sales cases 1jkjlijuooui

8/12/2019 Sales Cases 1jkjlijuooui

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Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 103577 October 7, 1996

ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL,ANNABELLE C. GONALES !"or #er$e%" &'( o' be#&%" o" )%or*(& C. T+er, &$&ttor'e-*'"&ct/, CIELITO A. CORONEL, )LORAIA A. ALMONTE, &'( CATALINABALAIS MABANAG, petitioners,vs.TE COURT O) APPEALS, CONCEPCION . ALCARA, &'( RAMONA PATRICIAALCARA, &$$*$te( b- GLORIA ). NOEL &$ &ttor'e-*'"&ct, respondents.

MELO, J.:p

The petition before us has its roots in a coplaint for specific perforance to copelherein petitioners !e"cept the last naed, #atalina $alais Mabana%& to consuatethe sale of a parcel of land 'ith its iproveents located alon% Roosevelt (venue in)ue*on #it+ entered into b+ the parties soetie in anuar+ -/0 for the price ofP-,123,333.33.

The undisputed facts of the case 'ere suari*ed b+ respondent court in this 'ise4

On anuar+ -, -/0, defendants5appellants Roulo #oronel, et al. !hereinafterreferred to as #oronels& e"ecuted a docuent entitled 6Receipt of Do'n Pa+ent6

!7"h. 6(6& in favor of plaintiff Raona Patricia (lcara* !hereinafter referred to asRaona& 'hich is reproduced hereunder4

R7#7IPT O8 DO9N P(:M7NT

P-,123,333.33 ; Total aount

03,333 ; Do'n pa+ent;;;;;;;;;;;

P-,-3,333.33 ; $alance

Received fro Miss Raona Patricia (lcara* of -2< Tio%, )ue*on #it+, the su of8ift+ Thousand Pesos purchase price of our inherited house and lot, covered b+ T#TNo. --


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8or this reason, #oronels canceled and rescinded the contract !7"h. 6(6& 'ith Raonab+ depositin% the do'n pa+ent paid b+ #oncepcion in the ban> in trust for RamonaPatricia Alcaraz.

On 8ebruar+ 11, -/0, #oncepcion, et al., filed a coplaint for specific perforancea%ainst the #oronels and caused the annotation of a notice of lis pendens at the bac>of T#T No. @1=23@ !7"h. 676? 7"h. 606&.

On (pril 1, -/0, #atalina caused the annotation of a notice of adverse clai coverin%the sae propert+ 'ith the Re%istr+ of Deeds of )ue*on #it+ !7"h. 686? 7"h. 6in%s. Apon otion of theparties, the trial court %ave the thirt+ !@3& da+s 'ithin 'hich to siultaneousl+ subittheir respective eoranda, and an additional -0 da+s 'ithin 'hich to subit theircorrespondin% coent or repl+ thereof, after 'hich, the case 'ould be deeedsubitted for resolution.

On (pril -2, -//, the case 'as subitted for resolution before ud%e Re+naldo Roura,'ho 'as then teporaril+ detailed to preside over $ranch /1 of the RT# of )ue*on#it+. On March -, -/, Bud%ent 'as handed do'n b+ ud%e Roura fro his re%ularbench at Macabebe, Papan%a for the )ue*on #it+ branch, disposin% as follo's4

9H7R78OR7, Bud%ent for specific perforance is hereb+ rendered orderin%defendant to e"ecute in favor of plaintiffs a deed of absolute sale coverin% that parcel ofland ebraced in and covered b+ Transfer #ertificate of Title No. @1=23@ !no' T#T No.@@-0/1& of the Re%istr+ of Deeds for )ue*on #it+, to%ether 'ith all the iproveentse"istin% thereon free fro all liens and encubrances, and once accoplished, toiediatel+ deliver the said docuent of sale to plaintiffs and upon receipt thereof, the

said docuent of sale to plaintiffs and upon receipt thereof, the plaintiffs are ordered topa+ defendants the 'hole balance of the purchase price aountin% to P-,-3,333.33 incash. Transfer #ertificate of Title No. @@-0/1 of the Re%istr+ of Deeds for )ue*on #it+in the nae of intervenor is hereb+ canceled and declared to be 'ithout force andeffect. Defendants and intervenor and all other persons claiin% under the are hereb+ordered to vacate the subBect propert+ and deliver possession thereof to plaintiffs.

PlaintiffsC clai for daa%es and attorne+Cs fees, as 'ell as the counterclais ofdefendants and intervenors are hereb+ disissed.

No pronounceent as to costs.

So Ordered.

Macabebe, Papan%a for )ue*on #it+, March -, -/.

!Rollo, p. -3


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#oin% no' to the t'in pra+er for reconsideration of the Decision dated March -, -/rendered in the instant case, resolution of 'hich no' pertains to the undersi%nedPresidin% ud%e, after a eticulous e"aination of the docuentar+ evidencepresented b+ the parties, she is convinced that the Decision of March -, -/ issupported b+ evidence and, therefore, should not be disturbed.

IN VI79 O8 TH7 8OR7OIN, the 6Motion for Reconsideration andFor to (nnulDecision and Render (ne' Decision b+ the Incubent Presidin% ud%e6 dated March13, -/ is hereb+ D7NI7D.

SO ORD7R7D.

)ue*on #it+, Philippines, ul+ -1, -/.

!Rollo, pp. -3/5-3&

Petitioners thereupon interposed an appeal, but on Deceber -in%. In a contract to sell, the prospectiveseller e"plicit+ reserves the transfer of title to the prospective bu+er, eanin%, theprospective seller does not as +et a%ree or consent to transfer o'nership of thepropert+ subBect of the contract to sell until the happenin% of an event, 'hich forpresent purposes 'e shall ta>e as the full pa+ent of the purchase price. 9hat theseller a%rees or obli%es hiself to do is to fulfill is proise to sell the subBect propert+'hen the entire aount of the purchase price is delivered to hi. In other 'ords the fullpa+ent of the purchase price parta>es of a suspensive condition, the non5fulfillent of'hich prevents the obli%ation to sell fro arisin% and thus, o'nership is retained b+ theprospective seller 'ithout further reedies b+ the prospective bu+er. In Roque vs.Lapuz !< S#R( =2- G-/3&, this #ourt had occasion to rule4

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Hence, 9e hold that the contract bet'een the petitioner and the respondent 'as acontract to sell 'here the o'nership or title is retained b+ the seller and is not to passuntil the full pa+ent of the price, such pa+ent bein% a positive suspensive conditionand failure of 'hich is not a breach, casual or serious, but sipl+ an event thatprevented the obli%ation of the vendor to conve+ title fro acEuirin% bindin% force.

Stated positivel+, upon the fulfillent of the suspensive condition 'hich is the fullpa+ent of the purchase price, the prospective sellerCs obli%ation to sell the subBectpropert+ b+ enterin% into a contract of sale 'ith the prospective bu+er becoesdeandable as provided in (rticle -2= of the #ivil #ode 'hich states4

(rt. -2=. ( proise to bu+ and sell a deterinate thin% for a price certain isreciprocall+ deandable.

(n accepted unilateral proise to bu+ or to sell a deterinate thin% for a price certain isbindin% upon the proissor if the proise is supported b+ a consideration distinct frothe price.

( contract to sell a+ thus be defined as a bilateral contract 'hereb+ the prospectiveseller, 'hile e"pressl+ reservin% the o'nership of the subBect propert+ despite deliver+thereof to the prospective bu+er, binds hiself to sell the said propert+ e"clusivel+ tothe prospective bu+er upon fulfillent of the condition a%reed upon, that is, full pa+entof the purchase price.

( contract to sell as defined hereinabove, a+ not even be considered as a conditionalcontract of sale 'here the seller a+ li>e'ise reserve title to the propert+ subBect of thesale until the fulfillent of a suspensive condition, because in a conditional contract ofsale, the first eleent of consent is present, althou%h it is conditioned upon thehappenin% of a contin%ent event 'hich a+ or a+ not occur. If the suspensivecondition is not fulfilled, the perfection of the contract of sale is copletel+ abated !cf.Hoesite and housin% #orp. vs. #ourt of (ppeals, -@@ S#R( === G-/2&. Ho'ever, if

the suspensive condition is fulfilled, the contract of sale is thereb+ perfected, such thatif there had alread+ been previous deliver+ of the propert+ subBect of the sale to thebu+er, o'nership thereto autoaticall+ transfers to the bu+er b+ operation of la''ithout an+ further act havin% to be perfored b+ the seller.

In a contract to sell, upon the fulfillent of the suspensive condition 'hich is the fullpa+ent of the purchase price, o'nership 'ill not autoaticall+ transfer to the bu+eralthou%h the propert+ a+ have been previousl+ delivered to hi. The prospectiveseller still has to conve+ title to the prospective bu+er b+ enterin% into a contract ofabsolute sale.

It is essential to distin%uish bet'een a contract to sell and a conditional contract of salespeciall+ in cases 'here the subBect propert+ is sold b+ the o'ner not to the part+ theseller contracted 'ith, but to a third person, as in the case at bench. In a contract tosell, there bein% no previous sale of the propert+, a third person bu+in% such propert+despite the fulfillent of the suspensive condition such as the full pa+ent of thepurchase price, for instance, cannot be deeed a bu+er in bad faith and the

prospective bu+er cannot see> the relief of reconve+ance of the propert+. There is nodouble sale in such case. Title to the propert+ 'ill transfer to the bu+er after re%istrationbecause there is no defect in the o'ner5sellerCs titleper se, but the latter, of course,a+ be used for daa%es b+ the intendin% bu+er.

In a conditional contract of sale, ho'ever, upon the fulfillent of the suspensivecondition, the sale becoes absolute and this 'ill definitel+ affect the sellerCs titlethereto. In fact, if there had been previous deliver+ of the subBect propert+, the sellerCso'nership or title to the propert+ is autoaticall+ transferred to the bu+er such that, theseller 'ill no lon%er have an+ title to transfer to an+ third person. (ppl+in% (rticle -022of the #ivil #ode, such second bu+er of the propert+ 'ho a+ have had actual orconstructive >no'led%e of such defect in the sellerCs title, or at least 'as char%ed 'iththe obli%ation to discover such defect, cannot be a re%istrant in %ood faith. Such

second bu+er cannot defeat the first bu+erCs title. In case a title is issued to the secondbu+er, the first bu+er a+ see> reconve+ance of the propert+ subBect of the sale.

9ith the above postulates as %uidelines, 'e no' proceed to the tas> of decipherin% thereal nature of the contract entered into b+ petitioners and private respondents.

It is a canon in the interpretation of contracts that the 'ords used therein should be%iven their natural and ordinar+ eanin% unless a technical eanin% 'as intended !Tanvs. #ourt of (ppeals, 1-1 S#R( 0/< G-1&. Thus, 'hen petitioners declared in thesaid 6Receipt of Do'n Pa+ent6 that the+ ;

Received fro Miss Raona Patricia (lcara* of -2< Tio%, )ue*on #it+, the su of

8ift+ Thousand Pesospurchase price of our inherited house and lot, covered b+ T#TNo. -- upon

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receipt of the do'n pa+ent fro private respondent Raona P. (lcara*, to cause theissuance of a ne' certificate of title in their naes fro that of their father, after 'hich,the+ proised to present said title, no' in their naes, to the latter and to e"ecute thedeed of absolute sale 'hereupon, the latter shall, in turn, pa+ the entire balance of thepurchase price.

