Republic of the Philippines
SUPREME COURT 6. WHETHER PRIVATE RESPONDENT'S ACTION FOR SPECIFIC PERFORMANCE HAS PRESCRIBED.
Manila
SPECIAL FIRST DIVISION
G.R. No. 122544 January 28, 2003
REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D. BALZA, ESTER ABAD DIZON and JOSEPH
ANTHONY DIZON, RAYMUND A. DIZON, GERARD A. DIZON and JOSE A. DIZON, JR., petitioners,
vs.
COURT OF APPEALS and OVERLAND EXPRESS LINES, INC., respondents.
x---------------------------------------------------------x
G.R. No. 124741 January 28, 2003
REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D. BALZA, ESTER ABAD DIZON and JOSEPH
ANTHONY DIZON, RAYMUND A. DIZON, GERARD A. DIZON and JOSE A. DIZON, JR., petitioners,
vs.
COURT OF APPEALS HON. MAXIMIANO C. ASUNCION and OVERLAND EXPRESS LINES, INC., respondents.
RESOLUTION
YNARES-SANTIAGO, J.:
On January 28, 1999, this Court rendered judgment in these consolidated cases as follows:
WHEREFORE, in view of the foregoing, both petitions are GRANTED. The decision dated March 29, 1994
and the resolution dated October 19, 1995 in CA-G.R. CV Nos. 25153-54, as well as the decision dated
December 11, 1995 and the resolution dated April 23, 1997 in CA-G.R. SP No. 33113 of the Court of
Appeals are hereby REVERSED and SET ASIDE.
Let the records of this case be remanded to the trial court for immediate execution of the judgment dated
November 22, 1982 in Civil Case No. VIII-29155 of the then City Court (now Metropolitan Trial Court) of
Quezon City, Branch III as affirmed in the decision dated September 26, 1984 of the then Intermediate
Appellate Court (now Court of Appeals) and in the resolution dated June 19, 1985 of this Court.
However, petitioners are ordered to REFUND to private respondent the amount of P300,000.00 which
they received through Alice A. Dizon on June 20, 1975.
SO ORDERED.
Private respondent filed a Motion for Reconsideration, Second Motion for Reconsideration, and Motion to Suspend
Procedural Rules in the Higher Interest of Substantial Justice, all of which have been denied by this Court. This
notwithstanding, the cases were set for oral argument on March 21, 2001, on the following issues:
1. WHETHER THERE ARE CIRCUMSTANCES THAT WOULD JUSTIFY SUSPENSION OF THE RULES OF
COURT;
2. WHETHER THE SUM OF P300,000.00 RECEIVED BY ALICE DIZON FROM PRIVATE RESPONDENT WAS
INTENDED AS PARTIAL PAYMENT OF THE PURCHASE PRICE OF THE PROPERTY, OR AS PAYMENT OF
BACK RENTALS ON THE PROPERTY;
3. WHETHER ALICE DIZON WAS AUTHORIZED TO RECEIVE THE SUM OF P300,000.00 ON BEHALF OF
PETITIONERS;
4. (A) IF SO, WHETHER PETITIONERS ARE ESTOPPED FROM QUESTIONING THE BELATED EXERCISE BY
PRIVATE RESPONDENT OF ITS OPTION TO BUY WHEN THEY ACCEPTED THE SAID PARTIAL PAYMENT;
(B) IF SO, WHETHER ALICE DIZON CAN VALIDLY BIND PETITIONERS IN THE ABSENCE OF A WRITTEN
POWER OF ATTORNEY;
5. (A) WHETHER THERE WAS A PERFECTED CONTRACT OF SALE BETWEEN THE PARTIES;
(B) WHETHER THERE WAS A CONTRACT OF SALE AT LEAST WITH RESPECT TO THE SHARES OF FIDELA
AND ALICE DIZON; AND
In order to resolve the first issue, it is necessary to pass upon the other questions which relate to the merits of the
case. It is only where there exist strong compelling reasons, such as serving the ends of justice and preventing a
miscarriage thereof, that this Court can suspend the rules.1
After reviewing the records, we find that, despite all of private respondent's protestations, there is absolutely no
written proof of Alice Dizon's authority to bind petitioners. First of all, she was not even a co-owner of the
property. Neither was she empowered by the co-owners to act on their behalf.
The acceptance of the amount of P300,000.00, purportedly as partial payment of the purchase price of the land,
was an act integral to the sale of the land. As a matter of fact, private respondent invokes such receipt of payment
as giving rise to a perfected contract of sale. In this connection, Article 1874 of the Civil Code is explicit that: "When
a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing;
otherwise, the sale shall be void."
When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall
be in writing; otherwise, the sale shall be void. Thus the authority of an agent to execute a contract for the
sale of real estate must be conferred in writing and must give him specific authority, either to conduct the
general business of the principal or to execute a binding contract containing terms and conditions which
are in the contract he did execute. A special power of attorney is necessary to enter into any contract by
which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable
consideration. The express mandate required by law to enable an appointee of an agency (couched) in
general terms to sell must be one that expressly mentions a sale or that includes a sale as a necessary
ingredient of the act mentioned. For the principal to confer the right upon an agent to sell real estate, a
power of attorney must so express the powers of the agent in clear and unmistakable language. When
there is any reasonable doubt that the language so used conveys such power, no such construction shall be
given the document.2
It necessarily follows, therefore, that petitioners cannot be deemed to have received partial payment of the
supposed purchase price for the land through Alice Dizon. It cannot even be said that Alice Dizon's acceptance of
the money bound at least the share of Fidela Dizon, in the absence of a written power of attorney from the latter. It
should be borne in mind that the Receipt dated June 20, 1975, while made out in the name of Fidela Dizon, was
signed by Alice Dizon alone.
Moreover, there could not have been a perfected contract of sale. As we held in our Decision dated January 28,
1999, the implied renewal of the contract of lease between the parties affected only those terms and conditions
which are germane to the lessee's right of continued enjoyment of the property. The option to purchase afforded
private respondent expired after the one-year period granted in the contract. Otherwise stated, the implied
renewal of the lease did not include the option to purchase. We see no reason to disturb our ruling on this point,
viz:
In this case, there was a contract of lease for one (1) year with option to purchase. The contract of lease
expired without the private respondent, as lessee, purchasing the property but remained in possession
thereof. Hence, there was an implicit renewal of the contract of lease on a monthly basis. The other terms
of the original contract of lease which are revived in the implied new lease under Article 1670 of the New
Civil Code are only those terms which are germane to the lessee's right of continued enjoyment of the
property leased. Therefore, an implied new lease does not ipso facto carry with it any implied revival of
private respondent's option to purchase (as lessee thereof) the leased premises. The provision entitling
the lessee the option to purchase the leased premises is not deemed incorporated in the impliedly
renewed contract because it is alien to the possession of the lessee. Private respondent's right to exercise
the option to purchase expired with the termination of the original contract of lease for one year. The
rationale of this Court is that:
"This is a reasonable construction of the provision, which is based on the presumption that when the
lessor allows the lessee to continue enjoying possession of the property for fifteen days after the
expiration of the contract he is willing that such enjoyment shall be for the entire period
corresponding to the rent which is customarily paid in this case up to the end of the month
1
 because the rent was paid monthly. Necessarily, if the presumed will of the parties refers to the
enjoyment of possession the presumption covers the other terms of the contract related to such
possession, such as the amount of rental, the date when it must be paid, the care of the property, the
responsibility for repairs, etc. But no such presumption may be indulged in with respect to special
agreements which by nature are foreign to the right of occupancy or enjoyment inherent in a contract
of lease."3
There being no merit in the arguments advanced by private respondent, there is no need to suspend the Rules of
Court and to admit the motion for reconsideration. While it is within the power of the Court to suspend its own
rules, or to except a particular case from its operation, whenever the interest of justice require it, however, the
movant must show strong compelling reasons such as serving the ends of justice and preventing a grave
miscarriage thereof,4 none of which obtains in this case.
Litigation must end sometime and somewhere. An effective and efficient administration of justice requires that,
once a judgment has become final, the winning party be not, through a mere subterfuge, deprived of the fruits of
the verdict. Courts must, therefore, guard against any scheme calculated to bring about that result. Constituted as
they are to put an end to controversies, courts should frown upon any attempt to prolong them.5
ACCORDINGLY, the Motion to Suspend Procedural Rules in the Higher Interest of Substantial Justice filed by
private respondent is DENIED WITH FINALITY. No further pleadings will be entertained in these cases.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 112212 March 2, 1998
GREGORIO FULE, petitioner, vs. COURT OF APPEALS, NINEVETCH CRUZ and JUAN BELARMINO, respondents.
ROMERO, J.:
This petition for review on certiorari questions the affirmance by the Court of Appeals of the decision 1 of the
Regional Trial Court of San Pablo City, Branch 30, dismissing the complaint that prayed for the nullification of a
contract of sale of a 10-hectare property in Tanay, Rizal in consideration of the amount of P40,000.00 and a 2.5
carat emerald-cut diamond (Civil Case No. SP-2455). The lower court's decision disposed of the case as follows:
WHEREFORE, premises considered, the Court hereby renders judgment dismissing the complaint for lack
of merit and ordering plaintiff to pay:
1. Defendant Dra. Ninevetch M. Cruz the sum of P300,000.00 as and for moral damages and the sum of
P100,000.00 as and for exemplary damages;
2. Defendant Atty. Juan Belarmino the sum of P250,000.00 as and for moral damages and the sum of
P150,000.00 as and for exemplary damages;
3. Defendant Dra. Cruz and Atty. Belarmino the sum of P25,000.00 each as and for attorney's fees and
litigation expenses; and
4. The costs of suit.
SO ORDERED.
As found by the Court of Appeals and the lower court, the antecedent facts of this case are as follows:
Petitioner Gregorio Fule, a banker by profession and a jeweler at the same time, acquired a 10-hectare property in
Tanay, Rizal (hereinafter "Tanay property"), covered by Transfer Certificate of Title No. 320725 which used to be
under the name of Fr. Antonio Jacobe. The latter had mortgaged it earlier to the Rural Bank of Alaminos (the Bank),
Laguna, Inc. to secure a loan in the amount of P10,000.00, but the mortgage was later foreclosed and the property
offered for public auction upon his default.
