Cases on Sales Price

G.R. No. 115734 February 23, 2000 B. As there is no preponderance of evidence showin" that the plaintiffs suffered !oral and e=e!plar4 da!a"es their clai! for such da!a"es is here34 dis!issed. %he plaintiffs5 clai! under the second cause of action is here34 dis!issed on the "round of prescription. (iCewise the defendants5 counterclai! is here34 dis!issed for lacC of !erit. ?e shall now e=a!ine the factual antecedents of this petition. +n dispute here is a parcel of land in &i'an (a"una particularl4 descri3ed as follows, A -ARC.( 1F (AN2 9(ot ##B-A-#; of the su3division plan 9(RC; -sd-3)##>; 3ein" a portion of (ot ##B-A descri3ed on -lan -sd-BB))< (RC 9G(R1; Record No. <3>*; situated in the -o3lacion /unicipalit4 of &i'an -rovince of (a"una +sland of (uDon. &ounded on the N.. points 3 to * 34 the &i'an River6 on the 0.. points * to # 34 (ot ##B-A-) of the su3d. -lan6 on the 0?. points # to ) 34 the Road and on points ) to 3 34 (ot ##B-& -sd-BB))< . . . containin" an area of 0.V.N @EN2R.2 F+F%F %@R.. 9>B3; 0G. /.%.R0 !ore or less . . . .3 1ri"inall4 owned in co!!on 34 the si3lin"s /ariano and Gaudencia Aarra"a who inherited it fro! their father the parcel is covered 34 %ransfer Certificate of %itle 9%C%; No. %-3)00>. /ariano predeceased his sister who died sin"le without offsprin" on Au"ust B #9<3 at the a"e of 9>. Victorina Aarra"a vda. de (o4ola and Cecilia Aarra"a are sisters of Gaudencia and /ariano. Victorina died on 1cto3er #< #9<9 while Civil Case No. &-)#9* was pendin" with the trial court. Cecilia died on Au"ust * #990 un!arried and childless. Victorina and Cecilia were su3stituted 34 petitioners as plaintiffs. -rivate respondents children of /ariano e=ceptin" those deno!inated as the 7@eirs of Hose Aarra"a 7 are first cousins of petitioners. Respondents desi"nated as the 7@eirs of Hose Aarra"a7 are first cousins once re!oved of the petitioners. -rivate respondents alle"e that the4 are the lawful owners of (ot ##B-A-# the onehalf share inherited 34 their father /ariano and the other half purchased fro! their deceased aunt Gaudencia. %ransfer Certificate of %itle No. ##606> was issued in their na!es coverin" (ot ##B-A-#. %he records show that the propert4 was earlier the su3$ect of Civil Case No. &-#09* 3efore the then Court of First +nstance of (a"una &ranch # entitled 70pouses Ro!ualdo Aarra"a et al. v. Gaudencia Aarra"a et al.7 Ro!ualdo Aarra"a one of the private respondents now was the plaintiff in Civil Case No. &-#09*. %he defendants were his si3lin"s, Nieves Ro!ana Guiller!o -urificacion An"eles Ro3erto .strella and Hose all surna!ed Aarra"a as well as his aunt the late Gaudencia. %he trial court decided Civil Case No. &-#09* in favor of the defendants. Gaudencia was ad$ud"ed owner of the one-half portion of (ot ##B-A-#. Ro!ualdo elevated the decision to the Court of Appeals and later the 0upre!e Court. %he petition docCeted as G.R. No. B9B)9 was denied 34 this Court on /arch #> #9<).

RUBEN LOYOLA, CANDELARIA LOYOLA, LOREN O LOYOLA, FLORA LOYOLA, NICANDRO LOYOLA, RO!ARIO LOYOLA, "ERE!I"A LOYOLA a#$ %ICEN"E LOYOLA, &e'('(o#er), *). "+E +ONORABLE COUR" OF A,,EAL!, NIE%E!, RO-ANA, RO-UALDO, GUILLER-O, LUCIA, ,URIFICACION, ANGELE!, ROBER"O, E!"RELLA, a.. )ur#a/e$ ARRAGA a#$ "+E +EIR! OF 0O!E ARRAGA, #a/e.y AURORA, -ARI"A, 0O!E, RONALDO, %IC"OR, LAURIANO, a#$ ARIEL, a.. )ur#a/e$ ARRAGA, re)&o#$e#'. For review on certiorari is the decision of the Court of Appeals in CA-G.R. No. CV 36090 pro!ul"ated on Au"ust 3# #993 reversin" the $ud"!ent of the Re"ional %rial Court of &i'an (a"una &ranch )* in Civil Case No. &-)#9*. +n said decision the appellate court decreed, -R./+0.0 C1N0+2.R.2 the decision appealed fro! is here34 R.V.R0.2 and a new $ud"!ent rendered as follows, #. 2is!issin" the plaintiff5s Co!plaint6

). 2eclarin" the 7&ilihan" %ulu4an n" 8alahati 9#:); n" +san" 9#; (a"a4 na (upa7 dated Au"ust )* #9<0 9.=hi3it #; as well as %ransfer Certificate of %itle No. %##606> of the Re"istr4 of 2eeds for the Cala!3a &ranch to 3e lawful valid and effective. %he R%C decision reversed 34 the Court of Appeals had disposed of the co!plaint as follows, ?@.R.F1R. pre!ises considered $ud"!ent is here34 rendered in favor of the plaintiffs and a"ainst the defendants as follows, #. 2eclarin" the si!ulated deed of a3solute sale purportedl4 e=ecuted 34 the late Gaudencia Aarra"a on Au"ust )* #9<0 as well as the issuance of the correspondin" certificate of title in favor of the defendants null and void fro! the 3e"innin"6 ). 1rderin" the Re"ister of 2eeds of (a"una Cala!3a &ranch to cancel %ransfer Certificate of %itle No. %-##60<> issued in favor of the defendants and to issue another one if feasi3le in favor of the plaintiffs and the defendants as coowners and le"al heirs of the late Gaudencia Aarra"a6 3. 1rder9in"; the defendants to reconve4 and deliver the possession of the shares of the plaintiff on 9sic; the su3$ect propert46 *. 1rderin" the defendants to pa4 the a!ount of -)0 000 as and for attorne45s fees and the costs of this suit.

Cases on Sales Price

%he present controvers4 3e"an on Au"ust )* #9<0 nearl4 three 4ears 3efore the death of Gaudencia while G.R. No. B9B)9 was still pendin" 3efore this Court. 1n said date Gaudencia alle"edl4 sold to private respondents her share in (ot ##B-A-# for -3* 000.00. %he sale was evidenced 34 a notariDed docu!ent deno!inated as 7&ilihan" %ulu4an n" 8alahati 9#:); n" +san" (a"a4 na (upa.7* Ro!ualdo the petitioner in G.R. No. B9B)9 was a!on" the vendees. /eanwhile the decision in Civil Case No. &-#09* 3eca!e final. -rivate respondents filed a !otion for e=ecution. 1n Fe3ruar4 #6 #9<* the sheriff e=ecuted the correspondin" deed of reconve4ance to Gaudencia. 1n Hul4 )3 #9<* however the Re"ister of 2eeds of (a"una Cala!3a &ranch issued in favor of private respondents %C% No. %-##606> on the 3asis of the sale on Au"ust )* #9<0 34 Gaudencia to the!. 1n Hanuar4 3# #9<B Victorina and Cecilia filed a co!plaint docCeted as Civil Case No. &-)#9* with the R%C of &i'an (a"una for the purpose of annullin" the sale and the %C%. %he trial court rendered $ud"!ent in favor of co!plainants. 1n appeal the appellate court R.V.R0.2 the trial court. 1n 0epte!3er #B #993 herein petitioners 9as su3stitute parties for Victorina and Cecilia the ori"inal plaintiffs; filed a !otion for reconsideration which was denied on Hune 6 #99*. @ence the instant petition. -etitioners su3!it the followin" issues for resolution 34 this Court, #. ?@.%@.R 1R N1% %@.R. AR. 0%R1NG AN2 C1G.N% R.A01N90; %1 2+0%ER& %@. F+N2+NG0 AN2 C1NC(E0+1N0 1F %@. %R+A( C1ER% %@A% %@. C1N%RAC% 2.N1/+NA%.2 A0 2..2 1F A&01(E%. 0A(. +0 0+/E(A%.2 AN2 %@.R.F1R. NE(( AN2 V1+2. ). ?@.%@.R %@. AC%0 1F -R+VA%. R.0-1N2.N%0 +0 90+C; C1N0+0%.N% ?+%@ %@. AC%0 1F V.N2..0 ?@.N %@.F 2.F+.2 (1G+C A0 F1EN2 &F %@. %R+A( C1ER%. . . 3. ?@.%@.R %@. A((.G.2 V.N21R0 90+C; GAE2.NC+A AARRAGA ?@1 ?A0 %@.N 9* F.AR0 1(2 A(R.A2F ?.A8 AN2 ?@1 ?A0 EN2.R %@. CAR. 1F 1N. 1F %@. V.N2..0 -R+VA%. R.0-1N2.N% R1/ANA AARRAGA 0+NG(. AN2 ?+%@1E% ANF C@+(2 &E% @A0 0+0%.R0 AN2 1%@.R N.-@.?0 AN2 N+.C.0 ?+(( 0.(( @.R -R1-.R%F %@.N ?1R%@ -#<< )B0.00 +N #9<0 F1R 1N(F -3* 000 AN2 ?@.%@.R A C1N%RAC% 1F 0A(. 1F R.A(%F +0 -.RF.C%.2 VA(+2 AN2 G.NE+N. ?@.N 1N. 1F %@. V.N2..0 R1/EA(21 AARRAGA 21.0 N1% 8N1? 1F %@. %RAN0AC%+1N %@. 1%@.R V.N2.. H10. AARRAGA ?A0 A(R.A2F (1NG 2.A2 &.F1R. %@. .I.CE%+1N 1F %@. &+(+@AN +N GE.0%+1N AN2 F.% ?A0 +NC(E2.2 A0 1N. 1F %@. V.N2..0 (+8.?+0. 1%@.R 0E--10.2 V.N2..0 N+.V.0 AARRAGA AN2 GE+((.R/1 AARRAGA A0+2. FR1/ R1/EA(21 ?.R. N1% -R.0.N% ?@.N %@. %RAN0AC%+1N %118 -(AC.. *. %@. (.GA( /.AN+NG AN2 +/-1R% 1F 0+/E(A%.2 C1N%RAC% 1F 0A(. ?@+C@ +NVA(+2A%.0 A %RAN0AC%+1N +0 A(01 A (.GA( +00E. %1 &. %@R.0@.2 1E% +N %@+0 CA0. A% &AR. B. ?@.%@.R -.%+%+1N.R0 @AV. %@. (.GA( -.R01NA(+%F %1 0E..B

Notwithstandin" petitioners5 for!ulation of the issues we find the onl4 issue for resolution in this case is whether or not the deed of a3solute sale is valid. -etitioners vi"orousl4 assail the validit4 of the e=ecution of the deed of a3solute sale su""estin" that since the notar4 pu3lic who prepared and acCnowled"ed the Juestioned &ilihan did not personall4 Cnow Gaudencia the e=ecution of the deed was suspect. @owever the notar4 pu3lic testified that he interviewed Gaudencia prior to preparin" the deed of sale.6 -etitioners failed to re3ut this testi!on4. %he rule is that a notariDed docu!ent carries the evidentiar4 wei"ht conferred upon it with respect to its due e=ecution > and docu!ents acCnowled"ed 3efore a notar4 pu3lic have in their favor the presu!ption of re"ularit4.< &4 their failure to overco!e this presu!ption with clear and convincin" evidence petitioners are estopped fro! Juestionin" the re"ularit4 of the e=ecution of the deed.9 -etitioners also char"e that one of the vendees Hose Aarra"a was alread4 dead at the ti!e of the sale. @owever the records reveal that Hose died on Hul4 )9 #9<#.#0 @e was still alive on Au"ust )* #9<0 when the sale tooC place. -etitioners then contend that three of the vendees included in the deed na!el4 Ro!ualdo Guiller!o and Nieves were not aware of the transaction which casts dou3t on the validit4 of the e=ecution of the deed. Curiousl4 Ro!ualdo who Juestioned Gaudencia5s ownership in Civil Case No. &-#09* was one of those included as 3u4er in the deed of sale. Ro!ana however testified that Ro!ualdo reall4 had no Cnowled"e of the transaction and he was included as a 3u4er of the land onl4 3ecause he was a 3rother. -etitioners su""est that all the aforecited circu!stances lead to the conclusion that the deed of sale was si!ulated. 0i!ulation is 7the declaration of a fictitious will deli3eratel4 !ade 34 a"ree!ent of the parties in order to produce for the purposes of deception the appearances of a $uridical act which does not e=ist or is different what that which was reall4 e=ecuted.7## Characteristic of si!ulation is that the apparent contract is not reall4 desired or intended to produce le"al effect or in an4 wa4 alter the $uridical situation of the parties. -erusal of the Juestioned deed will show that the sale of the propert4 would convert the co-owners to vendors and vendees a clear alteration of the $uridical relationships. %his is contrar4 to the reJuisite of si!ulation that the apparent contract was not reall4 !eant to produce an4 le"al effect. Also in a si!ulated contract the parties have no intention to 3e 3ound 34 the contract. &ut in this case the parties clearl4 intended to 3e 3ound 34 the contract of sale an intention the4 did not den4.

Cases on Sales Price

%he reJuisites for si!ulation are, 9a; an outward declaration of will different fro! the will of the parties6 93; the false appearance !ust have 3een intended 34 !utual a"ree!ent6 and 9c; the purpose is to deceive third persons.#) None of these are present in the assailed transaction. Anent Ro!ualdo5s lacC of Cnowled"e and participation in the sale the rule is that contracts are 3indin" onl4 upon the parties who e=ecute the!.#3 Ro!ualdo had no Cnowled"e of the sale. @e was a stran"er and not a part4 to it. Article #3## of the Civil Code#* clearl4 covers this situation. -etitioners fault the Court of Appeals for not considerin" that at the ti!e of the sale in #9<0 Gaudencia was alread4 9* 4ears old6 that she was alread4 weaC6 that she was livin" with private respondent Ro!ana6 and was dependent upon the latter for her dail4 needs such that under these circu!stances fraud or undue influence was e=ercised 34 Ro!ana to o3tain Gaudencia5s consent to the sale. %he rule on fraud is that it is never presu!ed 3ut !ust 3e 3oth alle"ed and proved.#B For a contract to 3e annulled on the "round of fraud it !ust 3e shown that the vendor never "ave consent to its e=ecution. +f a co!petent person has assented to a contract freel4 and fairl4 said person is 3ound. %here also is a disputa3le presu!ption that private transactions have 3een fair and re"ular.#6 Applied to contracts the presu!ption is in favor of validit4 and re"ularit4. +n this case the alle"ations of fraud was unsupported and the presu!ption stands that the contract Gaudencia entered into was fair and re"ular. -etitioners also clai! that since Gaudencia was old and senile she was incapa3le of independent and clear $ud"!ent. @owever a person is not incapacitated to contract !erel4 3ecause of advanced 4ears or 34 reason of ph4sical infir!ities.#> 1nl4 when such a"e or infir!ities i!pair his !ental faculties to such e=tent as to prevent hi! fro! properl4 intelli"entl4 and fairl4 protectin" his propert4 ri"hts #< is he considered incapacitated. -etitioners show no proof that Gaudencia had lost control of her !ental faculties at the ti!e of the sale. %he notar4 pu3lic who interviewed her testified that when he talCed to Gaudencia 3efore preparin" the deed of sale she answered correctl4 and he was convinced that Gaudencia was !entall4 fit and Cnew what she was doin". 1n whether or not Gaudencia was under the undue influence of the private respondents Article #33> of the Civil Code states, %here is undue influence when a person taCes i!proper advanta"e of his power over the will of another deprivin" the latter of a reasona3le freedo! of choice. %he followin" circu!stances shall 3e considered, confidential fa!il4 spiritual and other relations 3etween the parties or the fact that the person alle"ed to have 3een undul4 influenced was sufferin" fro! !ental weaCness or was i"norant or in financial distress. Endue influence depends upon the circu!stances of each case#9 and not on 3are acade!ic rules.)0 For undue influence to 3e esta3lished to $ustif4 the cancellation of an instru!ent three ele!ents !ust 3e present, 9a; a person who can 3e influenced6 93; the fact that i!proper influence was e=erted6 9c; su3!ission to the overwhel!in" effect of such unlawful conduct.)# +n the a3sence of a confidential or fiduciar4 relationship 3etween the parties the law does not presu!e that one person e=ercised undue influence upon the other.)) A confidential or fiduciar4 relationship !a4 include an4 relation 3etween persons which allows one to do!inate the other with the opportunit4 to use that superiorit4 to the other5s disadvanta"e.)3 +ncluded are those of attorne4 and client )* ph4sician and patient )B nurse and invalid )6 parent and child )> "uardian and ward )< !e!3er of a church or sect and spiritual adviser )9 a person and his confidential adviser 30 or whenever a confidential relationship e=ists as a fact.3# %hat Gaudencia looCed after Ro!ana in her old a"e is not sufficient to show that the relationship was confidential. %o prove a confidential relationship fro! which undue influence !a4 arise the relationship !ust reflect a do!inant over!asterin" influence which controls over the dependent person.3) +n the present case petitioners failed to show that Ro!ana used her aunt5s reliance upon her to taCe advanta"e or do!inate her and dictate that she sell her land. Endue influence is not to 3e inferred fro! a"e sicCness or de3ilit4 of 3od4 if sufficient intelli"ence re!ains.33 -etitioners never re3utted the testi!on4 of the notar4 pu3lic that he o3served Gaudencia still alert and sharp. +n &a'eD v. Court of Appeals B9 0CRA #B 9#9>*; we had occasion to sa4 that solicitation i!portunit4 ar"u!ent and persuasion are not undue influence. A contract is not to 3e set aside !erel4 3ecause one part4 used these !eans to o3tain the consent of the other. ?e have liCewise held in /artineD v. @on"Con" and 0han"hai &anC #B -hil. )B) 9#9#0; that influence o3tained 34 persuasion ar"u!ent or 34 appeal to the affections is not prohi3ited either in law or !orals and is not o3no=ious even in courts of eJuit4. A3sent an4 proof that Ro!ana e=erted undue influence the presu!ption is that she did not. -etitioners also seeC the annul!ent of the sale due to "ross inadeJuac4 of price. %he4 contend that Gaudencia in her ri"ht senses would never have sold her propert4 worth -#<< )B0.00 in #9<0 for onl4 -3* 000.00. %he records show that !uch of petitioners5 evidence was !eant to prove the !arCet value of the lot at the ti!e of the sale.3* A review of the records will show that lesion was not an issue raised 3efore the lower courts. An issue which was neither averred in the co!plaint nor raised in the court 3elow cannot 3e raised for the first ti!e on appeal. %o do so would 3e offensive to the 3asic rules of fair pla4. -etitioners see! to 3e unsure whether the4 are assailin" the sale of (ot ##B-A-# for 3ein" a3solutel4 si!ulated or for inadeJuac4 of the price. %hese two "rounds are irreconcila3le. +f there e=ists an actual consideration for transfer evidenced 34 the alle"ed act of sale no !atter how inadeJuate it 3e the transaction could not 3e a 7si!ulated sale.73B No reversi3le error was thus co!!itted 34 the Court of Appeals in refusin" to annul the Juestioned sale for alle"ed inadeJuac4 of the price.#Kwphi#.nLt ?@.R.F1R. the petition is 2.N+.2 and the assailed decision of the Court of Appeals AFF+R/.2. Costs a"ainst petitioners. 01 1R2.R.2.

Cases on Sales Price

G.R. No. 120415 !e&'e/ber 2, 1222 3ILLIA- UY a#$ RODEL RO4A!, &e'('(o#er), *). COUR" OF A,,EAL!, +ON. ROBER" BALAO a#$ NA"IONAL +OU!ING AU"+ORI"Y, re)&o#$e#'). na!e of his principal the action was properl4 dis!issed 9Ferrer vs. Villa!or 60 0CRA *06 M#9>*N6 /arcelo vs. de (eon #0B -hil. ##>B; 3ecause the rule is that ever4 action !ust 3e prosecuted in the na!e of the real parties-in-interest 90ection ) Rule 3 Rules of Court;. ?hen plaintiffs EF and Ro=as sou"ht pa4!ent of da!a"es in their favor in view of the partial rescission of Resolution No. #63) and the 2eed of A3solute 0ale coverin" %C% Nos. #099< #0999 and ##)9) 9-ra4er co!plaint pa"e B R%C records; it 3eco!es o3viousl4 indispensa3le that the lot owners 3e included !entioned and na!ed as part4-plaintiffs 3ein" the real part4-in-interest. EF and Ro=as as attorne4s-in-fact or apoderados cannot 34 the!selves lawfull4 co!!ence this action !ore so when the supposed special power of attorne4 in their favor was never presented as an evidence in this case. &esides even if herein plaintiffs E4 and Ro=as were authoriDed 34 the lot owners to co!!ence this action the sa!e !ust still 3e filed in the na!e of the principal 9Filipino +ndustrial Corporation vs. 0an 2ie"o )3 0CRA >06 M#96<N;. As such indispensa3le part4 their $oinder in the action is !andator4 and the co!plaint !a4 3e dis!issed if not so i!pleaded 9N2C vs. CA )## 0CRA *)) M#99)N;. ) %heir !otion for reconsideration havin" 3een denied petitioners seeC relief fro! this Court contendin" that, +. %@. R.0-1N2.N% CA .RR.2 +N 2.C(AR+NG %@A% R.0-1N2.N% N@A @A2 ANF (.GA( &A0+0 F1R R.0C+N2+NG %@. 0A(. +NV1(V+NG %@. (A0% %@R.. 93; -ARC.(0 C1V.R.2 &F N@A R.01(E%+1N N1. #63). ++. GRAN%+NG ARGE.N21 %@A% %@. R.0-1N2.N% N@A @A2 (.GA( &A0+0 %1 R.0C+N2 %@. 0E&H.C% 0A(. %@. R.0-1N2.N% CA N1N.%@.(.00 .RR.2 +N 2.NF+NG @.R.+N -.%+%+1N.R05 C(A+/ %1 2A/AG.0 C1N%RARF %1 %@. -R1V+0+1N0 1F AR%. ##9# 1F %@. C+V+( C12.. +++. %@. R.0-1N2.N% CA .RR.2 +N 2+0/+00+NG %@. 0E&H.C% C1/-(A+N% F+N2+NG %@A% %@. -.%+%+1N.R0 FA+(.2 %1 H1+N A0 +N2+0-.N0A&(. -AR%F -(A+N%+FF %@. 0.((+NG (1%-1?N.R0. 3 ?e first resolve the issue raised in the the third assi"n!ent of error. Epon appeal 34 petitioners the Court of Appeals reversed the decision of the trial court and entered a new one dis!issin" the co!plaint. +t held that since there was 7sufficient $ustifia3le 3asis7 in cancellin" the sale 7it saw no reason7 for the award of da!a"es. %he Court of Appeals also noted that petitioners were !ere attorne4s-infact and therefore not the real parties-in-interest in the action 3efore the trial court. . . . +n para"raph * of the co!plaint plaintiffs alle"ed the!selves to 3e 7sellers5 a"ents7 for the several owners of the < lots su3$ect !atter of the case. 13sviousl4 ?illia! E4 and Rodel Ro=as in filin" this case acted as attorne4s-in-fact of the lot owners who are the real parties in interest 3ut who were o!itted to 3e pleaded as part4-plaintiffs in the case. %his o!ission is fatal. ?here the action is 3rou"ht 34 an attorne4-in-fact of a land owner in his na!e 9as in our present action; and not in the -etitioners clai! that the4 lod"ed the co!plaint not in 3ehalf of their principals 3ut in their own na!e as a"ents directl4 da!a"ed 34 the ter!ination of the contract. %he da!a"es pra4ed for were intended not for the 3enefit of their principals 3ut to inde!nif4 petitioners for the losses the4 the!selves alle"edl4 incurred as a result of such ter!ination. %hese da!a"es consist !ainl4 of 7unearned inco!e7 and advances. * -etitioners thus atte!pt to distin"uish the case at 3ar fro! those involvin" a"ents or apoderedos institutin" actions in their own na!e 3ut in 3ehalf of their principals. B -etitioners in this case purportedl4 3rou"ht the action for da!a"es in their own na!e and in their own 3ehalf. ?e find this contention un!eritorious.

8A-ENAN H., -etitioners ?illia! E4 and Rodel Ro=as are a"ents authoriDed to sell ei"ht parcels of land 34 the owners thereof. &4 virtue of such authorit4 petitioners offered to sell the lands located in %u3a %adian"an &en"uet to respondent National @ousin" Authorit4 9N@A; to 3e utiliDed and developed as a housin" pro$ect. 1n Fe3ruar4 #* #9<9 the N@A &oard passed Resolution No. #63) approvin" the acJuisition of said lands with an area of 3#.<)3# hectares at the cost of -)3.<6> !illion pursuant to which the parties e=ecuted a series of 2eeds of A3solute 0ale coverin" the su3$ect lands. 1f the ei"ht parcels of land however onl4 five were paid for 34 the N@A 3ecause of the report # it received fro! the (and Geosciences &ureau of the 2epart!ent of .nviron!ent and Natural Resources 92.NR; that the re!ainin" area is located at an active landslide area and therefore not suita3le for develop!ent into a housin" pro$ect. 1n )) Nove!3er #99# the N@A issued Resolution No. )3B) cancellin" the sale over the three parcels of land. %he N@A throu"h Resolution No. )39* su3sec"uentl4 offered the a!ount of -#.))B !illion to the landowners as da'os per$uicios. 1n 9 /arch #99) petitioners filed 3efore the Re"ional %rial Court 9R%C; of GueDon Cit4 a Co!plaint for 2a!a"es a"ainst N@A and its General /ana"er Ro3ert &alao. After trial the R%C rendered a decision declarin" the cancellation of the contract to 3e $ustified. %he trial court nevertheless awarded da!a"es to plaintiffs in the su! of -#.)BB !illion the sa!e a!ount initiall4 offered 34 N@A to petitioners as da!a"es.#Kwphi#.nLt

Cases on Sales Price

0ec. ) Rule 3 of the Rules of Court reJuires that ever4 action !ust 3e prosecuted and defended in the na!e of the real part4-in-interest. %he real part4-in-interest is the part4 who stands to 3e 3enefited or in$ured 34 the $ud"!ent or the part4 entitled to the avails of the suit. 7+nterest within the !eanin" of the rule !eans !aterial interest an interest in the issue and to 3e affected 34 the decree as distin"uished fro! !ere interest in the Juestion involved or a !ere incidental interest. 6 Cases construin" the real part4-in-interest provision can 3e !ore easil4 understood if it is 3orne in !ind that the true !eanin" of real part4-in-interest !a4 3e su!!ariDed as follows, An action shall 3e prosecuted in the na!e of the part4 who 34 the su3stantive law has the ri"ht sou"ht to 3e enforced. > 2o petitioners under su3stantive law possess the ri"ht the4 seeC to enforceO ?e rule in the ne"ative. %he applica3le su3stantive law in this case is Article #3## of the Civil Code which states, Contracts taCe effect onl4 3etween the parties their assi"ns and heirs e=cept in case where the ri"hts and o3li"ations arisin" fro! the contract are not trans!issi3le 34 their nature or 34 stipulation or 34 provision of law. . . . +f a contract should contain so!e stipulation in favor of a third person he !a4 de!and its fulfill!ent provided he co!!unicated his acceptance to the o3li"or 3efore its revocation. A !ere incidental 3enefit or interest of a person is not sufficient. %he contractin" parties !ust have clearl4 and deli3eratel4 conferred a favor upon a third person. 9.!phasis supplied.; -etitioners are not parties to the contract of sale 3etween their principals and N@A. %he4 are !ere a"ents of the owners of the land su3$ect of the sale. As a"ents the4 onl4 render so!e service or do so!ethin" in representation or on 3ehalf of their principals. < %he renderin" of such service did not !aCe the! parties to the contracts of sale e=ecuted in 3ehalf of the latter. 0ince a contract !a4 3e violated onl4 34 the parties thereto as a"ainst each other the real parties-in-interest either as plaintiff or defendant in an action upon that contract !ust "enerall4 either 3e parties to said contract. 9 Neither has there 3een an4 alle"ation !uch less proof that petitioners are the heirs of their principals. Are petitioners assi"nees to the ri"hts under the contract of saleO +n /c/icCin" vs. &anco .spa'ol-Filipino #0 we held that the rule reJuirin" ever4 action to 3e prosecuted in the na!e of the real part4-in-interest. . . . reco"niDes the assi"n!ents of ri"hts of action and also reco"niDes that when one has a ri"ht of action assi"ned to hi! he is then the real part4 in interest and !a4 !aintain an action upon such clai! or ri"ht. %he purpose of Mthis ruleN is to reJuire the plaintiff to 3e the real part4 in interest or in other words he !ust 3e the person to who! the proceeds of the action shall 3elon" and to prevent actions 34 persons who have no interest in the result of the sa!e. . . . %hus an a"ent in his own 3ehalf !a4 3rin" an action founded on a contract !ade for his principal as an assi"nee of such contract. ?e find the followin" declaration in 0ection 3>) 9#; of the Restate!ent of the (aw on A"enc4 90econd;, ## 0ec. 3>). A"ent as 1wner of Contract Ri"ht 9#; Enless otherwise a"reed an a"ent who has or who acJuires an interest in a contract which he !aCes on 3ehalf of his principal can althou"h not a pro!isee !aintain such action thereon !aintain such action thereon as !i"ht a transferee havin" a si!ilar interest. %he Co!!ent on su3section 9#; states, a. A"ent a transferee. 1ne who has !ade a contract on 3ehalf of another !a4 3eco!e an assi"nee of the contract and 3rin" suit a"ainst the other part4 to it as an4 other transferee. %he custo!s of 3usiness or the course of conduct 3etween the principal and the a"ent !a4 indicate that an a"ent who ordinaril4 has !erel4 a securit4 interest is a transferee of the principals ri"hts under the contract and as such is per!itted to 3rin" suit. +f the a"ent has settled with his principal with the understandin" that he is to collect the clai! a"ainst the o3li"or 34 wa4 of rei!3ursin" hi!self for his advances and co!!issions the a"ent is in the position of an assi"nee who is the 3eneficial owner of the chose in action. @e has an irrevoca3le power to sue in his principal5s na!e. . . . And under the statutes which per!it the real part4 in interest to sue he can !aintain an action in his own na!e. %his power to sue is not affected 34 a settle!ent 3etween the principal and the o3li"or if the latter has notice of the a"ent5s interest. . . . .ven thou"h the a"ent has not settled with his principal he !a4 34 a"ree!ent with the principal have a ri"ht to receive pa4!ent and out of the proceeds to rei!3urse hi!self for advances and co!!issions 3efore turnin" the 3alance over to the principal. +n such a case althou"h there is no for!al assi"n!ent the a"ent is in the position of a transferee of the whole clai! for securit46 he has an irrevoca3le power to sue in his principal5s na!e and under statutes which per!it the real part4 in interest to sue he can !aintain an action in his own na!e. -etitioners however have not shown that the4 are assi"nees of their principals to the su3$ect contracts. ?hile the4 alle"ed that the4 !ade advances and that the4 suffered loss of co!!issions the4 have not esta3lished an4 a"ree!ent "rantin" the! 7the ri"ht to receive pa4!ent and out of the proceeds to rei!3urse Mthe!selvesN for advances and co!!issions 3efore turnin" the 3alance over to the principalMsN.7 Finall4 it does not appear that petitioners are 3eneficiaries of a stipulation pour autrui under the second para"raph of Article #3## of the Civil Code. +ndeed there is no stipulation in an4 of the 2eeds of A3solute 0ale 7clearl4 and deli3eratel47 conferrin" a favor to an4 third person. %hat petitioners did not o3tain their co!!issions or recoup their advances 3ecause of the non-perfor!ance of the contract did not entitle the! to file the action 3elow

Cases on Sales Price

a"ainst respondent N@A. 0ection 3>) 9); of the Restate!ent of the (aw on A"enc4 90econd; states, 9); An a"ent does not have such an interest in a contract as to entitle hi! to !aintain an action at law upon it in his own na!e !erel4 3ecause he is entitled to a portion of the proceeds as co!pensation for !aCin" it or 3ecause he is lia3le for its 3reach. %he followin" Co!!ent on the a3ove su3section is illu!inatin", %he fact that an a"ent who !aCes a contract for his principal will "ain or suffer loss 34 the perfor!ance or nonperfor!ance of the contract 34 the principal or 34 the other part4 thereto does not entitle hi! to !aintain an action on his own 3ehalf a"ainst the other part4 for its 3reach. An a"ent entitled to receive a co!!ission fro! his principal upon the perfor!ance of a contract which he has !ade on his principal5s account does not fro! this fact alone have an4 clai! a"ainst the other part4 for 3reach of the contract either in an action on the contract or otherwise. An a"ent who is not a pro!isee cannot !aintain an action at law a"ainst a purchaser !erel4 3ecause he is entitled to have his co!pensation or advances paid out of the purchase price 3efore pa4!ent to the principal. . . . %hus in @opCins vs. +ves #) the 0upre!e Court of ArCansas citin" 0ection 3>) 9); a3ove denied the clai! of a real estate 3roCer to recover his alle"ed co!!ission a"ainst the purchaser in an a"ree!ent to purchase propert4. +n Goduco vs. Court of appeals #3 this Court held that, . . . "rantin" that appellant had the authorit4 to sell the propert4 the sa!e did not !aCe the 3u4er lia3le for the co!!ission she clai!ed. At !ost the owner of the propert4 and the one who pro!ised to "ive her a co!!ission should 3e the one lia3le to pa4 the sa!e and to who! the clai! should have 3een directed. . . . As petitioners are not parties heirs assi"nees or 3eneficiaries of a stipulation pour autrui under the contracts of sale the4 do not under su3stantive law possess the ri"ht the4 seeC to enforce. %herefore the4 are not the real parties-in-interest in this case. -etitioners not 3ein" the real parties-in-interest an4 decision rendered herein would 3e pointless since the sa!e would not 3ind the real parties-ininterest. #* Nevertheless to forestall further liti"ation on the su3stantive aspects of this case we shall proceed to rule on !e !erits. #B -etitioners su3!it that respondent N@A had no le"al 3asis to 7rescind7 the sale of the su3$ect three parcels of land. %he e=istence of such le"al 3asis notwithstandin" petitioners ar"ue that the4 are still entitled to an award of da!a"es. %he in$ured part4 !a4 choose 3etween the fulfill!ent and the rescission of the o3li"ation with the pa4!ent of da!a"es in either case. @e !a4 also seeC rescission even after he has chosen fulfill!ent if the latter should 3eco!e i!possi3le. +n this case the N@A did not rescind the contract. +ndeed it did not have the ri"ht to do so for the other parties to the contract the vendors did not co!!it an4 3reach !uch less a su3stantial 3reach #< of their o3li"ation. %heir o3li"ation was !erel4 to deliver the parcels of land to the N@A an o3li"ation that the4 fulfilled. %he N@A did not suffer an4 in$ur4 34 the perfor!ance thereof. %he cancellation therefore was not a rescission under Article ##9#. Rather the cancellation was 3ased on the ne"ation of the cause arisin" fro! the realiDation that the lands which were the o3$ect of the sale were not suita3le for housin".#Kwphi#.nLt Cause is the essential reason which !oves the contractin" parties to enter into it. #9 +n other words the cause is the i!!ediate direct and pro=i!ate reason which $ustifies the creation of an o3li"ation throu"h the will of the contractin" parties. )0 Cause which is the essential reason for the contract should 3e distin"uished fro! !otive which is the particular reason of a contractin" part4 which does not affect the other part4. )# For e=a!ple in a contract of sale of a piece of land such as in this case the cause of the vendor 9petitioners5 principals; in enterin" into the contract is to o3tain the price. For the vendee N@A it is the acJuisition of the land. )) %he !otive of the N@A on the other hand is to use said lands for housin". %his is apparent fro! the portion of the 2eeds of A3solute 0ale )3 statin", ?@.R.A0 under the .=ecutive 1rder No. 90 dated 2ece!3er #> #9<6 the V.N2.. is !andated to focus and concentrate its efforts and resources in providin" housin" assistance to the lowest thirt4 percent 930P; of ur3an inco!e earners thru slu! up"radin" and develop!ent of sites and services pro$ects6 ?@.R.A0 (etters of +nstructions Nos. BBB and BB> MasN a!ended 34 (etter of +nstruction No. 630 prescri3ed slu! i!prove!ent and up"radin" as well as the develop!ent of sites and services as the principal housin" strate"4 for dealin" with slu! sJuatter and other 3li"hted co!!unities6 === === === -etitioners confuse the cancellation of the contract 34 the N@A as a rescission of the contract under Article ##9# of the Civil Code. %he ri"ht of rescission or !ore accuratel4 resolution of a part4 to an o3li"ation under Article ##9# is predicated on a 3reach of faith 34 the other part4 that violates the reciprocit4 3etween the!. #6 %he power to rescind therefore is "iven to the in$ured part4. #> Article ##9# states, %he power to rescind o3li"ations is i!plied in reciprocal ones in case one of the o3li"ors should not co!pl4 with what is incu!3ent upon hi!.

