Fule vs Ca
GREGORIO FULE,vsCOURT OF APPEALS, NINEVETCH CRUZand JUAN
BELARMINO[G.R. No. 112212 March 2, 1998; ThirdDivision]ROMERO,
J.:FACTSGregorio Fule (petitioner), a banker byprofession and a
jeweler at the same time,acquired a 10-hectare property in Tanay,
Rizal(Tanay property).Petitioner, as corporate secretary of the
bank,asked Remelia Dichoso and Oliva Mendoza tolook for a buyer who
might be interested in theTanay property. The two found Dr.
NinevetchCruz (private respondent).It so happens that at that time
petitioner hadshown interest in buying a pair of emerald-cutdiamond
earrings owned by Dr. Cruz which hehad seen when his mother
examined andappraised them as genuine. Petitioner thenmade a bid to
buy them but Dr. Cruz declinedthe offer. At that point former
inspected saidjewelry at the lobby of the Prudential Bankbranch in
San Pablo City and then made asketch thereof. Having sketched the
jewelry thengave them back to Dr. Cruz.Subsequently, negotiations
for the barter of thejewelry and the Tanay property ensued. WhenDr.
Cruz had later agreed to the proposal,petitioner went to Prudential
Bank once again totake a look at the jewelry.In the afternoon of
October 23, 1984, petitionermet Atty. Belarmino (Dr. Cruzs lawyer)
at thelatter's residence to prepare the documents ofsale. The
Attorney accordingly caused thepreparation of a deed of absolute
sale whilepetitioner and Dr. Cruz attended to thesafekeeping of the
jewelry.The following day, petitioner, together withDichoso and
Mendoza, arrived at the residenceof Atty. Belarmino to finally
execute a deed ofabsolute sale.Petitioner signed the deed. Since
the jewelrywas appraised only at P160,000.00, the partiesagreed
that the balance of P40,000.00 wouldjust be paid later in
cash.Thereafter the petitioner headed for the bank,arriving there
at past 5:00 p.m. Dr. Cruz (whoarrived later) and the cashier then
opened thesafety deposit box, the former retrieving acellophane bag
with the jewelry inside andhanding over the same to petitioner. The
lattertook the jewelry from the bag, went near theelectric light at
the bank's lobby, held the jewelryagainst the light and examined it
for ten to fifteenminutes. After a while, Dr. Cruz asked, "Okay
naba iyan?" Petitioner expressed his satisfactionby nodding his
head.Later, at about 8:00 o'clock in the evening of thesame day,
petitioner arrived at the residence ofAtty. Belarmino complaining
that the jewelrygiven to him was fake. He then used a tester
toprove the alleged fakery.On October 26, 1984, petitioner filed a
complaintbefore the Regional Trial Court (RTC) againstprivate
respondents praying, among otherthings, that the contract of sale
over the Tanayproperty be declared null and void on the groundof
fraud and deceit.RTC, as affirmed by the Court of Appeals, heldthe
earrings uses as consideration for the salewas delivered by Dr.
Cruz to the petitioner asgenuine.Hence this petition.ISSUEWhether
or not the deed of sale of the Tanayproperty is null and
void.RULINGPETITION DENIED. The contract of barter orsale is
valid.The Civil Code provides that contracts areperfected by mere
consent. From this moment,the parties are bound not only to the
fulfillmentof what has been expressly stipulated but also toall the
consequences which, according to theirnature, may be in keeping
with good faith, usageand law. A contract of sale is perfected at
themoment there is a meeting of the minds uponthe thing which is
the object of the contract andupon the price. Being consensual, a
contract ofsale has the force of law between thecontracting parties
and they are expected toabide in good faith by their
respectivecontractual commitments. Article 1358 of theCivil Code
which requires the embodiment ofcertain contracts in a public
instrument, is onlyfor convenience, and registration of
theinstrument only adversely affects third parties.Formal
requirements are, therefore, for thebenefit of third parties.
Non-compliancetherewith does not adversely affect the validity
ofthe contract nor the contractual rights andobligations of the
parties thereunder.It is evident from the facts of the case that
therewas a meeting of the minds between petitionerand Dr. Cruz. As
such, they are bound by thecontract unless there are reasons
orcircumstances that warrant its nullification.Hence, the problem
that should be addressed inthis case is whether or not under the
facts dulyestablished herein, the contract can be voided
inaccordance with law so as to compel the partiesto restore to each
other the things that havebeen the subject of the contract with
their fruits,and the price with interest.Contracts that are
voidable or annullable, eventhough there may have been no damage to
thecontracting parties are: (1) those where one ofthe parties is
incapable of giving consent to acontract; and (2) those where the
consent isvitiated by mistake, violence, intimidation,
undueinfluence or fraud. Accordingly, petitioner nowstresses before
this Court that he entered intothe contract in the belief that the
pair of emeraldcutdiamond earrings was genuine. On thepretext that
those pieces of jewelry turned out tobe counterfeit, however,
petitioner subsequentlysought the nullification of said contract on
theground that it was, in fact, "tainted with fraud"such that his
consent was vitiated.There is fraud when, through the insidious
wordsor machinations of one of the contractingparties, the other is
induced to enter into acontract which, without them, he would not
haveagreed to. The records, however, are bare ofany evidence
manifesting that privaterespondents employed such insidious words
ormachinations to entice petitioner into enteringthe contract of
barter. Neither is there anyevidence showing that Dr. Cruz
inducedpetitioner to sell his Tanay property or that shecajoled him
to take the earrings in exchange forsaid property. On the contrary,
Dr. Cruz did notinitially accede to petitioner's proposal to buy
thesaid jewelry. Rather, it appears that it waspetitioner, through
his agents, who led Dr. Cruzto believe that the Tanay property was
worthexchanging for her jewelry as he representedthat its value was
P400,000.00 or more thandouble that of the jewelry which was valued
onlyat P160,000.00. If indeed petitioner's propertywas truly worth
that much, it was certainlycontrary to the nature of a
businessman-bankerlike him to have parted with his real estate
forhalf its price. In short, it was in fact petitionerwho resorted
to machinations to convince Dr.Cruz to exchange her jewelry for the
Tanayproperty.Moreover, petitioner did not clearly allegemistake as
a ground for nullification of thecontract of sale. Even assuming
that he did,petitioner cannot successfully invoke the same.To
invalidate a contract, mistake must "refer tothe substance of the
thing that is the object ofthe contract, or to those conditions
which haveprincipally moved one or both parties to enterinto the
contract." An example of mistake as tothe object of the contract is
the substitution of aspecific thing contemplated by the parties
withanother. In his allegations in the complaint,petitioner
insinuated that an inferior one or onethat had only Russian
diamonds was substitutedfor the jewelry he wanted to exchange with
his10-hectare land. He, however, failed to provethe fact that prior
to the delivery of the jewelry tohim, private respondents
endeavored to makesuch substitution.Likewise, the facts as proven
do not support theallegation that petitioner himself could
beexcused for the "mistake." On account of hiswork as a
banker-jeweler, it can be rightfullyassumed that he was an expert
on mattersregarding gems. He had the intellectual capacityand the
business acumen as a banker to takeprecautionary measures to avert
such a mistake,considering the value of both the jewelry and
hisland. The fact that he had seen the jewelrybefore October 24,
1984 should not haveprecluded him from having its genuinenesstested
in the presence of Dr. Cruz. Had he doneso, he could have avoided
the present situationthat he himself brought about. Indeed, the
fingerof suspicion of switching the genuine jewelry fora fake
inevitably points to him. Such a mistakecaused by manifest
negligence cannot invalidatea juridical act. As the Civil Code
provides,"(t)here is no mistake if the party alleging it knewthe
doubt, contingency or risk affecting theobject of the
contract."Furthermore, petitioner was afforded thereasonable
opportunity required in Article 1584of the Civil Code within which
to examine thejewelry as he in fact accepted them when askedby Dr.
