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The two settled on the price of P250.00 per square meter. Then, Ysaac
demanded for an initial payment of P1,500.00, which Cabrera paid.
Subsequently, Ysaac informed Cabrera that the Borbe family and the
Espiritu family were no longer interested in purchasing the properties
they were leasing since Mamerta Espiritu initially considered
purchasing the property and had made an initial deposit for it.
Cabrera agreed to reimburse his earlier payment. However, Cabrera
still paid an additional amount of P6,100.00. Ysaac issued a receipt
for this amount. P3,100.00 of the said amount paid was reimbursed to
Mamerta Espiritu and, in turn, she gave Cabrera the receipts issued to
her by Ysaac.
When Cabrera tried to pay the balance of the purchase price Ysaac was
in the United States. The only person in Ysaac's residence was his
wife who refused to accept Cabrera's payment.
The resurvey shows that the area now covered by the transaction.
Cabrera intended to show the sketch plan and pay the amount due for
the payment of the lot. However, on that day, Henry Ysaac was in
Manila. Once more, Henry Ysaac's wife refused to receive the payment
because of lack of authority from her husband.
When Cabrera went to Ysaac's house to settle the matter, the latter
told the former that he could no longer sell the property because the
new administrator of the property was his brother, Franklin Ysaac.
Before the Regional Trial Court decided the case, the heirs of Luis
and Matilde Ysaac, under the administration of Franklin Ysaac, sold
their property to the local government of Naga City in order to turned
into a project for the urban poor of the city.
During the trial, Corazon Borbe Combe of the Borbe family testified
that contrary to what Juan Cabrera claimed, her family never agreed to
sell the land they were formerly leasing from Ysaac in favor of Juan
Cabrera. The Borbe family bought the property from Naga City's urban
poor program after the sale between the Ysaacs and the local
government of Naga City.
The RTC of Naga City ruled that the contract of sale between Cabrera
and Ysaac was duly rescinded when the former failed to pay the balance
of the purchase price in the period agreed upon. The RTC found that
there was an agreement between Cabrera and Ysaac as to the sale of
land and the corresponding unit price. However, aside from the
receipts turned over by Mamerta Espiritu of the Espiritu family to
Cabrera, there was no "evidence that the other adjoining lot occupants
agreed to sell their respective landholdings" to Cabrera. The RTC also
doubted that Cabrera was willing and able to pay Ysaac.
On appeal, the CA agreed with the RTC that there was a perfected
contract of sale between the two. According to the CA, even if the
subject of the sale is part of Ysaac's undivided property, a co-owner
may sell a definite portion of the property. The CA also ruled that
the contract of sale between Cabrera and Ysaac was not validly
rescinded. For the rescission to be valid under Article 1592 of the
Civil Code, it should have been done through a judicial or notarial
act and not merely through a letter.
However, due to the sale of the entire property of the Ysaac family in
favor of the local government of Naga City, the Court of Appeals ruled
that the verbal contract between Juan Cabrera and Henry Ysaac cannot
be subject to the remedy of specific performance. The local government
of Naga City was an innocent purchaser for value, and following the
rules on double sales, it had a preferential right since the sale, it
entered into was in a public instrument, while the one with Juan
Cabrera was only made orally. The only recourse the CA gave Cabrera
was to order Ysaac to return the initial payment of the purchase price
of P10,600.00 (P1,500.00 and P6,100.00 as evidenced by the receipts
issued by Henry Ysaac to Juan Cabrera, and P3,000.00 for the surveying
expenses) as payment of actual damages.
Issue: Whether there was a valid contract of sale between Cabrera and
Ysaac.
Held: No. There was no valid contract of sale between petitioner and
respondent. As defined by the Civil Code, "[a] contract is a meeting
of minds between two persons whereby one binds himself, with respect
to the other, to give something or to render some service." For there
to be a valid contract, there must be consent of the contracting
parties, an object certain which is the subject matter of the
contract, and cause of the obligation which is established.
