Maxima Hemedes v. CA, Dominium Realty and Construction Corp.

, Enrique Hemedes and R&B

Insurance Corp

Facts
The case is about a question of ownership over an unregistered parcel of land in Laguna, which was
originally owned by the late Jose Hemedes, father of Maxima Hemedes and Enrique Hemedes. Jose Hemedes
executed a document entitled "Donation Inter Vivos With Resolutory Conditions" whereby he conveyed
ownership over the land in favor of his third wife, Justa Kauapin, subject to the resolutory condition that “Upon
the death or remarriage of the DONEE, the title to the property donated shall revert to any of the children, or
their heirs, of the DONOR expressly designated by the DONEE in a public document conveying the property to
the latter.” Kausapin executed "Deed of Conveyance of Unregistered Real Property by Reversion" conveying to
Maxima Hemedes the property. The Original Certificate of Title (OCT) was issued to Maxima with the
annotation that Kausapin shall have usufructuary rights. Later on, R&B Insurance claimed that Maxima and her
husband constituted real estate mortgage as security for loan they obtained in the amount of ₱6,000. R&B
extrajudicially foreclosed the mortgage since Maxima failed to pay the loan even after it became due. It was
sold at a public auction and R&B was the highest bidder. The certificate of sale was then issued to them. They
executed Affidavit of Consolidation and they have acquired the Transfer Certificate of Title (TCT). Meanwhile,
Kausapin executed “Kasunduan” where she transferred the land to Enrique. Enrique then sold it to Dominium
Realty. Later on, Dominium leased the property to Asia Brewery, in which before signing the contract of lease
was able to construct 2 warehouses in the land. R&B sent a letter to Asia Brewery informing of its ownership
and the right to appropriate constructions since Asia is a builder in bad faith. Maxima also wrote a letter where
she asserted that she is the rightful owner of the land. She also claimed that Kausapin should not be given
credence since it is dependent to Enrique. The respondents contended that the Deed of Conveyance in favor of
Maxima was in English and it was not explained to Kausapin, in which it only goes to show that Maxima did
not comply to Art. 1332 of the Civil Code. The trial court and the Court of Appeals ruled in favor of Dominium
and Enrique.

Issue
Whether or not the conveyance made in favor of Enrique Hemedes effectively transferred ownership
over the subject land

Ruling
No.
A party to a contract cannot just evade compliance with contractual obligations by denying the
execution of contract. After a perfect and binding contract has been executed, and it occurs that there is a defect,
the defect must be proven since validity and fulfillment of contracts cannot be left to the will of one of the
parties.

The court found out that it is apparent that Enrique Hemedes influenced his 80-year old mother to
donate the property to him. The Court of Appeals was in error when it sustained the trial court’s decision to
nullify the deed of conveyance in favor of Maxima for failure to comply with Art. 1332 of the Civil Code. Art.
1332 states that, “When one of the parties is unable to read, or if the contract is in a language not understood by
him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have
been fully explained to the former.” This contemplates a situation wherein a contract has been entered into, but
the consent of one of the parties is vitiated by mistake or fraud committed by the other contracting party. Article
1330 states that, “A contract where consent is given through mistake, violence, intimidation, undue influence, or
fraud is voidable.” In order that mistake may invalidate consent, it should refer to the substance of the thing
which is the object of the contract, or to those conditions which have principally moved one or both parties to
enter into the contract. Fraud, on the other hand, is present when, through insidious words or machinations of
one of the contracting parties, the other is induced to enter into a contract which, without them, he would not
have agreed to.

The decision of Court of Appeals is reversed.