In July 1984, petitioner, as corporate secretary of the bank, asked Remelia Dichoso and Oliva Mendoza to look for a
buyer who might be interested in the Tanay property. The two found one in the person of herein private
respondent Dr. Ninevetch Cruz. It so happened that at the time, petitioner had shown interest in buying a pair of
emerald-cut diamond earrings owned by Dr. Cruz which he had seen in January of the same year when his mother
examined and appraised them as genuine. Dr. Cruz, however, declined petitioner's offer to buy the jewelry for
P100,000.00. Petitioner then made another bid to buy them for US$6,000.00 at the exchange rate of $1.00 to
P25.00. At this point, petitioner inspected said jewelry at the lobby of the Prudential Bank branch in San Pablo City
and then made a sketch thereof. Having sketched the jewelry for twenty to thirty minutes, petitioner gave them
back to Dr. Cruz who again refused to sell them since the exchange rate of the peso at the time appreciated to
P19.00 to a dollar.
Subsequently, however, negotiations for the barter of the jewelry and the Tanay property ensued. Dr. Cruz
requested herein private respondent Atty. Juan Belarmino to check the property who, in turn, found out that no
sale or barter was feasible because the one-year period for redemption of the said property had not yet expired at
the time.
In an effort to cut through any legal impediment, petitioner executed on October 19, 1984, a deed of redemption on
behalf of Fr. Jacobe purportedly in the amount of P15,987.78, and on even date, Fr. Jacobe sold the property to
petitioner for P75,000.00. The haste with which the two deeds were executed is shown by the fact that the deed of
sale was notarized ahead of the deed of redemption. As Dr. Cruz had already agreed to the proposed barter,
petitioner went to Prudential Bank once again to take a look at the jewelry.
In the afternoon of October 23, 1984, petitioner met Atty. Belarmino at the latter's residence to prepare the
documents of sale.2 Dr. Cruz herself was not around but Atty. Belarmino was aware that she and petitioner had
previously agreed to exchange a pair of emerald-cut diamond earrings for the Tanay property. Atty. Belarmino
accordingly caused the preparation of a deed of absolute sale while petitioner and Dr. Cruz attended to the
safekeeping of the jewelry.
The following day, petitioner, together with Dichoso and Mendoza, arrived at the residence of Atty. Belarmino to
finally execute a deed of absolute sale. Petitioner signed the deed and gave Atty. Belarmino the amount of
P13,700.00 for necessary expenses in the transfer of title over the Tanay property. Petitioner also issued a
certification to the effect that the actual consideration of the sale was P200,000.00 and not P80,000.00 as indicated
in the deed of absolute sale. The disparity between the actual contract price and the one indicated on the deed of
absolute sale was purportedly aimed at minimizing the amount of the capital gains tax that petitioner would have
to shoulder. Since the jewelry was appraised only at P160,000.00, the parties agreed that the balance of
P40,000.00 would just be paid later in cash.
As pre-arranged, petitioner left Atty. Belarmino's residence with Dichoso and Mendoza and headed for the bank,
arriving there at past 5:00 p.m. Dr. Cruz also arrived shortly thereafter, but the cashier who kept the other key to
the deposit box had already left the bank. Dr. Cruz and Dichoso, therefore, looked for said cashier and found him
having a haircut. As soon as his haircut was finished, the cashier returned to the bank and arrived there at 5:48
p.m., ahead of Dr. Cruz and Dichoso who arrived at 5:55 p.m. Dr. Cruz and the cashier then opened the safety
deposit box, the former retrieving a transparent plastic or cellophane bag with the jewelry inside and handing over
the same to petitioner. The latter took the jewelry from the bag, went near the electric light at the bank's lobby,
held the jewelry against the light and examined it for ten to fifteen minutes. After a while, Dr. Cruz asked, "Okay na
ba iyan?" Petitioner expressed his satisfaction by nodding his head.
For services rendered, petitioner paid the agents, Dichoso and Mendoza, the amount of US$300.00 and some
pieces of jewelry. He did not, however, give them half of the pair of earrings in question which he had earlier
promised.
Later, at about 8:00 o'clock in the evening of the same day, petitioner arrived at the residence of Atty. Belarmino
complaining that the jewelry given to him was fake. He then used a tester to prove the alleged fakery. Meanwhile,
at 8:30 p.m., Dichoso and Mendoza went to the residence of Dr. Cruz to borrow her car so that, with Atty.
Belarmino, they could register the Tanay property. After Dr. Cruz had agreed to lend her car, Dichoso called up
Atty. Belarmino. The latter, however, instructed Dichoso to proceed immediately to his residence because
petitioner was there. Believing that petitioner had finally agreed to give them half of the pair of earrings, Dichoso
2
went posthaste to the residence of Atty. Belarmino only to find petitioner already demonstrating with a tester that
the earrings were fake. Petitioner then accused Dichoso and Mendoza of deceiving him which they, however,
denied. They countered that petitioner could not have been fooled because he had vast experience regarding
jewelry. Petitioner nonetheless took back the US$300.00 and jewelry he had given them.
Thereafter, the group decided to go to the house of a certain Macario Dimayuga, a jeweler, to have the earrings
tested. Dimayuga, after taking one look at the earrings, immediately declared them counterfeit. At around 9:30
p.m., petitioner went to one Atty. Reynaldo Alcantara residing at Lakeside Subdivision in San Pablo City,
complaining about the fake jewelry. Upon being advised by the latter, petitioner reported the matter to the police
station where Dichoso and Mendoza likewise executed sworn statements.
On October 26, 1984, petitioner filed a complaint before the Regional Trial Court of San Pablo City against private
respondents praying, among other things, that the contract of sale over the Tanay property be declared null and
void on the ground of fraud and deceit.
On October 30, 1984, the lower court issued a temporary restraining order directing the Register of Deeds of Rizal
to refrain from acting on the pertinent documents involved in the transaction. On November 20, 1984, however,
the same court lifted its previous order and denied the prayer for a writ of preliminary injunction.
After trial, the lower court rendered its decision on March 7, 1989. Confronting the issue of whether or not the
genuine pair of earrings used as consideration for the sale was delivered by Dr. Cruz to petitioner, the lower court
said:
The Court finds that the answer is definitely in the affirmative. Indeed, Dra. Cruz delivered (the) subject
jewelries (sic) into the hands of plaintiff who even raised the same nearer to the lights of the lobby of the
bank near the door. When asked by Dra. Cruz if everything was in order, plaintiff even nodded his
satisfaction (Hearing of Feb. 24, 1988). At that instance, plaintiff did not protest, complain or beg for
additional time to examine further the jewelries (sic). Being a professional banker and engaged in the
jewelry business plaintiff is conversant and competent to detect a fake diamond from the real thing.
Plaintiff was accorded the reasonable time and opportunity to ascertain and inspect the jewelries (sic) in
accordance with Article 1584 of the Civil Code. Plaintiff took delivery of the subject jewelries (sic) before
6:00 p.m. of October 24, 1984. When he went at 8:00 p.m. that same day to the residence of Atty.
Belarmino already with a tester complaining about some fake jewelries (sic), there was already undue
delay because of the lapse of a considerable length of time since he got hold of subject jewelries (sic). The
lapse of two (2) hours more or less before plaintiff complained is considered by the Court as unreasonable
delay.3
The lower court further ruled that all the elements of a valid contract under Article 1458 of the Civil Code were
present, namely: (a) consent or meeting of the minds; (b) determinate subject matter, and (c) price certain in
money or its equivalent. The same elements, according to the lower court, were present despite the fact that the
agreement between petitioner and Dr. Cruz was principally a barter contract. The lower court explained thus:
. . . . Plaintiff's ownership over the Tanay property passed unto Dra. Cruz upon the constructive delivery
thereof by virtue of the Deed of Absolute Sale (Exh. D). On the other hand, the ownership of Dra. Cruz over
the subject jewelries (sic) transferred to the plaintiff upon her actual personal delivery to him at the lobby
of the Prudential Bank. It is expressly provided by law that the thing sold shall be understood as delivered,
when it is placed in the control and possession of the vendee (Art. 1497, Civil Code; Kuenzle & Straff vs.
Watson & Co. 13 Phil. 26). The ownership and/or title over the jewelries (sic) was transmitted
immediately before 6:00 p.m. of October 24, 1984. Plaintiff signified his approval by nodding his head.
Delivery or tradition, is one of the modes of acquiring ownership (Art. 712, Civil Code).
Similarly, when Exhibit D was executed, it was equivalent to the delivery of the Tanay property in favor of
Dra. Cruz. The execution of the public instrument (Exh. D) operates as a formal or symbolic delivery of the
Tanay property and authorizes the buyer, Dra. Cruz to use the document as proof of ownership (Florendo
v. Foz, 20 Phil. 399). More so, since Exhibit D does not contain any proviso or stipulation to the effect that
title to the property is reserved with the vendor until full payment of the purchase price, nor is there a
stipulation giving the vendor the right to unilaterally rescind the contract the moment the vendee fails to
pay within a fixed period (Taguba v. Vda. De Leon, 132 SCRA 722; Luzon Brokerage Co. Inc. vs. Maritime
Building Co. Inc. 86 SCRA 305; Froilan v. Pan Oriental Shipping Co. et al. 12 SCRA 276). 4
Aside from concluding that the contract of barter or sale had in fact been consummated when petitioner and Dr.
Cruz parted ways at the bank, the trial court likewise dwelt on the unexplained delay with which petitioner
complained about the alleged fakery. Thus:
. . . . Verily, plaintiff is already estopped to come back after the lapse of considerable length of time to claim
that what he got was fake. He is a Business Management graduate of La Salle University, Class 1978-79, a
professional banker as well as a jeweler in his own right. Two hours is more than enough time to make a
switch of a Russian diamond with the real diamond. It must be remembered that in July 1984 plaintiff
made a sketch of the subject jewelries (sic) at the Prudential Bank. Plaintiff had a tester at 8:00 p.m. at the
residence of Atty. Belarmino. Why then did he not bring it out when he was examining the subject
jewelries (sic) at about 6:00 p.m. in the bank's lobby? Obviously, he had no need for it after being satisfied
of the genuineness of the subject jewelries (sic). When Dra. Cruz and plaintiff left the bank both of them
had fully performed their respective prestations. Once a contract is shown to have been consummated or
fully performed by the parties thereto, its existence and binding effect can no longer be disputed. It is
irrelevant and immaterial to dispute the due execution of a contract if both of them have in fact performed
their obligations thereunder and their respective signatures and those of their witnesses appear upon the
face of the document (Weldon Construction v. CA G.R. No. L-35721, Oct. 12, 1987).5
Finally, in awarding damages to the defendants, the lower court remarked:
The Court finds that plaintiff acted in wanton bad faith. Exhibit 2-Belarmino purports to show that the
Tanay property is worth P25,000.00. However, also on that same day it was executed, the property's worth
was magnified at P75,000.00 (Exh. 3-Belarmino). How could in less than a day (Oct. 19, 1984) the value
would (sic) triple under normal circumstances? Plaintiff, with the assistance of his agents, was able to
exchange the Tanay property which his bank valued only at P25,000.00 in exchange for a genuine pair of
emerald cut diamond worth P200,000.00 belonging to Dra. Cruz. He also retrieved the US$300.00 and
jewelries (sic) from his agents. But he was not satisfied in being able to get subject jewelries for a song. He
had to file a malicious and unfounded case against Dra. Cruz and Atty. Belarmino who are well known,
respected and held in high esteem in San Pablo City where everybody practically knows everybody.