Cases on Sales Price

?@.R.A0 the V.N2.. in pursuit of and in co!pliance with the a3ove-stated purposes offers to 3u4 and the V.N21R0 in a "esture of their willin" to cooperate with the a3ove polic4 and co!!it!ents a"ree to sell the aforesaid propert4 to"ether with all the e=istin" i!prove!ents there or 3elon"in" to the V.N21R06 N1? %@.R.F1R. for and in consideration of the fore"oin" pre!ises and the ter!s and conditions herein3elow stipulated the V.N21R0 here34 sell transfer cede and conve4 unto the V.N2.. its assi"ns or successors-in-interest a parcel of land located at &o. %adian"an %u3a &en"uet containin" a total area of F+F%F 0+I %@1E0AN2 .+G@% @EN2R.2 N+N.%..N 9B6 <#9; 0GEAR. /.%.R0 !ore or less . . . . 1rdinaril4 a part45s !otives for enterin" into the contract do not affect the contract. @owever when the !otive predeter!ines the cause the !otive !a4 3e re"arded as the cause. +n (i"ueD vs. Court of Appeals )* this Court speaCin" throu"h Hustice H.&.(. R.F.0 @.(2, . . . it is well to note however that /anresa hi!self 9Vol. < pp. 6*#-6*); while !aintainin" the distinction and upholdin" the inoperativeness of the !otives of the parties to deter!ine the validit4 of the contract e=pressl4 e=cepts fro! the rule those contracts that are conditioned upon the attain!ent of the !otives of either part4. %he sa!e view is held 34 the 0upre!e Court of 0pain in its decisions of Fe3ruar4 * #9*# and 2ece!3er * #9*6 holdin" that the !otive !a4 3e re"arded as causa when it predeter!ines the purpose of the contract. +n this case it is clear and petitioners do not dispute that N@A would not have entered into the contract were the lands not suita3le for housin". +n other words the Jualit4 of the land was an i!plied condition for the N@A to enter into the contract. 1n the part of the N@A therefore the !otive was the cause for its 3ein" a part4 to the sale. ?ere the lands indeed unsuita3le for housin" as N@A clai!edO ?e dee! the findin"s contained in the report of the (and Geosciences &ureau dated #B Hul4 #99# sufficient 3asis for the cancellation of the sale thus, +n %adian"an %u3a the housin" site is situated in an area of !oderate topo"raph4. %here MareN !ore areas of less slopin" "round apparentl4 ha3ita3le. %he site is underlain 34 . . . thicC slide deposits 9*-*B!; consistin" of hu"e con"lo!erate 3oulders 9see -hoto No. ); !i=MedN with silt4 cla4 !aterials. %hese cla4 particles when saturated have so!e swellin" characteristics which is dan"erous for an4 civil structures especiall4 !ass housin" develop!ent. )B -etitioners contend that the report was !erel4 7preli!inar4 7 and not conclusive as indicated in its title, /./1RAN2E/ %1, .2?+N G. 21/+NG1

Chief (ands Geolo"4 2ivision FR1/, AR+0%1%(. A. R+((1N Geolo"ist ++ 0E&H.C%, -reli!inar4 Assess!ent of

%adian"an @ousin" -ro$ect in %u3a &en"uet )6 %hus pa"e ) of the report states in part, === === ===

Actuall4 there is a need to conduct further "eottechnical MsicN studies in the N@A propert4. 0tandard -enetration %est 90-%; !ust 3e carried out to "ive an esti!ate of the de"ree of co!paction 9the relative densit4; of the slide deposit and also the 3earin" capacit4 of the soil !aterials. Another thin" to consider is the vulnera3ilit4 of the area to landslides and other !ass !ove!ents due to thicC soil cover. -reventive ph4sical !iti"ation !ethods such as surface and su3surface draina"e and re"radin" of the slope !ust 3e done in the area. )> ?e read the Juoted portion however to !ean onl4 that further tests are reJuired to deter!ine the 7de"ree of co!paction 7 7the 3earin" capacit4 of the soil !aterials 7 and the 7vulnera3ilit4 of the area to landslides 7 since the tests alread4 conducted were inadeJuate to ascertain such "eolo"ical attri3utes. +t is onl4 in this sense that the assess!ent was 7preli!inar4.7 Accordin"l4 we hold that the N@A was $ustified in cancelin" the contract. %he realiDation of the !istaCe as re"ards the Jualit4 of the land resulted in the ne"ation of the !otive:cause thus renderin" the contract ine=istent. )< Article #3#< of the Civil Code states that, Art. #3#<. %here is no contract unless the followin" reJuisites concur, 9#; 9); 93; Consent of the contractin" parties6 13$ect certain which is the su3$ect !atter of the contract6 Cause of the o3li"ation which is esta3lished. 9.!phasis supplied.;

%herefore assu!in" that petitioners are parties assi"nees or 3eneficiaries to the contract of sale the4 would not 3e entitled to an4 award of da!a"es. ?@.R.F1R. the instant petition is here34 2.N+.2.

Cases on Sales Price

G.R. No. L521462 a#$ L521126 -ay 12, 1211 /apalo Guie3 who had a house on the western part of the land with the consent of the spouses /apalo and Gui3a. %he /apalo spouses filed their answer with a counterclai! on /arch #> #96B seeCin" cancellation of the %ransfer Certificate of %itle of the Narcisos as to the western half of the land on the "rounds that their 9/apalo spouses; si"natures to the deed of sale of #936 was procured 34 fraud and that the Narcisos were 3u4ers in 3ad faith. %he4 asCed for reconve4ance to the! of the western portion of the land and issuance of a %ransfer Certificate of %itle in their na!es as to said portion. +n addition the /apalo spouses filed on 2ece!3er #6 #9B> their own co!plaint in the Court of First +nstance of -an"asinan 9Civil Case No. E-#33; a"ainst the aforestated Narcisos and /a=i!o /apalo. %he4 asCed that the deeds of sale of #936 and of #9B# over the land in Juestion 3e declared null and void as to the western half of said land. Hud"e A!ado 0antia"o of the Court of First +nstance of -an"asinan located in the !unicipalit4 of Erdaneta tried the two cases $ointl4. 0aid court rendered $ud"!ent on Hanuar4 #< #96# as follows, ?@.R.F1R. $ud"!ent is here34 rendered as follows to wit, 9a; dis!issin" the co!plaint in Civil Case No. ##99#6 93; declarin" .=hi3it A plaintiffs in Case No. ##99# and .=hi3it # defendants in Case No. E-#33 as a donation onl4 over the eastern half portion of the a3ove-descri3ed land and as null and void with respect to the western half portion thereof6 9c; declarin" as null and void and without le"al force and effect %ransfer Certificate of %itle No. #)<)9 issued in favor of /a=i!o /apalo as re"ards the western half portion of the land covered therein6 9d; declarin" as null and void %ransfer Certificate of %itle No. ##3B0 in the na!es of the Narcisos insofar as the western half portion of the land covered therein is concerned6 9e; orderin" the spouses /apalo and Gui3a and the Narcisos to have the a3ovedescri3ed land 3e su3divided 34 a co!petent land surve4or and that the e=penses incident thereto 3e 3orne out 34 said parties pro rata6 9f; orderin" the Re"ister of 2eeds of -an"asinan to issue in lieu of %ransfer Certificate of %itle No. ##3B0 two new titles upon co!pletion of the su3division plan one in favor of the spouses /i"uel /apalo and Candida Gui3a coverin" the western half portion and another for the Narcisos coverin" the eastern half portion of the said land upon pa4!ent of the le"al fees6 !eanwhile the ri"ht of the spouses /apalo and Gui3a is here34 ordered to 3e annotated on the 3acC of %ransfer Certificate of %itle No. ##3B06 and 9"; sentencin" /a=i!o /apalo and the Narcisos to pa4 the costs.

-IGUEL -A,ALO, E" AL., &e'('(o#er), *). -A4I-O -A,ALO, E" AL., re)&o#$e#'). -edro -. %uason for petitioners. -ri!icias and 2el Castillo for respondents. &.NGA1N H.-. H., %he spouses /i"uel /apalo and Candida Gui3a si!ple illiterate far!ers were re"istered owners with %orrens title certificate 1.C.%. No. *6B03 of a # 63B-sJuare!eter residential land in /anaoa" -an"asinan. 0aid spouses-owners out of love and affection for /a=i!o /apalo Q a 3rother of /i"uel who was a3out to "et !arried Q decided to donate the eastern half of the land to hi!. 1.C.%. No. *6B03 was delivered. As a result however the4 were deceived into si"nin" on 1cto3er #B #936 a deed of a3solute sale over the entire land in his favor. %heir si"natures thereto were procured 34 fraud that is the4 were !ade to 3elieve 34 /a=i!o /apalo and 34 the attorne4 who acted as notar4 pu3lic who 7translated7 the docu!ent that the sa!e was a deed of donation in /a=i!o5s favor coverin" one-half 9the eastern half; of their land. Althou"h the docu!ent of sale stated a consideration of Five @undred 9-B00.00; -esos the aforesaid spouses did not receive an4thin" of value for the land. %he attorne45s !is3ehaviour was the su3$ect of an investi"ation 3ut its result does not appear on record. @owever we tooC note of the fact that durin" the hearin" of these cases said notar4 pu3lic was present 3ut did not taCe the witness stand to re3ut the plaintiffs5 testi!on4 supportin" the alle"ation of fraud in the preparation of the docu!ent. Followin" the e=ecution of the afore-stated docu!ent the spouses /i"uel /apalo and Candida Gui3a i!!ediatel4 3uilt a fence of per!anent structure in the !iddle of their land se"re"atin" the eastern portion fro! its western portion. 0aid fence still e=ists. %he spouses have alwa4s 3een in continued possession over the western half of the land up to the present. Not Cnown to the! !eanwhile /a=i!o /apalo on /arch #B #93< re"istered the deed of sale in his favor and o3tained in his na!e %ransfer Certificate of %itle No. #)<)9 over the entire land. %hirteen 4ears later on 1cto3er )0 #9B# he sold for -) B00.00 said entire land in favor of .varisto -etronila -acifico and /i"uel all surna!ed Narciso. %he sale to the Narcisos was in turn re"istered on Nove!3er B #9B# and %ransfer Certificate of %itle No. ##3B0 was issued for the whole land in their na!es. %he Narcisos tooC possession onl4 of the eastern portion of the land in #9B# after the sale in their favor was !ade. 1n Fe3ruar4 > #9B) the4 filed suit in the Court of First +nstance of -an"asinan 9Civil Case No. ##9#; to 3e declared owners of the entire land for possession of its western portion6 for da!a"es6 and for rentals. +t was 3rou"ht a"ainst the /apalo spouses as well as a"ainst Floro Guie3 and Rosalia

Cases on Sales Price

+% +0 01 1R2.R.2. %he Narcisos appealed to the Court of Appeals. +n its decision on /a4 )< #963 the Court of Appeals reversed the $ud"!ent of the Court of First +nstance solel4 on the "round that the consent of the /apalo spouses to the deed of sale of #936 havin" 3een o3tained 34 fraud the sa!e was voida3le not void a3 initio and therefore the action to annul the sa!e within four 4ears fro! notice of the fraud had lon" prescri3ed. +t recConed said notice of the fraud fro! the date of re"istration of the sale on /arch #B #93<. %he Court of First +nstance and the Court of Appeals are therefore unani!ous that the spouses /apalo and Gui3a were definitel4 the victi!s of fraud. +t was onl4 on prescription that the4 lost in the Court of Appeals. Fro! said decision of the Court of Appeals the /apalo spouses appealed to this Court. And here appellants press the contention that the docu!ent dated 1cto3er #B #936 purportin" to sell the entire land in favor of /a=i!o /apalo is void not !erel4 voida3le as to the western portion of the land for 3ein" a3solutel4 si!ulated or fictitious. 0tartin" with funda!entals under the Civil Code either the old or the new for a contract to e=ist at all three essential reJuisites !ust concur, 9#; consent 9); o3$ect and 93; cause or consideration.# %he Court of Appeals is ri"ht in that the ele!ent of consent is present as to the deed of sale of 1cto3er #B #936. For consent was ad!ittedl4 "iven al3eit o3tained 34 fraud. Accordin"l4 said consent althou"h defective did e=ist. +n such case the defect in the consent would provide a "round for annul!ent of a voida3le contract not a reason for nullit4 a3 initio. %he parties are a"reed that the second ele!ent of o3$ect is liCewise present in the deed of 1cto3er #B #936 na!el4 the parcel of land su3$ect !atter of the sa!e. Not so however as to the third ele!ent of cause or consideration. And on this point the decision of the Court of Appeals is silent. As re"ards the eastern portion of the land the /apalo spouses are not clai!in" the sa!e it 3ein" their stand that the4 have donated and freel4 "iven said half of their land to /a=i!o /apalo. And since the4 did not appeal fro! the decision of the trial court findin" that there was a valid and effective donation of the eastern portion of their land in favor of /a=i!o /apalo the sa!e pronounce!ent has 3eco!e final as to the! renderin" it no lon"er proper herein to e=a!ine the e=istence validit4 efficac4 of said donation as to said eastern portion.#RwphS#.'Tt Now as to the western portion however the fact not disputed herein is that no donation 34 the /apalo spouses o3tained as to said portion. Accordin"l4 we start with the fact that li3eralit4 as a cause or consideration does not e=ist as re"ards the western portion of the land in relation to the deed of #9366 that there was no donation with respect to the sa!e. +t is reduced then to the Juestion whether there was an onerous conve4ance of ownership that is a sale 34 virtue of said deed of 1cto3er #B #936 with respect to said western portion. 0pecificall4 was there a cause or consideration to support the e=istence of a contrar4 of saleO %he rule under the Civil Code a"ain 3e it the old or the new is that contracts without a cause or consideration produce no effect whatsoever.) Nonetheless under the 1ld Civil Code the state!ent of a false consideration renders the contract voida3le unless it is proven that it is supported 34 another real and licit consideration.3 And it is further provided 34 the 1ld Civil Code that the action for annul!ent of a contract on the "round of falsit4 of consideration shall last four 4ears the ter! to run fro! the date of the consu!!ation of the contract.* Accordin"l4 since the deed of sale of #936 is "overned 34 the 1ld Civil Code it should 3e asCed whether its case is one wherein there is no consideration or one with a state!ent of a false consideration. +f the for!er it is void and ine=istent6 if the latter onl4 voida3le under the 1ld Civil Code. As o3served earlier the deed of sale of #936 stated that it had for its consideration Five @undred 9-B00.00; -esos. +n fact however said consideration was totall4 a3sent. %he pro3le! therefore is whether a deed which states a consideration that in fact did not e=ist is a contract without consideration and therefore void a3 initio or a contract with a false consideration and therefore at least under the 1ld Civil Code voida3le. Accordin" to /anresa what is !eant 34 a contract that states a false consideration is one that has in fact a real consideration 3ut the sa!e is not the one stated in the docu!ent. %hus he sa4s, .n pri!er lu"ar nor interesa recordar la diferencia entre si!ulacion 4 el contrato con proposito fraudulento. .ste aunJue ilicito es real6 !as el pri!ero es falso en realidad aunJue se le presente co!o verdadero. 9/anresa Codi"o Civil %o!o V+++ Vol. ++ p. 3B*.; And citin" a decision of the 0upre!e Court of 0pain on the !atter /anresa further clarifies the difference of false cause and no cause thus, +nsiste en el distin"o con !as detenida descripcion la sentencia de )B de !a4o de #9** en la Jue se ar"u!enta, 0i 3ien es ele!ento funda!ental de todo ne"ocio la declaracion de voluntad su3stracto de una voluntad efectiva 4 la e=istencia de una causa Jue leconfiera si"nificado $uridico se'alando la finalidad Jue con este se persi"ue no ha de deducirse de esta doctrina funda!ental!ente reco"ida en el articulo #.)6# 4 concordantes del Codi"o civil Jue cualJuier falta de adecuacion entre cualJuier incon"ruencia entre la causa e=presada 4 la verdadera 4 en "eneral entre la estructuracion 4 la finalidad econo!ica6 ha4an de producir la ineficacia del ne"ocio pues por el contrario puede este ser valido 4 producir sus efectos tanto en el caso de la !era disonancia entre el !edio $uridico adoptado 4 el fin practico perse"uido por utiliDacion de una via o3licua o co!3inacion de for!as $uridicas entrelaDadas Jue per!ita la o3tencion de un resultado no previsto en los cuadros de la le4 Q ne"ocios

Cases on Sales Price

indirectos 4 ne"ocios fiduciarlos validos cuando no envuelven fraude de le4 co!o en el caso de la verdadera disconfor!idad entre la apariencia del acto 4 su real contenido preparada deli3erada!ente por las partes Q ne"ocio si!ulado Q 4a Jue cuando esta diver"encia i!plica no una ausencia total de voluntad 4 de acto real sino !era ocultacion de un ne"ocio verdadero 3a$o la falsa apariencia de un ne"ocio fin"ido 7sirulacion relativa7 la ineficacia de la for!a e=terna si!ulada no es o3staculo para la posi3le valideD del ne"ocio disi!ulado Jue contiene en tanto este ulti!o sea licito 4 reuna no solo los reJuisitos "enerales sino ta!3ien los Jue corresponden a su naturaleDa especial doctrina en o3li"ada aplicacion de los preceptos de nuestra (e4 civil especial!ente en su art. #.)>6 Jue al esta3lecer el principio de nulidad de los contratos en los Jue se hace e=presion de una causa falsa de$a a salvo el caso de Jue esten fundados en otra verdadera 4 licita. 9/anresa Codi"o Civil %o!o V+++ Vol. ++ pp. 3B>-3B<; 0ancheD Ro!an sa4s, Fa he!os dicho Jue la intervencion de causa en los contratos es necesaria 4 Jue sin ellos son nulos6 solo se conci3e Jue un ho!3re pertur3ado en su raDon pueda contratar sin causa. ... -or la !is!a raDon de la necesidad de la intervencion de causa en el contrato es preciso Jue esta sea verdadera 4 no supuesta aparente o fi"urada. Gue la falsedad de la causa vicia el consenti!iento 4 anula el contrato es no solo doctrina induda3le de 2erecho Cientifico sino ta!3ien de anti"uo 2erecho de Castilla Jue en !ultitud de le4es asi lo declararon. 90ancheD Ro!an 2erecho Civil %o!o +V p. )06.;. +n a clearer e=position of the a3ove distinction Castan states, ).U. (a causa ha de ser verdadera. (a causa falsa puede ser erronea o si!ulada. .s erronea co!o dice Gior"i la causa Jue tiene por 3ase la credulidad en un hecho no e=istente6 4 si!ulada la Jue tiene lu"ar cuando se hace aparecer artificiosa!ente una distinta de la verdadera. (a erronea produce sie!pre la ine=istencia del contrato6 la si!ulada no sie!pre produce este efecto porJue puede suceder Jue la causa oculta pero verdadera 3aste para sostener el contrato. 2e acuerdo con esta doctrina dice el art. #.)>6 de nuestro Codi"o Jue 7la e=presion de una causa falsa en los contratos dara lu"ar a la nulidad si no se pro3ase Jue esta3an fundados en otra verdadera 4 licita7. 9Castan 2erecho Civil .spa'ol %o!o ++ pp. 6#<-6#9; Fro! the fore"oin" it can 3e seen that where as in this case there was in fact no consideration the state!ent of one in the deed will not suffice to 3rin" it under the rule of Article #)>6 of the 1ld Civil Code as statin" a false consideration. Returnin" to /anresa, Fi"urando en nuestro 2erecho positivo la causa co!o un ele!ento esential del contrato es consecuencia ineludi3le se reputar si!ulada la entre"a del precio en la co!praventa de autos el Jue ha4a Jue declararla nula por ine=istente haciendose aplicacion inde3ida de art. #.)>6 por el %ri3unal sentenciador al cohonestar la falta de precio ad!itiendo se pueda tratar de una donacion 4a Jue la recta aplicacion del citado precepto e=i"e Jue los ne"ocios si!ulados o sea con causa falsa se $ustifiJue la verdadera 4 licita en Jue se funda el acto Jue las partes han Juerido ocultar 4 el cu!pli!iento de las for!alidades i!puestas por la (e4 4 cual dice la sentencia de 3 de !arDo de #93) esta ri"urosa doctrina ha de ser especial!ente i!puesta en la donaciones puras 4 si!ples6 de los Jue deduce Jue la sentencia recurrida al no decretar la nulidad instada por falta de causa incide en la infraccion de los articulos #.)6# #.)>* #.)>B 4 #.)>6 del Codi"o Civil. 90entencia de )) de fe3rero de #9*0;. 9/anresa Codi"o Civil %o!o V+++ Vol. ++ p. 3B6; +n our view therefore the rulin" of this Court in 1ce$o -ereD V Co. vs. Flores *0 -hil. 9)# is sJuarel4 applica3le herein. +n that case we ruled that a contract of purchase and sale is null and void and produces no effect whatsoever where the sa!e is without cause or consideration in that the purchase price which appears thereon as paid has in fact never 3een paid 34 the purchaser to the vendor. Needless to add the ine=istence of a contract is per!anent and incura3le and cannot 3e the su3$ect of prescription. +n the words of Castan, 7(a ine=istencia es perpetua e insu3sana3le no pudiendo ser o3$ecto de confir!acion ni prescripcion 91p. cit. p. 6**.; +n .u"enio v. -erdido 9> -hil. *# *)-*3 involvin" a sale dated #93) this Court speaCin" throu"h Hustice Cesar &en"Don now Chief Hustice stated, Ender the e=istin" classification such contract would 3e 7ine=istin"7 and 7the action or defense for declaration7 of such ine=istence 7does not prescri3e7. 9Art. #*#0 New Civil Code;. ?hile it is true that this is a new provision of the New Civil Code it is nevertheless a principle reco"niDed since %ipton vs. Velasco 6 -hil. 6> that 7!ere lapse of ti!e cannot "ive efficac4 to contracts that are null and void7. Anent the !atter of whether the Narcisos were purchasers in "ood faith the trial court in its decision resolved this issue thus, ?ith re"ard to the second issue the Narcisos contend that the4 are the owners of the a3ove-descri3ed propert4 34 virtue of the deed of sale 9.=h. & plaintiffs in ##99# and .=h. ) defendants in E-#33; e=ecuted in their favor 34 /a=i!o /apalo and further clai! that the4 are purchasers for value and in "ood faith. %his court however cannot also "ive wei"ht and credit on this theor4 of the Narcisos on the followin" reasons, Firstl4 it has 3een positivel4 shown 34 the undisputed testi!on4 of Candida Gui3a that -acifico Narciso and .varisto Narciso sta4ed for so!e da4s on the western side 9the portion in Juestion; of the a3ove-descri3ed land until their house was re!oved in #9*0 34 the spouses /apalo and Gui3a6 secondl4 -acifica Narciso ad!itted in his testi!on4 in chief that when the4 3ou"ht the propert4 /i"uel /apalo was still in the pre!ises in Juestion 9western part; which he is occup4in" and his house is still standin" thereon6 and thirdl4 said -acifico Narciso when presented as a re3uttal and su3-re3uttal witness cate"oricall4 declared that 3efore 3u4in" the land in Juestion he went to the house of /i"uel /apalo and Candida Gui3a and asCed the! if the4 will per!it their elder 3rother /a=i!o to sell the propert4. Aside fro! the fact that all the parties in these cases are nei"h3ors e=cept /a=i!o /apalo the fore"oin" facts are e=plicit enou"h and sufficientl4 reveal that the Narcisos were aware of the nature and e=tent of the interest of /a=i!o /apalo their

10

Cases on Sales Price

vendor over the a3ove-descri3ed land 3efore and at the ti!e the deed of sale in their favor was e=ecuted. Epon the aforestated declaration of -acifico Narciso the followin" Juestion arises, ?hat was the necessit4 purpose and reason of -acifico Narciso in still "oin" to the spouses /apalo and asCed the! to per!it their 3rother /a=i!o to dispose of the a3ove-descri3ed landO %o this Juestion it is safe to state that this act of -acifico Narciso is a conclusive !anifestation that the4 9the Narcisos; did not onl4 have prior Cnowled"e of the ownership of said spouses over the western half portion in Juestion 3ut that the4 also have reco"niDed said ownership. +t also conclusivel4 shows their prior Cnowled"e of the want of do!inion on the part of their vendor /a=i!o /apalo over the whole land and also of the flaw of his title thereto. Ender this situation the Narcisos !a4 3e considered purchasers in value 3ut certainl4 not as purchasers in "ood faith. ... 9pp. 9>-9< Record on Appeal.; And said findin" Q which is one of fact Q is found 34 us not a 3it distur3ed 34 the Court of Appeals. 0aid the Court of Appeals, +n view of the conclusion thus reached it 3eco!es unnecessar4 to pass on the other errors assi"ned. 0uffice it to sa4 that on the !erits the appealed decision could have 3een upheld under Article #33) of the new Civil Code and the followin" authorities, A4ola vs. Valderra!a (u!3er /anufacturers Co. +nc. *9 1.G. 9<0 9<)6 %rasporte vs. &eltran B# 1.G. #*3* #*3B6 CorteD vs. CorteD CA-G.R. No. #<*B#-R Au"ust < #96#6 Castillo vs. (a3erinto CA-G.R. No. #<##<-R 2ece!3er )0 #96#6 and #3 C.H. 3>)-3>3 as well as the several facts and circu!stances appreciated 34 the trial court as supportin" appellees5 case. there34 in effect sustainin" Q 3arrin" onl4 its rulin" on prescription Q the $ud"!ent and findin"s of the trial court includin" that of 3ad faith on the part of the Narcisos in purchasin" the land in Juestion. ?e therefore see no need to further re!and this case to the Court of Appeals for a rulin" on this point as appellees reJuest in their 3rief in the event we hold the contract of #936 to 3e ine=istent as re"ards the western portion of the land. +n view of defendants5 3ad faith under the circu!stances we dee! it $ust and eJuita3le to award in plaintiffs5 favor attorne4s5 fees on appeal in the a!ount of -# 000.00 as pra4ed for in the counterclai!. ?herefore the decision of the Court of Appeals is here34 reversed and set aside and another one is here34 rendered affir!in" in toto the $ud"!ent of the Court of First +nstance a Juo with attorne45s fees on appeal in favor of appellants in the a!ount of -# 000.00 plus the costs 3oth a"ainst the private appellees. 0o ordered. G.R. No. (-6><<< 1cto3er < #9<B +/.(2A 1NG .% A(. petitioners vs. A(FR.21 1NG .% A(. respondents. Faustino F &autista and Fernando /. /an"u3at for private respondent.

R.(1VA H., %his is a petition for review on certiorari of the decision dated Hune )0 #9<* of the +nter!ediate Appellate Court in AC-G.R. No. CV-0#>*< affir!in" the $ud"!ent of the Re"ional %rial Court of /aCati /etro /anila. -etitioner +!elda 1n" assails the interpretation "iven 34 respondent Appellate Court to the Juestioned Guitclai! 2eed. Records show that on Fe3ruar4 )B #9>6 +!elda 1n" for and in consideration of 1ne 9-#.00; -eso and other valua3le considerations e=ecuted in favor of private respondent 0andra /aruDDo then a !inor a Guitclai! 2eed where34 she transferred released assi"ned and forever Juit-clai!ed to 0andra /aruDDo her heirs and assi"ns all her ri"hts title interest and participation in the 1N.-@A(F 9W; undivided portion of the parcel of land particularl4 descri3ed as follows, A parcel of land 9(ot #0-& of the su3division plan 9(RC; -sd #B><*# 3ein" a portion of (ot #0 &locC #< -sd-#3)<< (RC 9G(RC; Record No. )0)9 situated in the /unicipalit4 of /aCati -rovince of RiDal +sland of (uDon ... containin" an area of 1N. @EN2R.2 AN2 %?.N%F F+V. 9#)B; 0GEAR. /.%.R0 !ore or less. 1n Nove!3er #9 #9<0 +!elda 1n" revoCed the aforesaid 2eed of Guitclai! and thereafter on Hanuar4 )0 #9<) donated the whole propert4 descri3ed a3ove to her son Re= 1n"-Hi!eneD. 1n Hune )0 #9<3 0andra /aruDDo throu"h her "uardian 9ad lite!; Alfredo 1n" filed with the Re"ional %rial Court of /aCati /etro /anila an action a"ainst petitioners for the recover4 of ownership:possession and nullification of the 2eed of 2onation over the portion 3elon"in" to her and for Accountin". +n their responsive pleadin" petitioners clai!ed that the Guitclai! 2eed is null and void inas!uch as it is eJuivalent to a 2eed of 2onation acceptance of which 34 the donee is necessar4 to "ive it validit4. Further it is averred that the donee 0andra /aruDDo 3ein" a !inor had no le"al personalit4 and therefore incapa3le of acceptin" the donation. Epon ad!ission of the docu!ents involved the parties filed their responsive !e!oranda and su3!itted the case for decision.

