Sales Cases Prelim

[G.R. No. 109125. December 2, 1994.
]
ANG YU ASUNCION, ARTHUR GO AND KEH
TIONG, Petitioners, v. THE HON. COURT OF
APPEALS and BUEN REALTY DEVELOPMENT
CORPORATION, Respondents.
DECISION
VITUG, J.:
Assailed, in this petition for review, is the decision

of the Court of Appeals, dated 04 December
1991, in CA-G.R. SP No. 26345 setting aside and
declaring without force and effect the orders of
execution of the trial court, dated 30 August 1991
and 27 September 1991, in Civil Case No. 8741058.
The antecedents are recited in good detail by the
appellate court thusly:
jgc:chanroble s.com.ph
"On July 29, 1987 a Second Amended Complaint

for Specific Performance was filed by Ann Yu
Asuncion and Keh Tiong, Et Al., against Bobby Cu
Unjieng, Rose Cu Unjieng and Jose Tan before the
Regional Trial Court, Branch 31, Manila in Civil
Case No. 87-41058, alleging, among others, that
plaintiffs are tenants or lessees of residential and
commercial spaces owned by defendants
described as Nos. 630-638 Ongpin Street,
Binondo, Manila; that they have occupied said
spaces since 1935 and have been religiously
paying the rental and complying with all the
conditions of the lease contract; that on several
occasions before October 9, 1986, defendants
informed plaintiffs that they are offering to sell
the premises and are giving them priority to
acquire the same; that during the negotiations,
Bobby Cu Unjieng offered a price of P6-million
while plaintiffs made a counter offer of P5-million;
that plaintiffs thereafter asked the defendants to
put their offer in writing to which request
defendants acceded; that in reply to defendants
letter, plaintiffs wrote them on October 24, 1986
asking that they specify the terms and conditions
of the offer to sell; that when plaintiffs did not
receive any reply, they sent another letter dated
January 28, 1987 with the same request; that
since defendants failed to specify the terms and
conditions of the offer to sell and because of
information received that defendants were about
to sell the property, plaintiffs were compelled to
file the complaint to compel defendants to sell the
property to them.
"Defendants filed their answer denying the
material allegations of the complaint and
interposing a special defense of lack of cause of

action.
"After the issues were joined, defendants filed a
motion for summary judgment which was granted
by the lower court. The trial court found that
defendants offer to sell was never accepted by
the plaintiffs for the reason that the parties did
not agree upon the terms and conditions of the
proposed sale, hence, there was no contract of
sale at all. Nonetheless, the lower court ruled that
should the defendants subsequently offer their
property for sale at a price of P11-million or
below, plaintiffs will have the right of first refusal.
Thus the dispositive portion of the decision
states:
"WHEREFORE, judgment is hereby rendered in

favor of the defendants and against the plaintiffs
summarily dismissing the complaint subject to the
aforementioned condition that if the defendants
subsequently decide to offer their property for
sale for a purchase price of Eleven Million Pesos
or lower, then the plaintiffs has the option to
purchase the property or of first refusal,
otherwise, defendants need not offer the property
to the plaintiffs if the purchase price is higher
than Eleven Million Pesos.
"SO ORDERED.
"Aggrieved by the decision, plaintiffs appealed to
this Court in CA-G.R. CV No. 21123. In a decision
promulgated on September 21, 1990 (penned by
Justice Segundino G. Chua and concurred in by
Justices Vicente V. Mendoza and Fernando A.
Santiago), this Court affirmed with modification
the lower courts judgment, holding:
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"In resume, there was no meeting of the minds

between the parties concerning the sale of the
property. Absent such requirement, the claim for
specific performance will not lie. Appellants
demand for actual, moral and exemplary
damages will likewise fail as there exists no
justifiable ground for its award. Summary
judgment for defendants was properly granted.
Courts may render summary judgment when
there is no genuine issue as to any material fact
and the moving party is entitled to a judgment as
a matter of law (Garcia v. Court of Appeals, 176
SCRA 815). All requisites obtaining, the decision
of the court a quo is legally justifiable.
WHEREFORE, finding the appeal unmeritorious,
the judgment appealed from is hereby AFFIRMED,
but subject to the following modification: The
court a quo in the aforestated decision gave the
plaintiffs-appellants the right of first refusal only if
the property is sold for a purchase price of Eleven
Million pesos or lower; however, considering the
mercurial and uncertain forces in our market
economy today. We find no reason not to grant

the same right of first refusal to herein appellants
in the event that the subject property is sold for a
price in excess of Eleven Million pesos. No
pronouncement as to costs.
SO ORDERED.
"The decision of this Court was brought to the
Supreme Court by petition for review
on certiorari. The Supreme Court denied the
appeal on May 6, 1991 for insufficiency in form
and substances (Annex H, Petition).
"On November 15, 1990, while CA-G.R. CV No.
21123 was pending consideration by this Court,
the Cu Unjieng spouses executed a Deed of Sale
(Annex D, Petition) transferring the property in
question to herein petitioner Buen Realty and
Development Corporation, subject to the following
terms and conditions:
"1. That for and in consideration of the sum of

FIFTEEN MILLION PESOS (P15,000,000.00),
receipt of which in full is hereby acknowledged,
the VENDORS hereby sells, transfers and conveys
for and in favor of the VENDEE, his heirs,
executors, administrators or assigns, the abovedescribed property with all the improvements
found therein including all the rights and interest
in the said property free from all liens and
encumbrances of whatever nature, except the
pending ejectment proceeding;
2. That the VENDEE shall pay the Documentary
Stamp Tax, registration fees for the transfer of
title in his favor and other expenses incidental to
the sale of above-described property including
capital gains tax and accrued real estate taxes.
"As a consequence of the sale, TCT No. 105254/T881 in the name of the Cu Unjieng spouses was
cancelled and, in lieu thereof, TCT No. 195816
was issued in the name of petitioner on December
3, 1990.
"On July 1, 1991, petitioner as the new owner of
the subject property wrote a letter to the lessees
demanding that the latter vacate the premises.
"On July 16, 1991, the lessees wrote a reply to
petitioner stating that petitioner brought the
property subject to the notice of lis pendens
regarding Civil Case No. 87-41058 annotated on
TCT No. 105254/T-881 in the name of the Cu
Unjiengs.
"The lessees filed a Motion for Execution dated
August 27, 1991 of the Decision in Civil Case No.
87-41058 as modified by the Court of Appeals in
CA-G.R. CV No. 21123.
"On August 30, 1991, respondent Judge issued an

order (Annex A, Petition) quoted as follows:
"Presented before the Court is a Motion for

Execution filed by plaintiff represented by Atty.
Antonio Albano. Both defendants Bobby Cu
Unjieng and Rose Cu Unjieng represented by Atty.
Vicente Sison and Atty. Anacleto Magno
respectively were duly notified in todays
consideration of the motion as evidenced by the
rubber stamp and signatures upon the copy of the
Motion for Execution.
The gist of the motion is that the Decision of the
Court dated September 21, 1990 as modified by
the Court of Appeals in its decision in CA G.R. CV21123, and elevated to the Supreme Court upon
the petition for review and that the same was
denied by the highest tribunal in its resolution
dated May 6, 1991 in G.R. No. L-97276, had now
become final and executory. As a consequence,
there was an Entry of Judgment by the Supreme
Court as of June 6, 1991, stating that the
aforesaid modified decision had already become
final and executory.
It is the observation of the Court that this
property in dispute was the subject of the Notice
of Lis Pendens and that the modified decision of
this Court promulgated by the Court of Appeals
which had become final to the effect that should
the defendants decide to offer the property for
sale for a price of P11 Million or lower, and
considering the mercurial and uncertain forces in
our market economy today, the same right of first
refusal to herein plaintiffs/appellants in the event
that the subject property is sold for a price in
excess of Eleven Million pesos or more.
WHEREFORE, defendants are hereby ordered to
execute the necessary Deed of Sale of the
property in litigation in favor of plaintiffs Ang Yu
Asuncion, Keh Tiong and Arthur Go for the
consideration of P15 Million pesos in recognition
of plaintiffs right of first refusal and that a new
Transfer Certificate of Title be issued in favor of
the buyer.
All previous transactions involving the same
property notwithstanding the issuance of another
title to Buen Realty Corporation, is hereby set
aside as having been executed in bad faith.
SO ORDERED.
"On September 22, 1991 respondent Judge issue
another order, the dispositive portion of which
reads:
"WHEREFORE, let there be Writ of Execution

issue in the above-entitled case directing the
Deputy Sheriff Ramon Enriquez of this Court to
implement said Writ of Execution ordering the

defendants among others to comply with the
aforesaid Order of this Court within a period of
one (1) week from receipt of this Order and for
defendants to execute the necessary Deed of Sale
of the property in litigation in favor of the
plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur
Go for the consideration of P15,000,000.00 and
ordering the Register of Deeds of the City of
Manila, to cancel and set aside the title already
issued in favor of Buen Realty Corporation which
was previously executed between the latter and
defendants and to register the new title in favor
of the aforesaid plaintiffs Ang Yu Asuncion, Keh
Tiong and Arthur Go.
SO ORDERED.
"On the same day, September 27, 1991 the
corresponding writ of execution (Annex C,
Petition) was issued." 1
On 04 December 1991, the appellate court, on
appeal to it by private respondent, set aside and
declared without force and effect the above
questioned orders of the court a quo.
In this petition for review on certiorari, petitioners
contend that Buen Realty can be held bound by
the writ of execution by virtue of the notice of lis
pendens, carried over on TCT No. 195816 issued
in the name of Buen Realty, at the time of the
latters purchase of the property on 15 November
1991 from the Cu Unjiengs.
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We affirm the decision of the appellate court.
something or to render some service (Art. 1305,

Civil Code). A contract undergoes various stages
that include its negotiation or preparation, its
perfection and, finally, its consummation.
Negotiation covers the period from the time the
prospective contracting parties indicate interest in
the contract to the time the contract is concluded
(perfected). The perfection of the contract takes
place upon the concurrence of the essential
elements thereof. A contract which is consensual
as to perfection is so established upon a mere
meeting of minds, i.e., the concurrence of offer
and acceptance, on the object and on the cause
thereof. A contract which requires, in addition to
the above, the delivery of the object of the
agreement, as in a pledge or commodatum, is
commonly referred to as a real contract. In a
solemn contract, compliance with certain
formalities prescribed by law, such as in a
donation of real property, is essential in order to
make the act valid, the prescribed form being
thereby an essential element thereof. The stage
of consummation begins when the parties
perform their respective undertakings under the
contract culminating in the extinguishment
thereof.
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Until the contract is perfected, it cannot, as an

independent source of obligation, serve as a
binding juridical relation. In sales, particularly, to
which the topic for discussion about the case at
bench belongs, the contract is perfected when a
person, called the seller, obligates himself, for a
price certain, to deliver and to transfer ownership
of a thing or right to another, called the buyer,
over which the latter agrees. Article 1458 of the
Civil Code provides:
A not too recent development in real estate

transactions is the adoption of such arrangements
as the right of first refusal, a purchase option and
a contract to sell. For ready reference, we might
point out some fundamental precepts that may
find some relevance to this discussion.
An obligation is a juridical necessity to give, to do
or not to do (Art. 1156, Civil Code). The
obligation is constituted upon the concurrence of
the essential elements thereof, viz: (a) The
vinculum juris or juridical tie which is the efficient
cause established by the various sources of
obligations (law, contracts, quasi-contracts,
delicts and quasi-delicts); (b) the object which is
the prestation or conduct; required to be
observed (to give, to do or not to do); and (c) the
subject-persons who, viewed from the
demandability of the obligation, are the active
(obligee) and the passive (obligor) subjects.
Among the sources of an obligation is a contract
(Art. 1157, Civil Code), which is a meeting of
minds between two persons whereby one binds
himself, with respect to the other, to give
"Art. 1458. By the contract of sale one of the

contracting parties obligates himself to transfer
the ownership of and to deliver a determinate
thing, and the other to pay therefor a price
certain in money or its equivalent.
"A contract of sale may be absolute or
conditional.
When the sale is not absolute but conditional,
such as in a "Contract to Sell" where invariably
the ownership of the thing sold is retained until
the fulfillment of a positive suspensive condition
(normally, the full payment of the purchase
price), the breach of the condition will prevent the
obligation to convey title from acquiring an
obligatory force. 2 In Dignos v. Court of Appeals
(158 SCRA 375), we have said that, although
denominated a "Deed of Conditional Sale," a sale
is still absolute where the contract is devoid of
any proviso that title is reserved or the right to
unilaterally rescind is stipulated, e.g., until or
unless the price is paid. Ownership will then be
transferred to the buyer upon actual or
constructive delivery (e.g., by the execution of a

public document) of the property sold. Where the
condition is imposed upon the perfection of the
contract itself, the failure of the condition would
prevent such perfection. 3 If the condition is
imposed on the obligation of a party which is not
fulfilled, the other party may either waive the
condition or refuse to proceed with the sale (Art.
1545, Civil Code). 4
An unconditional mutual promise to buy and sell,
as long as the object is made determinate and
the price is fixed, can be obligatory on the
parties, and compliance therewith may
accordingly be exacted. 5
An accepted unilateral promise which specifies the
thing to be sold and the price to be paid, when
coupled with a valuable consideration distinct and
separate from the price, is what may properly be
termed a perfected contract of option. This
contract is legally binding, and in sales, it
conforms with the second paragraph of Article
1479 of the Civil Code, viz:
"ART. 1479. . . . .
"An accepted unilateral promise to buy or to sell a
determinate thing for a price certain is binding
upon the promissor if the promise is supported by
a consideration distinct from the price. (1451a) 6
Observe, however, that the option is not the
contract of sale itself. 7 The optionee has the
right, but not the obligation, to buy. Once the
option is exercised timely, i.e., the offer is
accepted before a breach of the option, a bilateral
promise to sell and to buy ensues and both
parties are then reciprocally bound to comply with
their respective undertakings. 8
Let us elucidate a little. A negotiation is formally
initiated by an offer. An imperfect promise
(policitacion) is merely an offer. Public
advertisements or solicitations and the like are
ordinarily construed as mere invitations to make
offers or only as proposals. These relations, until
a contract is perfected, are not considered binding
commitments. Thus, at any time prior to the
perfection of the contract, either negotiating party
may stop the negotiation. The offer, at this stage,
may be withdrawn; the withdrawal is effective
immediately after its manifestation, such as by its
mailing and not necessarily when the offeree
learns of the withdrawal (Laudico v. Arias, 43 Phil.
270). Where a period is given to the offeree
within which to accept the offer, the following
rules generally govern:
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(1) If the period is not itself founded upon or

supported by a consideration, the offeror is still
free and has the right to withdrawal the offer
before its acceptance, or, if an acceptance has

been made, before the offerors coming to know
of such fact, by communicating that withdrawal to
the offeree (see Art. 1324, Civil Code; see also
Atkins, Kroll & Co. v. Cua, 102 Phil. 948, holding
that this rule is applicable to a unilateral promise
to sell under Art. 1479, modifying the previous
decision in South Western Sugar v. Atlantic Gulf,
97 Phil. 249; see also Art. 1319, Civil Code; Rural
Bank of Paraaque, Inc., v. Remolado, 135 SCRA
409; Sanchez v. Rigos, 45 SCRA 368). The right
to withdraw, however, must not be exercised
whimsically or arbitrarily; otherwise, it could give
rise to a damage claim under Article 19 of the
Civil Code which ordains that "every person must,
in the exercise of his rights and in the
performance of his duties, act with justice, give
everyone his due, and observe honesty and good
faith."
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(2) If the period has a separate consideration, a

contract of "option" is deemed perfected, and it
would be a breach of that contract to withdraw
the offer during the agreed period. The option,
however, is an independent contract by itself, and
it is to be distinguished from the projected main
agreement (subject matter of the option) which is
obviously yet to be concluded. If, in fact, the
optioner-offeror withdraws the offer before its
acceptance (exercise of the option) by the
optionee-offeree, the latter may not sue for
specific performance on the proposed contract
("object" of the option) since it has failed to reach
its own stage of perfection. The optioner-offeror,
however, renders himself liable for damages for
breach of the option. In these cases, care should
be taken of the real nature of the consideration
given, for if, in fact, it has been intended to be
part of the consideration for the main contract
with a right of withdrawal on the part of the
optionee, the main contract could be deemed
perfected; a similar instance would be an "earnest
money" in a contract of sale that can evidence its
perfection (Art. 1482, Civil Code).
In the law on sales, the so-called "right of first
refusal" is an innovative juridical relation.
Needless to point out, it cannot be deemed a
perfected contract of sale under Article 1458 of
the Civil Code. Neither can the right of first
refusal, understood in its normal concept, per se
be brought within the purview of an option under
the second paragraph of Article 1479,
aforequoted, or possibly of an offer under Article
1319 9 of the same Code. An option or an offer
would require, among other things, 10 a clear
certainty on both the object and the cause or
consideration of the envisioned contract. In a
right of first refusal, while the object might be
made determinate, the exercise of the right,
however, would be dependent not only on the
grantors eventual intention to enter into a
binding juridical relation with another but also on

terms, including the price, that obviously are yet
to be later firmed up. Prior thereto, it can at best
be so described as merely belonging to a class of
preparatory juridical relations governed not by
contracts (since the essential elements to
establish the vinculum juris would still be
indefinite and inconclusive) but by, among other
laws of general application, the pertinent
scattered provisions of the Civil Code on human
conduct.
"Finally, the questioned writ of execution is in

variance with the decision of the trial court as
modified by this Court. As already stated, there
was nothing in said decision 13 that decreed the
execution of a deed of sale between the Cu
Unjiengs and respondent lessees, or the fixing of
the price of the sale, or the cancellation of title in
the name of petitioner (Limpin v. IAC, 147 SCRA
516; Pamantasan ng Lungsod ng Maynila v. IAC,
143 SCRA 311; De Guzman v. CA, 137 SCRA 730;
Pastor v. CA, 122 SCRA 885)."
Even on the premise that such right of first

refusal has been decreed under a final judgment,
like here, its breach cannot justify
correspondingly an issuance of a writ of execution
under a judgment that merely recognizes its
existence, nor would it sanction an action for
specific performance without thereby negating the
indispensable element of consensuality in the
perfection of contracts. 11 It is not to say,
however, that the right of first refusal would be
inconsequential for, such as already intimated
above, an unjustified disregard thereof, given, for
instance, the circumstances expressed in Article
19 12 of the Civil Code, can warrant a recovery
for damages.
It is likewise quite obvious to us that the decision

in Civil Case No. 87-41058 could not have
decreed at the time the execution of any deed of
sale between the Cu Unjiengs and petitioners.
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The final judgment in Civil Case No. 87-41058, it

must be stressed, has merely accorded a "right of
first refusal" in favor of petitioners. The
consequence of such a declaration entails no
more than what has heretofore been said. In fine,
if, as it is here so conveyed to us, petitioners are
aggrieved by the failure of private respondents to
honor the right of first refusal, the remedy is not
a writ of execution on the judgment, since there
is none to execute, but an action for damages in a
proper forum for the purpose.
Furthermore, whether private respondent Buen
Realty Development Corporation, the alleged
purchaser of the property, has acted in good faith
or bad faith and whether or not it should, in any
case, be considered bound to respect the
registration of the lis pendens in Civil Case No.
87-41058 are matters that must be independently
addressed in appropriate proceedings. Buen
Realty, not having been impleaded in Civil Case
No. 87-41058, cannot be held subject to the writ
of execution issued by respondent Judge, let
alone ousted from the ownership and possession
of the property, without first being duly afforded
its day in court.
We are also unable to agree with petitioners that
the Court of Appeals has erred in holding that the
writ of execution varies the terms of the
judgment in Civil Case No. 87-41058, later
affirmed in CA-G.R. CV-21123. The Court of
Appeals, in this regard, has observed:
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WHEREFORE, we UPHOLD the Court of Appeals in

ultimately setting aside the questioned Orders,
dated 30 August 1991 and 27 September 1991,
of the court a quo. Costs against petitioners.
SO ORDERED.
THIRD DIVISION
G.R. No. 205879, April 23, 2014
SKUNAC CORPORATION AND ALFONSO F.
ENRIQUEZ, Petitioners, v. ROBERTO S.
SYLIANTENG AND CAESAR S.
SYLIANTENG, Respondents.
DECISION
PERALTA, J.:
This treats of the petition for review
on certiorari assailing the Decision1 and
Resolution2 of the Court of Appeals (CA), dated
August 10, 2012 and February 18, 2013,
respectively, in CAG.R. CV No. 92022.
The factual and procedural antecedents of the
case, as narrated by the CA, are as follows:
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The civil cases before the [Regional Trial Court of

Pasig City] involved two (2) parcels of land
identified as Lot 1, with an area of 1,250 square
meters (Civil Case No. 63987) and Lot 2, with an
area of 990 square meters (Civil Case No.
63988), both found in Block 2 of the Pujalte
Subdivision situated along Wilson Street,
Greenhills, San Juan City which are portions of a
parcel of land previously registered in the name
of Luis A. Pujalte on October 29, 1945 and

covered by Transfer Certificate of Title (TCT) No.
(78865) (2668) 93165 (Mother Title) of the
Register of Deeds for the City of Manila.
Plaintiffsappellants Roberto S. Sylianteng and
Caesar S. Sylianteng (appellants) base their
claim of ownership over the subject lots a Deed of
Absolute Sale executed in their favor by their
mother, Emerenciana Sylianteng (Emerenciana),
on June 27, 1983. Appellants further allege that
Emerenciana acquired the lots from the late Luis
Pujalte [Luis] through a Deed of Sale dated June
20, 1958 as reflected in Entry No. P.E. 4023,
annotated on the covering TCT, by virtue of which
she was issued TCT No. 42369. Then, when she
sold the lots to appellants, TCT No. 39488,
covering the same, was issued in their names.
[Herein petitioners] Skunac Corporation
(Skunac) and Alfonso F. Enriquez (Enriquez),
on the other hand, claim that a certain Romeo
Pujalte who was declared by the RTC of Pasig
City, Branch 151 in Special Proceedings No. 3366
as the sole heir of Luis Pujalte, caused the
reconstitution of the Mother Title resulting to its
cancellation and the issuance of TCT No. 5760R
in his favor. Romeo Pujalte then allegedly sold the
lots to Skunac and Enriquez in 1992. Thus, from
TCT No. 5760R, TCT No. 5888R, for Lot 1 was
issued in the name of Skunac, while TCT No.
5889R for Lot 2 was issued in the name of
Enriquez.
[Respondents] contend that they have a better
right to the lots in question because the
transactions conveying the same to them
preceded those claimed by [petitioners] as source
of the latters titles. [Respondents] further assert
that [petitioners] could not be considered as
innocent purchasers in good faith and for value
because they had prior notice of the previous
transactions as stated in the memorandum of
encumbrances annotated on the titles covering
the subject lots. [Petitioners], for their part,
maintain that [respondents] acquired the lots
under questionable circumstances it appearing
that there was no copy of the Deed of Sale,
between Emerenciana and Luis Pujalte, on file
with the Office of the Register of Deeds.3
On November 16, 2007, the Regional Trial Court
of Pasig (RTC) rendered judgment in favor of
herein petitioners. The dispositive portion of the
RTC Decision reads as follows:
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WHEREFORE, premises considered, judgment is

hereby rendered in favor of the defendants and
against the plaintiffs:
1. Declaring as null and void TCT No. 42369 in
the name of Emerciana (sic) Sylianteng and TCT
No. 39488 in the name of plaintiffs herein and

ordering the cancellation thereof;
2. Declaring the herein defendants as buyers in
good faith and for value; and
3. Declaring TCT No. 5888R in the name of
SKUNAC Corporation and TCT No. 5889R in the
name of Alfonso Enriquez as valid.
The complaintinintervention is ordered
dismissed.
With costs against the plaintiffs.
SO ORDERED.4
Herein respondents then filed an appeal with the
CA.
On August 10, 2012, the CA promulgated its
assailed Decision, disposing as follows:
WHEREFORE, in light of all the foregoing, the

appeal is GRANTED. The decision dated
November 16, 2007 of Branch 160, Regional Trial
Court of Pasig City in Civil Case No. 63987 is
hereby REVERSED and SET ASIDE.
Judgment is hereby rendered in favor of
plaintiffsappellants Roberto S. Sylianteng and
Caesar S. Sylianteng and against defendants
appellees Skunac Corporation and Alfonso F.
Enriquez, and intervenorappellee Romeo N.
Pujalte:
1. Declaring as null and void Transfer Certificate
of Title No. 5760R in the name of Romeo N.
Pujalte, Transfer Certificate of Title No. 5888R in
the name of Skunac Corporation, and Transfer
Certificate of Title No. 5889R in the name of
Alfonso F. Enriquez;
2. Upholding the validity of Transfer Certificate of
Title No. 42369 in the name of Emerenciana
Sylianteng, and Transfer Certificate of Title No.
39488 in the names of Roberto S. Sylianteng and
Caesar S. Sylianteng; and
3. Ordering defendantsappellees Skunac
Corporation and Alfonso F. Enriquez, and
intervenorappellee Romeo N. Pujalte, jointly and
severally, to pay plaintiffsappellants Roberto S.
Sylianteng and Caesar S. Sylianteng:
a. Moral damages in the amount of P500,000.00,
b. Exemplary damages in the amount of
P500,000.00,
c. Attorneys fees in the amount of P250,000.00,
and
d. The costs of suit.
SO ORDERED.5
Petitioners filed a Motion for Reconsideration, but

the CA denied it in its Resolution dated February
18, 2013.
Hence, the instant petition with the following
assignment of errors:
I. THE HONORABLE COURT OF APPEALS ERRED

IN APPLYING IN THE CASE THE PROVISION OF
THE CIVIL CODE ON DOUBLE SALE OF A
REGISTERED LAND.
II. THE HONORABLE COURT OF APPEALS ERRED
IN NOT FINDING THAT RESPONDENTS FAILED TO
PROVE THE EXISTENCE OF SALE BETWEEN LUIS
PUJALTE AND THEIR PREDECESSORIN
INTEREST, EMERENCIANA SYLIANTENG.
III. THE HONORABLE COURT OF APPEALS ERRED
IN NOT DECLARING NULL AND VOID TCT NO.
42369 PURPORTED TO HAVE BEEN ISSUED TO
EMERENCIANA SYLIANTENG BY THE REGISTER
OF DEEDS OF QUEZON CITY.
and the appellee;

(g) When the CAs findings are contrary to
those by the trial court;
(h) When the findings are conclusions without
citation of specific evidence on which they are
based;
(i) When the facts set forth in the petition as well
as in the petitioners main and reply briefs are not
disputed by the respondent;
(j) When the findings of fact are premised on the
supposed absence of evidence and contradicted
by the evidence on record; or
(k) When the CA manifestly overlooked certain
relevant facts not disputed by the parties, which,
if properly considered, would justify a different
conclusion.8
In the instant case, the findings of the CA and the
RTC are conflicting. It, thus, behooves this Court
to entertain the questions of fact raised by
petitioners and review the records of this case to
resolve these conflicting findings. Thus, this Court
held in the case of Manongsong v.
Estimo9 that:
IV. THE HONORABLE COURT OF APPEALS ERRED

IN NOT FINDING THAT PETITIONERS ARE THE
LAWFUL OWNERS OF THE SUBJECT LOTS SINCE
THEY HAVE VALIDLY ACQUIRED THE SAME FROM
ROMEO PUJALTE, THE SOLE HEIR OF LUIS
PUJALTE.
V. THE HONORABLE COURT OF APPEALS ERRED
IN AWARDING MORAL AND EXEMPLARY
DAMAGES AS WELL AS ATTORNEY'S FEES AND
COST OF SUIT TO RESPONDENTS CONSIDERING
THAT PETITIONERS WERE NOT IN BAD FAITH IN
PURCHASING THE SUBJECT LOTS.6
The petition lacks merit.
At the outset, the Court observes that the main
issues raised in the instant petition are essentially
questions of fact. It is settled that, as a rule, in
petitions for review on certiorari under Rule 45 of
the Rules of Court, only questions of law may be
put in issue.7 Questions of fact cannot be
entertained. There are, however, recognized
exceptions to this rule, to wit:
(a) When the findings are grounded entirely on

speculation, surmises, or conjectures;
(b) When the inference made is manifestly
mistaken, absurd, or impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a
misapprehension of facts;
(e) When the findings of facts are conflicting;
(f) When in making its findings the CA went
beyond the issues of the case, or its findings are
contrary to the admissions of both the appellant
We review the factual and legal issues of this case

in light of the general rules of evidence and the
burden of proof in civil cases, as explained by this
Court in Jison v. Court of Appeals:
x x x Simply put, he who alleges the affirmative
of the issue has the burden of proof, and upon the
plaintiff in a civil case, the burden of proof never
parts. However, in the course of trial in a civil
case, once plaintiff makes out a prima facie case
in his favor, the duty or the burden of evidence
shifts to defendant to controvert plaintiffs prima
facie case, otherwise, a verdict must be returned
in favor of plaintiff. Moreover, in civil cases, the
party having the burden of proof must produce a
preponderance of evidence thereon, with plaintiff
having to rely on the strength of his own evidence
and not upon the weakness of the defendants.
The concept of preponderance of evidence
refers to evidence which is of greater weight, or
more convincing, that which is offered in
opposition to it; at bottom, it means probability of
truth.10
Coming to the merits of the case, the
abovementioned assignment of errors boils down
to two basic questions: (1) whether or not
respondents' predecessorininterest,
Emerenciana, validly acquired the subject lots
from Luis, and (2) whether or not respondents, in
turn, validly acquired the same lots from
Emerenciana.
The Court rules in the affirmative, but takes
exception to the CAs and RTCs application of
Article 1544 of the Civil Code.
Reliance by the trial and appellate courts on

Article 1544 of the Civil Code is misplaced. The
requisites that must concur for Article 1544 to
apply are:
(a) The two (or more sales) transactions must

constitute valid sales;
(b) The two (or more) sales transactions must
pertain to exactly the same subject matter;
(c) The two (or more) buyers at odds over the
rightful ownership of the subject matter must
each represent conflicting interests; and
(d) The two (or more) buyers at odds over
the rightful ownership of the subject
matter must each have bought from the very
same seller.11
Obviously, said provision has no application in
cases where the sales involved were initiated not
by just one but two vendors.12 In the present
case, the subject lots were sold to petitioners and
respondents by two different vendors
Emerenciana and Romeo Pujalte (Romeo). Hence,
Article 1544 of the Civil Code is not applicable.
Nonetheless, the Court agrees with the findings
and conclusion of the CA that Emerencianas
acquisition of the subject lots from Luis and her
subsequent sale of the same to respondents are
valid and lawful. Petitioners dispute such finding.
To prove their contention, they assail the
authenticity and due execution of the deed of sale
between Luis and Emerenciana.
Petitioners contend that respondents'
presentation of the duplicate/carbon original of
the Deed of Sale13 dated June 20, 1958 is in
violation of the best evidence rule under Section
3, Rule 130 of the Rules of Court.14 The Court
does not agree.
The best evidence rule is inapplicable to the
present case. The said rule applies only when the
content of such document is the subject of the
inquiry.15 Where the issue is only as to whether
such document was actually executed, or exists,
or on the circumstances relevant to or
surrounding its execution, the best evidence rule
does not apply and testimonial evidence is
admissible.16 Any other substitutionary evidence
is likewise admissible without need to account for
the original.17 In the instant case, what is being
questioned is the authenticity and due execution
of the subject deed of sale. There is no real issue
as to its contents.
In any case, going to the matter of authenticity
and due execution of the assailed document,
petitioners do not dispute that the copy of the
deed of sale that respondents submitted as part
of their evidence is a duplicate of the original
deed of sale dated June 20, 1958. It is settled

that a signed carbon copy or duplicate of a
document executed at the same time as the
original is known as a duplicate original and
maybe introduced in evidence without accounting
for the nonproduction of the original.18
Moreover, Section 4 (b), Rule 130 of the Rules of
Court provides that [w]hen a document is in two
or more copies executed at or about the same
time, with identical contents, all such copies are
equally regarded as originals.
In addition, evidence of the authenticity and due
execution of the subject deed is the fact that it
was notarized. The notarization of a private
document converts it into a public
document.19 Moreover, a notarized instrument is
admissible in evidence without further proof of its
due execution, is conclusive as to the truthfulness
of its contents, and has in its favor the
presumption of regularity.20 This presumption is
affirmed if it is beyond dispute that the
notarization was regular.21 To assail the
authenticity and due execution of a notarized
document, the evidence must be clear, convincing
and more than merely preponderant.22
In the present case, petitioners failed to present
convincing evidence to prove that the notarization
of the subject deed was irregular as to strip it of
its public character. On the contrary, a certified
copy of page 26 of the notarial register of the
notary public who notarized the subject deed of
sale, which was issued by the Records
Management and Archives Office of Manila, shows
that the sale of the subject lots by Luis to
Emerenciana was indeed regularly notarized.23
Petitioners further argue that the deed of sale
between Emerenciana and Luis was not registered
with the Register of Deeds of Quezon City. The
Court, however, agrees with the CA that the said
deed was, in fact, registered as evidenced by
official receipts24 issued to this effect. Petitioners,
again, did not present any evidence to assail the
authenticity of these documents.
Petitioners also question the authenticity of the
subject deed of sale (Exhibit B1C) by arguing
that only one copy of such deed was prepared as
only one document number was assigned by the
notary to the said deed. Petitioners claim that this
is contrary to the claim of respondents that the
said deed of sale was prepared, executed and
notarized in several copies. The Court is not
persuaded.
It is true that Section 246, Article V, Title IV,
Chapter II of the Revised Administrative Code
provides that [t]he notary shall give to each
instrument executed, sworn to, or acknowledged
before him a number corresponding to the one in

his register, and shall also state on the instrument
the page or pages of his register on which the
same is recorded. In this regard, the Court
agrees with respondents' contention that the
instrument being referred to in the abovequoted
provision is the deed or contract which is
notarized. It does not pertain to the number of
copies of such deed or contract. Hence, one
number is assigned to a deed or contract
regardless of the number of copies prepared and
notarized. Each and every copy of such contract is
given the same document number. It is, thus,
wrong for petitioners to argue that only one copy
of the June 20, 1958 deed of sale was prepared
and notarized, because only one document
number appears on the notarial book of the
notary public who notarized the said deed. On the
contrary, evidence shows that at least two copies
of the subject deed of sale was prepared and
notarized one was submitted for registration
with the Register of Deeds of Quezon City and the
other was retained by Emerenciana, which is the
copy presented in evidence by respondents.
As to petitioners' contention that the copy of the
deed of sale presented by respondents in
evidence is of dubious origin because it does not
bear the stamp RECEIVED by the Register of
Deeds of Quezon City, suffice it to state that the
Court finds no cogent reason to disagree with
respondents' contention that the duplicate original
of the subject deed of sale which they presented
as evidence in court could not have been received
by the Register of Deeds of Quezon City because
only the original copy, and not the duplicate
original, was submitted to the Register of Deeds
for registration.
Petitioners also question the authenticity of and
the entries appearing on the copy of the title
covering the subject properties in the name of
Luis. However, the Court finds no cogent reason
to doubt the authenticity of the document as well
as the entries appearing therein, considering that
the parties (herein petitioners and respondents)
stipulated25 that the machine copy of TCT No.
78865 in the name of Luis, marked as Exhibit
DDD for respondents, is a faithful reproduction
of the original copy of the said title, including the
memorandum of encumbrances annotated
therein. Included in the memorandum of
encumbrances is Entry No. P.E. 4023, which
states, thus:
This certificate of title is hereby cancelled (sic)

partially with respect to Lots 1 and 2, Blk. 2 by
virtue of a Deed of Sale ratified on June 20, 1958
before Armenio P. Engracia of Notary for the City
of Manila and Transfer Certificate of Title No.
42369 is issued in the name of Vendee,
Emerenciana A.S. de Sylianteng, filing the