Plaintiff came to Court with unclean hands dragging the defendants and soiling their clean and good name
in the process. Both of them are near the twilight of their lives after maintaining and nurturing their good
reputation in the community only to be stunned with a court case. Since the filing of this case on October
26, 1984 up to the present they were living under a pall of doubt. Surely, this affected not only their
earning capacity in their practice of their respective professions, but also they suffered besmirched
reputations. Dra. Cruz runs her own hospital and defendant Belarmino is a well respected legal
practitioner. The length of time this case dragged on during which period their reputation were (sic)
tarnished and their names maligned by the pendency of the case, the Court is of the belief that some of the
damages they prayed for in their answers to the complaint are reasonably proportionate to the sufferings
they underwent (Art. 2219, New Civil Code). Moreover, because of the falsity, malice and baseless nature of
the complaint defendants were compelled to litigate. Hence, the award of attorney's fees is warranted
under the circumstances (Art. 2208, New Civil Code).6
From the trial court's adverse decision, petitioner elevated the matter to the Court of Appeals. On October 20,
1992, the Court of Appeals, however, rendered a decision 7 affirming in toto the lower court's decision. His motion
for reconsideration having been denied on October 19, 1993, petitioner now files the instant petition alleging that:
I. THE TRIAL COURT ERRED IN DISMISSING PLAINTIFF'S COMPLAINT AND IN HOLDING THAT THE
PLAINTIFF ACTUALLY RECEIVED A GENUINE PAIR OF EMERALD CUT DIAMOND EARRING(S) FROM
DEFENDANT CRUZ . . . ;
II. THE TRIAL COURT ERRED IN AWARDING MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES
IN FAVOR OF DEFENDANTS AND AGAINST THE PLAINTIFF IN THIS CASE; and
III. THE TRIAL, COURT ERRED IN NOT DECLARING THE DEED OF SALE OF THE TANAY PROPERTY (EXH.
"D") AS NULL AND VOID OR IN NOT ANNULLING THE SAME, AND IN FAILING TO GRANT REASONABLE
DAMAGES IN FAVOR OF THE PLAINTIFF.8
3
As to the first allegation, the Court observes that petitioner is essentially raising a factual issue as it invites us to
examine and weigh anew the facts regarding the genuineness of the earrings bartered in exchange for the Tanay
property. This, of course, we cannot do without unduly transcending the limits of our review power in petitions of
this nature which are confined merely to pure questions of law. We accord, as a general rule, conclusiveness to a
lower court's findings of fact unless it is shown, inter alia, that: (1) the conclusion is a finding grounded on
speculations, surmises or conjectures; (2) the inference is manifestly mistaken, absurd and impossible; (3) when
there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the
findings of fact are conflicting; and (6) when the Court of Appeals, in making its findings, went beyond the issues of
the case and the same is contrary to the admission of both parties. 9 We find nothing, however, that warrants the
application of any of these exceptions.
Consequently, this Court upholds the appellate court's findings of fact especially because these concur with those
of the trial court which, upon a thorough scrutiny of the records, are firmly grounded on evidence presented at the
trial. 10 To reiterate, this Court's jurisdiction is only limited to reviewing errors of law in the absence of any
showing that the findings complained of are totally devoid of support in the record or that they are glaringly
erroneous as to constitute serious abuse of discretion. 11
Nonetheless, this Court has to closely delve into petitioner's allegation that the lower court's decision of March 7,
1989 is a "ready-made" one because it was handed down a day after the last date of the trial of the case. 12
Petitioner, in this regard, finds it incredible that Judge J. Ausberto Jaramillo was able to write a 12-page single-
spaced decision, type it and release it on March 7, 1989, less than a day after the last hearing on March 6, 1989. He
stressed that Judge Jaramillo replaced Judge Salvador de Guzman and heard only his rebuttal testimony.
This allegation is obviously no more than a desperate effort on the part of petitioner to disparage the lower court's
findings of fact in order to convince this Court to review the same. It is noteworthy that Atty. Belarmino clarified
that Judge Jaramillo had issued the first order in the case as early as March 9, 1987 or two years before the
rendition of the decision. In fact, Atty. Belarmino terminated presentation of evidence on October 13, 1987, while
Dr. Cruz finished hers on February 4, 1989, or more than a month prior to the rendition of the judgment. The
March 6, 1989 hearing was conducted solely for the presentation of petitioner's rebuttal testimony. 13 In other
words, Judge Jaramillo had ample time to study the case and write the decision because the rebuttal evidence
would only serve to confirm or verify the facts already presented by the parties.
The Court finds nothing anomalous in the said situation. No proof has been adduced that Judge Jaramillo was
motivated by a malicious or sinister intent in disposing of the case with dispatch. Neither is there proof that
someone else wrote the decision for him. The immediate rendition of the decision was no more than Judge
Jaramillo's compliance with his duty as a judge to "dispose of the court's business promptly and decide cases
within the required periods." 14 The two-year period within which Judge Jaramillo handled the case provided him
with all the time to study it and even write down its facts as soon as these were presented to court. In fact, this
Court does not see anything wrong in the practice of writing a decision days before the scheduled promulgation of
judgment and leaving the dispositive portion for typing at a time close to the date of promulgation, provided that
no malice or any wrongful conduct attends its adoption. 15 The practice serves the dual purposes of safeguarding
the confidentiality of draft decisions and rendering decisions with promptness. Neither can Judge Jaramillo be
made administratively answerable for the immediate rendition of the decision. The acts of a judge which pertain to
his judicial functions are not subject to disciplinary power unless they are committed with fraud, dishonesty,
corruption or bad faith. 16 Hence, in the absence of sufficient proof to the contrary, Judge Jaramillo is presumed to
have performed his job in accordance with law and should instead be commended for his close attention to duty.
Having disposed of petitioner's first contention, we now come to the core issue of this petition which is whether
the Court of Appeals erred in upholding the validity of the contract of barter or sale under the circumstances of
this case.
The Civil Code provides that contracts are perfected by mere consent. From this moment, the parties are bound
not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according
to their nature, may be in keeping with good faith, usage and law. 17 A contract of sale is perfected at the moment
there is a meeting of the minds upon the thing which is the object of the contract and upon the price. 18 Being
consensual, a contract of sale has the force of law between the contracting parties and they are expected to abide
in good faith by their respective contractual commitments. Article 1358 of the Civil Code which requires the
embodiment of certain contracts in a public instrument, is only for convenience, 19 and registration of the
instrument only adversely affects third parties. 20 Formal requirements are, therefore, for the benefit of third
parties. Non-compliance therewith does not adversely affect the validity of the contract nor the contractual rights
and obligations of the parties thereunder.
It is evident from the facts of the case that there was a meeting of the minds between petitioner and Dr. Cruz. As
such, they are bound by the contract unless there are reasons or circumstances that warrant its nullification.
Hence, the problem that should be addressed in this case is whether or not under the facts duly established herein,
the contract can be voided in accordance with law so as to compel the parties to restore to each other the things
that have been the subject of the contract with their fruits, and the price with interest.21
Contracts that are voidable or annullable, even though there may have been no damage to the contracting parties
are: (1) those where one of the parties is incapable of giving consent to a contract; and (2) those where the consent
is vitiated by mistake, violence, intimidation, undue influence or fraud. 22 Accordingly, petitioner now stresses
before this Court that he entered into the contract in the belief that the pair of emerald-cut diamond earrings was
genuine. On the pretext that those pieces of jewelry turned out to be counterfeit, however, petitioner subsequently
sought the nullification of said contract on the ground that it was, in fact, "tainted with fraud" 23 such that his
consent was vitiated.
There is fraud when, through the 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. 24 The records, however, are
bare of any evidence manifesting that private respondents employed such insidious words or machinations to
entice petitioner into entering the contract of barter. Neither is there any evidence showing that Dr. Cruz induced
petitioner to sell his Tanay property or that she cajoled him to take the earrings in exchange for said property. On
the contrary, Dr. Cruz did not initially accede to petitioner's proposal to buy the said jewelry. Rather, it appears
that it was petitioner, through his agents, who led Dr. Cruz to believe that the Tanay property was worth
exchanging for her jewelry as he represented that its value was P400,000.00 or more than double that of the
jewelry which was valued only at P160,000.00. If indeed petitioner's property was truly worth that much, it was
certainly contrary to the nature of a businessman-banker like him to have parted with his real estate for half its
price. In short, it was in fact petitioner who resorted to machinations to convince Dr. Cruz to exchange her jewelry
for the Tanay property.
Moreover, petitioner did not clearly allege mistake as a ground for nullification of the contract of sale. Even
assuming that he did, petitioner cannot successfully invoke the same. To invalidate a contract, mistake must "refer
to the substance of the thing that is the object of the contract, or to those conditions which have principally moved
one or both parties to enter into the contract." 25 An example of mistake as to the object of the contract is the
substitution of a specific thing contemplated by the parties with another. 26 In his allegations in the complaint,
petitioner insinuated that an inferior one or one that had only Russian diamonds was substituted for the jewelry
he wanted to exchange with his 10-hectare land. He, however, failed to prove the fact that prior to the delivery of
the jewelry to him, private respondents endeavored to make such substitution.
Likewise, the facts as proven do not support the allegation that petitioner himself could be excused for the
"mistake." On account of his work as a banker-jeweler, it can be rightfully assumed that he was an expert on
matters regarding gems. He had the intellectual capacity and the business acumen as a banker to take
precautionary measures to avert such a mistake, considering the value of both the jewelry and his land. The fact
that he had seen the jewelry before October 24, 1984 should not have precluded him from having its genuineness
tested in the presence of Dr. Cruz. Had he done so, he could have avoided the present situation that he himself
brought about. Indeed, the finger of suspicion of switching the genuine jewelry for a fake inevitably points to him.
Such a mistake caused by manifest negligence cannot invalidate a juridical act. 27 As the Civil Code provides,
"(t)here is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the
contract."28
Furthermore, petitioner was afforded the reasonable opportunity required in Article 1584 of the Civil Code within
which to examine the jewelry as he in fact accepted them when asked by Dr. Cruz if he was satisfied with the same.