11

Cases on Sales Price

1n 2ece!3er #) #9<3 the trial court rendered $ud"!ent in favor of respondent /aruDDo and held that the Guitclai! 2eed is eJuivalent to a 2eed of 0ale and hence there was a valid conve4ance in favor of the latter. -etitioners appealed to the respondent +nter!ediate Appellate Court. %he4 reiterated their ar"u!ent 3elow and in addition contended that the 1ne 9-#.00; -eso consideration is not a consideration at all to sustain the rulin" that the 2eed of Guitclai! is eJuivalent to a sale. 1n Hune )0 #9<* respondent +nter!ediate Appellate Court pro!ul"ated its 2ecision affir!in" the appealed $ud"!ent and held that the Guitclai! 2eed is a conve4ance of propert4 with a valid cause or consideration6 that the consideration is the 1ne 9-#.00; -eso which is clearl4 stated in the deed itself6 that the apparent inadeJuac4 is of no !o!ent since it is the usual practice in deeds of conve4ance to place a no!inal a!ount althou"h there is a !ore valua3le consideration "iven. Not satisfied with the decision of the respondent +nter!ediate Appellate Court petitioners ca!e to Es Juestionin" the interpretation "iven 34 the for!er to this particular docu!ent. 1n /arch #B #9<B respondent 0andra /aruDDo throu"h her "uardian ad lite! Alfredo 1n" filed an 1!ni3us /otion infor!in" this Court that she has reached the a"e of !a$orit4 as evidenced 34 her &irth Certificate and she pra4s that she 3e su3stituted as private respondent in place of her "uardian ad lite! Alfredo 1n". 1n April #B #9<B the Court issued a resolution "rantin" the sa!e. A careful perusal of the su3$ect deed reveals that the conve4ance of the one- half 9W; undivided portion of the a3ove-descri3ed propert4 was for and in consideration of the 1ne 9- #.00; -eso and the other valua3le considerations 9e!phasis supplied; paid 34 private respondent 0andra /aruDDo throu"h her representative Alfredo 1n" to petitioner +!elda 1n". 0tated differentl4 the cause or consideration is not the 1ne 9-#.00; -eso alone 3ut also the other valua3le considerations. As aptl4 stated 34 the Appellate Court... althou"h the cause is not stated in the contract it is presu!ed that it is e=istin" unless the de3tor proves the contrar4 9Article #3B* of the Civil Code;. 1ne of the disputa3le presu!ptions is that there is a sufficient cause of the contract 90ection B 9r; Rule #3# Rules of Court;. +t is a le"al presu!ption of sufficient cause or consideration supportin" a contract even if such cause is not stated therein 9Article #3B* New Civil Code of the -hilippines.; %his presu!ption cannot 3e overco!e 34 a si!ple assertion of lacC of consideration especiall4 when the contract itself states that consideration was "iven and the sa!e has 3een reduced into a pu3lic instru!ent with all due for!alities and sole!nities. %o overco!e the presu!ption of consideration the alle"ed lacC of consideration !ust 3e shown 34 preponderance of evidence in a proper action. 90a!anilla vs Ca$uco! et al. #0> -hil. *3);. %he e=ecution of a deed purportin" to conve4 ownership of a realt4 is in itself pri!a facie evidence of the e=istence of a valua3le consideration the part4 alle"in" lacC of consideration has the 3urden of provin" such alle"ation. 9Ca3allero et al. vs. Ca3allero et al. 9CA; *B 1.G. )B36;. /oreover even "rantin" that the Guitclai! deed in Juestion is a donation Article >*# of the Civil Code provides that the reJuire!ent of the acceptance of the donation in favor of !inor 34 parents of le"al representatives applies onl4 to onerous and conditional donations where the donation !a4 have to assu!e certain char"es or 3urdens 9Article >)6 Civil Code;. %he acceptance 34 a le"al "uardian of a si!ple or pure donation does not see! to 3e necessar4 9-ereD vs. Calin"o CA-*0 1.G. B3;. %hus 0upre!e Court ruled in 8apunan vs. Casilan and Court of Appeals 9#09 -hil. <<9; that the donation to an incapacitated donee does not need the acceptance 34 the lawful representative if said donation does not contain an4 condition. +n si!ple and pure donation the for!al acceptance is not i!portant for the donor reJuires no ri"ht to 3e protected and the donee neither undertaCes to do an4thin" nor assu!es an4 o3li"ation. %he Guitclai! now in Juestion does not i!pose an4 condition. %he a3ove pronounce!ent of respondent Appellate Court finds support in the rulin" of this Court in /orales 2evelop!ent Co. +nc. vs. CA )> 0CRA *<* which states that 7the !a$or pre!ise thereof is 3ased upon the fact that the consideration stated in the deeds of sale in favor of Re4es and the A3ellas is -#.00. +t is not unusual however in deeds of conve4ance adherin" to the An"lo-0a=on practice of statin" that the consideration "iven is the su! of -#.00 althou"h the actual consideration !a4 have 3een !uch !ore. /oreover assu!in" that said consideration of -#.00 is suspicious this circu!stance alone does not necessaril4 $ustif4 the inference that Re4es and the A3ellas were not purchasers in "ood faith and for value. Neither does this inference warrant the conclusion that the sales were null and void a3 initio. +ndeed 3ad faith and inadeJuac4 of the !onetar4 consideration do not render a conve4ance ine=istent for the assi"nor5s li3eralit4 !a4 3e sufficient cause for a valid contract 9Article #3B0 Civil Code; whereas fraud or 3ad faith !a4 render either rescissi3le or voida3le althou"h valid until annulled a contract concernin" an o3$ect certain entered into with a cause and with the consent of the contractin" parties as in the case at 3ar.7 ?@.R.F1R.. the appealed decision of the +nter!ediate Appellate Court should 3e as it is here34 AFF+R/.2 with costs a"ainst herein petitioners. 01 1R2.R.2.

12

Cases on Sales Price

G.R. No. (-3<*9< Au"ust #0 #9<9 +0AAC &AGNA0 .NCARNAC+1N &AGNA0 0+(V.0%R. &AGNA0 /AI+/+NA &AGNA0 0+I%1 &AGNA0 and AGA%1NA .NCARNAC+1N petitioners vs. @1N. C1ER% 1F A--.A(0 R10A (. R.%1N+( %.1F+(1 .NCARNAC+1N and H10. &. NA/&AFAN respondents. &eltran &eltran V &eltran for petitioners. Hose /. (e"aspi for private respondents. the twent4-nine parcels of land left 34 /ateu! at the pre-trial the parties a"reed that the controvers4 3e li!ited to the ten parcels su3$ect of the Juestioned sales and the %rial Court ordered the e=clusion of the nineteen other parcels fro! the action. 6 1f the ten parcels which re!ained in liti"ation nine were assessed for purposes of ta=ation at values a""re"atin" -#0 B00 00. %he record does not disclose the assessed value of the tenth parcel which has an area of # **3 sJuare !eters. > +n answer to the co!plaint the defendants 9respondents here; denied the alle"ed fictitious or fraudulent character of the sales in their favor assertin" that said sales were !ade for "ood and valua3le consideration6 that while 7... the4 !a4 have the effect of donations 4et the for!alities and sole!nities of donation are not reJuired for their validit4 and effectivit4 ... that defendants were collateral relatives of @ilario /ateu! and had done !an4 "ood thin"s for hi! nursin" hi! in his last illness which services constituted the 3ulC of the consideration of the sales6 and 934 wa4 of affir!ative defense; that the plaintiffs could not Juestion or seeC annul!ent of the sales 3ecause the4 were !ere collateral relatives of the deceased vendor and were not 3ound principall4 or su3sidiaril4 there34. < After the plaintiffs had presented their evidence the defendants filed a !otion for dis!issal in effect a de!urrer to the evidence reassertin" the defense set up in their answer that the plaintiffs as !ere collateral relatives of @ilario /ateu! had no li"ht to i!pu"n the latter5s disposition of his properties 34 !eans of the Juestioned conve4ances and su3!ittin" additionall4 that no evidence of fraud !aintainin" said transfers had 3een presented. 9 %he %rial Court "ranted the !otion to dis!iss holdin" 9a; on the authorit4 of Ar!entia vs. -atriarca #0 that the plaintiffs as !ere collateral relatives not forced heirs of @ilario /ateu! could not le"all4 Juestion the disposition !ade 34 said deceased durin" his lifeti!e re"ardless of whether as a !atter of o3$ective realit4 said dispositions were valid or not6 and 93; that the plaintiffs evidence of alle"ed fraud was insufficient the fact that the deeds of sale each stated a consideration of onl4 -l.00 not 3ein" in itself evidence of fraud or si!ulation. ## 1n appeal 34 the plaintiffs to the Court of Appeals that court affir!ed advertin" with approval to the %rial Court5s reliance on the Ar!entia rulin" which it would appear 3oth courts saw as den4in" without e=ception to collaterals of a decedent not forced heirs the ri"ht to i!pu"n the latter5s dispositions inter vivos of his propert4. %he Appellate Court also anal4Ded the testi!on4 of the plaintiffs5 witnesses declared that it failed to esta3lish fraud of an4 Cind or that /ateu! had continued pa4in" ta=es on the lands in Juestion even after e=ecutin" the deeds conve4in" the! to the defendants and closed with the state!ent that 7... since in dul4 notariDed and re"istered deeds of sale consideration is presu!ed we do not and it necessar4 to rule on the alternative alle"ations of the appellants that the said deed of sale were 9sic; in realit4 donations. #) 1ne issue clearl4 predo!inates here. +t is whether in view of the fact that for properties assuredl4 worth in actual value !an4 ti!es over their total assessed valuation of !ore than -#0 000.00 the Juestioned deeds of sale each state a price of onl4 one peso 9-#.00; plus unspecified past present and future services to which no

NARVA0A H., %he facts underl4in" this appeal 34 certiorari are not in dispute. @ilario /ateu! of 8awit Cavite died on /arch ## #96* sin"le without ascendants or descendants and survived onl4 34 collateral relatives of who! petitioners herein his first cousins were the nearest. /ateu! left no will no de3ts and an estate consistin" of twent4nine parcels of land in 8awit and +!us Cavite ten of which are involved in this appeal. # 1n April 3 #96* the private respondents the!selves collateral relatives of /ateu! thou"h !ore re!ote in de"ree than the petitioners ) re"istered with the Re"istr4 of 2eeds for the -rovince of Cavite two deeds of sale purportedl4 e=ecuted 34 /ateu! in their 9respondents5; favor coverin" ten parcels of land. &oth deeds were in %a"alo" save for the .n"lish descriptions of the lands conve4ed under one of the!6 and each recited the reconsideration of the sale to 3e7 ... hala"an" +0ANG -+01 9-l.00; salapin" -ilipino at !"a naipa"lin"Cod ipina"lilin"Cod sa aCin" CapaCanan ...7 97the su! of 1N. -.01 -l.00; -hilippine Currenc4 and services rendered 3ein" rendered and to 3e rendered for !4 3enefit7;. 1ne deed was dated Fe3ruar4 6 #963 and covered five parcels of land and the other was dated /arch * #963 coverin" five other parcels 3oth therefore antedatin" /ateu!5s death 34 !ore than a 4ear. 3 +t is asserted 34 the petitioners 3ut denied 34 the respondents that said sales notwithstandin" /ateu! continued in the possession of the lands purportedl4 conve4ed until his death that he re!ained the declared owner thereof and that the ta= pa4!ents thereon continued to 3e paid in his na!e. * ?hatever the truth however is not crucial. ?hat is not disputed is that on the stren"th of the deeds of sale the respondents were a3le to secure title in their favor over three of the ten parcels of land conve4ed there34. B 1n /a4 )) #96* the petitioners co!!enced suit a"ainst the respondents in the Court of First +nstance of Cavite seeCin" annul!ent of the deeds of sale as fictitious fraudulent or falsified or alternativel4 as donations void for want of acceptance e!3odied in a pu3lic instru!ent. Clai!in" ownership pro indiviso of the lands su3$ect of the deeds 34 virtue of 3ein" intestate heirs of @ilario /ateu! the petitioners pra4ed for recover4 of ownership and possession of said lands accountin" of the fruits thereof and da!a"es. Althou"h the co!plaint ori"inall4 sou"ht recover4 of all

13

Cases on Sales Price

value is assi"ned said deeds were void or ine=istent fro! the 3e"innin" 97nulo7; or !erel4 voida3le that is valid until annulled. +f the4 were onl4 voida3le then it is a correct proposition that since the vendor /ateu! had no forced heirs whose le"iti!es !a4 have 3een i!paired and the petitioners his collateral relatives not 3ein" 3ound either principall4 or su3sidiaril4 to the ter!s of said deeds the latter had and have no actiona3le ri"ht to Juestion those transfers. 1n the other hand if said deeds were void a3 initio 3ecause to all intents and purposes without consideration then a different le"al situation arises and Juite another result o3tains as pointed out 34 the e!inent civil law authorit4 /r. Hustice H.&.(. Re4es who in his concurrin" opinion in Ar!entia said, + ... cannot 3rin" !4self to a"ree to the proposition that the heirs intestate would have no le"al standin" to contest the conve4ance !ade 34 the deceased if the sa!e were !ade without an4 consideration or for a false and fictitious consideration. For under the Civil Code of the -hilippines Art. #*09 par. 3 contracts with a cause that did not e=ist at the ti!e of the transaction are ine=istent and void fro! the 3e"innin". %he sa!e is true of contracts statin" a false cause 9consideration; unless the persons interested in upholdin" the contract should prove that there is another true and lawful consideration therefor. 9l3id. Art. #3B3;. +f therefore the contract has no causa or consideration or the causa is false and fictitious 9and no true hidden causa is proved; the propert4 alle"edl4 conve4ed never reall4 leaves the patri!on4 of the transferor and upon the latter5s death without a testa!ent such propert4 would pass to the transferor5s heirs intestate and 3e recovera3le 34 the! or 34 the Ad!inistrator of the transferor5s estate. +n this particular re"ard + thinC Concepcion vs. 0ta. Ana <> -hil. ><> and 0o3s vs. Chua -ua @er!anos B0 -hil. B36 do not correctl4 state the present law and !ust 3e clarified. %o 3e sure the Juoted passa"e does not re$ect and is not to 3e construed as re$ectin" the Concepcion and 0olis rulin"s #3 as outri"htl4 erroneous far fro! it. 1n the contrar4 those rulin"s undou3tedl4 read and applied correctl4 the law e=tant in their ti!e, Art. #)>6 of the Civil Code of #<<9 under which the state!ent of a false cause in a contract rendered it voida3le onl4 not void a3 initio. +n o3servin" that the4 7... do not correctl4 state the present law and !ust 3e clarified 7 Hustice Re4es clearl4 had in !ind the fact that the law as it is now 9and alread4 was in the ti!e Ar!entia; no lon"er dee!s contracts with a false cause or which are a3solutel4 si!ulated or fictitious !erel4 voida3le 3ut declares the! void i.e. ine=istent 97nulo7; unless it is shown that the4 are supported 34 another true and lawful cause or consideration. #* A lo"ical conseJuence of that chan"e is the $uridical status of contracts without or with a false cause is that conve4ances of propert4 affected with such a vice cannot operate to divest and transfer ownership even if uni!pu"ned. +f afterwards the transferor dies the propert4 descends to his heirs and without re"ard to the !anner in which the4 are called to the succession said heirs !a4 3rin" an action to recover the propert4 fro! the purported transferee. As pointed out such an action is not founded on fraud 3ut on the pre!ise that the propert4 never leaves the estate of the transferor and is trans!itted upon his death to heirs who would la3or under no incapacit4 to !aintain the action fro! the !ere fact that the4 !a4 3e onl4 collateral relatives and 3ound neither principall4 or su3sidiaril4 under the deed or contract of conve4ance. +n Ar!entia the Court deter!ined that the conve4ance Juestioned was !erel4 annulla3le not void a3 initio and that the plaintiff s action was 3ased on fraud vitiatin" said conve4ance. %he Court said, @4potheticall4 ad!ittin" the truth of these alle"ations 9of plaintiffs co!plaint; the conclusion is irresisti3le that the sale is !erel4 voida3le. &ecause /arta Ar!entia e=ecuted the docu!ent and this is not controverted 34 plaintiff. &esides the fact that the vendees were !inors !aCes the contract at worst annulla3le 34 the! %hen a"ain inadeJuac4 of consideration does not i!pl4 total want of consideration. ?ithout !ore the parted acts of /arta Ar!entia after the sale did not indicate that the said sale was void fro! the 3ein". %he su! total of all these is that in essence plaintiffs case is 3otto!ed on fraud which renders the contract voida3le. +t therefore see!s clear that insofar as it !a4 3e considered as settin" or reaffir!in" precedent Ar!entia onl4 ruled that transfers !ade 34 a decedent in his lifeti!e which are voida3le for havin" 3een fraudulentl4 !ade or o3tained cannot 3e posthu!ousl4 i!pu"ned 34 collateral relatives succeedin" to his estate who are not principall4 or su3sidiaril4 3ound 34 such transfers. For the reasons alread4 stated that rulin" is not e=tendi3le to transfers which thou"h !ade under closel4 si!ilar circu!stances are void a3 initio for lacC or falsit4 of consideration. %he petitioners here ar"ue on a 3road front that the ver4 recitals of the Juestioned deeds of sale reveal such want or spuriousness of consideration and therefore the void character of said sales. %he4, #. advert to a decision of the Court of Appeals in /ontinola vs. @er3osa 9B9 1.G. No. *> pp <#0# <##<; holdin" that a price of - l.00 for the sale of thin"s worth at least -)0 000.00 is so insi"nificant as to a!ount to no price at all and does not satisf4 the law which while not reJuirin" for the validit4 of a sale that the price 3e adeJuate prescri3es that it !ust 3e real not fictitious stressin" the o3vious parallel 3etween that case and the present one in stated price and actual value of the propert4 sold6 ). cite /anresa to the sa!e effect, that true price which is essential to the validit4 of a sale !eans e=istent real and effective price that which does not consist in an insi"nificant a!ount as sa4 -.)0 for a house6 that it is not the sa!e as the concept of a $ust price which entails wei"hin" and !easurin" for econo!ic eJuivalence the a!ount of price a"ainst all the factors that deter!ine the value of the thin" sold6 3ut that there is no need of such a close e=a!ination when the i!!ense disproportion 3etween such econo!ic values is patent a case of insi"nificant or ridiculous price the un3elieva3le a!ount of which at once points out its ine=istence6 #B

14

Cases on Sales Price

3. assert that Art. #*B< of the Civil Code in prescri3in" that a sale 3e for a ... price certain in !one4 or its eJuivalent ... reJuires that 7eJuivalent7 3e so!ethin" representative of !one4 e.". a checC or draft a"ain citin" /anresa #6 to the effect that services are not the eJuivalent of !one4 insofar as said reJuire!ent is concerned and that a contract is not a true sale where the price consists of services or prestations6 *. once !ore citin" /anresa #> also point out that the 7services7 !entioned in the Juestioned deeds of sale are not onl4 va"ue and uncertain 3ut are unCnown and not suscepti3le of deter!ination without the necessit4 of a new a"ree!ent 3etween the parties to said deeds. ?ithout necessaril4 accordin" all these assertions its full concurrence 3ut upon the consideration alone that the apparent "ross not to sa4 enor!ous disproportion 3etween the stipulated price 9in each deed; of - l.00 plus unspecified and unJuantified services and the undisputa3l4 valua3le real estate alle"edl4 sold worth at least -#0 B00.00 "oin" onl4 34 assess!ents for ta= purposes which it is wellCnown are notoriousl4 low indicators of actual value plainl4 and unJuestiona3l4 de!onstrates that the4 state a false and fictitious consideration and no other true and lawful cause havin" 3een shown the Court finds 3oth said deeds insofar as the4 purport to 3e sales not !erel4 voida3le 3ut void a3 initio. Neither can the validit4 of said conve4ances 3e defended on the theor4 that their true causa is the li3eralit4 of the transferor and the4 !a4 3e considered in realit4 donations #< 3ecause the law #9 also prescri3es that donations of i!!ova3le propert4 to 3e valid !ust 3e !ade and accepted in a pu3lic instru!ent and it is not denied 34 the respondents that there has 3een no such acceptance which the4 clai! is not reJuired. )0 %he transfers in Juestion 3ein" void it follows as a necessar4 conseJuence and confor!a3l4 to the concurrin" opinion in Ar!entia with which the Court full4 a"rees that the properties purportedl4 conve4ed re!ained part of the estate of @ilario /ateu! said transfers notwithstandin" recovera3le 34 his intestate heirs the petitioners herein whose status as such is not challen"ed. %he private respondents have onl4 the!selves to 3la!e for the lacC of proof that !i"ht have saved the Juestioned transfers fro! the taint of invalidit4 as 3ein" fictitious and without ilicit cause6 proof to 3e 3rief of the character and value of the services past present and future constitutin" accordin" to the ver4 ter!s of said transfers the principal consideration therefor. %he petitioners5 co!plaint 9par. 6; )# averred that the transfers were 7... fraudulent fictitious and:or falsified and 9were; ... in realit4 donations of i!!ova3les ... 7 an aver!ent that the private respondents not onl4 specificall4 denied alle"in" that the transfers had 3een !ade 7... for "ood and valua3le consideration ... 7 3ut to which the4 also interposed the affir!ative defenses that said transfers were 7... valid 3indin" and effective ... 7 and in an o3vious reference to the services !entioned in the deeds that the4 7... had done !an4 "ood thin"s to 9the transferor; durin" his lifeti!e nursed hi! durin" his ripe 4ears and tooC care of hi! durin" his previous and last illness ... 7 9pars. * 6 #6 and #> their answer;.lKwphX#.'Yt )) %he onus therefore of showin" the e=istence of valid and illicit consideration for the Juestioned conve4ances rested on the private respondents. &ut even on a contrar4 assu!ption and positin" that the petitioners initiall4 had the 3urden of showin" that the transfers lacCed such consideration as the4 alle"ed in their co!plaint that 3urden was shifted to the private respondents when the petitioners presented the deeds which the4 clai!ed showed that defect on their face and it 3eca!e the dut4 of said respondents to offer evidence of e=istent lawful consideration. As the record clearl4 de!onstrates the respondents not onl4 failed to offer an4 proof whatsoever optin" to rel4 on a de!urrer to the petitioner5s evidence and upon the thesis which the4 have !aintained all the wa4 to this Court that petitioners 3ein" !ere collateral relatives of the deceased transferor were without ri"ht to the conve4ances in Juestion. +n effect the4 "a!3led their ri"ht to adduce evidence on a dis!issal in the %rial Court and lost it 3ein" the rule that when a dis!issal thus o3tained is reversed on appeal the !ovant loses the ri"ht to present evidence in his 3ehalf. )3 ?@.R.F1R. the appealed 2ecision of the Court of Appeals is reversed. %he Juestioned transfers are declared void and of no force or effect. 0uch certificates of title as the private respondents !a4 have o3tained over the properties su3$ect of said transfers are here34 annulled and said respondents are ordered to return to the petitioners possession of an the properties involved in tills action to account to the petitioners for the fruits thereof durin" the period of their possession and to pa4 the costs. No da!a"es attorne45s fees or liti"ation e=penses are awarded there 3ein" no evidence thereof 3efore the Court. 01 1R2.R.2.

15

Cases on Sales Price

G.R. No. #)0>)*-)B /a4 )# #99< 3. Althou"h it would appear in the docu!ent that petitioner is the vendor it is Hosie who will provide the !one4 for the rede!ption of the properties with her own funds6 *. %itles to the properties will 3e delivered to private respondent 3ut the sale will not 3e re"istered in the Re"ister of 2eeds and annotated on the titles. %o assure petitioner that Hosie will redee! the aforesaid properties she issued to hi! two 9); &-+ checCs 3oth postdated 2ece!3er #B #9<6. 1ne checC was for -# *00 000.00 supposedl4 for the sellin" price and the other was for -*)0 000.00 correspondin" to the interests for 6 !onths. +!!ediatel4 thereafter petitioner prepared the 2eed of 0ale with Ri"ht to Repurchase 9.=h. A; and after it has 3een si"ned and notariDed it was "iven to private respondent to"ether with the titles of the properties and the latter did not re"ister the transaction in the Re"ister of 2eeds as a"reed upon. 1n Hanuar4 #* #9<> petitioner deposited the checC for -# *00 000.00 9.=h. &; in his account at the Enited Coconut -lanters &anC and the other checC for -*)0 000.00 9.=h. 2; in his account at /.%R1&AN8 preparator4 to the rede!ption of his properties. @owever 3oth of the! were dishonored 34 the drawee 3anC for havin" 3een drawn a"ainst a closed account. RealiDin" that he was swindled he sent Hosie a tele"ra! a3out her checCs and when she failed to respond he went to /anila to looC for her 3ut she could not 3e found. 0o he returned to %aclo3an Cit4 and filed Cri!inal Cases Nos. <3#0 and <3#) a"ainst her for violation of &.-. )) 3ut the cases were later archived as the accused 9Hosie; could not 3e found as she went into hidin". %o protect his interest he filed Civil Case No. >396 of the Re"ional %rial Court of (e4te &ranch V++ entitled 7Fernando %. /ate vs. Hosefina R. Re4 and +nocencio %an7 for Annul!ent of Contract with 2a!a"es. 2efendant Hosefina R. Re4 9Hosie; was declared in default and the case proceeded a"ainst private respondent. &ut durin" the trial the R%C court asCed private respondent to file an action for consolidation of ownership of the properties su3$ect of the sale and pursuant thereto he filed Civil Case No. >B<> that was consolidated with the case he filed earlier which were later decided $ointl4 34 the trial court in favor of private respondent and was su3seJuentl4 appealed to respondent Court that affir!ed it with !odification. %hereupon petitioner filed a !otion to reconsider the decision 3ut it was denied. @ence the instant petition for review. 3 +n this petition for review the petitioner presents as the sole issue the validit4 of the 2eed of 0ale with Ri"ht to Repurchase. @e contends that it is null and void for lacC of consideration 3ecause alle"edl4 no !one4 chan"ed hands when he si"ned it and the checCs that were issued for rede!ption of the properties involved in the sale have 3een dishonored 34 the drawee 3anC for havin" 3een drawn a"ainst a closed account. * %he contention is without !erit. ). %he properties will 3e repurchased within si= 96; !onths or on or 3efore April * #9<>6 %here was a consideration. %he respondent court aptl4 o3served that Q

F.RNAN21 %. /A%. petitioner vs. %@. @1N1RA&(. C1ER% 1F A--.A(0 and +N1C.NC+1 %AN respondents. +n this petition for review petitioner assails the 2ecision # of the Court of Appeals dated Au"ust )9 #99* in CA-G.R. CV No. )<))B-)6 which affir!ed with !odification the decision of the trial court the dispositive portion of which reads to wit, ?@.R.F1R. this Court finds the 2eed of 0ale with Ri"ht of Repurchase e=ecuted 1cto3er 6 #9<6 valid and 3indin" 3etween plaintiff and defendant 9as vendor and vendee-a-retro respectivel4;6 that as the period to redee! has e=pired ownership thereof was consolidated 34 operation of law and the Re"ister of 2eeds is here34 ordered to R.G+0%.R this decision consolidatin" the defendant5s ownership over the properties covered 34 %ransfer Certificate of %itle No. %-90-># coverin" (ot <6 1ri"inal Certificate of %itle No. N-3## coverin" (ot B3>0 all of the %aclo3an Cadastre and issuin" to defendant +nocencio %an his titles after cancellation of the titles presentl4 re"istered in plaintiff Fernando %. /ate5s na!e and that of his wife. %he plaintiff Fernando /ate is further ordered to pa4 defendant the su! of 1N. @EN2R.2 F1R%F %@1E0AN2 9-#*0 000.00; -.010 for and as attorne45s fees. ?ith costs a"ainst the plaintiff Fernando /ate. %he facts of this case as su!!ariDed in the petition are reproduced hereunder, 1n 1cto3er 6 #9<6 Hosefina R. Re4 9hereafter referred to as 7Hosie7 for short; and private respondent went to the residence of petitioner at %aclo3an Cit4. Hosie who is a cousin of petitioner5s wife solicited his help to stave off her and her fa!il45s prosecution 34 private respondent for violation of &.-. )) on account of the ru33er checCs that she her !other sister and 3rother issued to private respondent a!ountin" to -* *3B06>.00. 0he reJuested petitioner to cede to private respondent his three 93; lots in %aclo3an Cit4 in order to placate hi!. 1n hearin" Hosie5s proposal he i!!ediatel4 re$ected it as he owed private respondent nothin" and he was under no o3li"ation to conve4 to hi! his properties. Further!ore his lots were not for sale. Hosie e=plained to hi! that he was in no dan"er of losin" his properties as he will !erel4 e=ecute a si!ulated docu!ent transferrin" the! to private respondent 3ut the4 will 3e redee!ed 34 her with her own funds. After a lon" discussion he a"reed to e=ecute a fictitious deed of sale with ri"ht to repurchase coverin" his three 93; lots !entioned a3ove su3$ect to the followin" conditions, #. %he a!ount to 3e stated in the docu!ent is -# *00 000.00 with interest thereon at BP a !onth6

16

Cases on Sales Price

+n preparin" and e=ecutin" the deed of sale with ri"ht of repurchase and in deliverin" to %an the land titles appellant actuall4 acco!!odated Hosefina so she would not 3e char"ed cri!inall4 34 %an. %o ensure that he could repurchase his lots appellant "ot a checC of -# *00 000.00 fro! her. Also 34 allowin" his titles to 3e in possession of %an for a period of si= !onths appellant secured fro! her another checC for -*)0 000.00. ?ith this arran"e!ent appellant was convinced he had a "ood 3ar"ain. Enfortunatel4 his e=pectation cru!3led. For this tra"ic incident not onl4 Hosefina 3ut also %an accordin" to appellant !ust 3e answera3le. +t is plain that consideration e=isted at the ti!e of the e=ecution of the deed of sale with ri"ht of repurchase. +t is not onl4 appellant5s Cindness to Hosefina 3ein" his cousin 3ut also his receipt of -*)0 000.00 fro! her which i!pelled hi! to e=ecute such contract. B Further!ore while petitioner did not receive the -#.* /illion purchase prices fro! respondent %an he had in his possession a postdated checC of Hosie Re4 in an eJuivalent a!ount precisel4 to repurchase the two lots on or 3efore the si=th !onth. As ad!itted 34 petitioner 34 virtue of the sale with pacto de retro Hosie Re4 "ave hi! as vendor-a-retro a postdated checC in the a!ount of -#.* /illion which represented the repurchase price of the two 9); lots. Aside fro! the -#.* /illion checC Hosie "ave another postdated checC to petitioner in the a!ount of -*)0 000.00 ostensi3l4 as interest for si= 96; !onths 3ut which apparentl4 was his fee for havin" e=ecuted the pacto de retro docu!ent. Hosie thus assu!ed the responsi3ilit4 of pa4in" the repurchase price on 3ehalf of petitioner to private respondent. Enfortunatel4 the two checCs issued 34 Hosie Re4 were worthless. &oth were dishonored upon present!ent 34 petitioner with the drawee 3anCs. @owever there is a3solutel4 no 3asis for petitioner to file a co!plaint a"ainst private respondent %an and Hosie Re4 to annul the pacto de retro sale on the "round of lacC of consideration invoCin" his failure to encash the two checCs. -etitioner5s cause of action was to file cri!inal actions a"ainst Hosie Re4 under &.-. )) which he did. %he filin" of the cri!inal cases was a tacit ad!ission 34 petitioner that there was a consideration of the pacto de retro sale. -etitioner further clai!s that the pacto de retro sale was su3$ect to the condition that in the event the checCs "iven 34 Hosie Re4es to hi! for the repurchase of the propert4 were dishonored then the docu!ent shall 3e declared null and void for lacC of consideration. ?e are not persuaded. -rivate respondent %an was alread4 poised to file cri!inal cases a"ainst Hosie Re4 and her fa!il4. +t would not 3e lo"ical for respondent %an to a"ree to the conditions alle"edl4 i!posed 34 petitioner. -etitioner Cnew that he was 3ound 34 the deed of sale with ri"ht to repurchase as evidenced 34 his filin" cri!inal cases a"ainst Hosie Re4 when the two checCs 3ounced. %he respondent court further !ade the candid 3ut true o3servation that, +f there is an43od4 to 3la!e for his predica!ent it is appellant hi!self. @e is a law4er. @e was the one who prepared the contract. @e Cnew what he was enterin" into. 0urel4 he !ust have 3een aware of the risC involved. ?hen Hosefina5s checCs 3ounced he should have repurchased his lots with his own !one4. +nstead he sued not onl4 Hosefina 3ut also %an for annul!ent of contract on the "round of lacC of consideration and false pretenses on their part. -etitioner then postulates that 7it is not onl4 ille"al 3ut i!!oral to reJuire hi! to repurchase his own properties with his own !one4 when he did not derive an4 3enefit fro! the transaction.7 %hus he invoCes the case of 0in"son vs. +sa3ela 0aw!ill << 0CRA 633 6*3 where the Court said that 7where one or two innocent persons !ust suffer that person who "ave occasion for the da!a"es to 3e caused !ust 3ear conseJuences.7 -etitioner5s reliance on this doctrine is !isplaced. @e is not an innocent person. As a !atter of fact he "ave occasion for the da!a"e caused 34 virtue of the deed of sale with ri"ht to repurchase which he prepared and si"ned. %hus there is the eJuita3le !a=i! that 3etween two innocent parties the one who !ade it possi3le for the wron" to 3e done should 3e the one to 3ear the resultin" loss. 6 -etitioner further insinuates that private respondent deceived hi! into si"nin" the deed of sale with ri"ht to repurchase. %his is not 3orne out 34 the evidence nor 34 petitioner5s own state!ent of facts which we heretofore produced. As aptl4 o3served 34 the respondent court 7?e are at a loss wh4 herein appellant ascri3es false pretenses to %an who !erel4 si"ned the contract.7 > Contrar4 to petitioner5s pretension respondent %an did not e!plo4 an4 devious sche!e to !aCe the for!er si"n the deed of sale. +t is to 3e noted that %an waived his ri"ht to collect fro! Hosefina Re4 34 virtue of the pacto de retro sale. +n turn Hosefina "ave petitioner a postdated checC in the a!ount of -#.* /illion to ensure that the latter would not lose his two lots. -etitioner a law4er should have Cnown that the transaction was frau"ht with risCs since Hosefina Re4 and fa!il4 had a checCered histor4 of issuin" worthless checCs. &ut had petitioner not a"reed to the arran"e!ent respondent %an would not have a"reed to waive prosecution of Hosefina Re4. Apparentl4 it was petitioner5s a"reed for a hu"e profit that i!pelled hi! to accede to the sche!e of Hosefina Re4 even if he Cnew it was a dan"erous undertaCin". ?hen the drafted the pacto de retro docu!ent he threw caution to the winds for"ettin" that prudence !i"ht have 3een the 3etter course of action. ?e can onl4 s4!pathiDe with petitioner5s predica!ent. @owever a contract is a contract. 1ne a"reed upon and provided all the essential ele!ents are present it is valid and 3indin" 3etween the parties. -etitioner has no one to 3la!e 3ut hi!self for his !isfortune. ?@.R.F1R. the 2ecision of the Court of Appeals dated Au"ust )9 #99* is here34 AFF+R/.2. %he petition for review is here34 2.N+.2 2E. C1ER0. for lacC of !erit.

