G.R. No.

203786 October 23, 2013

AQUILES RIOSA v TABACO LA SUERTE CORPORATION MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of CivPro assailing the May 30 2012 Decision of
the CA and its September 20 2012 Resolution reversing the September 30 2010 Decision of the RTC which granted
the complaint for annulment/declaration of nullity of the deed of absolute sale and transfer certificate of title
reconveyance and damages.
The Facts
Petitioner Aquiles filed his Complaint for Annulment/Declaration of Nullity of Deed of Absolute Sale and TCT,
Reconveyance and Damages against respondent Tabaco La Suerte Corporation (La Suerte) before the RTC.
In his complaint, Aquiles alleged that he was the owner and in actual possession of a 52-square meter commercial lot.
That he declared the property in his name and had been religiously paying the realty tax on the said property; that
thereafter, his daughter, Annie renovated the commercial building on the lot and introduced improvements, that
subsequently, on 3 occasions, he obtained loans from Sia Ko Pio (Sia) in the total amount of 50k, that Sia presented
to him a document purportedly a receipt for the 50k loan with an undertaking to pay the total amount of 52k, that
without reading the document, he affixed his signature thereon; and thereafter, to his surprise, he received a letter
from La Suerte informing him that the subject lot was already registered in its name.
Aquiles claimed that by means of fraud, misrepresentation and deceit employed by Sia, he was made to sign the
document which he thought was a receipt and undertaking to pay the loan, only to find out later that it was a
document of sale. Aquiles averred that he did not appear before the notary public to acknowledge the sale, and that
the notary public, a municipal judge, was not authorized to notarize a deed of conveyance. He prayed for the
nullification of the deed of sale and certificate of title in the name of La Suerte and the reconveyance of the subject
property to him.
In its Answer, La Suerte averred among others, that it was the actual and lawful owner of the commercial property,
after purchasing it from Aquiles, that it allowed Aquiles to remain in possession of the property to avoid the ire of his
father from whom he had acquired property subject to his obligation to vacate the premises anytime upon demand;
that the Register of Deeds issued TCT No. T-80054 covering the subject property in its name; that Aquiles necessarily
undertook the cost of repairs and did not pay rent for using the premises; that Aquiles transacted with it, through Sia,
now deceased, who was then its CEO; and that Aquiles complaint was barred by prescription, laches, estoppel and
indefeasibility of La Suertes title.
The RTC ruled in favor of Aquiles and annulled the sale of the subject properties on the ground of fraud as Aquiles was
made to sign an instrument which he believed to be a receipt of indebtedness.
The RTC ordered among others, the annulment of sale of the subject lot purportedly executed by plaintiff Aquiles in
favor of defendant corporation and annulling the TCT No. 80054 in the name of defendant corporation.
Xxx xxx xxx xxx
The RTC gave credence to the testimony of Aquiles that he was made to sign an instrument of sale without his
knowledge because he trusted Sia and he was of the belief that what he had signed was merely an instrument of
indebtedness. It cited, as legal basis, Article 1330 of the Civil Code which provides that a contract where the consent
is given thru violence, intimidation, undue influence or fraud is voidable.
With its MR denied, La Suerte appealed to the CA which reversed the RTC decision and upheld the validity of the
subject deed of sale in favor of La Suerte. The CA ruled that the contract of sale was valid. The CA is not convinced of
Aquiles bare assertion that the said document was executed through fraud, misrepresentation or deceit, and that his
wifes signature thereon was forged. The rule is that for an action for reconveyance based on fraud to prosper, the
party seeking reconveyance must prove by clear and convincing evidence his title to the property and the fact of
fraud. It must be stressed that mere allegations of fraud are not enough. Intentional acts to deceive and deprive
another of his right, or in some manner, injure him, must be specifically alleged and proved.
The CA declared La Suerte as the lawful owner of the subject lot and improvements thereon, subject to the right of
reimbursement for the renovation expenses. The CA held that tax declarations or realty tax payments by Aquiles were
not conclusive evidence of ownership, citing Sps. Camara v. Sps. Malabao, where it was ruled that a partys
declaration of real property and his payment of realty taxes could not defeat a certificate of title which was an
absolute and indefeasible evidence of ownership of the property in favor of the person whose name appeared thereon.
Aquiles MR was denied by the CA in its Resolution. Hence, Aquiles filed the present petition before the SC raising the
ff issues.
The primordial issue to be resolved is whether there was a perfected and valid contract of sale for the
subject property between Aquiles and La Suerte, through its CEO, Sia.
Aquiles argues that there was no perfected contract to sell because (1) there was no transaction between La Suerte
and Aquiles for the sale of the property in question; (2) there was no board resolution authorizing Sia to purchase the
property; (3) there was no evidence that the money received by Aquiles from Sia came from La Suerte; and (4) he
did not appear before the notary public for notarization of the instrument of sale. Moreover, there was a discrepancy
in the date appearing in the deed of sale and the date in the acknowledgment and the notarial reference.
La Suerte counters that the notarized deed of sale was the very evidence of the agreement between them. According
to it, said deed of sale was binding and enforceable between them, albeit there was a discrepancy in the dates, for the
time-honored rule is that even a verbal contract of sale of real estate produces legal effect between the parties. La
Suerte adds that the absence of a board resolution for the purchase of the property has no controlling consequence as
La Suerte had ratified the act of Sia.
HELD: (As a rule, only questions of law may be raised in a petition for review on certiorari because the Court is not a
trier of facts and is not to review or calibrate the evidence on record. When supported by substantial evidence, the
findings of fact by the CA are conclusive and binding on the parties and are not reviewable by this Court, unless the
case falls under any of the recognized exceptions. An acceptable exception is where there is a conflict between the
factual determination of the trial court and that of the appellate court. In such a case, it becomes imperative to
digress from this general rule and revisit the factual circumstances surrounding the controversy.
In this case, although the RTC and the CA were one in ruling that the prescriptive period of reconveyance did not run
against Aquiles because he remained in possession of the subject property, they differred in their findings of fact
and conclusions on the question of whether there was a perfected and valid contract of sale.)
The Court agrees with the finding of the RTC that there was no perfected contract of sale. It is a hornbook
doctrine that the findings of fact of the trial court are entitled to great weight on appeal and should not be disturbed
except for strong and valid reasons, because the trial court is in a better position to examine the demeanor of the
witnesses while testifying.
The elements of a contract of sale are: a] consent or meeting of the minds, that is, consent to transfer ownership in
exchange for the price; b] determinate subject matter; and c] price certain in money or its equivalent.
In this case, there was no clear and convincing evidence that Aquiles definitely sold the subject property to La Suerte,
nor was there evidence that La Suerte authorized its chief executive officer, Sia, to negotiate and conclude a purchase
of the property.
There was no agreement between the parties. As the first element was wanting, Aquiles correctly argued that there
was no contract of sale. Under Article 1475 of the Civil Code, the contract of sale is perfected at the moment there is
a meeting of minds on the thing which is the object of the contract and on the price.
Aquiles acknowledged that he signed the receipt for the total loan. There is, however, no proof that it came from La
Suerte as the consideration of the sale. Accordingly, there is no basis for a holding that the personal loan of Aquiles
from Sia was the consideration for the sale of his property in favor of La Suerte. As to La Suertes contention that a
deed of absolute sale was purportedly executed by Aquiles in its favor, it failed to adduce convincing evidence to
effectively rebut his consistent claim that he was not aware that what he had signed was already an instrument of
sale, considering his trust and confidence on Sia who was his long-time friend and former employer.
Indeed, if Aquiles sold the property in favor of La Suerte, he would not have religiously and continuously paid the real
property taxes. Also of note is the fact that his daughter spent for the renovation of improvements. More important,
La Suerte did not earlier ask him to transfer the possession thereof to the company. These uncontroverted attendant
circumstances bolster Aquiles positive testimony that he did not sell the property.
(And for said reasons, the CA should not have favorably considered the validity of the deed of absolute sale absent
any written authority from La Suertes BOD for Sia to negotiate and purchase Aquiles property on its behalf and to use
its money to pay the purchase price.
As held in AF Realty & Development, Inc. v. Dieselman Freight Services, Co.:
Section 23 of the Corp. Code expressly provides that the corporate powers of all corporations shall be exercised by the
BOD. Just as a natural person may authorize another to do certain acts in his behalf, so may the board of directors of
a corporation validly delegate some of its functions to individual officers or agents appointed by it. Thus, contracts or
acts of a corp. must be made either by the BOD or by a corporate agent duly authorized by the board. Absent such
valid delegation/authorization, the rule is that the declarations of an individual director relating to the affairs of the
corp., but not in the course of, or connected with, the performance of authorized duties of such director, are held not
binding on the corporation.
In the case at bench, Sia, although an officer of La Suerte, had no authority from its BOD to enter into a contract of
sale of Aquiles property. It is, thus, clear that the loan obtained by Aquiles from Sia was a personal loan from the
latter, not a transaction between Aquiles and La Suerte. There was no evidence to show that Sia was clothed with
authority to use his personal fund for the benefit of La Suerte. Evidently, La Suerte was never in the picture.
The CA also failed to consider the glaring material discrepancies on the dates appearing in the purported deed of
absolute sale notarized by Judge Arsenio Base, Municipal Court Presiding Judge of Tabaco City (Judge Base).
La Suerte insists that the discrepancy on the dates was a mere clerical error that did not invalidate the deed of sale. It
is worthy to stress that a notarial document is evidence of the facts in the clear unequivocal manner therein expressed
and has in its favor the presumption of regularity. While it is true that an error in the notarial inscription does not
generally invalidate a sale, if indeed it took place, the same error can only mean that the document cannot be treated
as a notarial document and thus, not entitled to the presumption of regularity. The document would be taken out of
the realm of public documents whose genuineness and due execution need not be proved.
An even more substantial irregularity raised by Aquiles pertains to the capacity of the notary public, Judge Base, to
notarize the deed of sale. Judge Base, who acted as ex-oficio notary public, is not allowed under the law to notarize
documents not connected with the exercise of his official duties.
With Judge Base not being authorized to notarize a deed of conveyance, the notarized document cannot be considered
a valid registrable document in favor of La Suerte.
Moreover, Aquiles wife, Erlinda, who appeared to have affixed her signature as a witness to the purported document
of sale, categorically stated that she never signed such an instrument and never appeared before a notary public.
Although it is true that the absence of notarization of the deed of sale would not invalidate the transaction evidenced
therein, yet an irregular notarization reduces the evidentiary value of a document to that of a private document, which
requires proof of its due execution and authenticity to be admissible as evidence.
It should be noted that the deed of sale was offered in evidence as authentic by La Suerte, hence, the burden was
upon it to prove its authenticity and due execution. La Suerte unfortunately failed to discharge this burden.
Accordingly, the preponderance of evidence is in favor of Aquiles.)
In fine, considering the irregularities or defects in the execution and notarization of the deed of sale, the Court finds
Itself unable to stamp its seal of approval on it. The RTC was correct in ordering its annulment.
WHEREFORE, the petition GRANTED. The May 30, 2012 Decision of the CA is REVERSED and SET ASIDE. The
September 30, 2010 Decision of the RTC is REINSTATED.
This disposition is without prejudice to any valid claim of the heirs of Sia against Aquiles. SO ORDERED.






G.R. No. 162826 October 14, 2013
NARCISO DEGAOS v PEOPLE BERSAMIN, J.:
FACTS: In an amended information, the Office of the Provincial Prosecutor charged Aida Luz, and Narciso Degaos in
the RTC with estafa under Article 315 of the RPC allegedly committed as follows:
That they received from Sps Atty. Bordador gold and pieces of jewelry worth almost 500k under express obligation to
sell the same on commission and remit the proceeds thereof or return the unsold gold and pieces of jewelry, but the
said accused, once in possession of the said merchandise and far from complying with their obligation, inspite of
repeated demands for compliance therewith, willfully, unlawfully and feloniously, with intent of gain and grave abuse
of confidence misapply, misappropriate and convert to their own use and benefit the said merchandise and/or the
proceeds thereof, to the damage and prejudice of said Sps. Atty. Bordador in the said amount of almost 500k.
Prior to the institution of the instant case, a separate civil action for the recovery of sum of money was filed by the
Sps. Bordador against accused Aida and Narciso. In an amended complaint Ernesto Luz, husband of Aida, was
impleaded as party defendant. RTC found Narciso liable and ordered him to pay the sum of P725,463,98 as actual and
consequential damages plus interest and attorneys fees in the amount of P10,000.00. On the other hand, Aida was
ordered to pay the amount of P21,483.00, representing interest on her personal loan. The case against Ernesto Luz
was dismissed for insufficiency of evidence. Both parties appealed to the CA which affirmed the aforesaid decision. On
further appeal, the SC sustained the CA. While the said civil case was pending, the private complainants instituted the
present case against the accused.
Narciso and Aida Luz are brother and sister. Lydia knew them because they are the relatives of her husband. The
usual business practice of Sps. Atty Bordador with the accused was for Narciso to receive the jewelry and gold items
for and in behalf of Aida and for Narciso to sign the "Kasunduan at Katibayan" receipts while Aida will pay for the price
later on. The subject items were usually given to Narciso only upon instruction from Aida through telephone calls or
letters. Said business arrangement went on for quite sometime since Narciso and Aida Luz had been paying
religiously. When the accused defaulted in their payment, they sent demand letters.
Aida sent a letter to Lydia Bordador requesting for an accounting of her indebtedness. Lydia made an accounting
which contained the amount of P122,673.00 as principal and P21,483.00 as interest. Thereafter, she paid the principal
amount through checks. She did not pay the interest because the same was allegedly excessive. Atty. Jose Bordador
brought a ledger to her and asked her to sign the same. The said ledger contains a list of her supposed indebtedness
to the private complainants. She refused to sign the same because the contents thereof are not her indebtedness but
that of his brother, Narciso. She even asked the private complainants why they gave so many pieces of jewelry and
gold bars to Narciso without her permission, and told them that she has no participation in the transactions covered
by the subject "Kasunduan at Katibayan" receipts.
Co-accused Narciso categorically admitted that he is the only one who was indebted to the private complainants and
out of his indebtedness, he already made partial payments in the amount of P53,307.00. Included in the said partial
payments is the amount of P20,000.00 which was contributed by his brothers and sisters who helped him and which
amount was delivered by Aida to the private complainants.
RTC found Narciso GUILTY beyond reasonable doubt of the crime of estafa but acquitted Luz for insufficiency of
evidence, imposing on Narciso twenty years of reclusion temporal.
On appeal, Degaos assailed his conviction upon the following grounds, to wit:
I That the RTC ERRED IN NOT FINDING THAT THE AGREEMENT BETWEEN THE PRIVATE COMPLAINANT LYDIA
BORDADOR AND THE ACCUSED WAS ONE OF SALE ON CREDIT.
(II That the RTC ERRED IN NOT FINDING THAT NOVATION HAD CONVERTED THE LIABILITY OF THE ACCUSED INTO A
CIVIL ONE.
Xxx xxx xxx)
However, the CA affirmed the conviction of Narciso but modified the prescribed penalty.
Issues: Hence, Degaos has appealed with the same issues he raised before the CA.
HELD: The appeal lacks merit.
I. Transaction was an agency, not a sale on credit
Narciso contends that his agreement with the complainants relative to the items of jewelry and gold was a sale on
credit, not a consignment to sell on commission basis.
The contention of Degaos is devoid of factual and legal bases.
Based on the express terms and tenor of the Kasunduan at Katibayan, Narciso received and accepted the items
under the obligation to sell them in behalf of the complainants and he would be compensated with the
overprice as his commission. Plainly, the transaction was a consignment under the obligation to account for the
proceeds of sale, or to return the unsold items. As such, he was the agent of the complainants in the sale to
others of the items.
In contrast, according the first paragraph of Article 1458 of the Civil Code, one of the contracting parties in a
contract of sale obligates himself to transfer the ownership of and to deliver a determinate thing, while the other party
obligates himself to pay therefor a price certain in money or its equivalent. Contrary to the contention of Narciso,
there was no sale on credit to him because the ownership of the items did not pass to him.
II. Novation did not transpire as to prevent
the incipient criminal liability from arising
Degaos claims that his partial payments to the complainants novated his contract with them from agency to loan,
thereby converting his liability from criminal to civil. He insists that his failure to complete his payments prior to the
filing of the complaint-affidavit by the complainants notwithstanding, the fact that the complainants later required him
to make a formal proposal before the barangay authorities on the payment of the balance of his outstanding
obligations confirmed that novation had occurred.
The CA rejected the claim of Degaos, opining that his argument that novation took place when the private
complainants accepted his partial payments before the criminal information was filed in court and therefore, his
criminal liability was extinguished is untenable.
Novation is not one of the grounds prescribed by the RPC for the extinguishment of criminal liability.1wphi1 It is well
settled that criminal liability for estafa is not affected by compromise or novation of contract, for it is a public offense
which must be prosecuted and punished by the Government on its own motion even though complete reparation
should have been made of the damage suffered by the offended party. A criminal offense is committed against the
People and the offended party may not waive or extinguish the criminal liability that the law imposes for the
commission of the offense. The criminal liability for estafa already committed is not affected by the subsequent
novation of the contract.
We sustain the CA.
Degaos claim was again factually unwarranted and legally devoid of basis, because the partial payments he made
and his purported agreement to pay the remaining obligations did not equate to a novation of the original contractual
relationship of agency to one of sale. As we see it, he misunderstands the nature and the role of novation in a criminal
prosecution.
Novation is the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one
that terminates the first, either by (a) changing the object or principal conditions; or (b) substituting the person of the
debtor; or (c) subrogating a third person in the rights of the creditor. In order that an obligation may be extinguished
by another that substitutes the former, it is imperative that the extinguishment be so declared in unequivocal terms,
or that the old and the new obligations be on every point incompatible with each other.

Obviously, in case of only
slight modifications, the old obligation still prevails.
The extinguishment of the old obligation by the new one is necessary element of novation which may be effected
either expressly or impliedly. The term "expressly" means that the contracting parties incontrovertibly disclose that
their object in executing the new contract is to extinguish the old one. Upon the other hand, no specific form is
required for an implied novation, and all that is prescribed by law would be an incompatibility between the two
contracts. While there is really no hard and fast rule to determine what might constitute to be a sufficient change that
can bring about novation, the touchstone for contrarity, however would be an irreconcilable incompatibility between
the old and the new obligations.
The changes alluded to by petitioner consists only in the manner of payment.1There was really no substitution of
debtors since private complainant merely acquiesced to the payment but did not give her consent to enter into a new
contract.
The legal effects of novation on criminal liability The novation theory may perhaps apply prior to the filing of the
criminal information in court by the state prosecutors because up to that time the original trust relation may be
converted by the parties into an ordinary creditor-debtor situation, thereby placing the complainant in estoppel to
insist on the original trust. But after the justice authorities have taken cognizance of the crime and instituted action in
court, the offended party may no longer divest the prosecution of its power to exact the criminal liability, as
distinguished from the civil. The crime being an offense against the state, only the latter can renounce it (People vs.
Gervacio, 54 Off. Gaz. 2898; People vs. Velasco, 42 Phil. 76; U.S. vs. Montaes, 8 Phil. 620).
Thus, this Court has ruled that the offended partys acceptance of a promissory note for all or part of the amount
misapplied does not obliterate the criminal offense (Camus vs. Court of Appeals, 48 Off. Gaz. 3898).
Although the novation of a contract of agency to make it one of sale may relieve an offender from an incipient criminal
liability, that did not happen here, for the partial payments and the proposal to pay the balance the accused made
during the barangay proceedings were not at all incompatible with Narcisos liability under the agency that had
already attached. Rather than converting the agency to sale, therefore, he even thereby confirmed his
liability as the sales agent of the complainants.
WHEREFORE, the Court AFFIRMS the decision of the CA; and ORDERS petitioner to pay the costs of suit. SO
ORDERED.