29 By taking the jewelry outside the bank, petitioner executed an act which was more consistent with his exercise
of ownership over it. This gains credence when it is borne in mind that he himself had earlier delivered the Tanay
property to Dr. Cruz by affixing his signature to the contract of sale. That after two hours he later claimed that the
jewelry was not the one he intended in exchange for his Tanay property, could not sever the juridical tie that now
bound him and Dr. Cruz. The nature and value of the thing he had taken preclude its return after that supervening
period within which anything could have happened, not excluding the alteration of the jewelry or its being
switched with an inferior kind.
4

Both the trial and appellate courts, therefore, correctly ruled that there were no legal bases for the nullification of
the contract of sale. Ownership over the parcel of land and the pair of emerald-cut diamond earrings had been
transferred to Dr. Cruz and petitioner, respectively, upon the actual and constructive delivery thereof. 30 Said
contract of sale being absolute in nature, title passed to the vendee upon delivery of the thing sold since there was
no stipulation in the contract that title to the property sold has been reserved in the seller until full payment of the
price or that the vendor has the right to unilaterally resolve the contract the moment the buyer fails to pay within a
fixed period. 31 Such stipulations are not manifest in the contract of sale.
While it is true that the amount of P40,000.00 forming part of the consideration was still payable to petitioner, its
nonpayment by Dr. Cruz is not a sufficient cause to invalidate the contract or bar the transfer of ownership and
possession of the things exchanged considering the fact that their contract is silent as to when it becomes due and
demandable. 32
Neither may such failure to pay the balance of the purchase price result in the payment of interest thereon. Article
1589 of the Civil Code prescribes the payment of interest by the vendee "for the period between the delivery of the
thing and the payment of the price" in the following cases:
(1) Should it have been so stipulated;
(2) Should the thing sold and delivered produce fruits or income;
(3) Should he be in default, from the time of judicial or extrajudicial demand for the payment of the
price.
Not one of these cases obtains here. This case should, of course, be distinguished from De la Cruz v. Legaspi, 33
where the court held that failure to pay the consideration after the notarization of the contract as previously
promised resulted in the vendee's liability for payment of interest. In the case at bar, there is no stipulation for
the payment of interest in the contract of sale nor proof that the Tanay property produced fruits or income.
Neither did petitioner demand payment of the price as in fact he filed an action to nullify the contract of sale.
All told, petitioner appears to have elevated this case to this Court for the principal reason of mitigating the
amount of damages awarded to both private respondents which petitioner considers as "exorbitant." He contends
that private respondents do not deserve at all the award of damages. In fact, he pleads for the total deletion of the
award as regards private respondent Belarmino whom he considers a mere "nominal party" because "no specific
claim for damages against him" was alleged in the complaint. When he filed the case, all that petitioner wanted was
that Atty. Belarmino should return to him the owner's duplicate copy of TCT No. 320725, the deed of sale executed
by Fr. Antonio Jacobe, the deed of redemption and the check alloted for expenses. Petitioner alleges further that
Atty. Belarmino should not have delivered all those documents to Dr. Cruz because as the "lawyer for both the
seller and the buyer in the sale contract, he should have protected the rights of both parties." Moreover, petitioner
asserts that there was no firm basis for damages except for Atty. Belarmino's uncorroborated testimony.34
Moral and exemplary damages may be awarded without proof of pecuniary loss. In awarding such damages, the
court shall take into account the circumstances obtaining in the case said assess damages according to its
discretion.35 To warrant the award of damages, it must be shown that the person to whom these are awarded has
sustained injury. He must likewise establish sufficient data upon which the court can properly base its estimate of
the amount of damages.36 Statements of facts should establish such data rather than mere conclusions or opinions
of witnesses. 37 Thus:
. . . . For moral damages to be awarded, it is essential that the claimant must have satisfactorily
proved during the trial the existence of the factual basis of the damages and its causal connection
with the adverse party's acts. If the court has no proof or evidence upon which the claim for moral
damages could be based, such indemnity could not be outrightly awarded. The same holds true with
respect to the award of exemplary damages where it must be shown that the party acted in a wanton,
oppressive or malevolent manner. 38
In this regard, the lower court appeared to have awarded damages on a ground analogous to malicious
prosecution under Article 2219 (8) of the Civil Code 39 as shown by (1) petitioner's "wanton bad faith" in bloating
the value of the Tanay property which he exchanged for "a genuine pair of emerald-cut diamond worth
P200,00.00;" and (2) his filing of a "malicious and unfounded case" against private respondents who were "well
known, respected and held in high esteem in San Pablo City where everybody practically knows everybody" and
whose good names in the "twilight of their lives" were soiled by petitioner's coming to court with "unclean hands,"
thereby affecting their earning capacity in the exercise of their respective professions and besmirching their
reputation.
For its part, the Court of Appeals affirmed the award of damages to private respondents for these reasons:
The malice with which Fule filed this case is apparent. Having taken possession of the genuine
jewelry of Dra. Cruz, Fule now wishes to return a fake jewelry to Dra. Cruz and, more than that, get
back the real property, which his bank owns. Fule has obtained a genuine jewelry which he could sell
anytime, anywhere and to anybody, without the same being traced to the original owner for
practically nothing. This is plain and simple, unjust enrichment.40
While, as a rule, moral damages cannot be recovered from a person who has filed a complaint against another in
good faith because it is not sound policy to place a penalty on the right to litigate, 41 the same, however, cannot
apply in the case at bar. The factual findings of the courts a quo to the effect that petitioner filed this case because
he was the victim of fraud; that he could not have been such a victim because he should have examined the jewelry
in question before accepting delivery thereof, considering his exposure to the banking and jewelry businesses; and
that he filed the action for the nullification of the contract of sale with unclean hands, all deserve full faith and
credit to support the conclusion that petitioner was motivated more by ill will than a sincere attempt to protect his
rights in commencing suit against respondents.
As pointed out earlier, a closer scrutiny of the chain of events immediately prior to and on October 24, 1984 itself
would amply demonstrate that petitioner was not simply negligent in failing to exercise due diligence to assure
himself that what he was taking in exchange for his property were genuine diamonds. He had rather placed himself
in a situation from which it preponderantly appears that his seeming ignorance was actually just a ruse. Indeed, he
had unnecessarily dragged respondents to face the travails of litigation in speculating at the possible favorable
outcome of his complaint when he should have realized that his supposed predicament was his own making. We,
therefore, see here no semblance of an honest and sincere belief on his part that he was swindled by respondents
which would entitle him to redress in court. It must be noted that before petitioner was able to convince Dr. Cruz
to exchange her jewelry for the Tanay property, petitioner took pains to thoroughly examine said jewelry, even
going to the extent of sketching their appearance. Why at the precise moment when he was about to take physical
possession thereof he failed to exert extra efforts to check their genuineness despite the large consideration
involved has never been explained at all by petitioner. His acts thus failed to accord with what an ordinary prudent
man would have done in the same situation. Being an experienced banker and a businessman himself who
deliberately skirted a legal impediment in the sale of the Tanay property and to minimize the capital gains tax for
its exchange, it was actually gross recklessness for him to have merely conducted a cursory examination of the
jewelry when every opportunity for doing so was not denied him. Apparently, he carried on his person a tester
which he later used to prove the alleged fakery but which he did not use at the time when it was most needed.
Furthermore, it took him two more hours of unexplained delay before he complained that the jewelry he received
were counterfeit. Hence, we stated earlier that anything could have happened during all the time that petitioner
was in complete possession and control of the jewelry, including the possibility of substituting them with fake
ones, against which respondents would have a great deal of difficulty defending themselves. The truth is that
petitioner even failed to successfully prove during trial that the jewelry he received from Dr. Cruz were not
genuine. Add to that the fact that he had been shrewd enough to bloat the Tanay property's price only a few days
after he purchased it at a much lower value. Thus, it is our considered view that if this slew of circumstances were
connected, like pieces of fabric sewn into a quilt, they would sufficiently demonstrate that his acts were not merely
negligent but rather studied and deliberate.
We do not have here, therefore, a situation where petitioner's complaint was simply found later to be based on an
erroneous ground which, under settled jurisprudence, would not have been a reason for awarding moral and
exemplary damages. 42 Instead, the cause of action of the instant case appears to have been contrived by
petitioner himself. In other words, he was placed in a situation where he could not honestly evaluate whether his
cause of action has a semblance of merit, such that it would require the expertise of the courts to put it to a test. His
insistent pursuit of such case then coupled with circumstances showing that he himself was guilty in bringing
about the supposed wrongdoing on which he anchored his cause of action would render him answerable for all
damages the defendant may suffer because of it. This is precisely what took place in the petition at bar and we find
5
no cogent reason to disturb the findings of the courts below that respondents in this case suffered considerable
damages due to petitioner's unwarranted action.
WHEREFORE, the decision of the Court of Appeals dated October 20, 1992 is hereby AFFIRMED in toto. Dr. Cruz,
however, is ordered to pay petitioner the balance of the purchase price of P40,000.00 within ten (10) days from
the finality of this decision. Costs against petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. NO. 145470 December 9, 2005
SPS. LUIS V. CRUZ and AIDA CRUZ, Petitioners, vs. SPS. ALEJANDRO FERNANDO, SR., and RITA
FERNANDO, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
For resolution is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision1
dated October 3, 2000 of the Court of Appeals (CA) in CA-G.R. CV No. 61247, dismissing petitioners appeal and
affirming the decision of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 79, in Civil Case No. 877-M-94.
The antecedent facts are as follows:
Luis V. Cruz and Aida Cruz (petitioners) are occupants of the front portion of a 710-square meter property located
in Sto. Cristo, Baliuag, Bulacan. On October 21, 1994, spouses Alejandro Fernando, Sr. and Rita Fernando
(respondents) filed before the RTC a complaint for accion publiciana against petitioners, demanding the latter to
vacate the premises and to pay the amount of P500.00 a month as reasonable rental for the use thereof.
Respondents alleged in their complaint that: (1) they are owners of the property, having bought the same from the
spouses Clodualdo and Teresita Glorioso (Gloriosos) per Deed of Sale dated March 9, 1987; (2) prior to their
acquisition of the property, the Gloriosos offered to sell to petitioners the rear portion of the property but the
transaction did not materialize due to petitioners failure to exercise their option; (3) the offer to sell is embodied
in a Kasunduan dated August 6, 1983 executed before the Barangay Captain; (4) due to petitioners failure to buy
the allotted portion, respondents bought the whole property from the Gloriosos; and (5) despite repeated
demands, petitioners refused to vacate the property.2
Petitioners filed a Motion to Dismiss but the RTC dismissed it for lack of merit in its Order dated March 6, 1995. 3
Petitioners then filed their Answer setting forth the affirmative defenses that: (1) the Kasunduan is a perfected
contract of sale; (2) the agreement has already been partially consummated as they already relocated their house
from the rear portion of the lot to the front portion that was sold to them; (3) Mrs. Glorioso prevented the
complete consummation of the sale when she refused to have the exact boundaries of the lot bought by petitioners
surveyed, and the existing survey was made without their knowledge and participation; and (4) respondents are
buyers in bad faith having bought that portion of the lot occupied by them (petitioners) with full knowledge of the
prior sale to them by the Gloriosos.4
After due proceedings, the RTC rendered a Decision on April 3, 1998 in favor of respondents. The decretal portion
of the decision provides:
PREMISES CONSIDERED, the herein plaintiffs was able to prove by preponderance of evidence the case of accion
publiciana, against the defendants and judgment is hereby rendered as follows:
1. Ordering defendants and all persons claiming under them to vacate peacefully (sic) the premises in question and
to remove their house therefore (sic);
2. Ordering defendants to pay plaintiff the sum of P500.00 as reasonable rental per month beginning October 21,
1994 when the case was filed before this Court and every month thereafter until they vacate the subject premises
and to pay the costs of suit.