17

Cases on Sales Price

G.R. No. L555222Au7u)' 24, 1264 !,OU!E! !AL%ACION !ERRANO LADANGA a#$ AGU!"IN !. LADANGA, &e'('(o#er), *). COUR" OF A,,EAL! a#$ BERNARDO !. A!ENE"A, a) Guar$(a# o8 '9e I#:o/&e'e#' CLE-ENCIA A. A!ENE"A, re)&o#$e#'). Venusto -. France and A!3rosia -adilla /e!pia Re4es V .JuideD (aw 1ffice for petitioners. A"rava (ucero V Gineta for private respondents. %he notar4 testified that the deed of sale for the -aco propert4 was si"ned in the office of the GueDon Cit4 re"istr4 of deeds. @e did not see 0alvacion "ivin" an4 !one4 to Cle!encia. +n /a4 #9>B &ernardo as "uardian of Cle!encia filed an action for reconve4ance of the -aco propert4 accountin" of the rentals and da!a"es. Cle!encia was not !entall4 inco!petent 3ut she was placed under "uardianship 3ecause she was an eas4 pre4 for e=ploitation and deceit. -arentheticall4 it should 3e stated that she died on /a4 )# #9>> at the a"e of <0. 0he alle"edl4 3eJueathed her properties in a holo"raphic will dated Nove!3er )3 #9>3 to 2octor /aninan". +n that will she disinherited &ernardo. %he will was presented for pro3ate 9.=h. ))-A and ))-C;. %he testate case was consolidated with the intestate proceedin" filed 34 &ernardo in the sala of Hud"e Ricardo (. -ronove at -asi" RiDal. @e dis!issed the testate case. @e appointed &ernardo as ad!inistrator in the intestate case 9p. )3 &ernardo5s 3rief;. As alread4 stated in the instant case the trial court and the Appellate Court declared void the sale of the -aco propert4. %he (adan"a spouses contend that the Appellate Court disre"arded the rule on 3urden of proof. %his contention is devoid of !erit 3ecause Cle!encia herself testified that the price of -)6 000 was not paid to her. %he 3urden of the evidence shifted to the (adan"a spouses. %he4 were not a3le to prove the pa4!ent of that a!ount. %he sale was fictitious. %he (adan"a spouses ar"ue that the Appellate Court erred in not considerin" that inadeJuac4 of price !a4 indicate a donation or so!e other contract6 in disre"ardin" the presu!ption that the sale was fair and re"ular and for a sufficient consideration6 in overlooCin" i!portant facts and in not holdin" that &ernardo had no ri"ht to file a co!plaint to annul the sale. As a rule onl4 i!portant le"al issues as conte!plated in section * Rule *B of the Rules of Court !a4 3e raised in a review of the Appellate Court5s decision. %his case does not fall within an4 of the e=ceptions to that rule 9) /oran5s Co!!ents on the Rules of Court #9>9 .d. p. *>B6 Ra!os vs. -epsi-Cola &ottlin" Co. #)B -hil. >0#;. %he Juestions ventilated 34 the (adan"as in their 3riefs and in their co!!ent of April 3 #9<* !a4 3e reduced to the issue of the validit4 of the sale which the vendor Cle!encia herself assailed in her testi!on4 on Au"ust #6 and 2ece!3er 3 #9>6 when she was ei"ht4 4ears old. @er testi!on4 and that of the notar4 leave no dou3t that the price of -)6 000 was never paid. A contract of sale is void and produces no effect whatsoever where the price which appears therein as paid has in fact never 3een paid 34 the purchaser to the vendor 9/eneses Vda. de Catindi" vs. @eirs of Catalina RoJue (-)B>>> Nove!3er )6 #9>6 >* 0CRA <3 <<6 /apalo vs. /apalo #)3 -hil. 9>9 9<>6 04lla3us 1ce$o -ereD V Co. vs. Flores and &as *0 -hil. 9)#;.

AGE+N1 H., %he spouses 0alvacion 0errano and 2octor A"ustin 0. (adan"a appealed fro! the decision of the Court of Appeals 9affir!in" the decision of the /anila Court of First +nstance; declarin" void the sale to 0alvacion 34 her aunt Cle!encia A. Aseneta of the #66-sJuare-!eter lot with a house located at #)3< 0ison 0treet -aco /anila for non-pa4!ent of the price of -)6 000. +t ordered the re"ister of deeds of /anila to issue a new title to Cle!encia. %he said spouses were further ordered to pa4 to Cle!encia5s estate -)# 000 as !oral and e=e!plar4 da!a"es and attorne45s fees and to render to &ernardo an accountin" of the rentals of the propert4 fro! April 6 #9>*. %he Appellate Court and Hud"e Hose C. Cola4co found that Cle!encia a spinster who retired as division superintendent of pu3lic schools at 6B in #96# had a nephew na!ed &ernardo 0. Aseneta the child of her sister Gloria and a niece na!ed 0alvacion the dau"hter of her sister Flora. 0he le"all4 adopted &ernardo in #96# 9.=h. &;. 1n a sin"le date April 6 #9>* 9when Cle!encia was a3out >< 4ears old; she si"ned nine deeds of sale in favor of 0alvacion for various real properties. 1ne deed of sale concerned the said -aco propert4 9ad!inistered 34 the (adan"a spouses; which purportedl4 was sold to 0alvacion for -)6 000 9.=h. C;. %he total price involved in the nine deeds of sale and in the tenth sale e=ecuted on Nove!3er < #9>* was -9) )00. 1n the witness stand Cle!encia denied havin" 7received even one centavo7 of the price of -)6 000 9#B #6 3) tsn Au"ust #6 #9>6; !uch less the -9) 000. 0he considered the alle"ation that she received the price as a he e=clai!in" on the witness stand, 70us!ar4osepZ -9) 000Z7 9#B )<-30 tsn Au"ust #6 #9>6;. %his testi!on4 was corro3orated 34 0oledad (. /aninan" 69 a dentist with who! Cle!encia had lived for !ore than thirt4 4ears in 8a!unin" GueDon Cit4.

18

Cases on Sales Price

0uch a sale is ine=istent and cannot 3e considered consu!!ated 9&orro!eo5 vs. &orro!eo 9< -hil. *3)6 CruDado vs. &ustos and .scaler 3* -hil. #>6 Garancian" vs. Garancian" (-))3B# /a4 )# #969 )< 0CRA ))9;. +t was not shown that Cle!encia intended to donate the -aco propert4 to the (adan"as. @er testi!on4 and the notar45s testi!on4 destro4ed an4 presu!ption that the sale was fair and re"ular and for a true consideration. Hud"e Cola4co concluded that the (adan"as a3used Cle!encia5s confidence and defrauded her of properties with a !arCet value of -393 BB9.)B when she was alread4 >< 4ears old. %he contention that &ernardo had no ri"ht to institute the instant action 3ecause he was not a co!pulsor4 heir of Cle!encia cannot 3e sustained. &ernardo was Cle!encia5s adopted son. /oreover Cle!encia 34 testif4in" in this case tacitl4 approved the action 3rou"ht in her 3ehalf. &ut the !oral da!a"es awarded 34 the trial court is not sanctioned 34 articles ))#> to )))0 of the Civil Code. Cle!encia5s own si"nature in the deed 3rou"ht a3out the !ess within which she was entan"led. ?@.R.F1R. the $ud"!ent of the Appellate Court is affir!ed with the !odification that the ad$udication for !oral and e=e!plar4 da!a"es is discarded. No costs. 01 1R2.R.2. +t appears that on Hune #B #9>> Aurelio A. RoJue filed a co!plaint for partition docCeted as Civil Case No. #0903) a"ainst CoraDon RoJue Al3erto de los 0antos Feliciano RoJue 0evera RoJue and 1s!undo RoJue 3efore the then Court of First +nstance of /anila &ranch +I. ) 2efendants therein were declared in default and plaintiff presented evidence e=-parte. 1n /arch )9 #9>9 the trial court rendered a decision in favor of plaintiff Aurelio A. RoJue the pertinent portion of which reads, 3 Fro! the evidence it has 3een clearl4 esta3lished that the lot in Juestion covered 34 %ransfer Certificate of %itle No. B#330 was acJuired 34 plaintiff Aurelio Ro"ue and /aria /esina durin" their con$u"al union and the house constructed thereon was liCewise 3uilt durin" their !arital union. 1ut of their union plaintiff and /aria /esina had four children who are the defendants in this case. ?hen /aria /esina died on Au"ust )< #966 the onl4 con$u"al properties left are the house and lot a3ove stated of which plaintiff herein as the le"al spouse is entitled to one-half share pro-indiviso thereof. ?ith respect to the one-half share pro-indiviso now for!in" the estate of /aria /esina plaintiff and the four children the defendants here are each entitled to one-fifth 9#:B; share pro-indiviso. %he deceased wife left no de3t. ?herefore $ud"!ent is here34 rendered orderin" the partition of the properties su3$ect !atter of this case consistin" of the house and lot in the followin" !anner, #. 1f the house and lot for!in" the con$u"al properties plaintiff is entitled to one-half share pro-indiviso thereof while the other half for!s the estate of the deceased /aria /esina6 G.R. No. 102410 Au7u)' 26, 1221 CLARA -. BALA"BA", &e'('(o#er, *). COUR" OF A,,EAL! a#$ !&ou)e) 0O!E RE,UYAN a#$ AURORA RE,UYAN, re)&o#$e#').

%1RR.0 HR. H.,p -etitioner Clara /. &alat3at instituted this petition for review pursuant to Rule *B of the Revised Rules of Court seeCin" to set aside the decision dated Au"ust #) #99) of the respondent Court of Appeals in CA-GR. CV No. )999* entitled 7Ale=andra &alat3at and Clara &alat3at plaintiffs-appellants versus Hose Repu4an and Aurora Repu4an defendants-appellees7 the dispositive portion of which reads, # ?@.R.F1R. the $ud"!ent appealed fro! is affir!ed with the !odification that the awards of -#0 000.00 for attorne45s fees and -B 000.00 as costs of liti"ation are deleted. 01 1R2.R.2. %he records show the followin" factual antecedents,

19

Cases on Sales Price

). 1f the .state of deceased /aria /esina the sa!e is to 3e divided into five 9B; shares and plaintiff and his four children are entitled each to one-fifth share thereof pro-indiviso. -laintiff clai! for !oral e=e!plar4 and actual da!a"es and attorne45s fees not havin" 3een esta3lished to the satisfaction of the Court the sa!e is here34 denied. ?ithout pronounce!ent as to costs. 01 1R2.R.2 1n Hune ) #9>9 the decision 3eca!e final and e=ecutor4. %he correspondin" entr4 of $ud"!ent was !ade on /arch )9 #9>9. * 1n 1cto3er B #9>9 the Re"ister of 2eeds of /anila issued a %ransfer Certificate of %itle No. #3B6># in the na!e of the followin" persons in the followin" proportions, B Aurelio A. RoJue 6:#0 share 0everina /. RoJue #:#0 share 1s!undo /. RoJue #:#0 share Feliciano /. RoJue #:#0 share CoraDon /. RoJue #:#0 share 1n April # #9<0 Aurelio A. Ro"ue sold his 6:#0 share in %.C.%. No. #3B6># to spouses Aurora %uaDon-Repu4an and Hose Repu4an as evidenced 34 .72eed of A3solute 0ale.7 6 1n Hul4 )# #9<0 Aurora %uaDon Repu4an caused the annotation of her affidavit of adverse clai! > on the %ransfer Certificate of %itle No. #3B6># < to wit, .ntr4 No. B6)>:%-#3B6># Q N1%+C. 1F A2V.R0. C(A+/ Q Filed 34 Aurora %uaDon Repu4an !arried clai!in" a!on" others that she 3ou"ht 6:#0 portion of the propert4 herein descri3ed fro! Aurelio RoJue for the a!ount of -B0 000.00 with a down pa4!ent of -B 000.00 and the 3alance of -*B 000.00 to 3e paid after the partition and su3division of the propert4 herein descri3ed other clai!s set forth in 2oc. No. 9B* pa"e #< &ooC 9* of [[[[[[[[[[[[[[[[ 6* [[[[[[[ -.2R1 2. CA0%R1 Notar4 -u3lic of /anila. 2ate of instru!ent Q Hul4 )# #9<0 2ate of inscription Q Hul4 )# #9<0 at 3,3B p.!. %.R.0+%A @. N1&(.HA0 Actin" Re"ister of 2eeds &4, RA/1N 2. /ACAR+CAN Actin" 0econd 2eput4 +n view of all the fore"oin" and findin" that the a!ount of -#00 000.00 as purchase price for the sale of the parcel of land covered 34 %C% No. B#330 of the Re"istr4 of 2eeds of /anila consistin" of <* sJuare !eters situated in Calle$on 0ulu 2istrict of 0anta CruD /anila to 3e reasona3le and fair and considerin" the opportunities "iven defendants to si"n the deed of a3solute sale voluntaril4 the Court has no alternative 3ut to order as it here34 orders the 2eput4 ClerC of this Court to si"n the deed of a3solute sale for and in 3ehalf of defendants pursuant to 0ec. #0 Rule 39 of the Rules of Court in order to effect the partition of the propert4 involved in this case. 01 1R2.R.2. A deed of a3solute sale was e=ecuted on Fe3ruar4 * #9<) 3etween Aurelio 0. RoJue CoraDon RoJue Feliciano RoJue 0evera RoJue and 1s!undo RoJue and Clara &alat3at !arried to Ale$andro &alat3at. #) 1n April #* #9<) Clara &alat3at filed a !otion for the issuance of a writ of possession which was "ranted 34 the trial court on 0epte!3er #* #9<) 7su3$ect however to valid ri"hts and interest of third persons over the sa!e portion thereof other than vendor or an4 other person or persons priv4 to or clai!in" an4 ri"hts or interests under it.7 %he correspondin" writ of possession was issued on 0epte!3er )0 #9<). #3 1n /a4 )0 #9<) petitioner Clara &alat3at filed a !otion to intervene in Civil Case No. #3*#3# #* which was "ranted as per court5s resolution of 1cto3er )# #9<). #B @owever Clara &alat3at failed to file her co!plaint in intervention. #6 1n April #B #9<6 the trial court rendered a decision dis!issin" the co!plaint the pertinent portion of which reads, #> %he rescission of contracts are provided for in the laws and nowhere in the provision of the Civil Code under the title Rescissi3le Contracts does the circu!stances in the case at 3ar appear to have occurred hence the pra4er for rescission is outside the a!3it for which rescissi3le MsicN could 3e "ranted. %he +ntervenor Q -laintiff Clara &alat3at althou"h allowed to intervene did not file her co!plaint in intervention. ConseJuentl4 the plaintiff havin" failed to prove with sufficient preponderance his action the relief pra4ed for had to 3e denied. %he contract of sale deno!inated as 72eed of A3solute 0ale7 9.=h. > and su3-!arCin"s; 3ein" valid and enforcea3le the sa!e pursuant to the provisions of Art. ##B9 of the Civil Code which sa4s, 1n Au"ust )0 #9<0 Aurelio A. RoJue filed a co!plaint for 7Rescission of Contract7 docCeted as Civil Case No. #3*#3# a"ainst spouses Aurora %uaDon-Repu4an and Hose Repu4an 3efore &ranch +V of the then Court of First +nstance of /anila. %he co!plaint is "rounded on spouses Repu4an5s failure to pa4 the 3alance of -*B 000.00 of the purchase price. 9 1n 0epte!3er B #9<0 spouses Repu4an filed their answer with counterclai!. #0 +n the !eanti!e the trial court issued an order in Civil Case No. #0903) 9-artition case; dated Fe3ruar4 ) #9<) to wit, ##

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Cases on Sales Price

13li"ations arisin" fro! contracts have the force of law 3etween the contractin" parties and should 3e co!plied with in "ood faith. has the effect of 3ein" the law 3etween the parties and should 3e co!plied with. %he o3li"ation of the plaintiff under the contract 3ein" to have the land covered 34 %C% No. #3B6># partitioned and su3divided and title issued in the na!e of the defendant 3u4er 9see pa"e ) par. C of .=h. >-A; plaintiff had to co!pl4 thereto to "ive effect to the contract. ?@.R.F1R. $ud"!ent is rendered a"ainst the plaintiff Aurelio A. RoJue and the plaintiff in intervention Clara &alat3at and in favor of the defendants dis!issin" the co!plaint for lacC of !erit and declarin" the 2eed of A3solute 0ale dated April # #9<0 as valid and enforcea3le and the plaintiff is as he is here34 ordered to partition and su3divide the land covered 34 %.C.%. No. #3B6># and to a""re"ate therefro! a portion eJuivalent to 6:#0 thereof and cause the sa!e to 3e titled in the na!e of the defendants and after which the defendants and after which the defendants and after which the defendants and after which the defendants to pa4 the plaintiff the su! of -*B 000.00. Considerin" further that the defendants suffered da!a"es since the4 were forced to liti"ate unnecessaril4 34 wa4 of their counterclai! plaintiff is here34 ordered to pa4 defendants the su! of -#B 000.00 as !oral da!a"es attorne45s fees in the a!ount of -B 000.00. Costs a"ainst plaintiff. 01 1R2.R.2. ++ 1n /arch 3 #9<> petitioner &alat3at filed a notice of lis pendens in Civil Case No. #0903) 3efore the Re"ister of 2eeds of /anila. #< 1n 2ece!3er 9 #9<< petitioner Clara &alat3at and her hus3and Ale$andro &alat3at filed the instant co!plaint for deliver4 of the owners duplicate cop4 of %.C.%. No. #3B6># docCeted as Civil Case No. <<-*>#>6 3efore &ranch )* of the Re"ional %rial Court of /anila a"ainst private respondents Hose Repu4an and Aurora Repu4an. #9 1n Hanuar4 )> #9<9 private respondents filed their answer with affir!ative defenses and co!pulsor4 counterclai!. )0 1n Nove!3er #3 #9<9 private respondents filed their !e!orandu! )# while petitioners filed their !e!orandu! on Nove!3er )3 #9<9. )) 1n Au"ust ) #990 the Re"ional %rial Court of /anila &ranch )* rendered a decision dis!issin" the co!plaint the dispositive portion of which reads , )3 Considerin" all the fore"oin" this Court finds that the plaintiffs have not 3een a3le to esta3lish their cause of action a"ainst the defendants and have no ri"ht to the reliefs de!anded in the co!plaint and the co!plaint of the plaintiff a"ainst the defendants is here34 2+0/+00.2. 1n the counterclai! the plaintiff are ordered to pa4 defendants ?@.%@.R 1R N1% %@.R. ?A0 A 21E&(. 0A(. A0 C1N%./-(A%.2 EN2.R AR%. #B** 1F %@. C+V+( C12.O +++ ?@.%@.R 1R N1% -.%+%+1N.R ?A0 A &EF.R +N G112 FA+%@ AN2 F1R VA(E.O +V ?@.%@.R 1R N1% %@. C1ER% 1F A--.A(0 .RR.2 +N G+V+NG ?.+G@% AN2 C1N0+2.RA%+1N %1 %@. .V+2.NC. 1F %@. -R+VA%. R.0-1N2.N%0 ?@+C@ ?.R. N1% 1FF.R.2O -etitioner asseverates that the respondent Court of Appeals co!!itted "rave a3use of discretion tanta!ount to lacC or e=cess of $urisdiction in affir!in" the appealed $ud"!ent considerin" 9#; that the alle"ed sale in favor of the private respondents Repu4an was !erel4 e=ecutor46 9); that there is no dou3le sale6 93; that petitioner is a 3u4er in "ood faith and for value6 and 9*; that private respondents did not offer their evidence durin" the trial. the a!ount of %en %housand -esos 34 wa4 of attorne45s fees Five %housand -esos as costs of liti"ation and further to pa4 the costs of the suit. 01 1R2.R.2. 2issatisfied petitioner &alat3at filed an appeal 3efore the respondent Court of Appeals which rendered the assailed decision on Au"ust #) #99) to wit, )* ?@.R.F1R. the $ud"!ent appealed fro! is affir!ed with the !odification that the awards of -#0 000.00 for attorne45s fees and -B 000.00 as costs of liti"ation are deleted. 01 1R2.R.2. 1n /arch )) #993 the respondent Court of Appeals denied petitioner5s !otion for reconsideration. )B @ence this petition for review. -etitioner raised the followin" issues for this Court5s resolution, + ?@.%@.R 1R N1% %@. A((.G.2 0A(. %1 %@. -R+VA%. R.0-1N2.N%0 ?A0 /.R.(F .I.CE%1RF AN2 N1% A C1N0E//A%.2 %RAN0AC%+1NO

21

Cases on Sales Price

Contrar4 to petitioner5s contention that the sale dated April # #9<0 in favor of private respondents Repu4an was !erel4 e=ecutor4 for the reason that there was no deliver4 of the su3$ect propert4 and that consideration:price was not full4 paid we find the sale as consu!!ated hence valid and enforcea3le. +n a decision dated April #B #9<6 of the Re"ional %rial Court of /anila &ranch +V in Civil Case No. #3*#3# the Court dis!issed vendor5s Aurelio RoJue co!plaint for rescission of the deed of sale and declared that the 0ale dated April # #9<0 as valid and enforcea3le. No appeal havin" 3een !ade the decision 3eca!e final and e=ecutor4. +t !ust 3e noted that herein petitioner &alat3at filed a !otion for intervention in that case 3ut did not file her co!plaint in intervention. +n that case wherein Aurelio RoJue sou"ht to rescind the April # #9<0 deed of sale in favor of the private respondents for non-pa4!ent of the -*B 000.00 3alance the trial court dis!issed the co!plaint for rescission. .=a!inin" the ter!s and conditions of the 72eed of 0ale7 dated April # #9<0 the -*B 000.00 3alance is pa4a3le onl4 7after the propert4 covered 34 %.C.%. No. #3B6># has 3een partitioned and su3divided and title issued in the na!e of the &EF.R7 hence vendor RoJue cannot de!and pa4!ent of the 3alance unless and until the propert4 has 3een su3divided and titled in the na!e of private respondents. 2evoid of an4 stipulation that 7ownership in the thin" shall not pass to the purchaser until he has full4 paid the price7 )6 ownership in thin" shall pass fro! the vendor to the vendee upon actual or constructive deliver4 of the thin" sold even if the purchase price has not 4et 3een full4 paid. %he failure of the 3u4er has not 4et 3een full4 paid. %he failure of the 3u4er to !aCe "ood the price does not in law cause the ownership to revest to the seller unless the 3ilateral contract of sale is first rescinded or resolved pursuant to Article ##9# of the New Civil Code. )> Non-pa4!ent onl4 creates a ri"ht to de!and the fulfill!ent of the o3li"ation or to rescind the contract. ?ith respect to the non-deliver4 of the possession of the su3$ect propert4 to the private respondent suffice it to sa4 that ownership of the thin" sold is acJuired onl4 fro! the ti!e of deliver4 thereof either actual or constructive. )< Article #*9< of the Civil Code provides that Q when the sale is !ade throu"h a pu3lic instru!ent the e=ecution thereof shall 3e eJuivalent to the deliver4 of the thin" which is the o3$ect of the contract if fro! the deed the contrar4 does not appear or cannot 3e inferred. )9 %he e=ecution of the pu3lic instru!ent without actual deliver4 of the thin" transfers the ownership fro! the vendor to the vendee who !a4 thereafter e=ercise the ri"hts of an owner over the sa!e. 30 +n the instant case vendor RoJue delivered the owner5s certificate of title to herein private respondent. +t is not necessar4 that vendee 3e ph4sicall4 present at ever4 sJuare inch of the land 3ou"ht 34 hi! possession of the pu3lic instru!ent of the land is sufficient to accord hi! the ri"hts of ownership. %hus deliver4 of a parcel of land !a4 3e done 34 placin" the vendee in control and possession of the land 9real; or 34 e!3od4in" the sale in a pu3lic instru!ent 9constructive;. %he provision of Article #3B< on the necessit4 of a pu3lic docu!ent is onl4 for convenience not for validit4 or enforcea3ilit4. +t is not a reJuire!ent for the validit4 of a contract of sale of a parcel of land that this 3e e!3odied in a pu3lic instru!ent. 3# A contract of sale 3ein" consensual it is perfected 34 the !ere consent of the parties. 3) 2eliver4 of the thin" 3ou"ht or pa4!ent of the price is not necessar4 for the perfection of the contract6 and failure of the vendee to pa4 the price after the e=ecution of the contract does not !aCe the sale null and void for lacC of consideration 3ut results at !ost in default on the part of the vendee for which the vendor !a4 e=ercise his le"al re!edies. 33 Article #B** of the New Civil Code provides, +f the sa!e thin" should have 3een sold to different vendees the ownership shall 3e transferred to the person who !a4 have first taCen possession thereof in "ood faith if it should 3e !ova3le propert4. 0hould it 3e !ova3le propert4 the ownership shall 3elon" to the person acJuirin" it who in "ood faith first recorded it in the Re"istr4 of -ropert4. 0hould there 3e no inscription the ownership shall pertain to the person who in "ood faith was first in the possession and in the a3sence thereof to the person who present the oldest title provided there is "ood faith. Article #B** of the Civil Code provides that in case of dou3le sale of an i!!ova3le propert4 ownership shall 3e transferred 9#; to the person acJuirin" it who in "ood faith first recorded it in the Re"istr4 of -ropert46 9); in default thereof to the person who in "ood faith was first in possession6 and 93; in default thereof to the person who presents the oldest title provided there is "ood faith. 3* +n the case at 3ar vendor Aurelio RoJue sold 6:#0 portion of his share in %C% No. #3B6># to private respondents Repu4an on April # #9<0. 0u3seJuentl4 the sa!e lot was sold a"ain 34 vendor Aurelio RoJue 96:#0; and his children 9*:#0; represented 34 the ClerC of Court pursuant to 0ection #0 Rule 39 of the Rules of Court on Fe3ruar4 * #9<). Endou3tedl4 this is a case of dou3le sale conte!plated under Article #B** of the New Civil Code. %his is an instance of a dou3le sale of an i!!ova3le propert4 hence the ownership shall vests in the person acJuirin" it who in "ood faith first recorded it in the Re"istr4 of -ropert4. .videntl4 private respondents Repu4an5s caused the annotation of an adverse clai! on the title of the su3$ect propert4 deno!inated as .ntr4 No. B6)>:%#3B6># on Hul4 )# #9<0. 3B %he annotation of the adverse clai! on %C% No. #3B6># in the Re"istr4 of -ropert4 is sufficient co!pliance as !andated 34 law and serves notice to the whole world. 1n the other hand petitioner filed a notice of lis pendens onl4 on Fe3ruar4 ) #9<). Accordin"l4 private respondents who first caused the annotation of the adverse clai! in "ood faith shall have a 3etter ri"ht over herein petitioner. /oreover the ph4sical possession of herein petitioners 34 virtue of a writ of possession issued 34 the trial court on 0epte!3er )0 #9<) is 7su3$ect to the valid ri"hts and interest of third persons over the sa!e portion thereof other than vendor or an4 other person or persons priv4 to or clai!in" an4 ri"hts to interest under it.7 36 As 3etween two purchasers the one who has re"istered the sale in his favor has a preferred ri"ht over the other who has not re"istered his title even if the latter is in actual possession of the i!!ova3le propert4. 3> Further even in default of the first re"istrant or first in possession private respondents have presented the oldest title. 3< %hus private

22

Cases on Sales Price

respondents who acJuired the su3$ect propert4 in "ood faith and for valua3le consideration esta3lished a superior ri"ht as a"ainst the petitioner. .videntl4 petitioner cannot 3e considered as a 3u4er in "ood faith. +n the co!plaint for rescission filed 34 vendor Aurelio RoJue on Au"ust )0 #9<0 herein petitioner filed a !otion for intervention on /a4 )0 #9<) 3ut did not file her co!plaint in intervention hence the decision was rendered adversel4 a"ainst her. +f petitioner did investi"ate 3efore 3u4in" the land on Fe3ruar4 * #9<) she should have Cnown that there was a pendin" case and an annotation of adverse clai! was !ade in the title of the propert4 3efore the Re"ister of 2eeds and she could have discovered that the su3$ect propert4 was alread4 sold to the private respondents. +t is incu!3ent upon the vendee of the propert4 to asC for the deliver4 of the owner5s duplicate cop4 of the title fro! the vendor. A purchaser of a valued piece of propert4 cannot $ust close his e4es to facts which should put a reasona3le !an upon his "uard and then clai! that he acted in "ood faith and under the 3elief that there were no defect in the title of the vendor. 39 1ne who purchases real estate with Cnowled"e of a defect or lacC of title in his vendor cannot clai! that he has acJuired title thereto in "ood faith as a"ainst the true owner of the land or of an interest therein6 and the sa!e rule !ust 3e applied to one who has Cnowled"e of facts which should have put hi! upon such inJuir4 and investi"ation as !i"ht 3e necessar4 to acJuaint hi! with the defects in the title of his vendor. Good faith or the want of it is not a visi3le tan"i3le fact that can 3e seen or touched 3ut rather a state or condition of !ind which can onl4 3e $ud"ed of 34 actual or fancied toCens or si"ns. *0 +n fine petitioner had no3od4 to 3la!e 3ut herself in dealin" with the disputed propert4 for failure to inJuire or discover a flaw in the title to the propert4 thus it is a=io!atic that Q culpa lata dolo aeJuiparatur Q "ross ne"li"ence is eJuivalent to intentional wron". +N V+.? 1F %@. F1R.G1+NG -R./+0.0 this petition for review is here34 2+0/+00.2 for lacC of !erit. No pronounce!ent as to costs. +% +0 01 1R2.R.2. ;G.R. No. 112777. O:'ober 23, 1227< "+E +EIR! OF ,EDRO E!CANLAR, FRANCI!CO +OLGADO a#$ '9e !,OU!E! DR. ED3IN A. 0AY-E a#$ ELI!A "AN50AY-E, &e'('(o#er), *). "+E +ON. COUR" OF A,,EAL!, GENERO!A -AR"INE , CAR-EN CARI5AN, RODOLFO CARI5AN, NELLY C+UA CARI5AN, 8or 9er)e.8 a#$ a) 7uar$(a# a$ .('e/ o8 9er /(#or )o#, LEONELL C. CARI5AN, FREDI!-INDA CARI5AN, '9e !,OU!E! ,A=UI"O C+UA a#$ NEY !ARRO!A5C+UA a#$ "+E REGI!"ER OF DEED! OF NEGRO! OCCIDEN"AL, re)&o#$e#'). ;G.R. No. 120120. O:'ober 23, 1227< FRANCI!CO +OLGADO a#$ +R!. OF ,EDRO E!CANLAR, #a/e.y BERNARDO, FELY, !ONIA, LILY, DYE!EBEL a#$ NOE-I a.. )ur#a/e$ E!CANLAR, &e'('(o#er), *). +ON. COUR" OF A,,EAL!, GENERO!A -AR"INE , CAR-EN CARI5AN, RODOLFO CARI5AN, NELLY C+UA CARI5AN, 8or 9er)e.8 a#$ a) 7uar$(a# a$ .('e/ o8 9er /(#or )o#, LEONELL C. CARI5AN a#$ FREDI!-INDA CARI5AN, a#$ !,. ,A=UI"O C+UA a#$ NEY !ARRO!A C+UA a#$ REGI!"ER OF DEED! OF NEGRO! OCCIDEN"AL, re)&o#$e#'). 2 . C + 0 + 1N R1/.R1 H., &efore us are consolidated petitions for review of the decision of the Court of Appeals in CA-G.R. CV No. 399>B which affir!ed the trial court\s pronounce!ent that the deed of sale of ri"hts interests and participation in favor of petitioners is null and void. %he case arose fro! the followin" facts, 0pouses Guiller!o No!3re and Victoriana Cari-an died without issue in #9)* and #93< respectivel4. No!3re\s heirs include his nephews and "randnephews. Victoriana Cari-an was succeeded 34 her late 3rother\s son Gre"orio Cari-an. %he latter was declared as Victoriana\s heir in the estate proceedin"s for No!3re and his wife 90pecial -roceedin" No >->)>9;.M#N After Gre"orio died in #9># his wife Generosa /artineD and children Rodolfo Car!en (eonardo and Fredis!inda all surna!ed Cari-an were also ad$ud"ed as heirs 34 representation to Victoriana\s estate.M)N (eonardo Cari-an passed awa4 leavin" his widow Nell4 Chua vda. de Cari-an and !inor son (eonell as his heirs. %wo parcels of land deno!inated as (ot No. #6#6 and #6#> of the 8a3anCalan Cadastre with an area of )9 3B0 sJuare !eters and *60 9*< sJuare !eters respectivel4 for!ed part of the estate of No!3re and Cari-an. 1n 0epte!3er #B #9>< Gre"orio Cari-an\s heirs herein collectivel4 referred to as private respondents Cari-an e=ecuted the 2eed of 0ale of Ri"hts +nterests and -articipation worded as follows, ]N1? %@.R.F1R. for and in consideration of the su! of %?1 @EN2R.2 0.V.N%F-F+V. %@1E0AN2 9-)>B 000.00; -esos -hilippine Currenc4 to 3e paid 34 the V.N2..0 to the V.N21R0 e=cept the share of the !inor child of (eonardo