aforesaid Deed under TNo. 42369.26
The same entry appears in Exhibit 11 for
petitioners.27
P.E. No. 4023 has been entered on TCT No. 78865
by the then Acting Register of Deeds of San Juan.
Petitioners assail the regularity of such entry.
However, one of the disputable presumptions
provided under Section 3 (m), Rule 131 of the
Rules of Court is that official duty has been
regularly performed. Under the said Rule, this
presumption shall be considered satisfactory
unless contradicted and overcome by other
evidence. In the present case, petitioners failed
to present sufficient evidence to contradict the
presumption of regularity in the performance of
the duties of then Acting Register of Deeds of San
Juan.
Petitioners, nonetheless, insist that they have
valid title over the subject properties. They trace
their respective titles from that of Romeo. Romeo,
in turn, derives his supposed ownership of and
title over the subject lots from his claim that he is
the sole heir of the estate of his alleged
predecessorininterest, Luis. Evidence, however,
shows that Romeo never became the owner of
the subject properties for two reasons.
First, as shown above, the disputed lots were
already sold by Luis during his lifetime. Thus,
these parcels of land no longer formed part of his
estate when he died. As a consequence, Romeos
sale of the disputed lots to petitioners was not
affirmed by the estate court, because the subject
parcels of land were not among those included in
the said estate at the time that Romeo was
appointed as the administrator thereof. As shown
in its October 11, 1993 Order,28 the RTC of Pasig,
acting as an estate court, denied Romeos motion
for approval of the sale of the subject lots,
because these properties were already sold to
respondents per report submitted by the Register
of Deeds of San Juan.
In fact, as early as July 14, 1960, prior to
Romeos appointment as administrator of the
estate of Luis, Paz L. Vda. de Pujalte (Paz), the
mother of Luis, who was then appointed
administratrix of the estate of the latter, in her
Inventory and Appraisal29 which was submitted to
the estate court, already excluded the subject
properties among those which comprise the
estate of Luis. Subsequently, in the Project of
Partition30 of the residual estate of Luis, dated
March 22, 1963, Paz again did not include the
disputed lots as part of such residual estate.
Hence, Romeos sale of the subject lots to
petitioners is invalid as it is settled that any
unauthorized disposition of property under
administration is null and void and title does not

pass to the purchasers.31
Second, even granting that the subject lots
formed part of the estate of Luis, it was
subsequently proven in a separate case that
Romeo is not his heir. In a criminal case for use of
falsified documents filed against Romeo, it was
proven that his claim of heirship is spurious. In
the said criminal case, his birth certificate and the
marriage certificate of his supposed parents,
which he presented before the estate court, to
prove his claim that he is the sole heir of Luis,
were found by the criminal court to be falsified. 32
In this regard, it bears to note the disquisition of
the CA as to the legitimacy of Romeos claim, and
its subsequent effect on petitioners' rights to the
disputed properties, to wit:
Appellees' [herein petitioners'] predicament is

further compounded by Romeo Pujaltes
conviction on November 18, 2005 of the offense
of Use of Falsified Documents, for falsifying the
documents that enabled him to deceive the estate
court and have himself named as Luis Pujaltes
sole heir. He did not appeal his conviction and,
instead, applied for probation. It goes without
saying that the documents purportedly conveying
the lots in question to appellees and which are
founded on Romeo Pujaltes alleged rights over
the estate of the late Luis Pujalte do not deserve
any consideration at all. x x x33
Indeed, not being an heir of Luis, Romeo never
acquired any right whatsoever over the subject
lots, even if he was able to subsequently obtain a
title in his name. It is a wellsettled principle that
no one can give what one does not have, nemo
dat quod non habet.34 One can sell only what one
owns or is authorized to sell, and the buyer can
acquire no more right than what the seller can
transfer legally.35 Since Romeo has no right to
the subject lots, petitioners, who simply stepped
into the shoes of Romeo, in turn, acquired no
rights to the same.
In addition, and as correctly pointed out by the
CA, petitioners' position is neither helped by the
fact that, in the present case, Romeo filed a
Verified ComplaintinIntervention36 with the RTC,
denying that he sold the subject lots to
petitioners and claiming that the same properties
still form part of the estate of Luis.
Stretching petitioners' contention a bit further,
granting that both petitioners and respondents
bought the disputed lots in good faith by simply
relying on the certificates of the sellers, and
subsequently, acquiring titles in their own names,
respondents' title shall still prevail. It is a settled
rule that when two certificates of title are issued
to different persons covering the same land in

whole or in part, the earlier in date must prevail,
and, in case of successive registrations where
more than one certificate is issued over the land,
the person holding a prior certificate is entitled to
the land as against a person who relies on a
subsequent certificate.37 The titles of
respondents, having emanated from an older
title, should thus be upheld.
Anent petitioners' bad faith, this Court finds no
persuasive reason to depart from the findings of
the CA that petitioners had prior knowledge of the
estate proceedings involving the subject lots and
that they have notice of the defect in the title of
Romeo.
It is true that a person dealing with registered
land need not go beyond the title. However, it is
equally true that such person is charged with
notice of the burdens and claims which are
annotated on the title.38 In the instant case, The
Torrens Certificate of Title (TCT No. 5760R) in
the name of Romeo, which was the title relied
upon by petitioners, also contained Entry No. P.E.
4023, quoted above, which essentially informs
petitioners that the lots which they were about to
buy and which they in fact bought, were already
sold to Emerenciana.39 This entry should have
alerted petitioners and should have prodded
them to conduct further investigation. Simple
prudence would have impelled them as honest
persons to make deeper inquiries to clear the
suspiciousness haunting Romeos title. On the
contrary, rather than taking caution in dealing
with Romeo, petitioners, instead, subsequently
executed deeds of sale40 over the same properties
but all of which were, nonetheless, disallowed by
the estate court in its Order41 dated October 11,
1993 on the ground that the said lots were
already sold, this time, by Emerenciana to
respondents. In this regard, petitioners acted in
bad faith.
Thus, as correctly held by the CA, respondents
are entitled to moral damages. Moral damages
are treated as compensation to alleviate physical
suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury
resulting from a wrong.42 In the instant case,
respondents satisfactorily established their claim
for moral damages. They endured suffering
brought about by Romeos bad faith in using
falsified documents to enable himself to acquire
title to and sell the subject lots to petitioners to
the prejudice of respondents. Respondents also
suffered by reason of petitioners' stubborn
insistence in buying the said properties despite
their knowledge of the defect in the title of
Romeo.43 Though moral damages are not capable
of pecuniary estimation, the amount should be
proportional to and in approximation of the

suffering inflicted.44 Respondents sought the
award of P1,000,000.00 as moral damages from
each of the petitioners, but the Court agrees with
the CA that the total amount of P500,000.00 is
sufficient for both respondents.
As to exemplary damages, these are imposed by
way of example or correction for the public good,
in addition to moral, temperate, liquidated or
compensatory damages.45 They are imposed not
to enrich one party or impoverish another, but to
serve as a deterrent against or as a negative
incentive to curb socially deleterious
actions.46 While respondents were again seeking
the amount of P1,000,000.00 as exemplary
damages from each of the petitioners, the CA
correctly reduced it to a total of P500,000.00.
Respondents are also entitled to attorneys fees,
as awarded by the CA, on the strength of the
provisions of Article 2208 of the Civil Code which
provides, among others, that such fees may be
recovered when exemplary damages are
awarded, when the defendants act or omission
has compelled the plaintiff to litigate with third
persons, or in any other case where the court
deems it just and equitable that attorneys fees
and expenses of litigation should be recovered.
WHEREFORE, the petition is DENIED. The
Decision and Resolution of the Court of Appeals,
dated August 10, 2012 and February 18, 2013,
respectively, in CAG.R. CV No. 92022,
are AFFIRMED.
SO ORDERED.
This is a Petition for Review

on Certiorari1 pursuant to Rule 45 of the Revised
Rules of Court, assailing the 7 December 2006
Decision2 and 8 August 2007 Resolution3 of the
Fourth Division of the Court of Appeals in CA-G.R.
CV No. 64172. In its assailed Resolution, the
appellate couti modified its earlier ruling and
proceeded to direct petitioners to execute the
requisite Deed of Sale over the subject property.
The Facts
The subject prope1iy consists of a 3,750 square
meter-portion of the 15,001 square meters parcel
of land situated in Barrio Saog, Marilao, Bulacan
denominated as Lot No. 1, and registered under
Transfer Certificate of Title (TCT) No. T-1
074494 under the names of Reynaldo Del a Rosa
(Reynaldo), Eduardo Dela Rosa (Eduardo), Araceli
Del a Rosa (Araceli) and Zenaida Dela Rosa
(Zenaida).
Sometime in 1984, Reynaldo offered to sell the
subject property to Guillermo Batongbacal
(Guillermo) and Mario Batongbacal (Mario) for
F50.00 per square meter or for a total of
Fl87,500.00. Pursuant to the agreement,
Reynaldo received an advance payment of F31 ,
500.00 leaving a balance of F156,000.00. As
shown in the document denominated
as Resibo and signed by Reynaldo on 18 February
1987, the parties agreed that the amount
ofF20,000.00 as part of the advance payment
shall be paid upon the delivery of the Special
Power-of-Attorney (SPA), which would authorize
Reynaldo to alienate the subject property on
behalf of his co-owners and siblings namely,
Eduardo, Araceli and Zenaida. The balance
thereon shall be paid in F10,000.00 monthly
installments until the purchase price is fully
settled, to wit:
RESIBO
SECOND DIVISION
G.R. No. 179205, July 30, 2014
HEIRS OR REYNALDO DELA ROSA, NAMELY:
TEOFISTA DELA ROSA, JOSEPHINE
SANTIAGO AND JOSEPH DELA
ROSA, Petitioners, v. MARIO A.
BATONGBACAL, IRENEO BATONGBACAL,
JOCELYN BATONGBACAL, NESTOR
BATONGBACAL AND LOURDES
BATONGBACAL, Respondents.
DECISION
PEREZ, J.:
Tinaggap ko ngayong araw na ito kay Engr.

Guillermo A. Batongbacal, ng Poblacion II,
Marilao, Bulacan, ang halagang sampung libong
piso (P10,000.00) salaping Pilipino, hilang
bahaging hayad sa bahagi ng lupang may sukat
na 3,750 sq.m. na aking kabahagi sa
isang (1) lagay na lupang nasasaog, Marilao,
Bulakan, sinasaklaw ng T.C.T. No. T-1
07449, ng Bulakan, na ipinagkasundo kong
ipagbili sa naulit na Engr. Guillermo A.
Batongbacal sa halagang Limampung
Piso (P50.00) salaping Filipino, bawat
isang (1)metrong parisukat. Ang paunang hayad
na aking tinanggap ukol sa lupang nabanggit sa
itaas ay P21 ,500.00, nuong Abril 14-18,
1984. Ang halagang dapat pa niyang bayaran sa
akin ay P 156,000.00, na ang halagang
dalawampung libong piso (P20,000.00) ay
bahayaran niya sa akin sa araw na nag power-ofattorney nina Zenaida dela Rosa, atEnrique
Magsaloc ay aking nahigay sa nasahing Engr.
Guillermo A. Batongbacal; na ang nalalahing
hahaging bayad ay kanyang habayaran sa akin
ng Sampung libong piso(P10,000.00) salaping
Pilipino, bawat buwan hanggang sa matapusan
ang pagbabayad ng kabuuang halaga na Isang
Daang at Walumpu't Pitong libo Limang Daang
Piso(P187,500.00). Ang bahaging aking
ipinagbibili ay ang Lote No. 1, may sukat
na 3,750 sq.m. na makikita sa nakalakip na
sketch plan na aking ding nilagdaan sa
ikaliliwanag ng kasulutang ito.5
chanrobleslaw
Subsequent to the execution of the said

agreement, Mario and Guillermo, on their own
instance, initiated a survey to segregate the area
of 3,750 square meters from the whole area
covered by TCT No. T-107449, delineating the
boundaries of the subdivided parts. As a result,
they came up with a subdivision plan specifically
designating the subject property signed by a
Geodetic Engineer.6 Mario and Guillermo
thereafter made several demands from Reynaldo
to deliver the SPA as agreed upon, but such
demands all went unheeded.
Following the pre-trial conference without the

parties reaching an amicable settlement, trial on
the merits ensued.9 Both parties proceeded to
present, in open court, documentary and
testimonial evidence to substantiate their claims.
For failure of Mario and Guillermo as plaintiffs
therein to adduce sufficient evidence to support
their complaint, the RTC, in a Decision10 dated 24
March 1999, dismissed Civil Case No. 215-M-90
and ordered Reynaldo to return to the former the
sum of P28,000.00 with 12% annual interest.
Reynaldo failed to convince the court a quo that
the contract he entered into with Mario was an
equitable mortgage. It was held by the trial court,
however, that the supposed Contract to Sell
denominated asResibo is unenforceable under
Article 1403 of the New Civil Code because
Reynaldo cannot bind his co-owners into such
contract without an SPA authorizing him to do so.
As such, Reynaldo cannot be compelled to deliver
the subject property but he was nonetheless
ordered by the court to return the amount he
received as part of the contract price since no one
should be allowed to unjustly enrich himself at
the expense of another. The RTC disposed in this
wise:
Consequently, Guillermo and Mario initiated an

action for Specific Performance or Rescission and
Damages before the Regional Trial Court (RTC) of
Malolos, Bulacan, seeking to enforce their
Contract to Sell dated 18 February 1987. In their
Complaint docketed as Civil Case No. 215-M90,7 Mario and Guillermo asserted that they have
a better right over the subject property and
alleged that the subsequent sale thereof effected
by Reynaldo to third persons is void as it was
done in bad faith. It was prayed in the Complaint
that Reynaldo be directed to deliver the SPA and,
in case of its impossibility, to return the amount
of P31,500.00 with legal interest and with
damages in either case.
To protect their rights on the subject property,
Mario and Guillermo, after initiating Civil Case No.
215-M-90, filed a Notice of Lis
Pendens registering their claim on the certificate
of title covering the entire property.
In refuting the allegations of Mario and Guillermo
in their Complaint. Reynaldo in his
Answer8countered that the purported Contract to
Sell is void, because he never gave his consent
thereto. Reynaldo insisted that he was made to
understand that the contract between him and
the Batongbacals was merely an equitable
mortgage whereby it was agreed that the latter
will loan to him the amount of P31,500.00
payable once he receives his share in the
proceeds of the sale of the land registered under
TCT No. T-1 07449.
WHEREFORE, premises considered[,] the instant

complaint is hereby DISMISSED.
However, [Reynaldo is] hereby ordered to return
to [Mario and Guillermo of the sum of 28,000.00
plus 12% interest per annum from the date of
this decision until fully paid.11
chanroble slaw
On appeal, the Court of Appeals, in its

Decision12 dated 7 December 2006, brushed aside
the claim of equitable mortgage and held that the
sale effected by Reynaldo of his undivided share
in the property is valid and enforceable. According
to the appellate court, no SPA is necessary for
Reynaldo's disposition of his undivided share as it
is limited to the portion that may be allotted to
him upon the termination of the co-ownership.
The Batongbacals could have validly demanded
from Reynaldo to deliver the subject property
pursuant to the Contract to Sell but such option is
no longer feasible because the entire property has
already been sold to third persons to whom a new
title was issued. The appellate court thus
proceeded to rescind the contract and ordered
Reynaldo to return the amount he received as
consideration thereby restoring the parties to
their situation before entering into the
agreement. The decretal portion of the decision
reads:
In the course of the trial, Guillermo died and he

was substituted by his heirs as party to the case.
WHEREFORE, the decision dated March 24, 1999

is AFFIRMED with modification that appellee is
ordered to return to appellants the amount of
P31,500.00 plus 12% interest per annum from
the date of decision of the trial court until full
payment thereof.
In addition, the appellee is ordered:
1.
2.
3.
Petitioners Heirs of Reynaldo are now before this

Court via this instant Petition for Review
onCertiorari praying that the Court of Appeals
Decision and Resolution be reversed on the
ground that it was rendered not in accordance
with the applicable law and jurisprudence.
Issues
To pay appellants P50,000.00 as

compensatory damages;
P50,000.00 as moral damages;
and P30,000.00 as exemplary
damages.
I.
WHETHER OR NOT THERE IS A CONTRACT OF
SALE BETWEEN REYNALDO DELA ROSA AND
GUILLERMO BATONGBACAL;
II.
To pay attorney's fees and

litigation expenses of
P50,000.00; and
ASSUMING THAT THERE IS A CONTRACT OF

SALE, WHETHER OR NOT GUILLERMO
BATONGBACAL COMPLIED WITH HIS OBLIGATION
[UNDER THE CONTRACT];
Double costs.13
In seeking modification of the appellate court's

decision, Mario and Guillermo pointed out that the
title of the subject property has not yet been
transferred to third persons, and thus, Reynaldo
can still be compelled to execute a deed of
conveyance over his undivided share of the entire
property.
In a Resolution14 dated 8 August 2007, the Court
of Appeals granted the Motion for Reconsideration
of Mario and Guillermo and directed Reynaldo to
convey the subject property to them, viz:
WHEREFORE, [Reynaldo's] Motion for

Reconsideration is DENIED for lack of merit.
III.
WHETHER OR NOT RESPONDENTS ARE GUILTY OF
LACHES;
IV.
WHETHER OR NOT MARIO BATONGBACAL IS A
PARTY TO THE TRANSACTION BETWEEN
REYNALDO DELA ROSA AND GUILLERMO
BATONGBACAL;
V.
WHETHER OR NOT RESPONDENT[S] ARE
ENTITLED TO AN AWARD OF DAMAGES;
Upon the other hand, [Mario and Guillermo]

Motion for Reconsideration is GRANTED.
Accordingly, the decision dated December 7, 2006
is PARTIALLY RECONSIDERED ordering defendantappellee Reynaldo dela Rosa or his successor-ininterest to execute the requisite Deed of Sale
over his 1/4 undivided share in the subject
property covered by TCT T-107449 and to accept
the consideration of P156,000.00 within thirty
(30) days from the finality of the decision.
In case of failure of [Reynaldo] to execute the
deed of sale, the Branch Clerk of Court of RTC Br.
16 of Malolos, Bulacan is directed to execute the
same and receive the Pl56,000.00 balance on the
purchase price on behalf of Reynaldo dela
Rosa.15
VI.
ASSUMING ARGUENDO THAT RESPONDENTS ARE
ENTITLED TO AWARD OF DAMAGES. WHETHER
OR NOT TI IE COURT OF APPEALS. A WARD OF
DAMAGES WAS EXCESSIVE.17
chanroble slaw
The various contentions revolve on the sole issue

of whether the contract entered into by parties
was a Contract to Sell or an equitable mortgage.
The Court will not delve into questions which arc
factual m nature, consistent with the rule that this
Court is not a trier of facts.
The Court's Ruling
chanroble slaw
On 9 September 2007, the appellate court was

notified of the death of Reynaldo, and his heirs
sought to be substituted as party in this case.16
cralawlawlibrary
In assailing the Court of Appeals' Decision and

Resolution, petitioners are unflinching in their
stand that the disputed contract purporting to be
an absolute deed of sale was an equitable
mortgage with the subject property as security
for a loan obligation. To prove their point,
petitioners asserted that the consideration in the

amount of P187,500.00 for a property consisting
of 15,001 square meters is grossly inadequate
because the land valuation in Barrio Saog,
Marilao, Bulacan, at the time the transaction was
entered into by the parties in 1984, was already
P80.00 to P110.00 per square meter. The gross
inadequacy of the price, the Heirs of Reynaldo
argued, is telling of the intention of the parties to
mortgage and not to sell the property with the
end view of affording the mortgagor an easy
opportunity to redeem the property should his
means permit him to do so.
binds himself to pay the taxes

on the thing sold;
(6 In any other case where it may
) be fairly inferred that the real
intention of the parties is that
the transaction shall secure the
payment of a debt or the
performance of any other
obligation.
An equitable mortgage is defined as one although

lacking in some formality, or form or words, or
other requisites demanded by a statute,
nevertheless reveals the intention of the parties
to charge real property as security for a debt, and
contains nothing impossible or contrary to law.
For the presumption of an equitable mortgage to
arise, two requisites must concur: (1) that the
parties entered into a contract denominated as a
sale; and (2) the intention was to secure an
existing debt by way of mortgage. Consequently,
the non-payment of the debt when due gives the
mortgagee the right to foreclose the mortgage,
sell the property and apply the proceeds of the
sale for the satisfaction of the loan
obligation.18 While there is no single test to
determine whether the deed of absolute sale on
its face is really a simple loan accommodation
secured by a mortgage, the Civil Code, however,
enumerates several instances when a contract is
presumed to be an equitable mortgage, to wit:
In any of the foregoing cases, any money, fruits,

or other benefit to be received by the vendee as
rent or otherwise shall be considered as interest
which shall be subject to the usury laws.
Article 1602. The contract shall be presumed to

be an equitable mortgage, in any of the following
cases:
(1 When the price of a sale with

) right to repurchase is unusually
inadequate;
(2 When the vendor remains in
) possession as lessee or
otherwise;
(3 When upon or after the
) expiration of the right to
repurchase another instrument
extending the period of
redemption or granting a new
period is executed;
(4 When the purchaser retains for
) himself a part of the purchase
price; (5) When the vendor
A perusal of the contract denominated

as Resibo reveals the utter frailty of petitioners'
position because nothing therein suggests, even
remotely, that the subject property was given to
secure a monetary obligation. The terms of the
contract set forth in no uncertain terms that the
instrument was executed with the intention of
transferring the ownership or the subject property
to the buyer in exchange for the price. Nowhere
in the deed is it indicated that the transfer was
merely intended to secure a debt obligation. On
the contrary, the document clearly indicates the
intent of Reynaldo to sell his share in the
property. The primary consideration in
determining the true nature of a contract is the
intention of the parties.19 If the words of a
contract appear to contravene the evident
intention of the parties, the latter shall
prevail.20 Such intention is determined not only
from the express terms of their agreement, but
also from the contemporaneous and subsequent
acts of the parties.21 That the parties intended
some other acts or contracts apart from the
express terms of the agreement, was not proven
by Reynaldo during the trial or by his heirs
herein.22 Beyond their bare and uncorroborated
asseverations that the contract failed to express
the true intention of the parties, the record is
bereft of any evidence indicative that there was
an equitable mortgage.
Neither could the allegation of gross inadequacy
of the price carry the day for the petitioners. It
must be underscored at this point that the subject
of the Contract to Sell was limited only to
1/4 pro-indiviso share of Reynaldo consisting an
area of 3,750 square meter and not the entire
15,001-square meter parcel of land. As a coowner of the subject property, Reynaldo's right to
sell, assign or mortgage his ideal share in the
property held in common is sanctioned by law.
The applicable law is Article 493 of the New Civil
Code, which spells out the rights of co-owners

over a co-owned property, to wit:
Art. 493. Each co-owner shall have the full

ownership of his part and or the fruits and
benefits pertaining thereto, and he may therefore
alienate, assign or mortgage it, and even
substitute another person in its enjoyment,
except when personal rights arc involved. But the
effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the
portion which may be allotted to him m the
division upon the termination of the coownership.
Pursuant to this law, a co-owner has the right to
alienate his proindiviso share in the co-owned
property even without the consent of his co-owners.23 This right is absolute and in accordance
with the well-settled doctrine that a co-owner has
a full ownership of his pro-indiviso share and has
the right to alienate, assign or mortgage it, and
substitute another person for its enjoyment.24 In
other words, the law does not prohibit a co-owner
from selling, alienating, mortgaging his ideal
share in the property held m common.25
cralawlawlibrary
In Vaglidad v. Vaglidad, Jr., a case nearly on all

fours to the present petition, the Court upheld the
right of the co-owner to alienate his proindiviso share in the co-owned property as part of
his right of dominion. It was even pointed out
that since the previous sale is valid, the
subsequent conveyance effected by the co-owner
is null and void pursuant to the principle that "no
one can give what he does not have," nemo dat
quod non habet, thus:
LORETO sold the subject property to GABINO, JR.

on May 12, 1986 as a co-owner. LORETO had a
right, even before the partition of the property on
January 19, 1987, to transfer in whole or in part
his undivided interest in the lot even without the
consent of his co-heirs. This right is absolute in
accordance with the well-settled doctrine that a
co-owner has full ownership of his proindiviso share and has the right to alienate,
assign or mortgage it, and substitute another
person for its enjoyment. Thus, what GABINO, JR.
obtained by virtue of the sale on May 12, 1986
were the same rights as the vendor LORETO had
as co-owner, in an ideal share equivalent to the
consideration given under their transaction.
LORETO sold some 1,604 square meters of Lot
No. 1253 to GABINO, JR. Consequently, when
LORETO purportedly sold to WILFREDO on
December 7, 1989 the same portion of the lot, he
was no longer the owner of Lot No. 1253-B.
Based on the principle that "no one can give what
he does not have," LORETO could not have validly
sold to WILFREDO on December 7, 1989 what he

no longer had. As correctly pointed out by the
appellate court, the sale made by LORETO in
favor of WILFREDO is void as LORETO did
not have the right to transfer the ownership
of the subject property at the time of
sale.26 (Emphasis supplied).
In the same breadth, a co-owner cannot be
compelled by the court to give their consent to
the sale of his share in a co-owned property.
In Arambula v. Nolasco, the Court intimated:
The ultimate authorities in civil law, recognized as

such by the Court, agree that co-owners such as
respondents have over their part, the right of full
and absolute ownership. Such right is the same
as that or individual owners which is not
diminished by the fact that the entire property is
co-owned with others. That part which ideally
belongs to them, or their mental portion, may be
disposed of as they please, independent of the
decision of their co-owners. So we rule in this
case. The respondents cannot be ordered to sell
their portion of the co-owned properties. In the
language of Rodriguez v. Court of First Instance
of Rizal, "each party is the sole judgeof what is
good for him."27 (Underscoring ours).
Thus, even if the impression of the Court of
Appeals were true, i.e., that the entire propc1iy
has been sold to thirds persons, such sale could
not have affected the right of Mario and Guillermo
to recover the property from Reynaldo. In view of
the nature of co-ownership, the Court of Appeals
correctly ruled that the terms in the Contract to
Sell, which limited the subject to Reynaldo's ideal
share in the property held in common is perfectly
valid and binding. In fact, no authority from the
other co-owners is necessary for such disposition
to be valid as he is afforded by the law fullownership of his part and of the fruits and
benefits pertaining thereto. A condition set forth
in a sale contract requiring a co-owner to secure
an authority from his co-owners for the alienation
of his share, as seemingly indicated in this case,
should be considered mere surplusage and docs
not, in any way, affect the validity or the
enforceability of the contract. Nor should such a
condition indicate an intention to sell the whole
because the contrary intention has been clearly
written:
x x x Ang bahaging aking ipinagbibili ay ang !.ole

No. 1, may sukat na 3,750 sq.m. na makikita sa
nakalakip na sketch plan na aking ding nilagdaan
sa ikaliliwanag ng kasulatang ito.28
chanrobleslaw
Indeed, the intention clearly written, settles the

issue regarding the purchase price. A contract of
sale is a consensual contract, which becomes

valid and binding upon the meeting of minds of
the parties on the price and the object of the
sale.29 The mere inadequacy of the price docs not
affect its validity when both parties arc in a
position to form an independent judgment
concerning the transaction, unless fraud, mistake
or undue influence indicative of a defect in
consent is present.30 A contract may consequently
be annulled on the ground of vitiated consent and
not due to the inadequacy of the price.31 In the
case at bar, however, no evidence to prove fraud,
mistake or undue influence indicative of vitiated
consent is attendant.
As the parties invoking equitable mortgage, the
Heirs of Reynaldo did not even come close to
proving that the parties intended to charge the
property as security for a debt, leaving us with no
other choice but to uphold the stipulations in the
contract. Basic is the rule that if the terms of the
contract are clear and leave no doubt upon the
intention of the parties, the literal meaning of its
stipulations shall control,32 we find that the Court
of Appeals cannot be faulted for ruling, in
modification of its original judgment, that the sale
effected by Reynaldo of his undivided share in the
property is valid and enforceable.
WHEREFORE, premises considered, the petition
is DENIED. The assailed Decision and Resolution
of the Court of Appeals are hereby AFFIRMED.
SO ORDERED.
cralawred
Carpio, (Chairperson), Brion, Del Castil,

Perez, and Perlas-Bernabe, JJ., concur.
SECOND DIVISION
In this petition for review on certiorari,1 Juan P.

Cabrera assails the Court of Appeals' decision
dated June 19, 20032 and resolution dated
January 3, 2005.3 These decisions ruled that a
specific performance to execute a deed of sale
over a parcel of land is not available as a relief for
Juan Cabrera.
It appears that the heirs of Luis and Matilde Ysaac
co-owned a 5,517-square-meter parcel of land
located in Sabang, Naga City, covered by Original
Certificate of Title (OCT) No. 506.4 One of the coowners is respondent, Henry Ysaac.
Henry Ysaac leased out portions of the property to
several lessees. Juan Cabrera, one of the lessees,
leased a 95-square-meter portion of the land
beginning in 1986.5
On May 6, 1990, Henry Ysaac needed money and

offered to sell the 95-square-meter piece of land
to Juan Cabrera.6 He told Henry Ysaac that the
land was too small for his needs because there
was no parking space for his vehicle.7
In order to address Juan Cabrera's concerns,

Henry Ysaac expanded his offer to include the two
adjoining lands that Henry Ysaac was then leasing
to the Borbe family and the Espiritu family. Those
three parcels of land have a combined area of
439-square-meters. However, Henry Ysaac
warned Juan Cabrera that the sale for those two
parcels could only proceed if the two families
agree to it.
Juan Cabrera accepted the new offer. Henry Ysaac
and Juan Cabrera settled on the price of P250.00
per square meter, but Juan Cabrera stated that he
could only pay in full after his retirement on June
15, 1992.8 Henry Ysaac agreed but demanded for
an initial payment of P1,500.00, which Juan
Cabrera paid.9
G.R. No. 166790, November 19, 2014

JUAN P. CABRERA, Petitioner, v. HENRY
YSAAC, Respondent.
DECISION
LEONEN, J.:
Unless all the co-owners have agreed to partition
their property, none of them may sell a definite
portion of the land. The co-owner may only sell
his or her proportionate interest in the coownership. A contract of sale which purports to
sell a specific or definite portion of unpartitioned
land is null and void ab initio.
According to Juan Cabrera, Henry Ysaac informed

him that the Borbe family and the Espiritu family
were no longer interested in purchasing the
properties they were leasing. Since Mamerta
Espiritu of the Espiritu family initially considered
purchasing the property and had made an initial
deposit for it, Juan Cabrera agreed to reimburse
this earlier payment. On June 9, 1990, Juan
Cabrera paid the amount of P6,100.00.10 Henry
Ysaac issued a receipt for this amount. P3,100.00
of the'amount paid was reimbursed to Mamerta
Espiritu and, in turn, she gave Juan Cabrera the
receipts issued to her by Henry Ysaac.11
On June 15, 1992, Juan Cabrera tried to pay the

balance of the purchase price to Henry Ysaac.
However, at that time, Henry Ysaac was in the
United States. The only person in Henry Ysaac's
residence was his wife. The wife refused to accept

Juan Cabrera's payment.12
Sometime in September 1993, Juan Cabrera

alleged that Henry Ysaac approached him,
requesting to reduce the area of the land subject
of their transaction. Part of the 439-square-meter
land was going to be made into a barangay
walkway, and another part was being occupied by
a family that was difficult to eject.13 Juan Cabrera
agreed to the proposal. The land was surveyed
again. According to Juan Cabrera, Henry Ysaac
agreed to shoulder the costs of the resurvey,
which Juan Cabrera advanced in the amount of
P3,000.00.
The resurvey shows that the area now covered by
the transaction was 321 square meters.14 Juan
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.15
On September 21, 1994, Henry Ysaac's counsel,

Atty. Luis Ruben General, wrote a letter
addressed to Atty. Leoncio Clemente, Juan
Cabrera's counsel.16 Atty. General informed Atty.
Clemente that his client is formally rescinding the
contract of sale because Juan Cabrera failed to
pay the balance of the purchase price of the land
between May 1990 and May 1992. The letter also
stated that Juan Cabrera's initial payment of
P1,500.00 and the subsequent payment of
P6,100.00 were going to be applied as payment
for overdue rent of the parcel of land Juan
Cabrera was leasing from Henry Ysaac.17 The
letter also denied the allegation of Juan Cabrera
that Henry Ysaac agreed to shoulder the costs of
the resurveying of the property.18
Juan Cabrera, together with his uncle, Delfin

Cabrera, went to Henry Ysaac's house on
September 16, 1995 to settle the matter.19 Henry
Ysaac told Juan Cabrera that he could no longer
sell the property because the new administrator
of the property was his brother, Franklin
Ysaac.20
Due to Juan Cabrera's inability to enforce the

contract of sale between him and Henry Ysaac, he
decided to file a civil case for specific performance
on September 20, 1995.21 Juan Cabrera prayed
for the execution of a formal deed of sale and for
the transfer of the title of the property in his
name.22 He tendered the sum of P69,650.00 to
the clerk of court as payment of the remaining
balance of the original sale price.23 On September
22, 1995, a notice of lis pendens was annotated
on OCT No. 560.24
In his answer with counterclaim,25 Henry Ysaac

prayed for the dismissal of Juan Cabrera's
complaint.26 He also prayed for compensation in
the form of moral damages, attorney's fees, and
incidental litigation expenses.27
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 on
February 12, 1997.28 The property was turned
into a project for the urban poor of the city.29
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 Henry
Ysaac in favor of Juan Cabrera.30 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.31
On September 22, 1999, the Regional Trial Court

of Naga City ruled that the contract of sale
between Juan Cabrera and Henry Ysaac was duly
rescinded when the former failed to pay the
balance of the purchase price in the period agreed
upon.32 The Regional Trial Court found that there
was an agreement between Juan Cabrera and
Henry Ysaac as to the sale of land and the
corresponding unit price.33 However, aside from
the receipts turned over by Mamerta Espiritu of
the Espiritu family to Juan Cabrera, there was no
"evidence that the other adjoining lot occupants
agreed to sell their respective landholdings" to
Juan Cabrera.34 The Regional Trial Court also
doubted that Juan Cabrera was willing and able to
pay Henry Ysaac on June 15, 1992. According to
the trial court:
chanroblesvirtuallawlibrary
[A]fter the said refusal of Henry Ysaac's wife,

plaintiff [Juan Cabrera] did not bother to write to
the defendant [Henry Ysaac] or to any of the coowners his intention to pay for the land or he
could have consigned the amount in court at the
same time notifying [Henry Ysaac] of the
consignation in accordance with Article 1256 of
the Civil Code. Furthermore, in September, 1993
[Juan Cabrera] was able to meet [Henry Ysaac]
when the latter allegedly talked to him about the
reduction of the area he was going to buy. There
is no showing that [Juan Cabrera] again tendered
his payment to Henry Ysaac. Instead, he allegedly
made his offer after he had the land resurveyed
but defendant was then in Manila. There is no
evidence as to what date this offer was made. . .
. . . [T]he court does not see any serious demand
made for performance of the contract on the part
of [Juan Cabrera] in 1992 when he allegedly
promised to pay the balance of the purchase
price. Neither could he demand for the sale of the
adjoining lots because. the occupants thereof did

not manifest their consent thereto. At the most,
he could have demanded the sale of the lot which
he was occupying. If his payment was refused in
1995, he cannot demand for damages because
the rescission of the contract was relayed to him
in writing in Exhibit "4".35
The Regional Trial Court dismissed Juan Cabrera's
complaint and Henry Ysaac's counterclaim.36 Juan
Cabrera appealed the Regional Trial Court's
decision.37
The Court of Appeals agreed with the Regional