Cruz if he was satisfied with the same. 29By taking the jewelry
outside the bank, petitionerexecuted an act which was more
consistent withhis exercise of ownership over it. This
gainscredence when it is borne in mind that hehimself had earlier
delivered the Tanay propertyto Dr. Cruz by affixing his signature
to thecontract of sale. That after two hours he laterclaimed that
the jewelry was not the one heintended in exchange for his Tanay
property,could not sever the juridical tie that now boundhim and
Dr. Cruz. The nature and value of thething he had taken preclude
its return after thatsupervening period within which anything
couldhave happened, not excluding the alteration ofthe jewelry or
its being switched with an inferiorkind.Both the trial and
appellate courts, therefore,correctly ruled that there were no
legal bases forthe nullification of the contract of sale.Ownership
over the parcel of land and the pairof emerald-cut diamond earrings
had beentransferred to Dr. Cruz and petitioner,respectively, upon
the actual and constructivedelivery thereof. Said contract of sale
beingabsolute in nature, title passed to the vendeeupon delivery of
the thing sold since there wasno stipulation in the contract that
title to theproperty sold has been reserved in the selleruntil full
payment of the price or that the vendorhas the right to
unilaterally resolve the contractthe moment the buyer fails to pay
within a fixedperiod. Such stipulations are not manifest in
thecontract of sale.While it is true that t
EARNEST MONEYVILLONCO vs. BORMACHECO (1975)Unqualified
acceptance, even if it contained request for changes; receipt of
earnest moneyFrancisco N. Cervantes and his wife, Rosario P.
Navarra-Cervantes, are the owners of 3 lots inBuendia. Makati with
a total area of 3,500 sq. m and were titled. The lots were
mortgaged to the DevelopmentBank of the Phil (DBP) as security for
a loan of P441,000. The mortgage debt was fully paid on July 10,
1969.Cervantes is the president of Bormaheco, Inc., a dealer and
importer of industrial and agricultural machinery.The entire lots
are occupied by the building, machinery and equipment of Bormaheco,
Inc. and are adjacent tothe property of Villonco Realty
Company.Negotiations for the sale of the said lots pursued through
the intervention of EdithaPerez as real estate broker. Bormaheco,
Inc., through Cervantes, made a written offer dated February
12,1964, to Romeo Villonco for the sale of the property. The
written offer mentioned the ff:1. That a deposit of P100,000.00
must be placed as earnest money on thepurchase of the above
property which will become part payment of the property in the
event that the sale isconsummated; 2.That this sale is to be
consummated only after I shall have alsoconsummated my purchase of
another property located at Sta. Ana, Manila;3. That if my
negotiations with said property will not beconsummated by reason
beyond my control, I will return to you your deposit of P100,000
and the sale of myproperty to you will not also be consummated; and
4.That final negotiations on both properties canbe definitely known
after 45 days.The property mentioned in the letter was theland of
the National Shipyards & Steel Corporation (Nassco), located at
Punta, Sta. Ana, Manila. At the bidding,that land was awarded to
Bormaheco, Inc., the highest bidder, for the price of P552,000. The
Nassco Board ofDirectors in its resolution of February 18, 1964
authorized the General Manager to sign the necessary
contract.Villonco Realty Company, throughTeofilo Villonco, in its
letter made a revised counter- offer for the purchase of the
property. The counter-offerwas accepted by Cervantes which was in a
way a reiteration only of Cervantes letter.The check for P100,000
wasdelivered by Edith Perez de Tagle to Bormaheco, Inc. and was
received by Cervantes. In the voucher-receiptevidencing the
delivery the broker indicated in her handwriting that the earnest
money was "subject to theterms and conditions embodied in
Bormaheco's letter". Then, unexpectedly,or 26 days after the
signing of the contract of sale, Cervantes returned the earnest
money, with interest.Cervantes cited as an excuse the circumstance
that "despite the lapse of 45 days from February 12, 1964there is
no certainty yet" for the acquisition of the Punta property.
Villonco Realty Company refused to acceptthe letter and the checks
of Bormaheco, Inc. Cervantes sent them by registered mail. When he
rescinded thecontract, he was already aware that the Punta lot had
been awarded to Bormaheco, Inc. Villonco fileda complaint and a
notice of lis pendens was annotated at the back of the title of the
lands. Bormachecopleaded the defense that no perfection of sale
occured. LC:in favor of petitioner spousesIssue: w/n there was a
perfected contract of saleHeld: YES1. There was meeting of the
minds upon the matter and consideration of the sale.
Bormachecosacceptance of the part of the payment of 100k shows that
the sale was conditionally consummated.The non-consummation of that
purchase would be a negative resolutory condition. In
fact,Bormachecos bid for the Sta. Ana property was already accepted
by Naasco.2. The agreement between the parties has a subject
matter, the price, and the mode of payment andthat part of the
price was paid. Whenever earnest money is given, it shall be
considered as part of theprice and proof of the perfection of the
contract of sale.3. The 45 day period was merely an estimate and
did not serve as deadline. And as stated above, thecondition that
Bormacheco should acquire the Sta. Ana property was fulfilled.4.
Cervantes alleged that he did not obtain the consent of his wife,
the property being a conjugal one.Court held that such is not
sustainable because if he did not obtain so, such would only make
the salevoidable.5. Under the facts of the case, it is evident that
Bormacheco acted in gorss and evident bad faith inrefusing to
satisfy the valid and just demand of Villonco for specific
performance.The contract of sale is perfected at the moment of the
meeting of the minds upon the thing which isthe object of the
contract and upon the price. From that moment, the parties may
reciprocallydemand performance, subject to the provisions of the
law governing the form of contracts.Payment of earnest money was
part of price and proof of perfection of contractConcurring opinion
of Barredo:1. The actual contract between the parties is not the
letter made by Cervantes but the counter-offer thatwas given by
Villonco.The act of Cervantes in signing his conformity to the
counter-offer resulted in a completely perfected sale
SPOUSES DOROMAL V. CANot clear if the money was in the concept
of earnest money
DOROMAL V. CA (September 5, 1975)FACTS:A parcel of land
inIloilowere co-owned by 7 siblings all surnamed Horilleno. 5 of
the siblings gave a SPA to their niece Mary Jimenez, who succeeded
her father as a co-owner, for the sale of the land to father and
son Doromal. One of the co-owner, herein petitioner, Filomena
Javellana however did not gave her consent to the sale even though
her siblings executed a SPA for her signature. The co-owners went
on with the sale of 6/7 part of the land and a new title for the
Doromals were issued.