The counter claim is hereby DISMISSED for lack of merit.
SO ORDERED.5
Petitioners appealed the RTC decision but it was affirmed by the CA per its Decision dated October 3, 2000.
Hence, the present petition raising the following issues:
1. Whether the Honorable Court of Appeals committed an error of law in holding that the Agreement (Kasunduan)
between the parties was a mere offer to sell, and not a perfected Contract of Purchase and Sale?
2. Whether the Honorable Court of Appeals committed an error of law in not holding that where the parties clearly
gave the petitioners a period of time within which to pay the price, but did not fix said period, the remedyof the
vendors is to ask the Court to fix the period for the payment of the price, and not an accion publiciana?
3. Whether the Honorable Court of Appeals committed an error of law in not ordering respondents to at least
deliver the back portion of the lot in question upon payment of the agreed price thereof by petitioners, assuming
that the Regional Trial Court was correct in finding that the subject matter of the sale was said back portion, and
not the front portion of the property?
4. Whether the Honorable Court of Appeals committed an error of law in affirming the decision of the trial court
ordering the petitioners, who are possessors in good faith, to pay rentals for the portion of the lot possessed by
them?6
The RTC dwelt on the issue of which portion was being sold by the Gloriosos to petitioners, finding that it was the
rear portion and not the front portion that was being sold; while the CA construed the Kasunduan as a mere
contract to sell and due to petitioners failure to pay the purchase price, the Gloriosos were not obliged to deliver
to them (petitioners) the portion being sold.
Petitioners, however, insist that the agreement was a perfected contract of sale, and their failure to pay the
purchase price is immaterial. They also contend that respondents have no cause of action against them, as the
obligation set in the Kasunduan did not set a period, consequently, there is no breach of any obligation by
petitioners.
The resolution of the issues in this case principally is dependent on the interpretation of the Kasunduan dated
August 6, 1983 executed by petitioners and the Gloriosos. The Kasunduan provided the following pertinent
stipulations:
a. Na pumayag ang mga maysumbong (referring to the Gloriosos) na pagbilhan ang mga ipinagsumbong (referring
to petitioners) na bahagi ng lupa at ang ipagbibili ay may sukat na 213 metrong parisukat humigit kumulang sa
halagang P40.00 bawat metrong parisukat;
b. Na sa titulong papapanaugin ang magiging kabuuang sukat na mauukol sa mga ipinagsusumbong ay 223
metrong parisukat at ang 10 metro nito ay bilang kaloob ng mga maysumbong sa mga Ipinagsusumbong na bahagi
ng right of way;
c. Na ang right of way ay may luwang na 1.75 meters magmula sa daang Lopez Jaena patungo sa likuran ng lote
na pagtatayuan ng bahay ng mga Ipinagsusumbong na kanyang bibilhin;
d. Na ang gugol sa pagpapasukat at pagpapanaog ng titulo ay paghahatian ng magkabilang panig na ang panig ay
magbibigay ng halagang hindi kukulanging sa halagang tig-AAPAT NA DAANG PISO (P400.00);
e. Na ang ipinagsusumbong ay tiyakang ililipat ang bahay sa bahaging kanilang nabili o mabibili sa buwan ng Enero
31, 1984;7(Emphasis supplied)
Under Article 1458 of the Civil Code, a contract of sale is a contract by which one of the contracting parties
obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a
price certain in money or its equivalent. Article 1475 of the Code further provides that the contract of sale is
perfected at the moment there is meeting of the minds upon the thing which is the object of the contract and upon
the price. From that moment the parties may reciprocally demand performance subject to the provisions of the law
governing the form of contracts.
6
In a contract of sale, the title to the property passes to the vendee upon the delivery of the thing sold, as
distinguished from a contract to sell where ownership is, by agreement, reserved in the vendor and is not to pass
to the vendee until full payment of the purchase price.8 Otherwise stated, in a contract of sale, the vendor loses
ownership over the property and cannot recover it until and unless the contract is resolved or rescinded; whereas,
in a contract to sell, title is retained by the vendor until full payment of the price. In the latter contract, payment of
the price is a positive suspensive condition, failure of which is not a breach but an event that prevents the
obligation of the vendor to convey title from becoming effective.
The Kasunduan provides for the following terms and conditions: (a) that the Gloriosos agreed to sell to petitioners
a portion of the property with an area of 213 meters at the price of P40.00 per square meter; (b) that in the title
that will be caused to be issued, the aggregate area is 223 square meters with 10 meters thereof serving as right of
way; (c) that the right of way shall have a width of 1.75 meters from Lopez Jaena road going towards the back of
the lot where petitioners will build their house on the portion of the lot that they will buy; (d) that the expenses for
the survey and for the issuance of the title will be divided between the parties with each party giving an amount of
no less than P400.00; and (e) that petitioners will definitely relocate their house to the portion they bought or will
buy by January 31, 1984.
The foregoing terms and conditions show that it is a contract to sell and not a contract of sale. For one, the
conspicuous absence of a definite manner of payment of the purchase price in the agreement confirms the
conclusion that it is a contract to sell. This is because the manner of payment of the purchase price is an
essential element before a valid and binding contract of sale can exist.9 Although the Civil Code does not
expressly state that the minds of the parties must also meet on the terms or manner of payment of the price, the
same is needed, otherwise there is no sale.10 As held in Toyota Shaw, Inc. vs. Court of Appeals,11 a definite
agreement on the manner of payment of the price is an essential element in the formation of a binding and
enforceable contract of sale.
The Kasunduan does not establish any definite agreement between the parties concerning the terms of payment.
What it merely provides is the purchase price for the 213-square meter property at P40.00 per square meter.
For another, the telltale provision in the Kasunduan that: Na pumayag ang mga maysumbong na pagbilhan ang
mga ipinagsumbong na bahagi ng lupa at ang ipagbibili ay may sukat na 213 metrong parisukat humigit kumulang
sa halagang P40.00 bawat metrong parisukat, simply means that the Gloriosos only agreed to sell a portion of the
property and that the portion to be sold measures 213 square meters.
Another significant provision is that which reads: Na ang ipinagsusumbong ay tiyakang ililipat ang bahay sa
bahaging kanilang nabili o mabibili sa buwan ng Enero 31, 1984. The foregoing indicates that a contract of sale is
yet to be consummated and ownership of the property remained in the Gloriosos. Otherwise, why would the
alternative term mabibili be used if indeed the property had already been sold to petitioners.
In addition, the absence of any formal deed of conveyance is a strong indication that the parties did not intend
immediate transfer of ownership.12
Normally, in a contract to sell, the payment of the purchase price is the positive suspensive condition upon which
the transfer of ownership depends.13 The parties, however, are not prohibited from stipulating other lawful
conditions that must be fulfilled in order for the contract to be converted from a contract to sell or at the most an
executory sale into an executed one.14
In the present case, aside from the payment of the purchase price, there existed another suspensive condition, i.e.:
that petitioners will relocate their house to the portion they bought or will buy by January 31, 1984.
Petitioners failed to abide by the express condition that they should relocate to the rear portion of the property
being bought by January 31, 1984. Indeed, the Kasunduan discloses that it is the rear portion that was being sold
by the Gloriosos, and not the front portion as petitioners stubbornly claim. This is evident from the provisions
establishing a right of way from Lopez Jaena road going towards the back of the lot, and requiring them to relocate
their house to the portion being sold by January 31, 1984. Petitioners are presently occupying the front portion of
the property. Why the need for a right of way and for petitioners to relocate if the front portion on which their
house stands is the portion being sold?
This condition is a suspensive condition noncompliance of which prevented the Gloriosos from proceeding with
the sale and ultimately transferring title to petitioners; and the Kasunduan from having obligatory force.15 It is
established by evidence that the petitioners did not transfer their house located in the front portion of the subject
property to the rear portion which, under the Kasunduan, they intended to buy. Thus, no obligation arose on the
part of the Gloriosos to consider the subject property as having been sold to petitioners because the latters non-
fulfillment of the suspensive condition rendered the contract to sell ineffective and unperfected.
Petitioners admit that they have not paid a single centavo to the Gloriosos. However, petitioners argue that their
nonpayment of the purchase price was due to the fact that there is yet to be a survey made of the property. But
evidence shows, and petitioners do not dispute, that as early as August 12, 1983, or six days after the execution of
the Kasunduan, a survey has already been made and the property was subdivided into Lot Nos. 565-B-1 (front
portion) and 565-B-2 (rear portion), with Lot No. 565-B-2 measuring 223 square meters as the portion to be
bought by petitioners.
Petitioners question the survey made, asserting that it is a table survey made without their knowledge and
participation. It should be pointed out that the Kasunduan merely provides that the expenses for the survey will be
divided between them and that each party should give an amount of no less than P400.00. Nowhere is it stated that
the survey is a condition precedent for the payment of the purchase price.
Petitioners further claim that respondents have no cause of action against them because their obligation to pay the
purchase price did not yet arise, as the agreement did not provide for a period within which to pay the purchase
price. They argue that respondents should have filed an action for specific performance or judicial rescission
before they can avail of accion publiciana.
Notably, petitioners never raised these arguments during the proceedings before the RTC. Suffice it to say that
issues raised for the first time on appeal and not raised timely in the proceedings in the lower court are barred by
estoppel.16 Matters, theories or arguments not brought out in the original proceedings cannot be considered on
review or appeal where they are raised for the first time. To consider the alleged facts and arguments raised
belatedly would amount to trampling on the basic principles of fair play, justice and due process.17
Moreover, it would be inutile for respondents to first petition the court to fix a period for the performance of the
contract. In the first place, respondents are not parties to the Kasunduan between petitioners and the Gloriosos,
and they have no standing whatsoever to seek such recourse. In the second place, such recourse properly pertains
to petitioners. It was they who should have sought the courts intercession. If petitioners believed that they have
an actionable contract for the sale of the property, prudence and common sense dictate that they should have
sought its enforcement forthwith. Instead, petitioners whiled away their time.