Trial Court that there was a perfected contract of
sale between Juan Cabrera and Henry
Ysaac.38 According to the Court of Appeals, even if
the subject of the sale is part of Henry Ysaac's
undivided property, a co-owner may sell a definite
portion of the property.39
Cabrera] actual damages in the amount of

P10,600.00, with legal interest of 12% per annum
from September 20, 1995 until paid;
3. Ordering [Henry Ysaac] to pay [Juan P.
Cabrera], the amount of thirty thousand pesos
(P30,000.00) by way of attorney's fees and
litigation expenses.
Henry Ysaac filed his motion for reconsideration
dated July 14, 2003 of the decision of the Court of
Appeals.44 On the other hand, Juan Cabrera
immediately filed a petition for review on
certiorari with this court.45 In the resolution dated
October 15, 2003, this court denied the petition
"for being premature since respondent's motion
for reconsideration of the questioned decision of
the Court of Appeals is still pending
resolution."46
The Court of Appeals also ruled that the contract

of sale between Juan Cabrera and Henry Ysaac
was not validly rescinded.40 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.41
In the resolution dated January 3, 2005, the

Court of Appeals denied Henry Ysaac's motion for
reconsideration. On February 24, 2005, Juan
Cabrera filed another petition with this court,
questioning the propriety of the Court of Appeals'
decision and resolution.
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.42 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.43 The only
recourse the Court of Appeals could do is to order
Henry 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. The Court of Appeals likewise awarded
attorney's fees and litigation costs. To wit:
WHEREFORE, premises considered, the assailed

decision of the lower court is hereby SET ASIDE
and a new one is entered as follows:
1. Declaring that there is no valid rescission of the
contract of sale of the subject lot between
plaintiff-appellant [Juan P. Cabrera] and
defendant-appellee [Henry Ysaac]; however,
specific performance is not an available relief to
plaintiff because of the supervening sale of the
property to the City of Naga, an innocent
purchaser and for value;
ChanRoblesVirtualawlibrary
2. Ordering [Henry Ysaac] to pay [Juan P.
This court initially noted that the petition was filed

out of time. The stamp on the petition states that
it was received by this court on March 24,
2005,47 while the reglementary period to file the
petition expired on February 28, 2005. Thus, the
petition was dismissed in this court's resolution
dated April 27, 2005.48 Petitioner filed a motion
for reconsideration.49 However, the same was
denied with finality in this court's resolution dated
August 17, 2005.50
In a letter addressed to the Chief Justice,

petitioner argued that it would be unfair to him if
a clerical error would deprive his petition from
being judged on the merits. Petitioner
emphasized that the registry receipts show that
he filed the petition on February 24, 2005, not
March 24, 2005, as noted by this court in his
pleading.51 This court treated the letter as a
second motion for reconsideration. In the
resolution dated March 31, 2006, this court found
merit in petitioner's letter.52 The petition was
reinstated, and respondent was ordered to file his
comment.53 Respondent filed his comment on
September 18, 2006.54 This court required
petitioner to file a reply,55 which petitioner
complied with on January 15, 2007.56
The issues raised by petitioner and respondent

are summarized as follows:
1.
Whether this court could take cognizance

of issues not raised by petitioner but by
respondent in his comment to the

petition for review;
2.
Whether there was a valid contract of

sale between petitioner and respondent;
3.
Whether the contract of sale still

subsisted;
4.
5.
a.
Whether the contract was

terminated through rescission;
b.
Whether the contract was no

longer enforceable due to the
supervening sale of the property
to the local government of Naga
City;
Whether petitioner is entitled to the

execution of a deed of sale in his favor;
and
Whether petitioner is entitled to actual
damages, attorney's fees, and costs of
litigation.
The petition should be denied.
Petitioner's position is erroneous. This court can

resolve issues and assignments of error argued
by petitioner and respondent.
This court "is clothed with ample authority to
review matters, even if they are not assigned as
errors in their appeal, if it finds that their
consideration is necessary to arrive at a just
decision of the case."62 We can consider errors not
raised by the parties, more so if these errors were
raised by respondent.
Respondent raised different issues compared with
those raised by petitioner. However, the
assignment of error of respondent was still
responsive to the main argument of petitioner.
Petitioner's argument works on the premise that
there was a valid contract. By attacking the
validity of the contract, respondent was merely
responding to the premise of petitioner's main
argument. The issue is relevant to the final
disposition of this case; hence, it should be
considered by this court in arriving at a decision.
cralawre d
II
There was no valid contract of sale
between petitioner and respondent
Petitioner agrees with the decision of the Court of
Appeals that there was a perfected contract of
sale between him and respondent.63
cralawred
I
This court can resolve issues
raised by both parties
Petitioner stated that the errors in this case are:
(1) "the [Court of Appeals] erred in holding that
the relief of specific performance is not available
to [petitioner] supposedly because of the
supervening sale of [the] property to the City
Government of Naga";57 and (2) "consequently,
the [Court of Appeals] erred in not ordering the
execution of the necessary deed of sale in favor of
[petitioner]."58Petitioner argues that this court
should limit its adjudication to these two
errors.59
On the other hand, respondent raised issues on

the validity of the contract of sale in favor of
petitioner, and the propriety of the award of
actual damages with interest, attorney's fees, and
litigation expenses.60
For petitioner, if respondent wanted to raise

issues regarding the Court of Appeals' decision,
respondent should have interposed a separate
appeal.61
Respondent, however, argues that there was no

contract between him and petitioner because
under Article 1475 of the Civil Code, there has to
be a meeting of the minds as to the price and the
object of the contract.64 Respondent argues that
there was no meeting of the minds as to the final
price65and size66 of the property subject of the
sale.
In addition, while respondent admits that he was
willing to sell the property being leased from him
by the Borbe family and the Espiritu family,
petitioner presented no evidence to show that
these families agreed to the sale in favor of
petitioner. During trial, Corazon Borbe Combe of
the Borbe family testified that her family never
agreed to allow the sale of the property in favor
of petitioner.67Respondent likewise alleged that
Mamerta Espiritu of the Espiritu family eventually
bought the property occupied by her family, which
is contrary to the claim that petitioner obtained
the consent of Mamerta Espiritu to have the land
sold in his favor.68
Petitioner replied that respondent sold 113 square

meters of the 321-square-meter property to the
Espiritu family on January 17, 1996.69
Petitioner argued that Mamerta Espiritu was not a
buyer in good faith because in 1990, she

voluntarily agreed to surrender the lot for sale in
favor of petitioner because she did not have the
money to pay for the lot. Hence, the sale in favor
of Mamerta Espiritu should not supersede the sale
in favor of petitioner.70
the contract, while the price is the cause or

consideration.
The object of a valid sales contract must be
owned by the seller. If the seller is not the owner,
the seller must be authorized by the owner to sell
the object.79
The Regional Trial Court ruled that there was a

valid contract of sale, although it found that there
was no evidence to support petitioner's claim that
he was able to secure the consent of the Espiritu
family and the Borbe family to the sale of the
land.71 There was a valid contract of sale subject
to a suspensive condition, but the suspensive
condition was not complied with.
For the Court of Appeals, there was a valid
contract of sale.72 The Court of Appeals' ruling
was based on the idea that a co-owner could sell
a definite portion of the land owned in common,
and not because the suspensive conditions of the
contract were complied with. In ruling this way,
the Court of Appeals relied on Pamplona v.
Morato,73 which stated that:
. . . [A] "co-owner may validly sell his undivided

share of the property owned in common. (If the
part sold happens to be his allotted share after
partition, the transaction is entirely valid). Now
then if there has been no express partition as yet,
but the co-owner who sells points out to his
buyers the boundaries of the part he was selling,
and the other co-owners make no objection, there
is in effect already a partial partition, and the sale
of the definite portion can no longer be
assailed."74
We find that there was no contract of sale. It was
null ab initio.
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."75 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.76
Specific rules attach when the seller co-owns the

object of the contract. Sale of a portion of the
property is considered an alteration of the thing
owned in common. Under the Civil Code, such
disposition requires the unanimous consent of the
other co-owners.80 However, the rules also allow a
co-owner to alienate his or her part in the coownership. These two rules are reconciled
through jurisprudence.81
If the alienation precedes the partition, the coowner cannot sell a definite portion of the land
without consent from his or her co-owners. He or
she could only sell the undivided interest of the
co-owned property.82 As summarized in Lopez v.
Ilustre,83 "[i]f he is the owner of an undivided half
of a tract of land, he has a right to sell and
convey an undivided half, but he has no right to
divide the lot into two parts, and convey the
whole of one part by metes and bounds."84
The undivided interest of a co-owner is also

referred to as the "ideal or abstract quota" or
"proportionate share." On the other hand,
the definite portion of the land refers to specific
metes and bounds of a co-owned property.
To illustrate, if a ten-hectare property is owned
equally by ten co-owners, the undivided interest
of a co-owner is one hectare. The definite portion
of that interest is usually determined during
judicial or extrajudicial partition. After partition, a
definite portion of the property held in common is
allocated to a specific co-owner. The co-ownership
is dissolved and, in effect, each of the former coowners is free to exercise autonomously the
rights attached to his or her ownership over the
definite portion of the land.
It is crucial that the co-owners agree to which
portion of the land goes to whom.
Sale is a special contract. The seller obligates

himself to deliver a determinate thing and to
transfer its ownership to the buyer. In turn, the
buyer pays for a price certain in money or its
equivalent.77 A "contract of sale is perfected at
the moment there is a -meeting of minds upon
the thing which is the object of the contract and
upon the price.'"78 The seller and buyer must
agree as to the certain thing that will be subject
of the sale as well as the price in which the thing
will be sold. The thing to be sold is the object of
Hence, prior to partition, a sale of a definite

portion of common property requires the consent
of all co-owners because it operates to partition
the land with respect to the co-owner selling his
or her share. The co-owner or seller is already
marking which portion should redound to his or
her autonomous ownership upon future partition.
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.85
The rules allow respondent to sell his undivided

interest in the co-ownership. However, this was
not the object of the sale between him and
petitioner. The object of the sale was a definite
portion. Even if it was respondent who was
benefiting from the fruits of the lease contract to
petitioner, respondent has "no right to sell or
alienate a concrete, specific or determinate part
of the thing owned in common, because his right
over the thing is represented by quota or ideal
portion without any physical adjudication."86
tolerated such alienation, occupation and

possession, We rule that a factual partition or
termination of the co-ownership, although partial,
was created, and barred not only the vendor,
Flaviano Moreto, but also his heirs, the private
respondents herein from asserting as against the
vendees-petitioners any right or title in
derogation of the deed of sale executed by said
vendor Flaviano Moreto.88(Emphasis supplied)
In Pamplona, the co-heirs of Flaviano Moreto only
questioned the sale to the Pamplona family nine
(9) years after the sale. By then, the Pamplona
family had exercised several acts of ownership
over the land. That is why this court considered it
acquiescence or tolerance on the part of the coheirs when they allowed the Pamplonas to take
possession and build upon the land sold, and only
questioned these acts several years later.
There was no showing that respondent was

authorized by his co-owners to sell the portion of
land occupied by Juan Cabrera, the Espiritu
family, or the Borbe family. Without the consent
of his co-owners, respondent could not sell a
definite portion of the co-owned property.
Respondent had no right to define a 95-squaremeter parcel of land, a 439-square-meter parcel
of land, or a 321-square-meter parcel of land for
purposes of selling to petitioner. The
determination of those metes and bounds are not
binding to the co-ownership and, hence, cannot
be subject to sale, unless consented to by all the
co-owners.
In finding that there was a valid contract of sale
between petitioner and respondent, the Court of
Appeals erred in the application of Pamplona v.
Moreto.87 The ruling in Pamplona should be read
and applied only in situations similar to the
context of that case.
Pamplona involved the Spouses Moreto who
owned three (3) parcels of land with a total, area
of 2,346 square meters. The spouses had six (6)
children. After the wife had died, the husband
sold one of the parcels to the Pamplona family,
even if the conjugal partnership had not yet been
liquidated. The parcel sold measured 781 square
meters, which was less than the ideal share of the
husband in the estate. This court allowed the sale
to prosper because of the tolerance from the
husband's co-heirs. This court ruled:
The title may be pro-indiviso or inchoate but the

moment the co-owner as vendor pointed out its
location and even indicated the boundaries over
which the fences were to be erected without
objection, protest or complaint by the other coowners, on the contrary they acquiesced and
The ruling in Pamplona does not apply to

petitioner. There was no evidence adduced during
the trial that respondent's co-owners acquiesced
or tolerated the sale to petitioner. The co-owners
tolerated petitioner's possession of a portion of
their land because petitioner was a lessee over a
95-square-meter portion of the property, not the
buyer of the 321-square-meter portion.
There was also no evidence of consent to sell
from the co-owners. When petitioner approached
respondent in 1995 to enforce the contract of
sale, respondent referred him to Franklin Ysaac,
the administrator over the entire property.
Respondent's act suggests the absence of consent
from the co-owners. Petitioner did not show that
he sought Franklin Ysaac's consent as
administrator and the consent of the other coowners. Without the consent of the co-owners, no
partial partition operated in favor of the sale to
petitioner.
At best, the agreement between petitioner and
respondent is a contract to sell, not a contract of
sale.A contract to sell is a promise to sell an
object, subject to suspensive
conditions.89 Without the fulfillment of these
suspensive conditions, the sale does not operate
to determine the obligation of the seller to deliver
the object.
A co-owner could enter into a contract to sell a
definite portion of the property. However, such
contract is still subject to the suspensive condition
of the partition of the property, and that the other
co-owners agree that the part subject of the
contract to sell vests in favor of the co-owner's
buyer. Hence, the co-owners' consent is an
important factor for the sale to ripen.
A non-existent contract cannot be a
source of obligations, and it cannot be
enforced by the courts

Since petitioner believes that there was a
perfected contract of sale between him and
respondent, he argues that a deed of sale should
be formally executed. Petitioner agrees with the
Court of Appeals' finding that there was no valid
rescission of the contract in accordance with
Article 1592 of the Civil Code.90 However,
petitioner disagrees with the Court of Appeals
when it ruled that the contract was no longer
enforceable due to the supervening sale with the
local government of Naga City. Petitioner argues
that the sale in favor of the local government of
Naga City was not made in good faith. Before the
sale was finalized between the local government
and the heirs of Luis and Matilde Ysaac, petitioner
had a notice of lis pendens annotated to OCT No.
506.91 It was presumed that the local government
had due notice of petitioner's adverse claim, thus,
it cannot be considered an innocent purchaser.
For respondent, due to the inexistence of a valid
contract of sale, petitioner cannot demand
specific performance from
respondent.92 Respondent disagrees with the
Court of Appeals when it stated that Article 1592
of the rescission of contract of sale applies. There
is no need to apply Article 1592 because there
was no contract to begin with.93 The contract
between respondent and petitioner was
terminated by virtue of the letter dated
September 21, 1994.94
We rule in favor of respondent.
Article 1592. In the sale of immovable property,

even though it may have been stipulated that
upon failure to pay the price at the time agreed
upon the rescission of the contract shall of right
take place, the vendee may pay, even after the
expiration of the period, as long as no demand for
rescission of the contract has been made upon
him either judicially or by notarial act. After the
demand, the court may not grant him a new
term.
This provision contemplates (1) a contract of
sale of an immovable property and (2) a
stipulation in the contract that failure to pay the
price at the time agreed upon will cause the
rescission of the contract. The vendee or the
buyer can still pay even after the time agreed
upon, if the agreement between the parties has
these requisites. This right of the vendee to pay
ceases when the vendor or the seller demands
the rescission of the contract judicially or
extrajudicially. In case of an extrajudicial demand
to rescind the contract, it should be notarized.
Hence, this provision does not apply if it is not a
contract of sale of an immovable property and
merely a contract to sell an immovable property.
A contract to sell is "where the ownership or title
is retained by the seller and is not to pass until
the full payment of the price, such payment being
a positive suspensive condition and failure of
which is not a breach, casual or serious, but
simply an event that prevented the obligation of
the vendor to convey title from acquiring binding
force."96
The absence of a contract of sale means that

there is no source of obligations for respondent,
as seller, or petitioner, as buyer. Rescission is
impossible because there is no contract to
rescind. The rule in Article 1592 that requires a
judicial or notarial act to formalize rescission of a
contract of sale of an immovable property does
not apply. This court does not need to rule
whether a letter is a valid method of rescinding a
sales contract over an immovable property
because the question is moot and academic.
Even if we assume that respondent had full
ownership of the property and that he agreed to
sell a portion of the property to petitioner, the
letter was enough to cancel the contract to sell.
Generally, "[t]he power to rescind obligations is
implied in reciprocal ones, in case one of the
obligors should not comply with what is
incumbent on him."95
For the sale of immovable property, the following

provision governs its rescission:
In a similar case entitled Manuel v.

Rodriguez,97 Eusebio Manuel offered to buy the
land owned by Payatas Subdivision, Inc. The
Secretary-Treasurer of Payatas Subdivision,
Eulogio.Rodriguez, Sr., agreed to sell the land to
Eusebio Manuel after negotiations. Similar to this
case, the agreement was only made orally and
not in writing. An initial payment was made, and
a final payment was to be made nine (9) to ten
(10) months later. Manuel never paid for the
latter installment; hence, Eulogio Rodriguez
cancelled their agreement and sold the land to
someone else.
In Manuel, this court categorically stated that
Article 1592 "does not apply to a contract to sell
or promise to sell, where title remains with the
vendor until fulfillment to a positive suspensive
condition, such as full payment of the
price."98 This court upheld that the contract to sell
was validly cancelled through the non-payment of
Eusebio Manuel. The same conclusion applies in
this case.
chanroble svirtuallawlibrary
The law does not prescribe a form to rescind a

contract to sell immovable property. In Manuel,
the non-payment operated to cancel the contract.

If mere non-payment is enough to cancel a
contract to sell, the letter given to petitioner's
lawyer is also an acceptable form of rescinding
the contract. The law does not require
notarization for a letter to rescind a contract to
sell immovable property. Notarization is only
required if a contract of sale is being rescinded.
Petitioner argued that he was willing to comply
with the suspensive condition on the contract to
sell because he was ready to pay the balance of
the purchase price on June 15, 1992.99 However,
his argument is unmeritorious. As ruled by the
Regional Trial Court, petitioner should have
resorted to the various modes of consignment
when respondent's wife refused to accept the
payment on respondent's behalf.100
Therefore, even if we assumed that the contract

between petitioner and respondents were
perfected, the strict requisites in Article 1592 did
not apply because the only perfected contract was
a contract to sell, not a contract of sale. The
courts cannot enforce the right of petitioner to
buy respondent's property. We cannot order the
execution of a deed of sale between petitioner
and respondent.
The question of double sale also becomes moot
and academic. There was no valid sale between
petitioner and respondent, while there was a valid
sale between the local government of Naga City
and respondent and his co-owners. Since there is
only one valid sale, the rule on double sales under
Article 1544 of the Civil Code does not
apply.101
Compensatory damages, attorney's

fees, and costs of litigation
Respondent argued that petitioner is not entitled
to the compensatory damages that the Court of
Appeals awarded. According to respondent,
petitioner continues to occupy the 95-squaremeter property that he has been leasing since
1986 because the parcel was not included in the
sale to the local government of Naga City.102 Since
April 30, 1990, petitioner has not been paying
rent to respondent despite his continued
occupation of the property.103 Therefore, there
was no unjust enrichment on the part of
respondent when he applied petitioner's initial
payment over the sale of the property as
payment for rent.
Respondent argued further that the award of
attorney's fees and litigation expenses in favor of
petitioner was also erroneous because prior to
this litigation, respondent already informed
petitioner that his claim has no basis in law and
fact.104 Yet, petitioner persisted on filing this
case.105
We rule that petitioner is entitled to the return of

the amount of money because he paid it as
consideration for ownership of the land. Since the
ownership of the land could not be transferred to
him, the money he paid for that purpose must be
returned to him. Otherwise, respondent will be
unjustly enriched.
Respondent's claim for rent in arrears is a
separate cause of action from this case. For
petitioner's earnest money payment to be
considered payment for his rent liabilities, the
rules of compensation under Article 1279 of the
Civil Code must be followed.106
It was not proven during trial if petitioner's rental

liability to respondent is due, or if it is already
liquidated and demandable. Hence, this court is
limited to uphold the ruling of the Court of
Appeals, but such payment could be subject to
the rule on compensation.
However, petitioner is not entitled to attorney's
fees and the costs of litigation. The Court of
Appeals awarded attorney's fees to petitioner
"just to protect his right [because petitioner]
reached this court to seek justice for
himself."107
Contrary to the Court of Appeals' ruling, we find

that petitioner did not have a clear right over the
property in question. The Court of Appeals
awarded attorney's fees and litigation costs on
the premise that the contract between petitioner
and respondent was perfected. Without a valid
contract that stipulates his rights, petitioner
risked litigation in order to determine if he has
rights, and not to protect rights that he currently
has. Hence, the award of attorney's fees and
litigation costs was not properly justified.
chanroble slaw
WHEREFORE, the petition is DENIED. The Court

of Appeals' decision dated June 19, 2003 in CAG.R. CV No. 65869 is SET ASIDE. The contract
between petitioner and respondent
is DECLARED invalid and, therefore, cannot be
subject to specific performance. Respondent
is ORDERED to return P10,600.00 to petitioner,
with legal interest of 12% per annum from
September 20, 1995 until June 30, 2013 and 6%
per annum from July 1, 2013 until fully paid. The
award of attorney's fees and litigation expenses
is DELETED.
SO ORDERED.
SECOND DIVISION
[G.R. NO. 153820 : October 16, 2009]
DELFIN TAN, Petitioner, v. ERLINDA C.
BENOLIRAO, ANDREW C. BENOLIRAO,
ROMANO C. BENOLIRAO, DION C.
BENOLIRAO, SPS. REYNALDO TANINGCO and
NORMA D. BENOLIRAO, EVELYN T.
MONREAL, and ANN KARINA
TANINGCO, Respondents.
DECISION
BRION, J.:
Is an annotation made pursuant to Section 4,
Rule 74 of the Rules of Court (Rules) on a
certificate of title covering real property
considered an encumbrance on the property? We
resolve this question in the Petition for Review
on Certiorari 1 filed by Delfin Tan (Tan) to assail
the decision of the Court of Appeals (CA) in CAG.R. CV No. 520332 and the decision of the
Regional Trial Court (RTC)3 that commonly
declared the forfeiture of his P200,000.00 down
payment as proper, pursuant to the terms of his
contract with the respondents.
THE ANTECEDENTS
The facts are not disputed. Spouses Lamberto
and Erlinda Benolirao and the Spouses Reynaldo
and Norma Taningco were the co-owners of a
689-square meter parcel of land (property)
located in Tagaytay City and covered by Transfer
Certificate of Title (TCT) No. 26423. On October
6, 1992, the co-owners executed a Deed of
Conditional Sale over the property in favor of Tan
for the price ofP1,378,000.00. The deed stated:
a) An initial down-payment of TWO HUNDRED
(P200,000.00) THOUSAND PESOS, Philippine
Currency, upon signing of this contract; then the
remaining balance of ONE MILLION ONE
HUNDRED SEVENTY EIGHT THOUSAND
(P1,178,000.00) PESOS, shall be payable within a
period of one hundred fifty (150) days from date
hereof without interest;
b) That for any reason, BUYER fails to pay the
remaining balance within above mentioned
period, the BUYER shall have a grace period of
sixty (60) days within which to make the
payment, provided that there shall be an interest
of 15% per annum on the balance amount due
from the SELLERS;
c) That should in case (sic) the BUYER fails to

comply with the terms and conditions within the
above stated grace period, then the SELLERS
shall have the right to forfeit the down payment,
and to rescind this conditional sale without need
of judicial action;
d) That in case, BUYER have complied with the
terms and conditions of this contract, then the
SELLERS shall execute and deliver to the BUYER
the appropriate Deed of Absolute Sale;
Pursuant to the Deed of Conditional Sale, Tan
issued and delivered to the co-owners/vendors
Metrobank Check No. 904407 for P200,000.00 as
down payment for the property, for which the
vendors issued a corresponding receipt.
On November 6, 1992, Lamberto Benolirao died
intestate. Erlinda Benolirao (his widow and one of
the vendors of the property) and her children, as
heirs of the deceased, executed an extrajudicial
settlement of Lamberto's estate on January 20,
1993. On the basis of the extrajudicial settlement,
a new certificate of title over the property, TCT
No. 27335, was issued on March 26, 1993 in the
names of the Spouses Reynaldo and Norma
Taningco and Erlinda Benolirao and her children.
Pursuant to Section 4, Rule 74 of the Rules, the
following annotation was made on TCT No.
27335:
x x x any liability to credirots (sic), excluded heirs
and other persons having right to the property,
for a period of two (2) years, with respect only to
the share of Erlinda, Andrew, Romano and Dion,
all surnamed Benolirao
As stated in the Deed of Conditional Sale, Tan had
until March 15, 1993 to pay the balance of the
purchase price. By agreement of the parties, this
period was extended by two months, so Tan had
until May 15, 1993 to pay the balance. Tan failed
to pay and asked for another extension, which the
vendors again granted. Notwithstanding this
second extension, Tan still failed to pay the
remaining balance due on May 21, 1993. The
vendors thus wrote him a letter demanding
payment of the balance of the purchase price
within five (5) days from notice; otherwise, they
would declare the rescission of the conditional
sale and the forfeiture of his down payment based
on the terms of the contract.
Tan refused to comply with the vendors' demand
and instead wrote them a letter (dated May 28,
1993) claiming that the annotation on the title,
made pursuant to Section 4, Rule 74 of the Rules,
constituted an encumbrance on the property that
would prevent the vendors from delivering a clean
title to him. Thus, he alleged that he could no

longer be required to pay the balance of the
purchase price and demanded the return of his
down payment.
When the vendors refused to refund the down
payment, Tan, through counsel, sent another
demand letter to the vendors on June 18, 1993.
The vendors still refused to heed Tan's demand,
prompting Tan to file on June 19, 1993 a
complaint with the RTC of Pasay City for specific
performance against the vendors, including
Andrew Benolirao, Romano Benolirao, Dion
Benolirao as heirs of Lamberto Benolirao, together
with Evelyn Monreal and Ann Karina Taningco
(collectively, the respondents). In his complaint,
Tan alleged that there was a novation of the Deed
of Conditional Sale done without his consent since
the annotation on the title created an
encumbrance over the property. Tan prayed for
the refund of the down payment and the
rescission of the contract.
On August 9, 1993, Tan amended his Complaint,
contending that if the respondents insist on
forfeiting the down payment, he would be willing
to pay the balance of the purchase price provided
there is reformation of the Deed of Conditional
Sale. In the meantime, Tan caused the annotation
on the title of a notice of lis pendens.
On August 21, 1993, the respondents executed a
Deed of Absolute Sale over the property in favor
of Hector de Guzman (de Guzman) for the price
of P689,000.00.
Thereafter, the respondents moved for the
cancellation of the notice of lis pendens on the
ground that it was inappropriate since the case
that Tan filed was a personal action which did not
involve either title to, or possession of, real
property. The RTC issued an order dated October
22, 1993 granting the respondents' motion to
cancel the lis pendens annotation on the title.
Meanwhile, based on the Deed of Absolute Sale in
his favor, de Guzman registered the property and
TCT No. 28104 was issued in his name. Tan then
filed a motion to carry over the lis pendens
annotation to TCT No. 28104 registered in de
Guzman's name, but the RTC denied the motion.
On September 8, 1995, after due proceedings,
the RTC rendered judgment ruling that the
respondents' forfeiture of Tan's down payment
was proper in accordance with the terms and
conditions of the contract between the
parties.4 The RTC ordered Tan to pay the
respondents the amount of P30,000.00,
plus P1,000.00 per court appearance, as

attorney's fees, and to pay the cost of suit.
On appeal, the CA dismissed the petition and
affirmed the ruling of the trial court in toto.
Hence, the present petition.
THE ISSUES
Tan argues that the CA erred in affirming the
RTC's ruling to cancel the lis pendens annotation
on TCT No. 27335. Due to the unauthorized
novation of the agreement, Tan presented before
the trial court two alternative remedies in his
complaint - either the rescission of the contract
and the return of the down payment, or the
reformation of the contract to adjust the payment
period, so that Tan will pay the remaining balance
of the purchase price only after the lapse of the
required two-year encumbrance on the title. Tan
posits that the CA erroneously disregarded the
alternative remedy of reformation of contract
when it affirmed the removal of the lis pendens
annotation on the title.
Tan further contends that the CA erred when it
recognized the validity of the forfeiture of the
down payment in favor of the vendors. While
admitting that the Deed of Conditional Sale
contained a forfeiture clause, he insists that this
clause applies only if the failure to pay the
balance of the purchase price was through his
own fault or negligence. In the present case, Tan
claims that he was justified in refusing to pay the
balance price since the vendors would not have
been able to comply with their obligation to
deliver a "clean" title covering the property.
Lastly, Tan maintains that the CA erred in
ordering him to pay the respondents P30,000.00,
plusP1,000.00 per court appearance as attorney's
fees, since he filed the foregoing action in good
faith, believing that he is in the right.
The respondents, on the other hand, assert that
the petition should be dismissed for raising pure
questions of fact, in contravention of the
provisions of Rule 45 of the Rules which provides
that only questions of law can be raised in
Petitions for Review on Certiorari .
THE COURT'S RULING
The petition is granted.
No new issues can be raised in the Memorandum
At the onset, we note that Tan raised the
following additional assignment of errors in his
Memorandum: (a) the CA erred in holding that

the petitioner could seek reformation of the Deed
of Conditional Sale only if he paid the balance of
the purchase price and if the vendors refused to
execute the deed of absolute sale; and (b) the CA
erred in holding that the petitioner was estopped
from asking for the reformation of the contract or
for specific performance.
defense, and a description of the property in that

province affected thereby. Only from the time of
filing such notice for record shall a purchaser, or
encumbrancer of the property affected thereby,
be deemed to have constructive notice of the
pendency of the action, and only of its pendency
against the parties designated by their real
names.
The Court's September 27, 2004 Resolution

expressly stated that "No new issues may be
raised by a party in his/its Memorandum."
Explaining the reason for this rule, we said that:
The notice of lis pendens hereinabove mentioned

may be cancelled only upon order of the court,
after proper showing that the notice is for the
purpose of molesting the adverse party, or that it
is not necessary to protect the rights of the party
who caused it to be recorded.
The raising of additional issues in a memorandum

before the Supreme Court is irregular, because
said memorandum is supposed to be in support
merely of the position taken by the party
concerned in his petition, and the raising of new
issues amounts to the filing of a petition beyond
the reglementary period. The purpose of this rule
is to provide all parties to a case a fair
opportunity to be heard. No new points of law,
theories, issues or arguments may be raised by a
party in the Memorandum for the reason that to
permit these would be offensive to the basic rules
of fair play, justice and due process. 5
Tan contravened the Court's explicit instructions
by raising these additional errors. Hence, we
disregard them and focus instead on the issues
previously raised in the petition and properly
included in the Memorandum.
Petition raises a question of law
Contrary to the respondents' claim, the issue
raised in the present petition - defined in the
opening paragraph of this Decision - is a pure
question of law. Hence, the petition and the issue
it presents are properly cognizable by this Court.
Lis pendens annotation not proper in personal
actions
Section 14, Rule 13 of the Rules enumerates the
instances when a notice of lis pendens can be
validly annotated on the title to real property:
Sec. 14. Notice of lis pendens.
In an action affecting the title or the right of
possession of real property, the plaintiff and the
defendant, when affirmative relief is claimed in
his answer, may record in the office of the
registry of deeds of the province in which the
property is situated a notice of the pendency of
the action. Said notice shall contain the names of
the parties and the object of the action or
The litigation subject of the notice of lis pendens

must directly involve a specific property which is
necessarily affected by the judgment.6
Tan's complaint prayed for either the rescission or
the reformation of the Deed of Conditional Sale.
While the Deed does have real property for its
object, we find that Tan's complaint is an in
personam action, as Tan asked the court to
compel the respondents to do something - either
to rescind the contract and return the down
payment, or to reform the contract by extending
the period given to pay the remaining balance of
the purchase price. Either way, Tan wants to
enforce his personal rights against the
respondents, not against the property subject of
the Deed. As we explained in Domagas v.
Jensen:7
The settled rule is that the aim and object of an
action determine its character. Whether a
proceeding is in rem, or in personam, or quasi in
rem for that matter, is determined by its nature
and purpose, and by these only. A proceeding in
personam is a proceeding to enforce personal
rights and obligations brought against the person
and is based on the jurisdiction of the person,
although it may involve his right to, or the
exercise of ownership of, specific property, or
seek to compel him to control or dispose of it in
accordance with the mandate of the court. The
purpose of a proceeding in personam is to
impose, through the judgment of a court, some
responsibility or liability directly upon the person
of the defendant. Of this character are suits to
compel a defendant to specifically perform some
act or actions to fasten a pecuniary liability on
him.
Furthermore, as will be explained in detail below,
the contract between the parties was merely a
contract to sell where the vendors retained title
and ownership to the property until Tan had fully
paid the purchase price. Since Tan had no claim of
ownership or title to the property yet, he

obviously had no right to ask for the annotation of
a lis pendens notice on the title of the property.
sell.12Thus, while the contract is denominated as a

Deed of Conditional Sale, the presence of the
above-quoted provision identifies the contract as
being a mere contract to sell.
Contract is a mere contract to sell

