0art" could 0oint to an" s0ecific .uantit" of sugar!. Bresent case '(--erent -rom cases c(te' ,(t* per-ecte' contracts The contract in the 0resent case is different fro/ the contracts discussed in the cases referred to- 5n the /cCullough case, for instance, the to'acco factor" &hich the 0arties dealt &ith &as s0ecificall" 0ointed out and distinguished fro/ all other to'acco factories- !o, in the 5arretto case, the 0articular shares of stoc@ &hich the 0arties desired to transfer &ere ca0a'le of designation- 5n the +an Leonco case, &here a .uantit" of he/0 &as the su'=ect of the contract, it &as sho&n that .uantit" had 'een de0osited in a s0ecific &arehouse, and thus set a0art and distinguished fro/ all other he/08. Amer(can 8ur(spru'ence3 E7ecutory contracts 5n &itt 'hoe Co. vs. 'eegars ( Co. (1** La-, 146G 4+ !ou-, 444), a contract &as entered into '" a traveling sales/an for a .uantit" of shoes, the sales having 'een /ade '" sa/0le- !ince Aitchell &as offering to sell '" sa/0le shoes, 0art of &hich had not 'een /anufactured and the rest of &hich &ere incor0orated in :itt !hoe o-;s stoc@ in L"nch'urg, 1a-, it &as i/0ossi'le that he and !eegars Q o- should at that ti/e have
.a+es" /001 ( /84 )
agreed u0on the s0ecific o'=ects, the title to &hich &as to 0ass, and hence there could have 'een no sale5n 'tate vs. 'hiel$s, et al. (110 La-, 64+, 34 !ou-, 9+3), it &as held that in receiving an order for a .uantit" of goods, of a @ind and at a 0rice agreed on, to 'e su00lied fro/ a general stoc@, &arehoused at another 0lace, the agent receiving the order /erel" enters into an e4ecutor" contract for the sale of the goods, &hich does not divest or transfer the title of an" deter/inate o'=ect, and &hich 'eco/es effective for that 0ur0ose onl" &hen s0ecific goods are thereafter a00ro0riated to the contractG and, in the a'sence of a /ore s0ecific agree/ent on the su'=ect, that such a00ro0riation ta@es 0lace onl" &hen the goods as ordered are delivered to the 0u'lic carriers at the 0lace fro/ &hich the" are to 'e shi00ed, consigned to the 0erson '" &ho/ the order is given, at &hich ti/e and 0lace, therefore, the sale is 0erfected and the title 0asses-8 #. Amer(can 8ur(spru'ence& Recovery o- payment3 App+(ca (+(ty to present case 5n Larue ( Prevost vs. 1ugely, 5lair ( Co. (10 La- 3nn-, *4*), the defendants therein had /ade a contract for the sale, '" &eight, of a lot of cotton, had received T3,000 on account of the 0rice, and had given an order for its deliver", &hich had 'een 0resented to the 0urchaser, and recogni2ed '" the 0ress in &hich the cotton &as stored, 'ut that the cotton had 'een destro"ed '" fire 'efore it &as &eighed- 5t &as held that it &as still at the ris@ of the seller, and that the 'u"er &as entitled to recover the T3,000 0aid on account of the 0rice!i/ilarl", in the 0resent case, Fon2ales having defaulted in his engage/ent, Eu Te@ Q o- is entitled to recover the P3,000 &hich it advanced to Fon2ales10. Contract(n) part(es -ree to st(pu+ate3 .t(pu+at(on c+ear" no room -or (nterpretat(on3 @(2u('ate' 'ama)e The contract 0lainl" states that if Fon2ales fails to deliver the 900 0iculs of sugar &ithin the ti/e agreed on, the contract &ill 'e rescinded and he &ill 'e o'liged to return the P3,000 and 0a" the su/ of P1,*00 '" &a" of inde/nit" for loss and da/ages- There cannot 'e the slightest dou't a'out the /eaning of this language or the intention of the 0arties- There is no roo/ for either inter0retation or construction- ?nder the 0rovisions of article 1*66 of the ivil ode contracting 0arties are free to e4ecute the contracts that the" /a" consider suita'le, 0rovided the" are not in contravention of la&, /orals, or 0u'lic order- 5n our o0inion there is nothing in the contract under consideration &hich is o00osed to an" of these 0rinci0les- Thus, this is a clear case of li.uidated da/ages[1/0] Cuvien4co v. @acu,cu,, /%- SC6A ''8 (/08/( [1/1] Payas vs. @uneta 9otor Company [G.R. No. @D10$81. >cto er /1" 1#8/.] First Division, Futierre2 Jr- (J): 6 concur %acts& >utro0io Va"as, Jr- 0urchased on install/ent 'asis a Ford Tha/es Freighter &ith P?