Furthermore, there is no need for a judicial rescission of the Kasunduan for the simple reason that the obligation of
the Gloriosos to transfer the property to petitioners has not yet arisen. There can be no rescission of an obligation
that is nonexistent, considering that the suspensive conditions therefor have not yet happened.18
Hence, petitioners have no superior right of ownership or possession to speak of. Their occupation of the property
was merely through the tolerance of the owners. Evidence on record shows that petitioners and their predecessors
were able to live and build their house on the property through the permission and kindness of the previous
owner, Pedro Hipolito, who was their relative,19 and subsequently, Teresita Glorioso, who is also their relative.
They have no title or, at the very least, a contract of lease over the property. Based as it was on mere tolerance,
petitioners possession could neither ripen into ownership nor operate to bar any action by respondents to
recover absolute possession thereof.20
There is also no merit to petitioners contention that respondents are buyers in bad faith. As explained in Coronel
vs. Court of Appeals:
In a contract to sell, there being no previous sale of the property, a third person buying such property despite
the fulfillment of the suspensive condition such as the full payment of the purchase price, for instance,
cannot be deemed a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance of the
property. There is no double sale in such case. Title to the property will transfer to the buyer after registration
because there is no defect in the owner-sellers title per se, but the latter, of course, may be sued for damages by
the intending buyer.21 (Emphasis supplied)
A person who occupies the land of another at the latters forbearance or permission without any contract between
them is necessarily bound by an implied promise that he will vacate upon demand. 22
7

Considering that petitioners continued possession of the property has already been rendered unlawful, they are
bound to pay reasonable rental for the use and occupation thereof, which in this case was appropriately pegged by
the RTC at P500.00 per month beginning October 21, 1994 when respondents filed the case against them until they
vacate the premises.
Finally, petitioners seek compensation for the value of the improvements introduced on the property. Again, this is
the first time that they are raising this point. As such, petitioners are now barred from seeking such relief. 23
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated October 3, 2000 in CA-G.R. CV
No. 61247 is AFFIRMED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-24732 April 30, 1968
PIO SIAN MELLIZA, petitioner, vs. CITY OF ILOILO, UNIVERSITY OF THE PHILIPPINES and THE COURT
APPEALS, respondents.
BENGZON, J.P., J.:
Juliana Melliza during her lifetime owned, among other properties, three parcels of residential land in Iloilo City
registered in her name under Original Certificate of Title No. 3462. Said parcels of land were known as Lots Nos. 2,
5 and 1214. The total area of Lot No. 1214 was 29,073 square meters.
On November 27, 1931 she donated to the then Municipality of Iloilo, 9,000 square meters of Lot 1214, to serve as
site for the municipal hall. 1 The donation was however revoked by the parties for the reason that the area donated
was found inadequate to meet the requirements of the development plan of the municipality, the so-called
"Arellano Plan". 2
Subsequently, Lot No. 1214 was divided by Certeza Surveying Co., Inc. into Lots 1214-A and 1214-B. And still later,
Lot 1214-B was further divided into Lots 1214-B-1, Lot 1214-B-2 and Lot 1214-B-3. As approved by the Bureau of
Lands, Lot 1214-B-1 with 4,562 square meters, became known as Lot 1214-B; Lot 1214-B-2, with 6,653 square
meters, was designated as Lot 1214-C; and Lot 1214-B-13, with 4,135 square meters, became Lot 1214-D.
On November 15, 1932 Juliana Melliza executed an instrument without any caption containing the following:
Que en consideracion a la suma total de SEIS MIL CUATRO CIENTOS VEINTIDOS PESOS (P6,422.00), moneda
filipina que por la presente declaro haber recibido a mi entera satisfaccion del Gobierno Municipal de Iloilo,
cedo y traspaso en venta real y difinitiva a dicho Gobierno Municipal de Iloilo los lotes y porciones de los
mismos que a continuacion se especifican a saber: el lote No. 5 en toda su extension; una porcion de 7669
metros cuadrados del lote No. 2, cuya porcion esta designada como sub-lotes Nos. 2-B y 2-C del piano de
subdivision de dichos lotes preparado por la Certeza Surveying Co., Inc., y una porcion de 10,788 metros
cuadrados del lote No. 1214 cuya porcion esta designada como sub-lotes Nos. 1214-B-2 y 1214-B-3 del
mismo plano de subdivision.
Asimismo nago constar que la cesion y traspaso que ariba se mencionan es de venta difinitiva, y que para la
mejor identificacion de los lotes y porciones de los mismos que son objeto de la presente, hago constar que
dichos lotes y porciones son los que necesita el Gobierno Municipal de Iloilo para la construccion de avenidas,
parques y City Hall site del Municipal Government Center de iloilo, segun el plano Arellano.
On January 14, 1938 Juliana Melliza sold her remaining interest in Lot 1214 to Remedios Sian Villanueva who
thereafter obtained her own registered title thereto, under Transfer Certificate of Title No. 18178. Remedios in
turn on November 4, 1946 transferred her rights to said portion of land to Pio Sian Melliza, who obtained Transfer
Certificate of Title No. 2492 thereover in his name. Annotated at the back of Pio Sian Melliza's title certificate was
the following:
... (a) that a portion of 10,788 square meters of Lot 1214 now designated as Lots Nos. 1214-B-2 and 1214-B-3
of the subdivision plan belongs to the Municipality of Iloilo as per instrument dated November 15, 1932....
On August 24, 1949 the City of Iloilo, which succeeded to the Municipality of Iloilo, donated the city hall site
together with the building thereon, to the University of the Philippines (Iloilo branch). The site donated consisted
of Lots Nos. 1214-B, 1214-C and 1214-D, with a total area of 15,350 square meters, more or less.
Sometime in 1952, the University of the Philippines enclosed the site donated with a wire fence. Pio Sian Melliza
thereupon made representations, thru his lawyer, with the city authorities for payment of the value of the lot (Lot
1214-B). No recovery was obtained, because as alleged by plaintiff, the City did not have funds (p. 9, Appellant's
Brief.)
The University of the Philippines, meanwhile, obtained Transfer Certificate of Title No. 7152 covering the three
lots, Nos. 1214-B, 1214-C and 1214-D.
On December 10, 1955 Pio Sian Melliza filed an action in the Court of First Instance of Iloilo against Iloilo City and
the University of the Philippines for recovery of Lot 1214-B or of its value.
The defendants answered, contending that Lot 1214-B was included in the public instrument executed by Juliana
Melliza in favor of Iloilo municipality in 1932. After stipulation of facts and trial, the Court of First Instance
rendered its decision on August 15, 1957, dismissing the complaint. Said court ruled that the instrument executed
by Juliana Melliza in favor of Iloilo municipality included in the conveyance Lot 1214-B. In support of this
conclusion, it referred to the portion of the instrument stating:
Asimismo hago constar que la cesion y traspaso que arriba se mencionan es de venta difinitiva, y que para la
major identificacion de los lotes y porciones de los mismos que son objeto de la presente, hago constar que
dichos lotes y porciones son los que necesita el Gobierno municipal de Iloilo para la construccion de avenidas,
parques y City Hall site del Municipal Government Center de Iloilo, segun el plano Arellano.
and ruled that this meant that Juliana Melliza not only sold Lots 1214-C and 1214-D but also such other portions of
lots as were necessary for the municipal hall site, such as Lot 1214-B. And thus it held that Iloilo City had the right to
donate Lot 1214-B to the U.P.
Pio Sian Melliza appealed to the Court of Appeals. In its decision on May 19, 1965, the Court of Appeals affirmed
the interpretation of the Court of First Instance, that the portion of Lot 1214 sold by Juliana Melliza was not limited
to the 10,788 square meters specifically mentioned but included whatever was needed for the construction of
avenues, parks and the city hall site. Nonetheless, it ordered the remand of the case for reception of evidence to
determine the area actually taken by Iloilo City for the construction of avenues, parks and for city hall site.
The present appeal therefrom was then taken to Us by Pio Sian Melliza. Appellant maintains that the public
instrument is clear that only Lots Nos. 1214-C and 1214-D with a total area of 10,788 square meters were the
portions of Lot 1214 included in the sale; that the purpose of the second paragraph, relied upon for a contrary
interpretation, was only to better identify the lots sold and none other; and that to follow the interpretation
accorded the deed of sale by the Court of Appeals and the Court of First Instance would render the contract invalid
because the law requires as an essential element of sale, a "determinate" object (Art. 1445, now 1448, Civil Code).
Appellees, on the other hand, contend that the present appeal improperly raises only questions of fact. And,
further, they argue that the parties to the document in question really intended to include Lot 1214-B therein, as
shown by the silence of the vendor after Iloilo City exercised ownership thereover; that not to include it would
have been absurd, because said lot is contiguous to the others admittedly included in the conveyance, lying directly
in front of the city hall, separating that building from Lots 1214-C and 1214-D, which were included therein. And,
finally, appellees argue that the sale's object was determinate, because it could be ascertained, at the time of the
execution of the contract, what lots were needed by Iloilo municipality for avenues, parks and city hall site
"according to the Arellano Plan", since the Arellano plan was then already in existence.
The appeal before Us calls for the interpretation of the public instrument dated November 15, 1932. And
interpretation of such contract involves a question of law, since the contract is in the nature of law as between the
parties and their successors-in-interest.
8
At the outset, it is well to mark that the issue is whether or not the conveyance by Juliana Melliza to Iloilo
municipality included that portion of Lot 1214 known as Lot 1214-B. If not, then the same was included, in the
instrument subsequently executed by Juliana Melliza of her remaining interest in Lot 1214 to Remedios Sian
Villanueva, who in turn sold what she thereunder had acquired, to Pio Sian Melliza. It should be stressed, also, that
the sale to Remedios Sian Villanueva from which Pio Sian Melliza derived title did not specifically designate
Lot 1214-B, but only such portions of Lot 1214 as were not included in the previous sale to Iloilo municipality
(Stipulation of Facts, par. 5, Record on Appeal, p. 23). And thus, if said Lot 1214-B had been included in the prior
conveyance to Iloilo municipality, then it was excluded from the sale to Remedios Sian Villanueva and, later, to Pio
Sian Melliza.
The point at issue here is then the true intention of the parties as to the object of the public instrument Exhibit "D".
Said issue revolves on the paragraph of the public instrument aforequoted and its purpose, i.e., whether it was
intended merely to further describe the lots already specifically mentioned, or whether it was intended to cover
other lots not yet specifically mentioned.