A contract is what the law defines it to be, taking
into consideration its essential elements, and not
what the contracting parties call it.8 Article 1485
of the Civil Code defines a contract of sale as
follows:
Art. 1458. By the contract of sale 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.
A contract of sale may be absolute or conditional.
The very essence of a contract of sale is the
transfer of ownership in exchange for a price paid
or promised.9
In contrast, a contract to sell is defined as a
bilateral contract whereby the prospective seller,
while expressly reserving the ownership of the
property despite delivery thereof to the
prospective buyer, binds himself to sell the
property exclusively to the prospective buyer
upon fulfillment of the condition agreed, i.e., full
payment of the purchase price.10 A contract to sell
may not even be considered as aconditional
contract of sale where the seller may likewise
reserve title to the property subject of the sale
until the fulfillment of a suspensive condition,
because in a conditional contract of sale, the first
element of consent is present, although it is
conditioned upon the happening of a contingent
event which may or may not occur.11
In the present case, the true nature of the
contract is revealed by paragraph D thereof,
which states:
xxx
d) That in case, BUYER has complied with the
terms and conditions of this contract, then the
SELLERS shall execute and deliver to the BUYER
the appropriate Deed of Absolute Sale;
xxx
Jurisprudence has established that where the
seller promises to execute a deed of absolute sale
upon the completion by the buyer of the payment
of the price, the contract is only a contract to
A Section 4, Rule 74 annotation is an

encumbrance on the property
While Tan admits that he refused to pay the
balance of the purchase price, he claims that he
had valid reason to do so - the sudden
appearance of an annotation on the title pursuant
to Section 4, Rule 74 of the Rules, which Tan
considered an encumbrance on the property.
We find Tan's argument meritorious.
The annotation placed on TCT No. 27335, the new
title issued to reflect the extrajudicial partition of
Lamberto Benolirao's estate among his heirs,
states:
x x x any liability to credirots (sic), excluded heirs
and other persons having right to the property,
for a period of two (2) years, with respect only to
the share of Erlinda, Andrew, Romano and Dion,
all surnamed Benolirao [Emphasis supplied.]
This annotation was placed on the title pursuant
to Section 4, Rule 74 of the Rules, which reads:
Sec. 4. Liability of distributees and estate. - If it
shall appear at any time within two (2) years
after the settlement and distribution of an estate
in accordance with the provisions of either of the
first two sections of this rule, that an heir or other
person has been unduly deprived of his lawful
participation in the estate, such heir or such other
person may compel the settlement of the estate
in the courts in the manner hereinafter provided
for the purpose of satisfying such lawful
participation. And if within the same time of two
(2) years, it shall appear that there are
debts outstanding against the estate which
have not been paid, or that an heir or other
person has been unduly deprived of his
lawful participation payable in money, the
court having jurisdiction of the estate may,
by order for that purpose, after hearing, settle
the amount of such debts or lawful
participation and order how much and in
what manner each distributee shall
contribute in the payment thereof, and may
issue execution, if circumstances
require, against the bond provided in the
preceding section or against the real estate
belonging to the deceased, or both. Such bond
and such real estate shall remain charged with a
liability to creditors, heirs, or other persons for
the full period of two (2) years after such
distribution, notwithstanding any transfers of real

estate that may have been made. [Emphasis
supplied.]
Senator Vicente Francisco discusses this provision
in his book The Revised Rules of Court in the
Philippines,13 where he states:
The provision of Section 4, Rule 74 prescribes the
procedure to be followed if within two years after
an extrajudicial partition or summary distribution
is made, an heir or other person appears to have
been deprived of his lawful participation in the
estate, or some outstanding debts which have not
been paid are discovered. When the lawful
participation of the heir is not payable in money,
because, for instance, he is entitled to a part of
the real property that has been partitioned, there
can be no other procedure than to cancel the
partition so made and make a new division,
unless, of course, the heir agrees to be paid the
value of his participation with interest. But in case
the lawful participation of the heir consists in his
share in personal property of money left by the
decedent, or in case unpaid debts are discovered
within the said period of two years, the procedure
is not to cancel the partition, nor to appoint an
administrator to re-assemble the assets, as was
allowed under the old Code, but the court, after
hearing, shall fix the amount of such debts or
lawful participation in proportion to or to the
extent of the assets they have respectively
received and, if circumstances require, it may
issue execution against the real estate belonging
to the decedent, or both. The present procedure
is more expedient and less expensive in that it
dispenses with the appointment of an
administrator and does not disturb the possession
enjoyed by the distributees.14 [Emphasis
supplied.]
An annotation is placed on new certificates of title
issued pursuant to the distribution and partition
of a decedent's real properties to warn third
persons on the possible interests of excluded
heirs or unpaid creditors in these properties. The
annotation, therefore, creates a legal
encumbrance or lien on the real property in favor
of the excluded heirs or creditors. Where a buyer
purchases the real property despite the
annotation, he must be ready for the possibility
that the title could be subject to the rights of
excluded parties. The cancellation of the sale
would be the logical consequence where: (a) the
annotation clearly appears on the title, warning all
would-be buyers; (b) the sale unlawfully
interferes with the rights of heirs; and (c) the
rightful heirs bring an action to question the
transfer within the two-year period provided by
law.
As we held in Vda. de Francisco v. Carreon:15

And Section 4, Rule 74 xxx expressly authorizes
the court to give to every heir his lawful
participation in the real estate "notwithstanding
any transfers of such real estate" and to "issue
execution" thereon. All this implies that, when
within the amendatory period the realty has been
alienated, the court in re-dividing it among the
heirs has the authority to direct cancellation of
such alienation in the same estate proceedings,
whenever it becomes necessary to do so. To
require the institution of a separate action for
such annulment would run counter to the letter of
the above rule and the spirit of these summary
settlements. [Emphasis supplied.]
Similarly, in Sps. Domingo v. Roces,16 we said:
The foregoing rule clearly covers transfers of real
property to any person, as long as the deprived
heir or creditor vindicates his rights within two
years from the date of the settlement and
distribution of estate. Contrary to petitioners'
contention, the effects of this provision are not
limited to the heirs or original distributees of the
estate properties, but shall affect any transferee
of the properties. [Emphasis supplied.]
Indeed, in David v. Malay,17 although the title of
the property had already been registered in the
name of the third party buyers, we cancelled the
sale and ordered the reconveyance of the
property to the estate of the deceased for proper
disposal among his rightful heirs.
By the time Tan's obligation to pay the balance of
the purchase price arose on May 21, 1993 (on
account of the extensions granted by the
respondents), a new certificate of title covering
the property had already been issued on March
26, 1993, which contained the encumbrance on
the property; the encumbrance would remain so
attached until the expiration of the two-year
period. Clearly, at this time, the vendors could no
longer compel Tan to pay the balance of the
purchase since considering they themselves could
not fulfill their obligation to transfer a clean title
over the property to Tan.
Contract to sell is not rescinded but terminated
What then happens to the contract?
cralawred
We have held in numerous cases18 that the

remedy of rescission under Article 1191 cannot
apply to mere contracts to sell. We explained the
reason for this in Santos v. Court of
Appeals,19 where we said:
[I]n a contract to sell, title remains with the

vendor and does not pass on to the vendee until
the purchase price is paid in full. Thus, in a
contract to sell, the payment of the purchase
price is a positive suspensive condition. Failure
to pay the price agreed upon is not a mere
breach, casual or serious, but a situation
that prevents the obligation of the vendor to
convey title from acquiring an obligatory
force. This is entirely different from the situation
in a contract of sale, where non-payment of the
price is a negative resolutory condition. The
effects in law are not identical. In a contract of
sale, the vendor has lost ownership of the thing
sold and cannot recover it, unless the contract of
sale is rescinded and set aside. In a contract to
sell, however, the vendor remains the owner for
as long as the vendee has not complied fully with
the condition of paying the purchase price. If the
vendor should eject the vendee for failure to meet
the condition precedent, he is enforcing the
contract and not rescinding it. x x x Article 1592
speaks of non-payment of the purchase price as a
resolutory condition. It does not apply to a
contract to sell. As to Article 1191, it is
subordinated to the provisions of Article 1592
when applied to sales of immovable property.
Neither provision is applicable [to a contract to
sell]. [Emphasis supplied.]
We, therefore, hold that the contract to sell was
terminated when the vendors could no longer
legally compel Tan to pay the balance of the
purchase price as a result of the legal
encumbrance which attached to the title of the
property. Since Tan's refusal to pay was due to
the supervening event of a legal encumbrance on
the property and not through his own fault or
negligence, we find and so hold that the forfeiture
of Tan's down payment was clearly unwarranted.
Award of Attorney's fees
As evident from our previous discussion, Tan had
a valid reason for refusing to pay the balance of
the purchase price for the property. Consequently,
there is no basis for the award of attorney's fees
in favor of the respondents.
On the other hand, we award attorney's fees in
favor of Tan, since he was compelled to litigate
due to the respondents' refusal to return his down
payment despite the fact that they could no
longer comply with their obligation under the
contract to sell, i.e., to convey a clean title. Given
the facts of this case, we find the award
of P50,000.00 as attorney's fees proper.
Monetary award is subject to legal interest
Undoubtedly, Tan made a clear and unequivocal

demand on the vendors to return his down
payment as early as May 28, 1993. Pursuant to
our definitive ruling in Eastern Shipping Lines,
Inc. v. Court of Appeals,20 we hold that the
vendors should return the P200,000.00 down
payment to Tan, subject to the legal interest of
6% per annum computed from May 28, 1993, the
date of the first demand letter.
?
SECOND DIVISION
G.R. No. 193787, April 07, 2014
SPOUSES JOSE C. ROQUE AND BEATRIZ
DELA CRUZ ROQUE, WITH DECEASED JOSE C.
ROQUE REPRESENTED BY HIS SUBSTITUTE
HEIR JOVETTE ROQUE
LIBREA, Petitioners, v. MA. PAMELA P.
AGUADO, FRUCTUOSO C. SABUG, JR.,
NATIONAL COUNCIL OF CHURCHES IN THE
PHILIPPINES (NCCP), REPRESENTED BY ITS
SECRETARY GENERAL SHARON ROSE JOY
RUIZDUREMDES, LAND BANK OF THE
PHILIPPINES (LBP), REPRESENTED BY
BRANCH MANAGER EVELYN M. MONTERO,
ATTY. MARIO S.P. DIAZ, IN HIS OFFICIAL
CAPACITY AS REGISTER OF DEEDS FOR
RIZAL, MORONG BRANCH, AND CECILIO U.
PULAN, IN HIS OFFICIAL CAPACITY AS
SHERIFF, OFFICE OF THE CLERK OF COURT,
REGIONAL TRIAL COURT, BINANGONAN,
RIZAL, Respondents.
DECISION
PERLASBERNABE, J.:
Assailed in this petition for review
on certiorari1 are the Decision2 dated May 12,
2010 and the Resolution3 dated September 15,
2010 of the Court of Appeals (CA) in CA G.R. CV
No. 92113 which affirmed the Decision4 dated July
8, 2008 of the Regional Trial Court of Binangonan,
Rizal, Branch 69 (RTC) that dismissed Civil Case
Nos. 03022 and 05003 for reconveyance,
annulment of sale, deed of real estate mortgage,
foreclosure and certificate of sale, and damages.
The Facts
The property subject of this case is a parcel of
land with an area of 20,862 square meters (sq.
m.), located in Sitio Tagpos, Barangay Tayuman,
Binangonan, Rizal, known as Lot 18089.5

On July 21, 1977, petitionersspouses Jose C.
Roque and Beatriz dela Cruz Roque (Sps. Roque)
and the original owners of the then unregistered
Lot 18089 namely, Velia R. Rivero (Rivero),
Magdalena Aguilar, Angela Gonzales, Herminia R.
Bernardo, Antonio Rivero, Araceli R. Victa, Leonor
R. Topacio, and Augusto Rivero (Rivero, et al.)
executed a Deed of Conditional Sale of Real
Property6 (1977 Deed of Conditional Sale) over
a 1,231sq. m. portion of Lot 18089 (subject
portion) for a consideration of P30,775.00. The
parties agreed that Sps. Roque shall make an
initial payment of P15,387.50 upon signing, while
the remaining balance of the purchase price shall
be payable upon the registration of Lot 18089, as
well as the segregation and the concomitant
issuance of a separate title over the subject
portion in their names. After the deeds execution,
Sps. Roque took possession and introduced
improvements on the subject portion which they
utilized as a balut factory.7
On August 12, 1991, Fructuoso Sabug, Jr.
(Sabug, Jr.), former Treasurer of the National
Council of Churches in the Philippines (NCCP),
applied for a free patent over the entire Lot
18089 and was eventually issued Original
Certificate of Title (OCT) No. M59558 in his name
on October 21, 1991. On June 24, 1993, Sabug,
Jr. and Rivero, in her personal capacity and in
representation of Rivero, et al., executed a Joint
Affidavit9 (1993 Joint Affidavit), acknowledging
that the subject portion belongs to Sps. Roque
and expressed their willingness to segregate the
same from the entire area of Lot 18089.
On December 8, 1999, however, Sabug, Jr.,
through a Deed of Absolute Sale10 (1999 Deed of
Absolute Sale), sold Lot 18089 to one Ma.
Pamela P. Aguado (Aguado) for P2,500,000.00,
who, in turn, caused the cancellation of OCT No.
M5955 and the issuance of Transfer Certificate of
Title (TCT) No. M96692 dated December 17,
199911 in her name.
Thereafter, Aguado obtained an P8,000,000.00
loan from the Land Bank of the Philippines (Land
Bank) secured by a mortgage over Lot
18089.12 When she failed to pay her loan
obligation, Land Bank commenced extrajudicial
foreclosure proceedings and eventually tendered
the highest bid in the auction sale. Upon Aguados
failure to redeem the subject property, Land Bank
consolidated its ownership, and TCT No. M
11589513 was issued in its name on July 21,
2003.14
On June 16, 2003, Sps. Roque filed a
complaint15 for reconveyance, annulment of sale,
deed of real estate mortgage, foreclosure, and
certificate of sale, and damages before the RTC,

docketed as Civil Case No. 03022, against
Aguado, Sabug, Jr., NCCP, Land Bank, the
Register of Deeds of Morong, Rizal, and Sheriff
Cecilio U. Pulan, seeking to be declared as the
true owners of the subject portion which had
been erroneously included in the sale between
Aguado and Sabug, Jr., and, subsequently, the
mortgage to Land Bank, both covering Lot 18089
in its entirety.
In defense, NCCP and Sabug, Jr. denied any
knowledge of the 1977 Deed of Conditional Sale
through which the subject portion had been
purportedly conveyed to Sps. Roque.16
For her part, Aguado raised the defense of an
innocent purchaser for value as she allegedly
derived her title (through the 1999 Deed of
Absolute Sale) from Sabug, Jr., the registered
owner in OCT No. M5955, covering Lot 18089,
which certificate of title at the time of sale was
free from any lien and/or encumbrances. She also
claimed that Sps. Roques cause of action had
already prescribed because their adverse claim
was made only on April 21, 2003, or four (4)
years from the date OCT No. M5955 was issued
in Sabug, Jr.s name on December 17, 1999. 17
On the other hand, Land Bank averred that it had
no knowledge of Sps. Roques claim relative to
the subject portion, considering that at the time
the loan was taken out, Lot 18089 in its entirety
was registered in Aguados name and no lien
and/or encumbrance was annotated on her
certificate of title.18
Meanwhile, on January 18, 2005, NCCP filed a
separate complaint19 also for declaration of nullity
of documents and certificates of title and
damages, docketed as Civil Case No. 05003. It
claimed to be the real owner of Lot 18089 which
it supposedly acquired from Sabug, Jr. through
an oral contract of sale20in the early part of
1998, followed by the execution of a Deed of
Absolute Sale on December 2, 1998 (1998 Deed
of Absolute Sale).21 NCCP also alleged that in
October of the same year, it entered into a Joint
Venture Agreement (JVA) with Pilipinas Norin
Construction Development Corporation (PNCDC),
a company owned by Aguados parents, for the
development of its real properties, including Lot
18089, into a subdivision project, and as such,
turned over its copy of OCT No. M5955 to
PNCDC. 22 Upon knowledge of the purported sale
of Lot 18089 to Aguado, Sabug, Jr. denied the
transaction and alleged forgery. Claiming that the
Aguados23 and PNCDC conspired to defraud NCCP,
it prayed that PNCDCs corporate veil be pierced
and that the Aguados be ordered to pay the
amount of P38,092,002.00 representing the
unrealized profit from the JVA.24 Moreover, NCCP
averred that Land Bank failed to exercise the

diligence required to ascertain the true owners of
Lot 18089. Hence, it further prayed that: (a) all
acts of ownership and dominion over Lot 18089
that the bank might have done or caused to be
done be declared null and void; (b) it be declared
the true and real owners of Lot 18089; and (c)
the Register of Deeds of Morong, Rizal be ordered
to cancel any and all certificates of title covering
the lot, and a new one be issued in its name.25
In its answer, Land Bank reiterated its stance that
Lot 18089 was used as collateral for the
P8,000,000.00 loan obtained by the Countryside
Rural Bank, Aguado, and one Bella Palasaga.
There being no lien and/ or encumbrance
annotated on its certificate of title, i.e., TCT No.
M115895, it cannot be held liable for NCCPs
claims. Thus, it prayed for the dismissal of NCCPs
complaint.26
On September 7, 2005, Civil Case Nos. 02022
and 05003 were ordered consolidated.27
The RTC Ruling
After due proceedings, the RTC rendered a
Decision28 dated July 8, 2008, dismissing the
complaints of Sps. Roque and NCCP.
With respect to Sps. Roques complaint, the RTC
found that the latter failed to establish their
ownership over the subject portion, considering
the following: (a) the supposed owners
vendors, i.e., Rivero, et al., who executed the
1977 Deed of Conditional Sale, had no proof of
their title over Lot 18089; (b) the 1977 Deed of
Conditional Sale was not registered with the
Office of the Register of Deeds;29 (c) the 1977
Deed of Conditional Sale is neither a deed of
conveyance nor a transfer document, as it only
gives the holder the right to compel the supposed
vendors to execute a deed of absolute sale upon
full payment of the consideration; (d) neither Sps.
Roque nor the alleged owners
vendors, i.e., Rivero, et al., have paid real
property taxes in relation to Lot 18089; and (e)
Sps. Roques occupation of the subject portion did
not ripen into ownership that can be considered
superior to the ownership of Land
Bank.30 Moreover, the RTC ruled that Sps. Roques
action for reconveyance had already prescribed,
having been filed ten (10) years after the
issuance of OCT No. M5955. 31
On the other hand, regarding NCCPs complaint,
the RTC observed that while it anchored its claim
of ownership over Lot 18089 on the 1998 Deed of
Absolute Sale, the said deed was not annotated
on OCT No. M5955. Neither was any certificate
of title issued in its name nor did it take
possession of Lot 18089 or paid the real property
taxes therefor. Hence, NCCPs claim cannot prevail

against Land Banks title, which was adjudged by
the RTC as an innocent purchaser for value. Also,
the RTC disregarded NCCPs allegation that the
signature of Sabug, Jr. on the 1999 Deed of
Absolute Sale in favor of Aguado was forged
because his signatures on both instruments bear
semblances of similarity and appear genuine.
Besides, the examiner from the National Bureau
of Investigation, who purportedly found that
Sabug, Jr.s signature thereon was spurious
leading to the dismissal of a criminal case against
him, was not presented as a witness in the civil
action.32
Finally, the RTC denied the parties respective
claims for damages.33
The CA Ruling
On appeal, the Court of Appeals (CA) affirmed the
foregoing RTC findings in a Decision34 dated May
12, 2010. While Land Bank was not regarded as a
mortgagee/purchaser in good faith with respect to
the subject portion considering Sps. Roques
possession thereof,35 the CA did not order its
reconveyance or segregation in the latters favor
because of Sps. Roques failure to pay the
remaining balance of the purchase price. Hence, it
only directed Land Bank to respect Sps. Roques
possession with the option to appropriate the
improvements introduced thereon upon payment
of compensation.36
As regards NCCP, the CA found that it failed to
establish its right over Lot 18089 for the following
reasons: (a) the sale to it of the lot by Sabug, Jr.
was never registered; and (b) there is no showing
that it was in possession of Lot 18089 or any
portion thereof from 1998. Thus, as far as NCCP
is concerned, Land Bank is a
mortgagee/purchaser in good faith.37
Aggrieved, both Sps. Roque38 and NCCP39 moved
for reconsideration but were denied by the CA in
a Resolution40 dated September 15, 2010,
prompting them to seek further recourse before
the Court.
The Issue Before the Court
The central issue in this case is whether or not
the CA erred in not ordering the reconveyance of
the subject portion in Sps. Roques favor.
Sps. Roque maintain that the CA erred in not
declaring them as the lawful owners of the
subject portion despite having possessed the
same since the execution of the 1977 Deed of
Conditional Sale, sufficient for acquisitive
prescription to set in in their favor.41 To bolster
their claim, they also point to the 1993 Joint
Affidavit whereby Sabug, Jr. and Rivero

acknowledged their ownership thereof.42Being the
first purchasers and in actual possession of the
disputed portion, they assert that they have a
better right over the 1,231 sq. m. portion of Lot
18089 and, hence, cannot be ousted therefrom by
Land Bank, which was adjudged as a
mortgagee/purchaser in bad faith, pursuant to
Article 1544 of the Civil Code.43
In opposition, Land Bank espouses that the
instant petition should be dismissed for raising
questions of fact, in violation of the proscription
under Rule 45 of the Rules of Court which allows
only pure questions of law to be
raised.44 Moreover, it denied that ownership over
the subject portion had been acquired by Sps.
Roque who admittedly failed to pay the remaining
balance of the purchase price.45Besides, Land
Bank points out that Sps. Roques action for
reconveyance had already prescribed.46
Instead of traversing the arguments of Sps.
Roque, NCCP, in its Comment47 dated December
19, 2011, advanced its own case, arguing that
the CA erred in holding that it failed to establish
its claimed ownership over Lot 18089 in its
entirety. Incidentally, NCCPs appeal from the CA
Decision dated May 12, 2010 was already denied
by the Court,48 and hence, will no longer be dealt
with in this case.
The Courts Ruling
The essence of an action for reconveyance is to
seek the transfer of the property which was
wrongfully or erroneously registered in another
persons name to its rightful owner or to one with
a better right.49 Thus, it is incumbent upon the
aggrieved party to show that he has a legal
claim on the property superior to that of the
registered owner and that the property has
not yet passed to the hands of an innocent
purchaser for value.50
Sps. Roque claim that the subject portion covered
by the 1977 Deed of Conditional Sale between
them and Rivero, et al. was wrongfully included in
the certificates of title covering Lot 18089, and,
hence, must be segregated therefrom and their
ownership thereof be confirmed. The salient
portions of the said deed state:
DEED OF CONDITIONAL SALE OF REAL

PROPERTY
KNOW ALL MEN BY THESE PRESENTS:
xxxx
That for and in consideration of the sum of

THIRTY THOUSAND SEVEN HUNDRED SEVENTY
FIVE PESOS (P30,775.00), Philippine Currency,
payable in the manner hereinbelow specified, the
VENDORS do hereby sell, transfer and convey
unto the VENDEE, or their heirs, executors,
administrators, or assignors, that unsegregated
portion of the above lot, x x x.
That the aforesaid amount shall be paid in two
installments, the first installment which is in the
amount of __________ (P15,387.50) and the
balance in the amount of __________
(P15,387.50), shall be paid as soon as the
described portion of the property shall have been
registered under the Land Registration Act and a
Certificate of Title issued accordingly;
That as soon as the total amount of the
property has been paid and the Certificate of
Title has been issued, an absolute deed of
sale shall be executed accordingly;
x x x x51
Examining its provisions, the Court finds that the
stipulation abovehighlighted shows that the
1977 Deed of Conditional Sale is actually in the
nature of a contract to sell and not one of sale
contrary to Sps. Roques belief.52 In this relation,
it has been consistently ruled that where the
seller promises to execute a deed of absolute
sale upon the completion by the buyer of the
payment of the purchase price, the contract is
only a contract to sell even if their agreement is
denominated as a Deed of Conditional Sale,53 as
in this case. This treatment stems from the legal
characterization of a contract to sell, that is, a
bilateral contract whereby the prospective seller,
while expressly reserving the ownership of
the subject property despite delivery thereof to
the prospective buyer,binds himself to sell the
subject property exclusively to the
prospective buyer upon fulfillment of the
condition agreed upon, such as, the full
payment of the purchase price.54Elsewise
stated, in a contract to sell, ownership is retained
by the vendor and is not to pass to the vendee
until full payment of the purchase
price.55 Explaining the subject matter further, the
Court, inUrsal v. CA,56 held that:
[I]n contracts to sell the obligation of the seller to

sell becomes demandable only upon the
happening of the suspensive condition, that is,
the full payment of the purchase price by the
buyer. It is only upon the existence of
the contract of sale that the seller becomes
obligated to transfer the ownership of the thing
sold to the buyer. Prior to the existence of
the contract of sale, the seller is not obligated to
transfer the ownership to the buyer, even if there

is a contract to sell between them.
Here, it is undisputed that Sps. Roque have not
paid the final installment of the purchase
price.57 As such, the condition which would have
triggered the parties obligation to enter into and
thereby perfect a contract of sale in order to
effectively transfer the ownership of the subject
portion from the sellers (i.e., Rivero et al.) to the
buyers (Sps. Roque) cannot be deemed to have
been fulfilled. Consequently, the latter cannot
validly claim ownership over the subject portion
even if they had made an initial payment and
even took possession of the same.58
The Court further notes that Sps. Roque did not
even take any active steps to protect their claim
over the disputed portion. This remains evident
from the following circumstances appearing on
record: (a) the 1977 Deed of Conditional Sale was
never registered; (b) they did not seek the
actual/physical segregation of the disputed
portion despite their knowledge of the fact that,
as early as 1993, the entire Lot 18089 was
registered in Sabug, Jr.s name under OCT No. M
5955; and (c) while they signified their
willingness to pay the balance of the purchase
price,59 Sps. Roque neither compelled Rivero et
al., and/or Sabug, Jr. to accept the same nor did
they consign any amount to the court, the proper
application of which would have effectively
fulfilled their obligation to pay the purchase
price.60 Instead, Sps. Roque waited 26 years,
reckoned from the execution of the 1977 Deed of
Conditional Sale, to institute an action for
reconveyance (in 2003), and only after Lot 18089
was sold to Land Bank in the foreclosure sale and
title thereto was consolidated in its name. Thus,
in view of the foregoing, Sabug, Jr. as the
registered owner of Lot 18089 borne by the grant
of his free patent application could validly
convey said property in its entirety to Aguado
who, in turn, mortgaged the same to Land Bank.
Besides, as aptly observed by the RTC, Sps.
Roque failed to establish that the parties who sold
the property to them, i.e., Rivero, et al., were
indeed its true and lawful owners.61In fine, Sps.
Roque failed to establish any superior right over
the subject portion as against the registered
owner of Lot 18089, i.e., Land Bank, thereby
warranting the dismissal of their reconveyance
action, without prejudice to their right to seek
damages against the vendors, i.e., Rivero et
al.62 As applied in the case of Coronel v. CA: 63
It is essential to distinguish between a contract to
sell and a conditional contract of sale specially in
cases where the subject property is sold by the
owner not to the party the seller contracted with,
but to a third person, as in the case at bench. In
a contract to sell, there being no previous sale of

the property, a third person buying such property
despite the fulfilment 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. (Emphasis supplied)
On the matter of double sales, suffice it to state
that Sps. Roques reliance64 on Article 154465 of
the Civil Code has been misplaced since the
contract they base their claim of ownership on is,
as earlier stated, a contract to sell, and not one of
sale. In Cheng v. Genato, 66 the Court stated the
circumstances which must concur in order to
determine the applicability of Article 1544, none
of which are obtaining in this case, viz.:
(a) The two (or more) sales transactions in issue

must pertain to exactly the same subject matter,
and must be valid sales transactions;
(b) The two (or more) buyers at odds over the
rightful ownership of the subject matter must
each represent conflicting interests; and
(c) The two (or more) buyers at odds over the
rightful ownership of the subject mattermust
each have bought from the same seller.
Finally, regarding Sps. Roques claims of
acquisitive prescription and reimbursement for
the value of the improvements they have
introduced on the subject property,67 it is keenly
observed that none of the arguments therefor
were raised before the trial court or the
CA.68 Accordingly, the Court applies the well
settled rule that litigants cannot raise an issue for
the first time on appeal as this would contravene
the basic rules of fair play and justice. In any
event, such claims appear to involve questions of
fact which are generally prohibited under a Rule
45 petition.69
With the conclusions herein reached, the Court
need not belabor on the other points raised by
the parties, and ultimately finds it proper to
proceed with the denial of the petition.
WHEREFORE, the petition is DENIED. The
Decision dated May 12, 2010 and the Resolution
dated September 15, 2010 of the Court of
Appeals in CA G.R. CV No. 92113 are
hereby AFFIRMED.
On May 29, 2009, respondent Joselin Tan

Lumapas, through counsel, filed a Motion for
Leave of Court for Intervention as Party
Defendant (with Urgent Motion to Hold in
Abeyance Implementation of Writ of
Possession)12 and an Answer in Intervention,13 as
a third party in actual possession of the
foreclosed property. She claimed that the
property had previously been sold to her by Aida
Ibabao, the propertys registered owner and the
judgment debtor/mortgagor in the extrajudicial
foreclosure sale, pursuant to a Deed of
Conditional Sale.14
SO ORDERED.
SECOND DIVISION
cralawre d
G.R. No. 196950, June 18, 2014

HELEN E. CABLING, ASSISTED BY HER
HUSBAND ARIEL
CABLING, Petitioner, v. JOSELIN TAN
LUMAPAS, AS REPRESENTED BY NORY
ABELLANES, Respondent.
On June 1, 2009, the RTC issued an

order15 holding in abeyance the implementation of
the petitioners writ of possession until after the
resolution of the respondents motion. The
following day, the RTC denied the respondents
motion for intervention.16 The respondent
promptly filed a motion for reconsideration.17
cralawred
DECISION
The RTCs Orders

BRION, J.:
We review the present petition for review

on certiorari1 that assails the May 12, 2011
decision2 of the Court of Appeals (CA) in CA-G.R.
SP No. 110865. The CA dismissed the petition
for certiorari, prohibition and mandamus filed by
petitioner Helen E. Cabling, assisted by her
husband Ariel Cabling, which questioned the July
14, 20093 and September 10, 20094 orders of the
Regional Trial Court (RTC) 3rd Judicial Region,
Branch 75, Olongapo City, in Other Case No. 160-09.
The Facts
The petitioner was the highest bidder in an
extrajudicial foreclosure sale conducted on
December 21, 2007 over a 216-square meter
property situated in the Barrio of Sta. Rita,
Olongapo City and covered by Transfer Certificate
of Title (TCT) No. T-14852.5 The Final Deed of
Sale6 was issued by the Sheriff of Olongapo City
on February 14, 2009 and the title to the property
was duly transferred. TCT No. T-14853 was issued
to the petitioner on March 23, 2009.7
cralawred
On May 6, 2009, the petitioner filed an

Application8 for the Issuance of a Writ of
Possession with the RTC.
On May 19, 2009, the RTC issued an
order9 granting the petitioners application, and
subsequently issued a Writ of Possession10 and
Notice to Vacate11 dated May 20, 2009 and May
25, 2009, respectively.
On July 14, 2009, the RTC issued the 1st assailed

order18 granting the respondents motion for
reconsideration. It recalled and rendered
ineffective the writ of possession issued to the
petitioner, stating that an ex-parte writ of
possession issued pursuant to Act No. 335 (sic),
as amended, cannot be enforced against a third
person who is in actual possession of the
foreclosed property and who is not in privity with
the debtor/mortgagor.19 Considering that the
respondent was not a party to the extrajudicial
foreclosure, the RTC held that she cannot be
ousted of her possession by a mere exparte motion for the issuance of a possessory
writ, and that the petitioner must now resort to
the appropriate judicial process in order to
recover the foreclosed property.
This time, the petitioner moved to reconsider the
RTCs July 14, 2009 order, but the RTC denied the
petitioners motion in an order dated September
10, 2009 - the 2nd assailed order.20
cralawre d
The CA Ruling
Before the CA, the petitioner filed a petition
for certiorari, prohibition and mandamus, under
Rule 65 of the Rules of Court, assailing the July
14, 2009 and September 10, 2009 orders of the
RTC.
In a decision dated May 12, 2011, the CA
dismissed the petitioners Rule 65 petition and
affirmed in toto the RTCs assailed orders. It ruled
that, while the issuance of a writ of possession is
generally a ministerial act, the RTC committed no
grave abuse of discretion in recalling the
petitioners writ of possession because the
obligation of the trial court to issue a writ of

possession ceases to be ministerial once it
appears that there is a third party in possession
of the property claiming a right adverse to that of
the debtor/mortgagor[; and where] such third
party exists, the trial court should conduct a
hearing to determine the nature of his adverse
possession.21
cralawre d
The Petition
We emphasize that the exception provided under

Section 33, Rule 39 of the Rules of Court
contemplates a situation in which a third party
holds the property by adverse title or right,
such as that of a co-owner, tenant or
usufructuary, who possesses the property in
his own right, and is not merely the
successor or transferee of the right of
possession of another co-owner or the
owner of the property.29
cralawred
The petitioner argues that the present case is not

an exception to the ministerial issuance of a writ
of possession.
While recognizing the respondents actual
possession of the subject property, the petitioner
contends that such possession is not adverse to
that of the judgment debtor/mortgagor. Neither is
possession in the concept of an owner because in
a conditional sale, ownership is retained by the
seller until the fulfillment of a positive suspensive
condition, that is, the full payment of the
purchase price.
Our Ruling
In the present case, the respondent cannot be

said to possess the subject property by adverse
title or right as her possession is merely premised
on the alleged conditional sale of the property to
her by the judgment debtor/mortgagor.
The execution of a contract of conditional sale
does not immediately transfer title to the property
to be sold from seller to buyer. In such contract,
ownership or title to the property is retained by
the seller until the fulfillment of a positive
suspensive condition which is normally the
payment of the purchase price in the manner
agreed upon.30
cralawred
We find merit in the petitioners arguments.

The well-settled rule is that in the extrajudicial
foreclosure of real estate mortgages under Act
No. 313522 (as amended), the issuance of a writ
of possession23 is ministerial upon the court after
the foreclosure sale and during the redemption
period when the court may issue the order for a
writ of possession upon the mere filing of an ex
parte motion and the approval of the
corresponding bond.24
In the present case, the Deed of Conditional Sale

between the respondent (buyer) and the subject
propertys registered owner (seller) expressly
reserved to the latter ownership over the property
until full payment of the purchase price, despite
the delivery of the subject property to the
respondent. It is provided in paragraph 6 of the
parties contract that only upon full payment of
the total sale value of P2.2 million that the seller
shall execute a deed of absolute sale in favor of
the respondent.31
cralawre d
cralawred
The writ of possession also issues as a matter of

course, without need of a bond or of a separate
and independent action, after the lapse of the
period of redemption,25 and after the
consolidation of ownership and the issuance
of a new TCT in the purchasers name.26
cralawred
There is, however, an exception to the rule.