The object of the sales contract between petitioner and respondent was
a definite portion of a co-owned parcel of land. At the time of the
alleged sale between petitioner and respondent, the entire property
was still held in common. This is evidenced by the original
certificate of title, which was under the names of Matilde Ysaac,
Priscilla Ysaac, Walter Ysaac, respondent Henry Ysaac, Elizabeth
Ysaac, Norma Ysaac, Luis Ysaac, Jr., George Ysaac, Franklin Ysaac,
Marison Ysaac, Helen Ysaac, Erlinda Ysaac, and Maridel Ysaac.
Also in this case, the Court held that a non-existent contract cannot
be a source of obligations, and it cannot be enforced by the courts.
ORION SAVINGS BANK, PETITIONER, VS. SHIGEKANE SUZUKI, RESPONDENT.
G.R. No. 205487, November 12, 2014
BRION, J.:
At the meeting, Soneja informed Suzuki that Unit No. 536 [covered by
Condominium Certificate of Title (CCT) No. 18186] and Parking Slot No.
42 [covered by CCT No. 9118] were for sale for P3,000,000.00. Soneja
likewise assured Suzuki that the titles to the unit and the parking
slot were clean. After a brief negotiation, the parties agreed to
reduce the price to P2,800,000.00.
Before long, Suzuki learned that CCT No. 9118 representing the title
to the Parking Slot No. 42 contained no annotations although it
remained under the name of Cityland Pioneer. This notwithstanding,
Cityland Pioneer, through Assistant Vice President Rosario D. Perez,
certified that Kang had fully paid the purchase price of Unit. No. 536
and Parking Slot No. 42.
CCT No. 18186 representing the title to the condominium unit had no
existing encumbrance, except for an annotation that any conveyance or
encumbrance of CCT No. 18186 shall be subject to approval by the
Philippine Retirement Authority (PRA). Although CCT No. 18186
contained Entry No. 66432/C-10186 dated February 2, 1999 representing
a mortgage in favor of Orion for a P1,000,000.00 loan, that annotation
was subsequently cancelled on June 16, 2000 by Entry No. 73232/T. No.
10186. Despite the cancellation of the mortgage to Orion, the titles
to the properties remained in possession of Perez.
To protect his interests, Suzuki then executed an Affidavit of Adverse
Claim with the Registry of Deeds of Mandaluyong City and then demanded
the delivery of the titles. Orion, (through Perez), however, refused
to surrender the titles, and cited the need to consult Orion’s legal
counsel as its reason.
The court found that Suzuki was an innocent purchaser for value whose
rights over the properties prevailed over Orion’s. The RTC further
noted that Suzuki exerted efforts to verify the status of the
properties but he did not find any existing encumbrance in the
titles. Although Orion claims to have purchased the property by way
of a Dacion en Pago, Suzuki only learned about it two (2) months after
he bought the properties because Orion never bothered to register or
annotate the Dacion en Pago in CCT Nos. 18186 and 9116.
Second, Perez, the supposed person who prepared the Dacion en Pago,
appears to only have a vague idea of the transaction he supposedly
prepared.
Third, the Dacion en Pago, mentioned that the P1,800,000.00 loan was
secured by a real estate mortgage. However, no document was ever
presented to prove this real estate mortgage aside from it being
mentioned in the Dacion en Pago itself.
Fourth, the Dacion en Pago was first mentioned only two (2) months
after Suzuki and Samin demanded the delivery of the titles sometime in
August 2003, and after Suzuki caused the annotation of his affidavit
of adverse claim. Records show that it was only on October 9, 2003,
when Orion, through its counsel, Cristobal Balbin Mapile & Associates
first spoke of the Dacion en Pago. Not even Perez mentioned any Dacion
en Pago on October 1, 2003, when he personally received a letter
demanding the delivery of the titles. Instead, Perez refused to accept
the letter and opted to first consult with his lawyer.
Hence, the Court held that the absence of any attempt on the part of
Orion to assert its right of dominion over the property allegedly sold
to it is a clear badge of fraud. That notwithstanding the execution of
the Dacion en Pago, Kang remained in possession of the disputed
condominium unit – from the time of the execution of the Dacion en
Pago until the property’s subsequent transfer to Suzuki – unmistakably
strengthens the fictitious nature of the Dacion en Pago.