G.R. No. 179594 September 11, 2013
MANUEL UY & SONS, INC., v VALBUECO, INCORPORATED PERALTA, J.:
Petitioner Manuel Uy & Sons, Inc. (Petitioner Manuel and Sons) is the registered owner of parcels of land located in
Teresa, Rizal covered by TCT No. 1; TCT No. 2; TCT No. 3; and TCT No. 4.
On November 29, 1973, two Conditional Deeds of Sale were executed by petitioner Manuel and Sons, as vendor, in
favor of respondent Valbueco, as vendee. The first Conditional Deed of Sale covered TCT Nos. 1, 2 and 3.
The said lots cost Php164,749.00, 41k upon signing of the deed and the rest, in installments. The last installment is
on or before November 15, 1974. The conditions of the deed among others, That it is understood that ownership
of the properties herein conveyed shall not pass to the VENDEE until after payment of the full purchase
price; provided, however, that the VENDOR shall allow the annotation of this Conditional Deed of Sale at the back of
the titles of the above-described parcels of land in the corresponding Registry of Deeds x xx. That upon full
payment of the total purchase price, a Deed of Absolute Sale shall be executed in favor of the VENDEE and
the VENDOR agrees to pay the documentary stamps and the science stamp tax of the Deed of Sale; while the VENDEE
agrees to pay the registration and other expenses for the issuance of a new title.
On the other hand, the second Conditional Deed of Sale covering Lot No. 4 provides almost just the same as to the
first conditional deed of sale (Iba lang sa price durr) x x x x P52K balance is P156K.
Respondent Valbueco was able to pay petitioner Manuel and Sons the amount of P275,055.55 as partial payment for
the two properties corresponding to the initial payments and the first installments of the said properties.
At the same time, petitioner complied with its obligation under the conditional deeds of sale.
However, respondent Valbueco suspended further payment as it was not satisfied with the manner petitioner Manuel
complied with its obligations under the conditional deeds of sale. Consequently, petitioner Manuel and Sons sent
respondent Valbueco a letter informing Valbueco of its intention to rescind the conditional deeds of sale and attaching
therewith the original copy of the respective notarial rescission but the same was proven in the course of trial that the
notice of notarial rescission was not sent to V.
On November 28, 1994, Valbueco filed a Complaint for specific performance and damages against Manuel and Sons
with the RTC of Antipolo. Manuel and Sons attached to their Answer notice dated March 17, 1978 and copies of the
notarial acts of rescission dated March 15, 1978, and that respondent received a copy of the said Answer with the
attached notices of notarial rescission However, the case was dismissed without prejudice for lack of interest, as
respondent's counsel failed to attend the pre-trial conference.
Five years later, Valbueco again filed with the RTC this time with the RTC of Manila, a Complaint for specific
performance and damages, seeking to compel Manuel and Sons to accept the balance of the purchase price for the
two conditional deeds of sale and to execute the corresponding deeds of absolute sale.
In its Answer, Manuel and Sons argued that the case should be dismissed, as it was barred by prior judgment.
Moreover, petitioner contended that it could not be compelled to execute any deed of absolute sale, because
respondent failed to pay in full the purchase price of the subject lots. Petitioner asserted that since respondent failed
to pay the full purchase price of the subject lots, both conditional deeds of sale were rescinded as of April 16,
1978; hence, respondent had no cause of action against it.
On August 1, 2005, the trial court dismissed the complaint, as Manuel and Sons had exercised its right to rescind the
contracts.
The trial court said that both conditional deeds of sale clearly provided that "ownership x x x shall not pass to the
VENDEE until after full payment of the purchase price." Valbueco admitted that it has not yet fully paid the purchase
price. The trial court stated that the evidence showed that petitioner Manuel and Sons had exercised its right to
rescind the contract by a written notice and notarial acts. The trial court noted that respondent V denied having
received the notice.
The trial court held that the conditional deeds of sale were executed on November 29, 1973 and were
already covered by RA 6552 (I think this is the Maceda Law), otherwise known as the Realty Installment
Buyer Act. Under Sec. 4 of the law, if the buyer fails to pay the installments due at the expiration of the grace
period, which is not less than 60 days from the date the installment became due, the seller may cancel the contract
after 30 days from receipt of the buyer of the notice of cancellation or the demand for rescission of the contracts by
notarial act. The trial court found no lawful ground to grant the relief prayed for and dismissed the complaint for lack
of merit.
Valbueco appealed the decision to the CA, and made these assignments of error: (1) the trial court erred in holding
that petitioner did not unlawfully evade executing a final deed of sale, since respondent's failure to fulfill its own
obligation is material; (2) the trial court erred in holding that it is unbelievable and a self-contradiction that
respondent was informed of the mortgage only when it was paying the balance of the properties; and (3) the trial
court erred in holding that as early as November 19, 1973, petitioner had already taken necessary steps to evict the
squatters/occupants through the intercession of the agrarian reform officer.
CA reversed and set aside the Decision of the trial court. It reinstated the complaint of respondent, and directed
petitioner to execute deeds of absolute sale in favor of respondent V after payment of the balance of the purchase
price of the subject lots.
CA held that the two conditional deeds of sale in this case are contracts to sell. It stated that the law
applicable to the said contracts to sell on installments is RA 6552, specifically Sec. 4 thereof, as Valbueco
paid less than two years in installments. It held that upon repeated defaults in payment by V, Manuel and Sons had
the right to cancel the said contracts, but subject to the proper receipt of respondent of the notice of cancellation or
the demand for the rescission of the contracts by notarial act.
However, the CA found that petitioner sent the notice of notarial rescission to the wrong address. Thus, the CA held
that the notarial rescission was invalidly served. For petitioner Manuel and Sons failure to cancel the contract in
accordance with the procedure provided by law, the CA held that the contracts to sell on installment were valid and
subsisting, and V has the right to offer to pay for the balance of the purchase price before actual cancellation.
Petitioner Manuel and Sons MR was denied for lack of merit by the CA.
Petitioner Manuel and Sons filed this petition raising the following issues:
I CA GRAVELY ERRED IN REVERSING THE RTC DECISION AND REINSTATING THE COMPLAINT WHEN ON ITS FACE IT
HAS LONG BEEN PRESCRIBED, AS IT WAS FILED AFTER 27 YEARS AND HAS NO JURISDICTION.
II CA SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION IN COMPELLING PETITIONER MANUEL AND SONS
TO EXECUTE A FINAL DEED OF ABSOLUTE SALE EVEN IF RESPONDENT JUDICIALLY ADMITTED ITS NON-PAYMENT OF
THE BALANCE OF THE DEEDS OF CONDITIONAL SALE DUE SINCE 1974.
XXX XXX XXX
The main issue is whether respondent is entitled to the relief granted by the CA. Petitioner contends that the CA erred
in directing it to execute deeds of absolute sale over the subject lots even if respondent admitted non-payment of the
balance of the purchase price.
HELD: As found by the CA, the two conditional deeds of sale entered into by the parties are contracts to sell,
as they both contained a stipulation that ownership of the properties shall not pass to the vendee until
after full payment of the purchase price. In a conditional sale, as in a contract to sell, ownership remains with the
vendor and does not pass to the vendee until full payment of the purchase price. The full payment of the purchase
price partakes of a suspensive condition, and non-fulfillment of the condition prevents the obligation to
sell from arising. To differentiate, a deed of sale is absolute when there is no stipulation in the contract that title to
the property remains with the seller until full payment of the purchase price.
Ramos v. Heruela held that Arts. 1191 and 1592, NCC are applicable to contracts of sale, while RA 6552 applies to
contracts to sell.
The CA correctly held that RA 6552, otherwise known as the Realty Installment Buyer Act, applies to the subject
contracts to sell. RA 6552 recognizes in conditional sales of all kinds of real estate (industrial, commercial, residential)
the right of the seller to cancel the contract upon non-payment of an installment by the buyer, which is
simply an event that prevents the obligation of the vendor to convey title from acquiring binding force.
It also provides the right of the buyer on installments in case he defaults in the payment of succeeding
installments,
Section 3. In all transactions or contracts involving the sale or financing of real estate on installment payments,
including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants
under RA 3844, as amended by RA 6389, where the buyer has paid at least two years of installments, the buyer is
entitled to the following rights in case he defaults in the payment of succeeding installments:
(a) To pay, without additional interest, the unpaid installments due within the total grace period earned by
him which is hereby fixed at the rate of one month grace period for every one year of installment payments
made: Provided, That this right shall be exercised by the buyer only once in every five years of the life of the
contract and its extensions, if any.
(b) If the contract is canceled, the seller shall refund to the buyer the cash surrender value of the payments
on the property equivalent to fifty per cent of the total payments made, and, after five years of installments,
an additional five per cent every year but not to exceed ninety per cent of the total payments made: Provided,
That the actual cancellation of the contract shall take place after thirty days from receipt by the buyer of the
notice of cancellation or the demand for rescission of the contract by a notarial act and upon full payment of
the cash surrender value to the buyer.
Down payments, deposits or options on the contract shall be included in the computation of the total number of
installment payments made.
Sec. 4. In case where less than two years of installments were paid, the seller shall give the buyer a grace period of
not less than sixty days from the date the installment became due.
If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel
the contract after thirty days from receipt by the buyer of the notice of cancellation or the demand for
rescission of the contract by a notarial act.
In this case, respondent V has paid less than two years of installments; therefore, Sec. 4 of RA 6552
applies.
As already mentioned, after respondent V filed its first Complaint for specific performance and damages with the RTC
of Antipolo on November 28, 1994, petitioner filed an Answer and attached thereto a copy of the written notice dated
March 17, 1978 and copies of the notarial acts of rescission dated March 15, 1978, and that respondent received a
copy of the said Answer with the attached notices of notarial rescission. However, to reiterate, the first Complaint was
dismissed without prejudice.
Five years after the dismissal of the first Complaint, respondent again filed this case for specific performance and
damages, this time, with the RTC of Manila. Petitioner filed an Answer, and alleged, among others, that the case was
barred by prior judgment, since respondent filed a complaint on November 28, 1994 before the RTC of Antipolo
against Manuel and Sons involving the same issues and that the case, was dismissed for lack of interest.
Respondent V is deemed to have had notice of the notarial rescission of the two conditional deeds of sale
when it received petitioners Answer to its first complaint filed with the RTC of Antipolo, since petitioners
Answer included notices of notarial rescission of the two conditional deeds of sale. The first complaint was
filed six years earlier before this complaint was filed. As stated earlier, the first complaint was dismissed without
prejudice, because respondents counsel failed to appear at the pre-trial. Since respondent already received notices of
the notarial rescission of the conditional deeds of sale, together with petitioners Answer to the first Complaint five
years before it filed this case, it can no longer deny having received notices of the notarial rescission in this case, as
respondent admitted the same when it attached the notices of notarial rescission to its Reply in this case.
Consequently, respondent is not entitled to the relief granted by the CA.
Under RA 6552, the right of the buyer to refund (Right to refund) accrues only when he has paid at least two years of
installments. In this case, respondent has paid less than two years of installments; hence, it is not entitled to a
refund.
Further, petitioner Manuel and Sons contends that the action has prescribed. Petitioner points out that the cause of
action is based on a written contract; hence, the complaint should have been brought within 10 years from the time
the right of action accrues under Article 1144 of the Civil Code. Petitioner argues that it is evident on the face of the
complaint and the two contracts of conditional sale that the cause of action accrued in 1974; yet, the complaint for
specific performance was filed after 27 years. Petitioner asserts that the action has prescribed.
The Complaint shows that the Conditional Deeds of Sale were executed on November 29, 1973, and payments were
due on both Conditional Deeds of Sale on November 15, 1974. Article 1144 of the Civil Code provides that
actions based upon a written contract must be brought within ten years from the time the right of action accrues.
Non-fulfillment of the obligation to pay on the last due date, that is, on November 15, 1974, would give rise to an
action by the vendor, which date of reckoning may also apply to any action by the vendee to determine his right RA
6552. The vendee, respondent V herein, filed this case on March 16, 2001, which is clearly beyond the 10-year
prescriptive period; hence, the action has prescribed.
WHEREFORE, the petition is GRANTED. The Decision of the CA and its Resolution are REVERSED and SET ASIDE. The
Decision of the RTC of Manila, dismissing the case for lack of merit, is REINSTATED. SO ORDERED.

G.R. No. 160322 August 24, 2011
PILIPINO TELEPHONE CORPORATION v
RADIOMARINE NETWORK (SMARTNET) PHILIPPINES, INC., ABAD, J.:
This case is about a partys right to summary judgment when the pleadings show that there are no genuine issues of
fact to be tried.
Facts: Petitioner Pilipino Telephone Corporation (Piltel) expressed its willingness, on purely best effort, to buy in 1997
from respondent Radiomarine Network, Inc. (Smartnet) 300,000 units of various brands of cellular phones and
accessories.
Piltel agreed to sell to Smartnet a 3,500-square meter lot, known as the Valgoson Property, in Makati for P560 million.
Smartnet agreed to pay Piltel P180 million as down payment with the balance of P380 million to be partly set off
against the obligations that Piltel was to incur from its projected purchase of cellular phones and accessories from
Smartnet. Smartnet agreed to settle any unpaid portion of the purchase price of the land after the set off on or about
April 30, 1997.
The contract to sell between the parties provides:
The total consideration of P560M shall be paid by the VENDEE [Smartnet], without the need of any demand, to the
VENDOR [Piltel] in the following manner:
(a) A downpayment of P180M
(b) Any and all outstanding payables which the VENDOR [Piltel] owes to the VENDEE [Smartnet] in
consideration of the cellular phone units and accessories ordered by the VENDOR [Piltel] and delivered by the
VENDEE [Smartnet] between the initial downpayment date i.e. December 28, 1996 and April 30, 1997, shall
be credited to the VENDEE [Smartnet] as additional payment of the purchase price.
(c) The remaining balance, after deducting (a) and (b) above, shall be paid on or about April 30, 1997. It is
expressly understood however, that the VENDOR [Piltel] shall submit to the VENDEE [Smartnet], on or about
April 20, 1997, a SOA updating the deliveries of cellular phones and its outstanding amount in order that the
VENDEE [Smartnet] can prepare the final payment. In this way, the amount of final payment shall be made to
the VENDOR [Piltel] on or before April 30, 1997. Should the VENDOR [Piltel] be delayed in the submission of
the said Statement on the stipulated date, the date of payment of the remaining balance shall be
automatically adjusted for a period equivalent to the number of days by which the VENDOR [Piltel] is delayed
in the submission thereof.
The parties also agreed on a rescission and forfeiture clause which provided that, if Smartnet fails to pay the full price
of the land within the stipulated period and within five days after receipt of a notice of delinquency, it would
automatically forfeit to Piltel 10% of the P180 million down payment or P18 million and the contract shall be without
force and effect.
Smartnet failed to pay the P380 million balance. Piltel returned P50 million to Smartnet, a portion of the P180 million
down payment that it received. Smartnet later requested Piltel for the return of the remaining P130 million but the
latter failed to do so.
Smartnet filed a complaint against Piltel for rescission of their contract to sell involving the Valgoson Property or its
partial specific performance before the RTC of Makati. Smartnet alleged, among other things, that it withheld payment
of the balance of the purchase price of the subject property because Piltel reneged on its commitment to purchase
from Smartnet 300,000 units of cellular phones and accessories.
Smartnet asked the court to (a) order Piltel to convey to Smartnet at least 32% interest in the Valgoson Property,
representing the value of its down payment of P180 million or, in the alternative, order Piltel to return to Smartnet
its P180 million down payment plus interest; (b) order Piltel to pay Smartnet P81,300,764.96, representing the value
of the 300,000 units of various cellular phones which it acquired pursuant to Piltels commitment to buy them but
which commitment Piltel disregarded, plus interest, as actual and compensatory damages; and (c) order Piltel to pay
Smartnet P500k in attorneys fees.
In its answer, Piltel claimed that the agreement to purchase cellular phones and accessories was not part of its
contract with Smartnet for the sale of the Valgoson Property and that Piltel committed to buy equipment from
Smartnet only on a best effort basis. For this reason, Piltel pointed out, Smartnet did not have the power to rescind
the contract to sell the Valgoson Property and, hence, cannot invoke that contracts rescission and forfeiture clause.
Piltel sought full payment by Smartnet of the purchase price for the Valgoson Property, moral damages, exemplary
damages, and litigation expenses.
On October 3, 2000 - Smartnet filed a motion for partial summary judgment for the return of the down payment it
paid Piltel. The RTC granted the motion and ordered Piltel to return the P180 million down payment that it received
less the forfeited amount of P18 million and the cash advance of P50 million or a net of P112 million, with interest at
6% per annum from the time of the extrajudicial demand on it on October 20, 1998 until finality of the judgment and
an additional 12% legal interest after the judgment becomes final and executory until the same is satisfied. Piltel filed
an MR which the RTC denied for lack of merit.
On March 15, 2001 - Smartnet filed a manifestation and motion, withdrawing its two remaining causes of action and
praying for the issuance of a writ of execution. On March 20, 2001 it filed an alternative motion for execution pending
appeal of the RTCs partial decision.
On April 4, 2001 - Piltel filed with the CA a special civil action for certiorari with application for a temporary restraining
order and a writ of preliminary injunction. Piltel alleged that the RTC presiding judge, gravely abused his discretion
when he issued a partial summary judgment in the case and denied Piltels MR. But the CA dismissed the petition,
prompting Piltel to challenge such dismissal before this Court.
Meantime, RTC issued a writ of execution on April 24, 2001.
On April 25, 2001 Piltel filed a notice of appeal to the CA from the judgment that allowed execution pending appeal.
On April 26, 2001 - Piltel filed with the RTC a motion to defer execution pending appeal upon the posting of a
supersedeas bond. The RTC denied the motion. Piltel filed an MR but the court denied it and directed Piltel to pay 12%
interest on the judgment amount from April 23, 2001, when it allowed the execution pending appeal. Piltel filed a
supplemental notice of appeal to the CA from this last order.
On June 11, 2003 - the CA dismissed Piltels appeal. The appellate court held that the RTC did not err when it granted
summary judgment since there were no genuine issues involved in the case. The CA said that Smartnets failure to
pay the balance of the purchase price ipso facto avoids the contract to sell. With the denial of its motion for
reconsideration, Piltel filed this petition under Rule 45 of the Rules of Court.
The Issue
The core issue for resolution is whether or not there are genuine issues of fact to be tried in this case.
The Courts Ruling
A genuine issue of fact is that which requires the presentation of evidence, as distinguished from a sham, fictitious,
contrived or false issue. When the facts as pleaded appear uncontested or undisputed, then there is no real or genuine
issue. Summary judgment is proper in such a case.
Here, Piltel contends that summary judgment is out of place because the parties raise factual issues of fraud and
breach of contract. Although their contract has a built-in rescission and forfeiture clause, this becomes operative only
upon the occurrence of the following conditions: 1) Piltel sends a Statement of Account to Smartnet; 2) Smartnet fails
to pay within 10 days from receipt of the statement; 3) Piltel sends a Notice of Delinquency to Smartnet; and 4)
Smartnet fails to pay within five days from receipt of the notice.
Notably, however, both Piltel and Smartnet admit that they entered into a contract to sell covering the Valgoson
Property; that Smartnet agreed to pay Piltel P560 million for it, with a down payment of P180 million; and that
Smartnet failed to pay the balance of the purchase price on or about April 30, 1997.
With these common admissions, it is clear that there are no genuine issues of fact as to the existence and nature of
the contract to sell as well as Smartnets failure to pay the balance of the purchase price within the agreed period.
Thus, the RTC was correct in skipping trial and deciding the case through a summary judgment based on the
undisputed facts.
Smartnets allegations respecting fraud and breach of contract referred to what appears to be Piltels non-binding
promise to buy cellular phones and accessories from Smartnet. These are matters independent of the parties
agreement concerning Piltels sale of the Valgoson Property to Smartnet. The contract to sell of such property was not
legally linked or made dependent on the aborted cellular phone deal between the parties. Indeed, Smartnet dropped
with leave of court its causes of action relating to such deal.
All that matters is that since Smartnet failed to pay the balance of the purchase price, automatic rescission set in and
this placed Piltel under an obligation to return the down payment it received, less the portion that it forfeited due to
Smartnets default. Consequently, it is but proper for Piltel to fully abide by such obligation. Piltel cannot avoid
rescission since it in fact partially abided by rescissions consequences when it returned to Smartnet a P50 million
portion of the down payment it received.
By returning part of the down payment, it is clear that Piltel recognized that the contract to sell the Valgoson Property
had reached the point of automatic rescission. Piltel is, therefore, in estoppel to deny rescission based on a claim that
it had not yet sent a statement of account or a notice of delinquency to Smartnet regarding the latters default. Such
statement of account and notice of delinquency had become academic.
Piltel argues that Smartnet cannot, as a defaulting buyer, rescind the contract to sell between them by the simple act
of refusing to pay. But, Smartnets nonpayment of the full price of the property was not an act of rescission. It was
but an event that rendered the contract to sell without force and effect. In a contract to sell, the prospective seller
binds himself to part with his property only upon fulfillment of the condition agreed, in this case, the payment in full of
the purchase price. If this condition is not fulfilled, the seller is then released from his obligation to sell.
As the Court said in Heirs of Cayetano Pangan and Consuelo Pangan v. Perreras, the payment of the purchase price in
a contract to sell is a positive suspensive condition, the failure of which is not a breach but a situation that results in
the cancellation of the contract. Strictly speaking, therefore, there can be no rescission or resolution of an obligation
that is still non-existent due to the non-happening of the suspensive condition.
Likewise, a cause of action for specific performance does not arise where the contract to sell has been cancelled due
to nonpayment of the purchase price. Smartnet obviously cannot demand title to the Valgoson Property because it did
not pay the purchase price in full. For its part, Piltel also cannot insist on full payment since Smartnets failure to pay
resulted in the cancellation of the contract to sell. Indeed, in the case of Ayala Life Assurance, Inc. v. Ray Burton
Devt. Corp., the Court rejected the sellers demand for full payment and instead ordered it to refund to the buyer all
sums previously paid. The order to refund is correct based on the principle that no one should unjustly enrich himself
at the expense of another.
WHEREFORE, premises considered, the Court DENIES the petition and AFFIRMS the June 11, 2003 Decision and the
October 6, 2003 Resolution of the Court of Appeals in CA-G.R. CV 71805. SO ORDERED.
G.R. No. 153820 October 16, 2009
DELFIN TAN v ERLINDA C. BENOLIRAO et.al
Is an annotation made pursuant to Sec. 4, Rule 74 of the Rules on a certificate of title covering real property
considered an encumbrance on the property? We resolve this question in the petition for review on certiorari filed by
Delfin Tan (Tan) to assail the decision of the CA and the decision of the RTC that commonly declared the forfeiture of
his P200,000.00 down payment as proper, pursuant to the terms of his contract with the respondents.
THE ANTECEDENTS
The facts are not disputed. Sps. Lamberto and Erlinda Benolirao and the Sps. Reynaldo and Norma Taningco were the
co-owners of a 689-square meter parcel of land (property) located in Tagaytay City and covered by Transfer
Certificate of Title (TCT) No. 26423. On October 6, 1992, the co-owners executed a Deed of Conditional Sale over the
property in favor of Tan for the price of P1,378,000.00. The deed stated:
a) An initial down-payment of TWO HUNDRED (P200,000.00) THOUSAND PESOS, Philippine Currency, upon
signing of this contract; then the remaining balance of ONE MILLION ONE HUNDRED SEVENTY EIGHT
THOUSAND (P1,178,000.00) PESOS, shall be payable within a period of one hundred fifty (150) days from
date hereof without interest;
b) That for any reason, BUYER fails to pay the remaining balance within above mentioned period, the BUYER
shall have a grace period of sixty (60) days within which to make the payment, provided that there shall be an
interest of 15% per annum on the balance amount due from the SELLERS;
c) That should in case (sic) the BUYER fails to comply with the terms and conditions within the above stated
grace period, then the SELLERS shall have the right to forfeit the down payment, and to rescind this
conditional sale without need of judicial action;
d) That in case, BUYER have complied with the terms and conditions of this contract, then the SELLERS shall
execute and deliver to the BUYER the appropriate Deed of Absolute Sale;
Pursuant to the Deed of Conditional Sale, Tan issued and delivered to the co-owners/vendors Metrobank Check No.
904407 for P200,000.00 as down payment for the property, for which the vendors issued a corresponding receipt.
On November 6, 1992, Lamberto Benolirao died intestate. Erlinda Benolirao (his widow and one of the vendors of the
property) and her children, as heirs of the deceased, executed an extrajudicial settlement of Lambertos estate on
January 20, 1993. On the basis of the extrajudicial settlement, a new certificate of title over the property, TCT No.
27335, was issued on March 26, 1993 in the names of the Spouses Reynaldo and Norma Taningco and Erlinda
Benolirao and her children. Pursuant to Section 4, Rule 74 of the Rules, the following annotation was made on TCT No.
27335:
x x x any liability to credirots (sic), excluded heirs and other persons having right to the property, for a period of two
(2) years, with respect only to the share of Erlinda, Andrew, Romano and Dion, all surnamed Benolirao
As stated in the Deed of Conditional Sale, Tan had until March 15, 1993 to pay the balance of the purchase price. By
agreement of the parties, this period was extended by two months, so Tan had until May 15, 1993 to pay the balance.
Tan failed to pay and asked for another extension, which the vendors again granted. Notwithstanding this second
extension, Tan still failed to pay the remaining balance due on May 21, 1993. The vendors thus wrote him a letter
demanding payment of the balance of the purchase price within five (5) days from notice; otherwise, they would
declare the rescission of the conditional sale and the forfeiture of his down payment based on the terms of the
contract.
Tan refused to comply with the vendors demand and instead wrote them a letter (dated May 28, 1993) claiming that
the annotation on the title, made pursuant to Section 4, Rule 74 of the Rules, constituted an encumbrance on the
property that would prevent the vendors from delivering a clean title to him. Thus, he alleged that he could no longer
be required to pay the balance of the purchase price and demanded the return of his down payment.
When the vendors refused to refund the down payment, Tan, through counsel, sent another demand letter to the
vendors on June 18, 1993. The vendors still refused to heed Tans demand, prompting Tan to file on June 19, 1993 a
complaint with the RTC of Pasay City for specific performance against the vendors, including Andrew Benolirao,
Romano Benolirao, Dion Benolirao as heirs of Lamberto Benolirao, together with Evelyn Monreal and Ann Karina
Taningco (collectively, the respondents). In his complaint, Tan alleged that there was a novation of the Deed of
Conditional Sale done without his consent since the annotation on the title created an encumbrance over the property.
Tan prayed for the refund of the down payment and the rescission of the contract.
On August 9, 1993, Tan amended his Complaint, contending that if the respondents insist on forfeiting the down
payment, he would be willing to pay the balance of the purchase price provided there is reformation of the Deed of
Conditional Sale. In the meantime, Tan caused the annotation on the title of a notice of lis pendens.
On August 21, 1993, the respondents executed a Deed of Absolute Sale over the property in favor of Hector de
Guzman (de Guzman) for the price of P689,000.00.
Thereafter, the respondents moved for the cancellation of the notice of lis pendens on the ground that it was
inappropriate since the case that Tan filed was a personal action which did not involve either title to, or possession of,
real property. The RTC issued an order dated October 22, 1993 granting the respondents motion to cancel the lis
pendens annotation on the title.
Meanwhile, based on the Deed of Absolute Sale in his favor, de Guzman registered the property and TCT No. 28104
was issued in his name. Tan then filed a motion to carry over the lis pendens annotation to TCT No. 28104 registered
in de Guzmans name, but the RTC denied the motion.
On September 8, 1995, after due proceedings, the RTC rendered judgment ruling that the respondents forfeiture of
Tans down payment was proper in accordance with the terms and conditions of the contract between the
parties.
4
The RTC ordered Tan to pay the respondents the amount of P30,000.00, plus P1,000.00 per court
appearance, as attorneys fees, and to pay the cost of suit.
On appeal, the CA dismissed the petition and affirmed the ruling of the trial court in toto. Hence, the present petition.
THE ISSUES
Tan argues that the CA erred in affirming the RTCs ruling to cancel the lis pendens annotation on TCT No. 27335. Due
to the unauthorized novation of the agreement, Tan presented before the trial court two alternative remedies in his
complaint either the rescission of the contract and the return of the down payment, or the reformation of the
contract to adjust the payment period, so that Tan will pay the remaining balance of the purchase price only after the
lapse of the required two-year encumbrance on the title. Tan posits that the CA erroneously disregarded the
alternative remedy of reformation of contract when it affirmed the removal of the lis pendens annotation on the title.
Tan further contends that the CA erred when it recognized the validity of the forfeiture of the down payment in favor
of the vendors. While admitting that the Deed of Conditional Sale contained a forfeiture clause, he insists that this
clause applies only if the failure to pay the balance of the purchase price was through his own fault or negligence. In
the present case, Tan claims that he was justified in refusing to pay the balance price since the vendors would not
have been able to comply with their obligation to deliver a "clean" title covering the property.
Lastly, Tan maintains that the CA erred in ordering him to pay the respondents P30,000.00, plus P1,000.00 per court
appearance as attorneys fees, since he filed the foregoing action in good faith, believing that he is in the right.
The respondents, on the other hand, assert that the petition should be dismissed for raising pure questions of fact, in
contravention of the provisions of Rule 45 of the Rules which provides that only questions of law can be raised in
petitions for review on certiorari.
THE COURTS RULING
The petition is granted.
No new issues can be raised in the Memorandum
At the onset, we note that Tan raised the following additional assignment of errors in his Memorandum: (a) the CA
erred in holding that the petitioner could seek reformation of the Deed of Conditional Sale only if he paid the balance
of the purchase price and if the vendors refused to execute the deed of absolute sale; and (b) the CA erred in holding
that the petitioner was estopped from asking for the reformation of the contract or for specific performance.
The Courts September 27, 2004 Resolution expressly stated that "No new issues may be raised by a party in his/its
Memorandum." Explaining the reason for this rule, we said that:
The raising of additional issues in a memorandum before the Supreme Court is irregular, because said memorandum
is supposed to be in support merely of the position taken by the party concerned in his petition, and the raising of new
issues amounts to the filing of a petition beyond the reglementary period. The purpose of this rule is to provide all
parties to a case a fair opportunity to be heard. No new points of law, theories, issues or arguments may be raised by
a party in the Memorandum for the reason that to permit these would be offensive to the basic rules of fair play,
justice and due process.
5