Under Section 33,27 Rule 39 of the Rules of Court,
which is made applicable to extrajudicial
foreclosures of real estate mortgages, the
possession of the property shall be given to the
purchaser or last redemptioner unless a third
party is actually holding the property in a capacity
adverse to the judgment obligor.28 Thus, the
courts obligation to issue an ex parte writ of
possession in favor of the purchaser in an
extrajudicial foreclosure sale ceases to be
ministerial when there is a third party in
possession of the property claiming a right
adverse to that of the judgment
debtor/mortgagor.
It likewise appears from the records that no deed

of absolute sale over the subject property has
been executed in the respondents favor. Thus,
the respondents possession from the time the
subject property was delivered to her by the
seller cannot be claimed as possession in the
concept of an owner, as the ownership and title to
the subject property still then remained with the
seller until the title to the property was
transferred to the petitioner in March 2009. In
order for the respondent not to be ousted by
the ex parte issuance of a writ of possession, her
possession of the property must be adverse in
that she must prove a right independent of
and even superior to that of the judgment
debtor/mortgagor.
Under these circumstances, the general rule, and
not the exception, applies.
WHEREFORE, premises considered,
we GRANT the petition for review
on certiorari and REVERSEand SET ASIDE the
May 12, 2011 decision of the Court of Appeals in

CA-G.R. SP No. 110865.
Accordingly, we ORDER the Regional Trial Court,
3rd Judicial Region, Branch 75, Olongapo City, to
issue a Writ of Possession in favor of petitioner
Helen E. Cabling.
SO ORDERED.
Del Castillo, Perez, Mendoza,** and PerlasBernabe, JJ., concur.
THIRD DIVISION
G.R. No. 196251, July 09, 2014
OLIVAREZ REALTY CORPORATION AND DR.
PABLO R. OLIVAREZ, Petitioners, v. BENJAMIN
CASTILLO, Respondent.
DECISION
LEONEN, J.:
Trial may be dispensed with and a summary
judgment rendered if the case can be resolved
judiciously by plain resort to the pleadings,
affidavits, depositions, and other papers filed by
the parties.
This is a petition for review on certiorari1 of the
Court of Appeals decision2 dated July 20, 2010
and resolution3 dated March 18, 2011 in CA-G.R.
CV No. 91244.
The facts as established from the pleadings of the
parties are as follows:
DATE
April 8, 2000
May 8, 2000
May 16, 2000
June 8, 2000
July 8, 2000
August 8,
2000
September 8,
2000
October 8,
2000
November 8,
2000
AMOUNT
P500,000.00
500,000.00
500,000.00
1,000,000.00
500,000.00
500,000.00
500,000.00
500,000.00
500,000.007
As to the balance of P14,080,490.00, Olivarez

Realty Corporation agreed to pay in 30 equal
monthly installments every eighth day of the
month beginning in the month that the parties
would receive a decision voiding the Philippine
Tourism Authoritys title to the property.8 Under
the deed of conditional sale, Olivarez Realty
Corporation shall file the action against the
Philippine Tourism Authority with the full
assistance of [Castillo].9 Paragraph C of the deed
of conditional sale provides:
C.
[Olivarez Realty Corporation]

assumes the responsibility of
taking necessary legal action
thru Court to have the claim/title
TCT T-18493 of Philippine
Tourism Authority over the
above-described property be
nullified and voided; with the full
assistance of [Castillo][.]10
cralawla wlibrary
Benjamin Castillo was the registered owner of a

346,918-square-meter parcel of land located in
Laurel, Batangas, covered by Transfer Certificate
of Title No. T-19972.4 The Philippine Tourism
Authority allegedly claimed ownership of the
same parcel of land based on Transfer Certificate
of Title No. T-18493.5
cralawred
On April 5, 2000, Castillo and Olivarez Realty

Corporation, represented by Dr. Pablo R. Olivarez,
entered into a contract of conditional sale6 over
the property. Under the deed of conditional sale,
Castillo agreed to sell his property to Olivarez
Realty Corporation for P19,080,490.00. Olivarez
Realty Corporation agreed to a down payment of
P5,000,000.00, to be paid according to the
following schedule:
Should the action against the Philippine Tourism

Authority be denied, Castillo agreed to reimburse
all the amounts paid by Olivarez Realty
Corporation. Paragraph D of the deed of
conditional sale provides:
D. In the event that the Court

denie[s] the petition against the
Philippine Tourism Authority, all
sums received by [Castillo] shall
be reimbursed to [Olivarez
Realty Corporation] without
interest[.]11
As to the legitimate tenants occupying the

property, Olivarez Realty Corporation undertook
to pay them disturbance compensation, while

Castillo undertook to clear the land of the tenants
within six months from the signing of the deed of
conditional sale. Should Castillo fail to clear the
land within six months, Olivarez Realty
Corporation may suspend its monthly down
payment until the tenants vacate the property.
Paragraphs E and F of the deed of conditional sale
provide:
E.
That [Olivarez Realty

Corporation] shall pay the
disturbance compensation to
legitimate agricultural tenants
and fishermen occupants which
in no case shall exceed ONE
MILLION FIVE HUNDRED
THOUSAND (P1,500,000.00)
PESOS. Said amount shall not
form part of the purchase price.
In excess of this amount, all
claims shall be for the account of
[Castillo];
F.
That [Castillo] shall clear the

land of [the] legitimate tenants
within a period of six (6) months
upon signing of this Contract,
and in case [Castillo] fails,
shall have the right to suspend
the monthly down payment until
such time that the tenants
[move] out of the land[.]12
and Dr. Olivarez with the Regional Trial Court of

Tanauan City, Batangas.
Castillo alleged that Dr. Olivarez convinced him
into selling his property to Olivarez Realty
Corporation on the representation that the
corporation shall be responsible in clearing the
property of the tenants and in paying them
disturbance compensation. He further alleged that
Dr. Olivarez solely prepared the deed of
conditional sale and that he was made to sign the
contract with its terms not adequately explained
[to him] in Tagalog.15
cralawre d
After the parties had signed the deed of

conditional sale, Olivarez Realty Corporation
immediately took possession of the property.
However, the corporation only paid P2,500,000.00
of the purchase price. Contrary to the agreement,
the corporation did not file any action against the
Philippine Tourism Authority to void the latters
title to the property. The corporation neither
cleared the land of the tenants nor paid them
disturbance compensation. Despite demand,
Olivarez Realty Corporation refused to fully pay
the purchase price.16
cralawre d
Arguing that Olivarez Realty Corporation

committed substantial breach of the contract of
conditional sale and that the deed of conditional
sale was a contract of adhesion, Castillo prayed
for rescission of contract under Article 1191 of the
Civil Code of the Philippines. He further prayed
that Olivarez Realty Corporation and Dr. Olivarez
be made solidarily liable for moral damages,
exemplary damages, attorneys fees, and costs of
suit.17
cralawred
The parties agreed that Olivarez Realty

Corporation may immediately occupy the property
upon signing of the deed of conditional sale.
Should the contract be cancelled, Olivarez Realty
Corporation agreed to return the propertys
possession to Castillo and forfeit all the
improvements it may have introduced on the
property. Paragraph I of the deed of conditional
sale states:
I.
Immediately upon signing this

Contract, [Olivarez Realty
Corporation] shall be entitled to
occupy, possess and develop the
subject property. In case this
Contract is canceled [sic], any
improvement introduced by [the
corporation] on the property
shall be forfeited in favor of
[Castillo][.]13
On September 2, 2004, Castillo filed a

complaint14 against Olivarez Realty Corporation
In their answer,18 Olivarez Realty Corporation and

Dr. Olivarez admitted that the corporation only
paid P2,500,000.00 of the purchase price. In their
defense, defendants alleged that Castillo failed to
fully assist19 the corporation in filing an action
against the Philippine Tourism Authority. Neither
did Castillo clear the property of the tenants
within six months from the signing of the deed of
conditional sale. Thus, according to defendants,
the corporation had all the legal right to withhold
the subsequent payments to [fully pay] the
purchase price.20
cralawred
Olivarez Realty Corporation and Dr. Olivarez

prayed that Castillos complaint be dismissed. By
way of compulsory counterclaim, they prayed for
P100,000.00 litigation expenses and P50,000.00
attorneys fees.21
cralawre d
Castillo replied to the counterclaim,22 arguing that

Olivarez Realty Corporation and Dr. Olivarez had
no right to litigation expenses and attorneys fees.
According to Castillo, the deed of conditional sale
clearly states that the corporation assume[d] the
responsibility of taking necessary legal

action23against the Philippine Tourism Authority,
yet the corporation did not file any case. Also, the
corporation did not pay the tenants disturbance
compensation. For the corporations failure to fully
pay the purchase price, Castillo claimed that he
had all the right to pray for the rescission of the
[contract],24 and he should not be held
liable . . . for any alleged damages by way of
litigation expenses and attorneys fees.25
cralawred
On January 10, 2005, Castillo filed a request for

admission,26 requesting Dr. Olivarez to admit
under oath the genuineness of the deed of
conditional sale and Transfer Certificate of Title
No. T-19972. He likewise requested Dr. Olivarez
to admit the truth of the following factual
allegations:
1. That Dr. Olivarez is the president of Olivarez

Realty Corporation;
2. That Dr. Olivarez offered to purchase the parcel

of land from Castillo and that he undertook to
clear the property of the tenants and file the court
action to void the Philippine Tourism Authoritys
title to the property;
3. That Dr. Olivarez caused the preparation of the

deed of conditional sale;
4. That Dr. Olivarez signed the deed of conditional

sale for and on behalf of Olivarez Realty
Corporation;
1. That the corporation failed to fully pay the

purchase price for his property;32
cralawred
2. That the corporation failed to file an action to

void the Philippine Tourism Authoritys title to his
property;33 and
3. That the corporation failed to clear the
property of the tenants and pay them disturbance
compensation.34
Should judgment on the pleadings be improper,
Castillo argued that summary judgment may still
be rendered as there is no genuine issue as to
any material fact.35 He cited Philippine National
Bank v. Noahs Ark Sugar Refinery36 as authority.
Castillo attached to his motion for summary
judgment and/or judgment on the pleadings his
affidavit37 and the affidavit of a Marissa
Magsino38 attesting to the truth of the material
allegations of his complaint.
opposed39 the motion for summary judgment
and/or judgment on the pleadings, arguing that
the motion was devoid of merit.40 They
reiterated their claim that the corporation
withheld further payments of the purchase price
because there ha[d] been no favorable decision
voiding the title of the Philippine Tourism
Authority.41 They added that Castillo sold the
property to another person and that the sale was
allegedly litigated in Quezon City.42
cralawre d
5. That Dr. Olivarez and the corporation did not

file any action against the Philippine Tourism
Authority;
6. That Dr. Olivarez and the corporation did not

pay the tenants disturbance compensation and
failed to clear the property of the tenants; and
ChanRoblesVirtualawlibrary
Considering that a title adverse to that of

Castillos existed, Olivarez Realty Corporation and
Dr. Olivarez argued that the case should proceed
to trial and Castillo be required to prove that his
title to the property is not spurious or fake and
that he had not sold his property to another
person.43
cralawred
7. That Dr. Olivarez and the corporation only paid

P2,500,000.00 of the agreed purchase price.27
On January 25, 2005, Dr. Olivarez and Olivarez
Realty Corporation filed their objections to the
request for admission,28 stating that they
reiterate[d] the allegations [and denials] in their
[answer].29
cralawre d
The trial court conducted pre-trial conference on

December 17, 2005.
On March 8, 2006, Castillo filed a motion for
summary judgment and/or judgment on the
pleadings.30He argued that Olivarez Realty
Corporation and Dr. Olivarez substantially
admitted the material allegations of [his]
complaint,31 specifically:
In reply to the opposition to the motion for

summary judgment and/or judgment on the
pleadings,44Castillo maintained that Olivarez
Realty Corporation was responsible for the filing
of an action against the Philippine Tourism
Authority. Thus, the corporation could not fault
Castillo for not suing the Philippine Tourism
Authority.45 The corporation illegally withheld
payments of the purchase price.
As to the claim that the case should proceed to
trial because a title adverse to his title existed,
Castillo argued that the Philippine Tourism
Authoritys title covered another lot, not his
property.46
cralawre d
During the hearing on August 3, 2006, Olivarez

Realty Corporation and Dr. Olivarez prayed that
they be given 30 days to file a supplemental
memorandum on Castillos motion for summary

judgment and/or judgment on the pleadings. 47
any genuine issue [as to any material fact].60
cralawre d
cralawred
The trial court granted the motion. It gave Castillo

20 days to reply to the memorandum and the
corporation and Dr. Olivarez 15 days to respond
to Castillos reply.48
cralawred
Defendants admitted that Castillo owned the

parcel of land covered by Transfer Certificate of
Title No. T-19972. They likewise admitted the
genuineness of the deed of conditional sale and
that the corporation only paid P2,500,000.00 of
the agreed purchase price.61
cralawred
In their supplemental memorandum,49 Olivarez

Realty Corporation and Dr. Olivarez argued that
there was an obvious ambiguity50 as to which
should occur first the payment of disturbance
compensation to the tenants or the clearing of the
property of the tenants.51 This ambiguity,
according to defendants, is a genuine issue and
ought to be threshed out in a full blown trial.52
cralawred
According to the trial court, the corporation was

responsible for suing the Philippine Tourism
Authority and for paying the tenants disturbance
compensation. Since defendant corporation
neither filed any case nor paid the tenants
disturbance compensation, the trial court ruled
that defendant corporation had no right to
withhold payments from Castillo.62
cralawred

added that Castillo prayed for irreconcilable reliefs
of reformation of instrument and rescission of
contract.53 Thus, Castillos complaint should be
dismissed.
Castillo replied54 to the memorandum, arguing
that there was no genuine issue requiring trial of
the case. According to Castillo, common sense
dictates . . . that the legitimate tenants of the
[property] shall not vacate the premises without
being paid any disturbance
compensation . . .55 Thus, the payment of
disturbance compensation should occur first
before clearing the property of the tenants.
With respect to the other issues raised in the
supplemental memorandum, specifically, that
Castillo sold the property to another person, he
argued that these issues should not be
entertained for not having been presented during
pre-trial.56
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In their comment on the reply

memorandum,57 Olivarez Realty Corporation and
Dr. Olivarez reiterated their arguments that
certain provisions of the deed of conditional sale
were ambiguous and that the complaint prayed
for irreconcilable reliefs.58
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As to the additional issues raised in the

supplemental memorandum, defendants argued
that issues not raised and evidence not identified
and pre-marked during pre-trial may still be
raised and presented during trial for good cause
shown. Olivarez Realty Corporation and Dr.
Olivarez prayed that Castillos complaint be
dismissed for lack of merit.59
As to the alleged ambiguity of paragraphs E and F

of the deed of conditional sale, the trial court
ruled that Castillo and his witness, Marissa
Magsino, clearly established63 in their affidavits
that the deed of conditional sale was a contract of
adhesion. The true agreement between the
parties was that the corporation would both clear
the land of the tenants and pay them disturbance
compensation.
With these findings, the trial court ruled that
Olivarez Realty Corporation breached the contract
of conditional sale. In its decision64 dated April 23,
2007, the trial court ordered the deed of
conditional sale rescinded and the P2,500,000.00
forfeited in favor of Castillo as damages under
Article 1191 of the Civil Code.65
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The trial court declared Olivarez Realty

Corporation and Dr. Olivarez solidarily liable to
Castillo for P500,000.00 as moral damages,
P50,000.00 as exemplary damages, and
P50,000.00 as costs of suit.66
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Ruling of the Court of Appeals

appealed to the Court of Appeals.67
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In its decision68 dated July 20, 2010, the Court of

Appeals affirmed in toto the trial courts decision.
According to the appellate court, the trial court
did not err in its finding that there is no genuine
controversy as to the facts involved [in this
case].69 The trial court, therefore, correctly
rendered summary judgment.70
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Ruling of the trial court

The trial court found that Olivarez Realty
Corporation and Dr. Olivarezs answer
substantially [admitted the material allegations
of Castillos] complaint and [did] not . . . raise
As to the trial courts award of damages, the

appellate court ruled that a court may award
damages through summary judgment if the
parties contract categorically [stipulates] the
respective obligations of the parties in case of
default.71 As found by the trial court, paragraph I
of the deed of conditional sale categorically states
that in case [the deed of conditional sale] is

cancelled, any improvement introduced by
[Olivarez Realty Corporation] on the property
shall be forfeited in favor of
[Castillo].72 Considering that Olivarez Realty
Corporation illegally retained possession of the
property, Castillo forewent rent to the property
and lost business opportunities.73 The
P2,500,000.00 down payment, according to the
appellate court, should be forfeited in favor of
Castillo. Moral and exemplary damages and costs
of suit were properly awarded.
Similar to Castillo, Torres filed a motion for

summary judgment, which the trial court granted.
On appeal, the Court of Appeals set aside the trial
courts summary judgment and remanded the
case to the trial court for further
proceedings.81 The Court of Appeals ruled that the
material allegations of the complaint were
directly disputed by [the corporation and Dr.
Olivarez] in their answer82 when they argued
that they refused to pay because Torres failed to
clear the land of the tenants.
On August 11, 2010, Olivarez Realty Corporation

and Dr. Olivarez filed their motion for
reconsideration,74 arguing that the trial court
exceeded its authority in forfeiting the
P2,500,000.00 down payment and awarding
P500,000.00 in moral damages to Castillo. They
argued that Castillo only prayed for a total of
P500,000.00 as actual and moral damages in his
complaint.75 Appellants prayed that the Court of
Appeals take a second hard look76 at the case
and reconsider its decision.
With the Court of Appeals decision in Torres,

Olivarez Realty Corporation and Dr. Olivarez argue
that this case should likewise be remanded to the
trial court for further proceedings under the
equipoise rule.
In the resolution77 dated March 18, 2011, the

Court of Appeals denied the motion for
reconsideration.
Petitioners likewise argue that the trial court had

no jurisdiction to decide the case as Castillo failed
to pay the correct docket fees.84 Petitioners argue
that Castillo should have paid docket fees based
on the propertys fair market value since Castillos
complaint is a real action.85
Proceedings before this court
Petitioners maintain that Castillo availed himself

of the irreconcilable reliefs of reformation of
instrument and rescission of contract.83 Thus, the
trial court should have dismissed the case
outright.
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Olivarez Realty Corporation and Dr. Olivarez filed

their petition for review on certiorari78 with this
court. Petitioners argue that the trial court and
the Court of Appeals erred in awarding damages
to Castillo. Under Section 3, Rule 35 of the 1997
Rules of Civil Procedure, summary judgment may
be rendered except as to the amount of damages.
Thus, the Court of Appeals violated the
procedural steps in rendering summary
judgment.79
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Petitioners reiterate that there are genuine issues

of material fact to be resolved in this case. Thus,
a full-blown trial is required, and the trial court
prematurely decided the case through summary
judgment. They cite Torres v. Olivarez Realty
Corporation and Dr. Pablo Olivarez,80 a case
decided by the Ninth Division of the Court of
Appeals.
In Torres, Rosario Torres was the registered
owner of a parcel of land covered by Transfer
Certificate of Title No. T-19971. Under a deed of
conditional sale, she sold her property to Olivarez
Realty Corporation for P17,345,900.00. When the
corporation failed to fully pay the purchase price,
she sued for rescission of contract with damages.
In their answer, the corporation and Dr. Olivarez
argued that they discontinued payment because
Rosario Torres failed to clear the land of the
tenants.
In his comment,86 Castillo maintains that there

are no genuine issues as to any material fact in
this case. The trial court, therefore, correctly
rendered summary judgment.
As to petitioners claim that the trial court had no
jurisdiction to decide the case, Castillo argues
that he prayed for rescission of contract in his
complaint. This action is incapable of pecuniary
estimation, and the Clerk of Court properly
computed the docket fees based on this prayer.87
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replied,88 reiterating their arguments in the
petition for review on certiorari.
The issues for our resolution are the following:
I. Whether the trial court erred in rendering

summary judgment;
II. Whether proper docket fees were paid in this

case.
chanrobleslaw

I
The trial court correctly rendered

summary judgment, as there were no
genuine issues of material fact in this
case
Trial is the judicial examination and
determination of the issues between the parties
to the action.89During trial, parties present their
respective evidence of their claims and
defenses.90 Parties to an action have the right to
a plenary trial of the case91 to ensure that they
were given a right to fully present evidence on
their respective claims.
There are instances, however, when trial may be
dispensed with. Under Rule 35 of the 1997 Rules
of Civil Procedure, a trial court may dispense with
trial and proceed to decide a case if from the
pleadings, affidavits, depositions, and other
papers on file, there is no genuine issue as to any
material fact. In such a case, the judgment issued
is called a summary judgment.
A motion for summary judgment is filed either by
the claimant or the defending party.92 The trial
court then hears the motion for summary
judgment. If indeed there are no genuine issues
of material fact, the trial court shall issue
summary judgment. Section 3, Rule 35 of the
1997 Rules of Civil Procedure provides:
filed fails to tender an issue or otherwise admits

the material allegations of the claimants
pleading.95
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Judgment on the pleadings is proper when the

answer filed fails to tender any issue, or
otherwise admits the material allegations in the
complaint.96 On the other hand, in a summary
judgment, the answer filed tenders issues as
specific denials and affirmative defenses are
pleaded, but the issues raised are sham,
fictitious, or otherwise not genuine.97
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In this case, Olivarez Realty Corporation admitted

that it did not fully pay the purchase price as
agreed upon in the deed of conditional sale. As to
why it withheld payments from Castillo, it set up
the following affirmative defenses: First, Castillo
did not file a case to void the Philippine Tourism
Authoritys title to the property; second, Castillo
did not clear the land of the tenants; third,
Castillo allegedly sold the property to a third
person, and the subsequent sale is currently
being litigated before a Quezon City court.
Considering that Olivarez Realty Corporation and
Dr. Olivarezs answer tendered an issue, Castillo
properly availed himself of a motion for summary
judgment.
SEC. 3. Motion and proceedings thereon. The

motion shall be served at least ten (10) days
before the time specified for the hearing. The
adverse party may serve opposing affidavits,
depositions, or admission at least three (3) days
before the hearing. After the hearing, the
judgment sought shall be rendered forthwith if
the pleadings, supporting affidavits, depositions,
and admissions on file, show that, except as to
the amount of damages, there is no genuine issue
as to any material fact and that the moving party
is entitled to a judgment as a matter of law.
An issue of material fact exists if the answer or
responsive pleading filed specifically denies the
material allegations of fact set forth in the
complaint or pleading. If the issue of fact
requires the presentation of evidence, it is a
genuine issue of fact.93 However, if the issue
could be resolved judiciously by plain resort 94 to
the pleadings, affidavits, depositions, and other
papers on file, the issue of fact raised is sham,
and the trial court may resolve the action through
summary judgment.
A summary judgment is usually distinguished
from a judgment on the pleadings. Under Rule 34
of the 1997 Rules of Civil Procedure, trial may
likewise be dispensed with and a case decided
through judgment on the pleadings if the answer
However, the issues tendered by Olivarez Realty

Corporation and Dr. Olivarezs answer are not
genuine issues of material fact. These are issues
that can be resolved judiciously by plain resort to
the pleadings, affidavits, depositions, and other
papers on file; otherwise, these issues are sham,
fictitious, or patently unsubstantial.
Petitioner corporation refused to fully pay the
purchase price because no court case was filed to
void the Philippine Tourism Authoritys title on the
property. However, paragraph C of the deed of
conditional sale is clear that petitioner Olivarez
Realty Corporation is responsible for initiating
court action against the Philippine Tourism
Authority:
C.

assumes the responsibility of
taking necessary legal action
thru Court to have the claim/title
TCT T-18493 of Philippine
Tourism Authority over the
above-described property be
nullified and voided; with the full
assistance of [Castillo].98
Castillos alleged failure to fully assist 99 the

corporation in filing the case is not a defense. As
the trial court said, how can [Castillo] assist [the
corporation] when [the latter] did not file the
action [in the first place?]100
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Neither can Olivarez Realty Corporation argue

that it refused to fully pay the purchase price due
to the Philippine Tourism Authoritys adverse
claim on the property. The corporation knew of
this adverse claim when it entered into a contract
of conditional sale. It even obligated itself under
paragraph C of the deed of conditional sale to sue
the Philippine Tourism Authority. This defense,
therefore, is sham.
Contrary to petitioners claim, there is no
obvious ambiguity101 as to which should occur
first the payment of the disturbance
compensation or the clearing of the land within
six months from the signing of the deed of
conditional sale. The obligations must be
performed simultaneously. In this case, the
parties should have coordinated to ensure that
tenants on the property were paid disturbance
compensation and were made to vacate the
property six months after the signing of the deed
of conditional sale.
On one hand, pure obligations, or obligations
whose performance do not depend upon a future
or uncertain event, or upon a past event unknown
to the parties, are demandable at once.102 On the
other hand, obligations with a resolutory period
also take effect at once but terminate upon arrival
of the day certain.103
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Olivarez Realty Corporations obligation to pay

disturbance compensation is a pure obligation.
The performance of the obligation to pay
disturbance compensation did not depend on any
condition. Moreover, the deed of conditional sale
did not give the corporation a period to perform
the obligation. As such, the obligation to pay
disturbance compensation was demandable at
once. Olivarez Realty Corporation should have
paid the tenants disturbance compensation upon
execution of the deed of conditional sale.
With respect to Castillos obligation to clear the
land of the tenants within six months from the
signing of the contract, his obligation was an
obligation with a resolutory period. The obligation
to clear the land of the tenants took effect at
once, specifically, upon the parties signing of the
deed of conditional sale. Castillo had until October
2, 2000, six months from April 5, 2000 when the
parties signed the deed of conditional sale, to
clear the land of the tenants.
Olivarez Realty Corporation, therefore, had no
right to withhold payments of the purchase price.
As the trial court ruled, Olivarez Realty
Corporation can only claim non-compliance [of
the obligation to clear the land of the tenants in]
October 2000.104 It said:
. . . it is clear that defendant [Olivarez Realty

Corporation] should have paid the installments on
the P5 million downpayment up to October 8,
2000, or a total of P4,500,000.00. That is the
agreement because the only time that defendant
[corporation] can claim non-compliance of the
condition is after October, 2000 and so it has the
clear obligation to pay up to the October 2000 the
agreed installments. Since it paid only
P2,500,000.00, then a violation of the contract
has already been committed. . . .105
The claim that Castillo sold the property to
another is fictitious and was made in bad faith to
prevent the trial court from rendering summary
judgment. Petitioners did not elaborate on this
defense and insisted on revealing the identity of
the buyer only during trial.106 Even in their
petition for review on certiorari, petitioners never
disclosed the name of this alleged buyer. Thus, as
the trial court ruled, this defense did not tender a
genuine issue of fact, with the defense bereft of
details.107
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Castillos alleged prayer for the irreconcilable

reliefs of rescission of contract and reformation of
instrument is not a ground to dismiss his
complaint. A plaintiff may allege two or more
claims in the complaint alternatively or
hypothetically, either in one cause of action or in
separate causes of action per Section 2, Rule 8 of
the 1997 Rules of Civil Procedure.108 It is the filing
of two separate cases for each of the causes of
action that is prohibited since the subsequently
filed case may be dismissed under Section 4, Rule
2 of the 1997 Rules of Civil Procedure109 on
splitting causes of action.
As demonstrated, there are no genuine issues of
material fact in this case. These are issues that
can be resolved judiciously by plain resort to the
pleadings, affidavits, depositions, and other
papers on file. As the trial court found, Olivarez
Realty Corporation illegally withheld payments of
the purchase price. The trial court did not err in
rendering summary judgment.
II
Castillo is entitled to cancel the
contract of conditional sale
Since Olivarez Realty Corporation illegally
withheld payments of the purchase price, Castillo
is entitled to cancel his contract with petitioner
corporation. However, we properly characterize
the parties contract as a contract to sell, not a
contract of conditional sale.
In both contracts to sell and contracts of
conditional sale, title to the property remains with

the seller until the buyer fully pays the purchase
price.110 Both contracts are subject to the positive
suspensive condition of the buyers full payment
of the purchase price.111
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In a contract of conditional sale, the buyer

automatically acquires title to the property upon
full payment of the purchase price.112 This transfer
of title is by operation of law without any further
act having to be performed by the seller.113 In a
contract to sell, transfer of title to the prospective
buyer is not automatic.114 The prospective seller
[must] convey title to the property [through] a
deed of conditional sale.115
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The distinction is important to determine the

applicable laws and remedies in case a party does
not fulfill his or her obligations under the contract.
In contracts of conditional sale, our laws on sales
under the Civil Code of the Philippines apply. On
the other hand, contracts to sell are not governed
by our law on sales116 but by the Civil Code
provisions on conditional obligations.
Specifically, Article 1191 of the Civil Code on the
right to rescind reciprocal obligations does not
apply to contracts to sell.117 As this court
explained in Ong v. Court of Appeals,118 failure to
fully pay the purchase price in contracts to sell is
not the breach of contract under Article
1191.119 Failure to fully pay the purchase price is
merely an event which prevents the [sellers]
obligation to convey title from acquiring binding
force.120 This is because there can be no
rescission of an obligation that is still nonexistent, the suspensive condition not having
[happened].121
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In this case, Castillo reserved his title to the

property and undertook to execute a deed of
absolute sale upon Olivarez Realty Corporations
full payment of the purchase price.122 Since
Castillo still has to execute a deed of absolute
sale to Olivarez Realty Corporation upon full
payment of the purchase price, the transfer of
title is not automatic. The contract in this case is
a contract to sell.
As this case involves a contract to sell, Article
1191 of the Civil Code of the Philippines does not
apply. The contract to sell is instead cancelled,
and the parties shall stand as if the obligation to
sell never existed.123
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Olivarez Realty Corporation shall return the

possession of the property to Castillo. Any
improvement that Olivarez Realty Corporation
may have introduced on the property shall be
forfeited in favor of Castillo per paragraph I of the
deed of conditional sale:
cralawlawlibrary
I.
Immediately upon signing this Contract,

[Olivarez Realty Corporation] shall be
entitled to occupy, possess and develop
the subject property. In case this
Contract is cancelled, any improvement
introduced by [Olivarez Realty
Corporation] on the property shall be
forfeited in favor of [Castillo.]124
As for prospective sellers, this court generally

orders the reimbursement of the installments paid
for the property when setting aside contracts to
sell.125 This is true especially if the propertys
possession has not been delivered to the
prospective buyer prior to the transfer of title.
In this case, however, Castillo delivered the
possession of the property to Olivarez Realty
Corporation prior to the transfer of title. We
cannot order the reimbursement of the
installments paid.
In Gomez v. Court of Appeals,126 the City of
Manila and Luisa Gomez entered into a contract to
sell over a parcel of land. The city delivered the
propertys possession to Gomez. She fully paid
the purchase price for the property but violated
the terms of the contract to sell by renting out
the property to other persons. This court set
aside the contract to sell for her violation of the
terms of the contract to sell. It ordered the
installments paid forfeited in favor of the City of
Manila as reasonable compensation for
[Gomezs] use of the [property]127 for eight
years.
In this case, Olivarez Realty Corporation failed to
fully pay the purchase price for the property. It
only paid P2,500,000.00 out of the
P19,080,490.00 agreed purchase price. Worse,
petitioner corporation has been in possession of
Castillos property for 14 years since May 5, 2000
and has not paid for its use of the property.
Similar to the ruling in Gomez, we order the
P2,500,000.00 forfeited in favor of Castillo as
reasonable compensation for Olivarez Realty
Corporations use of the property.
III
Olivarez Realty Corporation is liable for
moral and exemplary damages and
attorneys
fees
We note that the trial court erred in rendering
summary judgment on the amount of damages.
Under Section 3, Rule 35 of the 1997 Rules of
Civil Procedure, summary judgment may be
rendered, except as to the amount of damages.
In this case, the trial court erred in forfeiting the

P2,500,000.00 in favor of Castillo as damages
under Article 1191 of the Civil Code of the
Philippines. As discussed, there is no breach of
contract under Article 1191 in this case.
The trial court likewise erred in rendering
summary judgment on the amount of moral and
exemplary damages and attorneys fees.
Nonetheless, we hold that Castillo is entitled to
moral damages, exemplary damages, and
attorneys fees.
Moral damages may be awarded in case the
claimant experienced physical suffering, mental
anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social
humiliation, and similar injury.128
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As for exemplary damages, they are awarded in

addition to moral damages by way of example or
correction for the public good.129 Specifically in
contracts, exemplary damages may be awarded if
the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner.130
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also entitled to P50,000.00 as exemplary

damages to serve as a deterrent to other parties
to a contract to religiously comply with their
prestations under the contract.131
We likewise agree that Castillo is entitled to
attorneys fees in addition to the exemplary
damages.132Considering that Olivarez Realty
Corporation refused to satisfy Castillos plainly
valid, just, and demandable claim,133 the award of
P50,000.00 as attorneys fees is in order.
However, we find that Dr. Pablo R. Olivarez is not
solidarily liable with Olivarez Realty Corporation
for the amount of damages.
Under Article 1207 of the Civil Code of the
Philippines, there is solidary liability only when
the obligation states it or when the law or the
nature of the obligation requires solidarity.134 In
case of corporations, they are solely liable for
their obligations.135 The directors or trustees and
officers are not liable with the corporation even if
it is through their acts that the corporation
incurred the obligation. This is because a
corporation is separate and distinct from the
persons comprising it.136
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Under the deed of conditional sale, Olivarez

Realty Corporation may only suspend the monthly
down payment in case Castillo fails to clear the
land of the tenants six months from the signing of
the instrument. Yet, even before the sixth month
arrived, Olivarez Realty Corporation withheld
payments for Castillos property. It even used as a
defense the fact that no case was filed against the
Philippine Tourism Authority when, under the
deed of conditional sale, Olivarez Realty
Corporation was clearly responsible for initiating
action against the Philippine Tourism Authority.
These are oppressive and malevolent acts, and
we find Castillo entitled to P500,000.00 moral
damages and P50,000.00 exemplary
damages:
Plaintiff Castillo is entitled to moral damages

because of the evident bad faith exhibited by
defendants in dealing with him regarding the sale
of his lot to defendant [Olivarez Realty
Corporation]. He suffered much prejudice due to
the failure of defendants to pay him the balance
of purchase price which he expected to use for his
needs which caused him wounded feelings,
sorrow, mental anxiety and sleepless nights for
which defendants should pay P500,000.00 as
moral damages more than six (6) years had
elapsed and defendants illegally and unfairly
failed and refused to pay their legal obligations to
plaintiff, unjustly taking advantage of a poor
uneducated man like plaintiff causing much
sorrow and financial difficulties. Moral damages in
favor of plaintiff is clearly justified . . . [Castillo] is
As an exception to the rule, directors or trustees

and corporate officers may be solidarily liable with
the corporation for corporate obligations if they
acted in bad faith or with gross negligence in
directing the corporate affairs.137
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In this case, we find that Castillo failed to prove

with preponderant evidence that it was through
Dr. Olivarezs bad faith or gross negligence that
Olivarez Realty Corporation failed to fully pay the
purchase price for the property. Dr. Olivarezs
alleged act of making Castillo sign the deed of
conditional sale without explaining to the latter
the deeds terms in Tagalog is not reason to hold
Dr. Olivarez solidarily liable with the corporation.
Castillo had a choice not to sign the deed of
conditional sale. He could have asked that the
deed of conditional sale be written in Tagalog.
Thus, Olivarez Realty Corporation is solely liable
for the moral and exemplary damages and
attorneys fees to Castillo.
IV
The trial court acquired jurisdiction over
Castillos action as he paid the correct
docket fees
claimed that the trial court had no jurisdiction to
take cognizance of the case. In the reply/motion
to dismiss the complaint138 they filed with the
Court of Appeals, petitioners argued that Castillo

failed to pay the correct amount of docket fees.
Stating that this action is a real action, petitioners
argued that the docket fee Castillo paid should
have been based on the fair market value of the
property. In this case, Castillo only paid
P4,297.00, which is insufficient if the real nature
of the action was admitted and the fair market
value of the property was disclosed and made the
basis of the amount of docket fees to be paid to
the court.139 Thus, according to petitioners, the
case should be dismissed for lack of jurisdiction.
Castillo countered that his action for rescission is
an action incapable of pecuniary estimation. Thus,
the Clerk of Court of the Regional Trial Court of
Tanauan City did not err in assessing the docket
fees based on his prayer.
We rule for Castillo. In De Leon v. Court of
Appeals,140 this court held that an action for
rescission of contract of sale of real property is an
action incapable of pecuniary estimation. In De
Leon, the action involved a real property.
Nevertheless, this court held that it is the nature
of the action as one for rescission of contract
which is controlling.141 Consequently, the docket
fees to be paid shall be for actions incapable of
pecuniary estimation, regardless if the claimant
may eventually recover the real property. This
court said:
. . . the Court in Bautista v. Lim, held that an

action for rescission of contract is one which
cannot be estimated and therefore the docket fee
for its filing should be the flat amount of P200.00
as then fixed in the former Rule 141, 141,
5(10). Said this Court:
We hold that Judge Dalisay did not err in
considering Civil Case No. V-144 as basically one
for rescission or annulment of contract which is
not susceptible of pecuniary estimation (1 Moran's
Comments on the Rules of Court, 1970 Ed, p. 55;
Lapitan vs. Scandia, Inc., L-24668, July 31, 1968,
24 SCRA 479, 781-483).
Consequently, the fee for docketing it is P200, an
amount already paid by plaintiff, now respondent
Matilda Lim. (She should pay also the two pesos
legal research fund fee, if she has not paid it, as
required in Section 4 of Republic Act No. 3870,
the charter of the U.P. Law Center).
Thus, although eventually the result may be the
recovery of land, it is the nature of the action as
one for rescission of contract which is controlling.
The Court of Appeals correctly applied these
cases to the present one. As it said:
We would like to add the observations that since
the action of petitioners [private respondents]
against private respondents [petitioners] is solely
for annulment or rescission which is not
susceptible of pecuniary estimation, the action