The a%reeent could not have been a contract to sell because the sellers herein adeno express reservation of ownership or title to the subject parcel of land. 8urtherore,the circustance 'hich prevented the parties fro enterin% into an absolute contract ofsale pertained to the sellers theselves !the certificate of title 'as not in their naes&and not the full pa+ent of the purchase price. Ander the established facts andcircustances of the case, the #ourt a+ safel+ presue that, had the certificate oftitle been in the naes of petitioners5sellers at that tie, there 'ould have been noreason 'h+ an absolute contract of sale could not have been e"ecuted andconsuated ri%ht there and then.

Moreover, unli>e in a contract to sell, petitioners in the case at bar did not erel+proise to sell the properl+ to private respondent upon the fulfillent of the suspensivecondition. On the contrar+, havin% alread+ a%reed to sell the subBect propert+, the+

undertoo> to have the certificate of title chan%ed to their naes and iediatel+thereafter, to e"ecute the 'ritten deed of absolute sale.

Thus, the parties did not erel+ enter into a contract to sell 'here the sellers, aftercopliance b+ the bu+er 'ith certain ters and conditions, proised to sell thepropert+ to the latter. 9hat a+ be perceived fro the respective underta>in%s of theparties to the contract is that petitioners had alread+ a%reed to sell the house and lotthe+ inherited fro their father, copletel+ 'illin% to transfer full o'nership of thesubBect house and lot to the bu+er if the docuents 'ere then in order. It Busthappened, ho'ever, that the transfer certificate of title 'as then still in the nae of theirfather. It 'as ore e"pedient to first effect the chan%e in the certificate of title so as tobear their naes. That is 'h+ the+ undertoo> to cause the issuance of a ne' transferof the certificate of title in their naes upon receipt of the do'n pa+ent in the aount

of P03,333.33. (s soon as the ne' certificate of title is issued in their naes,petitioners 'ere coitted to iediatel+ e"ecute the deed of absolute sale. Onl+then 'ill the obli%ation of the bu+er to pa+ the reainder of the purchase price arise.

There is no doubt that unli>e in a contract to sell 'hich is ost coonl+ entered intoso as to protect the seller a%ainst a bu+er 'ho intends to bu+ the propert+ in installentb+ 'ithholdin% o'nership over the propert+ until the bu+er effects full pa+ent therefor,in the contract entered into in the case at bar, the sellers 'ere the one 'ho 'ereunable to enter into a contract of absolute sale b+ reason of the fact that the certificateof title to the propert+ 'as still in the nae of their father. It 'as the sellers in this case

'ho, as it 'ere, had the ipedient 'hich prevented, so to spea>, the e"ecution of ancontract of absolute sale.

9hat is clearl+ established b+ the plain lan%ua%e of the subBect docuent is that 'henthe said 6Receipt of Do'n Pa+ent6 'as prepared and si%ned b+ petitioners Roeo (.#oronel, et al., the parties had a%reed to a conditional contract of sale, consuationof 'hich is subBect onl+ to the successful transfer of the certificate of title fro the naeof petitionersC father, #onstancio P. #oronel, to their naes.

The #ourt si%nificantl+ notes this suspensive condition 'as, in fact, fulfilled on 8ebruar+


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@. The petitioners5sellers #oronel bound theselves 6to effect the transfer in our naesfro our deceased father #onstancio P. #oronel, the transfer certificate of titleiediatel+ upon receipt of the do'npa+ent above5stated6. The sale was still subjectto this suspensive condition. !7phasis supplied.&

!Rollo, p. -e aposture contrar+ to that 'hich the+ too> 'hen the+ entered into the a%reeent 'ithprivate respondent Raona P. (lcara*. The #ivil #ode e"pressl+ states that4

(rt. -2@-. Throu%h estoppel an adission or representation is rendered conclusiveupon the person a>in% it, and cannot be denied or disproved as a%ainst the personrel+in% thereon.

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Havin% represented theselves as the true o'ners of the subBect propert+ at the tieof sale, petitioners cannot clai no' that the+ 'ere not +et the absolute o'ners thereofat that tie.

Petitioners also contend that althou%h there 'as in fact a perfected contract of salebet'een the and Raona P. (lcara*, the latter breached her reciprocal obli%ation'hen she rendered ipossible the consuation thereof b+ %oin% to the Anited Statesof (erica, 'ithout leavin% her address, telephone nuber, and Special Po'er of(ttorne+ !Para%raphs -2 and -0, (ns'er 'ith #opulsor+ #ounterclai to the(ended #oplaint, p. 1? Rollo, p. 2@&, for 'hich reason, so petitioners conclude, the+'ere correct in unilaterall+ rescindin% rescindin% the contract of sale.

9e do not a%ree 'ith petitioners that there 'as a valid rescission of the contract of salein the instant case. 9e note that these supposed %rounds for petitionersC rescission,are ere alle%ations found onl+ in their responsive pleadin%s, 'hich b+ e"pressprovision of the rules, are deeed controverted even if no repl+ is filed b+ the plaintiffs!Sec. --, Rule


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#atalina $. Mabana% on une 0, -/0. Thus, the second para%raph of (rticle -022shall appl+.

The above5cited provision on double sale presues title or o'nership to pass to thefirst bu+er, the e"ceptions bein%4 !a& 'hen the second bu+er, in %ood faith, re%isters thesale ahead of the first bu+er, and !b& should there be no inscription b+ either of the t'o

bu+ers, 'hen the second bu+er, in %ood faith, acEuires possession of the propert+ahead of the first bu+er. Anless, the second bu+er satisfies these reEuireents, title oro'nership 'ill not transfer to hi to the preBudice of the first bu+er.

In his coentaries on the #ivil #ode, an accepted authorit+ on the subBect, no' adistin%uished eber of the #ourt, ustice ose #. Vitu%, e"plains4

The %overnin% principle isprius tempore,potior jure !first in tie, stron%er in ri%ht&.Jno'led%e b+ the first bu+er of the second sale cannot defeat the first bu+erCs ri%htse"cept 'hen the second bu+er first re%isters in %ood faith the second sale !Olivares vs.on*ales, -0 S#R( @@&. #onversel+, >no'led%e %ained b+ the second bu+er of thefirst sale defeats his ri%hts even if he is first to re%ister, since >no'led%e taints his

re%istration 'ith bad faith !see also (stor%a vs. #ourt of (ppeals, .R. No. 0/0@3, 1no'led%e of an+ defect in the title ofthe propert+ sold.

(s clearl+ borne out b+ the evidence in this case, petitioner Mabana% could not have in%ood faith, re%istered the sale entered into on 8ebruar+ -/, -/0 because as earl+ as

8ebruar+ 11, -/0, a notice of lis pendens had been annotated on the transfercertificate of title in the naes of petitioners, 'hereas petitioner Mabana% re%isteredthe said sale soetie in (pril, -/0. (t the tie of re%istration, therefore, petitionerMabana% >ne' that the sae propert+ had alread+ been previousl+ sold to privaterespondents, or, at least, she 'as char%ed 'ith >no'led%e that a previous bu+er isclaiin% title to the sae propert+. Petitioner Mabana% cannot close her e+es to the

defect in petitionersC title to the propert+ at the tie of the re%istration of the propert+.

This #ourt had occasions to rule that4

If a vendee in a double sale re%isters that sale after he has acEuired >no'led%e thatthere 'as a previous sale of the sae propert+ to a third part+ or that another personclais said propert+ in a pervious sale, the re%istration 'ill constitute a re%istration inbad faith and 'ill not confer upon hi an+ ri%ht. !Salvoro vs. Tane%a, /= S#R( @2G-=/? citin% Palarca vs. Director of and, 2@ Phil. -2


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Manila

THIRD DIVISION

G.R. No. 107207 Noe4ber 23, 1995

IRGILIO R. ROMERO, petitioner,vs.ON. COURT O) APPEALS &'( ENRIUETA CUA A. E ONGSIONG,respondents.

ITUG, J.:

The parties pose this Euestion4 Ma+ the vendor deand the rescission of a contract forthe sale of a parcel of land for a cause traceable to his o'n failure to have thesEuatters on the subBect propert+ evicted 'ithin the contractuall+5stipulated periodK

Petitioner Vir%ilio R. Roero, a civil en%ineer, 'as en%a%ed in the business ofproduction, anufacture and e"portation of perlite filter aids, peralite insulation andprocessed perlite ore. In -//, petitioner and his forei%n partners decided to put up acentral 'arehouse in Metro Manila on a land area of appro"iatel+ 1,333 sEuareeters. The proBect 'as ade >no'n to several freelance real estate bro>ers.

( da+ or so after the announceent, (lfonso 8lores and his 'ife, accopanied b+ a

bro>er, offered a parcel of land easurin% -,01 sEuare eters. ocated in $aran%a+San Dionisio, ParaLaEue, Metro Manila, the lot 'as covered b+ T#T No. @


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-. That the su of 8I8T: THOAS(ND P7SOS !P03,333.33& ON: Philippine#urrenc+, is to be paid upon si%nin% and e"ecution of this instruent.

1. The balance of the purchase price in the aount of ON7 MIION 8IV7 HANDR7D77V7N THOAS(ND SI HANDR7D P7SOS !P-,0--,ati MM, Philippines on this th da+ of une, -//.

!S%d.& !S%d.&

VIRIIO R. ROM7RO 7NRI)A7T( #HA( VD(.

D7 ONSION

Vendee Vendor

SIN7D IN TH7 PR7S7N#7 O84

!S%d.& !S%d.&

Ro'ena #. On%sion% ac> M. #ru* 1

(lfonso 8lores, in behalf of private respondent, forth'ith received and ac>no'led%ed a

chec> for P03,333.33

2

fro petitioner.3

Pursuant to the a%reeent, private respondent filed a coplaint for eBectent !#ivil#ase No. =0=& a%ainst Melchor Musa and 1 other sEuatter failies 'ith theMetropolitan Trial #ourt of ParaLaEue. ( fe' onths later, or on 1- 8ebruar+ -/,Bud%ent 'as rendered orderin% the defendants to vacate the preises. The decision'as handed do'n be+ond the e it upon hiself to eBect thesEuatters, provided, that e"penses 'hich shall be incurred b+ reason thereof shall bechar%eable to the purchase price of the land.

Mean'hile, the Presidential #oission for the Arban Poor !6P#AD6&, throu%h itsRe%ional Director for u*on, 8arle+ O. Viloria, as>ed the Metropolitan Trial #ourt ofParaLaEue for a %race period of 20 da+s fro 1- (pril -/ 'ithin 'hich to relocateand transfer the sEuatter failies. (ctin% favorabl+ on the reEuest, the court suspended

the enforceent of the 'rit of e"ecution accordin%l+.

On 3/ une -/, (tt+. (postol reinded private respondent on the e"pir+ of the 205da+ %race period and his clientCs 'il lin%ness to 6under'rite the e"penses for thee"ecution of the Bud%ent and eBectent of the occupants.65

In his letter of - une -/, (tt+. oaEuin :useco, r., counsel for private respondent,advised (tt+. (postol that the Deed of #onditional Sale had been rendered null andvoid b+ virtue of his clientCs failure to evict the sEuatters fro the preises 'ithin thea%reed


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On 1@ une -/, (tt+. (postol 'rote bac> to e"plain4

The contract of sale bet'een the parties 'as perfected fro the ver+ oent thatthere 'as a eetin% of the inds of the parties upon the subBect lot and the price in theaount of P-,0in% therescission, nael+4 !-& he !sic& is afraid of the sEuatters? and !1& she has spent souch to eBect the fro the preises !p.