Tan contravened the Courts explicit instructions by raising these additional errors. Hence, we disregard them and
focus instead on the issues previously raised in the petition and properly included in the Memorandum.
Petition raises a question of law
Contrary to the respondents claim, the issue raised in the present petition defined in the opening paragraph of this
Decision is a pure question of law. Hence, the petition and the issue it presents are properly cognizable by this
Court.
Lis pendens annotation not proper in personal actions
Section 14, Rule 13 of the Rules enumerates the instances when a notice of lis pendens can be validly annotated on
the title to real property:
Sec. 14. Notice of lis pendens.
In an action affecting the title or the right of possession of real property, the plaintiff and the defendant, when
affirmative relief is claimed in his answer, may record in the office of the registry of deeds of the province in which the
property is situated a notice of the pendency of the action. Said notice shall contain the names of the parties and the
object of the action or defense, and a description of the property in that province affected thereby. Only from the time
of filing such notice for record shall a purchaser, or encumbrancer of the property affected thereby, be deemed to
have constructive notice of the pendency of the action, and only of its pendency against the parties designated by
their real names.
The notice of lis pendens hereinabove mentioned may be cancelled only upon order of the court, after proper showing
that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the
party who caused it to be recorded.
The litigation subject of the notice of lis pendens must directly involve a specific property which is necessarily affected
by the judgment.
6

Tans complaint prayed for either the rescission or the reformation of the Deed of Conditional Sale. While the Deed
does have real property for its object, we find that Tans complaint is an in personam action, as Tan asked the court to
compel the respondents to do something either to rescind the contract and return the down payment, or to reform
the contract by extending the period given to pay the remaining balance of the purchase price. Either way, Tan wants
to enforce his personal rights against the respondents, not against the property subject of the Deed. As we explained
in Domagas v. Jensen:
7

The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in rem, or in
personam, or quasi in rem for that matter, is determined by its nature and purpose, and by these only. A proceeding
in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the
jurisdiction of the person, although it may involve his right to, or the exercise of ownership of, specific property, or
seek to compel him to control or dispose of it in accordance with the mandate of the court. The purpose of a
proceeding in personam is to impose, through the judgment of a court, some responsibility or liability directly upon
the person of the defendant. Of this character are suits to compel a defendant to specifically perform some act or
actions to fasten a pecuniary liability on him.
Furthermore, as will be explained in detail below, the contract between the parties was merely a contract to sell where
the vendors retained title and ownership to the property until Tan had fully paid the purchase price. Since Tan had no
claim of ownership or title to the property yet, he obviously had no right to ask for the annotation of a lis pendens
notice on the title of the property.
Contract is a mere contract to sell
A contract is what the law defines it to be, taking into consideration its essential elements, and not what the
contracting parties call it.
8
Article 1485 of the Civil Code defines a contract of sale as follows:
Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to
deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
The very essence of a contract of sale is the transfer of ownership in exchange for a price paid or promised.
9

In contrast, a contract to sell is defined as a bilateral contract whereby the prospective seller, while expressly
reserving the ownership of the property despite delivery thereof to the prospective buyer, binds himself to sell the
property exclusively to the prospective buyer upon fulfillment of the condition agreed, i.e., full payment of the
purchase price.
10
A contract to sell may not even be considered as a conditional contract of sale where the seller
may likewise reserve title to the property subject of the sale until the fulfillment of a suspensive condition, because in
a conditional contract of sale, the first element of consent is present, although it is conditioned upon the happening of
a contingent event which may or may not occur.
11

In the present case, the true nature of the contract is revealed by paragraph D thereof, which states:
x x x
d) That in case, BUYER has complied with the terms and conditions of this contract, then the SELLERS shall execute
and deliver to the BUYER the appropriate Deed of Absolute Sale;
x x x
Jurisprudence has established that where the seller promises to execute a deed of absolute sale upon the completion
by the buyer of the payment of the price, the contract is only a contract to sell.
12
Thus, while the contract is
denominated as a Deed of Conditional Sale, the presence of the above-quoted provision identifies the contract as
being a mere contract to sell.
A Section 4, Rule 74 annotation is an encumbrance on the property
While Tan admits that he refused to pay the balance of the purchase price, he claims that he had valid reason to do so
the sudden appearance of an annotation on the title pursuant to Section 4, Rule 74 of the Rules, which Tan
considered an encumbrance on the property.
We find Tans argument meritorious.
The annotation placed on TCT No. 27335, the new title issued to reflect the extrajudicial partition of Lamberto
Benoliraos estate among his heirs, states:
x x x any liability to creditors (sic), excluded heirs and other persons having right to the property, for a period of two
(2) years, with respect only to the share of Erlinda, Andrew, Romano and Dion, all surnamed Benolirao [Emphasis
supplied.]
This annotation was placed on the title pursuant to Section 4, Rule 74 of the Rules, which reads:
Sec. 4. Liability of distributees and estate. - If it shall appear at any time within two (2) years after the settlement and
distribution of an estate in accordance with the provisions of either of the first two sections of this rule, that an heir or
other person has been unduly deprived of his lawful participation in the estate, such heir or such other person may
compel the settlement of the estate in the courts in the manner hereinafter provided for the purpose of satisfying such
lawful participation. And if within the same time of two (2) years, it shall appear that there are debts
outstanding against the estate which have not been paid, or that an heir or other person has been unduly
deprived of his lawful participation payable in money, the court having jurisdiction of the estate may, by
order for that purpose, after hearing, settle the amount of such debts or lawful participation and order how
much and in what manner each distributee shall contribute in the payment thereof, and may issue
execution, if circumstances require, against the bond provided in the preceding section or against the real
estate belonging to the deceased, or both. Such bond and such real estate shall remain charged with a liability to
creditors, heirs, or other persons for the full period of two (2) years after such distribution, notwithstanding any
transfers of real estate that may have been made. [Emphasis supplied.]
Senator Vicente Francisco discusses this provision in his book The Revised Rules of Court in the Philippines,
13
where
he states:
The provision of Section 4, Rule 74 prescribes the procedure to be followed if within two years after an extrajudicial
partition or summary distribution is made, an heir or other person appears to have been deprived of his lawful
participation in the estate, or some outstanding debts which have not been paid are discovered. When the lawful
participation of the heir is not payable in money, because, for instance, he is entitled to a part of the real property
that has been partitioned, there can be no other procedure than to cancel the partition so made and make a new
division, unless, of course, the heir agrees to be paid the value of his participation with interest. But in case the lawful
participation of the heir consists in his share in personal property of money left by the decedent, or in case unpaid
debts are discovered within the said period of two years, the procedure is not to cancel the partition, nor to appoint an
administrator to re-assemble the assets, as was allowed under the old Code, but the court, after hearing, shall fix the
amount of such debts or lawful participation in proportion to or to the extent of the assets they have respectively
received and, if circumstances require, it may issue execution against the real estate belonging to the decedent, or
both. The present procedure is more expedient and less expensive in that it dispenses with the appointment of an
administrator and does not disturb the possession enjoyed by the distributees.
14
[Emphasis supplied.]
An annotation is placed on new certificates of title issued pursuant to the distribution and partition of a decedents real
properties to warn third persons on the possible interests of excluded heirs or unpaid creditors in these properties.
The annotation, therefore, creates a legal encumbrance or lien on the real property in favor of the excluded heirs or
creditors. Where a buyer purchases the real property despite the annotation, he must be ready for the possibility that
the title could be subject to the rights of excluded parties. The cancellation of the sale would be the logical
consequence where: (a) the annotation clearly appears on the title, warning all would-be buyers; (b) the sale
unlawfully interferes with the rights of heirs; and (c) the rightful heirs bring an action to question the transfer within
the two-year period provided by law.
As we held in Vda. de Francisco v. Carreon:
15

And Section 4, Rule 74 xxx expressly authorizes the court to give to every heir his lawful participation in the real
estate "notwithstanding any transfers of such real estate" and to "issue execution" thereon. All this implies that, when
within the amendatory period the realty has been alienated, the court in re-dividing it among the heirs has the
authority to direct cancellation of such alienation in the same estate proceedings, whenever it becomes necessary to
do so. To require the institution of a separate action for such annulment would run counter to the letter of the above
rule and the spirit of these summary settlements. [Emphasis supplied.]
Similarly, in Sps. Domingo v. Roces,
16
we said:
The foregoing rule clearly covers transfers of real property to any person, as long as the deprived heir or creditor
vindicates his rights within two years from the date of the settlement and distribution of estate. Contrary to
petitioners contention, the effects of this provision are not limited to the heirs or original distributees of the estate
properties, but shall affect anytransferee of the properties. [Emphasis supplied.]
Indeed, in David v. Malay,
17
although the title of the property had already been registered in the name of the third
party buyers, we cancelled the sale and ordered the reconveyance of the property to the estate of the deceased for
proper disposal among his rightful heirs.
By the time Tans obligation to pay the balance of the purchase price arose on May 21, 1993 (on account of the
extensions granted by the respondents), a new certificate of title covering the property had already been issued on
March 26, 1993, which contained the encumbrance on the property; the encumbrance would remain so attached until
the expiration of the two-year period. Clearly, at this time, the vendors could no longer compel Tan to pay the balance
of the purchase since considering they themselves could not fulfill their obligation to transfer a clean title over the
property to Tan.
Contract to sell is not rescinded but terminated
What then happens to the contract?
We have held in numerous cases
18
that the remedy of rescission under Article 1191 cannot apply to mere contracts to
sell. We explained the reason for this in Santos v. Court of Appeals,
19
where we said:
[I]n a contract to sell, title remains with the vendor and does not pass on to the vendee until the purchase price is
paid in full. Thus, in a contract to sell, the payment of the purchase price is a positive suspensive condition. Failure
to pay the price agreed upon is not a mere breach, casual or serious, but a situation that prevents the
obligation of the vendor to convey title from acquiring an obligatory force. This is entirely different from the
situation in a contract of sale, where non-payment of the price is a negative resolutory condition. The effects in law
are not identical. In a contract of sale, the vendor has lost ownership of the thing sold and cannot recover it, unless
the contract of sale is rescinded and set aside. In a contract to sell, however, the vendor remains the owner for as
long as the vendee has not complied fully with the condition of paying the purchase price. If the vendor should eject
the vendee for failure to meet the condition precedent, he is enforcing the contract and not rescinding it. x x x Article
1592 speaks of non-payment of the purchase price as a resolutory condition. It does not apply to a contract to sell. As
to Article 1191, it is subordinated to the provisions of Article 1592 when applied to sales of immovable property.
Neither provision is applicable [to a contract to sell]. [Emphasis supplied.]
We, therefore, hold that the contract to sell was terminated when the vendors could no longer legally compel Tan to
pay the balance of the purchase price as a result of the legal encumbrance which attached to the title of the property.
Since Tans refusal to pay was due to the supervening event of a legal encumbrance on the property and not through
his own fault or negligence, we find and so hold that the forfeiture of Tans down payment was clearly unwarranted.
Award of Attorneys fees
As evident from our previous discussion, Tan had a valid reason for refusing to pay the balance of the purchase price
for the property. Consequently, there is no basis for the award of attorneys fees in favor of the respondents.
On the other hand, we award attorneys fees in favor of Tan, since he was compelled to litigate due to the
respondents refusal to return his down payment despite the fact that they could no longer comply with their
obligation under the contract to sell, i.e., to convey a clean title. Given the facts of this case, we find the award
of P50,000.00 as attorneys fees proper.
Monetary award is subject to legal interest
Undoubtedly, Tan made a clear and unequivocal demand on the vendors to return his down payment as early as May
28, 1993. Pursuant to our definitive ruling in Eastern Shipping Lines, Inc. v. Court of Appeals,
20
we hold that the
vendors should return the P200,000.00 down payment to Tan, subject to the legal interest of 6% per annum
computed from May 28, 1993, the date of the first demand letter.1avvphi1
Furthermore, after a judgment has become final and executory, the rate of legal interest, whether the obligation was
in the form of a loan or forbearance of money or otherwise, shall be 12% per annum from such finality until its
satisfaction. Accordingly, the principal obligation of P200,000.00 shall bear 6% interest from the date of first demand
or from May 28, 1993. From the date the liability for the principal obligation and attorneys fees has become final and
executory, an annual interest of 12% shall be imposed on these obligations until their final satisfaction, this interim
period being deemed to be by then an equivalent to a forbearance of credit.
WHEREFORE, premises considered, we hereby GRANT the petition and, accordingly, ANNUL and SET ASIDE the May
30, 2002 decision of the Court of Appeals in CA-G.R. CV No. 52033. Another judgment is rendered declaring the Deed
of Conditional Sale terminated and ordering the respondents to return the P200,000.00 down payment to petitioner
Delfin Tan, subject to legal interest of 6% per annum, computed from May 28, 1993. The respondents are also
ordered to pay, jointly and severally, petitioner Delfin Tan the amount of P50,000.00 as and by way of attorneys fees.
Once this decision becomes final and executory, respondents are ordered to pay interest at 12% per annum on the
principal obligation as well as the attorneys fees, until full payment of these amounts. Costs against the respondents.
SO ORDERED.
G.R. No. 176474 November 27, 2008
HEIRS OF ARTURO REYES v ELENA SOCCO-BELTRAN CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision
1
dated 31 January
2006 rendered by the Court of Appeals in CA-G.R. SP No. 87066, which affirmed the Decision
2
dated 30 June 2003 of
the Office of the President, in O.P. Case No. 02-A-007, approving the application of respondent Elena Socco-Beltran to
purchase the subject property.
The subject property in this case is a parcel of land originally identified as Lot No. 6-B, situated in Zamora Street,
Dinalupihan, Bataan, with a total area of 360 square meters. It was originally part of a larger parcel of land,
measuring 1,022 square meters, allocated to the Spouses Marcelo Laquian and Constancia Socco (Spouses Laquian),
who paid for the same with Japanese money. When Marcelo died, the property was left to his wife Constancia. Upon
Constancias subsequent death, she left the original parcel of land, along with her other property, with her heirs her
siblings, namely: Filomena Eliza Socco, Isabel Socco de Hipolito, Miguel R. Socco, and Elena Socco-Beltran.
3
Pursuant
to an unnotarized document entitled "Extrajudicial Settlement of the Estate of the Deceased Constancia R. Socco,"
executed by Constancias heirs sometime in 1965, the parcel of land was partitioned into three lotsLot No. 6-A, Lot
No. 6-B, and Lot No. 6-C.
4
The subject property, Lot No. 6-B, was adjudicated to respondent, but no title had been
issued in her name.
On 25 June 1998, respondent Elena Socco-Beltran filed an application for the purchase of Lot No. 6-B before the
Department of Agrarian Reform (DAR), alleging that it was adjudicated in her favor in the extra-judicial settlement of
Constancia Soccos estate.
5