# Dod" (>ngine 400>)1*++3< and hassis 400>)1*++3<) fro/ Ar- (o.ue >scaMo of the >scaMo >nter0rises in aga"an de %ro it", dealer of Luneta Aotor o/0an" ( onditions: !elling 0rice, P +,600-00G Financing charge, 1,4*9-<*G Total !elling Price, <,,*9-<*G Pa"a'le on Deliver", 1,009-<*G Pa"a'le in *4 /onths at 1* I interest 0er annu/, +,,*0-00) The /otor vehicle &as delivered to the Va"as &ho 0aid the initial 0a"/ent in the a/ount of P1,009-<*, and e4ecuted a 0ro/issor" note in the a/ount of P+,,*0-00, the 'alance of the total selling 0rice, in favor of Luneta Aotor o/0an"- The 0ro/issor" note stated the a/ounts and dates of 0a"/ent of *9 install/ents covering the P+,,*0-00 de't- !i/ultaneousl" &ith the e4ecution of the 0ro/issor" note and to secure its 0a"/ent, Va"as e4ecuted a chattel /ortgage on the su'=ect /otor vehicle in favor of Luneta Aotors- 3fter 0a"ing a total a/ount of P3,14<-00, Va"as &as una'le to 0a" further /onthl" install/ents 0ro/0ting the Luneta Aotors to e4tra=udiciall" foreclose the chattel /ortgage- The /otor vehicle &as sold at 0u'lic auction &ith the Luneta Aotors re0resented '" 3tt"- Leandro D- Fernande2 as the highest
.a+es" /001 ( /8$ )
'idder in the a/ount of P6,000-00!ince the 0a"/ents /ade '" Va"as 0lus the P6,000-00, reali2ed fro/ the foreclosure of the chattel /ortgage could not cover the total a/ount of the 0ro/issor" note e4ecuted '" Va"as in favor of the res0ondent Luneta Aotors, the latter filed ivil ase 196*93 &ith the it" ourt of Aanila for the recover" of the 'alance of P1,661-+4 0lus interests- 3fter several 0ost0one/ents, the case &as set for hearing- 3s a result of Luneta Aotor;s and its counsel;s non)a00earance on the date set for hearing, Va"as, Jr- /oved to have the case dis/issed for lac@ of interest on the 0art of Luneta Aotors- #e also as@ed the court to allo& hi/ to discuss the /erits of his affir/ative defense as if a /otion to dis/iss had 'een filed- The issue raised and argued '" Va"as &as &hether or not a deficienc" a/ount after the /otor vehicle, su'=ect of the chattel /ortgage, has 'een sold at 0u'lic auction could still 'e recovered- Va"as cited the case of (u0erto ru2 v- Fili0inas 5nvest/ent (*3 ! (3 +,1)- 3cting on the /otion, the case &as dis/issed &ithout 0ronounce/ent as to costsLuneta Aotor o/0an" filed an 7?rgent Aotion for (econsideration,8 &hich the court denied for lac@ of /eritLuneta Aotor o/0an" a00ealed the case to the F5 Aanila (Dranch RRR5, 0resided '" Judge Juan %(e"esG ivil ase +43<1)- 3fter various incidents, the F5 issued an order re/anding the case to the court of origin for further 0roceedings at it is in the o0inion that the it" ourt should have not decided the case /erel" on the .uestion of la& since the 0resentation of evidence is necessar" to ad=udicate the .uestions involved- #ence, the 0etition for revie& '" certiorari filed '" Va"asThe !u0re/e ourt granted the 0etition, annulled the orders re/anding the case to the court of origin and den"ing the /otion for reconsideration of the F5 Aanila, directed the F5 to dis/iss the a00eal in ivil ase +43<1, and affir/ed the order of the it" ourt of Aanila dis/issing the co/0laint in ivil ase 196*931. Escano Enterpr(ses an a)ent o- @uneta 9otor Company The >scaMo >nter0rises of aga"an de %ro it" &as an agent of Luneta Aotor o/0an"- 3 ver" significant evidence &hich 0roves the nature of the relationshi0 'et&een Luneta Aotor o/0an" and >scaMo >nter0rises is a certification fro/ the cashier of >scaMo >nter0rises on the /onthl" install/ents 0aid '" Ar>utro0io Va"as, Jr- 5n the certification, the 0ro/issor" note in favor of Luneta Aotor o/0an" &as s0ecificall" /entioned- There &as onl" one 0ro/issor" note e4ecuted '" >utro0io Va"as, Jr- in connection &ith the 0urchase of the /otor vehicle- The 0ro/issor" note /entioned in the certification refers to the 0ro/issor" note e4ecuted '" >utro0io Va"as, Jr- in favor of Luneta Aotor o/0an"- Thus, >scaMo >nter0rises, a