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8ailin% to obtain a reconsideration, petitioner filed this petition for revie' on certiorariraisin% issues that, in fine, center on the nature of the contract adverted to and theP03,333.33 reittance ade b+ petitioner.

( perfected contract of sale a+ either be absolute or conditional12dependin% on'hether the a%reeent is devoid of, or subBect to, an+ condition iposed on the

passin(of title of the thin% to be conve+ed or on the obli(ationof a part+ thereto. 9heno'nership is retained until the fulfillent of a positive condition the breach of thecondition 'ill sipl+ prevent the dut+ to conve+ title fro acEuirin% an obli(ator! force.If the condition is iposed on an obli(ationof a part+ 'hich is not coplied 'ith, theother part! a+ either refuse to proceed or 'aive said condition !(rt. -020, #ivil #ode&.9here, of course, the condition is iposed upon theperfectionof the contract itself, thefailure of such condition 'ould prevent the Buridical relation itself fro coin% intoe"istence.13

In deterinin% the real character of the contract, the title %iven to it b+ the parties is notas uch si%nificant as its substance. 8or e"aple, a deed of sale, althou%hdenoinated as a deed of conditional sale, a+ be treated as absolute in nature, if titleto the propert+ sold is not reserved in the vendor or if the vendor is not %ranted the ri%ht

to unilaterall+ rescind the contract predicatedon the fulfillent or non5fulfillent, as the case a+ be, of the prescribed condition.1

The ter 6condition6 in the conte"t of aperfectedcontract of sale pertains, in realit+, tothe copliance b+ one part+ of an underta>in% the fulfillent of 'hich 'ould bec>on, inturn, the deandabilit+ of the reciprocal prestation of the other part+. The reciprocalobli%ations referred to 'ould norall+ be, in the case of vendee, the pa+ent of thea%reed purchase price and, in the case of the vendor, the fulfillent of certain e"press'arranties !'hich, in the case at bench is the tiel+ eviction of the sEuatters on thepropert+&.

It 'ould be futile to challen%e the a%reeent here in Euestion as not bein% a dul+perfected contract. ( sale is at once perfected 'hen a person !the seller& obli%ateshiself, for a price certain, to deliver and to transfer o'nership of a specified thin% orri%ht to another !the bu+er& over 'hich the latter a%rees.15

The obBect of the sale, in the case before us, 'as specificall+ identified to be a -,015sEuare eter lot in San Dionisio, ParaLaEue, Ri*al, covered b+ Transfer #ertificate ofTitle No. @e arran%eents 'ith the sheriff to effect such e"ecution. In his letter of 1@ une-/, counsel for petitioner has tendered pa+ent and deanded forth'ith thee"ecution of the deed of absolute sale. Parentheticall+, this offer to pa+, havin% beenade prior to the deand for rescission, assuin% for the sa>e of ar%uent that sucha deand is proper under (rticle -0123of the #ivil #ode, 'ould li>e'ise suffice todefeat private respondentCs prero%ative to rescind thereunder.

There is no need to still belabor the Euestion of 'hether the P03,333.33 advancepa+ent is reibursable to petitioner or forfeitable b+ private respondent, since, on thebasis of our fore%oin% conclusions, the atter has ceased to be an issue. Suffice it to

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sa+ that petitioner havin% opted to proceed 'ith the sale, neither a+ petitionerdeand its reiburseent fro private respondent nor a+ private respondent subBectit to forfeiture.

9H7R78OR7, the Euestioned decision of the #ourt of (ppeals is hereb+ R7V7RS7D(ND S7T (SID7, and another is entered orderin% petitioner to pa+ private respondent

the balance of the purchase price and the latter to e"ecute the deed of absolute sale infavor of petitioner. No costs.

SO ORD7R7D.

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Manila

THIRD DIVISION

G.R. No. 112212 M&rc# 2, 1998

GREGORIO )ULE, petitioner,vs.COURT O) APPEALS, NINEETC CRU &'( UAN BELARMINO, respondents.

ROMERO, J.:

This petition for revie' on certiorariEuestions the affirance b+ the #ourt of (ppeals ofthe decision 1of the Re%ional Trial #ourt of San Pablo #it+, $ranch @3, disissin% thecoplaint that pra+ed for the nullification of a contract of sale of a -35hectare propert+in Tana+, Ri*al in consideration of the aount of P23,333.33 and a 1.0 carat eerald5cut diaond !#ivil #ase No. SP51200&. The lo'er courtCs decision disposed of the caseas follo's4

9H7R78OR7, preises considered, the #ourt hereb+ renders Bud%ent disissin%the coplaint for lac> of erit and orderin% plaintiff to pa+4

-. Defendant Dra. Ninevetch M. #ru* the su of P@33,333.33 as and for oraldaa%es and the su of P-33,333.33 as and for e"eplar+ daa%es?

1. Defendant (tt+. uan $elarino the su of P103,333.33 as and for oral daa%esand the su of P-03,333.33 as and for e"eplar+ daa%es?

@. Defendant Dra. #ru* and (tt+. $elarino the su of P10,333.33 each as and forattorne+Cs fees and liti%ation e"penses? and

2. The costs of suit.

SO ORD7R7D.

(s found b+ the #ourt of (ppeals and the lo'er court, the antecedent facts of this caseare as follo's4

Petitioner re%orio 8ule, a ban>er b+ profession and a Be'eler at the sae tie,acEuired a -35hectare propert+ in Tana+, Ri*al !hereinafter 6Tana+ propert+6&, coveredb+ Transfer #ertificate of Title No. @13=10 'hich used to be under the nae of 8r.

(ntonio acobe. The latter had ort%a%ed it earlier to the Rural $an> of (lainos !the$an>&, a%una, Inc. to secure a loan in the aount of P-3,333.33, but the ort%a%e'as later foreclosed and the propert+ offered for public auction upon his default.

In ul+ -/2, petitioner, as corporate secretar+ of the ban>, as>ed Reelia Dichosoand Oliva Mendo*a to loo> for a bu+er 'ho i%ht be interested in the Tana+ propert+.The t'o found one in the person of herein private respondent Dr. Ninevetch #ru*. It sohappened that at the tie, petitioner had sho'n interest in bu+in% a pair of eerald5cutdiaond earrin%s o'ned b+ Dr. #ru* 'hich he had seen in anuar+ of the sae +ear'hen his other e"ained and appraised the as %enuine. Dr. #ru*, ho'ever,declined petitionerCs offer to bu+ the Be'elr+ for P-33,333.33. Petitioner then adeanother bid to bu+ the for AS the propert+ 'ho, in turn, found out that no sale or barter 'as feasible becausethe one5+ear period for redeption of the said propert+ had not +et e"pired at the tie.

In an effort to cut throu%h an+ le%al ipedient, petitioner e"ecuted on October -,-/2, a deed of redeption on behalf of 8r. acobe purportedl+ in the aount ofP-0,/=.=/, and on even date, 8r. acobe sold the propert+ to petitioner forP=0,333.33. The haste 'ith 'hich the t'o deeds 'ere e"ecuted is sho'n b+ the factthat the deed of sale 'as notari*ed ahead of the deed of redeption. (s Dr. #ru* hadalread+ a%reed to the proposed barter, petitioner 'ent to Prudential $an> once a%ain tota>e a loo> at the Be'elr+.

In the afternoon of October 1@, -/2, petitioner et (tt+. $elarino at the latterCsresidence to prepare the docuents of sale. 2Dr. #ru* herself 'as not around but (tt+.$elarino 'as a'are that she and petitioner had previousl+ a%reed to e"chan%e a pairof eerald5cut diaond earrin%s for the Tana+ propert+. (tt+. $elarino accordin%l+caused the preparation of a deed of absolute sale 'hile petitioner and Dr. #ru*attended to the safe>eepin% of the Be'elr+.

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15/79

The follo'in% da+, petitioner, to%ether 'ith Dichoso and Mendo*a, arrived at theresidence of (tt+. $elarino to finall+ e"ecute a deed of absolute sale. Petitioner si%nedthe deed and %ave (tt+. $elarino the aount of P-@,=33.33 for necessar+ e"pensesin the transfer of title over the Tana+ propert+. Petitioner also issued a certification tothe effect that the actual consideration of the sale 'as P133,333.33 and notP/3,333.33 as indicated in the deed of absolute sale. The disparit+ bet'een the actual

contract price and the one indicated on the deed of absolute sale 'as purportedl+aied at inii*in% the aount of the capital %ains ta" that petitioner 'ould have toshoulder. Since the Be'elr+ 'as appraised onl+ at P-, arrivin% there at past 0433 p.. Dr. #ru* also arrived shortl+thereafter, but the cashier 'ho >ept the other >e+ to the deposit bo" had alread+ left theban>. Dr. #ru* and Dichoso, therefore, loo>ed for said cashier and found hi havin% ahaircut. (s soon as his haircut 'as finished, the cashier returned to the ban> andarrived there at 042/ p.., ahead of Dr. #ru* and Dichoso 'ho arrived at 0400 p.. Dr.#ru* and the cashier then opened the safet+ deposit bo", the forer retrievin% atransparent plastic or cellophane ba% 'ith the Be'elr+ inside and handin% over the

sae to petitioner. The latter too> the Be'elr+ fro the ba%, 'ent near the electric li%htat the ban>Cs lobb+, held the Be'elr+ a%ainst the li%ht and e"ained it for ten to fifteeninutes. (fter a 'hile, Dr. #ru* as>ed, 614a! na ba i!an56 Petitioner e"pressed hissatisfaction b+ noddin% his head.

8or services rendered, petitioner paid the a%ents, Dichoso and Mendo*a, the aount [email protected] and soe pieces of Be'elr+. He did not, ho'ever, %ive the half of the pairof earrin%s in Euestion 'hich he had earlier proised.

ater, at about /433 oCcloc> in the evenin% of the sae da+, petitioner arrived at theresidence of (tt+. $elarino coplainin% that the Be'elr+ %iven to hi 'as fa>e. Hethen used a tester to prove the alle%ed fa>er+. Mean'hile, at /4@3 p.., Dichoso andMendo*a 'ent to the residence of Dr. #ru* to borro' her car so that, 'ith (tt+.

$elarino, the+ could re%ister the Tana+ propert+. (fter Dr. #ru* had a%reed to lend hercar, Dichoso called up (tt+. $elarino. The latter, ho'ever, instructed Dichoso toproceed iediatel+ to his residence because petitioner 'as there. $elievin% thatpetitioner had finall+ a%reed to %ive the half of the pair of earrin%s, Dichoso 'entposthaste to the residence of (tt+. $elarino onl+ to f ind petitioner alread+deonstratin% 'ith a tester that the earrin%s 'ere fa>e. Petitioner then accusedDichoso and Mendo*a of deceivin% hi 'hich the+, ho'ever, denied. The+ counteredthat petitioner could not have been fooled because he had vast e"perience re%ardin%Be'elr+. Petitioner nonetheless too> bac> the [email protected] and Be'elr+ he had %iventhe.