23

Cases on Sales Price

Cari-an which should 3e deposited with the /unicipal %reasurer of @i!a!a4lan -rovince of Ne"ros 1ccidental 34 the order of the Court of First +nstance of Ne"ros 1ccidental &ranch V+ @i!a!a4lan 34 those presents do here34 0.(( C.2. %RAN0F.R and C1NV.F 34 wa4 of A&01(E%. 0A(. all the R+G@%0 +N%.R.0%0 and -AR%+C+-A%+1N of the Vendors as to the one-half 9#:); portion pro-indiviso of (ots Nos. #6#6 and #6#> 9Fishpond; of the 8a3anCalan Cadastre pertainin" to the one-half 9#:); portion pro-indiviso of the late Victoriana Cari-an unto and in favor of the Vendees their heirs successors and assi"ns6 === === === install!ents fro! petitioners after /a4 #9>9.MBN Rodolfo Cari-an was full4 paid 34 Hune )# #9>9. Generosa /artineD Car!en Cari-an and Fredis!inda Cari-an were liCewise full4 co!pensated for their individual shares per receipts "iven in evidence. M6N %he !inor (eonell\s share was deposited with the Re"ional %rial Court on 0epte!3er > #9<).M>N &ein" for!er lessees petitioners continued in possession of (ot Nos. #6#6 and #6#>. +nterestin"l4 the4 continued to pa4 rent 3ased on their lease contract. 1n 0epte!3er #0 #9<# petitioners !oved to intervene in the pro3ate proceedin"s of No!3re and Cari-an as the 3u4ers of private respondent Cari-an\s share in (ot Nos. #6#6 and #6#>. -etitioners\ !otion for approval of the 0epte!3er #B #9>< sale 3efore the sa!e court filed on Nove!3er #0 #9<# was opposed 34 private respondents Carian on Hanuar4 B #9<).M<N 1n 0epte!3er #6 #9<) the pro3ate court approved a !otion filed 34 the heirs of Cari-an and No!3re to sell their respective shares in the estate. 1n 0epte!3er )# #9<) private respondents Cari-an in addition to so!e heirs of Guiller!o No!3re M9N sold their shares in ei"ht parcels of land includin" (ot Nos. #6#6 and #6#> to the spouses Ne4 0arrosa Chua and -aJuito Chua for -# <B0 000.00. 1ne weeC later the vendor-heirs includin" private respondents Cari-an filed a !otion for approval of sale of hereditar4 ri"hts i.e. the sale !ade on 0epte!3er )# #9<) to the Chuas. -rivate respondents Cari-an instituted this case for cancellation of sale a"ainst petitioners 9.scanlar and @ol"ado; on Nove!3er 3 #9<).M#0N %he4 co!plained of petitioners\ failure to pa4 the 3alance of the purchase price 34 /a4 3# #9>9 and alle"ed that the4 onl4 received a total of -#3) BB#.00 in cash and "oods. -etitioners replied that the Cari-ans havin" 3een paid had no ri"ht to resell the su3$ect lots6 that the Chuas were purchasers in 3ad faith6 and that the court approval of the sale to the Chuas was su3$ect to their e=istin" clai! over said properties. 1n April )0 #9<3 petitioners also sold their ri"hts and interests in the su3$ect parcels of land 9(ot Nos. #6#6 and #6#>; to .dwin Ha4!e for ->3B 000.00M##N and turned over possession of 3oth lots to the latter. %he Ha4!es in turn were included in the civil case as fourth-part4 defendants. 1n 2ece!3er 3 #9<* the pro3ate court approved the 0epte!3er )# #9<) sale ]without pre$udice to whatever ri"hts clai!s and interests over an4 of those properties of the estate which cannot 3e properl4 and le"all4 ventilated and resolved 34 the court in the sa!e intestate proceedin"s.^M#)N %he certificates of title over the ei"ht lots sold 34 the heirs of No!3re and Cari-an were later issued in the na!e of respondents Ne4 0arrosa Chua and -aJuito Chua. %he trial court allowed a third-part4 co!plaint a"ainst the third-part4 defendants -aJuito and Ne4 Chua on Hanuar4 > #9<6 where .scanlar and @ol"ado alle"ed that the Cari-ans conspired with the Chuas when the4 e=ecuted the second sale on 0epte!3er )# #9<) and that the latter sale is ille"al and of no effect. Respondents Chua countered that the4 did not Cnow of the earlier sale of one-half portion of the su3$ect lots to .scanlar and @ol"ado. &oth parties clai!ed da!a"es.M#3N

%hat this Contract of 0ale of ri"hts interests and participations shall 3eco!e effective onl4 upon the approval 34 the @onora3le Court of First +nstance of Ne"ros 1ccidental &ranch V+- @i!a!a4lan.^ 9Enderscorin" supplied.; -edro .scanlar and Francisco @ol"ado the vendees were concurrentl4 the lessees of the lots referred to a3ove.M3N %he4 stipulated that the 3alance of the purchase price 9-))B 000.00; shall 3e paid on or 3efore /a4 #9>9 in a 2eed of A"ree!ent e=ecuted 34 the parties on the sa!e da4, ]?@.R.A0 at the ti!e of the si"nin" of the Contract V.N2..0 has 9sic; onl4 F+F%F %@1E0AN2 9-B0 000.00; -esos availa3le thereof and was not a3le to secure the entire a!ount6 ?@.R.A0 the Vendors and one of the Vendees 34 the na!e of -edro .scanlar are relatives and a3solute faith and trust e=ist 3etween the! wherein durin" econo!ic crisis has not failed to "ive !onetar4 succor to the Vendors6 ?@.R.A0 Vendors herein understood the present scarcit4 of securin" availa3le each 9sic; in the a!ount stated in the contract6 N1? %@.R.F1R. for and in consideration of the su! of F+F%F %@1E0AN2 9-B0 000.00; -esos -hilippine Currenc4 the 3alance of %?1 @EN2R.2 %?.N%F F+V. %@1E0AN2 9-))B 000.00; -esos to 3e paid 34 the Vendees on or 3efore /a4 #9>9 the Vendors herein 34 these -resents do here34 C1NF+R/ and AFF+R/ the 2eed of 0ale of the Ri"hts +nterests and -articipation dated 0epte!3er #B #9>< over (ots Nos. #6#6 and #6#> 9fishpond; of the 8a3anCalan Cadastre in favor of the V.N2..0 their heirs and assi"ns. %hat pendin" the co!plete pa4!ent thereof Vendees shall not assi"n sell lease nor !ort"a"e the ri"hts interests and participation thereof6 %hat in the event the Vendees fail and: or o!it to pa4 the 3alance of said purchase price on /a4 3# #9>9 and the cancellation of said Contract of 0ale is !ade there34 the su! of F+F%F %@1E0AN2 9-B0 000.00; -esos shall 3e dee!ed as da!a"es thereof to Vendors.^ 9Enderscorin" supplied;M*N -etitioners were una3le to pa4 the Cari-an heirs\ individual shares a!ountin" to -BB 000.00 each 34 the due date. @owever said heirs received at least #)

24

Cases on Sales Price

1n April )< #9<< the trial court approved the Chuas\ !otion to file a fourth-part4 co!plaint a"ainst the spouses Ha4!e. Respondents Chua alle"ed that the Ha4!es refused to vacate said lots despite repeated de!ands6 and that 34 reason of the ille"al occupation of (ot Nos. #6#6 and #6#> 34 the Ha4!es the4 suffered !ateriall4 fro! uncollected rentals. /eanwhile the Re"ional %rial Court of @i!a!a4lan which tooC co"niDance of 0pecial -roceedin" No. >->)>9 9+ntestate .state of Guiller!o No!3re and Victoriana Cari-an; had rendered its decision on 1cto3er 30 #9<>.M#*N %he pro3ate court concluded that since all the properties of the estate were disposed of or sold 34 the declared heirs of 3oth spouses the case is considered ter!inated and the intestate estate of Guiller!o No!3re and Victoriana Cari-an is closed. %he court held, ]As re"ards the various incidents of this case the Court finds no co"ent reason to resolve the! since the ver4 o3$ect of the various incidents in this case is no lon"er in e=istence that is to sa4 the properties of the estate of Guiller!o No!3re and Victoriana Cari-an had lon" 3een disposed of 34 the ri"htful heirs of Guiller!o No!3re and Victoriana Cari-an. +n this respect there is no need to resolve the /otion for 0u3ro"ation of /ovants -edro .scanlar and Francisco @ol"ado to 3e su3ro"ated to the ri"hts of the heirs of Victoriana Cari-an since all the properties of the estate had 3een transferred and titled to in the na!e of spouses Ne4 0. Chua and 2r. -aJuito Chua. 0ince the nature of the proceedin"s in this case is su!!ar4 this Court 3ein" a -ro3ate Court has no $urisdiction to pass upon the validit4 or invalidit4 of the sale of ri"hts of the declared heirs of Guiller!o No!3re and Victoriana Cari-an to third parties. %his issue !ust 3e raised in another action where it can 3e properl4 ventilated and resolved. = = = @avin" deter!ined after e=hausted 9sic; and len"th4 hearin"s the ri"htful heirs of Guiller!o No!3re and Victoriana Cari-an the Court found out that the second issue has 3eco!e !oot and acade!ic considerin" that there are no !ore properties left to 3e partitioned a!on" the declared heirs as that had lon" a"o 3een disposed of 34 the declared heirs = = =.^ 9Enderscorin" supplied; %he se!inal case at 3ar was resolved 34 the trial court on 2ece!3er #< #99# in favor of cancellation of the 0epte!3er #B #9>< sale. 0aid transaction was nullified 3ecause it was not approved 34 the pro3ate court as reJuired 34 the contested deed of sale of ri"hts interests and participation and 3ecause the Cari-ans were not full4 paid. ConseJuentl4 the 2eed of 0ale e=ecuted 34 the heirs of No!3re and Cari-an in favor of -aJuito and Ne4 Chua which was approved 34 the pro3ate court was upheld. %he dispositive portion of the lower court\s decision reads, ]?@.R.F1R. pre!ises considered $ud"!ent is here34 rendered as follows, #; 2eclarin" the followin" contracts null and void and of no effect, c; %he 2eed of 0ale dated April )0 #9<3 e=ecuted 34 the defendants in favor of the fourth-part4 defendants 2r. .dwin Ha4!e and .lisa %an Ha4!e d; %he sale of leasehold ri"hts e=ecuted 34 the defendants in favor of the fourthpart4 defendants ); 2eclarin" the a!ount of Fift4 %housand -esos 9-B0 000.00; paid 34 the defendants to the plaintiffs in connection with the 0ept. #B #9>< deed of sale as forfeited in favor of the plaintiffs 3ut orderin" the plaintiffs to return to the defendants whatever a!ounts the4 have received fro! the latter after /a4 3# #9>9 and the a!ount of %hirt4 Five %housand %wo @undred .i"hteen V >B:#00 9-3B )#<.>B;M#BN deposited with the %reasurer of @i!a!a4lan Ne"ros 1ccidental for the !inor (eonell C. Cari-an 3; 2eclarin" the deed of sale dated 0epte!3er )3 #9<) e=ecuted 34 (asaro No!3re Victorio /adala" 2o!in"o Ca!pillanos 0ofronio Ca!pillanos Generosa Vda. de /artineD Car!en Cari-an Rodolfo Cari-an Nell4 Chua Vda. de Cari-an for herself and as "uardian ad lite! of the !inor (eonell C. Cari-an and Fredis!inda Cari-an in favor of the third-part4 defendants and fourth-part4 plaintiffs spouses 2r. -aJuito Chua and Ne4 0arrosa Chua 9.=h. ])^-Chua; as le"al valid and enforcea3le provided that the properties covered 34 the said deed of sale are su3$ect of the 3urdens of the estate if the sa!e have not 3een paid 4et. *; 1rderin" the defendants Francisco @ol"ado and -edro .scanlar and the fourth-part4 defendants spouses 2r. .dwin Ha4!e and .lisa %an Ha4!e to pa4 $ointl4 and severall4 the a!ount of 1ne @undred %housand -esos 9-#00 000.00 as !oral da!a"es and the further su! of %hirt4 %housand -esos 9-30 000.00; as attorne4\s fees to the third-part4 defendant spouses 2r. -aJuito Chua and Ne4 0arrosa-Chua. B; 1rderin" the fourth-part4 defendant spouses 2r. .dwin Ha4!e and .lisa %an Ha4!e to pa4 to the third-part4 defendants and fourth-part4 plaintiffs spouses 2r. -aJuito Chua and Ne4 0arrosa-Chua the su! of 1ne @undred Fift4 0even %housand -esos 9-#B> 000.00; as rentals for the riceland and %hree /illion %wo @undred %housand -esos 9-3 )00 000.00; as rentals for the fishpond fro! 1cto3er #9<B to Hul4 )* #9<9 plus the rentals fro! the latter date until the propert4 shall have 3een delivered to the spouses 2r. -aJuito Chua and Ne4 0arrosa-Chua6 6; 1rderin" the defendants and the fourth-part4 defendants to i!!ediatel4 vacate (ots Nos. #6#6 and #6#> 8a3anCalan Cadastre6 >; 1rderin" the defendants and the fourth-part4 defendants to pa4 costs.

a; %he 2eed of 0ale dated 0ept. #B #9>< e=ecuted 34 the plaintiffs in favor of the defendants -edro .scanlar and Francisco @ol"ado 9.=h. ]A ^ -laintiffs; 3; %he 2eed of A"ree!ent dated 0ept. #B #9>< e=ecuted 34 the plaintiffs in favor of the defendants -edro .scanlar and Francisco @ol"ado 9.=h. ]& ^ -laintiffs;

01 1R2.R.2.^M#6N -etitioners raised the case to the Court of Appeals.M#>N Respondent court affir!ed the decision of the trial court on Fe3ruar4 #> #99B and held that the Juestioned deed of sale of ri"hts interests and participation is a contract to sell 3ecause it shall 3eco!e

25

Cases on Sales Price

effective onl4 upon approval 34 the pro3ate court and upon full pa4!ent of the purchase price.M#<N -etitioners\ !otion for reconsideration was denied 34 respondent court on April 3 #99B.M#9N @ence these petitions.M)0N #. ?e disa"ree with the Court of Appeals\ conclusion that the 0epte!3er #B #9>< 2eed of 0ale of Ri"hts +nterests and -articipation is a contract to sell and not one of sale. %he distinction 3etween contracts of sale and contracts to sell with reserved title has 3een reco"niDed 34 this Court in repeated decisions accordin" to Hustice H.&.(. Re4es in (uDon &roCera"e Co. +nc. v. /ariti!e &uildin" Co. +nc. M)#N upholdin" the power of pro!isors under contracts to sell in case of failure of the other part4 to co!plete pa4!ent to e=tra$udiciall4 ter!inate the operation of the contract refuse the conve4ance and retain the su!s of install!ents alread4 received where such ri"hts are e=pressl4 provided for. +n contracts to sell ownership is retained 34 the seller and is not to pass until the full pa4!ent of the price. 0uch pa4!ent is a positive suspensive condition the failure of which is not a 3reach of contract 3ut si!pl4 an event that prevented the o3li"ation of the vendor to conve4 title fro! acJuirin" 3indin" force.M))N %o illustrate althou"h a deed of conditional sale is deno!inated as such a3sent a proviso that title to the propert4 sold is reserved in the vendor until full pa4!ent of the purchase price nor a stipulation "ivin" the vendor the ri"ht to unilaterall4 rescind the contract the !o!ent the vendee fails to pa4 within a fi=ed period 34 its nature it shall 3e declared a deed of a3solute sale.M)3N %he 0epte!3er #B #9>< sale of ri"hts interests and participation as to #:) portion pro indiviso of the two su3$ect lots is a contract of sale for the followin" reasons, First private respondents as sellers did not reserve unto the!selves the ownership of the propert4 until full pa4!ent of the unpaid 3alance of -))B 000.00. 0econd there is no stipulation "ivin" the sellers the ri"ht to unilaterall4 rescind the contract the !o!ent the 3u4er fails to pa4 within the fi=ed period.M)*N -rior to the sale petitioners were in possession of the su3$ect propert4 as lessees. Epon sale to the! of the ri"hts interests and participation as to the #:) portion pro indiviso the4 re!ained in possession not in concept of lessees an4!ore 3ut as owners now throu"h s4!3olic deliver4 Cnown as traditio 3revi !anu.M)BN Ender Article #*>> of the Civil Code the ownership of the thin" sold is acJuired 34 the vendee upon actual or constructive deliver4 thereof.M)6N +n a contract of sale the non-pa4!ent of the price is a resolutor4 condition which e=tin"uishes the transaction that for a ti!e e=isted and dischar"es the o3li"ations created thereunder. %he re!ed4 of an unpaid seller in a contract of sale is to seeC either specific perfor!ance or rescission.M)>N ). Ne=t to 3e discussed is the stipulation in the disputed 0epte!3er #B #9>< 2eed of 0ale of Ri"hts +nterests and -articipation which reads, ]9t;his Contract of 0ale of ri"hts interests and participations shall 3eco!e effective onl4 upon the approval 34 the @onora3le Court of First +nstance of Ne"ros 1ccidental &ranch V+-@i!a!a4lan.^ Nota3l4 the trial court and the Court of Appeals 3oth held that the deed of sale is null and void for not havin" 3een approved 34 the pro3ate court. %here has arisen here a confusion in the concepts of validit4 and the efficac4 of a contract. Ender Art. #3#< of the Civil Code the essential reJuisites of a contract are, consent of the contractin" parties6 o3$ect certain which is the su3$ect !atter of the contract and cause of the o3li"ation which is esta3lished. A3sent one of the a3ove no contract can arise. Conversel4 where all are present the result is a valid contract. @owever so!e parties introduce various Cinds of restrictions or !odalities the lacC of which will not however affect the validit4 of the contract. +n the instant case the 2eed of 0ale co!pl4in" as it does with the essential reJuisites is a valid one. @owever it did not 3ear the sta!p of approval of the court. %his notwithstandin" the contract\s validit4 was not affected for in the words of the stipulation ] . . . this Contract of 0ale of ri"hts interests and participations shall 3eco!e effective onl4 upon the approval 34 the @onora3le Court . . .^ +n other words onl4 the effectivit4 and not the validit4 of the contract is affected. %hen too petitioners are correct in sa4in" that the need for approval 34 the pro3ate court e=ists onl4 where specific properties of the estate are sold and not when onl4 ideal and indivisi3le shares of an heir are disposed of. +n the case of 2illena v. Court of Appeals M)<N the Court declared that it is within the $urisdiction of the pro3ate court to approve the sale of properties of a deceased person 34 his prospective heirs 3efore final ad$udication.M)9N +t is settled that court approval is necessar4 for the validit4 of an4 disposition of the decedent\s estate. @owever reference to $udicial approval cannot adversel4 affect the su3stantive ri"hts of the heirs to dispose of their ideal share in the co-heirship and:or co-ownership a!on" the heirs.M30N +t !ust 3e recalled that durin" the period of indivision of a decedent\s estate each heir 3ein" a co-owner has full ownership of his part and !a4 therefore alienate it.M3#N &ut the effect of the alienation with respect to the coowners shall 3e li!ited to the portion which !a4 3e allotted to hi! in the division upon the ter!ination of the co-ownership.M3)N Fro! the fore"oin" it is clear that hereditar4 ri"hts in an estate can 3e validl4 sold without need of court approval and that when private respondents Cari-an sold their ri"hts interests and participation in (ot Nos. #6#6 and #6#> the4 could le"all4 sell the sa!e without the approval of the pro3ate court. As a "eneral rule the pertinent contractual stipulation 9reJuirin" court approval; should 3e considered as the law 3etween the parties. @owever the presence of two factors !ilitate a"ainst this conclusion. First the evident intention of the parties appears to 3e contrar4 to the !andator4 character of said stipulation.M33N ?hoever crafted the docu!ent of conve4ance !ust have 3een of the 3elief that the controversial stipulation was a le"al reJuire!ent for the validit4 of the sale. &ut the conte!poraneous and su3seJuent acts of the parties reveal that the ori"inal o3$ective of the parties was to "ive effect to the deed of sale even without court approval.M3*N Receipt and acceptance of the nu!erous install!ents on the 3alance of the purchase

26

Cases on Sales Price

price 34 the Cari-ans and leavin" petitioners in possession of (ot Nos. #6#6 and #6#> reveal their intention to effect the !utual trans!ission of ri"hts and o3li"ations. +t was onl4 after private respondents Cari-an sold their shares in the su3$ect lots a"ain to the spouses Chua in 0epte!3er #9<) that these sa!e heirs filed the case at 3ar for the cancellation of the 0epte!3er #9>< conve4ance. ?orth considerin" too is the fact that althou"h the period to pa4 the 3alance of the purchase price e=pired in /a4 #9>9 the heirs continued to accept pa4!ents until late #9>9 and did not seeC $udicial relief until late #9<) or three 4ears later. 0econd we hold that the reJuisite approval was virtuall4 rendered i!possi3le 34 the Cari-ans 3ecause the4 opposed the !otion for approval of the sale filed 34 petitionersM3BN and sued the latter for the cancellation of that sale. %he pro3ate court e=plained, ]9e; ?hile it is true that .scanlar and @ol"ado filed a si!ilar !otion for the approval of 2eed of 0ale e=ecuted 34 so!e of the heirs in their favor concernin" the one-half 9#:); portions of (ots #6#6 and #6#> as earl4 as Nove!3er #0 #9<# 4et the Court could not have favora3l4 acted upon it 3ecause there e=ists a pendin" case for the rescission of that contract instituted 34 the vendors therein a"ainst -edro .scanlar and Francisco @ol"ado and filed 3efore another 3ranch of this Court. Entil now this case which attacCs the ver4 source of whatever ri"hts or interests @ol"ado and .scanlar !a4 have acJuired over one-half 9#:); portions of (ots Nos. #6#6 and #6#> is pendin" resolution 34 another court. 1therwise if this Court !eddles on these issues raised in that ordinar4 civil action seeCin" for the rescission of an e=istin" contract then the act of this Court would 3e totall4 ineffective as the sa!e would 3e in e=cess of its $urisdiction.^M36N @avin" provided the o3stacle and the $ustification for the stipulated approval not to 3e "ranted private respondents Cari-an should not 3e allowed to cancel their first transaction with petitioners 3ecause of lacC of approval 34 the pro3ate court which lacC is of their own !aCin". 3. ?ith respect to rescission of a sale of real propert4 Article #B9) of the Civil Code "overns, ]+n the sale of i!!ova3le propert4 even thou"h it !a4 have 3een stipulated that upon failure to pa4 the price at the ti!e a"reed upon the rescission of the contract shall of ri"ht taCe place the vendee !a4 pa4 even after the e=piration of the period as lon" as no de!and for rescission of the contract has 3een !ade upon hi! either $udiciall4 or 34 a notarial act. After the de!and the court !a4 not "rant hi! a new ter!.^ 9Enderscorin" added; +n the instant case the sellers "ave the 3u4ers until /a4 #9>9 to pa4 the 3alance of the purchase price. After the latter failed to pa4 install!ents due the for!er !ade no $udicial de!and for rescission of the contract nor did the4 e=ecute an4 notarial act de!andin" the sa!e as reJuired under Article #B9). ConseJuentl4 the 3u4ers could lawfull4 !aCe pa4!ents even after the /a4 #9>9 deadline as in fact the4 paid several install!ents to the sellers which the latter accepted. %hus upon the e=piration of the period to pa4 the sellers !ade no !ove to rescind 3ut continued acceptin" late pa4!ents an act which cannot 3ut 3e construed as a waiver of the ri"ht to rescind. ?hen the sellers instead of availin" of their ri"ht to rescind accepted and received dela4ed pa4!ents of install!ents 3e4ond the period stipulated and the 3u4ers were in arrears the sellers in effect waived and are now estopped fro! e=ercisin" said ri"ht to rescind.M3>N *. %he !atter of full pa4!ent is another issue taCen up 34 petitioners. An e=haustive review of the records of this case i!pels us to arrive at a conclusion at variance with that of 3oth the trial and the appellate courts. %he sole witness in the cancellation of sale case was private respondent herein Fredis!inda Cari-an &usta!ante. 0he initiall4 testified that after several install!ents she si"ned a receipt for the full pa4!ent of her share in 2ece!3er #9>9 3ut denied havin" actuall4 received the -B 000.00 intended to co!plete her share. 0he clai!s that .scanlar and @ol"ado !ade her si"n the receipt late in the afternoon and pro!ised to "ive the !one4 to her the followin" !ornin" when the 3anCs opened. 0he also clai!ed that while her 3rother Rodolfo Cari-an\s share had alread4 3een full4 paid her !other Generosa /artineD onl4 received -)< 33*.00 and her sister-inlaw Nell4 Chua vda. de Cari-an received onl4 -## 33*.00. Fredis!inda also su!!ed up all the install!ents and ca!e up with the total of -#3) BB#.00 fro! the lon" list on a sheet of a calendar which was transferred fro! a s!all 3rown note3ooC. 0he later ad!itted that her list !a4 not have 3een co!plete for she "ave the receipts for install!ents to petitioners .scanlar and @ol"ado. 0he thus clai!ed that the4 were defrauded 3ecause petitioners are wealth4 and private respondents are poor. @owever despite all her clai!s Fredis!inda\s testi!on4 fails to convince this Court that the4 were not full4 co!pensated 34 petitioners. Fredis!inda ad!its that her !other and her sister si"ned their individual receipts of full pa4!ent on their own and not in her presence.M3<N %he receipts presented in evidence show that Generosa /artineD was paid -*B 6)B.006 Car!en Cari-an -*B 6)B.006 Rodolfo Cari-an -*> B00.00 on Hune )# #9>96 Nell4 Chua vda. de Cari-an -## 33*.00 and the su! of -3* )#<.00 was consi"ned in court for the !inor (eonell Cari-an.M39N Fredis!inda insists that she si"ned a receipt for full pa4!ent without receivin" the !one4 therefor and ad!its that she did not o3$ect to the co!putation. ?e find it incredi3le that a !ature wo!an liCe Fredis!inda Cari-an would si"n a receipt for !one4 she did not receive. Further!ore her clai!s re"ardin" the actual a!ount of the install!ents paid to her and her Cin are Juite va"ue and unsupported 34 co!petent evidence. 0he even ad!its that all the receipts were taCen 34 petitioner .scanlar.M*0N ?orth notin" too is the a3sence of supportin" testi!on4 fro! her co-heirs and si3lin"s Car!en Cari-an Rodolfo Cari-an and Nell4 Chua vda. de Cari-an. %he trial court reasoned out that petitioners in continuin" to pa4 the rent for the parcels of land the4 alle"edl4 3ou"ht ad!it not havin" full4 paid the Cari-ans. -etitioners\ response that the4 paid rent until #9<6 in co!pliance with their lease contract onl4 proves that the4 respected this contract and did not taCe undue advanta"e of the heirs of No!3re and Cari-an who 3enefited fro! the lease. /oreover it is to 3e stressed that petitioners purchased the hereditar4 shares solel4 of the Cari-ans and not the entire lot.

27

Cases on Sales Price

%he fore"oin" discussion inelucta3l4 leads us to conclude that the Cari-ans were indeed paid the 3alance of the purchase price despite havin" accepted install!ents therefor 3elatedl4. %here is thus no "round to rescind the contract of sale 3ecause of non-pa4!ent. B. Recapitulatin" we have held that the 0epte!3er #B #9>< deed of sale of ri"hts interests and participations is valid and that the sellers-private respondents Cari-an were full4 paid the contract price. @owever it !ust 3e e!phasiDed that what was sold was onl4 the Cari-an\s hereditar4 shares in (ot Nos. #6#6 and #6#> 3ein" held pro indiviso 34 the! and is thus a valid conve4ance onl4 of said ideal shares. 0pecific or desi"nated portions of land were not involved. ConseJuentl4 the su3seJuent sale of < parcels of land includin" (ot Nos. #6#6 and #6#> to the spouses Chua is valid e=cept to the e=tent of what was sold to petitioners in the 0epte!3er #B #9>< conve4ance. +t !ust 3e noted however that the pro3ate court in 0pecial -roceedin" No. >->)>9 desisted fro! awardin" the individual shares of each heir 3ecause all the properties 3elon"in" to the estate had alread4 3een sold. M*#N %hus it is not certain how !uch private respondents Cari-an were entitled to with respect to the two lots or if the4 were even "oin" to 3e awarded shares in said lots. %he proceedin"s surroundin" the estate of No!3re and Cari-an havin" attained finalit4 for nearl4 a decade now the sa!e cannot 3e re-opened. %he protracted proceedin"s which have undou3tedl4 left the propert4 under a cloud and the parties involved in a state of uncertaint4 co!pels us to resolve it definitivel4. %he decision of the pro3ate court declares private respondents Cari-an as the sole heirs 34 representation of Victoriana Cari-an who was indisputa3l4 entitled to half of the estate.M*)N %here 3ein" no e=act apportion!ent of the shares of each heir and no co!petent proof that the heirs received uneJual shares in the disposition of the estate it can 3e assu!ed that the heirs of Victoriana Cari-an collectivel4 are entitled to half of each propert4 in the estate. /ore particularl4 private respondents Cari-an are entitled to half of (ot Nos. #6#6 and #6#> i.e. #* 6>B sJuare !eters of (ot No. #6#6 and )30 *>* sJuare !eters of (ot No. #6#>. ConseJuentl4 petitioners as their successors-in-interest own said half of the su3$ect lots and ou"ht to deliver the possession of the other half as well as pa4 rents thereon to the private respondents Ne4 0arrosa Chua and -aJuito Chua 3ut onl4 if the for!er 9petitioners; re!ained in possession thereof. %he rate of rental pa4!ents to 3e !ade were "iven in evidence 34 Ne4 0arrosa Chua in her unre3utted testi!on4 on Hul4 )* #9<9, For the fishpond 9(ot No. #6#>; - Fro! #9<) up to #9<6 rental pa4!ent of -3 000.00 per hectare6 fro! #9<6-#9<9 9and succeedin" 4ears; rental pa4!ent of -#0 000.00 per hectare. For the riceland 9(ot No. #6#6; - #B cavans per hectare per 4ear6 fro! #9<) to #9<6 -#)B.00 per cavan6 #9<>-#9<< -#>B.00 per cavan6 and #9<9 and succeedin" 4ears -)00.00 per cavan. M*3N ?@.R.F1R. the petitions are here34 GRAN%.2. %he decision of the Court of Appeals under review is here34 R.V.R0.2 AN2 0.% A0+2.. %he case is R./AN2.2 to the Re"ional %rial Court of Ne"ros 1ccidental &ranch 6# for petitioners and private respondents Cari-an or their successors-in-interest to deter!ine e=actl4 which #:) portion of (ot Nos. #6#6 and #6#> will 3e owned 34 each part4 at the option of petitioners. %he trial court is 2+R.C%.2 to order the issuance of the correspondin" certificates of title in the na!e of the respective parties and to resolve the !atter of rental pa4!ents of the land not delivered to the Chua spouses su3$ect to the rates specified a3ove with le"al interest fro! date of de!and. 01 1R2.R.2.