should not be confused and equated with the
"value of the property" subject of the transaction;
that by the very nature of the case, the
allegations, and specific prayer in the complaint,
sans any prayer for recovery of money and/or
value of the transaction, or for actual or
compensatory damages, the assessment and
collection of the legal fees should not be
intertwined with the merits of the case and/or
what may be its end result; and that to sustain
private respondents' [petitioners'] position on
what the respondent court may decide after all,
then the assessment should be deferred and
finally assessed only after the court had finally
decided the case, which cannot be done because
the rules require that filing fees should be based
on what is alleged and prayed for in the face of
the complaint and paid upon the filing of the
complaint.142
Although we discussed that there is no rescission
of contract to speak of in contracts of conditional
sale, we hold that an action to cancel a contract
to sell, similar to an action for rescission of
contract of sale, is an action incapable of
pecuniary estimation. Like any action incapable of
pecuniary estimation, an action to cancel a
contract to sell demands an inquiry into other
factors143 aside from the amount of money to be
awarded to the claimant. Specifically in this case,
the trial court principally determined whether
Olivarez Realty Corporation failed to pay
installments of the propertys purchase price as
the parties agreed upon in the deed of conditional
sale. The principal nature of Castillos action,
therefore, is incapable of pecuniary estimation.
All told, there is no issue that the parties in this
case entered into a contract to sell a parcel of
land and that Olivarez Realty Corporation failed to
fully pay the installments agreed upon.
Consequently, Castillo is entitled to cancel the
contract to sell.
WHEREFORE, the petition for review on
certiorari is DENIED. The Court of Appeals
decision dated July 20, 2010 and in CA-G.R. CV
No. 91244 is AFFIRMED with MODIFICATION.
The deed of conditional sale dated April 5, 2000 is
declared CANCELLED. Petitioner Olivarez Realty
Corporation shall RETURN to respondent
Benjamin Castillo the possession of the property
covered by Transfer Certificate of Title No. T19972 together with all the improvements that
petitioner corporation introduced on the property.
The amount of P2,500,000.00 is FORFEITED in
favor of respondent Benjamin Castillo as
reasonable compensation for the use of petitioner
Olivarez Realty Corporation of the property.
Petitioner Olivarez Realty Corporation

shall PAY respondent Benjamin Castillo
P500,000.00 as moral damages, P50,000.00 as
exemplary damages, and P50,000.00 as
attorneys fees with interest at 6% per annum
from the time this decision becomes final and
executory until petitioner corporation fully pays
the amount of damages.144
cralawre d
SO ORDERED.
Velasco, Jr., (Chairperson), Peralta, Villarama,
Jr.,* and Mendoza, JJ., concur.
SECOND DIVISION
G.R. No. 124874. March 17, 2000
ALBERT R.
PADILLA,, Petitioner, v. SPOUSES
FLORESCO PAREDES and ADELINA
PAREDES, and THE HONORABLE
COURT OF
APPEALS, Respondents. Supreme
DECISION
QUISUMBING, J.:
For resolution is a petition for review
on certiorari, seeking reversal of the
decision of the Court of Appeals in CA G.R.
CV No. 33089, which set aside the decision
of the Regional Trial Court in Civil Case
No. 4357 and confirmed the rescission of the
contract between petitioner and private
Respondents.
From the records, we glean the following
antecedent facts:
On October 20, 1988, petitioner Albert R.
Padilla and private respondents Floresco and
Adelina Paredes entered into a contract to
sell1 involving a parcel of land in San Juan,
La Union. At that time, the land was untitled

although private respondents were paying
taxes thereon. Under the contract, petitioner
undertook to secure title to the property in
private respondents' names. Of the
P312,840.00 purchase price, petitioner was
to pay a downpayment of P50,000.00 upon
signing of the contract, and the balance was
to be paid within ten days from the issuance
of a court order directing issuance of a
decree of registration for the property.
On December 27, 1989, the court ordered
the issuance of a decree of land registration
for the subject property. The property was
titled in the name of private respondent
Adelina Paredes. Private respondents then
demanded payment of the balance of the
purchase price, per the second paragraph of
the contract to sell,2 which reads as follows:
"VENDEE agrees to pay the balance of the
purchase price of subject property in the
amount of TWO HUNDRED SIXTY TWO
THOUSAND EIGHT HUNDRED FORTY
(P262,840.00) PESOS, within ten (10) days
counted from issuance of the Order of the
Court for the issuance of a decree pursuant
to an application for registration and
confirmation of title of said subject property,
of which the VENDEE is under obligation
to secure the title of subject property at his
own expense."
Petitioner made several payments to private
respondents, some even before the court
issued an order for the issuance of a decree
of registration.3 Still, petitioner failed to pay
the full purchase price even after the
expiration of the period set. In a letter dated
February 14, 1990,4 private respondents,
through counsel, demanded payment of the
remaining balance, with interest and
attorney's fees, within five days from receipt
of the letter. Otherwise, private respondents
stated they would consider the contract

rescinded.
On February 28, 1990, petitioner made a
payment of P100,000.00 to private
respondents,5 still insufficient to cover the
full purchase price. Shortly thereafter, in a
letter dated April 17, 1990,6 private
respondents offered to sell to petitioner onehalf of the property for all the payments the
latter had made, instead of rescinding the
contract. If petitioner did not agree with the
proposal, private respondents said they
would take steps to enforce the automatic
rescission of the contract.
Petitioner did not accept private respondents'
proposal. Instead, in a letter dated May 2,
1990,7 he offered to pay the balance in full
for the entire property, plus interest and
attorney's fees. Private respondents refused
the offer.
On May 14, 1990, petitioner instituted an
action for specific performance against
private respondents, alleging that he had
already substantially complied with his
obligation under the contract to sell. He
claimed that the several partial payments he
had earlier made, upon private respondents'
request, had impliedly modified the contract.
He also averred that he had already spent
P190,000.00 in obtaining title to the
property, subdividing it, and improving its
right-of-way.8Lexj uris
For their part, private respondents claimed
before the lower court that petitioner
maliciously delayed payment of the balance
of the purchase price, despite repeated
demand and despite his knowledge of
private respondents' need
therefor.9 According to private respondents,
their acceptance of partial payments did not
at all modify the terms of their agreement,
such that the failure of petitioner to fully pay
at the time stipulated was a violation of the

contract.10 Private respondents claimed that
this violation led to the rescission of the
contract, of which petitioner was formally
informed.11
crlwvirtualibrry
After trial, the lower court ruled in favor of

petitioner, saying that even if petitioner
indeed breached the contract to sell, it was
only a casual and slight breach that did not
warrant rescission of the contract. The trial
court pointed out that private respondents
themselves breached the contract when they
requested and accepted installment
payments from petitioner, even before the
land registration court ordered issuance of a
decree of registration for the
property.12 According to the trial court, this
constituted modification of the contract,
though not reduced into writing as required
by the contract itself. The payments,
however, were evidenced by receipts duly
signed by private respondents. Acceptance
of delayed payments estopped private
respondents from exercising their right of
rescission, if any existed.13
crlwvirtualibrry
The Court of Appeals, however, reversed the

ruling of the trial court and confirmed
private respondents' rescission of the
contract to sell. According to the Court of
Appeals, the issue of whether or not the
breach of contract committed is slight or
casual is irrelevant in the case of a contract
to sell, where title remains in the vendor if
the vendee fails to "comply with the
condition precedent of making payment at
the time specified in the contract."14Juri smis
The Court of Appeals rejected petitioner's
claim that there had been a novation of the
contract when he tendered partial payments
for the property even before payment was
due. The Court of Appeals noted that the
contract itself provides that no terms and
conditions therein shall be modified unless
such modification is in writing and duly

signed by the parties. The modification
alleged by petitioner is not in writing, much
less signed by the parties.15 Moreover, the
Court of Appeals ruled that private
respondents made a timely objection to
petitioner's partial payments when they
offered to sell to petitioner only one-half of
the property for such partial payments.16
The Court of Appeals ruled that private
respondents are entitled to rescission under
Article 1191 of the Civil Code, but with the
obligation to return to petitioner the
payments the latter had made, including
expenses incurred in securing title to the
property and in subdividing and improving
its right of way. Whatever damages private
respondents had suffered should be deemed
duly compensated by the benefits they
derived from the payments made by
petitioner.17
crl wvirtualibrry
Hence, this petition, wherein petitioner

assigns the following errors allegedly
committed by the Court of Appeals:
1. ...IN HOLDING THAT: "THE
APPELLANTS ARE ENTITLED TO
RESCISSION UNDER ARTICLE 1191 OF
THE CIVIL CODE."
2. IN CONFIRMING THE UNILATERAL
RESCISSION OF THE CONTRACT TO
SELL BY THE PRIVATE RESPONDENTS.
3. WHEN IT INTERPRETED AND
APPLIED LIBERALLY IN FAVOR OF
THE PRIVATE RESPONDENTS AND
STRICTLY AGAINST THE HEREIN
PETITIONERS, THE PROVISIONS OF
ARTICLE 1191 AND OTHER
PROVISIONS OF THE CIVIL CODE.18
crlwvirtualibrry
Petitioner contends that private respondents

are not entitled to rescission, because
rescission cannot be availed of when the

breach of contract is only slight or casual,
and not so substantial and fundamental as to
defeat the object of the parties in making the
contract. Petitioner points out that he made
partial payments even before they were due
- in fact, even before the land registration
court issued an order for the issuance of a
decree of registration for the property - since
private respondents requested it. Private
respondents' acceptance of the payments
amounted to a modification of the contract,
though unwritten. Petitioner believed in
good faith that private respondents would
honor an alleged verbal agreement that the
latter would not strictly enforce the period
for the payment of the remaining balance.
Petitioner additionally argues that private
respondents were also guilty of breach of
contract since they failed to deliver the
three-meter wide additional lot for a rightof-way, as agreed upon in their contract.
For their part, private respondents reiterate
that, as ruled by the Court of Appeals, the
issue of whether or not the breach is slight
or casual is irrelevant in a contract to sell.
They contend that in such a contract, the
non-payment of the purchase price is not a
breach but simply an event that prevents the
vendor from complying with his obligation
to transfer title to the property to the vendee.
Moreover, they point out that the degree of
breach was never raised as an issue during
the pre-trial conference nor at the trial of this
case.
Private respondents also aver that petitioner
cannot avail of an action for specific
performance since he is not an injured party
as contemplated in Article 1191 of the Civil
Code.
Private respondents admit having requested
cash advances from petitioner due to dire
financial need. Such need, they point out, is

the same reason why time is of the essence
in the payment of the balance of the
purchase price. They claim that petitioner
offered to pay the balance only after more
than three months had lapsed from the date
his obligation to pay became due.
Private respondents argue that their
acceptance of advance payments does not
amount to a novation of the contract since,
as provided in the contract itself,
modification of the contract would only be
binding if written and signed by the parties,
which is not the case here. Acceptance of
advance payments is a mere act of tolerance,
which under the contract would not be
considered as a modification of the terms
and conditions thereof.
The core issue in this case is whether the
respondent Court of Appeals erred in
reversing and setting aside the judgment of
the trial court, by holding that private
respondents are entitled to rescind their
"contract to sell" the land to petitioner.
To begin with, petitioner is alleging that the
contract entered into between the parties is a
contract of sale, in which case rescission
will not generally be allowed where the
breach is only slight or casual. Petitioner
insists that the title "Contract to Sell" does
not reflect the true intention of the parties,
which is to enter into a contract of sale.
We note, however, that petitioner only made
this claim as to the nature of the contract in
his reply to the comment of private
respondents to his petition for review. In his
complaint in the RTC and in his petition for
review, petitioner refers to the subject
contract as a contract to sell. The nature of
the contract was never in issue in the
proceedings in the courts below. Moreover,
petitioner does not deny private respondents'
allegation that it was he and his counsel who

prepared the contract. Thus, the ambiguity, if
an exists, must be resolved strictly against
him as the one who caused the same.19
crlwvirtualibrry
At any rate, the contract between the parties

in our view is indeed a contract to sell, as
clearly inferrable from the following
provisions thereof:
"xxxmarie
That the VENDORS hereby agree and bind
themselves not to allienate (sic) encumber,
or in any manner modify the right of title to
said property.
xxx
That the VENDORS agree to pay real estate
taxes of said subject property until the
samewill have been transferred to the
VENDEE.
That on payment of the full purchase price
of the above-mentioned property the
VENDORS will execute and deliver a
deed conveying to the VENDEE the title in
fee simple of said property free from all lien
and encumbrances..."(Underscoring
supplied.)20
crlwvirtualibrry
These provisions signify that title to the

property remains in the vendors until the
vendee should have fully paid the purchase
price, which is a typical characteristic of a
contract to sell.
Now, admittedly, petitioner failed to comply
with his obligation to pay the full purchase
price within the stipulated period. Under the
contract, petitioner was to pay the balance of
the purchase price within 10 days from the
date of the court order for the issuance of the
decree of registration for the property.
Private respondents claim, and petitioner
admits, that there was delay in the

fulfillment of petitioner's obligation. The
order of the court was dated December 27,
1989. By April 1990, or four months
thereafter, petitioner still had not fully paid
the purchase price, clearly in violation of the
contract.
Petitioners offer to pay is clearly not the
payment contemplated in the contract. While
he might have tendered payment through a
check, this is not considered payment until
the check is encashed.21 Besides, a mere
tender of payment is not sufficient.
Consignation is essential to extinguish
petitioner's obligation to pay the purchase
price.22
crl wvirtualibrry
We sustain the decision of the Court of

Appeals, to the effect that private
respondents may validly cancel the contract
to sell their land to petitioner. However, the
reason for this is not that private respondents
have the power to rescind such contract, but
because their obligation thereunder did not
arise.
Article 1191 of the Civil Code, on
rescission, is inapplicable in the present
case. This is apparent from the text of the
article itself:
"Art. 1191. The power to rescind obligations
is implied in reciprocal ones, in case one of
the obligors should not comply with what is
incumbent upon him.
The injured party may choose between the
fulfillment and the rescission of the
obligation, with the payment of damages in
either case. He may also seek rescission,
even after he has chosen fulfillment, if the
latter should become impossible.
The court shall decree the rescission

claimed, unless there be just cause
authorizing the fixing of a period.
This is understood to be without prejudice to
the rights of third persons who have
acquired the thing, in accordance with
articles 1385 and 1388 and the Mortgage
Law."
Article 1191 speaks of obligations already
existing, which may be rescinded in case
one of the obligors fails to comply with what
is incumbent upon him. However, in the
present case, there is still no obligation to
convey title of the land on the part of private
respondents. There can be no rescission of
an obligation that is non-existent,
considering that the suspensive condition
therefor has not yet happened.23
crlwvirtualibrry
In Rillo v. Court of Appeals,24 we ruled:

"The respondent court did not err when it
did not apply Articles 1191 and 1592 of the
Civil Code on rescission to the case at bar.
The contract between the parties is not an
absolute conveyance of real property but a
contract to sell. In a contract to sell real
property on installments, the full payment of
the purchase price is a positive suspensive
condition, the failure of which is not
considered a breach, casual or serious, but
simply an event which prevented the
obligation of the vendor to convey title from
acquiring any obligatory force. The transfer
of ownership and title would occur after full
payment of the purchase price."25Juri-smis
We reiterated this rule in Odyssey Park, Inc.
v. Court of Appeals, 280 SCRA 253 (1997).
Moreover, we held in Odyssey:
"The breach contemplated in Article 1191 of
the Code is the obligors failure to comply
with an obligation already extant, not a
failure of a condition to render binding that

obligation."26
crlwvirtualibrry
modification, change, alteration or waiver

appears in writing duly signed by the parties
hereto."28
crl wvirtualibrry
Under the parties contract, the property will

be transferred to petitioner only upon the
latter's "complete compliance of his
obligation provided in [the] contract."
Because of petitioners failure to fully pay
the purchase price, the obligation of private
respondents to convey title to the property
did not arise.27 Thus, private respondents are
under no obligation, and may not be
compelled, to convey title to petitioner and
receive the full purchase price.
Petitioner's reliance on Article 1592 of the
Civil Code is misplaced. It provides:
"Art. 1592. In the sale of immovable
property, even though it may have been
stipulated that upon failure to pay the price
at the time agreed upon the rescission of the
contract shall of right take place, the vendee
may pay, even after the expiration of the
period, as long as no demand for rescission
of the contract has been made upon him
either judicially or by a notarial act. After
the demand, the court may not grant him a
new term."
Clearly, what this provision contemplates is
an absolute sale and not a contract to sell as
in the present case.
Private respondents acceptance of several
partial payments did not modify the parties'
contract as to exempt petitioner from
complying with his obligation to pay within
the stipulated period. The contract itself
provided:
"No terms and conditions shall be
considered modified, changed, altered, or
waived by any verbal agreement by and
between the parties hereto or by an act of
tolerance on the parties unless such
Acceptance of the partial payments is, at

best, an act of tolerance on the part of
private respondents that could not modify
the contract, absent any written agreement to
that effect signed by the parties.
The Court of Appeals is correct in ordering
the return to petitioner of the amounts
received from him by private respondents,
on the principle that no one may unjustly
enrich himself at the expense of another.
WHEREFORE , the petition is DENIED,
for lack of merit. Costs against petitioner.
Lex
SO ORDERED.
Bellosillo, (Chairman), Mendoza,
Buena, and De Leon, Jr., JJ., concur.
THIRD DIVISION
[G.R. 139047, September
11, 2008]
SPOUSES EMMA H. VER
REYES AND RAMON
REYES, Petitioners, v. DOMIN
ADOR SALVADOR, SR.,
EMILIO FUERTE, FELIZA
LOZADA, ROSALINA
PADLAN, AURORA
TOLENTINO, TRINIDAD L.
CASTILLO, ROSARIO
BONDOC, MARIA Q.
CRISTOBAL AND DULOS
REALTY & DEVELOPMENT
CORPORATION, TRINIDAD
LOZADA, JOHN DOE AND
RICHARD DOE, Respondents.
[G.R. NO. 139365]
MARIA Q. CRISTOBAL AND
DULOS REALTY &
DEVELOPMENT
CORPORATION,Petitioners, v.
DOMINADOR SALVADOR,
SR., EMILIO FUERTE,
FELIZA LOZADA, TRINIDAD
LOZADA, ROSALINA
PADLAN, AURORA
TOLENTINO, TRINIDAD L.
CASTILLO, ROSARIO
BONDOC, SPOUSES EMMA
H. VER REYES AND RAMON
REYES,Respondents.
DECISION
CHICO-NAZARIO, J.:
The two Petitions for Review
on Certiorari1 now before this
Court seek to challenge, under
Rule 45 of the Rules of Court,
the Decision2 dated 17 June
1999 of the Court of Appeals in
CA-G.R. CV No. 35688, which
reversed and set aside the
Decision3 dated 25 November
1991 of the Regional Trial
Court (RTC) of Pasay City,

Branch 119, in the consolidated
cases of LRC Case No. LP-553P (an application for
registration of title to real
property) and Civil Case No.
6914-P (an action to declare
ownership over real property,
formerly numbered Pq-8557P). The Court of Appeals
upheld the title of Rosario
Bondoc to the disputed
property, thus, overturning the
finding of the RTC of Pasay City
that Maria Q. Cristobal and
Dulos Realty & Development
Corporation have a registrable
title to the same property.
The Contracts
At the core of the
controversy in the Petitions
at bar is a parcel of
unregistered land located in
Tungtong, Las Pias,
formerly of the Province of
Rizal, now a part of Metro
Manila, designated as Lot 1
of Plan Psu-205035, with an
area of 19,545 square
meters (subject property).
It previously formed part of
a bigger parcel of
agricultural land4 first
declared in the name of
Domingo Lozada (Domingo)
in the year 1916 under Tax
Declaration No. 2932.5
During the lifetime of

Domingo, he was married
twice. From his first
marriage to Hisberta
Guevarra in the year
1873,6 he fathered two
children, namely Bernardo
and Anatalia. After the
death of Hisberta, Domingo
married Graciana San Jose
in the year 18877 and their
marriage produced two
children, namely Nicomedes
and Pablo.
Domingo and Graciana died
on 27 February 1930 and 12
August 1941, respectively.
On 18 March 1965,
Nicomedes and the heirs of
his brother Pablo entered
into an Extrajudicial
Settlement of the Estate8 of
their parents Domingo and
Graciana. According to the
settlement, the entire
parcel of agricultural land
declared in the name of
Domingo9 was divided into
two, Lot 1 and Lot 2, in
accordance with the
approved subdivision plan
Psu-205035. The subject
property, i.e., Lot 1, was
adjudicated to Nicomedes;
while Lot 2 was given to the
heirs of Pablo. Nicomedes
then declared the subject
property in his name in

1965 under Tax Declaration
No. 2050.10
On 23 June 1965,
Nicomedes executed a Deed
of Conditional Sale11over
the subject property in
favor of Emma Ver Reyes
(Emma), which provided:
That the Vendor
[Nicomedes] is the true and
lawful owner of a parcel of
land situated at Tungtong,
Las Pinas, Rizal, more
particularly described as
follows:
"A parcel of land (Lot 1 of
plan Psu-205035), x x x;
containing an area of
NINETEEN THOUSAND FIVE
HUNDRED FOURTY FIVE
(19,545) SQUARE METERS,
more or less, and still a
portion of the land covered
by Tax Declaration No. 2304
of Las Pinas, Rizal, in the
name of Domingo Lozada,
and with a total assessed
value of P1,860.00."
That the [subject property]
is a paraphernal property of
the Vendor[Nicomedes], the
same having been inherited
by him from his deceased
mother, Graciana San Jose,
but was declared for
taxation in the name of his
deceased father, Domingo
Lozada;
That for and in
consideration of the sum of
FOUR PESOS AND FIFTY
CENTAVOS (P4.50),
Philippine Currency, per
square meter to be paid by
the Vendee to the Vendor,
the said Vendor by these
presents herebySELLS,
CEDES, TRANSFERS and
CONVEYS by way of
CONDITIONAL SALEthe
above-described parcel of
land together with all the
improvements thereon to
the said Vendee [Emma],
her heirs, assigns and
successors, free from all
liens and encumbrances,
under the following terms
and conditions, to wit:
1. That the Vendee [Emma]
will pay the Vendor
[Nicomedes] as follows:
(a). TWENTY FIVE PERCENT
(25%) of the total price on
the date of the signing of
this contract;
(b). The next TWENTY FIVE
PERCENT (25%) of the total
price upon the issuance of
the title for the land
described above; and
(c). The balance of FIFTY
PERCENT (50%) of the total
price within one (1) year

from the issuance of the
said title;
2. That if the Vendee
[Emma] fails to pay the
Vendor [Nicomedes] the
sums stated in paragraphs
1(b) and 1(c) above within
the period stipulated and
after the grace period of
one (1) month for each
payment, this contract shall
automatically be null and
void and of no
effect without the necessity
of any demand, notice or
filing the necessary action
in court, and the Vendor
[Nicomedes] shall have the
full and exclusive right to
sell, transfer and convey
absolutely the abovedescribed property to any
person, but the said Vendor
[Nicomedes] shall return to
the Vendee [Emma] all the
amount paid to him by
reason of this contract
without any interest upon
the sale of the said property
to another person;
3. That the total price shall
be subject to adjustment in
accordance with the total
area of the above-described
property that will be finally
decreed by the court in
favor of the herein Vendor
[Nicomedes]; and
4. That the Vendor
[Nicomedes] will execute a
final deed of absolute sale
covering the said property
in favor of the Vendee
[Emma] upon the full
payment of the total
consideration in accordance
with the stipulations above.
(Emphases ours.)
The Deed of Conditional
Sale was registered in the
Registry of Property for
Unregistered Lands in
August 1965.12
It would appear from the
records of the case that
Emma was only able to pay
the first installment of the
total purchase price agreed
upon by the parties.
Furthermore, as will be
discussed later on,
Nicomedes did not succeed
in his attempt to have any
title to the subject property
issued in his name.
On 14 June 1968,
Nicomedes entered into
another contract involving
the subject property with
Rosario D. Bondoc
(Rosario). Designated as
an Agreement of Purchase
and Sale,13 the significant

portions thereof states:
NOW, THEREFORE, for and
in consideration of the
foregoing premises and of
the sum of ONE HUNDRED
SEVENTY FIVE THOUSAND
NINE HUNDRED FIVE PESOS
(P175,905.00) Philippine
Currency, which the BUYER
[Rosario] shall pay to the
SELLER [Nicomedes] in the
manner and form
hereinafter specified, the
SELLER [Nicomedes] by
these presents hereby
agreed and contracted to
sell all his rights, interests,
title and ownership over the
parcel of land x x x unto the
BUYER [Rosario], who
hereby agrees and binds
herself to purchase from
the former, the aforesaid
parcel of land, subject to
the following terms and
conditions:
1. Upon the execution of
this Agreement, the BUYER
[Rosario] shall pay the
SELLER [Nicomedes], the
sum of FIFTEEN THOUSAND
PESOS (P15,000.00),
Philippine Currency.
2. [That] upon the delivery
by the SELLER [Nicomedes]
to the BUYER [Rosario] of a
valid title of the aforesaid

parcel of land, free from
any and all liens and
encumbrances, and the
execution of the final Deed
of Sale, the BUYER
[Rosario] shall pay to the
SELLER [Nicomedes], the
sum of THIRTY SEVEN
THOUSAND SEVEN
HUNDRED FIVE PESOS
Currency, and the final
balance of ONE HUNDRED
TWENTY THREE THOUSAND
AND TWO HUNDRED PESOS
Currency, one year from the
date of execution of the
final deed of sale, all
without interest.
3. That in the event the
BUYER [Rosario] fails to
pay any amount as specified
in Section 2, Paragraph II,
then this contract, shall, by
the mere fact of nonpayment expire itself and
shall be considered
automatically cancelled, of
no value and effect, and
immediately thereafter the
SELLER [Nicomedes] shall
return to the BUYER
[Rosario] the sums of
money he had received
from the BUYER [Rosario]
without any interests
and whatever improvement

or improvements made or
introduced by the BUYER
[Rosario] on the lot being
sold shall accrue to the
ownership and possession
of the SELLER [Nicomedes].
xxxx
6. The SELLER [Nicomedes]
hereby warrants the useful
and peaceful possession
and occupation of the lot
subject matter of this
agreement by the BUYER
[Rosario]. (Emphasis ours.)
On 7 March 1969,
Nicomedes and Rosario
executed a Joint
Affidavit,14 whereby they
confirmed the sale of the
subject property by
Nicomedes to Rosario
through the Agreement of
Purchase and Sale dated 14
June 1968. They likewise
agreed to have the said
Agreement registered with
the Registry of Deeds in
accordance with the
provisions of Section 194 of
the Revised Administrative
Code, as amended by Act
No. 3344. The Agreement of
Purchase and Sale was thus
registered on 10 March
1969.15
The records of this case

show that, of the entire
consideration stipulated
upon in the Agreement,
only the first installment
was paid by Rosario. No
was ever delivered to her
since, at the time of the
execution of the above
contract, Nicomedes's
application for the
registration of the subject
property was still pending.
Five months thereafter,
Nicomedes executed on 10
August 1969 a third
contract, a Deed of Absolute
Sale of Unregistered
Land,16 involving a portion
of the subject property
measuring 2,000 square
meters, in favor of Maria Q.
Cristobal (Maria).17The
relevant terms of the Deed
recite:
THAT I, NICOMEDES J.
LOZADA, of legal age,
Filipino citizen, married and
a resident of Las Pias,
Rizal, Philippines, for and in
consideration of the sum of
TWENTY FIVE THOUSAND
(P25,000.00) PESOS,
Philippine currency, receipt
of which is hereby
acknowledged to my full
and entire satisfaction, do
hereby sell, transfer and

convey to MARIA Q.
CRISTOBAL, likewise of
legal age, Filipino citizen,
married to Juan [Dulos],
and a resident of 114 Real
Street, Las Pias, Rizal,
Philippines, her heirs,
executors, administrators
and assigns, TWO
THOUSAND SQUARE
METERS (2,000) for an
easement of way of a parcel
of unregistered
land situated in the Barrio
of Tungtong, Municipality of
Las Pias, Province of Rizal,
Philippines, exclusively
belonging to and possessed
by me, and more
particularly described as
follows:
"A parcel of land described
under Tax Declaration No.
9575 (Lot No. 1, Psu
205035), situated in the
Barrio of Tuntong,
Municipality of Las Pias,
Province of Rizal,
Philippines. xxx
[C]ontaining an area of
1.9545 hectares, more or
less." (Emphasis ours.)
Nicomedes passed away on
29 June 1972. The Deed of
Absolute Sale of
Unregistered Land between
Nicomedes and Maria was
registered only on 8
February 1973,18 or more

than seven months after the
former's death.
On 10 August 1979,
Nicomedes's heirs, namely,
the four children from his
first marriage,19 the six
children from his second
marriage,20 and his
surviving second spouse
Genoveva Pallera Vda. De
Lozada, executed a Deed of
Extrajudicial Settlement of
the Estate of the Late
Nicomedes J. Lozada with
Ratification of a Certain
Deed of Absolute Sale of
Unregistered Land.21 The
heirs declared in said Deed
of Extrajudicial Settlement
that the only property left
by Nicomedes upon his
death was the subject
property. They also ratified
therein the prior sale of a
portion of the subject
property made by
Nicomedes in favor of
Maria, but they clarified
that the actual area of the
portion sold as presented in
the plan was 2,287 square
meters, not 2,000 square
meters. After excluding the
portion sold to Maria, the
heirs claimed equal pro
indiviso shares in the
remaining 17,258 square
meters of the subject

property.
On 30 July 1980,
Nicomedes's
heirs22 collectively sold, for
the sum of P414,192.00,
their shares in the subject
property in favor of Dulos
Realty and Development
Corporation (Dulos Realty),
as represented by its
President Juan B.
Dulos, via a Deed of
Absolute Sale of an
Unregistered Land.23 The
said Deed of Absolute Sale
dated 30 July 1980,
however, was not
registered.
The Cases
On 11 April 1966, after
executing the Deed of
Conditional Sale in favor of
Emma on 23 June 1965,
Nicomedes filed an
application for the
property with the then
Court of First Instance
(CFI) of Pasig, docketed
asLRC Case No. N-6577. The
grandchildren of Domingo
by his former
marriage24opposed the
application for registration
and Emma and her husband
Ramon filed their

intervention.
Sometime in 1973,
following the execution in
her favor of the Agreement
of Purchase and Sale dated
14 June 1968 and Joint
Affidavit dated 7 March
1969, Rosario filed a motion
to intervene in LRC Case No.
N-6577 then pending before
the CFI of Pasig; however,
her motion was denied by
the CFI of Pasig, in an Order
dated 2 June
1973.25 Rosario no longer
appealed from the order
denying her motion to
intervene in said case.
In view of the conflicting
claims over the subject
property, the CFI of Pasig
dismissed without prejudice
LRC Case No. N-6577 on 21
November 1975 and
ordered the parties therein,
namely, the applicant
Nicomedes and the
oppositors/intervenors, to
litigate first the issues of
ownership and possession.26
Five years later, on 27 June
1980, Domingo's
grandchildren from his first
marriage, Dominador, et
al.,27 filed an Application for
Registration28 of title to the

subject property with the
CFI of Rizal, docketed
as LRC Case No. LP-553-P.
In their Application,
Dominador, et al.,
alleged, inter alia, that they
were the owners of the
subject property by virtue
of inheritance; they were
the actual occupants of the
said property; and, other
than Emma, they had no
knowledge of any
encumbrance or claim of
title affecting the same.
On 6 November 1980,
Rosario, assisted by her
husband Mariano Bondoc,
invoking the Agreement of
Purchase and Sale executed
in her favor by Nicomedes
on 14 June 1968, filed a
Complaint29 before the CFI
of Rizal for the declaration
in her favor of ownership
over the subject property,
with an application for a
temporary restraining order
or preliminary injunction,
against Trinidad Lozada
(one of Domingo's heirs
from his first marriage who
applied for registration of
the subject property in LRC
Case No. LP-553-P) and two
other persons, who
allegedly trespassed into
the subject property.