Thereafter, the %roup decided to %o to the house of a certain Macario Dia+u%a, aBe'eler, to have the earrin%s tested. Dia+u%a, after ta>in% one loo> at the earrin%s,iediatel+ declared the counterfeit. (t around 4@3 p.., petitioner 'ent to one (tt+.Re+naldo (lcantara residin% at a>eside Subdivision in San Pablo #it+, coplainin%about the fa>e Be'elr+. Apon bein% advised b+ the latter, petitioner reported the atterto the police station 'here Dichoso and Mendo*a li>e'ise e"ecuted s'orn stateents.

On October 1 near the door. 9hen as>ed b+ Dra.#ru* if ever+thin% 'as in order, plaintiff even nodded his satisfaction !Hearin% of 8eb.12, -//&. (t that instance, plaintiff did not protest, coplain or be% for additional tieto e"aine further the Be'elries !sic&. $ein% a professional ban>er and en%a%ed in theBe'elr+ business plaintiff is conversant and copetent to detect a fa>e diaond frothe real thin%. Plaintiff 'as accorded the reasonable tie and opportunit+ to ascertainand inspect the Be'elries !sic& in accordance 'ith (rticle -0/2 of the #ivil #ode. Plaintifftoo> deliver+ of the subBect Be'elries !sic& before e Be'elries !sic&, there 'as alread+ undue dela+because of the lapse of a considerable len%th of tie since he %ot hold of subBectBe'elries !sic&. The lapse of t'o !1& hours ore or less before plaintiff coplained isconsidered b+ the #ourt as unreasonable dela+.3

The lo'er court further ruled that all the eleents of a valid contract under (rticle -20/of the #ivil #ode 'ere present, nael+4 !a& consent or eetin% of the inds? !b&deterinate subBect atter, and !c& price certain in one+ or its eEuivalent. The saeeleents, accordin% to the lo'er court, 'ere present despite the fact that thea%reeent bet'een petitioner and Dr. #ru* 'as principall+ a barter contract. The lo'ercourt e"plained thus4

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. . . . PlaintiffCs o'nership over the Tana+ propert+ passed unto Dra. #ru* upon theconstructive deliver+ thereof b+ virtue of the Deed of (bsolute Sale !7"h. D&. On theother hand, the o'nership of Dra. #ru* over the subBect Be'elries !sic& transferred tothe plaintiff upon her actual personal deliver+ to hi at the lobb+ of the Prudential $an>.It is e"pressl+ provided b+ la' that the thin% sold shall be understood as delivered,'hen it is placed in the control and possession of the vendee !(rt. -2=, #ivil #ode?

Juen*le Straff vs. 9atson #o. -@ Phil. 1er+. Thus4

. . . . Veril+, plaintiff is alread+ estopped to coe bac> after the lapse of considerablelen%th of tie to clai that 'hat he %ot 'as fa>e. He is a $usiness Mana%eent%raduate of a Salle Aniversit+, #lass -=/5=, a professional ban>er as 'ell as aBe'eler in his o'n ri%ht. T'o hours is ore than enou%h tie to a>e a s'itch of aRussian diaond 'ith the real diaond. It ust be reebered that in ul+ -/2plaintiff ade a s>etch of the subBect Be'elries !sic& at the Prudential $an>. Plaintiff had

a tester at /433 p.. at the residence of (tt+. $elarino. 9h+ then did he not brin% it out'hen he 'as e"ainin% the subBect Be'elries !sic& at about Cslobb+K Obviousl+, he had no need for it after bein% satisfied of the %enuineness of thesubBect Be'elries !sic&. 9hen Dra. #ru* and plaintiff left the ban> both of the had full+perfored their respective prestations. Once a contract is sho'n to have beenconsuated or full+ perfored b+ the parties thereto, its e"istence and bindin% effectcan no lon%er be disputed. It is irrelevant and iaterial to dispute the due e"ecutionof a contract if both of the have in fact perfored their obli%ations thereunder andtheir respective si%natures and those of their 'itnesses appear upon the face of thedocuent !9eldon #onstruction v. #( .R. No. 5@0=1-, Oct. -1, -/=&. 5

8inall+, in a'ardin% daa%es to the defendants, the lo'er court rear>ed4

The #ourt finds that plaintiff acted in 'anton bad faith. 7"hibit 15$elarino purports tosho' that the Tana+ propert+ is 'orth P10,333.33. Ho'ever, also on that sae da+ it'as e"ecuted, the propert+Cs 'orth 'as a%nified at P=0,333.33 !7"h. @5$elarino&.Ho' could in less than a da+ !Oct. -, -/2& the value 'ould !sic& triple under noral

circustancesK Plaintiff, 'ith the assistance of his a%ents, 'as able to e"chan%e theTana+ propert+ 'hich his ban> valued onl+ at P10,333.33 in e"chan%e for a %enuinepair of eerald cut diaond 'orth P133,333.33 belon%in% to Dra. #ru*. He alsoretrieved the [email protected] and Be'elries !sic& fro his a%ents. $ut he 'as not satisfied inbein% able to %et subBect Be'elries for a son%. He had to file a alicious and unfoundedcase a%ainst Dra. #ru* and (tt+. $elarino 'ho are 'ell >no'n, respected and held inhi%h estee in San Pablo #it+ 'here ever+bod+ practicall+ >no's ever+bod+. Plaintiffcae to #ourt 'ith unclean hands dra%%in% the defendants and soilin% their clean and%ood nae in the process. $oth of the are near the t'ili%ht of their l ives afteraintainin% and nurturin% their %ood reputation in the counit+ onl+ to be stunned'ith a court case. Since the filin% of this case on October 1


17/79

S(M7, (ND IN 8(IIN TO R(NT R7(SON($7 D(M(7S IN 8(VOR O8 TH7P(INTI88.8

(s to the first alle%ation, the #ourt observes that petitioner is essentiall+ raisin% afactual issue as it invites us to e"aine and 'ei%h ane' the facts re%ardin% the%enuineness of the earrin%s bartered in e"chan%e for the Tana+ propert+. This, of

course, 'e cannot do 'ithout undul+ transcendin% the liits of our revie' po'er inpetitions of this nature 'hich are confined erel+ to pure Euestions of la'. 9e accord,as a %eneral rule, conclusiveness to a lo'er courtCs findin%s of fact unless it is sho'n,inter alia, that4 !-& the conclusion is a findin% %rounded on speculations, surises orconBectures? !1& the inference is anifestl+ ista>en, absurd and ipossible? !@& 'henthere is a %rave abuse of discretion? !2& 'hen the Bud%ent is based on aisapprehension of facts? !0& 'hen the findin%s of fact are conflictin%? and !


18/79

each other the thin%s that have been the subBect of the contract 'ith their fruits, and theprice 'ith interest.21

#ontracts that are voidable or annullable, even thou%h there a+ have been nodaa%e to the contractin% parties are4 !-& those 'here one of the parties is incapableof %ivin% consent to a contract? and !1& those 'here the consent is vitiated b+ ista>e,

violence, intiidation, undue influence or f raud. 22(ccordin%l+, petitioner no' stressesbefore this #ourt that he entered into the contract in the belief that the pair of eerald5cut diaond earrin%s 'as %enuine. On the prete"t that those pieces of Be'elr+ turnedout to be counterfeit, ho'ever, petitioner subseEuentl+ sou%ht the nullification of saidcontract on the %round that it 'as, in fact, 6tainted 'ith fraud6 23such that his consent'as vitiated.

There is fraud 'hen, throu%h the insidious 'ords or achinations of one of thecontractin% parties, the other is induced to enter into a contract 'hich, 'ithout the, he'ould not have a%reed to. 2The records, ho'ever, are bare of an+ evidenceanifestin% that private respondents eplo+ed such insidious 'ords or achinations toentice petitioner into enterin% the contract of barter. Neither is there an+ evidencesho'in% that Dr. #ru* induced petitioner to sell his Tana+ propert+ or that she caBoled

hi to ta>e the earrin%s in e"chan%e for said propert+. On the contrar+, Dr. #ru* did notinitiall+ accede to petitionerCs proposal to bu+ the said Be'elr+. Rather, it appears that it'as petitioner, throu%h his a%ents, 'ho led Dr. #ru* to believe that the Tana+ propert+'as 'orth e"chan%in% for her Be'elr+ as he represented that its value 'as P233,333.33or ore than double that of the Be'elr+ 'hich 'as valued onl+ at P-e as to the obBect of thecontract is the substitution of a specific thin% conteplated b+ the parties 'ith another.26In his alle%ations in the coplaint, petitioner insinuated that an inferior one or onethat had onl+ Russian diaonds 'as substituted for the Be'elr+ he 'anted to e"chan%e'ith his -35hectare land. He, ho'ever, failed to prove the fact that prior to the deliver+of the Be'elr+ to hi, private respondents endeavored to a>e such substitution.

i>e'ise, the facts as proven do not support the alle%ation that petitioner hiself couldbe e"cused for the 6ista>e.6 On account of his 'or> as a ban>er5Be'eler, it can beri%htfull+ assued that he 'as an e"pert on atters re%ardin% %es. He had the

intellectual capacit+ and the business acuen as a ban>er to ta>e precautionar+easures to avert such a ista>e, considerin% the value of both the Be'elr+ and hisland. The fact that he had seen the Be'elr+ before October 12, -/2 should not haveprecluded hi fro havin% its %enuineness tested in the presence of Dr. #ru*. Had hedone so, he could have avoided the present situation that he hiself brou%ht about.Indeed, the fin%er of suspicion of s'itchin% the %enuine Be'elr+ for a fa>e inevitabl+

points to hi. Such a ista>e caused b+ anifest ne%li%ence cannot invalidate aBuridical act. 27(s the #ivil #ode provides, 6!t&here is no ista>e if the part+ alle%in% it>ne' the doubt, contin%enc+ or ris> affectin% the obBect of the contract.6 28

8urtherore, petitioner 'as afforded the reasonable opportunit+ reEuired in (rticle-0/2 of the #ivil #ode 'ithin 'hich to e"aine the Be'elr+ as he in fact accepted the'hen as>ed b+ Dr. #ru* if he 'as satisfied 'ith the sae. 29$+ ta>in% the Be'elr+outside the ban>, petitioner e"ecuted an act 'hich 'as ore consistent 'ith hise"ercise of o'nership over it. This %ains credence 'hen it is borne in ind that hehiself had earlier delivered the Tana+ propert+ to Dr. #ru* b+ affi"in% his si%nature tothe contract of sale. That after t'o hours he later claied that the Be'elr+ 'as not theone he intended in e"chan%e for his Tana+ propert+, could not sever the Buridical tie thatno' bound hi and Dr. #ru*. The nature and value of the thin% he had ta>en preclude

its return after that supervenin% period 'ithin 'hich an+thin% could have happened, note"cludin% the alteration of the Be'elr+ or its bein% s'itched 'ith an inferior >ind.