G.R. No. L510141

0a#uary 31, 1256

28

Cases on Sales Price

RE,UBLIC OF "+E ,+ILI,,INE!, &e'('(o#er, *). ,+ILI,,INE RE!OURCE! DE%ELO,-EN" COR,ORA"ION a#$ '9e COUR" OF A,,EAL!, re)&o#$e#'). %his is a petition under Rule *6 to review a $ud"!ent rendered 34 the Court of Appeals in CA-GR No. #B>6>-R -hilippine Resources 2evelop!ent Corporation vs. %he @on. Hud"e /a"no Gat!aitan et al. %he findin"s of the Court of Appeals are as follows. +t appears that on /a4 6 #9BB the Repu3lic of the -hilippines in representation of the &ureau of -risons instituted a"ainst /acario Apostol and the .!pire +nsurance Co. a co!plaint docCeted as Civil Case No. )6#66 of the Court of First instance of /anila. %he co!plaint alle"es as the first cause of action that defendant Apostol su3!itted the hi"hest 3id the a!ount -*B0.00 per ton for the purchase of #00 tons of -alawan Al!aci"a fro! the &ureau of -risons6 that a contract therefor was drawn and 34 virtue of which Apostol o3tained "oods fro! the &ureau of -risons valued -#B <><.B96 that of said account Apostol paid onl4 -69#.#0 leavin" a 3alane o3li"ation of -#B #<>.*9. %he co!plaint further averes as second cause of action that Apostol su3!itted the 3est 3id with the &ureau of -risons for the purchase of three !illion 3oard feet of lo"s at -<<.00 per # 000 3oard feet6 that a contract was e=ecuted 3etween the 2irector of -risons and Apostol pursuant to which contract Apostol o3tained deliveries of lo"s valued at -6B.<30.00 and that Apostol failed to pa4 a 3alance account 1f -#< <)>.B>. All told for the total de!and set forth in co!plaint a"ainst Apostol is for -3* 0#B.06 with le"al interests thereon fro! Hanuar4 < #9B). %he .!pire lnsurance Co!pan4 was included in the co!plaint havin" e=ecuted a perfor!ance 3ond of -#0 000.00 in favor of Apostol. +n his answer Apostol interposed pa4!ent as a defense and sou"ht the dis!issal of the co!plaint. 1n Hul4 #9 #9BB the -hilippine Resources 2evelop!ent Corporation !oved to intervene appendin" to its !otion the co!plaint in the intervention of even date. %he co!plaint recites that for so!eti!e prior to Apostol5s transactions the corporate had so!e "oods deposited in a warehouse at #)0# @erran /anila6 that Apostol then the president of the corporation 3ut without the Cnowled"e or consent of the stocCholders thereof disposed of said "oods 34 deliverin" the sa!e to the &ureau of -risons of in an atte!pt to settle his personal de3ts with the latter entit46 that upon discover4 of Apodol5s act the corporation tooC steps to recover said "oods 34 de!andin" fro! the &ureau of -risons the return thereof6 and that upon the refusal of the &ureau to return said "oods the corporation sou"ht leave to intervene in Civil Case No. )6#66. As aforestated @is @onor denied the !otion for intervention and there34 issued an order to this effect on Hul4 )3 #9BB. A !otion for the reconsideration of said order was filed 34 the !ovant corporation and the sa!e was liCewise denied 34 @is @onor on Au"ust #< #9BB . . . 9Anne= (.;. 1n 3 0epte!3er #9BB in a petition for a writ of certiorari filed in the Court of Appeals the herein respondent corporation pra4ed for the settin" aside of the order of the Court of First +nstance that had denied the ad!ission of its co!plaint-in-intervention and for an order directin" the latter Court to allow the herein respondent corporation to intervene in the action 9Anne= G;. 1n #) 2ece!3er #9BB the Court of Appeals set aside the order den4in" the !otion to intervene and ordered the respondent court to ad!it the herein respondent corporation5s co!plaint-in-intervention with costs a"ainst /acario Apostol. 1n 9 Hanuar4 #9B6 the Repu3lic of the -hilippines filed this petition in this Court for the purpose stated at the 3e"innin" of this opinion. %he Gover!ent contends that the intervenor has no le"al interest in the !atter in liti"ation 3ecause the action 3rou"ht in the Court of First +nstance of /anila a"ainst /acario Apostol and the .!pire +nsurance Co!pan4 9Civil Case No. )6#66 Anne= A; is $ust for the collection fro! the defendant Apostol of a su! of !one4 the unpaid 3alance of the purchase price of lo"s and al!aci"a 3ou"ht 34 hi! fro! the &ureau of -risons whereas the intervenor seeCs to recover ownership and possession of G. +. sheets 3lacC sheets /. 0. plates round 3ars and G. +. pipes that it clai!s its ownsan intervention which would chan"e a personal action into one ad re! and would undul4 dela4 the disposition of the case. %he Court of Appeals held that, -etitioner ardentl4 clai!s that the reason 3ehind its !otion to intervene is the desire to protect its ri"hts and interests over so!e !aterials purportedl4 3elon"in" to it6 that said !aterial were unauthoriDedl4 and ille"all4 assi"ned and delivered to the &ureau of -risons 34 petitionin" corporation5s president /acario Apostol in pa4!ent of the latter5s personal accounts with the said entit46 and that the &ureau of -risons refused to return said !aterials despite petitioner5s de!ands to do so. -etitioner refers to the particulars recited in Apostol5s answer dated Hul4 #) #9BB to the effect that Apostol had paid unto the &ureau of -risons his accounts covered a!on" others 34 &--1 #0>> for the su! of -* 63<.*0 and &--1 #B*9 for the a!ount of -* 39<.B*. -etitioner !oreover points to the 0tate of -aid and Enpaid accounts of Apostol dated Hanuar4 #6 #9B* prepared 34 the accountin" of officer of the &ureau of -risons 9Anne= &. Co!plaint in +ntervention; wherein it appears that the afore!entioned accounts covered respectivel4 34 &--1 Nos. #0>> for <9) pieces of G+ sheets and #B*9 for 399 pieces of G+ pipes in the total su! of -9 036.9* have not 3een credited to Apostol5s account in view of lacC of supportin" papers6 and that accordin" to the repl4 letter of the Endersecretar4 of Hustice said G+ sheets and pipes were delivered 34 /acario Apostol to the &ureau of -risons alle"edl4 in Apostol5s capacit4 as owner and that the 3lacC iron sheets were delivered 34 Apostol as -resident of the petitioner corporation. Respondents on the other hand assert that the su3$ect !atter of the ori"inal liti"ation is a su! of !one4 alle"edl4 due to the &ureau of -risons fro! /acario Apostol and not the "oods or the !aterials reportedl4 turned over 34 Apostol as pa4!ent of his private de3ts to the &ureau of -risons and the recover4 of which is sou"ht 34 the

29

Cases on Sales Price

petitioner6 and that for this reason petitioner has no le"al interest in the ver4 su3$ect !atter in liti"ation as to entitle it to intervene. ?e find no !erit in respondents5 contention. +t is true that the ver4 su3$ect !atter of the ori"inal case is a su! of !one4. &ut it is liCewise true as 3orne out 34 the records that the !aterials purportedl4 3elon"in" to the petitioner corporation have 3een assessed and evaluated and their price eJuivalent in ter!s of !one4 have 3een deter!ined6 and that said !aterials for whatever price the4 have 3een assi"ned 34 defendant now respondent Apostol as toCens of pa4!ent of his private de3ts with the &ureau of -risons. +n view of these considerations it 3eco!es enor!ousl4 plain in the event the respondent $ud"e decides to credit /acario Apostol with the value of the "oods delivered 34 the latter to the &ureau of -risons the petitioner corporation stands to 3e adversel4 affected 34 such $ud"!ent. %he conclusion therefore is inescapa3le that the petitioner possesses a le"al interest in the !atter in liti"ation and that such interest is of an actual !aterial direct and i!!ediate nature as to entitle petitioner to intervene. === === === %he Govern!ent reiterates in its ori"inal stand that counsel appearin" for the respondent corporation has no authorit4 to represent it or:and sue in its 3ehalf the Court of Appeals held that, Respondents aver also that petitioner lacCs le"al capacit4 to sue and that its counsel is actin" !erel4 in an individual capacit4 without the 3enefit of the corporate act authoriDin" hi! to 3rin" sue. +n this connection respondents invoCed a!on" others section )0 of Rule #)> which provision in our opinion sJuarel4 disproves their clai! as 34 virtue thereof the authorit4 of petitioner5s counsel is pressu!ed. ?ithal the clai! of the counsel for the petitioner that a resolution to proceed a"ainst Apostol had 3een unanoni!ousl4 adopted 34 the stocCholders of the corporation has not 3een refuted. .videntl4 petitioner is a dul4 or"aniDed corporation with offices at the 0a!anillo &uildin" and that as such it is endowed with a personalit4 distinct and separate fro! that of its president or stocCholders. +t has the ri"ht to 3rin" suit to safe"uard its interests and ordinaril4 such ri"ht is e=ercised at the instance of the president. @owever under the circu!stance now o3tainin" such ri"ht properl4 devolves upon the other officers of the corporations as said ri"ht is sou"ht to 3e e=ercised a"ainst the president hi!self who is the ver4 o3$ect of the intended suit. %he power of a corporation to sue and 3e sued in an4 court# is lod"ed in the 3oard of directors which e=ercises it corporater powers ) and not in the president as contended 34 the Govern!ent. %he 7!otion for ad!ission of co!plaint in intervention7 9Anne= C; and the 7co!plaint in intervention7 attached thereto si"ned 34 counsel and filed in the Court of First +nstance 3e"in with the followin" state!ent, 7C1/.0 N1? the a3ove-na!e +ntervenor 34 its undersi"ned counsel . . . 7and underneath his t4pewritten na!e is affi=ed the description7 Counsel for the +ntervenor.7 As counsels authorit4 to appeal for the respondent corporation was newer Juestioned in the Court of First +nstance it is to 3e pressu!ed that he was properl4 authoriDed to file the co!plaint in intervention and appeal for his client.# +t was onl4 in the Court of Appeals where his authorit4 to appear was Juestioned. As the Court of Appeals was satisfied that counsel was dul4 authoriDed 34 his client to file the co!plaint does in intervention and to appear in its 3ehalf hte resolution of the Court of Appeals on this point should not 3e distur3ed. Grantin" that counsel has not 3een actuall4 authoriDed 34 the 3oard of directors to appear for and in 3ehalf of the respondent corporation the fact that counsel is the secretar4 treasurer of the respondent corporation and !e!3er of the 3oard of directors6 and that the other !e!3ers of the 3oard na!el4 /acario Apostol the president and his wife -acita R. Apostol who shuold nor!all4 initiate the action to protect the corporate properties and in interest are the ones to 3e adversel4 affected there34 a sin"le stocCholder under such circu!stances !a4 sue in 3ehalf of the corporation.) Counsel as a stocCholder and director of the respondent corporation !a4 sue in its 3ehalf and file the co!plaint in intervention in the proper court. %he $ud"!ent under review is affir!ed without pronounce!ents as to costs.

0ection 3 of Rule #3 of the Rules of Court endows the lower Court with discretion to allow or disapprove the !otion for intrvention 90antarro!ana et al. vs. &arrios 63 -hil. *B6;6 and that in the e=ercise of such discretion the court shall consider whether or not the intervention will undul4 dela4 or pre$udice the ad$udicatio of the ri"hts of the ori"inal parties and whether or not the intervenors the ri"hts !a4 3e full4 protected in a separate proceedin". %he petitioner in the instant case positivel4 authoriDed to a separate action a"ainst an4 of all the respondents. &ut considerin" that the resolution of the issues raised in and en$oined 34 the pleadin"s in the !ain case would virtall4 affect the ri"hts not onl4 the ori"inal parties 3ut also of the 3erein petitioner, that far fro! undul4 dela4in" or pre$udicin" the ad$udication of the ri"hts of the ori"inal parties or 3rin"in" a3out confusion in the ori"inal case the adnission of the co!plaint in intervention would help clarif4 the vital issue of the true and real ownership of the !aterials involved 3esides preventin" an a3horrent !unltiplicit4 of suit we 3elieve that the !otion to intervene should 3e "iven due to cause. ?e find no reason for distur3in" the fore"oin" pronounce!ents. %he Govern!ent ar"ues that 7-rice . . . is alwa4s paid in ter!s of !one4 and the supposed pa4!ent 3eein" in Cind it is no pa4!ent at all 7citin" Article #*B< of the new Civil Code. @owever the sa!e Article provides that the purschaser !a4 pa4 7a price certain in !one4 or its eJuivalent 7 which !eans that the4 !eant of the price need not 3e in !one4. ?hether the G.+. sheets 3lacC sheets /. 0. -lates round 3ars and G. +. pipes clai!ed 34 the respondent corporation to 3elon" to it and delivered to the &ureau of -rison 34 /acario Apostol in pa4!ent of his account is sufficient pa4!ent therefore is for the court to pass upon and decide after hearin" all the parties in the case. 0hould the trial court hold that it is as to credit Apostol with the value or price of the !aterials delivered 34 hi! certainl4 the herein respondent corporation would 3e affected adversel4 if its clai! of ownership of such sheets plates 3ars and pipes is true.

30

Cases on Sales Price

G.R. No. 134552 De:e/ber 2, 1222 AN"ONIA "ORRE! a))()'e$ by 9er 9u)ba#$, ANGELO "ORRE!> a#$ E-E"ERIA BARING, &e'('(o#er), *). COUR" OF A,,EAL! a#$ -ANUEL "ORRE!, re)&o#$e#'). 1n the other hand respondent alle"ed that he used the loan to i!ple!ent the A"ree!ent. ?ith the said a!ount he was a3le to effect the surve4 and the su3division of the lots. @e secured the (apu (apu Cit4 Council5s approval of the su3division pro$ect which he advertised in a local newspaper. @e also caused the construction of roads cur3s and "utters. (iCewise he entered into a contract with an en"ineerin" fir! for the 3uildin" of si=t4 low-cost housin" units and actuall4 even set up a !odel house on one of the su3division lots. @e did all of these for a total e=pense of -<B 000. Respondent clai!ed that the su3division pro$ect failed however 3ecause petitioners and their relatives had separatel4 caused the annotations of adverse clai!s on the title to the land which eventuall4 scared awa4 prospective 3u4ers. 2espite his reJuests petitioners refused to cause the clearin" of the clai!s there34 forcin" hi! to "ive up on the pro$ect. B 0u3seJuentl4 petitioners filed a cri!inal case for estafa a"ainst respondent and his wife who were however acJuitted. %hereafter the4 filed the present civil case which upon respondent5s !otion was later dis!issed 34 the trial court in an 1rder dated 0epte!3er 6 #9<). 1n appeal however the appellate court re!anded the case for further proceedin"s. %hereafter the R%C issued its assailed 2ecision which as earlier stated was affir!ed 34 the CA. @ence this -etition. 6 Rulin" of the Court of Appeals ?@.R.F1R. for all the fore"oin" considerations the Court findin" for the defendant and a"ainst the plaintiffs orders the dis!issal of the plaintiffs co!plaint. %he counterclai!s of the defendant are liCewise ordered dis!issed. No pronounce!ent as to costs. 3 %he Facts 0isters Antonia %orres and .!eteria &arin" herein petitioners entered into a 7$oint venture a"ree!ent7 with Respondent /anuel %orres for the develop!ent of a parcel of land into a su3division. -ursuant to the contract the4 e=ecuted a 2eed of 0ale coverin" the said parcel of land in favor of respondent who then had it re"istered in his na!e. &4 !ort"a"in" the propert4 respondent o3tained fro! .Juita3le &anC a loan of -*0 000 which under the Hoint Venture A"ree!ent was to 3e used for the develop!ent of the su3division. * All three of the! also a"reed to share the proceeds fro! the sale of the su3divided lots. %he pro$ect did not push throu"h and the land was su3seJuentl4 foreclosed 34 the 3anC. Accordin" to petitioners the pro$ect failed 3ecause of 7respondent5s lacC of funds or !eans and sCills.7 %he4 add that respondent used the loan not for the develop!ent of the su3division 3ut in furtherance of his own co!pan4 Eniversal E!3rella Co!pan4. +n affir!in" the trial court the Court of Appeals held that petitioners and respondent had for!ed a partnership for the develop!ent of the su3division. %hus the4 !ust 3ear the loss suffered 34 the partnership in the sa!e proportion as their share in the profits stipulated in the contract. 2isa"reein" with the trial court5s pronounce!ent that losses as well as profits in a $oint venture should 3e distri3uted eJuall4 > the CA invoCed Article #>9> of the Civil Code which provides, Art. #>9> Q %he losses and profits shall 3e distri3uted in confor!it4 with the a"ree!ent. +f onl4 the share of each partner in the profits has 3een a"reed upon the share of each in the losses shall 3e in the sa!e proportion. %he CA elucidated further, +n the a3sence of stipulation the share of each partner in the profits and losses shall 3e in proportion to what he !a4 have contri3uted 3ut the industrial partner shall not 3e lia3le for the losses. As for the profits the industrial partner shall receive such share as !a4 3e $ust and eJuita3le under the circu!stances. +f 3esides his services he has contri3uted capital he shall also receive a share in the profits in proportion to his capital. %he +ssue -etitioners i!pute to the Court of Appeals the followin" error,

-ANGAN+&AN H., Courts !a4 not e=tricate parties fro! the necessar4 conseJuences of their acts. %hat the ter!s of a contract turn out to 3e financiall4 disadvanta"eous to the! will not relieve the! of their o3li"ations therein. %he lacC of an inventor4 of real propert4 will not ipso facto release the contractin" partners fro! their respective o3li"ations to each other arisin" fro! acts e=ecuted in accordance with their a"ree!ent. %he Case %he -etition for Review on Certiorari 3efore us assails the /arch B #99< 2ecision # of the Court of Appeals ) 9CA; in CA-GR CV No. *)3>< and its Hune )B #99< Resolution den4in" reconsideration. %he assailed 2ecision affir!ed the rulin" of the Re"ional %rial Court 9R%C; of Ce3u Cit4 in Civil Case No. R-)#)0< which disposed as follows,

31

Cases on Sales Price

. . . M%heN Court of Appeals erred in concludin" that the transaction . . . 3etween the petitioners and respondent was that of a $oint venture:partnership i"norin" outri"ht the provision of Article #>69 and other related provisions of the Civil Code of the -hilippines. < %he Court5s Rulin" %he -etition is 3ereft of !erit. /ain +ssue, .=istence of a -artnership -etitioners den4 havin" for!ed a partnership with respondent. %he4 contend that the Hoint Venture A"ree!ent and the earlier 2eed of 0ale 3oth of which were the 3ases of the appellate court5s findin" of a partnership were void. +n the sa!e 3reath however the4 assert that under those ver4 sa!e contracts respondent is lia3le for his failure to i!ple!ent the pro$ect. &ecause the a"ree!ent entitled the! to receive 60 percent of the proceeds fro! the sale of the su3division lots the4 pra4 that respondent pa4 the! da!a"es eJuivalent to 60 percent of the value of the propert4. 9 %he pertinent portions of the Hoint Venture A"ree!ent read as follows, 8N1? A(( /.N &F %@.0. -R.0.N%0, %his AGR../.N% is !ade and entered into at Ce3u Cit4 -hilippines this Bth da4 of /arch #969 34 and 3etween /R. /ANE.( R. %1RR.0 . . . the F+R0% -AR%F liCewise /R0. AN%1N+A &. %1RR.0 and /+00 ./.%.R+A &AR+NG . . . the 0.C1N2 -AR%F, ?+%N.00.%@, %hat whereas the 0.C1N2 -AR%F voluntaril4 offered the F+R0% -AR%F this propert4 located at (apu-(apu Cit4 +sland of /actan under (ot No. #36< coverin" %C% No. %-0#<* with a total area of #> 009 sJuare !eters to 3e su3-divided 34 the F+R0% -AR%F6 ?hereas the F+R0% -AR%F had "iven the 0.C1N2 -AR%F the su! of, %?.N%F %@1E0AN2 9-)0 000.00; -esos -hilippine Currenc4 upon the e=ecution of this contract for the propert4 entrusted 34 the 0.C1N2 -AR%F for su3-division pro$ects and develop!ent purposes6 N1? %@.R.F1R. for and in consideration of the a3ove covenants and pro!ises herein contained the respective parties hereto do here34 stipulate and a"ree as follows, 0+I%@, %hat the intended su3-division pro$ect of the propert4 involved will start the worC and all i!prove!ents upon the ad$acent lots will 3e ne"otiated in 3oth partiesM5N favor and all sales shall M3eN decided 34 3oth parties. 0.V.N%@, %hat the 0.C1N2 -AR%+.0 should 3e "iven an option to "et 3acC the propert4 !entioned provided the a!ount of %?.N%F %@1E0AN2 9-)0 000.00; -esos -hilippine Currenc4 3orrowed 34 the 0.C1N2 -AR%F will 3e paid in full to the F+R0% -AR%F includin" all necessar4 i!prove!ents spent 34 the F+R0% -AR%F and-the F+R0% -AR%F will 3e "iven a "race period to turnover the propert4 !entioned a3ove. %hat this AGR../.N% shall 3e 3indin" and o3li"ator4 to the parties who e=ecuted sa!e freel4 and voluntaril4 for the uses and purposes therein stated. #0 A readin" of the ter!s e!3odied in the A"ree!ent indu3ita3l4 shows the e=istence of a partnership pursuant to Article #>6> of the Civil Code which provides, Art. #>6>. &4 the contract of partnership two or !ore persons 3ind the!selves to contri3ute !one4 propert4 or industr4 to a co!!on fund with the intention of dividin" the profits a!on" the!selves. 1N., %hat the 0.C1N2 -AR%F si"ned an a3solute 2eed of 0ale . . . dated /arch B #969 in the a!ount of %?.N%F F+V. %@1E0AN2 F+V. @EN2R.2 %@+R%..N V F+F%F C%V0. 9-)B B#3.B0; -hilippine Currenc4 for # >00 sJuare !eters at 1N. M-.01N V F+F%F C%V0. 9-#.B0; -hilippine Currenc4 in favor of the F+R0% -AR%F 3ut the 0.C1N2 -AR%F did not actuall4 receive the pa4!ent. 0.C1N2, %hat the 0.C1N2 -AR%F had received fro! the F+R0% -AR%F the necessar4 a!ount of %?.N%F %@1E0AN2 9-)0 000.00; pesos -hilippine currenc4 for their personal o3li"ations and this particular a!ount will serve as an advance pa4!ent fro! the F+R0% -AR%F for the propert4 !entioned to 3e su3-divided and to 3e deducted fro! the sales. %@+R2, %hat the F+R0% -AR%F will not collect fro! the 0.C1N2 -AR%F the interest and the principal a!ount involvin" the a!ount of %?.N%F %@1E0AN2 9-)0 000.00; -esos -hilippine Currenc4 until the su3-division pro$ect is ter!inated and read4 for sale to an4 interested parties and the a!ount of %?.N%F %@1E0AN2 9-)0 000.00; pesos -hilippine currenc4 will 3e deducted accordin"l4. F1ER%@, %hat all "eneral e=penseMsN and all costMsN involved in the su3-division pro$ect should 3e paid 34 the F+R0% -AR%F e=clusivel4 and all the e=penses will not 3e deducted fro! the sales after the develop!ent of the su3-division pro$ect. F+F%@, %hat the sales of the su3-divided lots will 3e divided into 0+I%F -.RC.N%E/ 60P for the 0.C1N2 -AR%F and F1R%F -.RC.N%E/ *0P for the F+R0% -AR%F and additional profits or whatever inco!e derivin" fro! the sales will 3e divided eJuall4 accordin" to the . . . percenta"e Ma"reed uponN 34 3oth parties.

32

Cases on Sales Price

Ender the a3ove-Juoted A"ree!ent petitioners would contri3ute propert4 to the partnership in the for! of land which was to 3e developed into a su3division6 while respondent would "ive in addition to his industr4 the a!ount needed for "eneral e=penses and other costs. Further!ore the inco!e fro! the said pro$ect would 3e divided accordin" to the stipulated percenta"e. Clearl4 the contract !anifested the intention of the parties to for! a partnership. ## +t should 3e stressed that the parties i!ple!ented the contract. %hus petitioners transferred the title to the land to facilitate its use in the na!e of the respondent. 1n the other hand respondent caused the su3$ect land to 3e !ort"a"ed the proceeds of which were used for the surve4 and the su3division of the land. As noted earlier he developed the roads the cur3s and the "utters of the su3division and entered into a contract to construct low-cost housin" units on the propert4. Respondent5s actions clearl4 3elie petitioners5 contention that he !ade no contri3ution to the partnership. Ender Article #>6> of the Civil Code a partner !a4 contri3ute not onl4 !one4 or propert4 3ut also industr4. -etitioners &ound 34 %er!s of Contract Ender Article #3#B of the Civil Code contracts 3ind the parties not onl4 to what has 3een e=pressl4 stipulated 3ut also to all necessar4 conseJuences thereof as follows, Art. #3#B. Contracts are perfected 34 !ere consent and fro! that !o!ent the parties are 3ound not onl4 to the fulfill!ent of what has 3een e=pressl4 stipulated 3ut also to all the conseJuences which accordin" to their nature !a4 3e in Ceepin" with "ood faith usa"e and law. +t is undisputed that petitioners are educated and are thus presu!ed to have understood the ter!s of the contract the4 voluntaril4 si"ned. +f it was not in consonance with their e=pectations the4 should have o3$ected to it and insisted on the provisions the4 wanted. Courts are not authoriDed to e=tricate parties fro! the necessar4 conseJuences of their acts and the fact that the contractual stipulations !a4 turn out to 3e financiall4 disadvanta"eous will not relieve parties thereto of their o3li"ations. %he4 cannot now disavow the relationship for!ed fro! such a"ree!ent due to their supposed !isunderstandin" of its ter!s. Alle"ed Nullit4 of the -artnership A"ree!ent -etitioners ar"ue that the Hoint Venture A"ree!ent is void under Article #>>3 of the Civil Code which provides, Art. #>>3. A contract of partnership is void whenever i!!ova3le propert4 is contri3uted thereto if an inventor4 of said propert4 is not !ade si"ned 34 the parties and attached to the pu3lic instru!ent. %he4 contend that since the parties did not !aCe si"n or attach to the pu3lic instru!ent an inventor4 of the real propert4 contri3uted the partnership is void. ?e clarif4. First Article #>>3 was intended pri!aril4 to protect third persons. %hus the e!inent Arturo /. %olentino states that under the aforecited provision which is a co!ple!ent of Article #>># #) 7%he e=ecution of a pu3lic instru!ent would 3e useless if there is no inventor4 of the propert4 contri3uted 3ecause without its desi"nation and description the4 cannot 3e su3$ect to inscription in the Re"istr4 of -ropert4 and their contri3ution cannot pre$udice third persons. %his will result in fraud to those who contract with the partnership in the 3elief MinN the efficac4 of the "uarant4 in which the i!!ova3les !a4 consist. %hus the contract is declared void 34 the law when no such inventor4 is !ade.7 %he case at 3ar does not involve third parties who !a4 3e pre$udiced. 0econd petitioners the!selves invoCe the alle"edl4 void contract as 3asis for their clai! that respondent should pa4 the! 60 percent of the value of the propert4. #3 %he4 cannot in one 3reath den4 the contract and in another reco"niDe it dependin" on what !o!entaril4 suits their purpose. -arties cannot adopt inconsistent positions in re"ard to a contract and courts will not tolerate !uch less approve such practice. +n short the alle"ed nullit4 of the partnership will not prevent courts fro! considerin" the Hoint Venture A"ree!ent an ordinar4 contract fro! which the parties5 ri"hts and o3li"ations to each other !a4 3e inferred and enforced. -artnership A"ree!ent Not the Result of an .arlier +lle"al Contract -etitioners also contend that the Hoint Venture A"ree!ent is void under Article #*)) #* of the Civil Code 3ecause it is the direct result of an earlier ille"al contract which was for the sale of the land without valid consideration. %his ar"u!ent is puerile. %he Hoint Venture A"ree!ent clearl4 states that the consideration for the sale was the e=pectation of profits fro! the su3division pro$ect. +ts first stipulation states that petitioners did not actuall4 receive pa4!ent for the parcel of land sold to respondent. Consideration !ore properl4 deno!inated as cause can taCe different for!s such as the prestation or pro!ise of a thin" or service 34 another. #B +n this case the cause of the contract of sale consisted not in the stated peso value of the land 3ut in the e=pectation of profits fro! the su3division pro$ect for which the land was intended to 3e used. As e=plained 34 the trial court 7the land was in effect "iven to the partnership as Mpetitioner5sN participation therein. . . . %here was therefore a consideration for the sale the MpetitionersN actin" in the e=pectation that should the venture co!e into fruition the4 MwouldN "et si=t4 percent of the net profits.7

33

Cases on Sales Price

G.R. No. L5111150 (ia3ilit4 of the -arties Clai!in" that rerpondent was solel4 responsi3le for the failure of the su3division pro$ect petitioners !aintain that he should 3e !ade to pa4 da!a"es eJuivalent to 60 percent of the value of the propert4 which was their share in the profits under the Hoint Venture A"ree!ent. ?e are not persuaded. %rue the Court of Appeals held that petitioners5 acts were not the cause of the failure of the pro$ect. #6 &ut it also ruled that neither was respondent responsi3le therefor. #> +n i!putin" the 3la!e solel4 to hi! petitioners failed to "ive an4 reason wh4 we should disre"ard the factual findin"s of the appellate court relievin" hi! of fault. Veril4 factual issues cannot 3e resolved in a petition for review under Rule *B as in this case. -etitioners have not alle"ed not to sa4 shown that their -etition constitutes one of the e=ceptions to this doctrine. #< Accordin"l4 we find no reversi3le error in the CA5s rulin" that petitioners are not entitled to da!a"es. ?@.R.F1R. the -erition is here34 2.N+.2 and the challen"ed 2ecision AFF+R/.2. Costs a"ainst petitioners. 01 1R2.R.2 "OYO"A !+A3, INC., &e'('(o#er, *). COUR" OF A,,EAL! a#$ LUNA L. !O!A, re)&o#$e#'). -ay 23, 1225

2AV+2. HR. H., At the heart of the present controvers4 is the docu!ent !arCed .=hi3it 7A7 # for the private respondent which was si"ned 34 a sales representative of %o4ota 0haw +nc. na!ed -opon" &ernardo. %he docu!ent reads as follows, * Hune #9<9 AGR../.N%0 &.%?..N /R. 010A V -1-1NG &.RNAR21 1F %1F1%A 0@A? +NC. #. all necessar4 docu!ents will 3e su3!itted to %1F1%A 0@A? +NC. 9-1-1NG &.RNAR21; a weeC after upon arrival of /r. 0osa fro! the -rovince 9/arinduJue; where the unit will 3e used on the #9th of Hune. ). #9<9. the downpa4!ent of -#00 000.00 will 3e paid 34 /r. 0osa on Hune #B

3. the %1F1%A 0@A? +NC. (+%. AC. 4ellow will 3e picC-up MsicN and released 34 %1F1%A 0@A? +NC. on the #>th of Hune at #0 a.!. Ver4 trul4 4ours 90"d.; -1-1NG &.RNAR21. ?as this docu!ent e=ecuted and si"ned 34 the petitioner5s sales representative a perfected contract of sale 3indin" upon the petitioner 3reach of which would entitle the private respondent to da!a"es and attorne45s feesO %he trial court and the Court of Appeals tooC the affir!ative view. %he petitioner disa"rees. @ence this petition for review on certiorari. %he antecedents as disclosed in the decisions of 3oth the trial court and the Court of Appeals as well as in the pleadin"s of petitioner %o4ota 0haw +nc. 9hereinafter %o4ota; and respondent (una (. 0osa 9hereinafter 0osa; are as follows. 0o!eti!e in Hune of #9<9 (una (. 0osa wanted to purchase a %o4ota (ite Ace. +t was then a seller5s !arCet and 0osa had difficult4 findin" a dealer with an availa3le unit for sale. &ut upon contactin" %o4ota 0haw +nc. he was told that there was an availa3le unit. 0o on #* Hune #9<9 0osa and his son Gil3ert went to the %o4ota office at 0haw &oulevard -asi" /etro /anila. %here the4 !et -opon" &ernardo a sales representative of %o4ota.