Respondent offered to repurchase the land for 30K as stated in
the deed of sale but petitioners declined invoking lapse in time
for the right of repurchase. Petitioner also contend that the 30K
price was only placed in the deed of sale to minimize payment of
fees and taxes and as such, respondent should pay the real price
paid which was P115, 250.
ISSUE:WON the period to repurchase of petitioner has already
lapsed.
HELD:Period of repurchase has not yet lapsed because the
respondent was not notified of the sale. The 30-day period for the
right of repurchase starts only after actual notice not only of a
perfected sale but of actual execution and delivery of the deed of
sale.
The letter sent to the respondent by the other co-owners cannot
be considered as actual notice because the letter was only to
inform her of the intention to sell the property but not its actual
sale. As such, the 30-day period has not yet commenced and the
respondent can still exercise his right to repurchase.
The respondent should also pay only the 30K stipulated in the
deed of sale because a redemptioners right is to be subrogated by
the same terms and conditions stipulated in the contract.
Doromal vs. CA [G.R. No. L-36083. September 5, 1975.] En Banc,
Barredo (J): 6 concurring, 2 took no part, 2 on leave Facts: Lot
3504 of the cadastral survey of Iloilo, situated in the poblacion
of La Paz, one of its districts, with an area of a little more than
2-1/2 hectares was originally decreed in the name of the late
Justice Antonio Horilleno, in 1916, under OCT 1314. Before he died,
on a date not particularized in the record, he executed a last will
and testament attesting to the fact that it was a co-ownership
between himself and his brothers and sisters. The truth was that
the owners or better stated, the co-owners were, besides Justice
Horilleno, Luis, Soledad, Fe, Rosita, Carlos and Esperanza, all
surnamed Horilleno, in the proportion of 1/7 undivided ownership
each. Since Esperanza had already died, she was succeeded by her
only daughter, Filomena Javellana. Still, even though their right
had not as yet been annotated in the title, the co-owners led by
Carlos, and as to deceased Justice Antonio Horilleno, his daughter
Mary, sometime since early 1967, had wanted to sell their shares,
or if possible if Filomena Javellana were agreeable, to sell the
entire property. They hired an acquaintance Cresencia Harder, to
look for buyers, and the latter came to the interest of Ramon
Doromal, Sr. and Jr. In preparation for the execution of the sale
(since the brothers and sisters Horilleno were scattered in various
parts of the country: Carlos in Ilocos Sur, Mary in Baguio, Soledad
and Fe, in Mandaluyong, Rizal, and Rosita in Basilan City), the
Horillenos executed various powers of attorney in favor of their
niece, Mary H. Jimenez. They also caused preparation of a power of
attorney of identical tenor for signature by Javellana, and sent it
with a letter of Carlos, dated 18 January 1968 unto her thru Mrs.
Harder. Carlos informed Javellana that the price was P4.00 a square
meter. It appears, however, that as early as 22 October, 1967,
Carlos had received in check as earnest money from Ramon Doromal,
Jr., the sum of P5,000.00 and the price therein agreed upon was
P5.00 a square meter. At any rate, Javellana, not being agreeable,
did not sign the power of attorney, and the rest of the co-owners
went ahead with their sale of their 6/7. Carlos saw to it that the
deed of sale prepared by their common attorney in fact, Mary H.
Jimenez, be signed and ratified. The Deed was signed and ratified
in Candon, Ilocos Sur, on 15 January 1968, and was brought to
Iloilo by Carlos in the same month. The Register of Deeds of Iloilo
refused to register right away, since the original registered
owner, Justice Antonio Horilleno was already dead. Carlos had to
hire Atty. Teotimo Arandela to file a petition within the cadastral
case, on 26 February 1968, for the purpose. After which, Carlos
returned to Luzon. After compliance with the requisites of
publication, hearing and notice, the petition was approved. On 29
April 1968, Carlos (in Iloilo) went to the Register of Deeds and
caused the registration of the order of the cadastral court
approving the issuance of a new title in the name of the co-owners,
as well as of the deed of sale to the Doromals, as a result of
which on that same date, a new title was issued TCT 23152, in the
name of the Horillenos to 6/7 and Javellana to 1/7, Exh. D, only to
be cancelled on the same day under TCT 23153, , already in the
names of the vendees Doromals for 6/7 and to Javellana, 1/7. On 30
April 1968, the Doromals paid Carlos the sum of P97,000.00 by a
check of the Chartered Bank which was later substituted by check of
PNB, because there was no Chartered Bank Branch in Ilocos Sur.
Besides the amount paid in check, the Doromals according to their
evidence still paid an additional amount in cash of P18,250.00
since the agreed price was P5.00 a square meter; and thus was
consummated the transaction. On 10 June 1968, Atty. Arturo H.
Villanueva (Javellanas lawyer) arrived at the residence of the
Doromals in Dumangas, Iloilo, bringing with him her letter of that
date, making a formal offer to repurchase or redeem the 6/7
undivided share in Lot No. 3504, of the Iloilo Cadastre, which the
Doromals bought from her erstwhile co-owners, the Horillenos, for
the sum of P30,000.00 (the sum Atty. Villanueva has with him which
he would deliver to the Doromals as soon as they execute the
contract of sale in her favor). The Doromals refused. On 11 June,
1968, Javellana filed the case before the CFI Iloilo seeking to
exercise her right to redeem the share of the property, as
co-owner, at the price stated in the deed of sale, i.e. P30,000.00.
The trial judge, after hearing the evidence, ruled in favor of the
Doromals, holding that Javellana had no more right, to redeem as
she was already informed of the intended sale of the 6/7 share
belonging to the Horillenos, and further condemned Javellana to pay
attorneys fees, and moral and exemplary damages. Javellana
appealed. Sales, 2003 ( 90 ) Haystacks (Berne Guerrero) The Court
of Appeals (in CA-GR 47945-R) reversed the trial courts decision
and held that although respondent Javellana was informed of her
co-owners proposal to sell the land in question to the Doromals she
was, however, never notified least of all, in writing, of the
actual execution and registration of the corresponding deed of
sale, hence, Javellana s right to redeem had not yet expired at the
time she made her offer for that purpose thru her letter of 10 June
1968 delivered to the Doromals on even date. The intermediate court
further held that the redemption price to be paid by Javellana
should be that stated in the deed of sale which is P30,000
notwithstanding that the preponderance of the evidence proves that
the actual price paid by the Doromals was P115,250. The Doromals
appealed. The Supreme Court affirmed the decision of the Court of
Appeals, with costs against Spouses Doromal Sr. and Doromal Jr. 1.
Right of pre-emption or redemption Article 1623 of the Civil Code
which provides that The right of legal pre-emption or redemption
shall not be exercised except within thirty days from the notice in
writing by the prospective vendor, or by the vendor, as the case
may be. The deed of sale shall not be recorded in the Registry of
Property, unless accompanied by an affidavit of the vendor that he
has given written notice thereof to all possible redemptioners. The
right of redemption of co-owners excludes that of adjoining owners.