$oth the trial and appellate courts, therefore, correctl+ ruled that there 'ere no le%albases for the nullification of the contract of sale. O'nership over the parcel of land andthe pair of eerald5cut diaond earrin%s had been transferred to Dr. #ru* andpetitioner, respectivel+, upon the actual and constructive deliver+ thereof. 30Saidcontract of sale bein% absolute in nature, title passed to the vendee upon deliver+ of thethin% sold since there 'as no stipulation in the contract that title to the propert+ soldhas been reserved in the seller until full pa+ent of the price or that the vendor has theri%ht to unilaterall+ resolve the contract the oent the bu+er fails to pa+ 'ithin a fi"edperiod. 31Such stipulations are not anifest in the contract of sale.

9hile it is true that the aount of P23,333.33 forin% part of the consideration 'as stillpa+able to petitioner, its nonpa+ent b+ Dr. #ru* is not a sufficient cause to invalidatethe contract or bar the transfer of o'nership and possession of the thin%s e"chan%edconsiderin% the fact that their contract is silent as to 'hen it becoes due anddeandable. 32

Neither a+ such failure to pa+ the balance of the purchase price result in the pa+entof interest thereon. (rticle -0/ of the #ivil #ode prescribes the pa+ent of interest b+the vendee 6for the period bet'een the deliver+ of the thin% and the pa+ent of theprice6 in the follo'in% cases4

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!-& Should it have been so stipulated?

!1& Should the thin% sold and delivered produce fruits or incoe?

!@& Should he be in default, fro the tie of Budicial or e"traBudicial deand for thepa+ent of the price.

Not one of these cases obtains here. This case should, of course, be distin%uishedfro 0e la )ruz v. Le(aspi, 33'here the court held that failure to pa+ the considerationafter the notari*ation of the contract as previousl+ proised resulted in the vendeeCsliabilit+ for pa+ent of interest. In the case at bar, there is no stipulation for the pa+entof interest in the contract of sale nor proof that the Tana+ propert+ produced fruits orincoe. Neither did petitioner deand pa+ent of the price as in fact he filed an actionto nullif+ the contract of sale.

(ll told, petitioner appears to have elevated this case to this #ourt for the principalreason of iti%atin% the aount of daa%es a'arded to both private respondents'hich petitioner considers as 6e"orbitant.6 He contends that private respondents do not

deserve at all the a'ard of daa%es. In fact, he pleads for the total deletion of thea'ard as re%ards private respondent $elarino 'ho he considers a ere 6noinalpart+6 because 6no specific clai for daa%es a%ainst hi6 'as alle%ed in thecoplaint. 9hen he filed the case, all that petitioner 'anted 'as that (tt+. $elarinoshould return to hi the o'nerCs duplicate cop+ of T#T No. @13=10, the deed of salee"ecuted b+ 8r. (ntonio acobe, the deed of redeption and the chec> alloted fore"penses. Petitioner alle%es further that (tt+. $elarino should not have delivered allthose docuents to Dr. #ru* because as the 6la'+er for both the seller and the bu+er inthe sale contract, he should have protected the ri%hts of both parties.6 Moreover,petitioner asserts that there 'as no fir basis for daa%es e"cept for (tt+. $elarinoCsuncorroborated testion+.3

Moral and e"eplar+ daa%es a+ be a'arded 'ithout proof of pecuniar+ loss. In

a'ardin% such daa%es, the court shall ta>e into account the circustances obtainin%in the case said assess daa%es accordin% to its discretion.35To 'arrant the a'ard ofdaa%es, it ust be sho'n that the person to 'ho these are a'arded has sustainedinBur+. He ust li>e'ise establish sufficient data upon 'hich the court can properl+base its estiate of the aount of daa%es.36Stateents of facts should establishsuch data rather than ere conclusions or opinions of 'itnesses. 37Thus4

. . . . 8or oral daa%es to be a'arded, it is essential that the claiant ust havesatisfactoril+ proved durin% the trial the e"istence of the factual basis of the daa%esand its causal connection 'ith the adverse part+Cs acts. If the court has no proof orevidence upon 'hich the clai for oral daa%es could be based, such indenit+could not be outri%htl+ a'arded. The sae holds true 'ith respect to the a'ard of

e"eplar+ daa%es 'here it ust be sho'n that the part+ acted in a 'anton,oppressive or alevolent anner. 38

In this re%ard, the lo'er court appeared to have a'arded daa%es on a %roundanalo%ous to alicious prosecution under (rticle 11- !/& of the #ivil #ode 39as sho'nb+ !-& petitionerCs 6'anton bad faith6 in bloatin% the value of the Tana+ propert+ 'hich

he e"chan%ed for 6a %enuine pair of eerald5cut diaond 'orth P133,33.33?6 and !1&his filin% of a 6alicious and unfounded case6 a%ainst private respondents 'ho 'ere6'ell >no'n, respected and held in hi%h estee in San Pablo #it+ 'here ever+bod+practicall+ >no's ever+bod+6 and 'hose %ood naes in the 6t'ili%ht of their lives6 'eresoiled b+ petitionerCs coin% to court 'ith 6unclean hands,6 thereb+ affectin% theirearnin% capacit+ in the e"ercise of their respective professions and besirchin% theirreputation.

8or its part, the #ourt of (ppeals affired the a'ard of daa%es to private respondentsfor these reasons4

The alice 'ith 'hich 8ule filed this case is apparent. Havin% ta>en possession of the%enuine Be'elr+ of Dra. #ru*, 8ule no' 'ishes to return a fa>e Be'elr+ to Dra. #ru*and, ore than that, %et bac> the real propert+, 'hich his ban> o'ns. 8ule has obtaineda %enuine Be'elr+ 'hich he could sell an+tie, an+'here and to an+bod+, 'ithout thesae bein% traced to the ori%inal o'ner for practicall+ nothin%. This is plain and siple,unBust enrichent.0

9hile, as a rule, oral daa%es cannot be recovered fro a person 'ho has filed acoplaint a%ainst another in %ood faith because it is not sound polic+ to place a penalt+on the ri%ht to liti%ate, 1the sae, ho'ever, cannot appl+ in the case at bar. Thefactual findin%s of the courts a quoto the effect that petitioner filed this case becausehe 'as the victi of fraud? that he could not have been such a victi because heshould have e"ained the Be'elr+ in Euestion before acceptin% deliver+ thereof,considerin% his e"posure to the ban>in% and Be'elr+ businesses? and that he filed theaction for the nullification of the contract of sale 'ith unclean hands, all deserve full

faith and credit to support the conclusion that petitioner 'as otivated ore b+ ill 'illthan a sincere attept to protect his ri%hts in coencin% suit a%ainst respondents.

(s pointed out earlier, a closer scrutin+ of the chain of events iediatel+ prior to andon October 12, -/2 itself 'ould apl+ deonstrate that petitioner 'as not sipl+ne%li%ent in failin% to e"ercise due dili%ence to assure hiself that 'hat he 'as ta>in%in e"chan%e for his propert+ 'ere %enuine diaonds. He had rather placed hiself in asituation fro 'hich it preponderantl+ appears that his seein% i%norance 'as actuall+Bust a ruse. Indeed, he had unnecessaril+ dra%%ed respondents to face the travails ofliti%ation in speculatin% at the possible favorable outcoe of his coplaint 'hen heshould have reali*ed that his supposed predicaent 'as his o'n a>in%. 9e,

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20/79

therefore, see here no seblance of an honest and sincere belief on his part that he'as s'indled b+ respondents 'hich 'ould entitle hi to redress in court. It ust benoted that before petitioner 'as able to convince Dr. #ru* to e"chan%e her Be'elr+ forthe Tana+ propert+, petitioner too> pains to thorou%hl+ e"aine said Be'elr+, even %oin%to the e"tent of s>etchin% their appearance. 9h+ at the precise oent 'hen he 'asabout to ta>e ph+sical possession thereof he failed to e"ert e"tra efforts to chec> their

%enuineness despite the lar%e consideration involved has never been e"plained at allb+ petitioner. His acts thus failed to accord 'ith 'hat an ordinar+ prudent an 'ouldhave done in the sae situation. $ein% an e"perienced ban>er and a businessanhiself 'ho deliberatel+ s>irted a le%al ipedient in the sale of the Tana+ propert+and to inii*e the capital %ains ta" for its e"chan%e, it 'as actuall+ %rossrec>lessness for hi to have erel+ conducted a cursor+ e"aination of the Be'elr+'hen ever+ opportunit+ for doin% so 'as not denied hi. (pparentl+, he carried on hisperson a tester 'hich he later used to prove the alle%ed fa>er+ but 'hich he did not useat the tie 'hen it 'as ost needed. 8urtherore, it too> hi t'o ore hours ofune"plained dela+ before he coplained that the Be'elr+ he received 'ere counterfeit.Hence, 'e stated earlier that an+thin% could have happened durin% all the tie thatpetitioner 'as in coplete possession and control of the Be'elr+, includin% thepossibilit+ of substitutin% the 'ith fa>e ones, a%ainst 'hich respondents 'ould have a%reat deal of difficult+ defendin% theselves. The truth is that petitioner even failed to

successfull+ prove durin% trial that the Be'elr+ he received fro Dr. #ru* 'ere not%enuine. (dd to that the fact that he had been shre'd enou%h to bloat the Tana+propert+Cs price onl+ a fe' da+s after he purchased it at a uch lo'er value. Thus, it isour considered vie' that if this sle' of circustances 'ere connected, li>e pieces offabric se'n into a Euilt, the+ 'ould sufficientl+ deonstrate that his acts 'ere noterel+ ne%li%ent but rather studied and deliberate.

9e do not have here, therefore, a situation 'here petitionerCs coplaint 'as sipl+found later to be based on an erroneous %round 'hich, under settled Burisprudence,'ould not have been a reason for a'ardin% oral and e"eplar+ daa%es. 2Instead,the cause of action of the instant case appears to have been contrived b+ petitionerhiself. In other 'ords, he 'as placed in a situation 'here he could not honestl+evaluate 'hether his cause of action has a seblance of erit, such that it 'ould

reEuire the e"pertise of the courts to put it to a test. His insistent pursuit of such casethen coupled 'ith circustances sho'in% that he hiself 'as %uilt+ in brin%in% aboutthe supposed 'ron%doin% on 'hich he anchored his cause of action 'ould render hians'erable for all daa%es the defendant a+ suffer because of it. This is precisel+'hat too> place in the petition at bar and 'e find no co%ent reason to disturb thefindin%s of the courts belo' that respondents in this case suffered considerabledaa%es due to petitionerCs un'arranted action.

9H7R78OR7, the decision of the #ourt of (ppeals dated October 13, -1 is hereb+(88IRM7D in toto. Dr. #ru*, ho'ever, is ordered to pa+ petitioner the balance of the

purchase price of P23,333.33 'ithin ten !-3& da+s fro the finalit+ of this decision.#osts a%ainst petitioner.

SO ORD7R7D.

20


21/79


Manila

8IRST DIVISION

G.R. No. 9737 +%- 6, 1999

AIME G. ONG, petitioner,vs.TE ONORABLE COURT O) APPEALS, SPOUSES MIGUEL :. ROBLES &'(ALEANRO M. ROBLES,respondents.

;NARESSANTIAGO, J.:

$efore us is a petition for revie' on certiorarifro the Bud%ent rendered b+ the #ourtof (ppeals 'hich, e"cept as to the a'ard of e"eplar+ daa%es, affired the decisionof the Re%ional Trial #ourt of ucena #it+, $ranch of Philippine Islands !$PI&, 3inaccordance 'ith their stipulation that petitioner pa+ the loan of respondents 'ith $PI.