34

Cases on Sales Price

0osa e!phasiDed to &ernardo that he needed the (ite Ace not later than #> Hune #9<9 3ecause he his fa!il4 and a 3aliC3a4an "uest would use it on #< Hune #9<9 to "o to /arinduJue his ho!e province where he would cele3rate his 3irthda4 on the #9th of Hune. @e added that if he does not arrive in his ho!etown with the new car he would 3eco!e a 7lau"hin" stocC.7 &ernardo assured 0osa that a unit would 3e read4 for picC up at #0,00 a.!. on #> Hune #9<9. &ernardo then si"ned the aforeJuoted 7A"ree!ents &etween /r. 0osa V -opon" &ernardo of %o4ota 0haw +nc.7 +t was also a"reed upon 34 the parties that the 3alance of the purchase price would 3e paid 34 credit financin" throu"h &.A. Finance and for this Gil3ert on 3ehalf of his father si"ned the docu!ents of %o4ota and &.A. Finance pertainin" to the application for financin". %he ne=t da4 #B Hune #9<9 0osa and Gil3ert went to %o4ota to deliver the downpa4!ent of -#00 000.00. %he4 !et &ernardo who then acco!plished a printed Vehicle 0ales -roposal 9V0-; No. 9)< ) on which Gil3ert si"ned under the su3headin" C1NF1R/.. %his docu!ent shows that the custo!er5s na!e is 7/R. (ENA 010A7 with ho!e address at No. )3#6 Gui$o 0treet Enited -ara'aJue ++6 that the !odel series of the vehicle is a 7(ite Ace #B007 descri3ed as 7* 2r !ini3us76 that pa4!ent is 34 7install!ent 7 to 3e financed 34 7&.A. 7 3 with the initial cash outla4 of -#00 000.00 3roCen down as follows, a; #. downpa4!ent Q - B3 #*<.00 3; insurance Q - #3 9>0.00 c; &(% re"istration fee Q - # 06>.00 C@/1 fee Q %o4ota contends however that the (ite Ace was not delivered to 0osa 3ecause of the disapproval 34 &.A. Finance of the credit financin" application of 0osa. +t further alle"ed that a particular unit had alread4 3een reserved and ear!arCed for 0osa 3ut could not 3e released due to the uncertaint4 of pa4!ent of the 3alance of the purchase price. %o4ota then "ave 0osa the option to purchase the unit 34 pa4in" the full purchase price in cash 3ut 0osa refused. After it 3eca!e clear that the (ite Ace would not 3e delivered to hi! 0osa asCed that his downpa4!ent 3e refunded. %o4ota did so on the ver4 sa!e da4 34 issuin" a Far .ast &anC checC for the full a!ount of -#00 000.00 * the receipt of which was shown 34 a checC voucher of %o4ota B which 0osa si"ned with the reservation 7without pre$udice to our future clai!s for da!a"es.7 ). 0tated -rice is su3$ect to chan"e without prior notice -rice prevailin" and in effect at ti!e of sellin" will appl4. . . . Rodri"o Guirante the 0ales 0upervisor of &ernardo checCed and approved the V0-. 1n #> Hune #9<9 at around 9,30 a.!. &ernardo called Gil3ert to infor! hi! that the vehicle would not 3e read4 for picC up at #0,00 a.!. as previousl4 a"reed upon 3ut at ),00 p.!. that sa!e da4. At ),00 p.!. 0osa and Gil3ert !et &ernardo at the latter5s office. Accordin" to 0osa &ernardo infor!ed the! that the (ite Ace was 3ein" readied for deliver4. After waitin" for a3out an hour &ernardo told the! that the car could not 3e delivered 3ecause 7nasulot an" unit n" i3an" !alaCas.7 %his sale is su3$ect to availa3ilit4 of unit. - ) >#B.00 service fee Q - B00.00 accessories Q - )9 000.00

and that the 7&A(ANC. %1 &. F+NANC.27 is 7-)>* #3>.00.7 %he spaces provided for 72eliver4 %er!s7 were not filled-up. +t also contains the followin" pertinent provisions, C1N2+%+1N0 1F 0A(.0

35

Cases on Sales Price

%hereafter 0osa sent two letters to %o4ota. +n the first letter dated )> Hune #9<9 and si"ned 34 hi! he de!anded the refund within five da4s fro! receipt of the downpa4!ent of -#00 000.00 plus interest fro! the ti!e he paid it and the pa4!ent of da!a"es with a warnin" that in case of %o4ota5s failure to do so he would 3e constrained to taCe le"al action. 6 %he second dated * Nove!3er #9<9 and si"ned 34 /. 1. Ca3alles 0osa5s counsel de!anded one !illion pesos representin" interest and da!a"es a"ain with a warnin" that le"al action would 3e taCen if pa4!ent was not !ade within three da4s. > %o4ota5s counsel answered throu"h a letter dated )> Nove!3er #9<9 < refusin" to accede to the de!ands of 0osa. &ut even 3efore this answer was !ade and received 34 0osa the latter filed on )0 Nove!3er #9<9 with &ranch 3< of the Re"ional %rial Court 9R%C; of /arinduJue a co!plaint a"ainst %o4ota for da!a"es under Articles #9 and )# of the Civil Code in the total a!ount of -# )30 000.00. 9 @e alle"es inter alia that, 9. As a result of defendant5s failure and:or refusal to deliver the vehicle to plaintiff plaintiff suffered e!3arrass!ent hu!iliation ridicule !ental an"uish and sleepless ni"hts 3ecause, 9i; he and his fa!il4 were constrained to taCe the pu3lic transportation fro! /anila to (ucena Cit4 on their wa4 to /arinduJue6 9ii; his 3aliC3a4an-"uest canceled his scheduled first visit to /arinduJue in order to avoid the inconvenience of taCin" pu3lic transportation6 and 9iii; his relatives friends nei"h3ors and other province!ates continuousl4 irCed hi! a3out 7his &rand-New %o4ota (ite Ace Q that never was.7 Ender the circu!stances defendant should 3e !ade lia3le to the plaintiff for !oral da!a"es in the a!ount of 1ne /illion -esos 9-# 000 000.00;. #0 +n its answer to the co!plaint %o4ota alle"ed that no sale was entered into 3etween it and 0osa that &ernardo had no authorit4 to si"n .=hi3it 7A7 for and in its 3ehalf and that &ernardo si"ned .=hi3it 7A7 in his personal capacit4. As special and affir!ative defenses it alle"ed that, the V0- did not state date of deliver46 0osa had not co!pleted the docu!ents reJuired 34 the financin" co!pan4 and as a !atter of polic4 the vehicle could not and would not 3e released prior to full co!pliance with financin" reJuire!ents su3!ission of all docu!ents and e=ecution of the sales a"ree!ent:invoice6 the -#00 000.00 was returned to and received 34 0osa6 the venue was i!properl4 laid6 and 0osa did not have a sufficient cause of action a"ainst it. +t also interposed co!pulsor4 counterclai!s. After trial on the issues a"reed upon durin" the pre-trial session ## the trial court rendered on #< Fe3ruar4 #99) a decision in favor of 0osa. #) +t ruled that .=hi3it 7A 7 the 7AGR../.N%0 &.%?..N /R. 010A AN2 -1-1NG &.RNAR21 7 was a valid perfected contract of sale 3etween 0osa and %o4ota which 3ound %o4ota to deliver the vehicle to 0osa and further a"reed with 0osa that %o4ota acted in 3ad faith in sellin" to another the unit alread4 reserved for hi!. As to %o4ota5s contention that &ernardo had no authorit4 to 3ind it throu"h .=hi3it 7A 7 the trial court held that the e=tent of &ernardo5s authorit4 7was not !ade Cnown to plaintiff 7 for as testified to 34 Guirante 7the4 do not volunteer an4 infor!ation as to the co!pan45s sales polic4 and "uidelines 3ecause the4 are internal !atters.7 #3 /oreover 7MfNro! the 3e"innin" of the transaction up to its consu!!ation when the downpa4!ent was !ade 34 the plaintiff the defendants had !ade Cnown to the plaintiff the i!pression that -opon" &ernardo is an authoriDed sales e=ecutive as it per!itted the latter to do acts within the scope of an apparent authorit4 holdin" hi! out to the pu3lic as possessin" power to do these acts.7 #* &ernardo then 7was an a"ent of the defendant %o4ota 0haw +nc. and hence 3ound the defendants.7 #B %he court further declared that 7(una 0osa proved his social standin" in the co!!unit4 and suffered 3es!irched reputation wounded feelin"s and sleepless ni"hts for which he ou"ht to 3e co!pensated.7 #6 Accordin"l4 it disposed as follows, ?@.R.F1R. viewed fro! the a3ove findin"s $ud"!ent is here34 rendered in favor of the plaintiff and a"ainst the defendant, #. orderin" the defendant to pa4 to the plaintiff the su! of ->B 000.00 for !oral da!a"es6 ). orderin" the defendant to pa4 the plaintiff the su! of -#0 000.00 for e=e!plar4 da!a"es6 3. orderin" the defendant to pa4 the su! of -30 000.00 attorne45s fees plus -) 000.00 law4er5s transportation fare per trip in attendin" to the hearin" of this case6 *. orderin" the defendant to pa4 the plaintiff the su! of -) 000.00 transportation fare per trip of the plaintiff in attendin" the hearin" of this case6 and B. orderin" the defendant to pa4 the cost of suit.

01 1R2.R.2. 2issatisfied with the trial court5s $ud"!ent %o4ota appealed to the Court of Appeals. %he case was docCeted as CA-G.R. CV No. *00*3. +n its decision pro!ul"ated on )9 Hul4 #99* #> the Court of Appeals affir!ed in toto the appealed decision. %o4ota now co!es 3efore this Court via this petition and raises the core issue stated at the 3e"innin" of the ponencia and also the followin" related issues, 9a; whether or not the standard V0- was the true and docu!ented understandin" of the parties which would have led to the ulti!ate contract of sale 93; whether or not 0osa has an4 le"al and de!anda3le ri"ht to the deliver4 of the vehicle despite the non-pa4!ent of the consideration and the non-approval of his credit application 34 &.A. Finance 9c; whether or not %o4ota acted in "ood faith when it did not release the vehicle to 0osa and 9d; whether or not %o4ota !a4 3e held lia3le for da!a"es. ?e find !erit in the petition. Neither lo"ic nor recourse to one5s i!a"ination can lead to the conclusion that .=hi3it 7A7 is a perfected contract of sale. Article #*B< of the Civil Code defines a contract of sale as follows,

36

Cases on Sales Price

Art. #*B<. &4 the contract of sale one of the contractin" parties o3li"ates hi!self to transfer the ownership of and to deliver a deter!inate thin" and the other to pa4 therefor a price certain in !one4 or its eJuivalent. A contract of sale !a4 3e a3solute or conditional. and Article #*>B specificall4 provides when it is dee!ed perfected, Art. #*>B. %he contract of sale is perfected at the !o!ent there is a !eetin" of !inds upon the thin" which is the o3$ect of the contract and upon the price. Fro! that !o!ent the parties !a4 reciprocall4 de!and perfor!ance su3$ect to the provisions of the law "overnin" the for! of contracts. ?hat is clear fro! .=hi3it 7A7 is not what the trial court and the Court of Appeals appear to see. +t is not a contract of sale. No o3li"ation on the part of %o4ota to transfer ownership of a deter!inate thin" to 0osa and no correlative o3li"ation on the part of the latter to pa4 therefor a price certain appears therein. %he provision on the downpa4!ent of -#00 000.00 !ade no specific reference to a sale of a vehicle. +f it was intended for a contract of sale it could onl4 refer to a sale on install!ent 3asis as the V0- e=ecuted the followin" da4 confir!ed. &ut nothin" was !entioned a3out the full purchase price and the !anner the install!ents were to 3e paid. %his Court had alread4 ruled that a definite a"ree!ent on the !anner of pa4!ent of the price is an essential ele!ent in the for!ation of a 3indin" and enforcea3le contract of sale. #< %his is so 3ecause the a"ree!ent as to the !anner of pa4!ent "oes into the price such that a disa"ree!ent on the !anner of pa4!ent is tanta!ount to a failure to a"ree on the price. 2efiniteness as to the price is an essential ele!ent of a 3indin" a"ree!ent to sell personal propert4. #9 /oreover .=hi3it 7A7 shows the a3sence of a !eetin" of !inds 3etween %o4ota and 0osa. For one thin" 0osa did not even si"n it. For another 0osa was well aware fro! its title written in 3old letters viD. AGR../.N%0 &.%?..N /R. 010A V -1-1NG &.RNAR21 1F %1F1%A 0@A? +NC. that he was not dealin" with %o4ota 3ut with -opon" &ernardo and that the latter did not !isrepresent that he had the authorit4 to sell an4 %o4ota vehicle. @e Cnew that &ernardo was onl4 a sales representative of %o4ota and hence a !ere a"ent of the latter. +t was incu!3ent upon 0osa to act with ordinar4 prudence and reasona3le dili"ence to Cnow the e=tent of &ernardo5s authorit4 as an a"ent )0 in respect of contracts to sell %o4ota5s vehicles. A person dealin" with an a"ent is put upon inJuir4 and !ust discover upon his peril the authorit4 of the a"ent. )# At the !ost .=hi3it 7A7 !a4 3e considered as part of the initial phase of the "eneration or ne"otiation sta"e of a contract of sale. %here are three sta"es in the contract of sale na!el4, 9c; consu!!ation or death which is the fulfill!ent or perfor!ance of the ter!s a"reed upon in the contract. )) %he second phase of the "eneration or ne"otiation sta"e in this case was the e=ecution of the V0-. +t !ust 3e e!phasiDed that thereunder the downpa4!ent of the purchase price was -B3 #*<.00 while the 3alance to 3e paid on install!ent should 3e financed 34 &.A. Finance Corporation. +t is of course to 3e assu!ed that &.A. Finance Corp. was accepta3le to %o4ota otherwise it should not have !entioned &.A. Finance in the V0-. Financin" co!panies are defined in 0ection 39a; of R.A. No. B9<0 as a!ended 34 -.2. No. #*B* and -.2. No. #>93 as 7corporations or partnerships e=cept those re"ulated 34 the Central &anC of the -hilippines the +nsurance Co!!ission and the Cooperatives Ad!inistration 1ffice which are pri!aril4 or"aniDed for the purpose of e=tendin" credit facilities to consu!ers and to industrial co!!ercial or a"ricultural enterprises either 34 discountin" or factorin" co!!ercial papers or accounts receiva3les or 34 3u4in" and sellin" contracts leases chattel !ort"a"es or other evidence of inde3tedness or 34 leasin" of !otor vehicles heav4 eJuip!ent and industrial !achiner4 3usiness and office !achines and eJuip!ent appliances and other !ova3le propert4.7 )3 Accordin"l4 in a sale on install!ent 3asis which is financed 34 a financin" co!pan4 three parties are thus involved, the 3u4er who e=ecutes a note or notes for the unpaid 3alance of the price of the thin" purchased on install!ent the seller who assi"ns the notes or discounts the! with a financin" co!pan4 and the financin" co!pan4 which is su3ro"ated in the place of the seller as the creditor of the install!ent 3u4er. )* 0ince &.A. Finance did not approve 0osa5s application there was then no !eetin" of !inds on the sale on install!ent 3asis. ?e are inclined to 3elieve %o4ota5s version that &.A. Finance disapproved 0osa5s application for which reason it su""ested to 0osa that he pa4 the full purchase price. ?hen the latter refused %o4ota cancelled the V0- and returned to hi! his -#00 000.00. 0osa5s version that the V0- was cancelled 3ecause accordin" to &ernardo the vehicle was delivered to another who was 7!as !alaCas7 does not inspire 3elief and was o3viousl4 a dela4ed afterthou"ht. +t is clai!ed that &ernardo said 7-asensi4a Ca4o nasulot an" unit n" i3an" !alaCas 7 while the 0osas had alread4 3een waitin" for an hour for the deliver4 of the vehicle in the afternoon of #> Hune #9<9. @owever in para"raph > of his co!plaint 0osa sole!nl4 states, 1n Hune #> #9<9 at around 9,30 o5clocC in the !ornin" defendant5s sales representative /r. -opon" &ernardo called plaintiff5s house and infor!ed the plaintiff5s son that the vehicle will not 3e read4 for picC-up at #0,00 a.!. of Hune #> 9a; preparation conception or "eneration which is the period of ne"otiation and 3ar"ainin" endin" at the !o!ent of a"ree!ent of the parties6 93; perfection or 3irth of the contract which is the !o!ent when the parties co!e to a"ree on the ter!s of the contract6 and

37

Cases on Sales Price

#9<9 3ut at ),00 p.!. of that da4 instead. -laintiff and his son went to defendant5s office on Hune #> #9<9 at ),00 p.!. in order to picC-up the vehicle 3ut the defendant for reasons Cnown onl4 to its representatives refused and:or failed to release the vehicle to the plaintiff. -laintiff de!anded for an e=planation 3ut nothin" was "iven6 . . . 9.!phasis supplied;. )B %he V0- was a !ere proposal which was a3orted in lieu of su3seJuent events. +t follows that the V0- created no de!anda3le ri"ht in favor of 0osa for the deliver4 of the vehicle to hi! and its non-deliver4 did not cause an4 le"all4 inde!nifia3le in$ur4. %he award then of !oral and e=e!plar4 da!a"es and attorne45s fees and costs of suit is without le"al 3asis. &esides the onl4 "round upon which 0osa clai!ed !oral da!a"es is that since it was Cnown to his friends town!ates and relatives that he was 3u4in" a %o4ota (ite Ace which the4 e=pected to see on his 3irthda4 he suffered hu!iliation sha!e and sleepless ni"hts when the van was not delivered. %he van 3eca!e the su3$ect !atter of talCs durin" his cele3ration that he !a4 not have paid for it and this created an i!pression a"ainst his 3usiness standin" and reputation. At the 3otto! of this clai! is nothin" 3ut !isplaced pride and e"o. @e should not have announced his plan to 3u4 a %o4ota (ite Ace Cnowin" that he !i"ht not 3e a3le to pa4 the full purchase price. +t was he who 3rou"ht e!3arrass!ent upon hi!self 34 3ra""in" a3out a thin" which he did not own 4et. 0ince 0osa is not entitled to !oral da!a"es and there 3ein" no award for te!perate liJuidated or co!pensator4 da!a"es he is liCewise not entitled to e=e!plar4 da!a"es. Ender Article )))9 of the Civil Code e=e!plar4 or corrective da!a"es are i!posed 34 wa4 of e=a!ple or correction for the pu3lic "ood in addition to !oral te!perate liJuidated or co!pensator4 da!a"es. Also it is settled that for attorne45s fees to 3e "ranted the court !ust e=plicitl4 state in the 3od4 of the decision and not onl4 in the dispositive portion thereof the le"al reason for the award of attorne45s fees. )6 No such e=plicit deter!ination thereon was !ade in the 3od4 of the decision of the trial court. No reason thus e=ists for such an award. ?@.R.F1R. the instant petition is GRAN%.2. %he challen"ed decision of the Court of Appeals in CA-G.R. CV N1. *00*3 as well as that of &ranch 3< of the Re"ional %rial Court of /arinduJue in Civil Case No. <9-#* are R.V.R0.2 and 0.% A0+2. and the co!plaint in Civil Case No. <9-#* is 2+0/+00.2. %he counterclai! therein is liCewise 2+0/+00.2. No pronounce!ent as to costs. G.R. No. L5310160u#e 22, 1273 LOREN O %ELA!CO AND !OCORRO 0. %ELA!CO, &e'('(o#er), *). +ONORABLE COUR" OF A,,EAL! a#$ -AGDALENA E!"A"E, re)&o#$e#'). Napoleon G. Ra!a for petitioners. 2o!inador (. Re4es for private respondent.

INC.,

CA0%R1 H., %his is a petition for certiorari and !anda!us filed 34 (orenDo Velasco and 0ocorro H. Velasco 9hereinafter referred to as the petitioners; a"ainst the resolution of the Court of Appeals dated Hune )< #969 in CA-G.R. *)3>6 which ordered the dis!issal of the appeal interposed 34 the petitioners fro! a decision of the Court of First +nstance of GueDon Cit4 on the "round that the4 had failed seasona3l4 to file their printed record on appeal. Ender date of Nove!3er 3 #96< the Court of First +nstance of GueDon Cit4 after hearin" on the !erits rendered a decision in civil case >>6# dis!issin" the co!plaint filed 34 the petitioners a"ainst the /a"dalena .state +nc. 9hereinafter referred to as the respondent; for the purpose of co!pellin" specific perfor!ance 34 the respondent of an alle"ed deed of sale of a parcel of residential land in favor of the petitioners. %he 3asis for the dis!issal of the co!plaint was that the alle"ed purchase and sale a"ree!ent 7was not perfected7. 1n Nove!3er #< #96< after the perfection of their appeal to the Court of Appeals the petitioners received a notice fro! the said court reJuirin" the! to file their printed record on appeal within si=t4 960; da4s fro! receipt of said notice. %his 60-da4 ter! was to e=pire on Hanuar4 #> #969. Alle"edl4 under date of Hanuar4 #B #969 the petitioners alle"edl4 sent to the Court of Appeals and to counsel for the respondent 34 re"istered !ail alle"edl4 deposited personall4 34 its !ailin" clerC one Huanito 2. Guiachon at the /aCati -ost 1ffice a 7/otion For .=tension of %i!e %o File -rinted Record on Appeal.7 %he e=tension of ti!e was sou"ht on the "round 7of !echanical failures of the printin" !achines and the volu!inous printin" $o3s now pendin" with the Vera -rintin" -ress. ...7 1n Fe3ruar4 #0 #969 the petitioners filed their printed record on appeal in the Court of Appeals. %hereafter the petitioners received fro! the respondent a !otion filed on Fe3ruar4 < #969 pra4in" for the dis!issal of the appeal on the "round that the petitioners had failed to file their printed record on appeal on ti!e. Actin" on the said !otion to dis!iss the appeal the Court of Appeals on Fe3ruar4 )B #969 issued the followin" resolution,

38

Cases on Sales Price

Epon consideration of the !otion of counsel for defendant-appellee pra4in" on the "rounds therein stated that the appeal 3e dis!issed in accordance with Rules of Court and of the opposition thereto filed 34 counsel for plaintiff-appellants the Court R.01(V.2 to 2.NF the said !otion to dis!iss. Epon consideration of the re"istr4-!ailed !otion of counsel for plaintiffs appellants pra4in" on the "rounds therein stated for an e=tension of 30 da4s fro! Hanuar4 #B #969 within which to file the printed record on appeal the Court R.01(V.2 to GRAN% the said !otion and the printed record on appeal which has alread4 3een filed is A2/+%%.2. 1n /arch ## #969 the respondent pra4ed for a reconsideration of the a3ove!entioned resolution averrin" that the Court of Appeals had 3een !isled 34the petitioners5 7deceitful alle"ation that the4 filed the printed record on appeal within the re"le!entar4 period 7 3ecause accordin" to a certification issued 34 the post!aster of /aCati RiDal the records of the said post office failed to reveal that on Hanuar4 #B #969 Q the date when their !otion for e=tension of ti!e to file the printed record on appeal was supposedl4 !ailed 34 the petitioners Q there was an4 letter deposited there 34 the petitioners5 counsel. %he petitioners opposed the !otion for reconsideration. %he4 su3!itted to the appellate court the re"istr4 receipts 9nu!3ered 0)#B and 0)#6; 3oth sta!pled Hanuar4 #B #969 which were issued 34 the receivin" clerC of the re"istr4 section of the /aCati -ost 1ffice coverin" the !ails for the disputed !otion for e=tension of ti!e to file their printed record on appeal and the affidavit of its !ailin" clerC Huanito 2. Guiachon to prove that their !otion for e=tension was ti!el4 filed and served on the Court of Appeals and the respondent respectivel4. After several other pleadin"s and !anifestations were filed 34 the parties relative to the issue raised 34 the respondent5s a3ove-!entioned !otion for reconsideration the Court of Appeals pro!ul"ated on Hune )< #969 its Juestioned resolution the dispositive portion of which reads as follows, ?@.R.F1R. the !otion for reconsideration filed on /arch ## #969 is "ranted and appeal interposed 34 plaintiff-appellants fro! the $ud"!ent of the court 3elow is here34 dis!issed for their failure to file their printed Record on Appeal within the period authoriDed 34 this Court. Att4. -atrocino R. CorpuD Mcounsel of the petitionerN is reJuired to show cause within ten 9#0; da4s fro! notice wh4 he should not 3e suspended fro! the practice of his necessar4 investi"ation a"ainst Huanito 2. Guiachon of the 0alon"a 1rdo'eD Fap 0icat V Associates (aw 1ffice 0uite 3#9 33> Rufino &uildin" A4ala Avenue /aCati -ost 1ffice to file the appropriate cri!inal action a"ainst the! as !a4 3e warranted in the pre!ises and to report to this Court within thirt4 930; da4s the action he has taCen thereon. %he fore"oin" desposition was 3ased on the followin" findin"s of the Court of Appeals, An e=a!ination of the Rollo of this case particularl4 the letter envelope on pa"e )6 thereof reveals that on Hanuar4 #B #969 plaintiffs supposedl4 !ailed via re"istered !ail fro! the -ost 1ffice of /aCati RiDal their !otion for e=tension of 30 da4s fro! that date to file their printed Record on Appeal under re"istered letter No. 0)#6. @owever in an official certification the -ost!aster of /aCati states that the records of his office disclose, 9a; that there were no re"istered letters Nos. 0)#B and 0)#6 fro! the 0alon"a 1rdo'eD Fap 0icat V Associates addressed to Att4. A3raha! F. 0ar!iento )0) /a"dalena &uildin" .spa'a .=t. GueDon Cit4 and to the Court of Appeals /anila respectivel4 that were posted in the -ost 1ffice of /aCati RiDal on Hanuar4 #B #9696 93; that there is a re"istered letter nu!3ered )#B 3ut that the sa!e was posted on Hanuar4 3 #969 34 .nriJueta A!ada of > An"el -asillo F-) Carti!ar -asa4 Cit4 as sender and Giral A!asan of &arrio Ca3uni"a-an 0to. Ni'o 0a!ar as addressee6 and that there is also a re"istered letter nu!3ered )#66 3ut that the sa!e was liCewise posted on Hanuar4 3 #969 with ..&.A. Construction of #0*9 &el3ar &uildin" /etropolitan -ason" %a!o /aCati as sender and -res. R. NaCa4a of the Enited -acific %radin" Co. (td. >9 6 Cha!o NaCatu FoCohari Hapan as addressee6 9c; that on Hanuar4 #B #969 the re"istered letters posted at the /aCati -ost 1ffice were nu!3ered consecutivel4 fro! #00#-)))B inclusive and none of these letters was addressed to Att4. A3raha! F. 0ar!iento of to the Court of Appeals6 9d; that in Re"istr4 &ill &ooC No. 30 for GueDon Cit4 as well as that /anila correspondin" to Fe3ruar4 > #969 there are entries coverin" re"istered letters Nos. 0)#B and 0)#6 for dispatch to GueDon Cit4 and /anila respectivel46 however such re"istr4 3ooC for Fe3ruar4 > #969 shows no letters with such nu!3ers posted on the said date. %he Actin" -ost!aster of the Co!!ercial Center -ost 1ffice of /aCati RiDal further certifies that 7Re"istr4 Receipts Nos. 0)#B and 0)#6 addressed to Att4. A3raha! F. 0ar!iento of the /a"dalena .state GueDon Cit4 and the @onora3le Court of Appeals respectivel4 does not appear in our Re"istr4 Record &ooC which was alle"edl4 posted at this office on Hanuar4 #B #969.7 Fro! the fore"oin" it is i!!ediatel4 apparent that the !otion for e=tension of ti!e to file their Record on Appeal supposedl4 !ailed 34 the plaintiffs on Hanuar4 #B #969 was not reall4 !ailed on that date 3ut evidentl4 on a date !uch later than Hanuar4 #B #969. %his is further confir!ed 34 the affidavit of Flaviano /alindo" a letter carrier of the /aCati -ost 1ffice which defendant attached as Anne= # to its supple!ental repl4 to plaintiffs5 opposition to the !otion for reconsideration. +n his said affidavit /alindo" swore a!on" others, 5%hat on Fe3ruar4 > #969 3etween #),00 o5clocC noon and #,00 o5clocC in the afternoon HEAN+%1 2. GE+AC@1N approached !e at the /aCati -ost 1ffice and talCed to !e a3out certain letters which his e!plo4er had asCed hi! to !ail and that + should help hi! do so!ethin" a3out the !atter6 3ut + asCed hi! what the4 were all a3out and he told !e that the4 were letters for the Court of Appeals and for Att4. A3raha! 0ar!iento and that his purpose was to show that the4 were posted on Hanuar4 #B #9696 that + inJuired further and he said that the letters were not so i!portant and that his onl4 concern was to have the! post !aCer Hanuar4 #B #9696 5%hat 3elievin" the word of HEAN+%1 2. GE+AC@1N that the letters were not reall4 i!portant + a"reed to his reJuest6 whereupon + "ot two 9); re"istr4 receipts fro! an old re"istr4 receipt 3ooClet which is no lon"er 3ein" used and + nu!3ered the! 0)#B for the letter addressed to Att4. A3raha! 0ar!iento in GueDon Cit4 and 0)#6 for the letter addressed to the Court of Appeals /anila6 that + placed the sa!e nu!3erin" on

39

Cases on Sales Price

the respective envelopes containin" the letters6 and that + also post !aCer the! Hanuar4 #B #9696 5%hat to the 3est of !4 recollection + wrote the correct date of postin" Fe3ruar4 > #969 on the 3acC of one or 3oth of the re"istr4 receipts a3ove !entioned6 5%hat the correct date of postin" Fe3ruar4 > #969 also appears in the Re"istr4 &ill &ooCs for GueDon Cit4 and /anila where + entered the su3$ect re"istered letters6 1f course plaintiff5s counsel denies the sworn state!ent of /alindo" and even presented the counter-affidavit of one of his clerC 34 the na!e of Huanito 2. Guiachon. &ut 3etween /alindo" whose sworn state!ent is !anifestl4 a declaration a"ainst interest since he can 3e cri!inall4 prosecuted for falsification on the 3asis thereof and that of Guiachon whose state!ent is self-servin" we are ver4 !uch inclined to "ive "reater wei"ht and credit to the for!er. &esides plaintiffs have not refuted the facts disclosed in the two 9); official certifications a3ove !entioned 34 the -ost!aCers of /aCati RiDal. %hese two 9); certifications alone even without to !ove this Court to reconsider its resolution of Fe3ruar4 )B #969 and order the dis!issal of this appeal. 1n 0epte!3er B #969 after the rendition of the fore"oin" Appeals pro!ul"ated another den4in" the !otion for petitioner 3ut at the sa!e ti!e acceptin" as satisfactor4 -atrocino R. CorpuD wh4 he should not 3e suspended fro! profession. resolution the Court of reconsideration of the the e=planation of Att4. the practice of the le"al participated therein 34 postin" said !ail !atters on Hanuar4 #B #969 when in truth and in fact he did not so participate. %he petitioner contend that in pro!ul"atin" its Juestioned resolution the Court of Appeals acted without or in e=cess of $urisdiction or with such whi!sical and "rave a3use of discretion as to a!ount to lacC of $urisdiction 3ecause 9a; it declared that the !otion for e=tension of ti!e to file the printed record on appeal was not !ailed on Hanuar4 #B #969 when in fact it was !ailed on the record on appeal was filed onl4 on Fe3ruar4 #0 #969 3e4ond the ti!e authoriDed 34 the appellate court when the truth is that the said date of filin" was within the 30-da4 e=tension "ranted 34 it6 9c; the adverse conclusion of the appellate court are not supported 34 the records of the case 3ecause the said court i"nored the affidavit of the !ailin" clerC of the petitioners5 counsel the re"istr4 receipts and post!arCed envelopes 9citin" @ennin" v. ?estern .Juip!ent 6) -hil. B>9 and Calte= -hil. +nc. v. 8atipunan (a3or Enion B) 1.G. 6)09; and instead chose to rel4 upon the affidavit of the !ail carrier /alindo" which affidavit was prepared 34 counsel for the respondent at the affiant hi!self so declared at the preli!inar4 investi"ation at the Fiscal5s office which a3solved the petitioners5 counsel !ailin" clerC Guiachon fro! an4 cri!inal lia3ilit46 9d; section # Rule B0 of the Rules of Court which enu!erates the "rounds upon which the Court of Appeals !a4 dis!iss an appeal does not include as a "round the failure to file a printed record on appeal6 9e; the said section does not state either that the !is!ailin" of a !otion to e=tend the ti!e to file the printed record on appeal assu!in" this to 3e the case !a4 3e a 3asis for the dis!issal of the appeal6 9f; the Court of Appeals has no $urisdiction to revoCe the e=tention of ti!e to file the printed record on appeal it had "ranted to the petitioners 3ased on a "round not specified in section # Rule B0 of the Rules of Court6 and 9"; the o3$ection to an appeal !a4 3e waived as when the appellee has allowed the record on appeal to 3e printed and approved 9citin" /oran Vol. ++ p. B#9;. 0o!e of the o3$ections raised 34 the petitioners to the Juestioned resolution of the Court of Appeals are o3viousl4 !atters involvin" the correct construction of our rules of procedure and conseJuentl4 are proper su3$ects of an appeal 34 wa4 of certiorari under Rule *B of the Rules of Court rather than a special civil action for certiorari under Rule 6B. %he petitioners however have correctl4 appreciated the nature of its o3$ections and have asCed this Court to treat the instant petition as an appeal 34 wa4 of certiorari under Rule *B 7in the event ... that this @onora3le 0upre!e Court should dee! that an appeal is an adeJuate re!ed4 ...7 %he nature of the case at 3ar per!its in our view a disJuisition of 3oth t4pes of assi"n!ents. ?e do not share the view of the petitioners that the Court of Appeals acted without or in e=cess of $urisdiction or "ravel4 a3used its discretion in pro!ul"atin" the Juestioned resolution. ?hile it is true that sta!ped on the re"istr4 receipts 0)#B and 0)#B as well as on the envelopes coverin" the !ails in Juestion is the date 7Hanuar4 #B #969 7 this 34 itself does not esta3lish an unre3utta3le presu!ption of the fact of date of !ailin". @ennin" and Calte= cited 34 the petitioners are not in point 3ecause the specific ad$ective issue resolved in those cases was whether or not the date of !ailin" a pleadin" is to 3e considered as the date of its filin". %he issue in the case at 3ar is whether or not

1n 0epte!3er )0 #969 the First Assistant Fiscal of RiDal notified the Court of Appeals that he had found a pri!a facie case a"ainst Flaviano C. /alindo" and would file the correspondin" infor!ation for falsification of pu3lic docu!ents a"ainst hi!. %he said fiscal however dis!issed the co!plaint a"ainst Guiachon for lacC of sufficient evidence. %he infor!ation su3seJuentl4 filed a"ainst /alindo" 34 the first Assistance Fiscal of RiDal reads as follow, %hat on or a3out the >th da4 of Fe3ruar4 #969 in the !unicipalit4 of /aCati province of RiDal and a place within the $urisdiction of this @onora3le Court the a3ove-na!ed accused conspirin" and confederatin" to"ether and !utuall4 helpin" and aidin" with Hohn 2oe whose true identit4 and present wherea3out is still unCnown did then and there willfull4 unlawfull4 and feloniousl4 falsif4 two re"istr4 receipts which are pu3lic docu!ents 34 reason of the fact that said re"istr4 receipts are printed in accordance with the standard for!s prescri3ed 34 the &ureau of -osts co!!itted as follows, the a3ove-na!ed accused Hohn 2oe on the date a3ove-!entioned approached and induced the accused /alindo" a letter-carrier at the /aCati -ost 1ffice to post!arC on A3raha! 0ar!iento in GueDon Cit4 and the other to the Court of Appeals /anila and the accused /alindo" accedin" to the induce!ent of and in conspirac4 with his co-accused Hohn 2oe did then and there willfull4 and feloniousl4 falsif4 said re"istr4 receipts of the /aCati -ost 1ffice on Hanuar4 #B #969 there34 !aCin" it appear that the said sealed envelopes addressed to Att4. 0ar!iento and the Court of Appeals were actuall4 posted and causin" it to appear that the -ost!aster of /aCati