Rosario's complaint was
docketed as Civil Case No.
Pq-8557-P.
On 4 August 1981, the
parties agreed to have LRC
Case No. LP-553-P (the
application for land
registration of
Dominador, et al.)
consolidated with Civil Case
No. Pq-8557-P (the action
for declaration of ownership
of Rosario).30
By subsequent events,31 and
location of the subject
property in Las Pias, LRC
Case No. LP-553-P and Civil
Case No. Pq-8557-P,
reinstated as Civil Case No.
6914-P, were finally
transferred to and decided
by the RTC of Pasay City.
In its Decision dated 25
November 1991, the RTC of
Pasay City, Branch 119,
disposed of the cases thus:
WHEREFORE, considering
all the foregoing, the court
denies the application of
Dominador Salvador, Sr. et
al, having no more right
over the land applied for,
dismisses Civil Case No. Pq8557-P now 6914 for lack of
merit, and hereby

declares Maria Cristobal
Dulos and Dulos Realty and
Development Corporation to
have a registrable title,
confirming title and
decreeing the registration
of Lot 1 PSU-205035
containing a total area of
19,545 square meters,
2,287 square meters of
which appertains to Maria
Cristobal Dulos married to
Juan Dulos and the
remaining portion, in favor
of Dulos Realty and
Development Corporation,
without pronouncement as
to costs.32 (Emphasis ours.)
In so ruling, the RTC
rationalized that the subject
property constituted
Domingo's share in the
conjugal properties of his
second marriage to
Graciana San Jose and,
therefore, properly
pertained to Nicomedes as
one of his sons in said
marriage. Being Domingo's
heirs from his first
marriage, Dominador, et al.,
were not entitled to the
subject property.
The lower court also found
that neither Emma nor
Rosario acquired a better
as against Maria and Dulos

Realty. No final deed of sale
over the subject property
was executed in favor of
Emma or Rosario, while the
sales of portions of the
same property in favor of
Maria and of the rest to
Dulos Realty were fully
consummated as evidenced
by the absolute deeds of
sale dated 10 August 1969
and 30 July 1980,
respectively.
Dominador, et al., Emma
and her spouse Ramon
Reyes (Ramon), and
Rosario separately appealed
to the Court of Appeals the
foregoing Decision dated 25
November 1991 of the RTC
of Pasay City.33 Their
consolidated appeals were
docketed as CA-G.R. CV No.
35688.
Dominador, et al., however,
moved to withdraw their
appeal in light of the
amicable settlement they
entered into with Maria and
Dulos Realty.34 In a
Resolution dated 24
September 1992,35 the
Court of Appeals granted
their Motion to Withdraw
Appeal. Dominador, et
al., later filed a motion to
withdraw their earlier

Motion to Withdraw Appeal,
but this was denied by the
Court of Appeals in a
Resolution dated 15
January 1993.36
In their respective Briefs
before the appellate
court,37 Emma and Rosario
both faulted the RTC of
Pasay City for awarding the
subject property to Maria
and Dulos Realty. They each
claimed entitlement to the
subject property and
asserted the superiority of
their respective contracts
as against those of the
others.
On 17 June 1999, the Court
of Appeals rendered its
assailed Decision, ruling as
follows:
As gathered above, both
contracts [entered into with
Emma and Rosario] gave
Nicomedes, as vendor, the
right to unilaterally rescind
the contract the moment
the buyer failed to pay
within a fixed period
(Pingol v. CA, 226 SCRA
118), after which he, as
vendor, was obliged to
return without interest the
sums of money he had
received from the buyer
(under the Deed of

Conditional Sale [to Emma],
upon the sale of the
property to another).
Additionally, under the
Agreement of Purchase and
Sale [with Rosario], the
vendor, in case of
rescission, would become
the owner and entitled to
the possession of whatever
improvements introduced
by the buyer.
Under the Deed of
Conditional Sale [to Emma],
there was no provision that
possession would be, in
case of rescission, returned
to the vendor, thereby
implying that possession
remained with him
(vendor). Such being the
case, it appears to be a
contract to sell. Whereas
under the Agreement of
Purchase and Sale [with
Rosario], the provision that
in case of rescission, any
improvements introduced
by the vendee would
become the vendor's
implies that possession was
transferred to the vendee
and, therefore, it appears to
be a contract of sale.
That the Agreement of
Purchase and Sale [with
Rosario] was a contract of

sale gains light from the
Joint Affidavit subsequently
executed by Rosario and
Nicomedes stating that "an
Sale wherein the former
(Nicomedes J. Lozada) sold
to the latter (Rosario D.
Bondoc) a parcel of land"
had been executed but that
the lot "not having been
registered under Act No.
496 nor under the Spanish
Mortgage Law, the parties
hereto have agreed to
register the Agreement of
Purchase and Sale ... under
the provision of Section 194
of the Revised
Administrative Code, as
amended by Act No. 3344."
Rosario registered the
Sale alright on March 10,
1969. She paid taxes on the
lot from 1980 - 1985. She
fenced the lot with concrete
and hollow blocks. And
apart from opposing the
land registration case, she
filed a complaint against
Trinidad, et al., for
declaration ownership.
Article 1371 of the Civil
Code provides:
"Art. 1371. In order to

judge the intention of the
contracting parties, their
contemporaneous and
subsequent acts shall be
principally considered."
From the provisions of the
Sale [to Rosario] and the
subsequent acts of the
parties then including the
execution of the Joint
Affidavit by Rosario and
Nicomedes stating that "an
Sale wherein the former
(Nicomedes...) sold to the
latter (Rosario...) a parcel
of land", had been
executed, there is no
mistaking that the lot was
sold to Rosario xxx.
Anent the effect of
Rosario's registration of the
Sale on Emma's contract
involving the same lot, Act
No. 3344 (Amending Sec.
194 of the Administrative
Code [Recording of
instruments or deeds
relating to real estate not
registered under Act No.
496 or under the Spanish
Mortgage Law]) provides
that any registration made
under Sec. 194 of the
Administrative Code "shall
be understood to be without
prejudice to a third party
who has a better right".
"Better right", however,
was not defined by law.
But author Narciso Pea is
inclined to concur that
"better right" should refer
to a "right which must have
been acquired by a third
party independently of the
unregistered deed, such as,
for instance, title by
prescription, and that it has
no reference to rights
acquired under that
unregistered deed itself",
he citing Nisce v. Milo, G.R.
No. 425016, January 17,
1936 Unrep. 62 Phil. 976 x
x x.
Given the fact that the
contract in Emma's favor is
a mere contract to sell, as
against Rosario's contract
which, as demonstrated
above is one of sale and, in
any event, independently of
Emma's contract to sell, she
has no claim of a better
right unlike Rosario who
has, not to mention the
fact that she (Rosario)
registered her contract
earlier than Emma's,
Rosario must prevail.
The lot having been

previously sold to Rosario,
there was no lot or portion
thereof to be later sold to
Maria and to Dulos Realty in
1979 and 1980,
respectively.
WHEREFORE, the appealed
Joint Decision is hereby
REVERSED and SET ASIDE
and another is rendered
confirming the title
of Rosario D. Bondocover
subject lot, Lot 1, PSU205035 containing an area
of 19,545 sq.m., ordering
its registration in her name,
and dismissing the claims of
ownership of all other
claimants. Appellees Maria
Cristobal and Dulos Realty
and Development
Corporation and all other
claimants to subject land
including all persons
claiming under them are
hereby ordered to vacate
and restore possession to
appellant Rosario D.
Bondoc.
Upon issuance of title to
subject lot, appellant
Rosario D. Bondoc is
ordered to pay the balance
of the purchase price to the
heirs of Nicomedes Lozada
in accordance with the

Sale executed by the latter
in her favor. This judgment
is without prejudice to the
rights which Emma Ver
Reyes and Maria Cristobal
and Dulos Realty and
Development Corporation
might have against the
estate or surviving heirs of
Nicomedes Lozada to the
extent that the latter
was/were
benefited.38 (Emphasis
ours.)
Aggrieved, Emma and her
husband Ramon,39 as well
as Maria and Dulos
Realty,40without seeking
reconsideration of the
appellate court's decision,
filed directly before this
Court separate Petitions for
Review on Certiorari under
Rule 45 of the Rules of
Court, docketed as G.R. No.
139047 and G.R. No.
139365, respectively,
assailing the 17 June 1999
Decision of the appellate
court. Upon the
manifestation and motion of
Maria and Dulos
Realty,41 the two Petitions
were ordered consolidated
by this Court in a
Resolution42 dated 13
December 1999.
In their Petition, Emma and

her husband Ramon raise
the following issues:
I.
WHETHER OR NOT
OWNERSHIP OF THE
DISPUTED LOT WAS
VALIDLY AND LEGALLY
TRANSFERRED TO EMMA
VER REYES.
II.
WHETHER OR NOT MARIA
CRISTOBAL DULOS AND
DULOS REALTY AND
DEVELOPMENT
CORPORATION ARE
PURCHASERS IN BAD
FAITH.
III.
WHETHER OR NOT EMMA
VER REYES AND RAMON
REYES ARE BARRED BY
PRESCRIPTION OR LACHES.
IV.
WHETHER OR NOT THE
COURT OF APPEALS
PATENTLY AND GRAVELY
ERRED IN CONFIRMING THE
TITLE OF ROSARIO BONDOC
OVER THE DISPUTED LOT,
ORDERING ITS
REGISTRATION IN HER
NAME AND DISMISSING

THE CLAIM OF EMMA VER
REYES AND RAMON
REYES.43
Maria and Dulos Realty, on
the other hand, submitted
in their Petition the
following issues for
consideration of this Court:
I.
WHETHER OR NOT
BONDOC'S AGREEMENT OF
PURCHASE AND SALE AND
SPOUSES REYES DEED OF
CONDITIONAL SALE ARE
REGISTRABLE ABSOLUTE
CONVEYANCES IN FEE
SIMPLE TO SERVE AS BASIS
FOR AN AWARD AND
REGISTRATION OF THE
SUBJECT LOT IN THEIR
FAVOR.
II.
WHETHER OR NOT
RESPONDENTS BONDOC
AND THE REYESES ARE
BARRED BY LACHES
AND/OR PRESCRIPTION.
III.
WHETHER OR NOT
RESPONDENT BONDOC IS
BARRED BY RES
JUDICATA.44
The fundamental issue that

the Court is called upon to
resolve is, in consideration
of all the contracts
executed by Nicomedes
and/or his heirs involving
the subject property, which
party acquired valid and
registrable title to the
same.
Emma and Ramon contend
that although the subject
property was conditionally
sold to them by Nicomedes,
the "conditionality" of the
sale did not suspend the
transfer of ownership over
the subject property from
Nicomedes to Emma. Even
though Nicomedes may
automatically rescind the
contract in case of nonpayment by Emma of the
balance of the purchase
price, it did not bar the
transfer of title to the
subject property to Emma in
the meantime. Emma and
Reyes likewise claim that
there was constructive
delivery of the subject
property to Emma,
inasmuch as the Deed of
Conditional Sale in her favor
was a public instrument.
Furthermore, Emma was in
possession of the subject
property in the concept of
owner since she had been

paying realty taxes for the
same, albeit in the name of
Nicomedes (in whose name
it was declared), from the
time of the sale in 1965
until 1972. Emma and
Ramon also assert that
Maria and Dulos Realty
were in bad faith as the
sales of the subject
property in their favor, on
10 August 1969 and 30 July
1980, respectively, occurred
only after the filing of the
cases involving the
property45 and the
registration of the sale to
Emma. Finally, Emma and
Ramon maintain that the
Court of Appeals erred in
ruling that the contract in
favor of Rosario was a
contract of sale for the sole
reason that actual
possession of the property
was already transferred to
the latter.
For their part, Maria and
Dulos Realty point out that
Emma and Rosario are not
holders of absolute deeds of
conveyances over the
subject property, which
would have entitled them to
register the same in their
respective names. They
further buttress their
alleged superior right to the

subject property based on
the execution of two
notarized documents of sale
in their favor, which
constituted symbolic and
constructive delivery of the
subject property to them.
Maria and Dulos Realty
likewise assert that the
claims of Emma and Rosario
are already barred by
laches and prescription
because they only decided
to enforce their respective
rights over the subject
property after Domingo's
heirs filed with the CFI of
Rizal on 27 June 1980 an
application for registration
of the subject property,
docketed as LRC Case No.
LP-553-P, notwithstanding
their knowledge of
Nicomedes's death on 29
June 1972. Lastly, Maria
and Dulos Realty aver that
Rosario is already barred
by res judicatasince her
motion to intervene in LRC
Case No. 6577, the case
instituted by Nicomedes to
register the subject
property, was denied by the
CFI of Pasig. The dismissal
of Rosario's motion to
intervene in the case for
property already became
final and executory, thus,

barring Rosario from
pursuing her claim over the
same.
This Court's Ruling
After a conscientious review
of the arguments and
evidence presented by the
parties, the Court finds that
the Deed of Conditional Sale
between Nicomedes and
Emma and the Agreement
of Purchase and Sale
Rosario were both
mere contracts to sell and
did not transfer ownership
or title to either of the
buyers in light of their
failure to fully pay for the
purchase price of the
subject property.
In Coronel v. Court of
Appeals,46 this Court
effectively provided the
guidelines for
differentiating between a
contract to sell and a
contract of sale, to wit:
The Civil Code defines
a contract of sale, thus:
Art. 1458. By the contract
of sale one of the
contracting parties
obligates himself to transfer
the ownership of and to

deliver a determinate thing,
and the other to pay
therefor a price certain in
money or its equivalent.
Sale, by its very nature, is
a consensual contract
because it is perfected by
mere consent. The essential
elements of a contract of
sale are the following:
Consent or meeting of the
minds, that is, consent to
a)
transfer ownership in exchange
for the price;
b
Determinate subject matter; and
)
Price certain in money or its
c)
equivalent.
Under this definition, a

Contract to Sell may not be
considered as a Contract of
Sale because the first
essential element is lacking.
In acontract to sell, the
prospective seller explicitly
reserves the transfer of title
to the prospective buyer,
meaning, the prospective
seller does not as yet agree
or consent to transfer
ownership of the property
subject of the contract to
sell until the happening of
an event, which for present
purposes we shall take as
the full payment of the
purchase price. What the
seller agrees or obliges

himself to do is to fulfill his
promise to sell the subject
property when the entire
amount of the purchase
price is delivered to him. In
other words the full
payment of the purchase
price partakes of a
suspensive condition, the
non-fulfillment of which
prevents the obligation to
sell from arising and thus,
ownership is retained by
the prospective seller
without further remedies by
the prospective buyer.
In Roque vs. Lapuz (96
SCRA 741 [1980]), this
Court had occasion to rule:
Hence, We hold that the
contract between the
petitioner and the
respondent was a contract
to sell where the ownership
or title is retained by the
seller and is not to pass
until the full payment of the
price, such payment being a
positive suspensive
condition and failure of
which is not a breach,
casual or serious, but
simply an event that
prevented the obligation of
the vendor to convey title
from acquiring binding
force.
Stated positively, upon the

fulfillment of the
suspensive condition which
is the full payment of the
purchase price, the
prospective seller's
obligation to sell the
subject property by
entering into a contract of
sale with the prospective
buyer becomes demandable
as provided in Article 1479
of the Civil Code which
states:
Art. 1479. A promise to buy
and sell a determinate thing
for a price certain is
reciprocally demandable.
An accepted unilateral
promise to buy or to sell a
determinate thing for a
price certain is binding
upon the promissor if the
promise is supported by a
consideration distinct from
the price.
A contract to sell may thus
be defined as a bilateral
contract whereby the
prospective seller,
while expressly reserving
the ownership of the
subject property despite
delivery thereof to the
prospective buyer, binds
himself to sell the said
property exclusively to the
prospective buyer upon
fulfillment of the condition

agreed upon, that is, full
payment of the purchase
price.
A contract to sell as defined
hereinabove, may not even
be considered as
a conditional contract of
sale where the seller may
likewise reserve title to the
property subject of the sale
until the fulfillment of a
suspensive condition,
because in a conditional
contract of sale, the first
element of consent is
present, although it is
conditioned upon the
happening of a contingent
event which may or may not
occur. If the suspensive
condition is not fulfilled, the
perfection of the contract of
sale is completely abated
(cf. Homesite and Housing
Corp. vs. Court of Appeals,
133 SCRA 777 [1984]).
However, if the suspensive
condition is fulfilled, the
contract of sale is thereby
perfected, such that if there
had already been previous
delivery of the property
subject of the sale to the
buyer,ownership thereto
automatically transfers to
the buyer by operation of
law without any further act
having to be performed by
the seller.
In a contract to sell, upon
the fulfillment of the
suspensive conditionwhich
is the full payment of the
purchase price, ownership
will not automatically
transfer to the
buyer although the property
may have been previously
delivered to him.
The prospective seller still
has to convey title to the
prospective buyer by
entering into a contract of
absolute sale. (Emphases
ours.)
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-seller's
title per se, but the latter,
of course, may be sued for
damages by the intending
buyer.
Also in Coronel v. Court of

Appeals, the Court
highlighted the importance
of making the distinction
between a contract to sell
and a contract of sale:
It is essential to distinguish
between a contract to sell
and a conditional contract
of sale specially in cases
where the subject property
is sold by the owner not to
the party the seller
contracted with, but to a
third person, as in the case
at bench. In a contract to
sell, there being no
previous sale of the
property, a third person
buying such property
In a conditional contract of
sale, however, upon the
fulfillment of the
suspensive condition, the
sale becomes absolute and
this will definitely affect the
seller's title thereto. In fact,
if there had been previous
property, the seller's
ownership or title to the
property is automatically
transferred to the buyer
such that, the seller will no
longer have any title to
transfer to any third person.
Applying Article 1544 of the
Civil Code, such second
buyer of the property who
may have had actual or

constructive knowledge of
such defect in the seller's
title, or at least was
charged with the obligation
to discover such defect,
cannot be a registrant in
good faith. Such second
buyer cannot defeat the
first buyer's title. In case a
title is issued to the second
buyer, the first buyer may
seek reconveyance of the
property subject of the
sale.47
Even in the absence of an
express stipulation to such
effect, the intention of the
parties to execute a
contract to sell may be
implied from the provisions
of the contract. While
Article 147848 of the Civil
Code recognizes the right of
the parties to agree that the
ownership of the thing shall
not pass to the purchaser
until he has fully paid the
price therefore, the same
statutory provision does not
require that such be
expressly stipulated in the
contract.
In Adelfa Properties, Inc. v.
Court of Appeals,49 the
Court ruled that since the
parties therein did not
contain a stipulation on
reversion or reconveyance
of the property to the seller
in the event that the buyer
did not comply with its
obligation, it may legally be
inferred that the parties
never intended to transfer
ownership to the buyer
prior to the completion of
the payment of the
purchase price.
Consequently, the contract
involved in the
aforementioned case was a
mere contract to sell.
An agreement is also
considered a contract to sell
if there is a stipulation
therein giving the vendor
the rights to unilaterally
rescind the contract the
moment the vendee fails to
pay within a fixed period
and to consequently open
the subject property anew
to purchase offers.50 In the
same vein, where the seller
promises to execute a deed
of absolute sale upon the
completion by the buyer of
the payment of the price,
the contract is only a
contract to sell.51
Viewed in light of the
foregoing pronouncements,
executed by Nicomedes in
favor of Emma on 23 June
1965 is unmistakably a
mere contract to sell. The
Court looks beyond the title
of said document, since the
denomination or title given
by the parties in their
contract is not conclusive of
the nature of its
contents.52 In the
construction or
interpretation of an
instrument, the intention of
the parties is primordial and
is to be pursued.53 If the
terms of the contract are
clear and leave no doubt
upon the intention of the
contracting parties, the
literal meaning of its
stipulations shall control. If
the words appear to be
contrary to the evident
intention of the parties, the
latter shall prevail over the
former.54
A simple reading of the
terms of the 23 June 1965
Deed of Conditional Sale
readily discloses that it
contains stipulations
characteristic of a contract
to sell. It provides for the
automatic cancellation of
the contract should Emma
fail to pay the purchase
price as required therein;
and, in such an event, it

grants Nicomedes the
exclusive right to thereafter
sell the subject property to
a third person. As in Adelfa
Properties, the contract
Emma does not provide for
reversion or reconveyance
of the subject property to
Nicomedes in the event of
nonpayment by Emma of
the purchase price. More
importantly, the Deed in
question clearly states that
Nicomedes will issue a final
deed of absolute sale only
upon the full payment of
the purchase price for the
subject property. Taken
together, the terms of the
Deeds reveal the evident
intention of the parties to
reserve ownership over the
subject property to
Nicomedes pending
payment by Emma of the
full purchase price for the
same.
While the Deed of
Conditional Sale dated 23
June 1965 was indeed
contained in a public
instrument, it did not
constitute constructive
property to Emma in view of
the contrary inference in
the Deed itself that the

ownership over the subject
property was reserved by
Nicomedes.55 Moreover,
other than her claim that
she paid the realty taxes on
the subject property, Emma
did not present any
evidence that she took
actual and physical
possession of the subject
property at any given time.
This Court also finds that,
contrary to the ruling of the
Court of Appeals, the
Sale executed by
Nicomedes in favor of
Rosario on 14 June 1968 is
likewise a mere contract to
sell.
The Agreement itself
categorically states that
Nicomedes only undertakes
to sell the subject property
to Rosario upon the
payment of the stipulated
purchase price and that an
absolute deed of sale is yet
to be executed between the
parties. Thus:
NOW, THEREFORE, for and
foregoing premises and of
the sum of ONE HUNDRED
SEVENTY FIVE THOUSAND
NINE HUNDRED FIVE PESOS
Currency, which the BUYER
shall pay to the SELLER in
the manner and form
hereinafter specified, the
SELLER by these presents
hereby agreed and
contracted to sell all his
rights, interests, title and
ownership over the parcel
of land xxx unto the BUYER,
who hereby agrees and
binds herself to purchase
from the former, the
aforesaid parcel of land,
subject to the following
terms and conditions:
1. Upon the execution of
this Agreement, the BUYER
shall pay the SELLER, the
sum of FIFTEEN THOUSAND
PESOS (P15,000.00),
Philippine Currency.
2. That upon the delivery by
the SELLER to the BUYER of
a valid title of the aforesaid
parcel of land, free from
any and all liens and
encumbrances, and the
execution of the final Deed
of Sale, the BUYER shall pay
to the SELLER, the sum of
THIRTY SEVEN THOUSAND
SEVEN HUNDRED FIVE
PESOS (P37,705.00)
Philippine Currency, and the
final balance of ONE
HUNDRED TWENTY THREE

THOUSAND AND TWO
HUNDRED PESOS
Currency, one year from the
date of the execution of the
final deed of sale, all
without
interest.56(Emphases ours.)
The Agreement additionally
grants Nicomedes the right
to automatically cancel the
same in the event of
nonpayment by Rosario of
any of the specified sums
therein and any
improvement introduced in
the subject property shall
thereby accrue to
Nicomedes, viz:
3. That in the event the
BUYER fails to pay any
amount as specified in
Section 2, Paragraph II,
then this contract, shall, by
the mere fact of nonpayment expire itself and
shall be considered
automatically cancelled, of
no value and effect, and
immediately thereafter the
SELLER shall return to the
buyer the sums of money he
had received from the
BUYER without any
interests and whatever
improvement or
improvements made or
introduced by the BUYER on
the lot being sold shall

accrue to the ownership
and possession of the
SELLER.57
As can be clearly read
above, only the rights to
possess the property and
construct improvements
thereon have been
evidently given to Rosario.
The provisions of the
Agreement do not in any
way indicate that the
ownership of the subject
property has likewise been
transferred to Rosario. That
Nicomedes shall
appropriate the
improvements as his own
should Rosario default in
her payment of the
purchase price only further
supports the conclusion
that title to the subject
property itself still
remained with Nicomedes.
The Court concludes that
in favor of Emma and the
Sale in favor of Rosario
were mere contracts to sell.
As both contracts remained
unperfected by reason of
the non-compliance with
conditions thereof by all of
the parties thereto,
Nicomedes can still validly
convey the subject property

to another buyer. This fact,
however, is without
prejudice to the rights of
Emma and Rosario to seek
relief by way of damages
against the estate and heirs
of Nicomedes to the extent
that the latter were
benefited by the sale to
succeeding buyers.58
Thus, the Deeds of Absolute
Sale in favor of Maria and
Dulos Realty were the only
conveyances of the subject
property in this case that
can be the source of a valid
and registrable title. Both
contracts were designated
as absolute sales and the
provisions thereof leave no
doubt that the same were
true contracts of sale. The
total considerations for the
respective portions of the
subject property were fully
paid by the buyers and no
conditions whatsoever were
stipulated upon by the
parties as regards the
transmission of the
ownership of the said
property to the said buyers.
The fact that Rosario was
the first among the parties
to register her contract in
the Registry of Property for
Unregistered Lands on 10
March 1969 is of no
moment.
Act No. 3344,59 which
amended Section 194 of the
Administrative Code,
enunciates that any
registration made under
Section 194 of the
Administrative Code "shall
be understood to be without
prejudice to a third party
who has a better right."
In this case, Maria and
Dulos Realty acquired their
title to the property in
separate deeds of absolute
sale executed in their favor
by Nicomedes and his heirs.
Upon the execution of these
deeds, the ownership of the
subject property was vested
unto the said buyers
instantly, unlike the
contracts to sell executed in
favor of Emma and Rosario.
Consequently, the rights to
the subject property of
Maria and Dulos Realty,
acquired through the
contracts of sale in their
favor, are undeniably better
or superior to those of
Emma or Rosario, and can
thus be confirmed by
registration.
In sum, this Court

recognizes the valid and
registrable rights of Maria
and Dulos Realty to the
subject property, but
without prejudice to the
rights of Emma and Rosario
to seek damages against
the estate and heirs of
Nicomedes.
WHEREFORE, premises
considered, the Petition in
G.R. No. 139047 is DENIED,
while the Petition in G.R.
No. 139365 is GRANTED.
The assailed Decision of the
Court of Appeals in CA-G.R.
CV No. 35688 dated 17 June
1999 is SET ASIDE and the
Decision dated 25
November 1991 of the
Regional Trial Court of
Pasay City, Branch 119,
is REINSTATED. No costs.
SO ORDERED.
Tinga , Velasco, Jr. ,
Nachura, and Reyes, JJ., JJ.,
concur.
*
SECOND DIVISION
[G.R. No. 133749. August 23, 2001]
HERNANDO R. PEALOSA alias

HENRY
PEALOSA, petitioner,
vs. SEVERINO C. SANTOS
(deceased), Substituted by his
heirs: OLIVER SANTOS and
ADYLL M. SANTOS, and
ADELA DURAN MENDEZ
SANTOS, respondents.
DECISION
QUISUMBING, J.:
Petitioner appeals by certiorari from the

decision of the Court of Appeals, which
affirmed the judgment of the Regional Trial
Court of Quezon City, Branch 78, in Civil
Case No. Q-92-13531, declaring the deed of
absolute sale entered into between petitioner
and respondents as void and inexistent and
ordering petitioner to vacate the subject
property
and
to
pay
reasonable
compensation for its use.
The facts, as revealed by the records,
are as follows:
Respondents Severino C. Santos
(deceased) and Adela Mendez Santos are
registered owners of a residential house and
lot located at No. 113 Scout Rallos Street,
Quezon City under TCT No. PT-23458
(54434).[1] In 1988, Severino and Adela
decided to sell their property and for this
purpose,
negotiated
with
petitioner
Hernando (or Henry) Pealosa. The property
was then occupied by a lessee, Eleuterio
Perez, who was given preference to buy it
under the same terms offered by the buyer.
[2]
Perez proposed less favorable terms[3] and
expectedly, Severino rejected his offer.
On August 1, 1988, petitioner Henry

Pealosa and respondent Severino Santos
attempted to enter into an agreement
whereby the latter, for a consideration
of P1,800,000.00, would sell to the former
the property subject of the instant case. The
deed of absolute sale[4] (first deed)
evidencing this transaction was signed by
Henry but not by Severino, because
according to the latter, Henry took time to
decide on the matter.[5]
On August 15, 1988, Henry signed a
document[6] stating that the first deed was
executed between him and Severino, for the
sole purpose of helping the latter eject Perez,
the occupant of the property. Henry
acknowledged in said document that
although Severino had agreed to sell the
property to him, he had not paid the
consideration stated in the first deed.
Thereafter, Henry and Severino
executed another deed of absolute
sale[7] (second
deed)
for
a
higher
consideration of P2,000,000.00. Although
the second deed was originally dated August
1988, superimposed upon the same was the
date September 12, 1988. This second deed
was signed by both parties and duly
notarized. It states that Severino sells and
transfers the house and lot to Henry, who
had paid the full price of P2,000.000.00
therefor.
Severino explained that his initial
asking price for the property was only
P1,800,000.00 as shown in the first deed.
But he later asked for a higher price because
Henry could not give the money as soon as
expected. However, Severino claimed that
he made it clear to Henry that he agreed to
sell the property under the second deed for
P2,000,000.00, provided that payment be
immediately effected. Severino said that he
wanted to use the money to invest in another
property located in Alabang and told Henry
that if payment was made at a later date, the
price would be the current market value at

the time of payment.
Henry then gave Severino P300,000.00
as earnest money, purportedly with the
understanding that the former was to pay the
balance within 60 days. Otherwise, said
amount would be forfeited in favor of
Severino.[8] The latter also maintained that he
signed the second deed only for the purpose
of facilitating Henrys acquisition of a bank
loan to finance payment of the balance of
the purchase price[9] and added that
execution of the second deed was necessary
to enable Henry to file a court action for
ejectment of the tenant.[10]
After execution of the second deed,
Henry filed a loan application with the
Philippine American Life Insurance
Company (Philam Life) for the amount of
P2,500,000.00.[11] According to Henry, he
had agreed with Severino during the signing
of the second deed, that the balance of
P1,700,000.00 would be paid by means of a
loan, with the property itself given as
collateral.[12]
Meanwhile, on the strength of the first
deed and as new owner of the property,
Henry wrote a letter[13] dated August 8, 1988
to the lessee, Eleuterio Perez, demanding
that the latter vacate the premises within 10
days. Failing in this effort, Henry brought a
complaint for ejectment[14] against Perez
before the Office of the Barangay Captain.
On September 1, 1988, a Certification
To
File
Action[15] was
issued
by
the barangay lupon. This led to the
subsequent filing of Civil Case No. 88-0439
for
unlawful
detainer, before
the
Metropolitan Trial Court of Quezon City,
Branch 43, entitled Henry Pealosa, Plaintiff
vs. Eleuterio Perez, Defendant. Claiming
that he still had a subsisting contract of lease
over the property, Perez countersued and
brought Civil Case No. Q-88-1062 before
the Regional Trial Court of Quezon City,

Branch 96, entitled Eleuterio Perez, Plaintiff
vs. Severino Santos, et. al, Defendants. In
this latter case, Perez assailed the validity of
the sale transaction between Henry and
Severino and impleaded the former as codefendant of Severino.
While the aforesaid court cases were
pending resolution, Philam Life informed
Severino through a letter,[16] that Henrys loan
application had been approved by the
company on January 18, 1989. Philam Life
stated in the letter that of the total purchase
price of P2,500,000.00, the amount of
P1,700,000.00 would be paid directly to
Severino by Philam Life, while P800,000.00
would be paid by Henry.
The release of the loan proceeds was
made subject to the submission of certain
documents in Severinos possession, one of
which is the owners duplicate of the
Transfer Certificate of Title (TCT)
pertaining to the property. However, when
Henry and Severino met with officials of
Philam Life to finalize the loan/mortgage
contract, Severino refused to surrender the
owners duplicate title and insisted on being
paid immediately in cash.[17] As a
consequence, the loan/mortgage contract
with Philam Life did not materialize.
Subsequently, on April 28, 1989,
judgment[18] was rendered by the MTC-QC,
Branch 43, in Civil Case No. 0439, ordering
the tenant Perez to vacate and surrender
possession of the property to Henry. In said
judgment, Henry was explicitly recognized
as the new owner of the property by virtue
of the contract of sale dated September 12,
1988, after full payment of the purchase
price of P2,000,000.00, receipt of which was
duly acknowledged by Severino.
Upon finality of said judgment, Henry
and his family moved into the disputed
house and lot on August 1989, after making
repairs and improvements.[19] Henry spent a

total of P700,000.00 for the renovation, as
evidenced by receipts.[20]
On July 27, 1992, Severino sent a
letter[21] to
Henry,
through
counsel,
demanding that Henry vacate the house and
lot, on the ground that Henry did not
conclusively offer nor tender a price certain
for the purchase of the property. The letter
also stated that Henrys alleged offer and
promise to buy the property has since been
rejected by Severino.
When Henry refused to vacate the
property, Severino brought this action for
quieting of title, recovery of possession and
damages before the Regional Trial Court of
Quezon City, Branch 78, on September 28,
1992. Severino
alleged
in
his
complaint[22] that there was a cloud over the
title to the property, brought about by the
existence of the second deed of sale.
Essentially, Severino averred that the
second deed was void and inexistent
because: a) there was no cause or
consideration therefor, since he did not
receive the P2,000,000.00 stated in the deed;
b) his wife, Adela, in whose name the
property was titled, did not consent to the
sale nor sign the deed; c) the deed was not
registered with the Register of Deeds; d) he
did not acknowledge the deed personally
before the notary public; e) his residence
certificate, as appearing in the deed, was
falsified; and f) the deed is fictitious and
simulated because it was executed only for
the purpose of placing Henry in possession
of the property because he tendered earnest
money. Severino also claimed that there was
no meeting of minds with respect to the
cause or consideration, since Henrys varied
offers of P1,800,000.00, P2,000,000.00, and
P2,500,000.00, were all rejected by him.
For his part, Henry asserted that he was
already the owner of the property being
claimed by Severino, by virtue of a final

agreement reached with the latter. Contrary
to Severinos claim, the price of the property
was pegged at P2,000,000.00, as agreed
upon by the parties under the second deed.
Prior to the filing of the action, his
possession of the property remained
undisturbed
for
three
(3)
years.
Nevertheless, he admitted that since the
signing of the second deed, he has not paid
Severino the balance of the purchase price.
He, however, faulted the latter for the nonpayment, since according to him, Severino
refused to deliver the owners duplicate title
to the financing company.
1993, until the premises is fully

vacated, (the compensation for the use
thereof from the time the defendant had
occupied the premises up to July, 1993,
is recompensed for the repairs made by
him); and
On Aug. 20, 1993, the trial court

rendered judgment in favor of Severino and
disposed:
All other claims and counterclaims are

DENIED for lack of legal and factual
bases. No pronouncement as to costs.
WHEREFORE, judgment is rendered

as follows:
SO ORDERED.[23]
1) DECLARING the Deed of Absolute

Sale which was signed by the plaintiff
Severino C. Santos as vendor and the
defendant as vendee and which was
entered in the notarial register of notary
public Dionilo Marfil of Quezon City
as Doc. No. 474, Page No. 95, Book
No. 173, Series of 1988, as inexistent
and void from the beginning; and
consequently, plaintiffs title to the
property under T.C.T. No. PT-23458
(54434) issued by the Register of
Deeds of Quezon City is quieted,
sustained and maintained;
2) ORDERING the defendant to pay
plaintiffs the amount of P 15, 000.00 a
month as reasonable compensation for
the use of the House and Lot located at
No. 113 Scout Rallos St., Quezon City,
beginning on the month of August,
3) ORDERING the plaintiffs to

reimburse the defendant the amount of
P300,000.00 after defendant had
vacated the premises in question, and
the reasonable compensation for the
use thereof had been paid.
Both Henry and Severino appealed the

above decision to the Court of
Appeals. Before the appellate court could
decide the same, Severino passed away and
was substituted by his wife and children as
respondents. Henry filed a motion for leave
to be allowed to deposit P1,700,000.00 in
escrow with the Landbank of the Philippines
to answer for the money portion of the
decision.[24] This motion was granted.
On December 29, 1997, the appellate
court affirmed[25] the judgment of the trial
court and thereafter, denied Henrys motion
for reconsideration.[26] Thus, Henry brought
this petition, citing the following as alleged
errors:
I.
THE HONORABLE COURT OF

APPEALS GRIEVOUSLY ERRED
IN CONCLUDING THAT THERE
WAS
NO
PERFECTED
CONTRACT
OF
SALE
BETWEEN
SEVERINO
C.
SANTOS AND PETITIONER

HENRY R. PEALOSA.
II.

IN
CONSIDERING
NONPAYMENT OF THE FULL
PURCHASE PRICE AS CAUSE
FOR
DECLARING
A
PERFECTED CONTRACT OF
SALE AS NULL AND VOID.
III.