First of all, there is no question that the paramount intention of the parties was to provide Iloilo municipality with
lots sufficient or adequate in area for the construction of the Iloilo City hall site, with its avenues and parks. For
this matter, a previous donation for this purpose between the same parties was revoked by them, because of
inadequacy of the area of the lot donated.
Secondly, reading the public instrument in toto, with special reference to the paragraphs describing the lots
included in the sale, shows that said instrument describes four parcels of land by their lot numbers and area; and
then it goes on to further describe, not only those lots already mentioned, but the lots object of the sale, by stating
that said lots are the ones needed for the construction of the city hall site, avenues and parks according to the
Arellano plan. If the parties intended merely to cover the specified lots Lots 2, 5, 1214-C and 1214-D, there
would scarcely have been any need for the next paragraph, since these lots are already plainly and very clearly
described by their respective lot number and area. Said next paragraph does not really add to the clear description
that was already given to them in the previous one.
It is therefore the more reasonable interpretation, to view it as describing those other portions of land contiguous to
the lots aforementioned that, by reference to the Arellano plan, will be found needed for the purpose at hand, the
construction of the city hall site.
Appellant however challenges this view on the ground that the description of said other lots in the aforequoted
second paragraph of the public instrument would thereby be legally insufficient, because the object would
allegedly not be determinate as required by law.
Such contention fails on several counts. The requirement of the law that a sale must have for its object a
determinate thing, is fulfilled as long as, at the time the contract is entered into, the object of the sale is capable of
being made determinate without the necessity of a new or further agreement between the parties (Art. 1273, old
Civil Code; Art. 1460, New Civil Code). The specific mention of some of the lots plus the statement that the lots
object of the sale are the ones needed for city hall site, avenues and parks, according to the Arellano plan,
sufficiently provides a basis, as of the time of the execution of the contract, for rendering determinate said lots
without the need of a new and further agreement of the parties.
The Arellano plan was in existence as early as 1928. As stated, the previous donation of land for city hall site on
November 27, 1931 was revoked on March 6, 1932 for being inadequate in area under said Arellano plan.
Appellant claims that although said plan existed, its metes and bounds were not fixed until 1935, and thus it could
not be a basis for determining the lots sold on November 15, 1932. Appellant however fails to consider that the
area needed under that plan for city hall site was then already known; that the specific mention of some of the lots
covered by the sale in effect fixed the corresponding location of the city hall site under the plan; that, therefore,
considering the said lots specifically mentioned in the public instrument Exhibit "D", and the projected city hall
site, with its area, as then shown in the Arellano plan (Exhibit 2), it could be determined which, and how much of
the portions of land contiguous to those specifically named, were needed for the construction of the city hall site.
And, moreover, there is no question either that Lot 1214-B is contiguous to Lots 1214-C and 1214-D, admittedly
covered by the public instrument. It is stipulated that, after execution of the contract Exhibit "D", the Municipality
of Iloilo possessed it together with the other lots sold. It sits practically in the heart of the city hall site.
Furthermore, Pio Sian Melliza, from the stipulation of facts, was the notary public of the public instrument. As such,
he was aware of its terms. Said instrument was also registered with the Register of Deeds and such registration
was annotated at the back of the corresponding title certificate of Juliana Melliza. From these stipulated facts, it can
be inferred that Pio Sian Melliza knew of the aforesaid terms of the instrument or is chargeable with knowledge of
them; that knowing so, he should have examined the Arellano plan in relation to the public instrument Exhibit "D";
that, furthermore, he should have taken notice of the possession first by the Municipality of Iloilo, then by the City
of Iloilo and later by the University of the Philippines of Lot 1214-B as part of the city hall site conveyed under that
public instrument, and raised proper objections thereto if it was his position that the same was not included in the
same. The fact remains that, instead, for twenty long years, Pio Sian Melliza and his predecessors-in-interest, did
not object to said possession, nor exercise any act of possession over Lot 1214-B. Applying, therefore, principles of
civil law, as well as laches, estoppel, and equity, said lot must necessarily be deemed included in the conveyance in
favor of Iloilo municipality, now Iloilo City.
WHEREFORE, the decision appealed from is affirmed insofar as it affirms that of the Court of First Instance, and
the complaint in this case is dismissed. No costs. So ordered.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 182349 July 24, 2013
REMAN RECIO, Petitioner, vs. HEIRS OF THE SPOUSES AGUEDO and MARIA ALTAMIRANO, namely:
ALEJANDRO, ADELAIDA, CATALINA, ALFREDO, FRANCISCO, all surnamed ALTAMIRANO;
VIOLETAALTAMIRANO OLFATO, and LORETAALTAMIRANO VDA. DE MARALIT and SPOUSES LAURO and
MARCELINA LAJARCA, Respondents.
DECISION
REYES, J.:
This petition for review on certiorari1 under Rule 45 of the Rules of Court seeks to modify the Decision2 of the
Court of Appeals (CA) dated November 29, 2007 in CA-G.R. CV No. 86001, affirming with modification the
Decision3 dated August 23, 2005 of the Regional Trial Court (RTC) of Lipa City, Branch 85 in Civil Case No. 97-
0107. The petitioner asks this Court to reinstate in full the said RTC decision.
The Facts
In the 1950s, Nena Recio (Nena), the mother of Reman Recio (petitioner), leased from the respondents Alejandro,
Adelaida, Catalina, Alfredo, Francisco, all surnamed Altamirano, Violeta Altamirano Olfato, and Loreto Altamirano
Vda. De Maralit (referred to as the Altamiranos) a parcel of land with improvements, situated at No. 39 10 de Julio
Street (now Esteban Mayo Street), Lipa City, Batangas. The said land has an area of more or less eighty-nine square
meters and fifty square decimeters (89.50 sq m), and is found at the northern portion of two (2) parcels of land
covered by Transfer Certificate of Title (TCT) Nos. 66009 and 66010 of the Registry of Deeds of Lipa City. The
Altamiranos inherited the subject land from their deceased parents, the spouses Aguedo Altamirano and Maria
Valduvia.4
Nena used the ground floor of the subject property as a retail store for grains and the upper floor as the familys
residence. The petitioner claimed that in 1988, the Altamiranos offered to sell the subject property to Nena for Five
Hundred Thousand Pesos (P500,000.00). The latter accepted such offer, which prompted the Altamiranos to waive
the rentals for the subject property. However, the sale did not materialize at that time due to the fault of the
Altamiranos. Nonetheless, Nena continued to occupy and use the property with the consent of the Altamiranos.5
Meanwhile, the Altamiranos consolidated the two (2) parcels of land covered by TCT Nos. 66009 and 66010. They
were eventually subdivided into three (3) parcels of land which were then denominated as Lots 1, 2, and 3 of the
Consolidation-Subdivision Plan PCS-04-00367. Subsequently, TCT No. T-102563 of the Registry of Deeds of Lipa
City was issued to cover the subject property. The petitioner and his family remained in peaceful possession of Lot
No. 3.6
In the latter part of 1994, the petitioner renewed Nenas option to buy the subject property. The petitioner
conducted a series of negotiations with respondent Alejandro who introduced himself as representing the other
heirs. After the said negotiations, the Altamiranos through Alejandro entered into an oral contract of sale with the
petitioner over the subject property. In January 1995, in view of the said oral contract of sale, the petitioner made
9
partial payments to the Altamiranos in the total amount of One Hundred Ten Thousand Pesos (P110,000.00).
Alejandro duly received and acknowledged these partial payments as shown in a receipt dated January 24, 1995.
On April 14, 1995, the petitioner made another payment in the amount of Fifty Thousand Pesos (P50,000.00),
which Alejandro again received and acknowledged through a receipt of the same date. Subsequently, the petitioner
offered in many instances to pay the remaining balance of the agreed purchase price of the subject property in the
amount of Three Hundred Forty Thousand Pesos (P340,000.00), but Alejandro kept on avoiding the petitioner.
Because of this, the petitioner demanded from the Altamiranos, through Alejandro, the execution of a Deed of
Absolute Sale in exchange for the full payment of the agreed price.7
Thus, on February 24, 1997, the petitioner filed a complaint for Specific Performance with Damages. On March 14,
1997, the petitioner also caused to annotate on the TCT No. T-102563 a Notice of Lis Pendens.8
Pending the return of service of summons to the Altamiranos, the petitioner discovered that the subject property
has been subsequently sold to respondents Lauro and Marcelina Lajarca (Spouses Lajarca). TCT No. T-102563 was
cancelled and a new title, TCT No. 112727, was issued in the name of the Spouses Lajarca by virtue of a Deed of
Sale executed by the latter and the Altamiranos on February 26, 1998. Thus, the petitioner filed an Amended
Complaint impleading the Spouses Lajarca and adding as a cause of action the annulment of the sale between the
Altamiranos and the Spouses Lajarca.9
Thereafter, trial ensued. Alejandro was called to testify at the instance of the petitioner but after a brief testimony,
he excused himself and never returned to the witness stand despite several subpoenas. For the respondents, the
Altamiranos manifested that they would no longer present any witness while the Spouses Lajarca were considered
to have waived their right to present evidence since they failed to appear on the day set for them to do so. 10
The Ruling of the RTC in Civil Case No. 97-0107
On August 23, 2005, the trial court rendered a decision,11 the dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and against the defendants as
follows:
1. declaring as NULL AND VOID the Deed of Absolute Sale dated 26 February 1998 between the defendants
Altamiranos and the defendants Lajarcas covering that parcel of land together with all improvements thereon
situated at No. 39 10 de Julio Street (now Esteban Mayo Street), Lipa City, Batangas, containing an area of
more or less Eighty-Nine Square Meters and Fifty Square Decimeters (89.50 sq. m) then covered by Transfer
Certificate of Title No. T-102563 of the Registry of Deeds of Lipa City;
2. ordering the Register of Deeds of Lipa City to cancel Transfer Certificate of Title No. T-112727 of the
Registry of Deeds of Lipa City in the name of the defendants Lajarcas and to reinstate Transfer Certificate of
Title No. T-102563;
3. directing the defendants Altamiranos to execute a Deed of Absolute Sale in favor of plaintiff covering the
parcel of land together with all improvements thereon situated at No. 39 10 de Julio Street (now Esteban Mayo
Street), Lipa City, Batangas, containing an area of more or less Eighty-Nine Square Meters and Fifty Square
Decimeters (89.50 sq. m) then covered by Transfer Certificate of Title No. T-102563 upon payment by said
plaintiff of the balance of the purchase price in the amount of THREE HUNDRED FORTY THOUSAND PESOS
(P340,000.00).
4. directing the defendants Altamiranos and Lajarcas, jointly and severally, to pay plaintiff moral damages in
the amount of P100,000.00, actual and compensatory damages in the amount of P100,000.00, P50,000.00 as
exemplary damages and the sum of P50,000.00 as attorneys fees plus P2,500.00 for every hearing attended as
and for appearance fees, and costs of suit.