21


22/79

To ans'er for his balance of P-,233,333.33 petitioner issued four !2& post5dated Metro$an> chec>s pa+able to respondent spouses in the aount of P@03,3333.33 each,nael+4 #hec> No. -0==3/ dated une -0, -/@, #hec> No. -0==3 dated Septeber-0, -/@, 5#hec> No. -0==-3 dated Deceber -0, -/@ 6and #hec> No. -0==--dated March -0, -/2. 79hen presented for pa+ent, ho'ever, the chec>s 'eredishonored due to insufficient funds. Petitioner proised to replace the chec>s but

failed to do so. To a>e atters 'orse, out of the P2in% for the return of the properties. Their deand 'as left unheeded, so, onSepteber 1, -/0, the+ filed 'ith the Re%ional Trial #ourt of ucena #it+, $ranch


23/79

the reparation of daa%es caused to the b+ a contract, even if this should be valid, b+restoration of thin%s to their condition at the oent prior to the celebration of thecontract. 1It iplies a contract, 'hich even if initiall+ valid, produces a lesion or apecuniar+ daa%e to soeone. 15

On the other hand, (rticle --- of the Ne' #ivil #ode refers to rescission applicable to

reciprocal obli%ations. Reciprocal obli%ations are those 'hich arise fro the saecause, and in 'hich each part+ is a debtor and a creditor of the other, such that theobli%ation of one is dependent upon the obli%ation of the other. 16The+ are to beperfored siultaneousl+ such that the perforance of one is conditioned upon thesiultaneous fulfillent of the other. Rescission of reciprocal obli%ations under (rticle--- of the Ne' #ivil #ode should be distin%uished fro rescission of contracts under(rticle -@/@. (lthou%h both presuppose contracts validl+ entered into and subsistin%and both reEuire utual restitution 'hen proper, the+ are not entirel+ identical.

9hile (rticle --- uses the ter 6rescission,6 the ori%inal ter 'hich 'as used in theold #ivil #ode, fro 'hich the article 'as based, 'as 6resolution. 176 Resolution is aprincipal action 'hich is based on breach of a part+, 'hile rescission under (rticle -@/@is a subsidiar+ action liited to cases of rescission for lesion under (rticle -@/- of the

Ne' #ivil #ode, 'hich e"pressl+ enuerates the follo'in% rescissible contracts4

-. Those 'hich are entered into b+ %uardians 'henever the 'ards 'ho the+represent suffer lesion b+ ore than one fourth of the value of the thin%s 'hich are theobBect thereof?

1. Those a%reed upon in representation of absentees, if the latter suffer the lesionstated in the precedin% nuber?

@. Those underta>en in fraud of creditors 'hen the latter cannot in an+ anner collectthe clais due the?

2. Those 'hich refer to thin%s under liti%ation if the+ have been entered into b+ thedefendant 'ithout the >no'led%e and approval of the liti%ants or of copetent Budicialauthorit+?

0. (ll other contracts speciall+ declared b+ la' to be subBect to rescission.

Obviousl+, the contract entered into b+ the parties in the case at bar does not fall underan+ of those entioned b+ (rticle -@/-. #onseEuentl+, (rticle -@/@ is inapplicable.

Ma+ the contract entered into bet'een the parties, ho'ever, be rescinded based on(rticle ---K

( careful readin% of the partiesC 6(%reeent of Purchase and Sale6 sho's that it is inthe nature of a contract to sell, as distin%uished fro a contract of sale. In a contract ofsale, the title to the propert+ passes to the vendee upon the deliver+ of the thin% sold?'hile in a contract to sell, o'nership is, b+ a%reeent, reserved in the vendor and isnot to pass to the vendee until full pa+ent of the purchase price. 18In a contract tosell, the pa+ent of the purchase price is a positive suspensive condition, the failure of

'hich is not a breach, casual or serious, but a situation that prevents the obli%ation ofthe vendor to conve+ title fro acEuirin% an obli%ator+ force. 19

Respondents in the case at bar bound theselves to deliver a deed of absolute saleand clean title coverin% the t'o parcels of land upon full pa+ent b+ the bu+er of thepurchase price of P1,333,333.33. This proise to sell 'as subBect to the fulfillent ofthe suspensive condition of full pa+ent of the purchase price b+ the petitioner.Petitioner, ho'ever, failed to coplete pa+ent of the purchase price. The non5fulfillent of the condition of full pa+ent rendered the contract to sell ineffective and'ithout force and effect. It ust be stressed that the breach conteplated in (rticle--- of the Ne' #ivil #ode is the obli%orCs failure to copl+ 'ith anobli%ation. 208ailure to pa+, in this instance, is not even a breach but erel+ an event'hich prevents the vendorCs obli%ation to conve+ title fro acEuirin% bindin%

force.

21

Hence, the a%reeent of the parties in the case at bench a+ be set aside, butnot because of a breach on the part of petitioner for failure to coplete pa+ent of thepurchase price. Rather, his failure to do so brou%ht about a situation 'hich preventedthe obli%ation of respondent spouses to conve+ title fro acEuirin% an obli%ator+ force.

Petitioner insists, ho'ever, that the contract 'as novated as to the anner and tie ofpa+ent.

9e are not persuaded. (rticle -11 of the Ne' #ivil #ode states that, 6In order that anobli%ation a+ be e"tin%uished b+ another 'hich substitutes the sae, it is iperativethat it be so declared in uneEuivocal ters, or that the old and the ne' obli%ations beon ever+ point incopatible 'ith each other.6

Novation is never presued, it ust be proven as a fact either b+ e"press stipulationof the parties or b+ iplication derived fro an irreconcilable incopatibilit+ bet'eenthe old and the ne' obli%ation. 22Petitioner cites the follo'in% instances as proof thatthe contract 'as novated4 the retrieval of the transforers fro petitionerCs custod+and their sale b+ the respondents to M7R(#O on the condition that the proceedsthereof be accounted for b+ the respondents and deducted fro the price of thecontract? the ta>e5over b+ the respondents of the custod+ and operation of the riceill? and the continuous and re%ular 'ithdra'als b+ respondent Mi%uel Robles ofinstallent sus per vouchers !7"hs. 6/6 to 62=6& on the condition that theseinstallents be credited to petitionerCs account and deducted fro the balance of thepurchase price.

23


24/79

#ontrar+ to petitionerCs clai, records sho' that the parties never even intended tonovate their previous a%reeent. It is true that petitioner paid respondents sall susof one+ aountin% to P2/, of Philippine Islands. PetitionerCs letter ofauthori*ation reads4

""" """ """

Ander this authorit+, it is utuall+ understood that 'hatever pa+ent received froM7R(#O as pa+ent to the transfroers 'ill be considered as partial pa+ent of theundersi%nedCs obli%ation to Mr. and Mrs. Mi%uel J. Robles.

The sae 'ill be utili*ed as partial pa+ent to e"istin% loan 'ith the $an> of PhilippineIslands.

It is also utuall+ understood that this pa+ent to the $an> of Philippine Islands 'ill bereibursed to Mr. and Mrs. Mi%uel J. Robles b+ the undersi%ned. G7phasissupplied 2

It should be noted that 'hile it 'as. a%reed that part of the purchase price in the su ofP2


25/79

G.R. No. L11827 +%- 31, 1961

)ERNANO A. GAITE,plaintiff5appellee,vs.ISABELO )ONACIER, GEORGE :RA:Oed the po'er of attorne+ he %ave to aite and the

t'o e"ecuted and si%ned the 6Revocation of Po'er of (ttorne+ and #ontract6, 7"hibit6(6, 8onacier entered into a 6#ontract of Minin% Operation6, cedin%, transferrin%, andconve+in% unto the arap Mines and Seltin% #o., Inc. the ri%ht to develop, e"ploit,and e"plore the inin% clais in Euestion, to%ether 'ith the iproveents therein andthe use of the nae 6arap Iron Mines6 and its %ood 'ill, in consideration of certainro+alties. 8onacier li>e'ise transferred, in the sae docuent, the coplete title to theappro"iatel+ 12,333 tons of iron ore 'hich he acEuired fro aite, to the arap Seltin% #o., in consideration for the si%nin% b+ the copan+ and its stoc>holders ofthe suret+ bonds delivered b+ 8onacier to aite !Record on (ppeal, pp. /152&.

25


26/79

Ap to Deceber /, -00, 'hen the bond 7"hibit 6$6 e"pired 'ith respect to the 8ar7astern Suret+ and Insurance #opan+, no sale of the appro"iatel+ 12,333 tons ofiron ore had been ade b+ the arap Mines Seltin% #o., Inc., nor had thePe use ofthe period %iven the 'hen their bond, 7"hibit 6$6 autoaticall+ e"pired !7"hibits 6#6

to 6#5126&. (nd 'hen 8onacier and his sureties failed to pa+ as deanded b+ aite, thelatter filed the present coplaint a%ainst the in the #ourt of 8i rst Instance of Manila!#ivil #ase No. 1@-3& for the pa+ent of the Po'er in contept, filed b+ appellant 8onacier, and t'o otions to disissthe appeal as havin% becoe acadeic and a otion for ne' trial andFor to ta>eBudicial notice of certain docuents, filed b+ appellee aite. The otion for contept isuneritorious because the ain alle%ation therein that the appellants arap Mines Seltin% #o., Inc. and Jra>o'er had sold the iron ore here in Euestion, 'hich alle%edl+is 6propert+ in liti%ation6, has not been substantiated? and even if true, does not a>ethese appellants %uilt+ of contept, because 'hat is under liti%ation in this appeal isappellee aiteCs ri%ht to the pa+ent of the balance of the price of the ore, and not the

iron ore itself. (s for the several otions presented b+ appellee aite, it is unnecessar+to resolve these otions in vie' of the results that 'e have reached in this case, 'hich'e shall hereafter discuss.

The ain issues presented b+ appellants in this appeal are4

!-& that the lo'er court erred in holdin% that the obli%ation of appellant 8onacier to pa+appellee aite the P


27/79

a. T7N THOAS(ND P7SOS !P-3,333.33& 'ill be paid upon the si%nin% of thisa%reeent.

b. The balance of SIT:58IV7 THOAS(ND P7SOS !P of not bein% paid at all? and that the previous sale or shipent of the ore 'asnot a suspensive condition for the pa+ent of the balance of the a%reed price, but 'asintended erel+ to fi" the future date of the pa+ent.

This issue settled, the ne"t point of inEuir+ is 'hether appellants, 8onacier and hissureties, still have the ri%ht to insist that aite should 'ait for the sale or shipent ofthe ore before receivin% pa+ent? or, in other 'ords, 'hether or not the+ are entitled tota>e full advanta%e of the period %ranted the for a>in% the pa+ent.

9e a%ree 'ith the court belo' that the appellant have forfeited the ri%ht court belo'that the appellants have forfeited the ri%ht to copel aite to 'ait for the sale of the ore

before receivin% pa+ent of the balance of P


28/79

!-& . . .

!1& 9hen he does not furnish to the creditor the %uaranties or securities 'hich he hasproised.

!@& 9hen b+ his o'n acts he has ipaired said %uaranties or securities after theirestablishent, and 'hen throu%h fortuitous event the+ disappear, unless heiediatel+ %ives ne' ones eEuall+ satisfactor+.