Petitioners herein, the heirs of the late Arturo Reyes, filed their protest to respondents petition before the DAR on the
ground that the subject property was sold by respondents brother, Miguel R. Socco, in favor of their father, Arturo
Reyes, as evidenced by the Contract to Sell, dated 5 September 1954, stipulating that:
6

That I am one of the co-heirs of the Estate of the deceased Constancia Socco; and that I am to inherit as
such a portion of her lot consisting of Four Hundred Square Meters (400) more or less located on the (sic)
Zamora St., Municipality of Dinalupihan, Province of Bataan, bounded as follows:
x x x x
That for or in consideration of the sum of FIVE PESOS (P5.00) per square meter, hereby sell, convey and
transfer by way of this conditional sale the said 400 sq.m. more or less unto Atty. Arturo C. Reyes, his heirs,
administrator and assigns x x x. (Emphasis supplied.)
Petitioners averred that they took physical possession of the subject property in 1954 and had been uninterrupted in
their possession of the said property since then.
Legal Officer Brigida Pinlac of the DAR Bataan Provincial Agrarian Reform Office conducted an investigation, the results
of which were contained in her Report/ Recommendation dated 15 April 1999. Other than recounting the afore-
mentioned facts, Legal Officer Pinlac also made the following findings in her Report/Recommendation:
7

Further investigation was conducted by the undersigned and based on the documentary evidence presented
by both parties, the following facts were gathered: that the house of [the] Reyes family is adjacent to the
landholding in question and portion of the subject property consisting of about 15 meters [were] occupied by
the heirs of Arturo Reyes were a kitchen and bathroom [were] constructed therein; on the remaining portion a
skeletal form made of hollow block[s] is erected and according to the heirs of late Arturo Reyes, this was
constructed since the year (sic) 70s at their expense; that construction of the said skeletal building was not
continued and left unfinished which according to the affidavit of Patricia Hipolito the Reyes family where (sic)
prevented by Elena Socco in their attempt of occupancy of the subject landholding; (affidavit of Patricia
Hipolito is hereto attached as Annex "F"); that Elena Socco cannot physically and personally occupy the
subject property because of the skeletal building made by the Reyes family who have been requesting that
they be paid for the cost of the construction and the same be demolished at the expense of Elena Socco; that
according to Elena Socco, [she] is willing to waive her right on the portion where [the] kitchen and bathroom
is (sic) constructed but not the whole of Lot [No.] 6-B adjudicated to her; that the Reyes family included the
subject property to the sworn statement of value of real properties filed before the municipality of
Dinalupihan, Bataan, copies of the documents are hereto attached as Annexes "G" and "H"; that likewise
Elena Socco has been continuously and religiously paying the realty tax due on the said property.
In the end, Legal Officer Pinlac recommended the approval of respondents petition for issuance of title over the
subject property, ruling that respondent was qualified to own the subject property pursuant to Article 1091 of the New
Civil Code.
8
Provincial Agrarian Reform Officer (PARO) Raynor Taroy concurred in the said recommendation in his
Indorsement dated 22 April 1999.
9

In an Order dated 15 September 1999, DAR Regional Director Nestor R. Acosta, however, dismissed respondents
petition for issuance of title over the subject property on the ground that respondent was not an actual tiller and had
abandoned the said property for 40 years; hence, she had already renounced her right to recover the same.
10
The
dispositive part of the Order reads:
1. DISMISSING the claims of Elena Socco-Beltran, duly represented by Myrna Socco for lack of merit;
2. ALLOCATING Lot No. 6-B under Psd-003-008565 with an area of 360 square meters, more or less, situated
Zamora Street, Dinalupihan, Bataan, in favor of the heirs of Arturo Reyes.
3. ORDERING the complainant to refrain from any act tending to disturb the peaceful possession of herein
respondents.
4. DIRECTING the MARO of Dinalupihan, Bataan to process the pertinent documents for the issuance of CLOA
in favor of the heirs of Arturo Reyes.
11

Respondent filed a Motion for Reconsideration of the foregoing Order, which was denied by DAR Regional Director
Acosta in another Order dated 15 September 1999.
12

Respondent then appealed to the Office of the DAR Secretary. In an Order, dated 9 November 2001, the DAR
Secretary reversed the Decision of DAR Regional Director Acosta after finding that neither petitioners predecessor-in-
interest, Arturo Reyes, nor respondent was an actual occupant of the subject property. However, since it was
respondent who applied to purchase the subject property, she was better qualified to own said property as opposed to
petitioners, who did not at all apply to purchase the same. Petitioners were further disqualified from purchasing the
subject property because they were not landless. Finally, during the investigation of Legal Officer Pinlac, petitioners
requested that respondent pay them the cost of the construction of the skeletal house they built on the subject
property. This was construed by the DAR Secretary as a waiver by petitioners of their right over the subject
property.
13
In the said Order, the DAR Secretary ordered that:
WHEREFORE, premises considered, the September 15, 1999 Order is hereby SET ASIDE and a new Order is
hereby issued APPROVING the application to purchase Lot [No.] 6-B of Elena Socco-Beltran.
14

Petitioners sought remedy from the Office of the President by appealing the 9 November 2001 Decision of the DAR
Secretary. Their appeal was docketed as O.P. Case No. 02-A-007. On 30 June 2003, the Office of the President
rendered its Decision denying petitioners appeal and affirming the DAR Secretarys Decision.
15
The fallo of the
Decision reads:
WHEREFORE, premises considered, judgment appealed from is AFFIRMED and the instant
appeal DISMISSED.
16

Petitioners Motion for Reconsideration was likewise denied by the Office of the President in a Resolution dated 30
September 2004.
17
In the said Resolution, the Office of the President noted that petitioners failed to allege in their
motion the date when they received the Decision dated 30 June 2003. Such date was material considering that the
petitioners Motion for Reconsideration was filed only on 14 April 2004, or almost nine months after the promulgation
of the decision sought to be reconsidered. Thus, it ruled that petitioners Motion for Reconsideration, filed beyond
fifteen days from receipt of the decision to be reconsidered, rendered the said decision final and executory.
Consequently, petitioners filed an appeal before the Court of Appeals, docketed as CA-G.R. SP No. 87066. Pending the
resolution of this case, the DAR already issued on 8 July 2005 a Certificate of Land Ownership Award (CLOA) over the
subject property in favor of the respondents niece and representative, Myrna Socco-Beltran.
18
Respondent passed
away on 21 March 2001,
19
but the records do not ascertain the identity of her legal heirs and her legatees.
Acting on CA-G.R. SP No. 87066, the Court of Appeals subsequently promulgated its Decision, dated 31 January 2006,
affirming the Decision dated 30 June 2003 of the Office of the President. It held that petitioners could not have been
actual occupants of the subject property, since actual occupancy requires the positive act of occupying and tilling the
land, not just the introduction of an unfinished skeletal structure thereon. The Contract to Sell on which petitioners
based their claim over the subject property was executed by Miguel Socco, who was not the owner of the said
property and, therefore, had no right to transfer the same. Accordingly, the Court of Appeals affirmed respondents
right over the subject property, which was derived form the original allocatees thereof.
20
The fallo of the said Decision
reads:
WHEREFORE, premises considered, the instant PETITION FOR REVIEW is DISMISSED. Accordingly, the
Decision dated 30 June 2003 and the Resolution dated 30 December 2004 both issued by the Office of the
President are hereby AFFIRMED in toto.
21

The Court of Appeals denied petitioners Motion for Reconsideration of its Decision in a Resolution dated 16 August
2006.
22

Hence, the present Petition, wherein petitioners raise the following issues:
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE FINDINGS OF THE
OFFICE OF THE PRESIDENT THAT THE SUBJECT LOT IS VACANT AND THAT PETITIONERS ARE NOT ACTUAL
OCCUPANTS THEREOF BY DENYING THE LATTERS CLAIM THAT THEY HAVE BEEN IN OPEN, CONTINUOUS,
EXCLUSIVE, NOTORIOUS AND AVDERSE POSSESSION THEREOF SINCE 1954 OR FOR MORE THAN THIRTY
(30) YEARS.
II
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT HELD THAT PETITIONERS "CANNOT LEGALLY
ACQUIRE THE SUBJECT PROPERTY AS THEY ARE NOT CONSIDERED LANDLESS AS EVIDENCED BY A TAX
DECLARATION."
III
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT "WHATEVER RESERVATION WE HAVE
OVER THE RIGHT OF MYRNA SOCCO TO SUCCEED WAS ALREADY SETTLED WHEN NO LESS THAN MIGUEL
SOCCO (PREDECESSOR-IN INTEREST OF HEREIN PETITIONERS) EXECUTED HIS WAIVER OF RIGHT DATED
APRIL 19, 2005 OVER THE SUBJECT PROPERTY IN FAVOR OF MYRNA SOCCO.
IV
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DENIED PETITIONERS MOTION FOR NEW TRIAL
THEREBY BRUSHING ASIDE THE FACT THAT MYRNA V. SOCCO-ARIZO GROSSLY MISREPRESENTED IN HER
INFORMATION SHEET OF BENEFICIARIES AND APPLICATION TO PURCHASE LOT IN LANDED ESTATES THAT
SHE IS A FILIPINO CITIZEN, WHEN IN TRUTH AND IN FACT, SHE IS ALREADY AN AMERICAN NATIONAL.
23

The main issue in this case is whether or not petitioners have a better right to the subject property over the
respondent. Petitioners claim over the subject property is anchored on the Contract to Sell executed between Miguel
Socco and Arturo Reyes on 5 September 1954. Petitioners additionally allege that they and their predecessor-in-
interest, Arturo Reyes, have been in possession of the subject lot since 1954 for an uninterrupted period of more than
40 years.
The Court is unconvinced.
Petitioners cannot derive title to the subject property by virtue of the Contract to Sell. It was unmistakably stated in
the Contract and made clear to both parties thereto that the vendor, Miguel R. Socco, was not yet the owner of the
subject property and was merely expecting to inherit the same as his share as a co-heir of Constancias estate.
24
It
was also declared in the Contract itself that Miguel R. Soccos conveyance of the subject to the buyer, Arturo Reyes,
was a conditional sale. It is, therefore, apparent that the sale of the subject property in favor of Arturo Reyes was
conditioned upon the event that Miguel Socco would actually inherit and become the owner of the said property.
Absent such occurrence, Miguel R. Socco never acquired ownership of the subject property which he could validly
transfer to Arturo Reyes.
Under Article 1459 of the Civil Code on contracts of sale, "The thing must be licit and the vendor must have a right to
transfer ownership thereof at the time it is delivered." The law specifically requires that the vendor must have
ownership of the property at the time it is delivered. Petitioners claim that the property was constructively delivered
to them in 1954 by virtue of the Contract to Sell. However, as already pointed out by this Court, it was explicit in the
Contract itself that, at the time it was executed, Miguel R. Socco was not yet the owner of the property and was only
expecting to inherit it. Hence, there was no valid sale from which ownership of the subject property could have
transferred from Miguel Socco to Arturo Reyes. Without acquiring ownership of the subject property, Arturo Reyes also
could not have conveyed the same to his heirs, herein petitioners.
Petitioners, nevertheless, insist that they physically occupied the subject lot for more than 30 years and, thus, they
gained ownership of the property through acquisitive prescription, citing Sandoval v. Insular Government
25
and San
Miguel Corporation v. Court of Appeals.
26

In Sandoval, petitioners therein sought the enforcement of Section 54, paragraph 6 of Act No. 926, otherwise known
as the Land Registration Act, which required -- for the issuance of a certificate of title to agricultural public lands --
the open, continuous, exclusive, and notorious possession and occupation of the same in good faith and under claim
of ownership for more than ten years. After evaluating the evidence presented, consisting of the testimonies of
several witnesses and proof that fences were constructed around the property, the Court in the afore-stated case
denied the petition on the ground that petitioners failed to prove that they exercised acts of ownership or were in
open, continuous, and peaceful possession of the whole land, and had caused it to be enclosed to the exclusion of
other persons. It further decreed that whoever claims such possession shall exercise acts of dominion and ownership
which cannot be mistaken for the momentary and accidental enjoyment of the property.
27

In San Miguel Corporation, the Court reiterated the rule that the open, exclusive, and undisputed possession of
alienable public land for the period prescribed by law creates the legal fiction whereby land ceases to be public land
and is, therefore, private property. It stressed, however, that the occupation of the land for 30 years must
be conclusively established. Thus, the evidence offered by petitioner therein tax declarations, receipts, and the sole
testimony of the applicant for registration, petitioners predecessor-in-interest who claimed to have occupied the land
before selling it to the petitioner were considered insufficient to satisfy the quantum of proof required to establish
the claim of possession required for acquiring alienable public land.
28

As in the two aforecited cases, petitioners herein were unable to prove actual possession of the subject property for
the period required by law. It was underscored in San Miguel Corporation that the open, continuous, exclusive, and
notorious occupation of property for more than 30 years must be no less than conclusive, such quantum of proof
being necessary to avoid the erroneous validation of actual fictitious claims of possession over the property that is
being claimed.
29

In the present case, the evidence presented by the petitioners falls short of being conclusive. Apart from their self-
serving statement that they took possession of the subject property, the only proof offered to support their claim was
a general statement made in the letter
30
dated 4 February 2002 of Barangay Captain Carlos Gapero, certifying that
Arturo Reyes was the occupant of the subject property "since peace time and at present." The statement is rendered
doubtful by the fact that as early as 1997, when respondent filed her petition for issuance of title before the DAR,
Arturo Reyes had already died and was already represented by his heirs, petitioners herein.
Moreover, the certification given by Barangay Captain Gapero that Arturo Reyes occupied the premises for an
unspecified period of time, i.e., since peace time until the present, cannot prevail over Legal Officer Pinlacs more
particular findings in her Report/Recommendation. Legal Officer Pinlac reported that petitioners admitted that it was
only in the 1970s that they built the skeletal structure found on the subject property. She also referred to the
averments made by Patricia Hipolito in an Affidavit,
31
dated 26 February 1999, that the structure was left unfinished
because respondent prevented petitioners from occupying the subject property. Such findings disprove petitioners
claims that their predecessor-in-interest, Arturo Reyes, had been in open, exclusive, and continuous possession of the
property since 1954. The adverted findings were the result of Legal Officer Pinlacs investigation in the course of her
official duties, of matters within her expertise which were later affirmed by the DAR Secretary, the Office of the
President, and the Court of Appeals. The factual findings of such administrative officer, if supported by evidence, are
entitled to great respect.
32

In contrast, respondents claim over the subject property is backed by sufficient evidence. Her predecessors-in-
interest, the spouses Laquian, have been identified as the original allocatees who have fully paid for the subject
property. The subject property was allocated to respondent in the extrajudicial settlement by the heirs of Constancias
estate. The document entitled "Extra-judicial Settlement of the Estate of the Deceased Constancia Socco" was not
notarized and, as a private document, can only bind the parties thereto. However, its authenticity was never put into
question, nor was its legality impugned. Moreover, executed in 1965 by the heirs of Constancia Socco, or more than
30 years ago, it is an ancient document which appears to be genuine on its face and therefore its authenticity must be
upheld.
33
Respondent has continuously paid for the realty tax due on the subject property, a fact which, though not
conclusive, served to strengthen her claim over the property.
34

From the foregoing, it is only proper that respondents claim over the subject property be upheld. This Court must,
however, note that the Order of the DAR Secretary, dated 9 November 2001, which granted the petitioners right to
purchase the property, is flawed and may be assailed in the proper proceedings. Records show that the DAR affirmed
that respondents predecessors-in-interest, Marcelo Laquian and Constancia Socco, having been identified as the
original allocatee, have fully paid for the subject property as provided under an agreement to sell. By the nature of a
contract or agreement to sell, the title over the subject property is transferred to the vendee upon the full payment of
the stipulated consideration. Upon the full payment of the purchase price, and absent any showing that the allocatee
violated the conditions of the agreement, ownership of the subject land should be conferred upon the
allocatee.
35
Since the extrajudicial partition transferring Constancia Soccos interest in the subject land to the
respondent is valid, there is clearly no need for the respondent to purchase the subject property, despite the
application for the purchase of the property erroneously filed by respondent. The only act which remains to be
performed is the issuance of a title in the name of her legal heirs, now that she is deceased.
Moreover, the Court notes that the records have not clearly established the right of respondents representative,
Myrna Socco-Arizo, over the subject property. Thus, it is not clear to this Court why the DAR issued on 8 July 2005 a
CLOA
36
over the subject property in favor of Myrna Socco-Arizo. Respondents death does not automatically transmit
her rights to the property to Myrna Socco-Beltran. Respondent only authorized Myrna Socco-Arizo, through a Special
Power of Attorney
37
dated 10 March 1999, to represent her in the present case and to administer the subject property
for her benefit. There is nothing in the Special Power of Attorney to the effect that Myrna Socco-Arizo can take over
the subject property as owner thereof upon respondents death. That Miguel V. Socco, respondents only nephew, the
son of the late Miguel R. Socco, and Myrna Socco-Arizos brother, executed a waiver of his right to inherit from
respondent, does not automatically mean that the subject property will go to Myrna Socco-Arizo, absent any proof
that there is no other qualified heir to respondents estate. Thus, this Decision does not in any way confirm the
issuance of the CLOA in favor of Myrna Socco-Arizo, which may be assailed in appropriate proceedings.
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. The assailed Decision of the Court of Appeals in CA-
G.R. SP No. 87066, promulgated on 31 January 2006, is AFFIRMED withMODIFICATION. This Court withholds the
confirmation of the validity of title over the subject property in the name of Myrna Socco-Arizo pending determination
of respondents legal heirs in appropriate proceedings. No costs. SO ORDERED.
G.R. No. 159578 July 28, 2008
ROGELIA DACLAG et.al v ELINO MACAHILIG et.al AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to annul and set aside the
Decision
1
dated October 17, 2001 and the Resolution
2
dated August 7, 2003 of the Court of Appeals (CA) in CA G.R.
CV No. 48498.
The antecedent facts:
During their lifetime, the spouses Candido and Gregoria Macahilig were the owners of seven parcels of land, all located
in Numancia, Aklan. They had seven children, namely: Dionesio, Emeliano, Mario, Ignacio, Eusebio, Tarcela and
Maxima.
On March 18, 1982, Maxima, a daughter of Candido and Gregoria entered into a Deed of Extra-judicial Partition
3
with
the heirs of her deceased brothers, Mario and Eusebio Macahilig, over the seven parcels of land. The same deed
stated that Dionesio was already deceased but was survived by his daughter, Susana Briones; Emeliano was out of
the country; Ignacio and Tarcela were also both deceased but were survived by three children each.
One of the properties partitioned in the Deed was a parcel of irrigated riceland located at Poblacion, Numancia, Aklan,
with an area of 1,896 square meters declared in the name of Maxima under Tax Declaration No. 644 which was
denominated as "Parcel One." This Parcel One was divided between Vicenta Macahilig Galvez for the heirs of Mario
Macahilig, who was given the one half southern portion of the land; and Adela Macahilig for the heirs of Eusebio
Macahilig, who got the one half northern portion. The Deed was notarized by Municipal Judge Francisco M. Ureta in his
capacity as ex-officio notary public. The heirs of Eusebio Macahilig are the herein respondents.
On March 19, 1982, Maxima executed a Statement of Conformity
4
in which she confirmed the execution of the Deed
of Extra-judicial Partition and conformed to the manner of partition and adjudication made therein. She also attested
that five parcels of land in the deed were declared in her name for taxation purposes, although said lands were
actually the property of her deceased parents Candido and Gregoria Macahilig; that she waived, renounced and
relinquished all her rights to the land adjudicated to all her co-heirs in the deed; and that she had already sold one
parcel before the deed was executed, which was considered as her advance share. Pedro Divison, Maxima's husband,
also affixed his signature to the Statement of Conformity.
On May 23, 1984, Maxima sold Parcel One to spouses Adelino and Rogelia Daclag (petitioners) as evidenced by a
Deed of Sale
5
.
On July 17, 1984, OCT No. P-13873
6
was issued in the name of petitioner Rogelia M. Daclag by virtue of her free
patent application.
On December 16, 1991, Elino Macahilig, Adela Macahilig, Conrado Macahilig, Lorenza Haber and Benita del Rosario
(respondents) filed with the Regional Trial Court (RTC) of Kalibo, Aklan a complaint for recovery of possession and
ownership, cancellation of documents and damages against Maxima and petitioners, docketed as Civil Case No. 4334.
Respondents alleged that they were the lawful owners and previous possessors of the one half northern portion of
Parcel One by virtue of a Deed of Extra-judicial Partition; that since they were all residents of Caloocan City, their land
was possessed by their first cousin, Penicula Divison Quijano, Maxima's daughter, as tenant thereon, as she was also
in possession of the one half southern portion as tenant of the heirs of Mario Macahilig; that sometime in 1983, upon
request of Maxima and out of pity for her as she had no share in the produce of the land, Penicula allowed Maxima to
farm the land; that without their knowledge, Maxima illegally sold on May 23, 1984, the entire riceland to petitioners,
who are now in possession of the land, depriving respondents of its annual produce valued at P4,800.00.
In their Answer with Cross-Claim, petitioners contended that: petitioner Rogelia had been the registered owner of the
entire riceland since 1984 as evidenced by OCT No. P-13873; her title had become incontrovertible after one year
from its issuance; they purchased the subject land in good faith and for value from co-defendant Maxima who was in
actual physical possession of the property and who delivered and conveyed the same to them; they were now in
possession and usufruct of the land since then up to the present; respondents were barred by laches for the
unreasonable delay in filing the case. They also filed a cross-claim against Maxima for whatever charges, penalties
and damages that respondents may demand from them; and they prayed that Maxima be ordered to pay them
damages for the fraud and misrepresentation committed against them.
Respondents subsequently filed an Amended Complaint, upon learning that petitioners were issued OCT No. 13873 by
virtue of their free patent application, and asked for the reconveyence of the one half northern portion of the land
covered by such title.
The land in question was delimited in the Commissioner's Report and sketch submitted by Bernardo G. Sualog as the
one half northern portion, which had an area of 1178 sq. meters. The Report and the sketch were approved by the
RTC on June 22, 1991.
For failure of Maxima to file an answer, the RTC declared her in default both in the complaint and cross-claim against
her.
After trial, the RTC rendered its Decision
7
dated November 18, 1994, the dispositive portion of which reads:
WHEREFORE, finding preponderance of evidence in favor of plaintiffs [respondents], judgment is hereby rendered as
follows:
1. The deed of sale dated May 23, 1984, executed by Maxima Divison in favor of Adelino Daclag and Rogelia
Daclag before Notary Public Edgar R. Peralta and docketed in his notarial register as Doc. No. 137, Page No.
30, Book No. VII, Series of 1984 is declared NULL and VOID;
2. The plaintiffs are hereby declared the true and lawful owners and entitled to the possession of the northern
one-half (1/2) portion of the land described under paragraph 2 of the amended complaint and designated as
Exhibit "F-1" in the commissioners sketch with an area of 1,178 square meters;
3. The defendants-spouses Adelino and Rogelia Daclag [petitioners] are hereby ordered and directed to vacate
the land described in the preceding paragraph and restore and deliver the possession thereof to the plaintiffs;
4. The defendants are ordered to execute a deed of reconveyance in favor of the plaintiffs over the land
described in paragraph 2 hereof;
5. The defendants are ordered, jointly and severally, to pay the plaintiffs ten (10) cavans of palay per annum
beginning the second cropping of 1984 until the time the possession of the land in question is restored to the
plaintiffs; and
6. The defendants are ordered, jointly and severally, to pay the plaintiffs reasonable attorneys fees in the
amount ofP3,000.00 plus cost of the suit.
8