2. Carlos letters do not constitute notice for the computation of
the 30-day period in Article 1623; Alleged letters do not refer to
a consummated sale The letters sent by Carlos Horilleno to Filomena
Javellana (dated 18 January 1968 and 5 November 1967) do not
constitute the required notice in writing from which the 30-day
period fixed in said provision should be computed. There is no
showing that said letters were in fact received by Javellana and
when they were actually received. In any event, neither of said
letters referred to a consummated sale. It was Carlos Horilleno
alone who signed them, and as of 18 January 1968, powers of
attorney from the various co-owners were still to be secured.
Indeed, the later letter of 18 January 1968 mentioned that the
price was P4.00/sq.m. whereas in the earlier letter of 5 November
1967 it was P5.00. In fact, as early as 21 October 1967, Carlos had
already received P5,000 from the Doromals supposedly as earnest
money, of which, however, mention was made by him to his niece only
in the later letter of 18 January 1968, the explanation being that
at later negotiation it was increased to P5.00/sq.m. 3. Sale not
yet perfected during the time of the sending of letters; Earnest
money was made as understood under the Old Civil Code While the
letters relied upon by the Doromals could convey the idea that more
or less some kind of consensus had been arrived at among the other
co-owners to sell the property in dispute to the Doromals, it
cannot be said definitely that such a sale had even been actually
perfected. The difference in the prices per square meter in the two
letters negatives the possibility that a price definite had already
been agreed upon. While P5,000 might have indeed been paid to
Carlos in October 1967, there is nothing to show that the same was
in the concept of the earnest money contemplated in Article 1482 of
the Civil Code as signifying perfection of the sale. Viewed in the
backdrop of the factual milieu thereof extant in the record, said
P5,000 were paid in the concept of earnest money as the term was
understood under the Old Civil Code, that is, as a guarantee that
the buyer would not back out, considering that it is not clear that
there was already a definite agreement as to the price then and
that the Doromals were decided to buy 6/7 only of the property
should Javellana refuse to agree to part with her 1/7 share. 3.
Right of redemption; Requirement of notice, must be in a public
instrument (Article 1620 and 1623) For purposes of the co-owners
right of redemption granted by Article 1620 of the Civil Code, the
notice in writing which Article 1623 requires to be made to the
other co-owners and from receipt of which the Sales, 2003 ( 91 )
Haystacks (Berne Guerrero) 30-day period to redeem should be
counted is a notice not only of a perfected sale but of the actual
execution and delivery of the deed of sale. This is implied from
the latter portion of Article 1623 which requires that before a
register of deeds can record a sale by a co-owner, there must be
presented to him, an affidavit to the effect that the notice of the
sale had been sent in writing to the other co-owners. A sale may
not be presented to the register of deeds for registration unless
it be in the form of a duly executed public instrument. Moreover,
the law prefers that all the terms and conditions of the sale
should be definite and in writing. 4. Co-owners right of redemption
(Article 1619) Article 1619 of the Civil Code bestows unto a
co-owner the right to redeem and to be subrogated under the same
terms and conditions stipulated in the contract, and to avoid any
controversy as to the terms and conditions under which the right to
redeem may be exercised, it is best that the period therefor should
not be deemed to have commenced unless the notice of the
disposition is made after the formal deed of disposal has been duly
executed. 5. Javellana not notified in writing Javellana has never
been notified in writing of the execution of the deed of sale by
which the Doromals acquired the subject property, it necessarily
follows that her tender to redeem the same made on 10 June 1968 was
well within the period prescribed by law. Indeed, it is immaterial
when she might have actually come to know about said deed, it
appearing she has never been shown a copy thereof through a written
communication by either any of the Doromals or any of the
Horillenos. (Cf. Cornejo et al. vs. CA et al., 16 SCRA 775.) 6. Tax
evasion must be condemned It is impossible for the Supreme Court to
sanction the Doromals pragmatic but immoral posture. Being patently
violative of public policy and injurious to public interest, the
seemingly wide practice of understating considerations of
transactions for the purpose of evading taxes and fees due to the
government must be condemned and all parties guilty thereof must be
made to suffer the consequences of their ill-advised agreement to
defraud the state. The trial court fell short of its devotion and
loyalty to the Republic in officially giving its stamp of approval
to the stand of the Doromals and even berating Javellana as wanting
to enrich herself at the expense of her own blood relatives who are
her aunts, uncles and cousins. On the contrary, said blood
relatives should have been sternly told that they are in
pari-delicto with the Doromals in committing tax evasion and should
not receive any consideration from any court in respect to the
money paid for the sale in dispute. Their situation is similar to
that of parties to an illegal contract. 7. Consideration is P30,000
The consideration of P30,000 only was placed in the deed of sale to
minimize the payment of the registration fees, stamps and sales
tax. The redemption in controversy should be only for the price
stipulated in the deed, regardless of what might have been actually
paid by the Doromals. 8. Article 1619: Legal redemption as the
right to be subrogated Legal redemption is the right to be
subrogated, upon the same terms and conditions stipulated in the
contract, in the place of one who acquires a thing by purchase or
dation in payment, or by any other transaction whereby ownership is
transmitted by onerous title. In the present case, the stipulation
in the public evidence of the contract, made public by both vendors
and vendees is that the price was P30,000.00. 9. Article 1620 and
1623; Reasonable price A co-owner of a thing may exercise the right
of redemption in case the share of all the other coowners or any of
them, are sold to a third person. If the price of the alienation is
grossly excessive, the redemptioner shall pay only a reasonable
one. The law seeks to protect redemptioner and converts his
position into one not that of a contractually but of a legally
subrogated creditor as to the right of redemption, if the price is
not grossly excessive, what the law had intended redemptioner to
pay can be read in Art. 1623, Sales, 2003 ( 92 ) Haystacks (Berne
Guerrero) which provides that The right of a legal pre-emption or
redemption shall not be exercised except within thirty (30) days
from the notice in writing by the prospective vendor, or by the
vendor as the case may be. The deed of sale shall not be recorded
in the Registry of Property, unless accompanied by an affidavit of
the vendor that he has given written notice thereof of all possible
redemptioners. 10. Affidavits intended for a definitive purpose
Affidavit must have been intended by the lawmakers for a definite
purpose, to argue that this affidavit has no purpose is to go
against all canons of statutory construction. No law mandatory in
character and worse, prohibitive should be understood to have no
purpose at all. That would be an absurdity. Purpose could not but
have been to give a clear and unmistakable guide to redemptioner,
on how much he should pay and when he should redeem. Notice must
have been intended to state the truth and if vendor and vendee
should have instead, decided to state an untruth therein, it is
they who should bear the consequences of having thereby misled the
redemptioner who had the right to rely and act thereon and on
nothing else. 11. Equitable estoppel Stated otherwise, all the
elements of equitable estoppel are present since the requirement of
the law is to submit the affidavit of notice to all possible
redemptioners, that affidavit to be a condition precedent to
registration of the sale therefore. The law must have intended that
it be by the parties understood that they were there asking a
solemn representation to all possible redemptioners, who upon faith
of that are thus induced to act. In the present case, the parties
to the sale sought to avoid compliance with the law and certainly
refusal to comply cannot be rewarded with exception and acceptance
of the plea that they cannot be now estopped by their own
representation. 12. No unjust enrichment, as right is not
contractual but granted by law Javellanas right is not contractual,
but a mere legal one, the exercise of a right granted by the law,
and the law is definite that she can subrogate herself in place of
the buyer, upon the same terms and conditions stipulated in the
contract, in the words of Art. 1619, and here the price. stipulated
in the contract was P30,000.00, in other words, if this be possible
enrichment on the part of Javellana, it was not unjust but just
enrichment because permitted by the law. 13. Exercise of right,
just solution, promotion of justice What Javellana sought to
enforce is not an abuse but a mere exercise of a right. The
solution is not unjust because it only binds the parties to make
good their solemn representation to possible redemptioners on the
price of the sale, to what they had solemnly averred in a public
document required by the law to be the only basis for that exercise
of redemption. This thus promote justice.