SO ORDERED.12
Aggrieved, the Spouses Lajarca filed an appeal assailing the above RTC decision.
The Ruling of the CA in CA-G.R. CV No. 86001
In its Decision13 dated November 29, 2007, the CA affirmed with modification, the dispositive portion of which
states:
WHEREFORE, premises considered, the August 23, 2005 Decision of the Regional Trial Court, Br. 85, Fourth
Judicial Region, Lipa City, in Civil Case No. 97-0107, is hereby AFFIRMED with MODIFICATION. Concomitantly,
judgment is hereby rendered, as follows:
1) The complaint, as far as Adelaida Altamirano, Catalina Altamirano, Alfredo Altamirano, Francisco
Altamirano, Violeta Altamirano Olfato and Loreta Altamirano vda. de Maralit are concerned, is hereby
DISMISSED;
2) The contract of sale between Alejandro Altamirano and Reman Recio is VALID only with respect to the
aliquot share of Alejandro Altamirano in the lot previously covered by TCT No. T-102563 (now covered by
TCT No. 112727);
3) The Deed of Sale, dated February 26, 1998, between the Altamiranos and the Lajarca Spouses is declared
NULL and VOID as far as the aliquot share of Alejandro Altamirano is concerned;
4) Reman Recio is DECLARED a co-owner of the Spouses Lauro and Marcelina Lajarca over the property
previously covered by TCT No. T-102563 (now TCT No. 112727), his share being that which previously
corresponds to the aliquot share of Alejandro Altamirano; and
5) The damages awarded below to Reman Recio are AFFIRMED. No costs.
SO ORDERED.14
In prcis, the CA found and ruled as follows:
1) That the summons to Alejandro is not summons to the other Altamiranos since Alejandros authority to
represent his co-heirs is disputed for lack of a written special power of attorney (SPA). Furthermore, the CA
found that the Altamiranos, save for Alejandro and Violeta, reside abroad with unknown addresses. Thus, for
the CA, summons to the non-resident Altamiranos should have been served extraterritorially as provided in
Section 15, Rule 1415 of the Revised Rules of Court.16
2) That there was a valid contract of sale entered into by Alejandro and the petitioner considering that: (a)
Alejandro did not make any express reservation of ownership or title to the subject parcel of land, and that he
issued receipts precisely to acknowledge the payments made for the purchase of Lot No. 3; (b) Alejendro
actually delivered Lot No. 3 to the petitioner and waived the rental payments thereof; (c) Alejandro did not
actually refuse the petitioners offer to pay the balance of the purchase price but instead, merely avoided the
petitioner; and (d) all the elements of a valid contract of sale exist in the transaction between the petitioner
and the Altamiranos.17
3) That Alejandros sale of Lot No. 3 did not bind his co-owners because a sale of real property by one
purporting to be an agent of the owner without any written authority from the latter is null and void. An SPA
from the co-owners pursuant to Article 1878 of the New Civil Code is necessary.
However, the CA held that the contract of sale between Alejandro and the petitioner is valid because under a
regime of co-ownership, a co-owner can freely sell and dispose his undivided interest, citing Acabal v. Acabal.18
Furthermore, the Spouses Lajarca were not buyers in good faith because they had knowledge of the prior sale to
the petitioner who even caused the annotation of the Notice of Lis Pendens on TCT No. T-102563.19
The CA, thereby, held that insofar as the verbal contract of sale between Alejandro and the petitioner is concerned,
Alejandros disposition affects only his pro indiviso share, such that the transferee (the petitioner) receives only
what corresponds to Alejandros undivided share in the subject lot. Likewise, the CA declared the deed of absolute
sale between the Altamiranos and the Spouses Lajarca valid only insofar as the aliquot shares of the other
Altamiranos are concerned. Thus, in effect, the petitioner and the Spouses Lajarca are co-owners of the subject
property.
10
Not satisfied with the decision, the petitioner sought reconsideration but his motion was denied in the CA
Resolution20 dated March 18, 2008.
Issue
The petitioner filed the instant petition alleging in the main that the CA gravely and seriously erred in modifying
the RTC decision.
Our Ruling
The petition has no merit.
Under Rule 45 of the Rules of Court, jurisdiction is generally limited to the review of errors of law committed by
the appellate court. The Supreme Court is not obliged to review all over again the evidence which the parties
adduced in the court a quo. Of course, the general rule admits of exceptions, such as where the factual findings of
the CA and the trial court are conflicting or contradictory.21 In the instant case, the findings of the trial court and its
conclusion based on the said findings contradict those of the CA. After a careful review, the Court finds no
reversible error with the decision of the CA.
At the core of the present petition is the validity of the verbal contract of sale between Alejandro and the
petitioner; and the Deed of Absolute Sale between the Altamiranos and the Spouses Lajarca involving the subject
property.
A valid contract of sale requires: (a) a meeting of minds of the parties to transfer ownership of the thing sold in
exchange for a price; (b) the subject matter, which must be a possible thing; and (c) the price certain in money or
its equivalent.22
In the instant case, all these elements are present. The records disclose that the Altamiranos were the ones who
offered to sell the property to Nena but the transaction did not push through due to the fault of the respondents.
Thereafter, the petitioner renewed Nenas option to purchase the property to which Alejandro, as the
representative of the Altamiranos verbally agreed. The determinate subject matter is Lot No. 3, which is covered
under TCT No. T-102563 and located at No. 39 10 de Julio Street (now Esteban Mayo Street), Lipa City, Batangas.23
The price agreed for the sale of the property was Five Hundred Thousand Pesos (P500,000.00).24 It cannot be
denied that the oral contract of sale entered into between the petitioner and Alejandro was valid.
However, the CA found that it was only Alejandro who agreed to the sale.1wphi1 There is no evidence to show
that the other co-owners consented to Alejandros sale transaction with the petitioner. Hence, for want of
authority to sell Lot No. 3, the CA ruled that Alejandro only sold his aliquot share of the subject property to the
petitioner.
In Alcantara v. Nido,25 the Court emphasized the requirement of an SPA before an agent may sell an immovable
property. In the said case, Revelen was the owner of the subject land. Her mother, respondent Brigida Nido
accepted the petitioners offer to buy Revelens land at Two Hundred Pesos (P200.00) per sq m. However, Nido
was only authorized verbally by Revelen. Thus, the Court declared the sale of the said land null and void under
Articles 1874 and 1878 of the Civil Code.26
Articles 1874 and 1878 of the Civil Code explicitly provide:
Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall
be in writing; otherwise, the sale shall be void.
Art. 1878. Special powers of attorney are necessary in the following cases:
xxxx
(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either
gratuitously or for a valuable consideration;
The petitioner insists that the authority of Alejandro to represent his co-heirs in the contract of sale entered into
with the petitioner had been adequately proven during the trial. He alleges that the other Altamiranos are deemed
to have knowledge of the contract of sale entered into by Alejandro with the petitioner since all of them, either
personally or through their authorized representatives participated in the sale transaction with the Spouses
Lajarca involving the same property covered by TCT No. T-102563. In fact, said TCT even contained a notice of lis
pendens which should have called their attention that there was a case involving the property. Moreover, the
petitioner points out that Alejandro represented a considerable majority of the co-owners as can be observed from
other transaction and documents, i.e., three (3) Deeds of Sale executed in favor of the Spouses Lajarca and the two
other buyers of the parcels of land co-owned by the Altamiranos.27
The petitioners contentions are untenable. Given the expressed requirement under the Articles 1874 and 1878 of
the Civil Code that there must be a written authority to sell an immovable property, the petitioners arguments
must fail. The petitioner asserts that since TCT No. T-102563 contained a notice of lis pendens, the Altamiranos
very well knew of the earlier sale to him by Alejandro. While this may be true, it does not negate the fact that
Alejandro did not have any SPA. It was a finding that need not be disturbed that Alejandro had no authority from
his co-owners to sell the subject property.
Moreover, the fact that Alejandro allegedly represented a majority of the co-owners in the transaction with the
Spouses Lajarca, is of no moment. The Court cannot just simply assume that Alejandro had the same authority
when he transacted with the petitioner.
In Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc.28 the Court stated that "persons
dealing with an assumed agency, whether the assumed agency be a general or special one, are bound at their peril,
if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of
authority, and in case either is controverted, the burden of proof is upon them to establish it." 29 In other words,
when the petitioner relied only on the words of respondent Alejandro without securing a copy of the SPA in favor
of the latter, the petitioner is bound by the risk accompanying such trust on the mere assurance of Alejandro.
The same Woodchild case stressed that apparent authority based on estoppel can arise from the principal who
knowingly permit the agent to hold himself out with authority and from the principal who clothe the agent with
indicia of authority that would lead a reasonably prudent person to believe that he actually has such authority. 30
Apparent authority of an agent arises only from "acts or conduct on the part of the principal and such acts or
conduct of the principal must have been known and relied upon in good faith and as a result of the exercise of
reasonable prudence by a third person as claimant and such must have produced a change of position to its
detriment."31 In the instant case, the sale to the Spouses Lajarca and other transactions where Alejandro allegedly
represented a considerable majority of the co-owners transpired after the sale to the petitioner; thus, the
petitioner cannot rely upon these acts or conduct to believe that Alejandro had the same authority to negotiate for
the sale of the subject property to him.
Indeed, the petitioner can only apply the principle of apparent authority if he is able to prove the acts of the
Altamiranos which justify his belief in Alejandros agency; that the Altamiranos had such knowledge thereof; and if
the petitioner relied upon those acts and conduct, consistent with ordinary care and prudence. 32
The instant case shows no evidence on record of specific acts which the Altamiranos made before tile sale of the
subject property to the petitioner, indicating that they fully knew of the representation of Alejandro. All that the
petitioner relied upon were acts that happened after the sale to him. Absent the consent of Alejandro's co-owners,
the Court holds that the sale between the other Altamiranos and the petitioner is null and void. But as held by the
appellate court, the sale between the petitioner and Alejandro is valid insofar as the aliquot share of respondent
Alejandro is concerned. Being a co-owner, Alejandro can validly and legally dispose of his share even without the
consent of all the other co-heirs.33 Since the balance of the full price has not yet been paid, the amount paid shall
represent as payment to his aliquot share.34 This then leaves the sale of the lot of the Altamiranos to the Spouses
Lajarca valid only insofar as their shares are concerned, exclusive of the aliquot part of Alejandro, as ruled by the
CA. The Court finds no reversible error with the decision of the CA in all respects.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated November 29, 2007 in CA-G.R. CV
No. 86001 is AFFIRMED.
SO ORDERED.
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