The RTC found that respondents were able to establish that Parcel One was divided between the heirs of Mario and
the heirs of Eusebio, with the former getting the one half southern portion and the latter the one half northern portion
embodied in a Deed of Extra-judicial partition, which bore Maxima's thumbmarks; that nobody questioned the Deed's
validity, and no evidence was presented to prove that the document was not validly and regularly executed; that
Maxima also executed a duly notarized Statement of Conformity dated March 19, 1982 with the conformity of her
husband, Pedro. The RTC concluded that when Maxima executed the Deed of Sale in favor of petitioners on May 23,
1984, Maxima had no right to sell that land as it did not belong to her; that she conveyed nothing to petitioners; and
that the deed of sale should be declared null and void.
In disposing the issue of whether petitioners could be considered innocent purchasers for value, the RTC ruled that
petitioners could not even be considered purchasers, as they never acquired ownership of the land since the sale to
them by Maxima was void; and that petitioners' act of reflecting only the price of P5,000.00 in the Deed of Sale to
avoid paying taxes to the BIR should be condemned for defrauding the government and thus should not be given
protection from the courts.
The RTC further ruled that since petitioners were able to obtain a free patent on the whole land in petitioner Rogelia's
name, reconveyance to respondents of the 1,178 sq. meter northern portion of the land was just and proper; that the
respondents were entitled to a share in the harvest at two croppings per year after deducting the share of the tenant;
that since Maxima died in October 1993, whatever charges and claims petitioners may recover from her expired with
her.
Aggrieved, petitioners filed their appeal with the CA.
On October 17, 2001, the CA dismissed the appeal and affirmed the RTC decision.
The CA ruled that since Maxima had no right to sell the land as she was not the rightful owner thereof, nothing was
conveyed to petitioners; that a person who acquired property from one who was not the owner and had no right to
dispose of the same, obtained the property without right of title, and the real owner may recover the same from him.
The CA found that since respondents were unaware of the sale, it was not a surprise that they did not question
petitioners' application for a free patent on the subject land; that the possession by Maxima of the subject land did
not vest ownership in her, as her possession was not in the concept of an owner; and that petitioners were not
purchasers in good faith. It also found that the right to enjoy included the right to receive the produce of the thing;
that respondents as true owners of the subject land were deprived of their property when Maxima illegally sold it to
petitioners; and thus, equity demanded that respondents be given what rightfully belonged to them under the
principle that a person cannot enrich himself at the expense of another.
Hence, herein petition on the following grounds:
A. THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR WHEN IT DECLARED THAT HEREIN
PETITIONERS HAD NO VALID TITLE OVER THE LAND IN QUESTION.
B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONERS ARE NOT
PURCHASERS OR BUYERS IN GOOD FAITH.
C. THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT AFFIRMED THE DECISION OF THE LOWER
COURT IN ORDERING THE DEFENDANTS-PETITIONERS JOINTLY AND SEVERALLY TO PAY PER ANNUM
BEGINNING THE SECOND CROPPING OF 1984 UNTIL THE TIME THE POSSESSION OF THE LAND IN QUESTION
IS RESTORED TO THE PLAINTIFFS [respondents].
9

The issues for resolution are (1) whether Maxima was the previous owner of Parcel One, which included respondents'
one half northern portion, now covered by OCT No. P-13873; 2) whether petitioners could validly invoke the defense
of purchasers in good faith; and (3) whether reconveyance is the proper remedy.
Preliminarily, we would like to state the inescapable fact that the Extra-judicial partition of the estate of Candido
Macahilig involving the seven parcels of land was made only between Maxima and the heirs of her two deceased
brothers Mario and Eusebio.
Section 1 of Rule 74 of the Rules of Court provides:
Section 1. Extrajudicial settlement by agreement between heirs. - If the decedent left no will and no debts and the
heirs are all of age, or the minors are represented by their judicial or legal representatives duly authorized for the
purpose, the parties may, without securing letters of administration, divide the estate among themselves as they see
fit by means of a public instrument filed in the office of the register of deeds, and should they disagree, they may do
so in an ordinary action for partition. x x x
The fact of the extrajudicial settlement or administration shall be published in a newspaper of general circulation in
the manner provided in the next succeeding section; but no extrajudicial settlement shall be binding upon any person
who has not participated therein or had no notice thereof.
Records do not show that there has been any case filed by the other heirs who had not participated in the Deed of
Extra-judicial Partition and were questioning the validity of such partition. Thus, the resolution of the present case
concerns only the issues between the parties before us and will not in any way affect the rights of the other heirs who
have not participated in the partition.
The first two issues raised for resolution are factual. It is a settled rule that in the exercise of the Supreme Court's
power of review, the Court is not a trier of facts and does not normally undertake the re-examination of the evidence
presented by the contending parties during the trial of the case, considering that the findings of facts of the CA are
conclusive and binding on the Court.
10
While jurisprudence has recognized several exceptions in which factual issues
may be resolved by this Court, namely: (1) when the findings are grounded entirely on speculation, surmises or
conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are
conflicting; (6) when in making its findings the CA went beyond the issues of the case, or its findings are contrary to
the admissions of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court;
(8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts
set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10)
when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on
record; and (11) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if
properly considered, could justify a different conclusion,
11
none of these exceptions has been shown to apply to the
present case and, hence, this Court may not review the findings of fact made by the lower courts.
We find no cogent reason to depart from the findings of both the trial court and the CA that Maxima was not the
owner of the land she sold to petitioners, and that the one half northern portion of such land was owned by the
respondents; that Maxima had no right to dispose of the land and, thus, she had no right to convey the same.
To repeat, records show that Maxima entered into a Deed of Extra-judicial Partition with the heirs of her two deceased
brothers, namely: Mario and Eusebio, over seven parcels of land owned by Candido and Gregoria Macahilig. One of
these lands was the irrigated riceland with an area of 1,896 sq. meters which, per the Deed of Partition, was divided
between the heirs of Mario and Eusebio; and the former got the one half southern portion, while the latter got the one
half northern portion. Maxima affixed her thumbmark to the Deed. This parcel of riceland was sold by Maxima to
petitioners. However, Maxima, at the time of the execution of the Deed of Sale over this parcel of land in favor of
petitioner on May 23, 1984, had no right to sell the same as she was not the owner thereof.
In fact, Maxima, with the conformity of her husband Pedro, had even executed a Statement of Conformity, in which
she affirmed the execution of the Deed of Extra-judicial Partition and conformed to the manner of the partition of
shares therein. She attested to the fact that the five parcels of land subject of the Deed of Extra-judicial Partition,
which were declared in her name under different tax declarations, were actually properties of her deceased parents;
and that she waived all her rights over the lands or portions thereof adjudicated to all her co-heirs.
Neither Maxima nor any of her heirs ever questioned the validity of these two above-mentioned documents to which
she affixed her thumbmarks. Notably, when the instant complaint was filed by respondents against Maxima and
petitioners in 1991, in which respondents claimed as basis of their ownership of the one half northern portion of the
riceland was the Deed of Extra-judicial Partition, Maxima, while still living at that time, as she died in 1993, never
denied the same. As already stated, she failed to file an answer and was declared in default.
In a contract of sale, it is essential that the seller is the owner of the property he is selling.
12
Under Article 1458 of the
Civil Code, the principal obligation of a seller is to transfer the ownership of the property sold.
13
Also, Article 1459 of
the Civil Code provides that the thing must be licit and the vendor must have a right to transfer the ownership thereof
at the time it is delivered. Maxima's execution of the Deed of Sale selling Parcel One, part of which is respondents'
one half northern portion, was not valid and did not transfer ownership of the land to petitioners, as Maxima had no
title or interest to transfer. It is an established principle that no one can give what one does not have -- nemo dat
quod non habet. Accordingly, one can sell only what one owns or is authorized to sell, and the buyer can acquire no
more than what the seller can transfer legally.
14

Petitioners insist that Maxima owned the subject land as shown by her actual and continuous possession of the same;
that it was declared in her name for taxation purposes; that throughout the time that Maxima and her children were in
possession of the property, she never gave any share of the produce to respondents; and that Maxima even
mortgaged the land to a bank.
We are not persuaded.
Maxima's possession of the subject land was by reason of her request to her daughter Penicula, who was installed by
respondents as tenant after the execution of the Deed of Extra-judicial Partition, as Maxima wanted to farm the land
so that she could have a share in the produce, to which Penicula acceded out of pity.
15
It was also established that
after the execution of the Deed of Extra-judicial Partition, Penicula as tenant was able to farm the subject land for one
cropping year before she allowed her mother Maxima to farm the land thereafter; and, at that time, Penicula gave the
corresponding share of the produce of that one crop year to Adela,
16
one of herein respondents, thus establishing
respondents' ownership of the subject land. Evidently, Maxima's possession of the land was not in the concept of an
owner.
While the land was declared in Maxima's name for taxation purposes, it did not establish Maxima's ownership of the
same. We have held that a tax declaration, by itself, is not considered conclusive evidence of ownership.
17
It is merely
an indicium of a claim of ownership.
18
Because it does not by itself give title, it is of little value in proving one's
ownership.
19
Petitioners' reliance on Maxima's tax declaration in assuming that she owned Parcel One is an erroneous
assumption that should not prejudice the rights of the real owners.
The fact that a mortgage was constituted on the land while the same was in Maxima's name would not make Maxima
the owner thereof. Maxima's non-ownership of Parcel One was clearly established by the Deed of Extra-judicial
Partition and the Statement of Conformity, wherein she categorically declared that the land was actually owned by her
deceased parents, to which she separately affixed her thumbmarks. Both documents showed declarations against her
interest in the land. A declaration against interest is the best evidence which affords the greatest certainty of the facts
in dispute.
20

While petitioners were able to secure a certificate of title covering Parcel One in petitioner Rogelia's name, their
possession of a certificate of title alone does not necessarily make them the true owners of the property described
therein. Our land registration laws do not give the holder any better title than what he actually has.
21

In Naval v. Court of Appeals,
22
we held:
Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of
acquiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property
described therein. It cannot be used to protect a usurper from the true owner; nor can it be used as a shield for the
commission of fraud; neither does it permit one to enrich himself at the expense of others. Its issuance in favor of a
particular person does not foreclose the possibility that the real property may be co-owned with persons not named in
the certificate, or that it may be held in trust for another person by the registered owner.
x x x notwithstanding the indefeasibility of the Torrens title, the registered owner may still be compelled to reconvey
the registered property to its true owners. The rationale for the rule is that reconveyance does not set aside or re-
subject to review the findings of fact of the Bureau of Lands. In an action for reconveyance, the decree of registration
is respected as incontrovertible. What is sought instead is the transfer of the property or its title which has been
wrongfully or erroneously registered in another person's name, to its rightful or legal owner, or to the one with a
better right.
23

We find that reconveyance of the subject land to respondents is proper. The essence of an action for reconveyance is
that the free patent and certificate of title are respected as incontrovertible. What is sought is the transfer of the
property, which has been wrongfully or erroneously registered in another person's name, to its rightful owner or to
one with a better right.
24

Respondents have specifically prayed that petitioners be ordered to restore and reconvey to them the subject land. In
an action for reconveyance, the issue involved is one of ownership; and for this purpose, evidence of title may be
introduced. Respondents had sufficiently established that Parcel One, covered by OCT No. P-13873, of which
respondents' northern one half portion formed a part, was not owned by Maxima at the time she sold the land to
petitioners. We have earlier discussed the evidence presented by respondents establishing that Maxima had no claim
of ownership over the land sold by her to petitioners.
An action for reconveyance prescribes in 10 years, the point of reference being the date of registration of the deed or
the date of issuance of the certificate of title over the property.
25
Records show that while the land was registered in
the name of petitioner Rogelia in 1984, the instant complaint for reconveyance was filed by the respondents in 1991,
and was thus still within the ten-year prescriptive period.
Petitioners claim that they were innocent buyers in good faith and for value; that there was no evidence showing that
they were in bad faith when they purchased the subject land; that Article 526 of the Civil Code provides that he is
deemed a possessor in good faith who is not aware that there exists in his title or mode of acquisition any flaw which
invalidates it; and that good faith is always presumed, and upon him who alleges bad faith on the part of a possessor
rests the burden of proof.
Notably, petitioners bought the property when it was still an unregistered land. The defense of having purchased the
property in good faith may be availed of only where registered land is involved and the buyer had relied in good faith
on the clear title of the registered owner.
26

In Ong v. Olasiman
27
in which a claim of good faith was raised by petitioner who bought an unregistered land, we
held:
Finally, petitioners' claim of good faith does not lie too as it is irrelevant:
[T]he issue of good faith or bad faith of the buyer is relevant only where the subject of the sale is registered land and
the purchaser is buying the same from the registered owner whose title to the land is clean x x x in such case the
purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in good faith for value.
Since the properties in question are unregistered lands, petitioners as subsequent buyers thereof did so at their peril.
Their claim of having bought the land in good faith, i.e., without notice that some other person has a right to or
interest in the property, would not protect them if it turns out, as it actually did in this case, that their seller did not
own the property at the time of the sale.
28

Petitioners claim that the subject land is a public land, and that petitioners were issued title over this land in 1984;
that respondents did not present any evidence to prove that the subject land was already a private land prior to their
acquisition and the issuance of a free patent title to them; that the presumption that the subject land was formerly
part of the mass of alienable lands of public domain under the Regalian doctrine, and was regularly granted to
petitioners by way of free patent and certificate of title, remains incontrovertible in favor of petitioner.1avvphi1
This issue was only raised for the first time in petitioners' Memorandum filed with us. Well-settled is the rule that
issues not raised and/or ventilated in the trial court cannot be raised for the first time on appeal and cannot be
considered for review to consider questions belatedly raised tramples on the basic principles of fair play, justice and
due process.
29

Finally, we find no error committed by the CA in affirming the RTC's order for petitioners to pay respondents their
corresponding share in the produce of the subject land from the time they were deprived thereof until the possession
is restored to them. As aptly stated by the CA, thus:
It is said that one of the attributes of ownership is the right to enjoy and dispose of the the thing owned, The right to
enjoy included the right to receive the produce of the thing. The plaintiffs-appellees, as true owners of the subject
land were deprived of their property when Maxima Divison illegally sold it to spouses Daclags. As such, equtiy
demands that the plaintiff-appeellees be given what rightfully belonged to them under the time honored principle that
a person cannot enrich himself at the expense of another.
WHEREFORE, the petition for review is DENIED. The Decision dated October 17, 2001 and Resolution dated August
7, 2003 of the Court of Appeals are AFFIRMED.
Costs against petitioners. SO ORDERED.
G.R. No. L-46892 September 30, 1981
HEIRS OF AMPARO DEL ROSARIO v AURORA O. SANTOS GUERRERO, J.:
The Court of Appeals,
1
in accordance with Section 31 of the Judiciary Act of 1948, as amended, certified to Us the
appeal docketed as CA-G.R. No. 56674-R entitled "Amparo del Rosario, plaintiff-appellee, vs. Spouses Andres Santos
and Aurora Santos, defendants-appellants," as only questions of law are involved.
On January 14, 1974, Amparo del Rosario filed a complaint against the spouses Andres F. Santos and Aurora O.
Santos, for specific performance and damages allegedly for failure of the latter to execute the Deed of Confirmation of
Sale of an undivided 20,000 square meters of land, part of Lot 1, Psu-206650, located at Barrio Sampaloc, Tanay,
Rizal, in malicious breach of a Deed of Sale (Exhibit A or 1) dated September 28, 1964.
Amparo del Rosario died on Sept. 21, 1980 so that she is now substituted by the heirs named in her will still
undergoing probate proceedings. Andres F. Santos also died, on Sept. 5, 1980, and he is substituted by the following
heirs: Jovita Santos Gonzales, Arnulfo O. Santos, Archimedes O. Santos, Germelina Santos Ravida, and Andres O.
Santos, Jr.
The Deed of Sale (Exh. A or 1) is herein reproduced below:
DEED OF SALE
KNOW ALL MEN BY THESE PRESENTS:
I, ANDRES F. SANTOS, of legal age, married to Aurora 0. Santos, Filipino and resident cf San Dionisio,
Paranaque, Rizal, Philippines, for and in consideration of the sum of TWO THOUSAND (P 2,000.00)
PESOS, Philippine Currency, the receipt whereof is hereby acknowledged, do hereby SELLS, CONVEYS,
and TRANSFERS (sic) unto Amparo del Rosario, of legal age, married to Fidel del Rosario but with legal
separation, Filipino and resident of San Dionisio, Paranaque, Rizal, Philippines that certain 20,000
square meters to be segregated from Lot 1 of plan Psu-206650 along the southeastern portion of said
lot, which property is more particularly described as follows:
A parcel of land (Lot 1 as shown on plan Psu-206650, situated in the Barrio of
Sampaloc, Municipality of Tanay, Province of Rizal. Bounded on the SW., along lines 1-
2-3, by Lot 80 of Tanay Public Land Subdivision, Pls-39; on the NW., along lines 3-4-5,
by Lot 2; and along lines 5-6-7-8-9-10-11, by Lot 6; on the NE., along lines 11-12-13,
by Lot 3: and along lines 13-1415, by Lot 4, all of plan Psu-206650; and on the SE.,
along line 15-1, by Lot 5 of plan Psu- 206650 ... ; containing an area of ONE
HUNDRED EIGHTY ONE THOUSAND FOUR HUNDRED TWENTY (181,420) SQUARE
METERS. All points referred to are indicated on the plan and are marked on the ground
as follows: ...
of which above-described property, I own one-half (1/2) interest thereof being my attorney's fee, and
the said 20,000 square meters will be transferred unto the VENDEE as soon as the title thereof has
been released by the proper authority or authorities concerned:
That the parties hereto hereby agree that the VENDOR shall execute a Deed of Confirmation of Deed
of Sale in favor of the herein VENDEE as soon as the title has been released and the subdivision plan
of said Lot 1 has been approved by the Land Registration Commissioner.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of September, 1964, in the City of
Manila, Philippines.
s/ ANDRES F. SANTOS t/ ANDRES F. SANTOS
With My Marital Consent:
s/ Aurora O. Santos (Wife) t/ Aurora O. Santos (Wife)
SIGNED IN THE PRESENCE OF: s/ Felicitas C. Moro s/ Corona C. Venal
REPUBLIC OF THE PHILIPPINES) ) SS.
BEFORE ME, a Notary Public for and in Rizal, Philippines, personally appeared Andres F. Santos, with
Res. Cert. No. 4500027 issued at Paranaque, Rizal, on Jan. 9, 1964, B-0935184 issued at Paranaque,
Rizal on April 15, 1964, and Aurora 0. Santos, with Res. Cert. No. A-4500028 issued at Paranaque,
Rizal, on Jan. 9, 1964, giving her marital consent to this instrument, both of whom are known to me
and to me known to be the same persons who executed the foregoing instruments and they
acknowledged to me that the same is their free act and voluntary deed.
IN WITNESS WHEREOF, I have hereunto signed this instrument and affixed my notarial seal this lst
day of October, 1964, in Pasig, Rizal, Philippines.
Doc. No. 1792; Page No. 85; Book No. 19; Series of 1964.
s/ FLORENCIO LANDRITO t/ FLORENCIO LANDRITO
NOTARY PUBLIC Until December 31, 1965
2