Article 1482 of the Civil Code - Earnest MoneySPOUSES SERRANO,
ET. AL. v.CAGUIATG.R. No. 139173February 28,
2007Sandoval-Gutierrez,J.:FACTS:Spouses Serrano agreed to sell in
favor of respondent Caguiat aparcel of land at 1,500.00 per square
meter. Caguiat partiallypaid petitioners100, 000.00 as evidenced by
a receipt issuedby petitioners indicating therein respondents
promise to pay
theremainingbalance.Respondent,aftermakingknownhisreadinesstopaythebalance,requestedfrompetitionersthepreparationofthenecessaryDeedofSale.Whenpetitionerscancelled
the transaction and intended to return to Caguiat
hispartialpayment,respondentfiledacomplaintforspecificperformance
and damages. The trial court relying on Article 1482of the Civil
Code ruled that the payment of 100, 000.00 beingan earnest money
signified the perfection of the contract of
sale.TheCourtofAppealsdeniedpetitionersmotionforreconsideration in
affirmation of the lowercourts decision.ISSUE:
Whetherornotthepartialpaymentconstitutesanearnestmoney as
manifested in Article 1482 of the Civil
CodeHELD:No.Article1482appliesonlytoearnestmoneygiveninacontract of
sale. It was apparent that the earnest money in thecase at bar was
given in lieu of a contract to sell. Unlike in acontract of sale,
the ownership of the parcel of land was retainedby the Spouses
Serrano and shall only be passed to Caguiat uponfull payment of the
purchase price as evidenced by the receipt.Relatively, no Deed of
Sale has been executed as proof of theintention of the parties to
immediately transfer the ownership ofthe parcel of land. Spouses
Serrano also retained ownership ofthe certificate of title of the
lot, thereby indicating no actual orconstructive delivery of the
ownership of the property. Finally,should the transaction pushed
through, Caguiats payment of theremaining balance would have been a
suspensive condition sincethe transfer of ownership was
subordinated to the happening of afuture and uncertain
event.Article 1484 Remedies of a vendor in a contract of sale ofa
personal property payable ininstallments (NotApplicable in Real
Estate Mortgage)
n April 4, 1990, petitioners, through Atty. Ruben V. Lopez, sent
a letter4to respondent stating that petitioner Amparo Herrera is
leaving for abroad on or before April 15, 1990 and that they are
canceling the transaction. Petitioners also informed respondent
that he can recover the earnest money ofP100,000.00 anytime.Again,
on April 6, 1990,5petitioners wrote respondent stating that they
delivered to his counsel Philippine National Bank Managers Check
No. 790537 dated April 6, 1990 in the amount ofP100,000.00 payable
to him.In view of the cancellation of the contract by petitioners,
respondent filed with the Regional Trial Court, Branch 63, Makati
City a complaint against them for specific performance and damages,
docketed as Civil Case No. 90-1067.6On June 27, 1994, after
hearing, the trial court rendered its Decision7finding there was a
perfected contract of sale between the parties and ordering
petitioners to execute a final deed of sale in favor of respondent.
The trial court held:In the evaluation of the evidence presented by
the parties as to the issue as to who was ready to comply with his
obligation on the verbal agreement to sell on March 23, 1990, shows
that plaintiffs position deserves more weight and credibility.
First, theP100,000.00 that plaintiff paid whether as downpayment or
earnest money showed that there was already a perfected contract.
Art. 1482 of the Civil Code of the Philippines, reads as follows,
to wit:Art. 1482. Whenever earnest money is given in a contract of
sale, it shall be considered as part of the price and as proof of
the perfection of the contract.Second, plaintiff was the first to
react to show his eagerness to push through with the sale by
sending defendants the letter dated March 25, 1990. (Exh. D) and
reiterated the same intent to pursue the sale in a letter dated
April 6, 1990. Third, plaintiff had the balance of the purchase
price ready for payment (Exh. C). Defendants mere allegation that
it was plaintiff who did not appear on March 23, 1990 is
unavailing. Defendants letters (Exhs. 2 and 5) appear to be mere
afterthought.On appeal, the Court of Appeals, in its assailed
Decision of January 29, 1999, affirmed the trial courts
judgment.Forthwith, petitioners filed their motion for
reconsideration but it was denied by the appellate court in its
Resolution8dated July 14, 1999.Hence, the present recourse.The
basic issue to be resolved is whether the document entitled
"Receipt for Partial Payment" signed by both parties earlier
mentioned is a contract to sell or a contract of sale.
InSan Miguel Properties Philippines, Inc. v. Spouses Huang,13we
held that the stages of a contract of sale are: (1)negotiation,
covering the period from the time the prospective contracting
parties indicate interest in the contract to the time the contract
is perfected; (2)perfection, which takes place upon the concurrence
of the essential elements of the sale, which is the meeting of the
minds of the parties as to the object of the contract and upon the
price; and (3)consummation, which begins when the parties perform
their respective undertakings under the contract of sale,
culminating in the extinguishment thereof.With the above postulates
as guidelines, we now proceed to determine the real nature of the
contract entered into by the parties.It is a canon in the
interpretation of contracts that the words used therein should be
given their natural and ordinary meaning unless a technical meaning
was intended.14Thus, when petitioners declared in the said "Receipt
for Partial Payment" that they RECEIVED FROM MR. GODOFREDO CAGUIAT
THE AMOUNT OF ONE HUNDRED THOUSAND PESOS (P100,000.00) ASPARTIAL
PAYMENTOF OUR LOT SITUATED IN LAS PIAS, M.M. COVERED BY TCT NO.