(ppellantsC failure to rene' or e"tend the suret+ copan+Cs bond upon its e"pirationplainl+ ipaired the securities %iven to the creditor !appellee aite&, unless iediatel+rene'ed or replaced.

There is no erit in appellantsC ar%uent that aiteCs acceptance of the suret+copan+Cs bond 'ith full >no'led%e that on its face it 'ould autoaticall+ e"pire 'ithinone +ear 'as a 'aiver of its rene'al after the e"piration date. No such 'aiver couldhave been intended, for aite stood to lose and had nothin% to %ain barel+? and if there'as an+, it could be rationall+ e"plained onl+ if the appellants had a%reed to sell the ore

and pa+ aite before the suret+ copan+Cs bond e"pired on Deceber /, -00. $ut inthe latter case the defendants5appellantsC obli%ation to pa+ becae absolute after one+ear fro the transfer of the ore to 8onacier b+ virtue of the deed 7"hibit 6(.6.

(ll the alternatives, therefore, lead to the sae result4 that aite acted 'ithin his ri%htsin deandin% pa+ent and institutin% this action one +ear fro and after the contract!7"hibit 6(6& 'as e"ecuted, either because the appellant debtors had ipaired thesecurities ori%inall+ %iven and thereb+ forfeited an+ further tie 'ithin 'hich to pa+? orbecause the ter of pa+ent 'as ori%inall+ of no ore than one +ear, and the balanceof Ppiles sold b+ appellee aite to appellant 8onacier,

and 'hether, if there had been a short5deliver+ as claied b+ appellants, the+ areentitled to the pa+ent of daa%es, 'e ust, at the outset, stress t'o thin%s4 first, thatthis is a case of a sale of a specific ass of fun%ible %oods for a sin%le price or a lupsu, the Euantit+ of 612,333 tons of iron ore, ore or less,6 stated in the contract7"hibit 6(,6 bein% a ere estiate b+ the parties of the total tonna%e 'ei%ht of theass? and second, that the evidence sho's that neither of the parties had actuall+easured of 'ei%hed the ass, so that the+ both tried to arrive at the total Euantit+ b+a>in% an estiate of the volue thereof in cubic eters and then ultipl+in% it b+ theestiated 'ei%ht per ton of each cubic eter.

The sale bet'een the parties is a sale of a specific ass or iron ore because noprovision 'as ade in their contract for the easurin% or 'ei%hin% of the ore sold inorder to coplete or perfect the sale, nor 'as the price of P=0,333,33 a%reed upon b+the parties based upon an+ such easureent.!see (rt. -2/3, second par., Ne' #ivil#ode&. The subBect atter of the sale is, therefore, a deterinate obBect, the ass, andnot the actual nuber of units or tons contained therein, so that all that 'as reEuired of

the seller aite 'as to deliver in %ood faith to his bu+er all of the ore found in the ass,not'ithstandin% that the Euantit+ delivered is less than the aount estiated b+ the!Mobile Machiner+ Suppl+ #o., Inc. vs. :or> Oilfield Salva%e #o., Inc. -=- So. /=1,appl+in% art. 120 of the ouisiana #ivil #ode&. There is no char%e in this case thataite did not deliver to appellants all the ore found in the stoc>piles in the inin%clais in Euestions? aite had, therefore, coplied 'ith his proise to deliver, andappellants in turn are bound to pa+ the lup price.

$ut assuin% that plaintiff aite undertoo> to sell and appellants undertoo> to bu+, nota definite ass, but appro"iatel+ 12,333 tons of ore, so that an+ substantial differencein this Euantit+ delivered 'ould entitle the bu+ers to recover daa%es for the short5deliver+, 'as there reall+ a short5deliver+ in this caseK

9e thin> not. (s alread+ stated, neither of the parties had actuall+ easured or'ei%hed the 'hole ass of ore cubic eter b+ cubic eter, or ton b+ ton. $oth partiespredicate their respective clais onl+ upon an estiated nuber of cubic eters of oreultiplied b+ the avera%e tonna%e factor per cubic eter.

No', appellee aite asserts that there 'as a total of =,@=0 cubic eters in thestoc>piles of ore that he sold to 8onacier, 'hile appellants contend that b+ actualeasureent, their 'itness #irpriano ManlaL%it found the total volue of ore in thestoc>piles to be onl+ e as the ost reliable estiate of thetonna%e factor of iron ore in this case to be that ade b+ eopoldo 8. (bad, chief of theMines and Metallur%ical Division of the $ureau of Mines, a %overnent pensionado tothe States and a inin% en%ineerin% %raduate of the Aniversities of Nevada and#alifornia, 'ith alost 11 +ears of e"perience in the $ureau of Mines. This 'itnessplaced the tonna%e factor of ever+ cubic eter of iron ore at bet'een @ etric tons asiniu to 0 etric tons as a"iu. This estiate, in turn, closel+ corresponds tothe avera%e tonna%e factor of @.@ adopted in his corrected report !7"hibits 6886 and 885-6& b+ en%ineer Neesio aatero, 'ho 'as sent b+ the $ureau of Mines to theinin% clais involved at the reEuest of appellant Jra>o'er, precisel+ to a>e anofficial estiate of the aount of iron ore in aiteCs stoc>piles after the dispute arose.

28


29/79

7ven %rantin%, then, that the estiate of in% an estiate of the

e"act Euantit+ in tons found in the ass. It ust not be for%otten that the contract7"hibit 6(6 e"pressl+ stated the aount to be 12,333 tons, more or less. !ch. Pine Rivero%%in% Iproveent #o. vs A.S., 1=, 2< . 7d. --in% an+isrepresentation to appellants as to the total Euantit+ of ore in the stoc>piles of theinin% clais in Euestion, as char%ed b+ appellants, since aiteCs estiate appears tobe substantiall+ correct.

9H7R78OR7, findin% no error in the decision appealed fro, 'e hereb+ affir thesae, 'ith costs a%ainst appellants.


Manila

8IRST DIVISION

29


30/79

G.R. No. 11811 ece4ber 7, 1995

TEOORO ACAP, petitioner,vs.COURT O) APPEALS &'( E; E LOS RE;ES, respondents.

PAILLA, J.:

This is a petition for revie' on certiorari of the decision1of the #ourt of (ppeals, 1ndDivision, in #(5.R. No. @


31/79

Durin% the trial before the court a quo, petitioner reiterated his refusal to reco%ni*eprivate respondentCs o'nership over the subBect land. He averred that he continues toreco%ni*e #ose Pido as the o'ner of the said land, and havin% been a re%isteredtenant therein since -no'led%e about an+transfer or sale of the lot to private respondent in -/- and even the follo'in% +earafter aurencianaCs departure for abroad. He denied havin% entered into a verbal leasetenanc+ contract 'ith private respondent and that assuin% that the said lot 'asindeed sold to private respondent 'ithout his >no'led%e, R.(. @/22, as aended,%rants hi the ri%ht to redee the sae at a reasonable price. Petitioner also be'ailedprivate respondentCs eBectent action as a violation of his ri%ht to securit+ of tenureunder P.D. 1=.

On 13 (u%ust --, the lo'er court rendered a decision in favor of private respondent,the dispositive part of 'hich reads4

9H7R78OR7, preises considered, the #ourt renders Bud%ent in favor of theplaintiff, 7d+ de los Re+es, and a%ainst the defendant, Teodoro (cap, orderin% thefollo'in%, to 'it4

-. Declarin% forfeiture of defendantCs preferred ri%ht to issuance of a #ertificate of andTransfer under Presidential Decree No. 1= and his farholdin%s?

1. Orderin% the defendant Teodoro (cap to deliver possession of said far to plaintiff,and?

@. Orderin% the defendant to pa+ P0,333.33 as attorne+Cs fees, the su of P-,333.33 as

e"penses of liti%ation and the aount of P-3,333.33 as actual daa%es.5

In arrivin% at the above5entioned Bud%ent, the trial court stated that the evidencehad established that the subBect land 'as 6sold6 b+ the heirs of #ose Pido to privaterespondent. This is clear fro the follo'in% disEuisitions contained in the trial courtCs si"!e'ise passed on their o'nership of ot --@3 to herein plaintiff !private

respondent&. (s o'ner hereof, plaintiff has the ri%ht to deand pa+ent of rental andthe tenant is obli%ated to pa+ rentals due fro the tie deand is ade. . . .6

""" """ """

#ertainl+, the sale of the Pido fail+ of ot --@3 to herein plaintiff does not of itself

e"tin%uish the relationship. There 'as onl+ a chan%e of the personalit+ of the lessor inthe person of herein plaintiff 7d+ de los Re+es 'ho bein% the purchaser or transferee,assues the ri%hts and obli%ations of the forer lando'ner to the tenant Teodoro (cap,herein defendant.7

(%%rieved, petitioner appealed to the #ourt of (ppeals, iputin% error to the lo'er court'hen it ruled that private respondent acEuired o'nership of ot No. --@3 and that he,as tenant, should pa+ rentals to private respondent and that failin% to pa+ the saefro -/@ to -/=, his ri%ht to a certificate of land transfer under P.D. 1= 'as deeedforfeited.

The #ourt of (ppeals brushed aside petitionerCs ar%uent that the Declaration of

Heirship and 9aiver of Ri%hts !7"hibit 6D6&, the docuent relied upon b+ privaterespondent to prove his o'nership to the lot, 'as e"cluded b+ the lo'er court in itsorder dated 1= (u%ust -3. The order indeed noted that the docuent 'as notidentified b+ #ose PidoCs heirs and 'as not re%istered 'ith the Re%istr+ of Deeds ofNe%ros Occidental. (ccordin% to respondent court, ho'ever, since the Declaration ofHeirship and 9aiver of Ri%hts appears to have been dul+ notari*ed, no further proof ofits due e"ecution 'as necessar+. i>e the trial court, respondent court 'as alsoconvinced that the said docuent stands asprima facieproof of appelleeCs !privaterespondentCs& ownership of the land in dispute.

9ith respect to its non5re%istration, respondent court noted that petitioner had actual>no'led%e of the subBect saleof the land in dispute to private respondent because asearl+ as -/@, he !petitioner& alread+ >ne' of private respondentCs clai over the saidland but 'hich he thereafter denied, and that in -/1, he !petitioner& actuall+ paid rentto private respondent. Other'ise stated, respondent court considered this fact of rentalpa+ent in -/1 as estoppel on petitionerCs part to thereafter refute privaterespondentCs clai of o'nership over the said land. Ander these circustances,respondent court ruled that indeed there 'as deliberate refusal b+ petitioner to pa+ rentfor a continued period of five +ears that erited forfeiture of his other'ise preferredri%ht to the issuance of a certificate of land transfer.

In the present petition, petitioner ipu%ns the decision of the #ourt of (ppeals as not inaccord 'ith the la' and evidence 'hen it rules that private respondent acEuiredo'nership of ot No. --@3 throu%h the aforeentioned Declaration of Heirship and9aiver of Ri%hts.

31


32/79

Hence, the issues to be resolved presentl+ are the follo'in%4

-. 9H7TH7R OR NOT TH7 SA$7#T D7#(R(TION O8 H7IRSHIP (ND 9(IV7RO8 RIHTS IS ( R7#ONI7D MOD7 O8 (#)AIRIN O9N7RSHIP $: PRIV(T7R7SPOND7NT OV7R TH7 OT IN )A7STION.