Plaintiff claimed fulfillment of the conditions for the execution of the Deed of Confirmation of Sale, namely: the release
of the title of the lot and the approval of the subdivision plan of said lot by the Land Registration Commission. She
even enumerated the titles with their corresponding land areas derived by defendants from the aforesaid lot, to wit:
(a) TCT 203580 30,205 sq. meters
(b) TCT 203581 19, 790 sq. meters
(c) TCT 167568 40,775 sq. meters
In a motion to dismiss, defendants pleaded, inter alia, the defenses of lack of jurisdiction of the court a quo over the
subject of the action and lack of cause of action allegedly because there was no allegation as to the date of the
approval of the subdivision plan, no specific statement that the titles therein mentioned were curved out of Lot I and
no clear showing when the demands were made on the defendants. They likewise set up the defense of prescription
allegedly because the deed of sale was dated September 28, 1964 and supposedly ratified October 1, 1964 but the
complaint was filed only on January 14, 1974, a lapse of more than nine years when it should have been filed within
five years from 1964 in accordance with Article 1149, New Civil Code.
Defendant also claimed that the demand set forth in the complaint has been waived, abandoned or otherwise
extinguished. It is alleged that the deed of sale was "only an accommodation graciously extended, out of close
friendship between the defendants and the plaintiff and her casual business partner in the buy and sell of real estate,
one Erlinda Cortez;"
3
that in order to allay the fears of plaintiff over the non-collection of the debt of Erlinda Cortez to
plaintiff in various sums exceeding P 2,000.00, defendants, who were in turn indebted to Erlinda Cortez in the amount
of P 2,000.00, voluntarily offered to transfer to plaintiff their inexistent but expectant right over the lot in question,
the same to be considered as part payment of Erlinda Cortez' indebtedness; that as Erlinda Cortez later on paid her
creditor what was then due, the deed of sale had in effect been extinguished. Defendants thereby characterized the
said deed of sale as a mere tentative agreement which was never intended nor meant to be ratified by and
acknowledged before a notary public. In fact, they claimed that they never appeared before Notary Public Florencio
Landrito.
Finally, defendants alleged that the claim on which the action or suit is founded is unenforceable under the statute of
frauds and that the cause or object of the contract did not exist at the time of the transaction.
After an opposition and a reply were filed by the respective parties, the Court a quo resolved to deny the motion to
dismiss of defendants. Defendants filed their answer with counterclaim interposing more or less the same defenses
but expounding on them further. In addition, they claimed that the titles allegedly derived by them from Lot 1 of
Annex A or I were cancelled and/or different from said Lot I and that the deed of sale was simulated and fictitious,
plaintiff having paid no amount to defendants; and that the deed was entrusted to plaintiff's care and custody on the
condition that the latter; (a) would secure the written consent of Erlinda Cortez to Annex A or I as part payment of
what she owed to plaintiff; (b) would render to defendants true accounting of collections made from Erlinda showing
in particular the consideration of 2,000.00 of Annex A or I duly credited to Erlinda's account.
4

Plaintiff filed a reply and answer to counterclaim and thereafter a motion for summary judgment and/or judgment on
the pleadings on the ground that the defenses of defendants fail to tender an issue or the same do not present issues
that are serious enough to deserve a trial on the merits,
5
submitting on a later date the affidavit of merits.
Defendants filed their corresponding opposition to the motion for summary judgment and/or judgment on the
pleadings. Not content with the pleadings already submitted to the Court, plaintiff filed a reply while defendants filed a
supplemental opposition.
With all these pleadings filed by the parties in support of their respective positions, the Court a quo still held in
abeyance plaintiff's motion for summary judgment or judgment on the pleadings pending the pre-trial of the case. At
the pre-trial, defendants offered by way of compromise to pay plaintiff the sum of P2,000.00, the consideration stated
in the deed of sale. But the latter rejected the bid and insisted on the delivery of the land to her. Thus, the pre-trial
proceeded with the presentation by plaintiff of Exhibits A to Q which defendants practically admitted, adopted as their
own and marked as Exhibits 1 to 17. In addition, the latter offered Exhibit 18, which was their reply to plaintiff's letter
of demand dated December 21, 1973.
From the various pleadings filed in this case by plaintiff, together with the annexes and affidavits as well as the
exhibits offered in evidence at the pre-trial, the Court a quo found the following facts as having been duly established
since defendant failed to meet them with countervailing evidence:
In February, 1964, Teofilo Custodia owner of a parcel of unregistered land with an area of
approximately 220,000 square meters in Barrio Sampaloc, Tanay, Rizal, hired Attorney Andres F.
Santos "to cause the survey of the above-mentioned property, to file registration proceedings in court,
to appear and represent him in all government office relative thereto, to advance all expenses for
surveys, taxes to the government, court fees, registration fees ... up to the issuance of title in the
name" of Custodia. They agreed that after the registration of the title in Custodio's name, and "after
deducting all expenses from the total area of the property," Custodio would assign and deliver to
Santos "one-half (1/2) share of the whole property as appearing in the certificate of title so issued."
Exh. B or 2).
On March 22, 1964, Custodio's land was surveyed under plan Psu-226650 (Exh. D or 4). It was
divided into six (6) lots, one of which was a road lot. The total area of the property as surveyed was
211,083 square meters. The respective areas of the lots were as follows:
Lot 1 181,420
square
meters
Lot 2 7,238 square
meters
Lot 3 7,305 square
meters
Lot 4 5,655 square
meters
Lot 5 5,235 square
meters
Road Lot 6 4,230 square
meters
TOTAL 211,083
square
meters
xxx xxx xxx
On December 27, 1965, a decree of registration No. N-108022 was issued in Land Registration Case
No. N-5023, of the Court of First Instance of Rizal, LRC Record No. N-27513, in favor of Teofilo
Custodia married to Miguela Perrando resident of Tanay, Rizal. On March 23, 1966, Original Certificate
of Title No. 5134 (Exh. Q or 17) was issued to Custodio for Lots 1, 2, 3, 4 and 5, Psu- 206650, with a
total area of 206,853 square meters. The areas of the five (5) lots were as follows:
Lot 1 181,420
square
meters
Lot 2 7,238 square
meters
Lot 3 7,305 square
meters
Lot 4 5,655 square
meters
Lot 5 5,235 square
meters
In April to May, 1966, a consolidation-subdivision survey (LRC) Pcs-5273 (Exh. E or 5) was made on
the above lots converting them into six (6) new lots as follows:
xxx xxx xxx
Lot 1 20,000
square
meters
Lot 2 40,775
square
meters
Lot 3 50,000
square
meters
Lot 4 40,775
square
meters
Lot 5 50,000
square
meters
Road Lot 6 5,303 square
meters
TOTAL 206,853
square
meters
On June 22, 1966, the consolidation-subdivision plan (LRC) Pcs-5273 (Exh. E or 5) was approved by
the Land Registration Commission and by the Court of First Instance of Rizal in an order dated July 2,
1966 (Entry No. 61037 T-167561, Exh. Q). Upon its registration, Custodio's O.C.T. No. 5134 (Exh. Q)
was cancelled and TCT Nos. 167561, 167562, 167563, 167564 (Exh. G), 167565 (Exh. H and 167566
were issued for the six lots in the name of Custodio (Entry No. 61035, Exh. Q).
On June 23, 1966, Custodio conveyed to Santos Lots 4 and 5, Pcs-5273 with a total area of 90,775
square meters (Exh. B or 2) described in Custodio's TCT No. 167564 (Exh. G or 7) and TCT No.
167565 (Exh. H or 8), plus a one-half interest in the Road Lot No. 6, as payment of Santos' attorney's
fees and advances for the registration of Custodio's land.
Upon registration of the deed of conveyance on July 5, 1966, Custodio's TCT Nos. 167564 and 167565
(Exhs. G and H) were cancelled. TCT No. 167568 (Exh. I or 9) for Lot 4 and TCT No. 167585 (Exh. J or
10) for Lot 5 were issued to Santos.
On September 2, 1967, Santos' Lot 5, with an area of 50,000 square meters was subdivided into two
(2) lots, designated as Lots 5-A and 5-B in the plan Psd-78008 (Exh. F or 6), with the following areas:
Lot 5-
A
30,205
square
meters
Lot 5-
B
19,795square
meters
TOTAL 50,000
square
meters
Upon registration of Psd-78008 on October 3, 1967, Santos' TCT No. 167585 (Exh. J) was cancelled
and TCT No. 203578 for Lot 5- A and TCT No. 203579 for Lot 5-B were supposed to have been issued
to Santos (See Entry 6311 in Exh. J or 10). Actually, TCT No. 203580 was issued for Lot 5-A (Exh. K
or 1 1), and TCT No. 203581 for Lot 5-B (Exh. L or 12), both in the name of Andres F. Santos.
Out of Custodio's original Lot 1, Psu-206650, with an area of 181,420 square meters, Santos was
given a total of 90,775 square meters, registered in his name as of October 3, 1967 under three (3)
titles, namely:

TCT No.
167585 for

Lot 4 Pcs-
5273
40,775 sq.
m.
(Exh. J or 10)
TCT No.
203580 for

Lot 5-A Psd-
78008
30,205 sq.
m.
(Exh. K or 11)
TCT No.
203581 for

Lot 5-B Psd-
78008
19,795 sq.
m.
(Exh. L or 12)
90,775 sq.m.
plus one-half of the road lot, Lot 6, PCS-5273, with an area of 5,303 square meters, which is
registered jointly in the name of Santos and Custodio (Exh. B & E)
6

The court a quo thereupon concluded that there are no serious factual issues involved so the motion for summary
judgment may be properly granted. Thereafter, it proceeded to dispose of the legal issues raised by defendants and
rendered judgment in favor of plaintiff. The dispositive portion of the decision states as follows:
WHEREFORE, defendants Andres F. Santos and Aurora Santos are ordered to execute and convey to
plaintiff Amparo del Rosario, within ten (10) days from the finality of this decision, 20,000 square
meters of land to be taken from the southeastern portion of either Lot 4, Pcs-5273, which has an area
of 40,775 square meters, described in TCT No. 167568 (Exh. I or 9) of from their LOL 5-A. with an
area of 30,205 square meters, described in TCI No. 203; O (Exh. K or 11). The expenses of
segregating the 20,000 square meters portion shall be borne fqually by the parties. rhe expenses for
the execution and registration of the sale shall be borne by the defendants (Art. 1487, Civil Code).
Since the defendants compelled the plaintiff to litigate and they failed to heed plainliff's just demand,
they are further ordered to pay the plaintiff the sum of P2,000.00 as attorney's fees and the costs of
this action.
SO ORDERED.
7

Aggrieved by the aforesaid decision, the defendant's filed all appeal to the Court of Appeals submitting for resolution
seven assignments of errors, to wit:
I. The lower court erred in depriving the appellants of their right to the procedural due process.
II. The lower court erred in holding that the appellee's claim has not been extinguished.
III. The lower court erred in sustaining appellee's contention that there are no other unwritten
conditions between the appellants and the appellee except those express in Exh. "1" or "A", and that
Erlinda Cortez' conformity is not required to validate the appellants' obligation.
IV. The lower court erred in holding that Exh. "l" or "A" is not infirmed and expressed the true intent
of the parties.
V. The lower court erred in declaring that the appellants are co-owners of the lone registered owner
Teofilo Custodia.
VI. The lower court erred in ordering the appellants to execute and convey to the appellee 20,000 sq.
m. of land to be taken from the southeastern portion of either their lot 4, Pcs-5273, which has an area
of 40,775 sq.m., described in T.C.T. No. 167568 (Exh. 9 or 1), or from their lot No. 5-A, with an area
of 30,205 sq.m. described in T.C.T. No. 203580 (Exh. 11 or K), the expenses of segregation to be
borne equally by the appellants and the appellee and the expenses of execution and registration to be
borne by the appellants.
VII. The lower court erred in ordering the appellants to pay to the appellee the sum of P2,000. 00 as
attorney's fee and costs.
8

The first four revolve on the issue of the propriety of the rendition of summary judgment by the court a quo, which
concededly is a question of law. The last three assail the summary judgment itself. Accordingly, the Court of Appeals,
with whom the appeal was filed, certified the records of the case to this Court for final determination.
For appellants herein, the rendition of summary judgment has deprived them of their right to procedural due process.
They claim that a trial on the merits is indispensable in this case inasmuch as they have denied under oath all the
material allegations in appellee's complaint which is based on a written instrument entitled "Deed of Sale", thereby
putting in issue the due execution of said deed.
Appellants in their opposition to the motion for summary judgment and/or judgment on the pleadings, however, do
not deny the genuineness of their signatures on the deed of sale.
(Par. 3 of said Motion, p. 101, Record on Appeal). They do not contest the words and figures in said deed except in
the acknowledgment portion thereof where certain words were allegedly cancelled and changed without their
knowledge and consent and where, apparently, they appeared before Notary Public Florencio Landrito when, in fact,
they claimed that they did not. In effect, there is an admission of the due execution and genuineness of the document
because by the admission of the due execution of a document is meant that the party whose signature it bears admits
that voluntarily he signed it or that it was signed by another for him and with his authority; and the admission of the
genuineness of the document is meant that the party whose signature it bears admits that at the time it was signed it
was in the words and figures exactly as set out in the pleading of the party relying upon it; and that any formal
requisites required by law, such as swearing and acknowledgment or revenue stamps which it requires, are waived by
him.
9

As correctly pointed out by the court a quo, the alleged false notarization of the deed of sale is of no consequence. For
a sale of real property or of an interest therein to be enforceable under the Statute of Frauds, it is enough that it be in
writing.
10
It need not be notarized. But the vendee may avail of the right under Article 1357 of the New Civil Code to
compel the vendor to observe the form required by law in order that the instrument may be registered in the Registry
of Deeds.
11
Hence, the due execution and genuineness of the deed of sale are not really in issue in this case.
Accordingly, assigned error I is without merit.
What appellants really intended to prove through the alleged false notarization of the deed of sale is the true import of
the matter, which according to them, is a mere tentative agreement with appellee. As such, it was not intended to be
notarized and was merely entrusted to appellee's care and custody in order that: first, the latter may secure the
approval of one Erlinda Cortez to their (appellants') offer to pay a debt owing to her in the amount of P2,000.00 to
appellee instead of paying directly to her as she was indebted to appellee in various amounts exceeding P2,000.00;
and second once the approval is secured, appellee would render an accounting of collections made from Erlinda
showing in particular the consideration of P2,000.00 of the deed of sale duly credited to Erlinda's account.
According to appellants, they intended to prove at a full dress trial the material facts: (1) that the aforesaid conditions
were not fulfilled; (2) that Erlinda Cortez paid her total indebtedness to appellee in the amount of P14,160.00, the
P2,000.00 intended to be paid by appellant included; and (3) that said Erlinda decided to forego, renounce and refrain
from collecting the P2,000.00 the appellants owed her as a countervance reciprocity of the countless favors she also
owes them.
Being conditions which alter and vary the terms of the deed of sale, such conditions cannot, however, be proved by
parol evidence in view of the provision of Section 7, Rule 130 of the Rules of Court which states as follows:
Sec. 7. Evidence of written agreements when the terms of an agreement have been reduced to
writing, it is to be considered as containing all such terms, and, therefore, there can be, between the
parties and their successors in interest, no evidence of the terms of the agreement other than the
contents of the writing, except in the following cases:
(a) Where a mistake or imperfection of the writing, or its failure to express the true intent and
agreement of the parties, or the validity of the agreement is put in issue by the pleadings;
(b) When there is an intrinsic ambiguity in the writing. The term "agreement" includes wills."
The parol evidence rule forbids any addition to or contradiction of the terms of a written instrument by testimony
purporting to show that, at or before the signing of the document, other or different terms were orally agreed upon by
the parties.
12

While it is true, as appellants argue, that Article 1306 of the New Civil Code provides that "the contracting parties may
establish such stipulations, clauses, terms and conditions as they may deem convenient, provided that they are not
contrary to law, morals, good customs, public order, or public policy" and that consequently, appellants and appellee
could freely enter into an agreement imposing as conditions thereof the following: that appellee secure the written
conformity of Erlinda Cortez and that she render an accounting of all collections from her, said conditions may not be
proved as they are not embodied in the deed of sale.
The only conditions imposed for the execution of the Deed of Confirmation of Sale by appellants in favor of appellee
are the release of the title and the approval of the subdivision plan. Thus, appellants may not now introduce other
conditions allegedly agreed upon by them because when they reduced their agreement to writing, it is presumed that
"they have made the writing the only repository and memorial of truth, and whatever is not found in the writing must
be understood to have been waived and abandoned."
13

Neither can appellants invoke any of the exceptions to the parol evidence rule, more particularly, the alleged failure of
the writing to express the true intent and agreement of the parties. Such an exception obtains where the written
contract is so ambiguous or obscure in terms that the contractual intention of the parties cannot be understood from a
mere reading of the instrument. In such a case, extrinsic evidence of the subject matter of the contract, of the
relations of the parties to each other, and of the facts and circumstances surrounding them when they entered into
the contract may be received to enable the court to make a proper interpretation of the instrumental.
14
In the case at
bar, the Deed of Sale (Exh. A or 1) is clear, without any ambiguity, mistake or imperfection, much less obscurity or
doubt in the terms thereof. We, therefore, hold and rule that assigned errors III and IV are untenable.
According to the court a quo, "(s)ince Santos, in his Opposition to the Motion for Summary Judgment failed to meet
the plaintiff's evidence with countervailing evidence, a circumstance indicating that there are no serious factual issues
involved, the motion for summary judgment may properly be granted." We affirm and sustain the action of the trial
court.
Indeed, where a motion for summary judgment and/or judgment on the pleadings has been filed, as in this case,
supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as may be
admissible in evidence, and shall show affirmatively that the affiant is competent to testify as to the matters stated
therein. Sworn or certified copies of all papers or parts thereof referred to in the affidavit shall be attached thereto or
served therewith.
15

Examining the pleadings, affidavits and exhibits in the records, We find that appellants have not submitted any
categorical proof that Erlinda Cortez had paid the P2,000.00 to appellee, hence, appellants failed to substantiate the
claim that the cause of action of appellee has been extinguished. And while it is true that appellants submitted a
receipt for P14,160.00 signed by appellee, appellants, however, have stated in their answer with counterclaim that the
P2,000.00 value of the property covered by the Deed of Sale, instead of being credited to Erlinda Cortez, was
conspicuously excluded from the accounting or receipt signed by appellee totalling P14,160.00. The aforesaid receipt
is no proof that Erlinda Cortez subsequently paid her P2,000.00 debt to appellee. As correctly observed by the court a
quo, it is improbable that Cortez would still pay her debt to appellee since Santos had already paid it.
Appellants' claim that their P2,000.00 debt to Erlinda Cortez had been waived or abandoned is not also supported by
any affidavit, document or writing submitted to the court. As to their allegation that the appellee's claim is barred by
prescription, the ruling of the trial court that only seven years and six months of the ten-year prescription period
provided under Arts. 1144 and 155 in cases of actions for specific performance of the written contract of sale had
elapsed and that the action had not yet prescribed, is in accordance with law and, therefore, We affirm the same.
The action of the court a quo in rendering a summary judgment has been taken in faithful compliance and conformity
with Rule 34, Section 3, Rules of Court, which provides that "the judgment sought shall be rendered forthwith if the
pleadings, depositions, and admissions on file together with the affidavits, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law. "
Resolving assignments of errors, V, VI, and VII which directly assail the summary judgment, not the propriety of the
rendition thereof which We have already resolved to be proper and correct, it is Our considered opinion that the
judgment of the court a quo is but a logical consequence of the failure of appellants to present any bona fide defense
to appellee's claim. Said judgment is simply the application of the law to the undisputed facts of the case, one of
which is the finding of the court a quo, to which We agree, that appellants are owners of one-half (1/2) interest of Lot
I and, therefore, the fifth assignment of error of appellants is without merit.
By the terms of the Deed of Sale itself, which We find genuine and not infirmed, appellants declared themselves to be
owners of one-half (1/2) interest thereof. But in order to avoid appellee's claim, they now contend that Plan Psu-
206650 where said Lot I appears is in the exclusive name of Teofilo Custodio as the sole and exclusive owner thereof
and that the deed of assignment of one-half (1/2) interest thereof executed by said Teofilo Custodio in their favor is
strictly personal between them. Notwithstanding the lack of any title to the said lot by appellants at the time of the
execution of the deed of sale in favor of appellee, the said sale may be valid as there can be a sale of an expected
thing, in accordance with Art. 1461, New Civil Code, which states:
Art. 1461. Things having a potential existence may be the object of the contract of sale.