T-9905 AND WITH AN AREA OF 439 SQUARE METERS.MR. CAGUIAT PROMISED
TO PAY THE BALANCE OF THE PURCHASE PRICE ON OR BEFORE MARCH 23,
1990, AND THAT WE WILL EXECUTE AND SIGN THE FINAL DEED OF SALE ON
THIS DATE.there can be no other interpretation than that they
agreed to a conditional contract of sale, consummation of which is
subject only to the full payment of the purchase price.A contract
to sell is akin to a conditional sale where the efficacy or
obligatory force of the vendor's obligation to transfer title is
subordinated to the happening of a future and uncertain event, so
that if the suspensive condition does not take place, the parties
would stand as if the conditional obligation had never existed.The
suspensive condition is commonly full payment of the purchase
price.15
DALION vs CARuperto Sabesaje (relative of the spouses Dalion)
sued to recover ownership over aparcel of land based on a private
document of Absolute Sale that he alleged wasexecuted in favor of
him by the spouses.Spouses denied the sale contending that the
document was fictitious, his signatureforged & the land is
conjugal property w/c he & his wife acquired from
SaturninaSabaje.Spouses also deny claims of Sebasaje that after
executing the deed of sale, they hadpleaded w/ him to be allowed to
administer the land because they did not have anymeans of
livelihood.Spouses however admitted administering 5 parcels of land
w/c belonged to Sabasajesgrandfather who had already died but never
received their 10% & 15% commissionfor sales of copra &
abaca respectively. Sebasaje sued merely to harass, preempt
&forestall their threat to sue for these unpaid commissions.TC:
Dalion to deliver to Sebaseje the parcel of land & to execute
formal deed of conveyancein a public document CA: AffirmedW/N a
public document is necessary for transfer of ownership?Dalion
impugns that even assuming genuineness of his signature & of
the document,the sale is not valid as it is embodied in private
document thus, did not conveytitle/right in question. Art 1358,
par.1: Acts & contracts w/c have for their object thecreation,
transmission, modification or extension of real rights over
immovableproperty must appear in a public instrumentHowever, this
necessity is only for convenience, not for validity or
enforceability. Itis not a requirement for the validity of a
contract of sale of a parcel of land thatthis be embodied in a
public instrument.A contract of sale is perfected by mere consent
& no required form is required for itsvalidity. Parties to a
perfected contract of sale have the right to reciprocally
demandperformance (Art1475), and to observe a particular form if
warranted (Art1357). Asale of real property may be in a private
instrument, but that contract is valid &binding between the
parties upon its perfection. And a party may compel theother party
to execute a public instrument embodying their contract
affectingreal rights once the contract appearing in a private
instrument has beenperfected.It was correct for TC to order Dalion
to deliver the land & to execute formal deed ofconveyance in a
public document. When the sale is made through a public
instrument,the execution thereof is equivalent to the delivery of
the thing (Art1498). Deliverymay either be actual (real) or
constructive. Thus, delivery may be done by placing thevendee in
control & possession of the land (real) or by embodying the
sale in a publicinstrument (constructive).DECISION AFFIRMED.STATUTE
OF FRAUDSSecuya vs. Vda. De Selma (2000)FACTS: Lot 5679 was
originally sold to Caballero. Caballero then entered into an
Agreement of Partition with Sabellona, whereby the latter will
receive1/3 of the portion of the whole property (Lot 5679).
Sabellona then sold her portion to Secuya (predecessors of
plaintiffs), by means of a privatedocument which was lost.
(Sabellonas only heir admitted and confirmed said sale) Secuya,
together with his bro and sis, took possession and cultivated the
land. Superales, husband of Secuyas sister, constructed his house
on the said lot, and lived theircontinuously up to the present.
(this was made with permission) Later, Secuya died. Selma,
defendant-respondent, bought a portion of the whole Lot 5679; and
later bought theremaining portion. The land in question, which was
a portion of Lot 5679, is embraced and included within the
boundaryof the acquired land by Selma. Selma then filed a complaint
with the Bgy. Captain asserting her ownership over the whole
property. Selma argued that she bought the whole property from Aro,
to whom the property was sold to byCaballeros heirs, as evidenced
by a notarized Deed of Sale. RTC: ruled in favor of Selma CA:
affirmed decision of RTC.ISSUE: I. W/N there was a valid transfer
of 1/3 portion of Lot 5679 by Caballero to Sebellona, by virtue of
theAgreement of Partition.HELD: I. NO1. The Agreement is to be
considered as an express trust, not a partition.2. In the said
Agreement, Caballero held the portion specified as belonging to
Sabellona when theapplication of ownership (granted by Director of
Lands in favor of Caballero) was eventuallyapproved and a sale
certificate is to be issued in her name.3. However, Caballero never
transferred the said lot to Sabellona during her lifetime. Instead,
herheirs sold it to Aro (as argued by Selma).4. Plaintiffs did not
even register the said Agreement with the Registry of Property or
pay therequisite land taxes.5. Plaintiffs even insist that there
was a sale between Sabellona and Secuya, which was embodied ina
private document.6. As held before, while a sale of a piece of land
appearing in a private deed is binding between theparties, it
cannot be considered binding on 3rd persons, if it is not embodied
in a public instrumentand recorded in the Registry of
Property.Yuvienco v. Dacuycuy this case refers to the Sotto
property in Tacloban which was offered through a letter by
Yuvienco(coursed through the attorney Gamboa) to Yao for 6.5M. Yao
was given around 19 days to respond tothe offer. A telegram was
sent accepting the offer, after which Gamboa wrote to Yao that he
would bearriving in Tacloban to negotiate the sale. The agreement
as to payment was as such: (though notincluded in the
memoranda)P2,000,000.00 to be paid in full on the date of the
execution of the contract; and the balance ofP4,500,000.00 shall be
fully paid within ninety (90) days thereafter; But when Gamboa
arrived Tacloban City bringing with him the prepared contract to
purchase and tosell referred to in his telegram dated July 27, 1978
for the purpose of closing the transactions,however, to the
complete surprise of plaintiffs, the defendant (except def.
Tacloban City Ice Plant,Inc.) without giving notice to plaintiffs,
changed the mode of payment with respect to thebalance of
P4,500,000.00 by imposing upon plaintiffs to pay same amount within
thirty(30) days from execution of the contract instead of the
former term of ninety (90) days Yuvienco moved to dismiss on the
ground of unenforceability under the Statute of FraudsIssues:1.
whether or not there was a perfected contract of sale2. whether or
not the claim alleged therein is unenforceable under the Statute of
FraudsHeld:1. NO it should be noted that the Gamboas telegram was
that he was going to Tacloban To negotiate thedetails and Yao King
Ong's telegram simply says "we agree to buy property". It does not
necessarilyconnote acceptance of the price but instead suggests
that the details were to be subject ofnegotiation. While
Respondents maintain that what the telegram refers to as "details"
to be "negotiated" are mere"accidental elements", not the essential
elements of the contract, this cannot hold water because itwas seen
that negotiations have been going on for quite some time, but they
have not come to a finalagreement, and a meeting of the minds did
not materialize. That respondents were all the timeagreeable to buy
the property may be conceded, but instead of "absolutely" accepting
the "certain"offer if there was one of the petitioners, they still
insisted on further negotiation of details. it being doubtful
whether or not, under Article 1319 of the Civil Code, the said
letter may be deemedas an offer to sell that is "certain", and
more, the Yao telegram is far from being an "absolute"acceptance
under said article, there still there appears to be a cause of
action alleged in Paragraphs 8to 12 of the respondents' complaint,
considering it is alleged therein that subsequent to the telegramof
Yao, it was agreed that the petitioners would sell the property to
respondents for P6.5 M, by pavingP2 M down and the balance in 90
days and which agreement was allegedly violated when in the
deedsprepared by Atty. Gamboa and taken to Tacloban, only 30 days
were given to respondents. BUT even if there seems to be a cause of
action, such is still unenforceable under the Statute ofFrauds.1.
