UP LAW A-2015 DIGEST SYSTEM [Obligations and Contracts | Prof.

Disini]
When one of the parties is unable to read --HEMEDES V CA 316 SCRA 347 Date of Promulgation: October 8, 1999 Ponente: Gonzaga-Reyes, J. Facts: -

OBLICON A-2015 | AY 2011-2012 II

owner, and also denied the execution of any mortgage with R&B. Aug 27, 1981 Dominium and Enrique filed a complaint for annulment of R&Bs TCT, and asserted that Justa never transferred the property to Maxima. TC ruled in favor of Dominium and Enrique: o Conveyance to Maxima is invalid for violating Art 1332. Said document was in English a language that Justa could not understand and its provisions were not explained to her. Hence, Maxima failed to discharge her burden pursuant to 1332. o Conveyance to Enrique is valid. CA affirmed the ruling in toto, hence this appeal by Maxima and R&B.

Mar 22, 1947 Jose Hemedes, owner of a parcel of land in Cabuyao, Laguna, executed a Donation Inter Vivos with Resolutory Conditions in favor of his third wife, Justa Kausapin: o Upon her death or remarriage, the property shall revert to any of his children expressly designated by her in a public document; o In the absence of the above, property shall revert to his legal heirs in common Sept 27, 1960 Justa entered into a Deed of Conveyance in favor of Maxima Hemedes, daughter of Jose, conveying to her said property. Justa reserved the right to possess and enjoy the same during her lifetime or widowhood. An original Cert. of Title was issued in Maximas name, with Justa having usufructuary rights. R&B insurance claims that Maxima constituted a real estate mortgage over the property for a loan of P6k on June 2, 1964 Feb 22, 1968 R&B foreclosed the mortgage upon Maximas failure to pay. A TCT for the property was then issued to R&B, wherein Justas usufruct was maintained. May 27, 1971 Justa executed a Kasunduan where she transferred the same land to Enrique Hemades, brother of Maxima. Since then Enrique has been paying the realty taxes on the property. Justa also executed an affidavit in 1981 affirming her conveyance to Enrique and denying the one to Maxima. Feb 28, 1979 Enrique sold the land to Dominium Realty, who in turn leased the property to Asia Brewery (who then constructed two P10m-worth steel warehouses) March 16, 1981 R&B sent a letter informing AB of its ownership of the property May 8, 1961 Maxima sent a letter informing AB that she was the rightful

Issue/s: Which of the two conveyances made by Justa is valid? Does Art 1332 have valid application in this case? Is R&B a mortgagor/purchaser in good faith? Ruling: Ruling reversed. Justa conveyance Maxima is valid. R&Bs TCT is valid. Ratio: -

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Conveyance to Maxima is valid o Its invalidity is only hinged on the mere denial of Justa that she made such conveyance to Maxima. One cannot evade compliance with his/her contractual obligations by way of denial. o Justa/respondents denied requests by Maxima for Justas thumbprint to be entered into evidence so as to allow them to compare the same with the thumbmark affixed on the Deed of Conveyance in favor of Maxima. By suppressing this evidence, it can be presumed that the same proves the authenticity of the Conveyance to Maxima. o Justas denial cannot be given weight as she is a biased witness. She is dependent on Enrique for financial assistance, hence giving

UP LAW A-2015 DIGEST SYSTEM [Obligations and Contracts | Prof. Disini]

her incentive to side with Enrique. Enrique could have easily influenced her by virtue of her advanced age and worsening physical conditions. Art 1332 cannot be applied o 1332 contemplates a situation where consent was given, but vitiated by a partys failure to adequately explain the provisions or was obtained by means of fraud. o In this case, Justa denies having ever given consent to the conveyance to Maxima. In the absence of consent, 1332 cannot be applied. Hence, it is Justas/respondents very own allegations which render 1332 inapplicable. This being said, Conveyance to Enrique and subsequent sale to Dominion is null and void o Tax receipts to Enrique cannot defeat a certificate of title in Maximas name R&B is a mortgagor/purchaser in good faith o Maxima did in fact execute a mortgage over the property in favor of R&B o TC: Because the title had an annotation regarding Justas usufructuary rights, R&B should have looked through the title and investigated whether or not the conveyance to Maxima was valid o Court: R&B may safely rely on the correctness and the validity of the title. It was under no obligation to investigate its validity. And even if it did investigate, there were no competing claims to the land when it entered into a mortgage with Maxima in 1964. The Kasunduan with Enrique was only made in 1971, hence everything was in order when the mortgage was made. Oyie Javelosa

OBLICON A-2015 | AY 2011-2012 II

Sorry kung medyo magulo. Ito talaga ay isang kaso na maraming pangyayari. HAHA.