The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the
thing will come into existence.
The sale of a vain hope or expectancy is void.
In the case at bar, the expectant right came into existence or materialized for the appellants actually derived titles
from Lot I.
We further reject the contention of the appellants that the lower court erred in ordering the appellants to execute and
convey to the appellee 20,000 sq.m. of land to be taken from the southeastern portion of either their Lot 4, Pcs-5273,
which has an area of 40,775 sq.m., described in T.C.T. No. 167568 (Exh. 9 or 1), or from their Lot No. 5-A, with an
area of 30,205 sq.m. described in T.C.T. No. 203580 (Exh. 11 or K), the expenses of segregation to be borne equally
by the appellants and the appellee and the expenses of execution and registration to be borne by the appellants. Their
argument that the southeastern portion of Lot 4 or Lot 5-A is no longer the southeastern portion of the bigger Lot 1,
the latter portion belonging to the lone registered owner, Teofilo Custodia is not impressed with merit. The subdivision
of Lot I between the appellants and Teofilo Custodio was made between themselves alone, without the intervention,
knowledge and consent of the appellee, and therefore, not binding upon the latter. Appellants may not violate nor
escape their obligation under the Deed of Sale they have agreed and signed with the appellee b3 simply subdividing
Lot 1, bisecting the same and segregating portions to change their sides in relation to the original Lot 1.
Finally, considering the trial court's finding that the appellants compelled the appellee to litigate and they failed to
heed appellee's just demand, the order of the court awarding the sum of P2,000.00 as attorney's fees is just and
lawful, and We affirm the same.
WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED in toto, with costs
against the appellants. SO ORDERED.
G.R. No. L-48194 March 15, 1990
JAVIER v COURT OF APPEALS REGALADO, J.:
Petitioners pray for the reversal of the decision of respondent Court of Appeals in CA-G.R. No. 52296-R, dated March
6, 1978,
1
the dispositive portion whereof decrees:
WHEREFORE, the judgment appealed from is hereby set aside and another one entered ordering the
defendants-appellees, jointly and solidarily, to pay plaintiff-appellant the sum of P79,338.15 with legal
interest thereon from the filing of the complaint, plus attorney's fees in the amount of P8,000.00.
Costs against defendants-appellees.
2

As found by respondent court or disclosed by the records,
3
this case was generated by the following antecedent facts.
Private respondent is a holder of an ordinary timber license issued by the Bureau of Forestry covering 2,535 hectares
in the town of Medina, Misamis Oriental. On February 15, 1966 he executed a "Deed of Assignment"
4
in favor of
herein petitioners the material parts of which read as follows:
xxx xxx xxx
I, LEONARDO A. TIRO, of legal age, married and a resident of Medina, Misamis Oriental, for and in
consideration of the sum of ONE HUNDRED TWENTY THOUSAND PESOS (P120,000.00), Philippine
Currency, do by these presents, ASSIGN, TRANSFER AND CONVEY, absolutely and forever unto JOSE
M. JAVIER and ESTRELLA F. JAVIER, spouses, of legal age and a resident (sic) of 2897 F.B. Harrison,
Pasay City, my shares of stocks in the TIMBERWEALTH CORPORATION in the total amount of
P120,000.00, payment of which shall be made in the following manner:
1. Twenty thousand (P20,000.00) Pesos upon signing of this contract;
2. The balance of P100,000.00 shall be paid P10,000.00 every shipment of export logs
actually produced from the forest concession of Timberwealth Corporation.
That I hereby agree to sign and endorse the stock certificate in favor of Mr. & Mrs. Jose M. Javier, as
soon as stock certificates are issued.
xxx xxx xxx
At the time the said deed of assignment was executed, private respondent had a pending application, dated October
21, 1965, for an additional forest concession covering an area of 2,000 hectares southwest of and adjoining the area
of the concession subject of the deed of assignment. Hence, on February 28, 1966, private respondent and petitioners
entered into another "Agreement"
5
with the following stipulations:
xxx xxx xxx
1. That LEONARDO TIRO hereby agrees and binds himself to transfer, cede and convey whatever
rights he may acquire, absolutely and forever, to TIMBERWEALTH CORPORATION, a corporation duly
organized and existing under the laws of the Philippines, over a forest concession which is now
pending application and approval as additional area to his existing licensed area under O.T. License
No. 391-103166, situated at Medina, Misamis Oriental;
2. That for and in consideration of the aforementioned transfer of rights over said additional area to
TIMBERWEALTH CORPORATION, ESTRELLA F. JAVIER and JOSE M. JAVIER, both directors and
stockholders of said corporation, do hereby undertake to pay LEONARDO TIRO, as soon as said
additional area is approved and transferred to TIMBERWEALTH CORPORATION the sum of THIRTY
THOUSAND PESOS (P30,000.00), which amount of money shall form part of their paid up capital stock
in TIMBERWEALTH CORPORATION;
3. That this Agreement is subject to the approval of the members of the Board of Directors of the
TIMBERWEALTH CORPORATION.
xxx xxx xxx
On November 18, 1966, the Acting Director of Forestry wrote private respondent that his forest concession was
renewed up to May 12, 1967 under O.T.L. No. 391-51267, but since the concession consisted of only 2,535 hectares,
he was therein informed that:
In pursuance of the Presidential directive of May 13, 1966, you are hereby given until May 12, 1967 to
form an organization such as a cooperative, partnership or corporation with other adjoining licensees
so as to have a total holding area of not less than 20,000 hectares of contiguous and compact territory
and an aggregate allowable annual cut of not less than 25,000 cubic meters, otherwise, your license
will not be further renewed.
6

Consequently, petitioners, now acting as timber license holders by virtue of the deed of assignment executed by
private respondent in their favor, entered into a Forest Consolidation Agreement
7
on April 10, 1967 with other
ordinary timber license holders in Misamis Oriental, namely, Vicente L. De Lara, Jr., Salustiano R. Oca and Sanggaya
Logging Company. Under this consolidation agreement, they all agreed to pool together and merge their respective
forest concessions into a working unit, as envisioned by the aforementioned directives. This consolidation agreement
was approved by the Director of Forestry on May 10, 1967.
8
The working unit was subsequently incorporated as the
North Mindanao Timber Corporation, with the petitioners and the other signatories of the aforesaid Forest
Consolidation Agreement as incorporators.
9

On July 16, 1968, for failure of petitioners to pay the balance due under the two deeds of assignment, private
respondent filed an action against petitioners, based on the said contracts, for the payment of the amount of
P83,138.15 with interest at 6% per annum from April 10, 1967 until full payment, plus P12,000.00 for attorney's fees
and costs.
On September 23, 1968, petitioners filed their answer admitting the due execution of the contracts but interposing
the special defense of nullity thereof since private respondent failed to comply with his contractual obligations and,
further, that the conditions for the enforceability of the obligations of the parties failed to materialize. As a
counterclaim, petitioners sought the return of P55,586.00 which private respondent had received from them pursuant
to an alleged management agreement, plus attorney's fees and costs.
On October 7, 1968, private respondent filed his reply refuting the defense of nullity of the contracts in this wise:
What were actually transferred and assigned to the defendants were plaintiff's rights and interest in a
logging concession described in the deed of assignment, attached to the complaint and marked as
Annex A, and agreement Annex E; that the "shares of stocks" referred to in paragraph II of the
complaint are terms used therein merely to designate or identify those rights and interests in said
logging concession. The defendants actually made use of or enjoyed not the "shares of stocks" but the
logging concession itself; that since the proposed Timberwealth Corporation was owned solely and
entirely by defendants, the personalities of the former and the latter are one and the same. Besides,
before the logging concession of the plaintiff or the latter's rights and interests therein were assigned
or transferred to defendants, they never became the property or assets of the Timberwealth
Corporation which is at most only an association of persons composed of the defendants.
10

and contending that the counterclaim of petitioners in the amount of P55,586.39 is actually only a part of the sum of
P69,661.85 paid by the latter to the former in partial satisfaction of the latter's claim.
11

After trial, the lower court rendered judgment dismissing private respondent's complaint and ordering him to pay
petitioners the sum of P33,161.85 with legal interest at six percent per annum from the date of the filing of the
answer until complete payment.
12

As earlier stated, an appeal was interposed by private respondent to the Court of Appeals which reversed the decision
of the court of a quo.
On March 28, 1978, petitioners filed a motion in respondent court for extension of time to file a motion for
reconsideration, for the reason that they needed to change counsel.
13
Respondent court, in its resolution dated March
31, 1978, gave petitioners fifteen (15) days from March 28, 1978 within which to file said motion for reconsideration,
provided that the subject motion for extension was filed on time.
14
On April 11, 1978, petitioners filed their motion
for reconsideration in the Court of Appeals.
15
On April 21, 1978, private respondent filed a consolidated opposition to
said motion for reconsideration on the ground that the decision of respondent court had become final on March 27,
1978, hence the motion for extension filed on March 28, 1978 was filed out of time and there was no more period to
extend. However, this was not acted upon by the Court of Appeals for the reason that on April 20, 1978, prior to its
receipt of said opposition, a resolution was issued denying petitioners' motion for reconsideration, thus:
The motion for reconsideration filed on April 11, 1978 by counsel for defendants-appellees is denied.
They did not file any brief in this case. As a matter of fact this case was submitted for decision without
appellees' brief. In their said motion, they merely tried to refute the rationale of the Court in deciding
to reverse the appealed judgment.
16

Petitioners then sought relief in this Court in the present petition for review on certiorari. Private respondent filed his
comment, reiterating his stand that the decision of the Court of Appeals under review is already final and executory.
Petitioners countered in their reply that their petition for review presents substantive and fundamental questions of
law that fully merit judicial determination, instead of being suppressed on technical and insubstantial reasons.
Moreover, the aforesaid one (1) day delay in the filing of their motion for extension is excusable, considering that
petitioners had to change their former counsel who failed to file their brief in the appellate court, which substitution of
counsel took place at a time when there were many successive intervening holidays.
On July 26, 1978, we resolved to give due course to the petition.
The one (1) day delay in the filing of the said motion for extension can justifiably be excused, considering that aside
from the change of counsel, the last day for filing the said motion fell on a holiday following another holiday, hence,
under such circumstances, an outright dismissal of the petition would be too harsh. Litigations should, as much as
possible, be decided on their merits and not on technicalities. In a number of cases, this Court, in the exercise of
equity jurisdiction, has relaxed the stringent application of technical rules in order to resolve the case on its
merits.
17
Rules of procedure are intended to promote, not to defeat, substantial justice and, therefore, they should
not be applied in a very rigid and technical sense.
We now proceed to the resolution of this case on the merits.
The assignment of errors of petitioners hinges on the central issue of whether the deed of assignment dated February
15, 1966 and the agreement of February 28, 1966 are null and void, the former for total absence of consideration and
the latter for non-fulfillment of the conditions stated therein.
Petitioners contend that the deed of assignment conveyed to them the shares of stocks of private respondent in
Timberwealth Corporation, as stated in the deed itself. Since said corporation never came into existence, no share of
stocks was ever transferred to them, hence the said deed is null and void for lack of cause or consideration.
We do not agree. As found by the Court of Appeals, the true cause or consideration of said deed was the transfer of
the forest concession of private respondent to petitioners for P120,000.00. This finding is supported by the following
considerations, viz:
1. Both parties, at the time of the execution of the deed of assignment knew that the Timberwealth Corporation stated
therein was non-existent.
18

2. In their subsequent agreement, private respondent conveyed to petitioners his inchoate right over a forest
concession covering an additional area for his existing forest concession, which area he had applied for, and his
application was then pending in the Bureau of Forestry for approval.
3. Petitioners, after the execution of the deed of assignment, assumed the operation of the logging concessions of
private respondent.
19

4. The statement of advances to respondent prepared by petitioners stated: "P55,186.39 advances to L.A. Tiro be
applied to succeeding shipments. Based on the agreement, we pay P10,000.00 every after (sic) shipment. We had
only 2 shipments"
20

5. Petitioners entered into a Forest Consolidation Agreement with other holders of forest concessions on the strength
of the questioned deed of assignment.
21

The aforesaid contemporaneous and subsequent acts of petitioners and private respondent reveal that the cause
stated in the questioned deed of assignment is false. It is settled that the previous and simultaneous and subsequent
acts of the parties are properly cognizable indica of their true intention.
22
Where the parties to a contract have given
it a practical construction by their conduct as by acts in partial performance, such construction may be considered by
the court in construing the contract, determining its meaning and ascertaining the mutual intention of the parties at
the time of contracting.
23
The parties' practical construction of their contract has been characterized as a clue or index
to, or as evidence of, their intention or meaning and as an important, significant, convincing, persuasive, or influential
factor in determining the proper construction of the agreement.
24

The deed of assignment of February 15, 1966 is a relatively simulated contract which states a false cause or
consideration, or one where the parties conceal their true agreement.
25
A contract with a false consideration is not
null and void per se.
26
Under Article 1346 of the Civil Code, a relatively simulated contract, when it does not
prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public order or
public policy binds the parties to their real agreement.
The Court of Appeals, therefore, did not err in holding petitioners liable under the said deed and in ruling that
. . . In view of the analysis of the first and second assignment of errors, the defendants-appellees are
liable to the plaintiff-appellant for the sale and transfer in their favor of the latter's forest concessions.
Under the terms of the contract, the parties agreed on a consideration of P120,000.00. P20,000.00 of
which was paid, upon the signing of the contract and the balance of P100,000.00 to be paid at the
rate of P10,000.00 for every shipment of export logs actually produced from the forest concessions of
the appellant sold to the appellees. Since plaintiff-appellant's forest concessions were consolidated or
merged with those of the other timber license holders by appellees' voluntary act under the Forest
Consolidation Agreement (Exhibit D), approved by the Bureau of Forestry (Exhibit D-3), then the
unpaid balance of P49,338.15 (the amount of P70,661.85 having been received by the plaintiff-
appellant from the defendants-appellees) became due and demandable.
27

As to the alleged nullity of the agreement dated February 28, 1966, we agree with petitioners that they cannot be
held liable thereon. The efficacy of said deed of assignment is subject to the condition that the application of private
respondent for an additional area for forest concession be approved by the Bureau of Forestry. Since private
respondent did not obtain that approval, said deed produces no effect. When a contract is subject to a suspensive
condition, its birth or effectivity can take place only if and when the event which constitutes the condition happens or
is fulfilled.
28
If the suspensive condition does not take place, the parties would stand as if the conditional obligation
had never existed.
29

The said agreement is a bilateral contract which gave rise to reciprocal obligations, that is, the obligation of private
respondent to transfer his rights in the forest concession over the additional area and, on the other hand, the
obligation of petitioners to pay P30,000.00. The demandability of the obligation of one party depends upon the
fulfillment of the obligation of the other. In this case, the failure of private respondent to comply with his obligation
negates his right to demand performance from petitioners. Delivery and payment in a contract of sale, are so
interrelated and intertwined with each other that without delivery of the goods there is no corresponding obligation to
pay. The two complement each other.
30

Moreover, under the second paragraph of Article 1461 of the Civil Code, the efficacy of the sale of a mere hope or
expectancy is deemed subject to the condition that the thing will come into existence. In this case, since private
respondent never acquired any right over the additional area for failure to secure the approval of the Bureau of
Forestry, the agreement executed therefor, which had for its object the transfer of said right to petitioners, never
became effective or enforceable.
WHEREFORE, the decision of respondent Court of Appeals is hereby MODIFIED. The agreement of the parties dated
February 28, 1966 is declared without force and effect and the amount of P30,000.00 is hereby ordered to be
deducted from the sum awarded by respondent court to private respondent. In all other respects, said decision of
respondent court is affirmed.
SO ORDERED.
G.R. No. L-69970 November 28, 1988
FELIX DANGUILAN v INTERMEDIATE APPELLATE COURT CRUZ, J.:
The subject of this dispute is the two lots owned by Domingo Melad which is claimed by both the petitioner and the
respondent. The trial court believed the petitioner but the respondent court, on appeal, upheld the respondent. The
case is now before us for a resolution of the issues once and for all.
On January 29, 1962, the respondent filed a complaint against the petitioner in the then Court of First Instance of
Cagayan for recovery of a farm lot and a residential lot which she claimed she had purchased from Domingo Melad in
1943 and were now being unlawfully withheld by the defendant.
1
In his answer, the petitioner denied the allegation
and averred that he was the owner of the said lots of which he had been in open, continuous and adverse possession,
having acquired them from Domingo Melad in 1941 and 1943.
2
The case was dismissed for failure to prosecute but
was refiled in 1967.
3

At the trial, the plaintiff presented a deed of sale dated December 4, 1943, purportedly signed by Domingo Melad and
duly notarized, which conveyed the said properties to her for the sum of P80.00.
4
She said the amount was earned
by her mother as a worker at the Tabacalera factory. She claimed to be the illegitimate daughter of Domingo Melad,
with whom she and her mother were living when he died in 1945. She moved out of the farm only when in 1946 Felix
Danguilan approached her and asked permission to cultivate the land and to stay therein. She had agreed on
condition that he would deliver part of the harvest from the farm to her, which he did from that year to 1958. The
deliveries having stopped, she then consulted the municipal judge who advised her to file the complaint against
Danguilan. The plaintiff 's mother, her only other witness, corroborated this testimony.
5

For his part, the defendant testified that he was the husband of Isidra Melad, Domingo's niece, whom he and his wife
Juana Malupang had taken into their home as their ward as they had no children of their own. He and his wife lived
with the couple in their house on the residential lot and helped Domingo with the cultivation of the farm. Domingo
Melad signed in 1941 a private instrument in which he gave the defendant the farm and in 1943 another private
instrument in which he also gave him the residential lot, on the understanding that the latter would take care of the
grantor and would bury him upon his death.
6
Danguilan presented three other witnesses
7
to corroborate his
statements and to prove that he had been living in the land since his marriage to Isidra and had remained in
possession thereof after Domingo Melad's death in 1945. Two of said witnesses declared that neither the plaintiff nor
her mother lived in the land with Domingo Melad.
8

The decision of the trial court was based mainly on the issue of possession. Weighing the evidence presented by the
parties, the judge
9
held that the defendant was more believable and that the plaintiff's evidence was "unpersuasive
and unconvincing." It was held that the plaintiff's own declaration that she moved out of the property in 1946 and left
it in the possession of the defendant was contradictory to her claim of ownership. She was also inconsistent when she
testified first that the defendant was her tenant and later in rebuttal that he was her administrator. The decision
concluded that where there was doubt as to the ownership of the property, the presumption was in favor of the one
actually occupying the same, which in this case was the defendant.
10

The review by the respondent court
11
of this decision was manifestly less than thorough. For the most part it merely
affirmed the factual findings of the trial court except for an irrelevant modification, and it was only toward the end
that it went to and resolved what it considered the lone decisive issue.
The respondent court held that Exhibits 2-b and 3-a, by virtue of which Domingo Melad had conveyed the two parcels
of land to the petitioner, were null and void. The reason was that they were donations of real property and as such
should have been effected through a public instrument. It then set aside the appealed decision and declared the
respondents the true and lawful owners of the disputed property.
The said exhibits read as follows:
EXHIBIT 2-b is quoted as follows:
12

I, DOMINGO MELAD, of legal age, married, do hereby declare in this receipt the truth of my giving to
Felix Danguilan, my agricultural land located at Barrio Fugu-Macusi, Penablanca, Province of Cagayan,
Philippine Islands; that this land is registered under my name; that I hereby declare and bind myself
that there is no one to whom I will deliver this land except to him as he will be the one responsible for
me in the event that I will die and also for all other things needed and necessary for me, he will be
responsible because of this land I am giving to him; that it is true that I have nieces and nephews but
they are not living with us and there is no one to whom I will give my land except to Felix Danguilan
for he lives with me and this is the length175 m. and the width is 150 m.
IN WITNESS WHEREOF, I hereby sign my name below and also those present in the execution of this
receipt this 14th day of September 1941.
Penablanca Cagayan, September 14, 1941.
(SGD.) DOMINGO MELAD
WITNESSES:
1. (T.M.) ISIDRO MELAD
2. (SGD.) FELIX DANGUILAN
3. (T.M.) ILLEGIBLE
EXHIBIT 3-a is quoted as follows:
13