NO. There wasnt sufficient compliance with the Statute of Frauds
because the manner of paymentwas not included in the letters and
telegrams. Yuvienco initially argued against this motion and asked
the court to reject the objection for the simplereason that the
contract of sale sued upon in this case is supported by letters and
telegrams annexedto the complaint and other papers which will be
presented during the trial. This is not well taken. Yaohaving
alleged that the contract is backed up by letters and telegrams,
and the same being asufficient memorandum, the complaint should be
given a day in court and allowed to substantiatetheir allegations.
In other words, the entire case was not dismissed outright just
because the contract was backed upby letters and telegrams.
However, the central issue now (whether there is a cause of action
becauseof the change in the manner of payment) is UNENFORCEABLE for
not being included in said lettersand telegrams. It is nowhere
alleged in said paragraphs 8 to 12 of the complaint that there is
any writing ormemorandum, much less a duly signed agreement to the
effect that the price of P6,500,000 fixed bypetitioners for the
real property herein involved was agreed to be paid not in cash but
in installmentsas alleged by respondents. In any sale of real
property on installments, the Statute of Frauds readtogether with
the perfection requirements of Article 1475 of the Civil Code must
be understood andapplied in the sense that the idea of payment on
installments must be in the requisite of a note ormemorandum
therein contemplated.Yaos complaint dismissed.LIMKETKAI SONS
MILLING, INCv s.C APhil Remnants Co constituted BPI as trustee to
manage, administer & sell its real estate propertyincluding one
in Pasig. Revilla, a real estate broker was given formal authority
by BPI to sell the lot for1K/sqm w/c was concurred in by the owners
of Phil Remnants.Revilla contacted Alfonso Lim of Limketkai Sons
who agreed to buy the land. So the officials ofLimketkai &
Revilla were given permission to enter & view the
property.Revilla informed BPI that he had procured a buyer & 2
officials of Limketkai Sons (Alfonso Lim &Albino Limketkai)
went to BPI & met w/ the VP (Albano) and Asst VP (Aromin) of
BPI to confirm thesale. They asked that the price be reduced to
900/sqm but Albano stated the price to be 1,100/sqm.They finally
agreed that the lot be sold at 1K/sqm to be paid in cash.
(Authority to sell was on a firstcome first served basis &
Limketkai Sons was the first comer)Lim asked if it was possible to
pay on terms. BPIs officials said that there was no harm in trying
toask as the same had been allowed. However, it was understood that
should the term payment bedisapproved, then price shall be paid in
cash. It was Albano who dictated the terms under w/cinstallments
payments may be made & so, Lim wrote to BPI embodying the
initial payment of 10% &the 90% w/in 90 days.3 days later,
Limketkai Sons learned that its offer to pay on terms had been
frozen. So Lim went toBPI to tender payment of 33M w/ Albano but he
refused stating that the authority to sell the land hadbeen w/drawn
from his unit. The same check for 33M was tendered to BPI VP Bona,
who also refused.Limketkai Sons filed an action for specific
performance w/ damages. In the course of trial, BPIinformed the TC
that it had sold the property to Natl Book Store (NBS) & the
complaint was amendedto include NBS.TC: In favor of Limketkai. CA:
reversedW/N bank officials were authorized to enter into the
contract? YESAt the start of the transaction, broker Revilla
himself had already full authority and was acting for &behalf
of BPI. Notwithstanding this, Revilla saw it fit to bring BPI
officials into the transaction. If BPIcould give authority to
licensed broker then there is no reason to doubt the authority to
sell of the BPIofficials whose precise job is to manage &
administer real estate property.Aromin, BPIs Asst VP & Trust
Officer acted in a perfectly natural manner & showed no
indication thatwe was acting ultra vires. This shows that BPI held
him out to the public as the officer routinelyhandling such
transactions. Everything in the record points to the full authority
of Aromin to bind thebank (made negotiations w/ Limketkai, etc)
except for the self-serving memoranda or letters laterproduced by
BPI that Aromin was an inefficient & undesirable officer and
who in fact, was dismissedafter he testified.MAIN ISSUE: W/N there
was a perfected contract because of Limketkais request to pay on
termsconstituting it as a counter-offer & negotiations were
still in progress at that point?
PERFECTEDCONTRACTNegotiation/Preparation Stage: authority given by
Phil remnants to BPI, authority given by BPI tobroker Revilla, the
offer to sell to Limketkai, the inspection of the property and the
negotiations w/Aromin & AlbanoPerfection: Aromin & Albano,
acting for BPI, agreed to sell & officers of Limketkai agreed
to buy thelot for 1K/sqm. Aside from this, there was the earlier
agreement between Limketkai & Revilla therewas a concurrence of
offer & acceptance on the object & the causeThe allegation
of NBS that there was no concurrence of the offer & acceptance
of the cause is beliedby Aromin & Albano, the officials w/ whom
the contract was perfected the fact that the deed of salestill had
to be signed & notarized does not mean that no contract had
already been perfectedThe sale of land is valid regardless of the
form it may have been entered into. The requisite formunder Art 458
is merely for convenience & failure to comply dos not affect
its validity or binding effect.If the law requires a document or
other special form, as in the sale of real property, the
contractingparties may compel each other to observe that form once
the contract has been perfectedSTATUTE OF FRAUDS APPLICABLE because
the sale involved real property. HOWEVER,under Art 1403, an
exception to the unenforceability of the Statute of Frauds (when
awritten contract of sale is not necessary) is the existence of a
written note or memorandumevidencing the contract, w/c may be found
in several writing, not only in one document.The memorandum is
written evidence that such a contract was entered into. a
writtennote/memorandum, embodying the essentials of the contract
& signed by the party charged or hisagents suffices to make the
verbal agreement enforceable, taking it out of the operation of the
statuteWhile in this case there is no written contract, there are
abundant notes & memoranda extant in therecords evidencing the
elements of a written contract. (e.g.: ExhPletter to Amorin
authorizing thesale at 1K, giving 2% commission to the broken &
instructing that sale be on cash basis;ExhBissued by BPI to Reviila
authorizing him to sell property, etc.) Combining all these notes
&memoranda, SC held that there is a perfected contract of sale.