dealer of Luneta Aotor o/0an", &as /erel" a collecting)agent as far as the 0urchase of the su'=ect /otor vehicle &as concerned- The 0rinci0al and agent relationshi0 is clear- Luneta Aotors; argu/ent that >scano >nter0rises is a distinct and different entit", that its role in the said transaction &as onl" to finance the 0urchase 0rice of the /otor vehicleG that in order to 0rotect its interest as regards the 0ro/issor" note e4ecuted in its favor, a chattel /ortgage covering the sa/e /otor vehicle &as e4ecuted '" Va"asG and thus that the contract 'et&een the 0arties &as onl" an ordinar" loan re/oved fro/ the coverage of 3rticle 14<4 of the $e& ivil odeG is &ithout /erit/. 1484 Nature o- transact(on rema(ns to e a sa+e o- persona+ property (n (nsta++ment covere' y Art(c+e
>ven assu/ing that the 7distinct and inde0endent entit"8 theor" of Luneta Aotors is valid, the nature of the transaction as a sale of 0ersonal 0ro0ert" on install/ent 'asis re/ains- :hen, therefore, >scaMo >nter0rises, assigned its rights vis)a)vis the sale to Luneta Aotors, the nature of the transaction involving >scaMo >nter0rises and >utro0io Va"as, Jr- did not change at all- 3s assignee, Luneta Aotors had no 'etter rights than assignor >scaMo >nter0rises under the sa/e transaction- The transaction &ould still 'e a sale of 0ersonal 0ro0ert" in install/ents covered '" 3rticle 14<4 of the $e& ivil ode1. Art(c+e 1484 o- t*e C(v(+ Co'e
.a+es" /001 ( /8: )
3rticle 14<4 of the $e& ivil ode, on the foreclosure of chattel /ortgages over 0ersonal 0ro0ert" sold on install/ent 'asis, 0rovides that 75n a contract of sale of 0ersonal 0ro0ert" the 0rice of &hich is 0a"a'le in install/ents, the vendor /a" e4ercise an" of the follo&ing re/edies: (3) Foreclose the chattel ,/ortgage on the thing sold, if one has 'een constituted, should the vendee;s failure to 0a" cover t&o or /ore install/ents- 5n this case, he shall have no further action against the 0urchaser to recover an" un0aid 'alance of the 0rice- 3n" agree/ent to the contrar" shall 'e void-8 4. %orec+osure an' actua+ sa+e o- a mort)a)e' c*atte+ ars -urt*er recovery o- a+ance y ven'or The foreclosure and actual sale of a /ortgaged chattel 'ars further recover" '" the vendor of an" 'alance on the 0urchaser;s outstanding o'ligation not so satisfied '" the sale- The reason for the doctrine &as a0tl" stated in the case of Dachrach Aotor o- vs- Aillan, thus 7 the 0rinci0al o'=ect of the a/end/ent &as to re/ed" the a'uses co//itted in connection &ith the foreclosure of chattel /ortgages- This a/end/ent 0revents /ortgagees fro/ sei2ing the /ortgaged 0ro0ert", 'u"ing it at foreclosure sale for a lo& 0rice and then 'ringing suit against the /ortgagor for a deficienc" =udg/ent- The al/ost invaria'le result of this 0rocedure &as that the /ortgagor found hi/self /inus the 0ro0ert" and still o&ing 0racticall" the full a/ount of his original inde'tedness- ?nder this a/end/ent the vendor of 0ersonal 0ro0ert", the 0urchase 0rice of &hich is 0a"a'le in install/ents, has the right to cancel the sale or foreclose the /ortgage if one has 'een given on the 0ro0ert"- :hichever right the vendor elects he need not return to the 0urchaser the a/ount of the install/ents alread" 0aid, Hif there 'e an agree/ent to that effect;- Further/ore, if the vendor avails hi/self of the right to foreclose the /ortgage this a/end/ent 0rohi'its hi/ fro/ 'ringing an action against the 0urchaser for the un0aid 'alance-;8 ( ru2 v- Fili0inas 5nvest/ent Q Finance or0oration *3 ! (3 +,1) $. No nee' -or reman' o- recor's to c(ty court The ourt;s findings and conclusions are 'orne out '" the records availa'le to the a00ellate courtThere &as no necessit" for the re/and of records to the cit" court for the 0resentation of evidence on the issue raised in the case-
.a+es" /001 ( /8! )

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Haystacks (Berne Guerrero)

ourt of 300eals, and declared the .uestioned

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)

Haystacks (Berne Guerrero)