I, DOMINGO MELAD, a resident of Centro, Penablanca, Province of Cagayan, do hereby swear and
declare the truth that I have delivered my residential lot at Centro, Penablanca, Cagayan, to Felix
Danguilan, my son-in-law because I have no child; that I have thought of giving him my land because
he will be the one to take care of SHELTERING me or bury me when I die and this is why I have
thought of executing this document; that the boundaries of this lot ison the east, Cresencio
Danguilan; on the north, Arellano Street; on the south by Pastor Lagundi and on the west, Pablo
Pelagio and the area of this lot is 35 meters going south; width and length beginning west to east is
40 meters.
IN WITNESS HEREOF, I hereby sign this receipt this 18th day of December 1943.
(SGD.) DOMINGO MELAD
WITNESSES:
(SGD.) ILLEGIBLE
(SGD.) DANIEL ARAO
It is our view, considering the language of the two instruments, that Domingo Melad did intend to donate the
properties to the petitioner, as the private respondent contends. We do not think, however, that the donee was
moved by pure liberality. While truly donations, the conveyances were onerous donations as the properties were given
to the petitioner in exchange for his obligation to take care of the donee for the rest of his life and provide for his
burial. Hence, it was not covered by the rule in Article 749 of the Civil Code requiring donations of real properties to
be effected through a public instrument. The case at bar comes squarely under the doctrine laid down in Manalo v. De
Mesa,
14
where the Court held:
There can be no doubt that the donation in question was made for a valuable consideration, since the
donors made it conditional upon the donees' bearing the expenses that might be occasioned by the
death and burial of the donor Placida Manalo, a condition and obligation which the donee Gregorio de
Mesa carried out in his own behalf and for his wife Leoncia Manalo; therefore, in order to determine
whether or not said donation is valid and effective it should be sufficient to demonstrate that, as a
contract, it embraces the conditions the law requires and is valid and effective, although not recorded
in a public instrument.
The private respondent argues that as there was no equivalence between the value of the lands donated and the
services for which they were being exchanged, the two transactions should be considered pure or gratuitous donations
of real rights, hence, they should have been effected through a public instrument and not mere private writings.
However, no evidence has been adduced to support her contention that the values exchanged were disproportionate
or unequal.
On the other hand, both the trial court and the respondent court have affirmed the factual allegation that the
petitioner did take care of Domingo Melad and later arranged for his burial in accordance with the condition imposed
by the donor. It is alleged and not denied that he died when he was almost one hundred years old,
15
which would
mean that the petitioner farmed the land practically by himself and so provided for the donee (and his wife) during
the latter part of Domingo Melad's life. We may assume that there was a fair exchange between the donor and the
donee that made the transaction an onerous donation.
Regarding the private respondent's claim that she had purchased the properties by virtue of a deed of sale, the
respondent court had only the following to say: "Exhibit 'E' taken together with the documentary and oral evidence
shows that the preponderance of evidence is in favor of the appellants." This was, we think, a rather superficial way of
resolving such a basic and important issue.
The deed of sale was allegedly executed when the respondent was only three years old and the consideration was
supposedly paid by her mother, Maria Yedan from her earnings as a wage worker in a factory.
16
This was itself a
suspicious circumstance, one may well wonder why the transfer was not made to the mother herself, who was after all
the one paying for the lands. The sale was made out in favor of Apolonia Melad although she had been using the
surname Yedan her mother's surname, before that instrument was signed and in fact even after she got
married.
17
The averment was also made that the contract was simulated and prepared after Domingo Melad's death
in 1945.
18
It was also alleged that even after the supposed execution of the said contract, the respondent considered
Domingo Melad the owner of the properties and that she had never occupied the same.
19

Considering these serious challenges, the appellate court could have devoted a little more time to examining Exhibit
"E" and the circumstances surrounding its execution before pronouncing its validity in the manner described above.
While it is true that the due execution of a public instrument is presumed, the presumption is disputable and will yield
to contradictory evidence, which in this case was not refuted.
At any rate, even assuming the validity of the deed of sale, the record shows that the private respondent did not take
possession of the disputed properties and indeed waited until 1962 to file this action for recovery of the lands from the
petitioner. If she did have possession, she transferred the same to the petitioner in 1946, by her own sworn
admission, and moved out to another lot belonging to her step-brother.
20
Her claim that the petitioner was her tenant
(later changed to administrator) was disbelieved by the trial court, and properly so, for its inconsistency. In short, she
failed to show that she consummated the contract of sale by actual delivery of the properties to her and her actual
possession thereof in concept of purchaser-owner.
As was held in Garchitorena v. Almeda:
21

Since in this jurisdiction it is a fundamental and elementary principle that ownership does not pass by
mere stipulation but only by delivery (Civil Code, Art. 1095; Fidelity and Surety Co. v. Wilson, 8 Phil.
51), and the execution of a public document does not constitute sufficient delivery where the property
involved is in the actual and adverse possession of third persons (Addison vs. Felix, 38 Phil. 404;
Masallo vs. Cesar, 39 Phil. 134), it becomes incontestable that even if included in the contract, the
ownership of the property in dispute did not pass thereby to Mariano Garchitorena. Not having become
the owner for lack of delivery, Mariano Garchitorena cannot presume to recover the property from its
present possessors. His action, therefore, is not one of revindicacion, but one against his vendor for
specific performance of the sale to him.
In the aforecited case of Fidelity and Deposit Co. v. Wilson,
22
Justice Mapa declared for the Court:
Therefore, in our Civil Code it is a fundamental principle in all matters of contracts and a well- known
doctrine of law that "non mudis pactis sed traditione dominia rerum transferuntur". In conformity with
said doctrine as established in paragraph 2 of article 609 of said code, that "the ownership and other
property rights are acquired and transmitted by law, by gift, by testate or intestate succession, and, in
consequence of certain contracts, by tradition". And as the logical application of this disposition article
1095 prescribes the following: "A creditor has the rights to the fruits of a thing from the time the
obligation to deliver it arises. However, he shall not acquire a real right" (and the ownership is surely
such) "until the property has been delivered to him."
In accordance with such disposition and provisions the delivery of a thing constitutes a necessary and
indispensable requisite for the purpose of acquiring the ownership of the same by virtue of a contract.
As Manresa states in his Commentaries on the Civil Code, volume 10, pages 339 and 340: "Our law
does not admit the doctrine of the transfer of property by mere consent but limits the effect of the
agreement to the due execution of the contract. ... The ownership, the property right, is only derived
from the delivery of a thing ... "
As for the argument that symbolic delivery was effected through the deed of sale, which was a public instrument, the
Court has held:
The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to
be delivered when it is placed "in the hands and possession of the vendee." (Civil Code, art. 1462). It
is true that the same article declares that the execution of a public instrument is equivalent to the
delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may
produce the effect of tradition, it is necessary that the vendor shall have had such control over the
thing sold that, at the moment of the sale, its material delivery could have been made. It is not
enough to confer upon the purchaser the ownership and the right of possession. The thing sold must
be placed in his control. When there is no impediment whatever to prevent the thing sold passing into
the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of
a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser
cannot have the enjoyment and material tenancy of the thing and make use of it himself or through
another in his name, because such tenancy and enjoyment are opposed by the interposition of
another will, then fiction yields to realitythe delivery has not been effected.
23

There is no dispute that it is the petitioner and not the private respondent who is in actual possession of the litigated
properties. Even if the respective claims of the parties were both to be discarded as being inherently weak, the
decision should still incline in favor of the petitioner pursuant to the doctrine announced in Santos & Espinosa v.
Estejada
24
where the Court announced:
If the claim of both the plaintiff and the defendant are weak, judgment must be for the defendant, for
the latter being in possession is presumed to be the owner, and cannot be obliged to show or prove a
better right.
WHEREFORE, the decision of the respondent court is SET ASIDE and that of the trial court REINSTATED, with costs
against the private respondent. It is so ordered.
G.R. No. 126376 November 20, 2003
SPOUSES BERNARDO BUENAVENTURA v CA CARPIO, J.:
The Case
This is a petition for review on certiorari
1
to annul the Decision
2
dated 26 June 1996 of the Court of Appeals in CA-
G.R. CV No. 41996. The Court of Appeals affirmed the Decision
3
dated 18 February 1993 rendered by Branch 65 of
the Regional Trial Court of Makati ("trial court") in Civil Case No. 89-5174. The trial court dismissed the case after it
found that the parties executed the Deeds of Sale for valid consideration and that the plaintiffs did not have a cause of
action against the defendants.
The Facts
The Court of Appeals summarized the facts of the case as follows:
Defendant spouses Leonardo Joaquin and Feliciana Landrito are the parents of plaintiffs Consolacion, Nora, Emma and
Natividad as well as of defendants Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, and Gavino, all surnamed JOAQUIN.
The married Joaquin children are joined in this action by their respective spouses.
Sought to be declared null and void ab initio are certain deeds of sale of real property executed by defendant parents
Leonardo Joaquin and Feliciana Landrito in favor of their co-defendant children and the corresponding certificates of
title issued in their names, to wit:
1. Deed of Absolute Sale covering Lot 168-C-7 of subdivision plan (LRC) Psd-256395 executed on 11 July
1978, in favor of defendant Felicitas Joaquin, for a consideration of P6,000.00 (Exh. "C"), pursuant to which
TCT No. [36113/T-172] was issued in her name (Exh. "C-1");
2. Deed of Absolute Sale covering Lot 168-I-3 of subdivision plan (LRC) Psd-256394 executed on 7 June 1979,
in favor of defendant Clarita Joaquin, for a consideration of P1[2],000.00 (Exh. "D"), pursuant to which TCT
No. S-109772 was issued in her name (Exh. "D-1");
3 Deed of Absolute Sale covering Lot 168-I-1 of subdivision plan (LRC) Psd-256394 executed on 12 May 1988,
in favor of defendant spouses Fidel Joaquin and Conchita Bernardo, for a consideration of P54,[3]00.00 (Exh.
"E"), pursuant to which TCT No. 155329 was issued to them (Exh. "E-1");
4. Deed of Absolute Sale covering Lot 168-I-2 of subdivision plan (LRC) Psd-256394 executed on 12 May
1988, in favor of defendant spouses Artemio Joaquin and Socorro Angeles, for a consideration of P[54,3]00.00
(Exh. "F"), pursuant to which TCT No. 155330 was issued to them (Exh. "F-1"); and
5. Absolute Sale of Real Property covering Lot 168-C-4 of subdivision plan (LRC) Psd-256395 executed on 9
September 1988, in favor of Tomas Joaquin, for a consideration of P20,000.00 (Exh. "G"), pursuant to which
TCT No. 157203 was issued in her name (Exh. "G-1").
6. Deed of Absolute Sale covering Lot 168-C-1 of subdivision plan (LRC) Psd-256395 executed on 7 October
1988, in favor of Gavino Joaquin, for a consideration of P25,000.00 (Exh. "K"), pursuant to which TCT No.
157779 was issued in his name (Exh. "K-1").]
In seeking the declaration of nullity of the aforesaid deeds of sale and certificates of title, plaintiffs, in their complaint,
aver:
- XX-
The deeds of sale, Annexes "C," "D," "E," "F," and "G," [and "K"] are simulated as they are, are NULL AND VOID AB
INITIObecause
a) Firstly, there was no actual valid consideration for the deeds of sale xxx over the properties in litis;
b) Secondly, assuming that there was consideration in the sums reflected in the questioned deeds, the
properties are more than three-fold times more valuable than the measly sums appearing therein;
c) Thirdly, the deeds of sale do not reflect and express the true intent of the parties (vendors and vendees);
and
d) Fourthly, the purported sale of the properties in litis was the result of a deliberate conspiracy designed to
unjustly deprive the rest of the compulsory heirs (plaintiffs herein) of their legitime.
- XXI -
Necessarily, and as an inevitable consequence, Transfer Certificates of Title Nos. 36113/T-172, S-109772, 155329,
155330, 157203 [and 157779] issued by the Registrar of Deeds over the properties in litis xxx are NULL AND
VOID AB INITIO.
Defendants, on the other hand aver (1) that plaintiffs do not have a cause of action against them as well as the
requisite standing and interest to assail their titles over the properties in litis; (2) that the sales were with sufficient
considerations and made by defendants parents voluntarily, in good faith, and with full knowledge of the
consequences of their deeds of sale; and (3) that the certificates of title were issued with sufficient factual and legal
basis.
4
(Emphasis in the original)
The Ruling of the Trial Court
Before the trial, the trial court ordered the dismissal of the case against defendant spouses Gavino Joaquin and Lea
Asis.
5
Instead of filing an Answer with their co-defendants, Gavino Joaquin and Lea Asis filed a Motion to Dismiss.
6
In
granting the dismissal to Gavino Joaquin and Lea Asis, the trial court noted that "compulsory heirs have the right to a
legitime but such right is contingent since said right commences only from the moment of death of the decedent
pursuant to Article 777 of the Civil Code of the Philippines."
7

After trial, the trial court ruled in favor of the defendants and dismissed the complaint. The trial court stated:
In the first place, the testimony of the defendants, particularly that of the xxx father will show that the Deeds of Sale
were all executed for valuable consideration. This assertion must prevail over the negative allegation of plaintiffs.
And then there is the argument that plaintiffs do not have a valid cause of action against defendants since there can
be no legitime to speak of prior to the death of their parents. The court finds this contention tenable. In determining
the legitime, the value of the property left at the death of the testator shall be considered (Art. 908 of the New Civil
Code). Hence, the legitime of a compulsory heir is computed as of the time of the death of the decedent. Plaintiffs
therefore cannot claim an impairment of their legitime while their parents live.
All the foregoing considered, this case is DISMISSED.
In order to preserve whatever is left of the ties that should bind families together, the counterclaim is likewise
DISMISSED.
No costs.
SO ORDERED.
8

The Ruling of the Court of Appeals
The Court of Appeals affirmed the decision of the trial court.1wphi1 The appellate court ruled:
To the mind of the Court, appellants are skirting the real and decisive issue in this case, which is, whether xxx they
have a cause of action against appellees.
Upon this point, there is no question that plaintiffs-appellants, like their defendant brothers and sisters, are
compulsory heirs of defendant spouses, Leonardo Joaquin and Feliciana Landrito, who are their parents. However,
their right to the properties of their defendant parents, as compulsory heirs, is merely inchoate and vests only upon
the latters death. While still alive, defendant parents are free to dispose of their properties, provided that such
dispositions are not made in fraud of creditors.
Plaintiffs-appellants are definitely not parties to the deeds of sale in question. Neither do they claim to be creditors of
their defendant parents. Consequently, they cannot be considered as real parties in interest to assail the validity of
said deeds either for gross inadequacy or lack of consideration or for failure to express the true intent of the parties.
In point is the ruling of the Supreme Court in Velarde, et al. vs. Paez, et al., 101 SCRA 376, thus:
The plaintiffs are not parties to the alleged deed of sale and are not principally or subsidiarily bound thereby; hence,
they have no legal capacity to challenge their validity.
Plaintiffs-appellants anchor their action on the supposed impairment of their legitime by the dispositions made by their
defendant parents in favor of their defendant brothers and sisters. But, as correctly held by the court a quo, "the
legitime of a compulsory heir is computed as of the time of the death of the decedent. Plaintiffs therefore cannot claim
an impairment of their legitime while their parents live."
With this posture taken by the Court, consideration of the errors assigned by plaintiffs-appellants is inconsequential.
WHEREFORE, the decision appealed from is hereby AFFIRMED, with costs against plaintiffs-appellants.
SO ORDERED.
9

Hence, the instant petition.
Issues
Petitioners assign the following as errors of the Court of Appeals:
1. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE CONVEYANCE IN QUESTION HAD NO VALID
CONSIDERATION.
2. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT EVEN ASSUMING THAT THERE WAS A
CONSIDERATION, THE SAME IS GROSSLY INADEQUATE.
3. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE DEEDS OF SALE DO NOT EXPRESS THE TRUE
INTENT OF THE PARTIES.
4. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE CONVEYANCE WAS PART AND PARCEL OF A
CONSPIRACY AIMED AT UNJUSTLY DEPRIVING THE REST OF THE CHILDREN OF THE SPOUSES LEONARDO
JOAQUIN AND FELICIANA LANDRITO OF THEIR INTEREST OVER THE SUBJECT PROPERTIES.
5. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT PETITIONERS HAVE A GOOD, SUFFICIENT AND
VALID CAUSE OF ACTION AGAINST THE PRIVATE RESPONDENTS.
10

The Ruling of the Court
We find the petition without merit.
We will discuss petitioners legal interest over the properties subject of the Deeds of Sale before discussing the issues
on the purported lack of consideration and gross inadequacy of the prices of the Deeds of Sale.
Whether Petitioners have a legal interest over the properties subject of the Deeds of Sale
Petitioners Complaint betrays their motive for filing this case. In their Complaint, petitioners asserted that the
"purported sale of the properties in litis was the result of a deliberate conspiracy designed to unjustly deprive the rest
of the compulsory heirs (plaintiffs herein) of their legitime." Petitioners strategy was to have the Deeds of Sale
declared void so that ownership of the lots would eventually revert to their respondent parents. If their parents die
still owning the lots, petitioners and their respondent siblings will then co-own their parents estate by hereditary
succession.
11

It is evident from the records that petitioners are interested in the properties subject of the Deeds of Sale, but they
have failed to show any legal right to the properties. The trial and appellate courts should have dismissed the action
for this reason alone. An action must be prosecuted in the name of the real party-in-interest.
12

[T]he question as to "real party-in-interest" is whether he is "the party who would be benefitted or injured by the
judgment, or the party entitled to the avails of the suit."
x x x
In actions for the annulment of contracts, such as this action, the real parties are those who are parties to the
agreement or are bound either principally or subsidiarily or are prejudiced in their rights with respect to one of the
contracting parties and can show the detriment which would positively result to them from the contract even though
they did not intervene in it (Ibaez v. Hongkong & Shanghai Bank, 22 Phil. 572 [1912]) xxx.
These are parties with "a present substantial interest, as distinguished from a mere expectancy or future, contingent,
subordinate, or consequential interest. The phrase present substantial interest more concretely is meant such
interest of a party in the subject matter of the action as will entitle him, under the substantive law, to recover if the
evidence is sufficient, or that he has the legal title to demand and the defendant will be protected in a payment to or
recovery by him."
13

Petitioners do not have any legal interest over the properties subject of the Deeds of Sale. As the appellate court
stated, petitioners right to their parents properties is merely inchoate and vests only upon their parents death. While
still living, the parents of petitioners are free to dispose of their properties. In their overzealousness to safeguard their
future legitime, petitioners forget that theoretically, the sale of the lots to their siblings does not affect the value of
their parents estate. While the sale of the lots reduced the estate, cash of equivalent value replaced the lots taken
from the estate.
Whether the Deeds of Sale are void for lack of consideration
Petitioners assert that their respondent siblings did not actually pay the prices stated in the Deeds of Sale to their
respondent father. Thus, petitioners ask the court to declare the Deeds of Sale void.
A contract of sale is not a real contract, but a consensual contract. As a consensual contract, a contract of sale
becomes a binding and valid contract upon the meeting of the minds as to price. If there is a meeting of the minds of
the parties as to the price, the contract of sale is valid, despite the manner of payment, or even the breach of that
manner of payment. If the real price is not stated in the contract, then the contract of sale is valid but subject to
reformation. If there is no meeting of the minds of the parties as to the price, because the price stipulated in the
contract is simulated, then the contract is void.
14
Article 1471 of the Civil Code states that if the price in a contract of
sale is simulated, the sale is void.
It is not the act of payment of price that determines the validity of a contract of sale. Payment of the price has
nothing to do with the perfection of the contract. Payment of the price goes into the performance of the contract.
Failure to pay the consideration is different from lack of consideration. The former results in a right to demand the
fulfillment or cancellation of the obligation under an existing valid contract while the latter prevents the existence of a
valid contract.
15

Petitioners failed to show that the prices in the Deeds of Sale were absolutely simulated. To prove simulation,
petitioners presented Emma Joaquin Valdozs testimony stating that their father, respondent Leonardo Joaquin, told
her that he would transfer a lot to her through a deed of sale without need for her payment of the purchase
price.
16
The trial court did not find the allegation of absolute simulation of price credible. Petitioners failure to prove
absolute simulation of price is magnified by their lack of knowledge of their respondent siblings financial capacity to
buy the questioned lots.
17
On the other hand, the Deeds of Sale which petitioners presented as evidence plainly
showed the cost of each lot sold. Not only did respondents minds meet as to the purchase price, but the real price
was also stated in the Deeds of Sale. As of the filing of the complaint, respondent siblings have also fully paid the
price to their respondent father.
18

Whether the Deeds of Sale are void for gross inadequacy of price
Petitioners ask that assuming that there is consideration, the same is grossly inadequate as to invalidate the Deeds of
Sale.
Articles 1355 of the Civil Code states:
Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a contract, unless there
has been fraud, mistake or undue influence. (Emphasis supplied)
Article 1470 of the Civil Code further provides:
Art. 1470. Gross inadequacy of price does not affect a contract of sale, except as may indicate a defect in the consent,
or that the parties really intended a donation or some other act or contract. (Emphasis supplied)
Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil Code which would
invalidate, or even affect, the Deeds of Sale. Indeed, there is no requirement that the price be equal to the exact
value of the subject matter of sale. All the respondents believed that they received the commutative value of what
they gave. As we stated in Vales v. Villa:
19

Courts cannot follow one every step of his life and extricate him from bad bargains, protect him from unwise
investments, relieve him from one-sided contracts, or annul the effects of foolish acts. Courts cannot constitute
themselves guardians of persons who are not legally incompetent. Courts operate not because one person has been
defeated or overcome by another, but because he has been defeated or overcome illegally. Men may do foolish things,
make ridiculous contracts, use miserable judgment, and lose money by them indeed, all they have in the world; but
not for that alone can the law intervene and restore. There must be, in addition, a violation of the law, the
commission of what the law knows as an actionable wrong, before the courts are authorized to lay hold of the
situation and remedy it. (Emphasis in the original)
Moreover, the factual findings of the appellate court are conclusive on the parties and carry greater weight when they
coincide with the factual findings of the trial court. This Court will not weigh the evidence all over again unless there
has been a showing that the findings of the lower court are totally devoid of support or are clearly erroneous so as to
constitute serious abuse of discretion.
20
In the instant case, the trial court found that the lots were sold for a valid
consideration, and that the defendant children actually paid the purchase price stipulated in their respective Deeds of
Sale. Actual payment of the purchase price by the buyer to the seller is a factual finding that is now conclusive upon
us.
WHEREFORE, we AFFIRM the decision of the Court of Appeals in toto.
SO ORDERED.