No particular form of languageor instrument is necessary to
constitute a memorandum or note in writing under the statute of
fraudsW/N NBS is an innocent purchaser for value? NO, NBS IN BAD
FAITHNBS ignored the notice of lis pedens annotated on the title
when it bought the lot. It was thewillingness & design of NBS
to buy property already sold to another party w/c led BPI to
dishonor thecontract w/ Limketkai.BADGES OF FRAUD: 1. Sale was
supposed to be done through authorized broken but BPI
officialspersonally & directly took over this particular sale
when a close friend became interested, 2. BPI SenVP admitted that
NBS Pres was his friend & had lunch meetings to discuss
purchase of the lot 3. NBSoffered 5m then 7M if Limketkai would
drop the case & give up the lot 4. In an area abound
w/buildings, NBS had constructed only a warehouse w/c ccan easily
be dismantledCA DECISION REVERSED, RTC DECISION REINSTATED.Ortega
v. LeonardoPartial performance EXC to Statute of Frauds Ortega and
Leonardo were both asserting their rights to a parcel of land in
Malate for the purposes ofpurchase. Because of this, an
investigation ensued, and Leonardo proposed to Ortega that the
latterdesist from her claim in exchange for the promise that if and
when he succeeded in getting title to thelot, he would sell to her
a portion thereof, provided (1) she paid for the surveying and
subdivision ofthe lot and that (2) after he acquired title, she
could continue holding the lot as tenant by payingmonthly rental
until said portion shall haven been segregated and the purchase
price fully paid. The offer was accepted and Ortega desisted from
her claim. She then caused the survey andsegregation and paid the
monthly rentals. However, when she tendered payment to defendant
the purchase price which the latter refused toaccept.Issue: w/n the
contract is unenforceable for not being written, as required by the
Statute ofFrauds?TC: unenforceableSC: the case falls under the
exception, where there is partial performance.There were several
circumstances indicating partial performance:1. the relinquishment
of the rights of continued possession2. the building of
improvements, which is considered to the the strongest and most
unequivocal act ofpart performance3. the tender of payment plus the
surveying of the lot at Ortegas expense and the payment of
therentalsIt would be fraud if Leonardo was permitted to oppose
performance of his part after he was allowed or inducedthe former
to perform in reliance upon the agreement.CLAUDEL V. CAStatute of
frauds applicable This case is basically a dispute over a land in
Muntinlupa which was previously owned by BasilioClaudel. He
declared the lot in his name and paid the realty taxes, which was
passed on to his widowand son after his death. The dispute is
between the HEIRS OF CECILIO and the SIBLINGS OF CECILIO. The HEIRS
partitionedthe land, and the SIBLINGS filed a case to cancel the
titles and for reconveyance. The ground for thiswas that the land
was supposedly sold to them prior to Cecilios death for P30, but
this was only averbal contract. The CFI dismissed the case because,
among others, the SIBLINGS were not able to present anydocument
evidencing the alleged sale, and the Statute of Frauds precludes
admission of oraltestimony on the sale of real property. Plus, the
action has prescribed. CA reversedIssue:1. w/n the contract may be
proven orally2. w/n the prescriptive period for filing the action
for cancellation and reconveyance should becounted from thesale or
from the date of issuance of titles?Held:1. NOThe rule of thumb is
that a sale of land, once consummated, is valid regardless of the
form it mayhave been entered into. For nowhere does law or
jurisprudence prescribe that the contract of sale be put inwriting
before such contract can validly cede or transmit rights over a
certain real property between the partiesthemselves.However, in the
event that a third party, as in this case, disputes the ownership
of the property, theperson against whom that claim is brought can
not present any proof of such sale and hence has no means toenforce
the contract. Thus the Statute of Frauds was precisely devised to
protect the parties in a contract ofsale of real property so that
no such contract is enforceable unless certain requisites, for
purposes of proof, aremet. Except under the conditions provided by
the Statute of Frauds, the existence of the contract of sale madeby
Cecilio w/ his siblings cannot be proved.2. YESThe action is
supposed to be based on an oral contract, which prescribes in 6
years. More than 6 years haslapsed. The reason that an implied
trust in favor of the SIBLINGS OF CECILIO was established in
1972,when the HEIRS OF CECILIO executed a contract of partition
over the said properties, is not well-taken. Asbeen pointed out,
the law recognizes the superiority of the torrens title. Above all,
the torrens title in thepossession of the HEIRS OF CECILIO carries
more weight as proof of ownership than the survey orsubdivision
plan of a parcel of land in the name of SIBLINGS OF CECILIO.ALFREDO
v. BORRAS (2003)The owners of the subject lot in this case were
petitioner spouses, Godofredo Alfredo and CarmenLimon Alfredo. The
Subject Land is covered by an OCT. Private respondents, spouses
Armando Borras andAdelia Lobaton Borras, filed a complaint for
specific performance against Godofredo and Carmen before theRTC.
Armando and Adelia alleged in their complaint that Godofredo and
Carmen mortgaged the Subject Landfor 7k with DBP. To pay the debt,
Carmen and Godofredo sold the Subject Land to Armando and Adelia
for15k, the buyers to pay the DBP loan and its accumulated
interest, and the balance to be paid in cash to thesellers. Armando
and Adelia gave Godofredo and Carmen the money to pay the loan to
DBPwhich signed the release of mortgage and returned the owners
duplicate copy of OCT to Godofredo andCarmen. Armando and Adelia
subsequently paid the balance of the purchase price of the Subject
Land.Godofredo and Carmen then delivered to Adelia the owners
duplicate copy of OCT, with the document ofcancellation of
mortgage, official receipts of realty tax payments, and tax
declaration in the name ofGodofredo. Godofredo and Carmen
introduced Armando and Adelia, as the new owners of the Subject
Land, tothe Natanawans, the old tenants of the Subject Land.
Armando and Adelia then took possession of the SubjectLand. In
January 1994, Armando and Adelia learned that hiredpersons had
entered the Subject Land and were cutting trees under instructions
of allegedly new owners of theSubject Land. Subsequently, Armando
and Adelia discovered that Godofredo and Carmen had re-sold
portionsof the Subject Land to several persons. Armando and Adelia
filed an adverse claim with the Register of Deedsof Bataan. Armando
and Adelia discovered that Godofredo and Carmen had secured an
owners duplicate copyof OCT after filing a petition in court for
the issuance of a new copy. Armando and Adelia wrote Godofredo
andCarmen complaining about their acts, but the latter did not
reply. Thus, Armando and Adelia filed a complaintfor specific
performance. Petitioners asserted that the Subsequent Buyers were
buyers in good faith and forvalue. TC: in favor of Armando and
Amelia. RTC: there was perfectedcontract of sale; all the elements
are present (object, purchase price, manner of payment); subsequent
buyersnot in GF. CA: affirmedRTCIssue: w/n therewas perfected
contract of saleHeld:1. There was a perfected contract of sale. A
contract is perfected once there is consent of the
contractingparties on the object certain and on the cause of the
obligation. The contract of sale has also beenconsummated because
the sellers and buyers have performed their respective obligations
under thecontract. In a contract of sale, the seller obligates
himself to transfer ownership of the determinatething sold, and to
deliver the same, to the buyer who obligates himself to pay a price
certain to theseller.2. Ownership of the thing sold is transferred
to the vendee upon its actual or constructive delivery.Godofredo
and Carmen also turned over to Amando and Amelia the documents of
ownership.Armando and Amelia paid the full purchase price as
evidenced by the receipt.3. Subsequent buyers not in GF because
they were aware of the lis pendens in the title. Also. The
settledrules is when ownership or title passes to the buyer, the
seller ceases to have any title to transfer toany 3rd person. If
the seller sells the same land to another, the 2nd buyer hwo has
actual orconstructive knowledge of the prior sal
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