1. 9H7TH7R OR NOT TH7 S(ID DO#AM7NT #(N $7 #ONSID7R7D ( D77D O8S(7 IN 8(VOR O8 PRIV(T7 R7SPOND7NT O8 TH7 OT IN )A7STION.

Petitioner ar%ues that the Re%ional Trial #ourt, in its order dated = (u%ust -3,e"plicitl+ e"cluded the docuent ar>ed as 7"hibit 6D6 !Declaration of Heirship, etc.&as private respondentCs evidence because it 'as not re%istered 'ith the Re%istr+ ofDeeds and 'as not identified b+ an+one of the heirs of #ose Pido. The #ourt of(ppeals, ho'ever, held the sae to be adissible, it bein% a notari*ed docuent,hence, aprima facie proof of private respondentsC o'nership of the lot to 'hich it refers.

Petitioner points out that the Declaration of Heirship and 9aiver of Ri%hts is not one ofthe reco%ni*ed odes of acEuirin% o'nership under (rticle =-1 of the #ivil #ode.Neither can the sae be considered a deed of sale so as to transfer o'nership of theland to private respondent because no consideration is stated in the contract !assuin%it is a contract or deed of sale&.

Private respondent defends the decision of respondent #ourt of (ppeals as in accord'ith the evidence and the la'. He posits that 'hile it a+ indeed be true that the trialcourt e"cluded his 7"hibit 6D6 'hich is the Declaration of Heirship and 9aiver of Ri%htsas part of his evidence, the trial court declared hi nonetheless o'ner of the subBect lotbased on other evidence adduced durin% the trial, nael+, the notice of adverse clai!7"hibit 676& dul+ re%istered b+ hi 'ith the Re%istr+ of Deeds, 'hich contains theEuestioned Declaration of Heirship and 9aiver of Ri%hts as an inte%ral part thereof.

9e find the petition ipressed 'ith erit.

In the first place, an asserted ri%ht or clai to o'nership or a real ri%ht over a thin%arisin% fro a Buridical act, ho'ever Bustified, is notper sesufficient to %ive rise too'nership over the res. That ri%ht or title ust be copleted b+ fulfillin% certainconditions iposed b+ la'. Hence, o'nership and real ri%hts are acEuired onl+pursuant to a le%al ode or process. 9hile title is the Buridical Bustification, ode is theactual process of acEuisition or transfer of o'nership over a thin% in Euestion.8

Ander (rticle =-1 of the #ivil #ode, the odes of acEuirin% o'nership are %enerall+classified into t'o !1& classes, nael+, the ori(inal mode!i.e., throu%h occupation,acEuisitive prescription, la' or intellectual creation& and the derivative mode !i.e.,

throu%h succession mortis causa or tradition as a result of certain contracts, such assale, barter, donation, assi%nent or utuu&.

In the case at bench, the trial court 'as obviousl+ confused as to the nature and effectof the Declaration of Heirship and 9aiver of Ri%hts, eEuatin% the sae 'ith a contract!deed& of sale. The+ are not the sae.

In a #ontract of Sale, one of the contractin% parties obli%ates hiself to transfer theo'nership of and to deliver a deterinate thin%, and the other part+ to pa+ a pricecertain in one+ or its eEuivalent.9

Apon the other hand, a declaration of heirship and 'aiver of ri%hts operates as a publicinstruent 'hen filed 'ith the Re%istr+ of Deeds 'hereb+ the intestate heirs adBudicateand divide the estate left b+ the decedent aon% theselves as the+ see fit. It is ineffect an e"traBudicial settleent bet'een the heirs under Rule =2 of the Rules of #ourt.10

Hence, there is a ar>ed difference bet'een a saleof hereditar+ ri%hts and a waiver ofhereditar+ ri%hts. The first presues the e"istence of a contract or deed of salebet'een the parties.11The second is, technicall+ spea>in%, a ode of e"tinction ofo'nership 'here there is an abdication or intentional relinEuishent of a >no'n ri%ht'ith >no'led%e of its e"istence and intention to relinEuish it, in favor of other personswho are co


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( notice of adverse clai, b+ its nature, does not ho'ever prove private respondentCso'nership over the tenanted lot. 6( notice of adverse clai is nothin% but a notice of aclai adverse to the re%istered o'ner, the validit+ of 'hich is +et to be established incourt at soe future date, and is no better than a notice of lis pendens'hich is a noticeof a case alread+ pendin% in court.615

It is to be noted that 'hile the e"istence of said adverse clai 'as dul+ proven, there isno evidence 'hatsoever that a deed of sale 'as e"ecuted bet'een #ose PidoCs heirsand private respondent transferrin% the ri%hts of PidoCs heirs to the land in favor ofprivate respondent. Private respondentCs ri%ht or interest therefore in the tenanted lotreains an adverse clai 'hich cannot b+ itself be sufficient to cancel the O#T to theland and title the sae in private respondentCs nae. #onseEuentl+, 'hile thetransaction bet'een PidoCs heirs and private respondent a+ be bindin% on bothparties, the ri%ht of petitioner as a re%istered tenant to the land cannot be perfunctoril+forfeited on a ere alle%ation of private respondentCs o'nership 'ithout thecorrespondin% proof thereof.

Petitioner had been a re%istered tenant in the subBect land since -


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G.R. No. 126 ece4ber , 1998

AL)ONSO UIAA, CRESENTE UIAA, RE;NELA UIAA, EMETRIOUIAA, ELIUTERIA UIAA, EULALIO UIAA, &'(


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0& orderin% the Defendants to pa+ Plaintiffs, Bointl+ and severall+, the aount ofP-3,333.33 representin% attorne+Cs fees?

no'n tothe donor.12(ccordin%, o'nership is iediatel+ transferred to the latter and thato'nership 'ill onl+ revert to the donor if the resolutor+ condition is not fulfilled.

In this case, that resolutor+ condition is the construction of the school. It has been ruledthat 'hen a person donates land to another on the condition that the latter 'ould buildupon the land a school, the condition iposed is not a condition precedent or asuspensive condition but a resolutor+ one. 13Thus, at the tie of the sales ade in

-no'led%e ; thato'nership of the donated propert+ reverted to the donor as provided in the autoaticreversion clause of the deed of donation.

The donor a+ have an inchoate interest in the donated propert+ durin% the t ie thato'nership of the land has not reverted to her. Such inchoate interest a+ be thesubBect of contracts includin% a contract of sale. In this case, ho'ever, 'hat the donorsold 'as the land itself 'hich she no lon%er o'ns. It 'ould have been different if thedonor5seller sold her interests over the propert+ under the deed of donation 'hich issubBect to the possibilit+ of reversion of o'nership arisin% fro the non5fulfillent of theresolutor+ condition.

(s to laches, petitionersC action is not +et barred thereb+. aches presupposes failure orne%lect for an unreasonable and une"plained len%th of tie, to do that 'hich, b+e"ercisin% due dili%ence, could or should have been done earlier? 16it is ne%li%ence oroission to assert a ri%ht 'ithin a reasonable tie, thus, %ivin% rise to a presuptionthat the part+ entitled to assert it either has abandoned or declined to assert it.6 15Itsessential eleents of4

a& #onduct on the part of the defendant, or of one under 'ho he clais, %ivin% rise tothe situation coplained of?

b& Dela+ in assertin% coplainantCs ri%ht after he had >no'led%e of the defendantCsconduct and after he has an opportunit+ to sue?

c& ac> of >no'led%e or notice on the part of the defendant that the coplainant 'ouldassert the ri%ht on 'hich he bases his suit? and,

d& InBur+ or preBudice to the defendant in the event relief is accorded to the coplainant.16

35


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are absent in this case. PetionersC cause of action to Euiet title coenced onl+ 'henthe propert+ reverted to the donor andFor his successors5in5interest in -/=. #ertainl+,'hen the suit 'as initiated the follo'in% +ear, it cannot be said that petioners had slepton their ri%hts for a lon% tie. The -onin% point as to 'hen petitionersC cause of action arose. The+ had no interestover the propert+ at that tie e"cept under the deed of donation to 'hich privaterespondents 'ere not priv+. Moreover, petitioners had previousl+ filed an eBectent suita%ainst private respondents onl+ that it did not prosper on a technicalit+.

$e that at it a+, there is one thin% 'hich ilitates a%ainst the clai of petitioners.Sale, bein% a consensual contract, is perfected b+ ere consent, 'hich is anifestedthe oent there is a eetin% of the inds 17as to the offer and acceptance thereof onthree !@& eleents4 subBect atter, price and ters of pa+ent of the price. 18O'nership b+ the seller on the thin% sold at the tie of the perfection of the contract ofsale is not an eleent for its perfection. 9hat the la' reEuires is that the seller has theri%ht to transfer o'nership at the tie the thin% sold is delivered. 19Perfectionper sedoes not transfer o'nership 'hich occurs upon the actual or constructive deliver+ ofthe thin% sold. 20( perfected contract of sale cannot be challen%ed on the %round ofnon5o'nership on the part of the seller at the tie of its perfection? hence, the sale isstill valid.

The consuation, ho'ever, of the perfected contract is another atter. It occurs uponthe constructive or actual deliver+ of the subBect atter to the bu+er 'hen the seller orher successors5in5interest subseEuentl+ acEuires o'nership thereof. Suchcircustance happened in this case 'hen petitioners ; 'ho are Trinidad )uiBadaCsheirs and successors5in5interest ; becae the o'ners of the subBect propert+ uponthe reversion of the o'nership of the land to the. #onseEuentl+, o'nership istransferred to respondent MondeBar and those 'ho clai their ri%ht fro hi. (rticle-2@2 of the Ne' #ivil #ode supports the rulin% that the sellerCs 6t itle passes b+operation of la' to the bu+er.6 21This rule applies not onl+ 'hen the subBect atter ofthe contract of sale is %oods,22but also to other >inds of propert+, includin% realpropert+. 23

There is also no erit in petitionersC contention that since the lots 'ere o'ned b+ theunicipalit+ at the tie of the sale, the+ 'ere outside the coerce of en under(rticle -23 !2& of the N##?2thus, the contract involvin% the sae is ine"istent andvoid fro the be%innin%. Ho'ever, no'here in (rticle -23 !2& is it provided that theproperties of a unicipalit+, 'hether it be those for public use or its patrionial propert+25are outside the coerce of en. $esides, the lots in this case 'ere conditionall+o'ned b+ the unicipalit+. To rule that the donated properties are outside thecoerce of en 'ould render nu%ator+ the unchallen%ed reasonableness andBustness of the condition 'hich the donor has the ri%ht to ipose as o'ner thereof.Moreover, the obBects referred to as outsides the coerce of an are those 'hichcannot be appropriated, such as the open seas and the heavenl+ bodies.

9ith respect to the trial courtCs a'ard of attorne+Cs fees, liti%ation e"penses and oraldaa%es, there is neither factual nor le%al basis thereof. (ttorne+Cs fees and e"pensesof liti%ation cannot, follo'in% the %eneral rule in (rticle 113/ of the Ne' #ivil #ode, berecovered in this case, there bein% no stipulation to that effect and the case does notfall under an+ of thee"ceptions. 26It cannot be said that private respondents

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