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Cases on Sales Price

the !otion of the petitioners for e=tension of ti!e to file the printed record on appeal was in point of fact !ailed 9and therefore filed; on Hanuar4 #B #969. +n resolvin" this issue in favor of the respondent this Court finds after a careful stud4 and appraisal of the pleadin"s ad!issions and denials respectivel4 adduced and !ade 34 the parties that the Court of Appeals did not "ravel4 a3use its discretion and did not act without or in e=cess of its $urisdiction. ?e share the view of the appellate court that the certifications issued 34 the two post!asters of /aCati RiDal and the sworn declaration of the !ail carrier /alindo" descri3in" how the said re"istr4 receipts ca!e to 3e issued are worth4 of 3elief. +t will 3e o3served that the said certifications e=plain clearl4 and in detail how it was i!pro3a3le that the petitioners5 counsel in the ordinar4 course of official 3usiness while /alindo"5s sworn state!ent which constitutes a ver4 "rave ad!ission a"ainst his own interest provides a!ple 3asis for a findin" that where official dut4 was not perfor!ed it was at the 3ehest of a person interested in the petitioners5 side of the action 3elow. %hat at the preli!inar4 investi"ation at the Fiscal5s office /alindo" failed to identif4 Guiachon as the person who induced hi! to issue falsified receipts contrar4 to what he declared in his affidavit is of no !o!ent since the findin"s of the inJuest fiscal as reflected in the infor!ation for falsification filed a"ainst /alindo" indicate that so!eone did induce /alindo" to !aCe and issue false re"istr4 receipts to the counsel for the petitioners. %his Court held in &ello vs. Fernando # that the ri"ht to appeal is nota natural ri"ht nor a part of due process6 it is !erel4 a statutor4 privile"e and !a4 3e e=ercised onl4 in the !anner provided 34 law. +n this connection the Rule of Court e=pressl4 !aCes it the dut4 of an appellant to file a printed record on appeal with the Court of Appeals within si=t4 960; record on appeal approved 34 the trial court has alread4 3een received 34 the said court. %hus section B of Rule *6 states, 0ec. B. 2ut4 of appellant upon receipt of notice. Q +t shall 3e the dut4 of the appellant within fifteen 9#B; da4s fro! the date of the notice referred to in the precedin" section to pa4 the clerC of the Court of Appeals the fee for the docCetin" of the appeal and within si=t4 960; da4s fro! such notice to su3!it to the court fort4 9*0; printed copies of the record on appeal to"ether with proof of service of fifteen 9#B; printed copies thereof upon the appelee. As the petitioners failed to co!pl4 with the a3ove-!entioned dut4 which the Rules of Court en$oins and considerin" that as found 34 the Court of Appeals there was a deli3erate effort on their part to !islead the said Court in "ratin" the! an e=tension of ti!e within which to file their printed record on appeal it stands to reason that the appellate court cannot 3e said to have a3used its discretion or to have acted without or in e=cess of its $urisdiction in orderin" the dis!issal of their appeal. 1ur $urisprudence is replete with cases in which this Court dis!issed an appeal on "rounds not !entioned specificall4 in 0ection # Rule B0 of the Rules of Court. 90ee for e=a!ple 2e la CruD vs. &lanco >3 -hil. B96 9#9*);6 Govern!ent of the -hilippines vs. Court of Appeals #0< -hil. <6 9#960;6 Ferinion vs. 0ta. Ro!ana ()BB)# Fe3ruar4 )< #966 #6 0CRA 3>0 3>B;. +t will liCewise 3e noted that inas!uch as the petitioners5 !otion for e=tension of the period to file the printed record on appeal was 3elated filed then it is as thou"h the sa!e were non-e=istent since as this Court has alread4 stated in &aJuiran vs. Court of Appeals ) 7%he !otion for e=tension of the period for filin" pleadin"s and papers in court !ust 3e !ade 3efore the e=piration of the period to 3e e=tended.7 %he soundness of this dictu! in !atters of procedure is self-evident. For were the doctrine otherwise the uncertainties that would follow when liti"ants are left to deter!ine and redeter!ine for the!selves whether to seeC further redress in court forthwith or taCe their own sweet ti!e will result in liti"ations 3eco!in" !ore unrea3le than the ver4 "rievances the4 are intended to redness. %he ar"u!ent raised 34 the petitioner Q that the o3$ection to an appeal !a43e waived as when the appellee allows the record on appeal to 3e printed and approved Q is liCewise not !eritorious considerin" that the respondent did file a !otion in the Court of Appeals on Fe3ruar4 < #969 pra4in" for the dis!issal of the 3elow of the petitioners had not 4et filed their record on appeal and therefore !ust 3e considered to have a3andoned their appeal. +n further assailin" the Juestioned resolution of the Court of Appeals the petitioners also point out that on the !erits the eJuities of the instant case are in their favor. A readin" of the record however persuades us that the $ud"!ent a Juo is su3stantiall4 correct and !orall4 $ust. %he appealed decision of the court a Juo narrates 3oth the alle"ed and proven facts of the dispute 3etween the petitioners and the respondent as follows, %his is a suit for specific perfor!ance filed 34 (orenDo Velasco a"ainst the /a"dalena .state +nc. on the alle"ation that on Nove!3er )9 #96) the plaintiff and the defendant had entered into a contract of sale 9Anne= A of the co!plaint; 34 virtue of which the defendant offered to sell the plaintiff and the plaintiff in turn a"reed to 3u4 a parcel of land with an area of ) 0B9 sJuare !eters !ore particularl4 descri3ed as (ot #B &locC > -sd-6#)9 located at No. 39 corner 6th 0treet and -acific Avenue New /anila this Cit4 for the total purchase price of -#00 000.00. +t is alle"ed 34 the plaintiff that the a"ree!ent was that the plaintiff was to "ive a down pa4!ent of -#0 000.00 to 3e followed 34 -)0 000.00 and the 3alance of ->0 000.00 would 3e paid in install!ents the eJual !onthl4 a!ortiDation of which was to 3e deter!ined as soon as the -30 000.00 down pa4!ent had 3een co!pleted. +t is further alle"ed that the plaintiff paid down pa4!ent of -#0 000.00 on Nove!3er )9 #96) as per receipt No. )0><*< 9.=h. 7A7;and that when on Hanuar4 < #96* he tendered to the defendant the pa4!ent of the additional -)0 000.00 to co!plete the -30 000.00 the defendant refused to accept and that eventuall4 it liCewise refused to e=ecute a for!al deed of sale o3viousl4 a"reed upon. %he plaintiff de!ands -)B 000.00 e=e!plar4 da!a"es -) 000.00 actual da!a"es and -> 000.00 attorne45s fees. %he defendant in its Answer denies that it has had an4 direct dealin"s !uch less contractual relations with the plaintiff re"ardin" the propert4 in Juestion and contends that the alle"ed contract descri3ed in the docu!ent attached to the co!plaint as

41

Cases on Sales Price

Anne= A is entirel4 unenforcea3le under the 0tatute of Frauds6 that the truth of the !atter is that a portion of the propert4 in Juestion was 3ein" leased 34 a certain 0ocorro Velasco who on Nove!3er )9 #96) went to the office of the defendant indicated her desire to purchase the lot6 that the defendant indicated its willin"ness to sell the propert4 to her at the price of -#00 000.00 under the condition that a down pa4!ent of -30 000.00 3e !ade -)0 000.00 of which was to 3e paid on Nove!3er 3# #96) and that the 3alance of ->0 000.00 includin" interest a 9P per annu! was to 3e paid on install!ents for a period of ten 4ears at the rate of -B 3<#.3) on Hune 30 and 2ece!3er of ever4 4ear until the sa!e shall have 3een full4 paid6 that on Nove!3er )9 #96) 0ocorro Velasco offered to pa4 -#0 000.00 as initial pa4!ent instead of the a"reed -)0 000.00 3ut 3ecause the a!ount was short of the alle"ed -)0 000.00 the sa!e was accepted !erel4 as deposited and upon reJuest of 0ocorro Velasco the receipt was !ade in the na!e of her 3rother-in-law the plaintiff herein6 that 0ocorro Velasco failed to co!plete the down pa4!ent of -30 000.00 and neither has she paid an4 install!ents on the 3alance of ->0 000.00 up to the present ti!e6 that it was onl4 on Hanuar4 < #96* that 0ocorro Velasco tendered pa4!ent of -)0 000.00 which offer the defendant refused to accept 3ecause it had considered the offer to sell rescinded on account of her failure to co!plete the down pa4!ent on or 3efore 2ece!3er 3# #96). %he lone witness for the plaintiff is (orenDo Velasco who e=hi3its the receipt .=hi3its A issued in his favor 34 the /a"dalena .state +nc. in the su! of -#0 000.00 dated Nove!3er )9 #96). @e also identifies a letter 9.=h. &;of the /a"dalena .state +nc. addressed to hi! and his repl4 thereto. @e testifies that 0ocorro Velasco is his sisterin-law and that he had reJuested her to !aCe the necessar4 contacts with defendant referrin" to the purchase of the propert4 in Juestion. &ecause he does not understand .n"lish well he had authoriDed her to ne"otiate with the defendant in her whenever she went to the office of the defendant and as a !atter of fact the receipt for the -#0 000.00 down pa4!ent was issued in his favor. %he plaintiff also depends on .=hi3it A to prove that there was a perfected follows, 7.arnest !one4 for the purchase of (ot #B &locC > -sd-6#)9 Area ) 0B9 sJuare !eters includin" i!prove!ents thereon Q -#0 000.00.7 At the 3otto! of .=hi3it A the followin" appears, 7A"reed price, -#00 000.00 -30 000.00 down pa4!ent 3al. in #0 4ears.7 %o prove that the /a"dalena .state +nc. had 3een dealin" all alon" with hi! and not with his sister-in-law and that the /a"dalena .state +nc. Cnew ver4 well that he was the person interested in the lot in Juestion and not his sister-in-law the plaintiff offers in evidence five checCs all drawn 34 hi! in favor of /a"dalena .state +nc. for pa4!ent of the lease of the propert4. .... %here does not see! to 3e an4 dispute re"ardin" the fact that the Velasco fa!il4 was leasin" this propert4 fro! the /a"dalena .state +nc. since 2ece!3er )9 #96#6 that the Velasco fa!il4 so!eti!e in #96) offered to purchase the lot as a result of which (orenDo Velasco thru 0ocorro Velasco !ade the -#0 000.00 deposit or in the lan"ua"e of the defendant 5earnest !one4 or down pa4!ent5 as evidenced 34 .=hi3it A. %he onl4 !atter that re!ains to 3e decided is whether the talCs 3etween the /a"dalena .state +nc. and (orenDo Velasco either directl4 or thru his sister-in-law 0ocorro Velasco ever ripened into a consu!!ated sale. +t is the position of the defendant 9#; that the sale was never consu!!ated and 9); that the contract is unenforcea3le under the 0tatute of Frauds. %he court a Juo a"reed with the respondent5s 9defendant therein; contention that no contract of sale was perfected 3ecause the !inds of the parties did not !eet 7in re"ard to the !anner of pa4!ent.7 %he court a Juo appraisal of this aspect of the action 3elow is correct. %he !aterial aver!ents contained in the petitioners5 co!plaint the!selves disclose a lacC of co!plete 7a"ree!ent in re"ard to the !anner of pa4!ent7 of the lot in Juestion. %he co!plaint states pertinentl4, *. %hat plaintiff and defendant further a"reed that the total down pa4!ent shall 34 -30 000.00 includin" the -#0 000.00 partial pa4!ent !entioned in para"raph 3 hereof and that upon co!pletion of the said down pa4!ent of -30 000.00 the 3alance of ->0 000.00 shall 3e said 34 the plaintiff to the defendant in #0 4ears fro! Nove!3er )9 #96)6 B. %hat the ti!e within the full down pa4!ent of the -30 000.00 was to 3e co!pleted was not specified 34 the parties 3ut the defendant was dul4 co!pensated durin" the said ti!e prior to co!pletion of the down pa4!ent of -30 000.00 34 wa4 of lease rentals on the house e=istin" thereon which was earlier leased 34 defendant to the plaintiff5s sister-in-law 0ocorro H. Velasco and which were dul4 paid to the defendant 34 checCs drawn 34 plaintiff. +t is not difficult to "lean fro! the aforeJuoted aver!ents that the petitioners the!selves ad!it that the4 and the respondent still had to !eet and a"ree on how and when the down-pa4!ent and the install!ent pa4!ents were to 3e paid. 0uch 3ein" the situation it cannot therefore 3e said that a definite and fir! sales a"ree!ent 3etween the parties had 3een perfected over the lot in Juestion. +ndeed this Court has alread4 ruled 3efore that a definite a"ree!ent on the !anner of pa4!ent of the purchase price is an essential ele!ent in the for!ation of a 3indin" and unforcea3le contract of sale. 3 %he fact therefore that the petitioners delivered to the respondent the su! of -#0 000 as part of the down-pa4!ent that the4 had to pa4 cannot 3e considered as sufficient proof of the perfection of an4 purchase and sale a"ree!ent 3etween the parties herein under article #*<) of the new Civil Code as the petitioners the!selves ad!it that so!e essential !atter Q the ter!s of pa4!ent Q still had to 3e !utuall4 covenanted. ACC1R2+NG(F the instant petitioner is here34 denied. No pronounce!ent as to costs.

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Cases on Sales Price

G.R. No. L522741No*e/ber 21, 1273 IN"E!"A"E E!"A"E OF "+E LA"E E-ILIO CA-ON. CONCE,CION ERE?E"A, a$/(#()'ra'r(@5a&&e..ee, *). IGNA"IU! +ENRY BE ORE, EL3OOD ANICAERBOCAER, a#$ -ARY IRENE FALLON -CCOR-ICA, :.a(/a#')5a&&e..a#')> -AR"INIANO O. DE LA CRU , a$/(#()'ra'or. /anuel %. %ono"3anua /anuel 0. %ono"3anua Hr. and @ilado and @ilado for ad!inistratri=-appellee. /artiniano 1. de la CruD for Clai!ants-appellants. 9#; An 7A"ree!ent to 0ell7 9e=hi3it 7#7; e=ecuted on Hanuar4 ## #96# where34 the clai!ants &eDore et al. a"reed to sell their one-half 9#:); share in the hacienda Rosario to A!paro 0ta. Ro!ana and Al3erta vda. de @opon6 9); A 7Release and ?aiver of Clai!s7 9e=hi3it 737; e=ecuted on Hanuar4 #) #96# where34 A!paro 0ta. Ro!ana and Al3erta vda. de @opon for and in consideration of 7their "ratitude for the various services financial and personal7 e=tended to the! 34 .!ilio Ca!on released hi! fro! 7an4 and all clai!s that !a4 have accrued pertainin" to the two-fourth 9):*; pro-indiviso share in @acienda Rosario7 owned 34 the appellants who had 3ound the!selves 7to sell their share in the said @acienda Rosario7 to A!paro and Al3erta 7includin" ri"hts accrued or accruin" 7 and where34 A!paro and Al3erta 3ound the!selves 7to waive in favor of /r. .!ilio Ca!on for his own use and 3enefit said ri"hts accrued or accruin".7 93; A 72eed of 0ale7 9e=hi3it 7)7; e=ecuted on Au"ust * #96# where34 the clai!ants &eDore et al. for and in consideration of the su! of ->< 000 to 3e paid in the !anner stated in the instru!ent sold transferred and conve4ed 7all their ri"hts title interest and participation whether accrued or accruin" in their two-fourth 9):*; pro-indiviso share7 in the hacienda Rosario 7to"ether with all the i!prove!ents now e=istin" thereon includin" its su"ar Juota 7 in favor of A!paro 0ta. Ro!ana and Al3erta vda. de @opon. %he lower court re$ected the appellants5 contention that the su"ar allot!ents and allowances su3$ect of their clai! a"ainst the estate of .!ilio Ca!on were not included in the sale and held that 34 the positive and cate"orical ter!s of the deed of sale all 3enefits accrued and accruin" to the appellants 3efore of Au"ust * #96# were included in the sale. %he court then dis!issed the clai! per its order dated Hul4 )0 #96<. %wo issues are here tendered for resolution to wit, 9#; whether the phrase 7accrued or accruin"7 9in the deed of sale; havin" reference to the clai!ants5 ri"hts title interest and participation in the plantation should 3e interpreted to e=clude the su"ar allot!ents and allowances adherent to the hacienda6 and 9); whether notwithstandin" the a3sence of a written contract of lease for the crop 4ears #9B)-B3 to #960-6# .!ilio Ca!on5s continued cultivation of the hacienda created an e=press trust in favor of the clai!ants. %he pre!ises upon which the appellants would conclude that the allot!ents and allowances were not included in the sale are, that on Hanuar4 #) #96# there was then no sale and therefore 34 the 7Release and ?aiver of Clai!s7 A!paro 0ta. Ro!ana and Al3erta vda. de @opon released and waived nothin" in favor of .!ilio Ca!on6 that the waiver was !ade in advance which is contrar4 to pu3lic polic46 that .!ilio Ca!on was not the vendee in the sale6 that the vendees represented to /artiniano 1. de la CruD that the su"ar Juedans and pala4 clai!ed were not included in the sale and that such was the intention of the parties6 that the words 7accrued and accruin"7 in the deeds are o3scure and since the deeds were prepared 34 Ra!on 0. .re'eta who is a 3rother of the ad!inistrati= Concepcion .re'eta who in turn is the widow of .!ilio Ca!on the o3scure words should not favor the part4 which caused

CA0%R1 H., %his is a direct appeal fro! the order of the Court of First +nstance of Ne"ros 1ccidental dated Hul4 )0 #96< which denied a clai! of the appellants +"natius @enr4 &eDore .lwood 8nicCer3ocCer and /ar4 +rene Fallon /cCor!icC filed a"ainst the estate of the late .!ilio Ca!on in 0pecial -roceedin" <366 of the said court. .!ilio Ca!on was the lessee of the hacienda Rosario located in -ontevedra Ne"ros 1ccidental for the period fro! crop 4ear #9*0-*# to crop 4ear #960-6#. 1ne-half 9#:); pro-indiviso of the said su"ar plantation 3elon"ed to the a3ove-na!ed clai!ants-appellants 9as their inheritance fro! the late %ho!as Fallon; while the other half 3elon"ed to -etronila Alunan vda. de 0ta. Ro!ana _ A!paro 0ta. Ro!ana and Al3erta vda. de @opon 9as their inheritance fro! their !other Rosario 0ta. Ro!ana;. Epon the death of .!ilio Ca!on in #96> his widow Concepcion .re'eta filed a petition in the court a Juo 9docCeted as 0pecial -roceedin" <366; pra4in" for the "rant to her of letters of ad!inistration of the estate of the deceased Ca!on. %he petition was "ranted. %hereafter the court issued an order reJuirin" all persons with !one4 clai!s a"ainst the estate to file their clai!s within the period prescri3ed in the order. %he clai!ants-appellants &eDore et al. thru their $udicial ad!inistrator and counsel /artiniano 1. de la CruD filed a clai! a"ainst the estate in the a!ounts of -6) 06B as the !one4 value of su"ar allot!ents and allowances and -) #00 as the !one4 value of pala4 and rentals or a total of -6* #6B appertainin" to the clai!ants5 half-share in the hacienda. %he appellants and the ad!inistratri=-appellee are a"reed that the late .!ilio Ca!on appropriated for hi!self the a!ounts clai!ed. %he appellants had de!anded pa4!ent of their clai! fro! .!ilio Ca!on when he was still alive 3ut the latter i"nored the de!ands. At the trial three docu!ents the authenticit4 of each of which is not controverted 34 the appellants were su3!itted in evidence 34 the ad!inistratri=-appellee. %hese are,

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Cases on Sales Price

the o3scurit46 that the consideration in the sale which is eJuivalent to -# 300 per hectare is 7cheap67 and that Ca!on5s silence re"ardin" the de!ands !ade upon hi! to pa4 the clai! was an ad!ission of his de3t. %he clai!ants-appellants5 view that at the ti!e of the e=ecution on Hanuar4 #) #96# of the deed of 7Release and ?aiver of Clai!s 7 A!paro 0ta. Ro!ana and Al3erta vda. de @opon could not release or waive accrued clai!s 3elon"in" the clai!ants is correct 3ecause the ri"ht that A!paro and Al3erta then had was a !ere pro!ise 34 the clai!ants to sell their share in the hacienda not the ri"ht to the accrued clai!s. ?hat was a"reed to 3e sold in the future was different fro! what was purportedl4 waived6 and even if the o3$ect in 3oth contracts were the sa!e the waiver would still 3e invalid for it is essential that a ri"ht in order that it !a4 3e validl4 waived !ust 3e in e=istence at the ti!e of the waiver. # Nonetheless whatever defect there was in the waiver was su3seJuentl4 cured 34 the deed of sale of Au"ust * #96# 34 virtue of which the appellants sold not onl4 their pro-indiviso half-share in the hacienda 3ut also their accrued ri"hts therein. +t is i!!aterial that .!ilio Ca!on was not the vendee since what !attered is that the appellants parted with their accrued ri"hts for a valua3le consideration. %hat the vendees represented to /artiniano 1. de la CruD that the su"ar Juedans and pala4 were not included in the sale and that such was the intention of the parties involves a Juestion of fact which is not reviewa3le in a direct appeal to the 0upre!e Court. ) %he words 7accrued or accruin"7 the deed of sale are not o3scure and as the lower court declared are in fact positive and cate"orical enou"h to include accrued allot!ents and allowances. 0ince the said words are not a!3i"uous there is no need to interpret the!. Art. #3>0. +f the ter!s of a contract are clear and leave no dou3t upon the intention of the contractin" parties the literal !eanin" of its stipulations shall control. ... 9Civil Code; %hat the consideration in the sale was 7cheap7 is not a "round for the infir!it4 of the sale. +nadeJuac4 of cause in a contract does not of itself invalidate the contract. 3 %he appellants5 stand that the silence of Ca!on with respect to the several de!and letters sent to hi! was an ad!ission of his de3t is without support or sanction in our law of evidence. Nor was there a chan"e in the $uridical relationship 3etween the hacienda owners and .!ilio Ca!on when after the e=piration of their written contract of lease he continued cultivatin" the hacienda durin" the crop 4ears #9B)-B3 to #960-6#. %he continuance in the cultivation with the acJuiescence of the owners did not convert the ori"inal relationship into an e=press trust as contended 34 appellants 3ut !erel4 i!plied a new lease over the propert4 with the sa!e ter!s and conditions provided in the ori"inal contract e=cept as to the period of the lease. Art. #6>0. +f at the end of the contract the lessee should continue en$o4in" the thin" leased for fifteen da4s with the acJuiescence of the lessor and unless a notice to the contrar4 34 either part4 has previousl4 3een "iven it is understood that there is an i!plied new lease not for the period of the ori"inal contract 3ut for the ti!e esta3lished in articles #6<) and #6<>. %he other ter!s of the ori"inal contract shall 3e revived. 9Civil Code; %here is nothin" in the record that evidence the creation of a fiduciar4 relationship 3etween the lessors and the lessee after the e=piration of their written contract of lease which fiduciar4 relationship is an essential characteristic of trust * and no written instru!ent has 3een pointed to as esta3lishin" an e=press trust which writin" is reJuired in e=press trusts over i!!ova3les. B %here is therefore no 3asis for the appellants5 clai! that an e=press trust was created when Ca!on continued to cultivate the land after the e=piration of the written contract of lease. ACC1R2+NG(F the order a Juo of Hul4 )0 #966 is affir!ed at clai!ants-appellants5 cost.

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Cases on Sales Price

G.R. No. L537631No*e/ber 23, 1261 RE!"I"U"A %. %DA. DE GORDON, 1 &e'('(o#er, *). "+E COUR" OF A,,EAL! 2 a#$ RO!ARIO DUA O, re)&o#$e#'). two parcels of land in Juestion within the one 4ear period prescri3ed 34 law the Cit4 %reasurer of GueDon Cit4 e=ecuted on Hanuar4 * #966 a final deed of sale of said lands and the i!prove!ents thereon6 and that said final deed of sale was also re"istered in the 1ffice of the Re"ister of 2eeds of GueDon Cit4 on Hanuar4 #< #966. %he principal issues to 3e resolved in this appeal are 9#; whether the price is so "rossl4 inadeJuate as to $ustif4 the settin" aside of the pu3lic sale and 9); whether the oppositor MGordonN is entitled to redee! the two parcels of land in Juestion. %..@AN8.. H., %he Court affir!s the appealed decision findin" the sa!e to 3e in accordance with the applica3le law. %he appellate court correctl4 upheld the ta= sale of the real properties at which respondent Rosario 2uaDo acJuired the sa!e and her ownership upon petitioner Restituta V. Vda. de Gordon5s failure to redee! the sa!e havin" found the sale to have 3een conducted 7under the direction and supervision of the Cit4 %reasurer of GueDon Cit4 after the proper procedure and le"al for!alities had 3een dul4 acco!plished.7 %he apppellate court5s decision under review held as follows, %he opposition Mto respondent 2uaDo5s petition for consolidation of ownershipN has not controverted 34 specific denials the !aterial aver!ents in the petition. @ence the !aterial aver!ents in the petition are dee!ed ad!itted. 90ection # Rule 9 Revised Rules of Court; /oreover the opposition has not raised the issue of irre"ularit4 in the pu3lic sale of the two parcels of land in Juestion. %his defense is dee!ed waived. 90ection ) Rule 9 +d.; %he uncontested aver!ents in the petition and the anne= attached to said petition disclose that the two parcels of land in Juestion were sold at pu3lic auction at the Cit4 @all GueDon Cit4 on 2ece!3er 3 #96* under the direction and supervision of the Cit4 %reasurer of GueDon Cit4 after the proper procedures and le"al for!alities had 3een dul4 acco!plished6 that the ta=es a"ainst the two parcels of land in Juestion for the 4ears #9B3 to #963 inclusive re!ained unpaid6 that the Cit4 %reasurer of GueDon Cit4 upon warrant of a certified cop4 of the record of such delinJuenc4 advertised for sale the two parcels of land in Juestion to satisf4 the ta=es penalties and costs for a period of thirt4 930; da4s prior to the sale on 2ece!3er 3 #96* 34 Ceepin" a notice of sale posted at the !ain entrance on the Cit4 @all and in a pu3lic and conspicuous place in the district where the sa!e is located and 34 pu3lication of said notice once a weeC for three 93; weeCs in the 72A+(F /+RR1R7 a newspaper of "eneral circulation in GueDon Cit4 the advertise!ent statin" the a!ount of ta=es and penalties due ti!e and place of sale na!e of the ta=pa4er a"ainst who! the ta=es are levied appro=i!ate area lot and 3locC nu!3er location 34 district street and street nu!3er of the propert46 7hat at the pu3lic sale on 2ece!3er 3 #96* the two parcels of land in Juestion were sold to M2uaDoN for the a!ount of -#0 B00.00 representin" the ta= penalt4 and costs6 that the certificate of sale e=ecuted 34 the Cit4 treasurer was dul4 re"istered on 2ece!3er )< #96* in the office of the Re"ister of 2eeds of GueDon Cit46 that upon the failure of the re"istered owner to redee! the +n 2irector of (ands vs. A3arca 6# -hil. >0 cited 34 the lower court in the order appealed fro! the 0upre!e Court considered the price of -<>>.)B as so inadeJuate to shocC the conscience of the court 3ecause the assessed value of the propert4 in Juestion was -60 000.00. %he assessed value of the land was !ore than si=t4 ti!es the price paid at the auction sale. +n the case at 3ar the price of -#0 B00.00 is a3out one si=th of the total assessed value of the two parcels of land in Juestion and the residential house thereon. %he findin" of the lower court that the house and land in Juestion have a fair !arCet value of not less than -)00 000.00 has no factual 3asis. +t cannot 3e said therefore that the price of -#0 B00.00 is so inadeJuate as to 3e shocCin" to the conscience of the court. /ere inadeJuac4 of the price alone is not sufficient "round to annul the pu3lic sale. 9&arroDo vs. /acarae" <3 -hil. 3><;. /oreover in VelasJueD vs. Coronet B 0CRA 9<B 9<< the 0upre!e Court has held, +t is true that respondent treasurer now clai!s that the prices for which the lands were sold are unconsciona3le considerin" the wide diver"ence 3etween their assessed values and the a!ounts for which the4 had 3een actuall4 sold. @owever while in ordinar4 sales for reasons of eJuit4 a transaction !a4 3e invalidated on the "round of inadeJuac4 of price or when such inadeJuac4 shocCs one5s conscience as to $ustif4the courts to interfere such does not follow when the law "ives to the owner the ri"ht to redee! as when a sale is !ade at pu3lic auction upon the theor4 that the lesser the price the easier it is for the owner to effect the rede!ption. And so it was aptl4 said, ?hen there is the ri"ht to redee! inadeJuac4 of pace should not 3e !aterial 3ecause the $ud"!ent de3tor !a4 reacJuire the propert4 or also sell his ri"ht to %he co!3ined assessed value of the two parcels of land is -#6 <00.00. %he price paid at the pu3lic sale is -#0 B00.00. %he residential house on the land is assessed at -*B B<0.00. &ut the assess!ent was !ade in #96#. %he present value of the residential house !ust 3e !uch less now considerin" the depreciation for over ten 4ears. ?hile the price of -#0 B00.00 is less than the total assessed value of the land and the i!prove!ent thereon said price cannot 3e considered so "rossl4 inadeJuate as to 3e shocCin" to the conscience of the court.

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Cases on Sales Price

redeee! and thus recover the loss he clai!s to have suffered 34 reason of the price o3tained at the auction sale. 9e!phasis supplied;. %he contention that the oppositor can still redee! the two parcels of land in Juestion 3ecause the pu3lic sale has not 3een $udiciall4 confir!ed deserves scant consideration. %he cases cited 34 the oppositor and 34 the lower court all refer to foreclosure of !ort"a"e sales which are 34 e=press provision of law su3$ect to $udicial confir!ation. %he pu3lic sale in the instant case is "overned 34 0ection *0 of Co!!onwealth Act No. *>0 which "ives the delinJuent ta=pa4er a period of one 4ear fro! the date of the sale within which to repurchase the propert4 sold. +n case the delinJuent ta=pa4er does not repurchase the propert4 sold within the period of one 4ear fro! the date of the sale it 3eco!es a !andator4 dut4 of the provincial treasurer to issue in favor of the purchaser a final deed of sale. 9VelasJueD vs. Coronel supra; ?e find that the oppositor is not entitled to repurchase the two parcels of land in Juestion 3ecause she failed to do so within one 4ear fro! the date of the sale thereof. ?@.R.F1R. the order appealed fro! is here34 reversed and the ownership of M2uaDoN over the two parcels of land in Juestion and the i!prove!ents thereon is declared consolidated. %he Re"ister of 2eeds of GueDon Cit4 is here34 ordered to cancel %ransfer Certificates of %itle Nos. #))0* and #))0B and to issue the correspondin" transfer certificates of title to M2uaDoN over the two parcels of land in Juestion upon the pa4!ent of the prescri3ed fees. No pronounce!ent as to costs. 3 %he Court finds petitioner5s assi"n!ent of errors to 3e without !erit. -etitioner5s first assi"n!ent of error as to alle"ed lacC of personal notice of the ta= sale is ne"ated 34 her own aver!ents in her own opposition filed in the court a Juo that 79%;he 1ppositor in the a3ove entitled petition is a wo!an <0 4ears of a"e. 0he was not aware of the auction sale conducted 34 the Cit4 %reasurer of GueDon Cit4 on 2ece!3er 3 #96* or if there was an4 notice sent to her the sa!e did not reach her or it !ust have escaped her !ind considerin" her a"e. ... * -etitioner5s second assi"n!ent of error that the period for rede!ption should 3e the two-4ear period provided in Repu3lic Act No. #)>B liCewise has no !erit since the specific law "overnin" ta= sales of properties in GueDon Cit4 is the GueDon Cit4 Charter Co!!onwealth Act No. B0) which provides in section 3# thereof for a one4ear rede!ption period. %he special law coverin" GueDon Cit4 necessaril4 prevails over the "eneral law. Further!ore as respondent has pointed out as of the ti!e of filin" in #9>* of respondent5s 3rief petitioner had not then for a period of #0 4ears 9and #> 4ears as of now; sou"ht to e=ercise her alle"ed ri"ht of rede!ption or !aCe an actual tender thereof as follows, /orever even if we do concede !erel4 for the saCe of ar"u!ent that the provisions of Rep. Act No. #)>B !a4 3e !ade applica3le in this case which is certainl4 not and -etitioner should have 3een "ranted %?1 9); F.AR0 fro! date of the pu3lic sale within which to e=ercise her ri"ht of rede!ption 4et since the sale of the Juestioned land to herein Respondent in that pu3lic auction in #96* herein -etitioner never had shown an4 "ood faith in e=ercisin" her ri"ht of rede!ption. 0ince #96* when the auction sale tooC place up to the present #9>* or a period of %.N 9#0; F.AR0 have alread4 elapsed and 4et herein -etitioner never !ade an4 tender of pa4!ents with either the Court of First +nstance of GueDon Cit4 or the Court of Appeals or the 0upre!e Court at least to show her "ood faith. Further!ore if herein -etitioner reall4 3elieves in "ood faith that MsheN had still that ri"ht of rede!ption then she should have paid the real estate ta=es 3ut as the records wi" show since #96* -rivate Respondent 2uaDo is the one pa4in" the real estate ta=es of the lands in Juestion B -etitioner5s third and last assi"n!ent of error as to the alle"ed "ross inadeJuac4 of the purchase price !ust liCewise fail. As the Court has held in VelasJueD vs. Coronet 6 alle"ed "ross inadeJuac4 of price is not !aterial 7when the law "ives the owner the ri"ht to redee! as when a sale is !ade at pu3lic auction upon the theor4 that the lesser the price the easier it is for the owner to effect the rede!ption.7 As the Court further stressed in the recent case of %a$onera vs. Court of Appeals > the law "overnin" ta= sales for delinJuent ta=es !a4 3e 7harsh and drastic 3ut it is a necessar4 !eans of insurin" the pro!pt collection of ta=es so essential to the life of the Govern!ent.7 ACC1R2+NG(F the appellate court5s decision under review is here34 affir!ed. ?ithout costs.

46