IN REFUSING TO RECOGNIZE
THAT OWNERSHIP OF THE
SUBJECT PROPERTY HAD
BEEN EFFECTIVELY VESTED
UPON PETITIONER HENRY R.
PEALOSA WHEN ACTUAL
POSSESSION THEREOF HAD
LAWFULLY TRANSFERRED TO
PETITIONER
HENRY
R.
PEALOSA BY VIRTUE OF THE
COURT JUDGMENT IN THE
EJECTMENT SUIT AGAINST
THE FORMER LESSEE.[27]
The pivotal issue presented before us is

whether or not the second deed is valid and
constitutes evidence of the final agreement
between the parties regarding the sale
transaction entered into by them.
Petitioner maintains that the existence
of a perfected contract of sale in this case is
beyond doubt, since there clearly was a
meeting of minds between the parties as to
the object and consideration of the
contract. According to petitioner, the
agreement of the parties is evidenced by
provisions contained in the second deed,
which cannot possibly be simulated or
fictitious. Subsequent and contemporaneous
acts indubitably point to the fact that the
parties truly intended to be bound by the
second
deed. Accordingly,
the
P2,000,000.00 stated therein was the actual
price agreed upon by the parties as

consideration for the sale.
On the other hand, in their
memorandum, respondents insist that the
second deed is a complete nullity because,
as found by both the appellate and trial
court: a) the consideration stated in the deed
was not paid; b) Severinos passport showed
that he was in the U.S. when said deed was
notarized; c) Severino did not surrender a
copy of the title at the time of the alleged
sale; d) petitioner did not pay real estate
taxes on the property; e) it was executed
only for the purpose of helping Severino
eject the tenant; f) Severinos wife, Adela,
did not sign the deed; and g) the various
documentary exhibits proved that there was
no price certain accepted or paid.
Respondents additionally argue that
petitioner merely seeks a review of the
aforesaid factual findings of the lower court
and that consequently, we should deny the
petition on the ground that it raises only
factual questions.
Considering the pivotal issue presented
after close scrutiny of the assigned errors as
well as the arguments of the parties, we are
unable to agree with respondents and we
must give due course to the petition.
First of all, the petition filed before this
Court explicitly questions the legal
significance and consequences of the
established facts[28] and not the findings of
fact themselves. As pointed out by
petitioner, he submits to the factual findings
of the lower court, but maintains that its
legal conclusions are irreconcilable and
inconsistent therewith. He also states that
the grounds relied upon in this petition do
not call for the weighing of conflicting
evidence submitted by the parties. Rather, he
merely asks the Court to give due
significance to certain undisputed and
admitted facts spread throughout the record,
which, if properly appreciated, would justify

a different conclusion.
At any rate, in Baricuatro, Jr. vs. Court
of Appeals, 325 SCRA 137, 145 (2000), we
reiterated the doctrine that findings of fact of
the Court of Appeals are binding and
conclusive upon this Court, subject to
certain exceptions, one of which is when the
judgment is based on a misapprehension of
facts. In this case, after carefully poring over
the records, we are convinced that the lower
courts
misappreciated
the
evidence
presented by the parties and that, indeed, a
reversal of the assailed judgment is in order.
It should have been readily apparent to
the trial court that the circumstances it cited
in its decision are not proper grounds for
holding that the second deed is simulated.
Simulation is a declaration of a fictitious
will, deliberately made by agreement of the
parties, in order to produce, for purposes of
deception, the appearance of a juridical act
which does not exist or is different from that
which was really executed. Its requisites are:
a) an outward declaration of will different
from the will of the parties; b) the false
appearance must have been intended by
mutual agreement; and c) the purpose is to
deceive third persons.[29] None of these
requisites is present in this case.
The basic characteristic of an absolutely
simulated or fictitious contract is that the
apparent contract is not really desired or
intended to produce legal effects or alter the
juridical situation of the parties in any way.
[30]
However, in this case, the parties already
undertook certain acts which were directed
towards fulfillment of their respective
covenants under the second deed, indicating
that they intended to give effect to their
agreement.
In particular, as early as August 8, 1988,
after execution of the first deed, Severino
authorized petitioner to bring an action for
ejectment against the overstaying tenant and

allowed petitioner to pursue the ejectment
case to its final conclusion, presumably to
secure possession of the property in
petitioners favor. Petitioner also applied for
a loan, which was approved by Philam Life,
to complete payment of the stipulated price.
After making extensive repairs with the
knowledge of Severino, petitioner moved
into the premises and actually occupied the
same for three years before this action was
brought. Moreover, simultaneous with the
execution of the second deed, petitioner
gave Severino P300,000.00 in earnest
money, which under Article 1482[31] of the
New Civil Code, is part of the purchase
price and proof of perfection of the contract.
What may have led the lower courts
into incorrectly believing that the second
deed was simulated is Exhibit D - a
document in which petitioner declared that
the deed was executed only for the purpose
of helping Severino eject the tenant.
However, a perusal of this document reveals
that it made reference to the first deed and
not the second deed, which was executed
only after Exhibit D. So that while the first
deed was qualified by stipulations contained
in Exhibit D, the same cannot be said of the
second deed which was signed by both
parties.
Further, the fact that Severino executed
the two deeds in question, primarily so that
petitioner could eject the tenant and enter
into a loan/mortgage contract with Philam
Life, is to our mind, a strong indication that
he intended to transfer ownership of the
property to petitioner. For why else would
he authorize the latter to sue the tenant for
ejectment under a claim of ownership, if he
truly did not intend to sell the property to
petitioner in the first place? Needless to
state, it does not make sense for Severino to
allow petitioner to pursue the ejectment
case, in petitioners own name, with
petitioner arguing that he had bought the

property from Severino and thus entitled to
possession thereof, if petitioner did not have
any right to the property.
Also worth noting is the fact that in the
case filed by Severinos tenant against
Severino and petitioner in 1989, assailing
the validity of the sale made to petitioner,
Severino explicitly asserted in his sworn
answer to the complaint that the sale was a
legitimate transaction. He further alleged
that the ejectment case filed by petitioner
against the tenant was a legitimate action by
an owner against one who refuses to turn
over possession of his property.[32]
Our attention is also drawn to the fact
that the genuineness and due execution of
the second deed was not denied by Severino.
Except to allege that he was not physically
present when the second deed was notarized
before the notary public, Severino did not
assail the truth of its contents nor deny that
he ever signed the same. As a matter of fact,
he even admitted that he affixed his
signature on the second deed to help
petitioner acquire a loan. This can only
signify that he consented to the manner
proposed by petitioner for payment of the
balance and that he accepted the stipulated
price of P2,000,000.00 as consideration for
the sale.
Since the genuineness and due
execution of the second deed was not
seriously put in issue, it should be upheld as
the best evidence of the intent and true
agreement of the parties. Oral testimony,
depending as it does exclusively on human
memory, is not as reliable as written or
documentary evidence.[33]
It should be emphasized that the nonappearance of the parties before the notary
public who notarized the deed does not
necessarily nullify nor render the parties
transaction void ab initio. We have held
previously that the provision of Article

1358[34] of the New Civil Code on the
necessity of a public document is only for
convenience,
not
for
validity
or
enforceability. Failure to follow the proper
form does not invalidate a contract. Where a
contract is not in the form prescribed by law,
the parties can merely compel each other to
observe that form, once the contract has
been perfected.[35] This is consistent with the
basic principle that contracts are obligatory
in whatever form they may have been
entered into, provided all essential requisites
are present.[36]
The elements of a valid contract of sale
under Art. 1458 of the Civil Code are: (1)
consent or meeting of the minds; (2)
determinate subject matter; and (3) price
certain in money or its equivalent.[37] In the
instant case, the second deed reflects the
presence of all these elements and as such,
there is already a perfected contract of sale.
Respondents contention that the second
deed was correctly nullified by the lower
court because Severinos wife, Adela, in
whose name the property was titled, did not
sign the same, is unavailing. The records are
replete with admissions made by Adela that
she had agreed with her husband to sell the
property[38] which is conjugal in nature[39] and
that she was aware of this particular
transaction with petitioner. She also said that
it was Severino who actually administered
their properties with her consent, because
she did not consider this as her
responsibility.[40]
We also observe that Severinos
testimony in court contained (1) admissions
that he indeed agreed to sell the property and
(2) references to petitioners failure to pay
the purchase price.[41] He did not mention
that he did not intend at all to sell the
property to petitioner and instead, stressed
the fact that the purchase price had not yet
been paid. Why would Severino stress nonpayment if there was no sale at all?
A
N
T
O
S
However, it is well-settled that nonpayment of the purchase price is not among

the instances where the law declares a
contract to be null and void. It should be
pointed out that the second deed specifically
provides:
That for and in consideration of the

sum of TWO MILLION PESOS
(P2,000,000.00), Philippine Currency
paid in full by HENRY R. PEALOSA,
receipt of which is hereby
acknowledged by me to my full
satisfaction, I hereby by these presents,
sells (sic), cede, convey and otherwise
dispose of the above described parcel
of land, unto HENRY R. PEALOSA,
his heirs, successors and assigns, free
from all liens and encumbrances.
V
E
N
D
O
R
x x x[42]
xxx
(
S
G
D
.
)
S
E
V
E
R
I
N
O
C
.
S
As can be seen from above, the contract

in this case is absolute in nature and is
devoid of any proviso that title to the
property is reserved in the seller until full
payment of the purchase price. Neither does
the second deed give Severino a unilateral
right to resolve the contract the moment the
buyer fails to pay within a fixed period.[43] At
most, the non-payment of the contract price
merely results in a breach of contract for
non-performance and warrants an action for
rescission or specific performance under
Article 1191 of the Civil Code.[44]
Be that as it may, we agree with
petitioner that although the law allows
rescission as a remedy for breach of
contract, the same may not be availed of by
respondents in this case. To begin with, it
was Severino who prevented full payment of
the stipulated price when he refused to
deliver the owners original duplicate title to
Philam Life. His refusal to cooperate was
unjustified, because as Severino himself
admitted, he signed the deed precisely to
enable petitioner to acquire the loan. He also
knew that the property was to be given as
security therefor. Thus, it cannot be said that
petitioner breached his obligation towards
Severino since the former has always been
willing to and could comply with what was

incumbent upon him.
In sum, the only conclusion which can
be
deduced
from
the
aforesaid
circumstances is that ownership of the
property has been transferred to petitioner.
Article 1477 of the Civil Code states that
ownership of the thing sold shall be
transferred to the vendee upon the actual or
constructive delivery thereof. It is
undisputed that the property was placed in
the
control
and
possession
of
[45]
petitioner when he came into material
possession thereof after judgment in the
ejectment case. Not only was the contract of
sale perfected, but also actual delivery of the
property effectively consummated the sale.
WHEREFORE, the petition is
GRANTED. The decision of the Court of
Appeals dated December 29, 1997 and its
resolution dated April 15, 1998 in CA-G.R.
CV No. 45206 which had affirmed the
judgment of the Regional Trial Court of
Quezon City, Branch 78, are REVERSED
and SET ASIDE. A new judgment is hereby
rendered UPHOLDING the validity of
Exhibit B, the Deed of Absolute Sale dated
September 12, 1988, entered into between
the parties. The Landbank of the Philippines
is further ordered to RELEASE to
respondents the amount of P1,700,000.00
held in escrow, representing the balance of
the purchase price agreed upon by the
parties under the deed of absolute
sale. Finally, the respondents are ordered to
DELIVER to petitioner the owners duplicate
copy of TCT No. PT-23458 after said
release, with the corresponding payment of
taxes due. Costs against respondents.
SO ORDERED.
Bellosillo,
(Chairman),
Mendoza,
Buena, and De Leon, Jr., JJ., concur.
SECOND DIVISION
[G.R. No. 135634. May 31, 2000]
HEIRS OF JUAN SAN ANDRES

(VICTOR S. ZIGA) and
SALVACION S. TRIA, petitioners,
vs. VICENTE
RODRIGUEZ, respondent.
DECISION
MENDOZA, J.:
This is a petition for review
on certiorari of the decision of the Court
of Appeals reversing the decision of the
Regional Trial Court, Naga City, Branch
19, in Civil Case No. 87-1335, as well as
the appellate courts resolution denying
reconsideration. Slxsc
[1]
The antecedent facts are as follows:

Juan San Andres was the registered
owner of Lot No. 1914-B-2 situated in
Liboton, Naga City. On September 28,
1964, he sold a portion thereof,
consisting of 345 square meters, to
respondent Vicente S. Rodriguez for
P2,415.00. The sale is evidenced by a
Deed of Sale.
[2]
Upon the death of Juan San Andres on

May 5, 1965, Ramon San Andres was
appointed judicial administrator of the
decedents estate in Special
Proceedings No. R-21, RTC, Branch 19,
Naga City. Ramon San Andres engaged
the services of a geodetic engineer,
Jose Peero, to prepare a consolidated
plan (Exh. A) of the estate. Engineer

Peero also prepared a sketch plan of
the 345-square meter lot sold to
respondent. From the result of the
survey, it was found that respondent had
enlarged the area which he purchased
from the late Juan San Andres by 509
square meters.
[3]
Accordingly, the judicial administrator

sent a letter, dated July 27, 1987, to
respondent demanding that the latter
vacate the portion allegedly encroached
by him. However, respondent refused to
do so, claiming he had purchased the
same from the late Juan San Andres.
Thereafter, on November 24, 1987, the
judicial administrator brought an action,
in behalf of the estate of Juan San
Andres, for recovery of possession of
the 509-square meter lot. Slxmis
[4]
In his Re-amended Answer filed on

February 6, 1989, respondent alleged
that apart from the 345-square meter lot
which had been sold to him by Juan San
Andres on September 28, 1964, the
latter likewise sold to him the following
day the remaining portion of the lot
consisting of 509 square meters, with
both parties treating the two lots as one
whole parcel with a total area of 854
square meters. Respondent alleged that
the full payment of the 509-square
meter lot would be effected within five
(5) years from the execution of a formal
deed of sale after a survey is conducted
over said property. He further alleged
that with the consent of the former
owner, Juan San Andres, he took
possession of the same and introduced
improvements thereon as early as 1964.
As proof of the sale to him of 509
square meters, respondent attached to
his answer a receipt (Exh. 2) signed by
[5]
the late Juan San Andres, which reads

in full as follows: Missdaa
Received from Vicente
Rodriguez the sum of Five
Hundred (P500.00) Pesos
representing an advance
payment for a residential
lot adjoining his previously
paid lot on three sides
excepting on the frontage
with the agreed price of
Fifteen (15.00) Pesos per
square meter and the
payment of the full
consideration based on a
survey shall be due and
payable in five (5) years
period from the execution
of the formal deed of sale;
and it is agreed that the
expenses of survey and its
approval by the Bureau of
Lands shall be borne by
Mr. Rodriguez.
Naga City, September 29,
1964.
(Sgd.)
JUAN R. SAN
Vendor
Noted:
(
S
g
d
.
)
VICENTE
RODRIGUEZ
V
e
n
d
e
e
Respondent also attached to his answer
a letter of judicial administrator Ramon
San Andres (Exh. 3), asking payment
of the balance of the purchase price.
The letter reads:
[6]
Received One Hundred

Only
(Sgd.)
RAMON SAN
3/30/66
Respondent deposited in court the
balance of the purchase price
amounting to P7,035.00 for the
aforesaid 509-square meter lot. Sdaadsc
Dear Inting,
Please accommodate my
request for Three Hundred
(P300.00) Pesos as I am
in need of funds as I
intimated to you the other
day.
We will just adjust it with
whatever balance you
have payable to the
subdivision.
Thanks.
Vicente Rodriguez
Penafrancia Subdivision,
Naga City
P.S.
You can let bearer Enrique
del Castillo sign for the
amount.
While the proceedings were pending,

judicial administrator Ramon San
Andres died and was substituted by his
son Ricardo San Andres. On the other
hand, respondent Vicente Rodriguez
died on August 15, 1989 and was
substituted by his heirs.
[7]
Petitioner, as plaintiff, presented two

witnesses. The first witness, Engr. Jose
Peero, testified that based on his
survey conducted sometime between
1982 and 1985, respondent had
enlarged the area which he purchased
from the late Juan San Andres by 509
Sincerely,
square meters belonging to the latters
estate. According to Peero, the titled
(Sgd.) property (Exh. A-5) of respondent was
enclosed with a fence with metal holes
and
barbed
wire, while the expanded
RAMON
SAN
ANDRES
area was fenced with barbed wire and
bamboo and light materials. Rtcspped
[8]
The second witness, Ricardo San

Andres, administrator of the estate,
testified that respondent had not filed
any claim before Special Proceedings
No. R-21 and denied knowledge of
Exhibits 2 and 3. However, he
recognized the signature in Exhibit 3 as
similar to that of the former
administrator, Ramon San Andres.
[9]
Finally, he declared that the expanded

portion occupied by the family of
respondent is now enclosed with barbed
wire fence unlike before where it was
found without fence.
On the other hand, Bibiana B.
Rodriguez, widow of respondent
Vicente Rodriguez, testified that they
had purchased the subject lot from Juan
San Andres, who was their compadre,
on September 29, 1964, at P15.00 per
square meter. According to her, they
gave P500.00 to the late Juan San
Andres who later affixed his signature to
Exhibit 2. She added that on March 30,
1966, Ramon San Andres wrote them a
letter asking for P300.00 as partial
payment for the subject lot, but they
were able to give him only P100.00. She
added that they had paid the total
purchase price of P7,035.00 on
November 21, 1988 by depositing it in
court. Bibiana B. Rodriquez stated that
they had been in possession of the 509square meter lot since 1964 when the
late Juan San Andres signed the receipt.
(Exh. 2) Lastly, she testified that they did
not know at that time the exact area sold
to them because they were told that the
same would be known after the survey
of the subject lot. Korte
[10]
On September 20, 1994, the trial

court rendered judgment in favor of
petitioner. It ruled that there was no
contract of sale to speak of for lack of a
valid object because there was no
sufficient indication in Exhibit 2 to
identify the property subject of the sale,
hence, the need to execute a new
contract.
decision of the trial court. The appellate

court held that the object of the contract
was determinable, and that there was a
conditional sale with the balance of the
purchase price payable within five years
from the execution of the deed of sale.
The dispositive portion of its decisions
reads:
IN VIEW OF ALL THE
FOREGOING, the
judgment appealed from is
hereby REVERSED and
SET ASIDE and a new one
entered DISMISSING the
complaint and rendering
judgment against the
plaintiff-appellee:
1. to accept the P7,035.00
representing the balance
of the purchase price of
the portion and which is
deposited in court under
Official Receipt No.
105754 (page 122,
Records);
2. to execute the formal
deed of sale over the said
509 square meter portion
of Lot 1914-B-2 in favor of
appellant Vicente
Rodriguez;
[11]
Respondent appealed to the Court of

Appeals, which on April 21, 1998
rendered a decision reversing the
3. to pay the defendantappellant the amount of

P50,000.00 as damages
and P10,000.00 attorneys
fees as stipulated by them
during the trial of this case;
and
4. to pay the costs of the
suit.
SO ORDERED.
Hence, this petition. Petitioner assigns
the following errors as having been
allegedly committed by the trial
court: Sclaw
I.THE HON. COURT OF
APPEALS ERRED IN
HOLDING THAT THE
DOCUMENT (EXHIBIT
"2") IS A CONTRACT TO
SELL DESPITE ITS
LACKING ONE OF THE
ESSENTIAL ELEMENTS
OF A CONTRACT,
NAMELY, OBJECT
CERTAIN AND
SUFFICIENTLY
DESCRIBED.
II.THE HON. COURT OF
APPEALS ERRED IN
HOLDING THAT
PETITIONER IS OBLIGED
TO HONOR THE
PURPORTED
CONTRACT TO SELL
DESPITE NONFULFILLMENT BY
RESPONDENT OF THE
CONDITION THEREIN OF
PAYMENT OF THE
BALANCE OF THE
PURCHASE PRICE.
III.THE HON. COURT OF
APPEALS ERRED IN
HOLDING THAT
CONSIGNATION WAS
VALID DESPITE NONCOMPLIANCE WITH THE
MANDATORY
REQUIREMENTS
THEREOF.
IV.THE HON. COURT OF

APPEALS ERRED IN
HOLDING THAT LACHES
AND PRESCRIPTION DO
NOT APPLY TO
RESPONDENT WHO
SOUGHT INDIRECTLY
TO ENFORCE THE
PURPORTED
CONTRACT AFTER THE
LAPSE OF 24 YEARS.
The petition has no merit.
First. Art. 1458 of the Civil Code
provides:
By the contract of sale one
of the contracting parties
obligates himself to
transfer the ownership of
and to deliver a
determinate thing, and the
other to pay therefor a
price certain in money or
its equivalent.
A contract of sale may be
absolute or conditional.
As thus defined, the essential elements
of sale are the following:
a) Consent or meeting of
the minds, that is, consent
to transfer ownership in
exchange for the price;
b) Determinate subject
matter; and,
c) Price certain in money
or its equivalent.
[12]
As shown in the receipt, dated

September 29, 1964, the late Juan San
Andres received P500.00 from

respondent as "advance payment for
the residential lot adjoining his
previously paid lot on three sides
excepting on the frontage;" the agreed
purchase price was P15.00 per square
meter; and the full amount of the
purchase price was to be based on the
results of a survey and would be due
and payable in five (5) years from the
execution of a deed of sale.
Petitioner contends, however, that the
"property subject of the sale was not
described with sufficient certainty such
that there is a necessity of another
agreement between the parties to finally
ascertain the identity, size and purchase
price of the property which is the object
of the alleged sale." He argues that the
"quantity of the object is not determinate
as in fact a survey is needed to
determine its exact size and the full
purchase price therefor." In support of
his contention, petitioner cites the
following provisions of the Civil
Code: Sclex
[13]
[14]
Art. 1349. The object of

every contract must be
determinate as to its kind.
The fact that the quantity
is not determinable shall
not be an obstacle to the
existence of a contract,
provided it is possible to
determine the same
without the need of a new
parties.
Art. 1460 . . . The requisite
that a thing be determinate
is satisfied if at the time
the contract is entered
into, the thing is capable of
being made determinate

without the necessity of a
new and further
agreement between the
parties.
Petitioners contention is without merit.
There is no dispute that respondent
purchased a portion of Lot 1914-B-2
consisting of 345 square meters. This
portion is located in the middle of Lot
1914-B-2, which has a total area of 854
square meters, and is clearly what was
referred to in the receipt as the
"previously paid lot." Since the lot
subsequently sold to respondent is said
to adjoin the "previously paid lot" on
three sides thereof, the subject lot is
capable of being determined without the
need of any new contract. The fact that
the exact area of these adjoining
residential lots is subject to the result of
a survey does not detract from the fact
that they are determinate or
determinable. As the Court of Appeals
explained:
[15]
Concomitantly, the object

of the sale is certain and
determinate. Under Article
1460 of the New Civil
Code, a thing sold is
determinate if at the time
the contract is entered
into, the thing is capable of
being determinate without
necessity of a new or
further agreement
between the parties. Here,
this definition finds
realization.
Appellees Exhibit "A"
(page 4, Records)
affirmingly shows that the
original 345 sq. m. portion
earlier sold lies at the

middle of Lot 1914-B-2
surrounded by the
remaining portion of the
said Lot 1914-B-2 on three
(3) sides, in the east, in
the west and in the north.
The northern boundary is
a 12 meter road.
Conclusively, therefore,
this is the only remaining
509 sq. m. portion of Lot
1914-B-2 surrounding the
345 sq. m. lot initially
purchased by Rodriguez. It
is quite defined,
determinate and certain.
Withal, this is the same
portion adjunctively
occupied and possessed
by Rodriguez since
September 29, 1964,
unperturbed by anyone for
over twenty (20) years
until appellee instituted
this suit.
Thus, all of the essential elements of a
contract of sale are present, i.e., that
there was a meeting of the minds
between the parties, by virtue of which
the late Juan San Andres undertook to
transfer ownership of and to deliver a
determinate thing for a price certain in
money. As Art. 1475 of the Civil Code
provides: Xlaw
The contract of sale is
perfected at the moment
there is a meeting of
minds upon the thing
which is the object of the
contract and upon the
price. . . .
That the contract of sale is perfected

was confirmed by the former
administrator of the estates, Ramon San
Andres, who wrote a letter to
respondent on March 30, 1966 asking
for P300.00 as partial payment for the
subject lot. As the Court of Appeals
observed:
Without any doubt, the
receipt profoundly speaks
of a meeting of the mind
between San Andres and
Rodriguez for the sale of
the property adjoining the
345 square meter portion
previously sold to
Rodriguez on its three (3)
sides excepting the
frontage. The price is
certain, which is P15.00
per square meter.
Evidently, this is a
perfected contract of sale
on a deferred payment of
the purchase price. All the
pre-requisite elements for
a valid purchase
transaction are present.
Sale does not require any
formal document for its
existence and validity. And
delivery of possession of
land sold is a
consummation of the sale
(Galar vs. Husain, 20
SCRA 186 [1967]). A
private deed of sale is a
valid contract between the
parties (Carbonell v. CA,
69 SCRA 99 [1976]). Xsc
In the same vein, after the
late Juan R. San Andres
received the P500.00
downpayment on March
30, 1966, Ramon R. San

Andres wrote a letter to
Rodriguez and received
from Rodriguez the
amount of P100.00
(although P300.00 was
being requested)
deductible from the
purchase price of the
subject portion. Enrique
del Castillo, Ramons
authorized agent,
correspondingly signed the
receipt for the P100.00.
Surely, this is explicitly a
veritable proof of the sale
over the remaining portion
of Lot 1914-B-2 and a
confirmation by Ramon
San Andres of the
existence thereof.
absolute where the

contract is devoid of
any proviso that title is
reserved or the right to
unilaterally rescind is
stipulated, e.g., until or
unless the price is paid.
Ownership will then be
transferred to the buyer
upon actual or constructive
delivery (e.g., by the
execution of a public
document) of the property
sold. Where the condition
is imposed upon the
perfection of the contract
itself, the failure of the
condition would prevent
such perfection. If the
condition is imposed on
the obligation of a party
which is not fulfilled, the
other party may either
waive the condition or
refuse to proceed with the
sale. (Art. 1545, Civil
Code)
[16]
There is a need, however, to clarify what

the Court of Appeals said is a
conditional contract of sale. Apparently,
the appellate court considered as a
"condition" the stipulation of the parties
that the full consideration, based on a
survey of the lot, would be due and
payable within five (5) years from the
execution of a formal deed of sale. It is
evident from the stipulations in the
receipt that the vendor Juan San Andres
sold the residential lot in question to
respondent and undertook to transfer
the ownership thereof to respondent
without any qualification, reservation or
condition. In Ang Yu Asuncion v. Court
of Appeals, we held: Sc
Thus, in one case, when the sellers

declared in a "Receipt of Down
Payment" that they received an amount
as purchase price for a house and lot
without any reservation of title until full
payment of the entire purchase price,
the implication was that they sold their
property. In Peoples Industrial and
Commercial Corporation v. Court of
Appeals, it was stated:
[18]
[19]
[17]
In Dignos v. Court of
Appeals (158 SCRA 375),
we have said that,
although denominated a
"Deed of Conditional
Sale," a sale is still
A deed of sale is considered absolute in

nature where there is neither a
stipulation in the deed that title to the
property sold is reserved in the seller
until full payment of the price, nor one
giving the vendor the right to unilaterally
resolve the contract the moment the
buyer fails to pay within a fixed

period. Scmis
Applying these principles to this case, it
cannot be gainsaid that the contract of
sale between the parties is absolute, not
conditional. There is no reservation of
ownership nor a stipulation providing for
a unilateral rescission by either party. In
fact, the sale was consummated upon
the delivery of the lot to respondent.
Thus, Art. 1477 provides that the
ownership of the thing sold shall be
transferred to the vendee upon the
actual or constructive delivery thereof.
[20]
The stipulation that the "payment of the

full consideration based on a survey
shall be due and payable in five (5)
years from the execution of a formal
deed of sale" is not a condition which
affects the efficacy of the contract of
sale. It merely provides the manner by
which the full consideration is to be
computed and the time within which the
same is to be paid. But it does not affect
in any manner the effectivity of the
contract. Consequently, the contention
that the absence of a formal deed of
sale stipulated in the receipt prevents
the happening of a sale has no
merit. Missc
Second. With respect to the contention
that the Court of Appeals erred in
upholding the validity of a consignation
of P7,035.00 representing the balance
of the purchase price of the lot, nowhere
in the decision of the appellate court is
there any mention of consignation.
Under Art. 1257 of this Civil Code,
consignation is proper only in cases
where an existing obligation is due. In
this case, however, the contracting
parties agreed that full payment of
purchase price shall be due and payable
within five (5) years from the execution

of a formal deed of sale. At the time
respondent deposited the amount of
P7,035.00 in the court, no formal deed
of sale had yet been executed by the
parties, and, therefore, the five-year
period during which the purchase price
should be paid had not commenced. In
short, the purchase price was not yet
due and payable.
This is not to say, however, that the
deposit of the purchase price in the
court is erroneous. The Court of Appeals
correctly ordered the execution of a
deed of sale and petitioners to accept
the amount deposited by respondent.
Third. The claim of petitioners that the
price of P7,035.00 is iniquitous is
untenable. The amount is based on the
agreement of the parties as evidenced
by the receipt (Exh. 2). Time and again,
we have stressed the rule that a
contract is the law between the parties,
and courts have no choice but to
enforce such contract so long as they
are not contrary to law, morals, good
customs or public policy. Otherwise,
courts would be interfering with the
freedom of contract of the parties.
Simply put, courts cannot stipulate for
the parties nor amend the latters
agreement, for to do so would be to alter
the real intentions of the contracting
parties when the contrary function of
courts is to give force and effect to the
intentions of the parties. Misspped
Fourth. Finally, petitioners argue that
respondent is barred by prescription and
laches from enforcing the contract. This
contention is likewise untenable. The
contract of sale in this case is perfected,
and the delivery of the subject lot to
respondent effectively transferred
ownership to him. For this reason,

respondent seeks to comply with his
obligation to pay the full purchase price,
but because the deed of sale is yet to be
executed, he deemed it appropriate to
deposit the balance of the purchase
price in court. Accordingly, Art. 1144 of
the Civil Code has no application to the
instant case. Considering that a survey
of the lot has already been conducted
and approved by the Bureau of Lands,
respondents heirs, assigns or
successors-in-interest should reimburse
the expenses incurred by herein
petitioners, pursuant to the provisions of
the contract. Spped
Petitioners,
YNARES-SANTIAGO
AUSTRIA-MARTINEZ
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
- versus Promulgated:
[21]
WHEREFORE, the decision of the Court

of Appeals is AFFIRMED with the
modification that respondent is
ORDERED to reimburse petitioners for
the expenses of the survey. Jospped
SO ORDERED.
Bellosillo, (Chairman), and Buena,
JJ., concur.
November 27, 2008

ELENA SOCCOBELTRAN,
Respondent.
x------------------------------------------------x
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review

on Certiorari under Rule 45 of the
Rules of Court, assailing the
Decision[1] dated 31 January 2006
rendered by the Court of Appeals in
CA-G.R. SP No. 87066, which
affirmed the Decision[2] dated 30 June
2003 of the Office of the President, in
O.P. Case No. 02-A-007, approving
THIRD DIVISION
the
application
of
respondent
Elena Socco-Beltran to purchase the
HEIRS
OF
G.R. No. 176474
subject property.
ARTURO REYES,
represented
by
The subject property in this
Evelyn R. San
Present:
case is a parcel of land originally
Buenaventura,
Quisumbing, and De Leon, Jr., JJ., on

leave.
identified as Lot No. 6-B, situated

in Zamora
Street, Dinalupihan, Bataan, with a
total area of 360 square meters. It was
originally part of a larger parcel of
land, measuring 1,022 square meters,
allocated
to
the
Spouses
Marcelo Laquian and Constancia Soc
co (Spouses Laquian), who paid for
the same with Japanese money. When
Marcelo died, the property was left to
his
wife Constancia. Upon Constancias su
bsequent death, she left the original
parcel of land, along with her other
property, with her heirs her siblings,
namely: Filomena Eliza Socco,
Isabel Socco de Hipolito,
Miguel
R. Socco, and Elena Socco-Beltran.
[3]
Pursuant
to
anunnotarized document
entitled
Extrajudicial Settlement of the Estate
of the Deceased Constancia R. Socco,
executed
by Constancias heirs
sometime in 1965, the parcel of land
was partitioned into three lotsLot No.
6-A, Lot No. 6-B, and Lot No. 6-C.
[4]
The subject property, Lot No. 6-B,
was adjudicated to respondent, but no
title had been issued in her name.
On 25 June 1998, respondent
Elena Socco-Beltran
filed
an
application for the purchase of Lot
No. 6-B before the Department of
Agrarian Reform (DAR), alleging that
it was adjudicated in her favor in the

extra-judicial
settlement
of Constancia Soccos estate.[5]
Petitioners herein, the heirs of
the late Arturo Reyes, filed their
protest to respondents petition before
the DAR on the ground that the
subject property was sold by
respondents brother, Miguel R. Socco,
in favor of their father, Arturo Reyes,
as evidenced by the Contract to Sell,
dated 5 September 1954, stipulating
that:[6]
That I am one of the
co-heirs of the Estate of the
deceased Constancia Socco;
and that I am to inherit as
such a portion of her lot
consisting of Four Hundred
Square Meters (400) more or
less located on the (sic)
Zamora St., Municipality
of Dinalupihan,
Province
of Bataan,
bounded
as
follows:
xxxx
That for or in consideration
of the sum of FIVE PESOS
(P5.00) per square meter,
hereby sell, convey and
transfer
by
way
of
this conditional sale the said
400 sq.m. more or less unto
Atty. Arturo C. Reyes, his
heirs,
administrator
and
assigns x x x. (Emphasis
supplied.)
Petitioners averred that they took

physical possession of the subject
property in 1954 and had been
uninterrupted in their possession of
the said property since then.
Legal Officer Brigida Pinlac of
the DAR Bataan Provincial Agrarian
Reform
Office
conducted
an
investigation, the results of which
were contained in her Report/
Recommendation dated 15 April
1999. Other than recounting the aforementioned
facts,
Legal
Officer Pinlac also
made
the
following
findings
in
her
[7]
Report/Recommendation:
Further investigation
was conducted by the
undersigned and based on the
documentary
evidence
presented by both parties, the
following
facts
were
gathered: that the house of
[the] Reyes family is adjacent
to the landholding in question
and portion of the subject
property consisting of about
15 meters [were] occupied by
the heirs of Arturo Reyes
were a kitchen and bathroom
[were] constructed therein;
on the remaining portion a
skeletal form made of hollow
block[s] is erected and
according to the heirs of late
Arturo Reyes, this was
constructed since the year
(sic) 70s at their expense; that
construction of the said
skeletal building was not

continued and left unfinished
which according to the
affidavit
of
Patricia Hipolito the Reyes
family where (sic) prevented
by
Elena Socco in
their
attempt of occupancy of the
subject
landholding;
(affidavit
of
Patricia Hipolito is
hereto
attached as Annex F); that
Elena Socco cannot
physically and personally
occupy the subject property
because of the skeletal
building made by the Reyes
family who have been
requesting that they be paid
for the cost of the
construction and the same be
demolished at the expense of
Elena Socco; that according
to Elena Socco, [she] is
willing to waive her right on
the portion where [the]
kitchen and bathroom is (sic)
constructed but not the whole
of Lot [No.] 6-B adjudicated
to her; that the Reyes family
included the subject property
to the sworn statement of
value of real properties filed
before
the
municipality
of Dinalupihan,Bataan,
copies of the documents are
hereto attached as Annexes G
and
H;
that
likewise
Elena Socco has
been
continuously and religiously
paying the realty tax due on
the said property.
In
the
end,
Officer Pinlac recommended
Legal
the
approval of respondents petition for

issuance of title over the subject
property, ruling that respondent was
qualified to own the subject property
pursuant to Article 1091 of the New
Civil Code.[8] Provincial Agrarian
Reform
Officer
(PARO) Raynor Taroy concurred in
the
said
recommendation
in
his Indorsement dated 22 April 1999.
[9]
In an Order dated 15 September

1999, DAR Regional Director Nestor
R. Acosta, however, dismissed
respondents petition for issuance of
title over the subject property on the
ground that respondent was not an
actual tiller and had abandoned the
said property for 40 years; hence, she
had already renounced her right to
recover
the
same.
[10]
Thedispositive part of the Order
reads:
1. DISMISSING the
claims
of
Elena SoccoBeltran, duly represented by
Myrna Socco for lack of
merit;
2. ALLOCATING Lot
No. 6-B under Psd-003008565 with an area of 360
square meters, more or less,
situated Zamora
Street, Dinalupihan, Bataan,
in favor of the heirs of Arturo
Reyes.
3. ORDERING
the
complainant to refrain from
any act tending to disturb the
peaceful possession of herein
respondents.
4. DIRECTING
the
MARO
of Dinalupihan, Bataan to
process
the
pertinent
documents for the issuance of
CLOA in favor of the heirs of
Arturo Reyes.[11]
Respondent filed a Motion for

Reconsideration of the foregoing
Order, which was denied by DAR
Regional Director Acosta in another
Order dated 15 September 1999.[12]
Respondent then appealed to
the Office of the DAR Secretary. In an
Order, dated 9 November 2001, the
DAR Secretary reversed the Decision
of DAR Regional Director Acosta
after finding that neither petitioners
predecessor-in-interest, Arturo Reyes,
nor respondent was an actual
occupant
of
the
subject
property. However, since it was
respondent
who
applied
to
purchase the subject property, she was
better qualified to own said property
as opposed to petitioners, who did not
at all apply to purchase the
same.Petitioners
were
further
disqualified from purchasing the
subject property because they were

not landless. Finally, during the
investigation of Legal Officer Pinlac,
petitioners requested that respondent
pay them the cost of the construction
of the skeletal house they built on the
subject property. This was construed
by the DAR Secretary as a waiver by
petitioners of their right over the
subject property.[13] In the said Order,
the DAR Secretary ordered that:
WHEREFORE, pre
mises
considered,
the
September 15, 1999 Order is
hereby SET ASIDE and a
new Order is hereby issued
APPROVING the application
to purchase Lot [No.] 6-B of
Elena Socco-Beltran.[14]
Petitioners sought remedy from

the Office of the President by
appealing
the 9
November
2001 Decision
of
the
DAR
Secretary. Their appeal was docketed
as O.P. Case No. 02-A-007. On 30
June 2003, the Office of the President
rendered its Decision denying
petitioners appeal and affirming the
DAR
Secretarys
Decision.
[15]
The fallo of the Decision reads:
WHEREFORE,
premises
considered,
judgment appealed from
is AFFIRMED and
the
instant appeal DISMISSED.

[16]
Petitioners
Motion
for
Reconsideration was likewise denied
by the Office of the President in a
Resolution dated 30 September 2004.
[17]
In the said Resolution, the Office
of the President noted that petitioners
failed to allege in their motion the
date when they received the Decision
dated 30 June 2003. Such date was
material
considering
that
the
petitioners
Motion
for
Reconsideration was filed only on 14
April 2004, or almost nine months
after the promulgation of the decision
sought to be reconsidered. Thus, it
ruled that petitioners Motion for
Reconsideration, filed beyond fifteen
days from receipt of the decision to be
reconsidered, rendered the said
decision final and executory.
Consequently, petitioners filed
an appeal before the Court of Appeals,
docketed as CA-G.R. SP No.
87066. Pending the resolution of this
case, the DAR already issued on8 July
2005 a Certificate of Land Ownership
Award (CLOA) over the subject
property
in
favor
of
the
respondents niece and representative,
Myrna Socco-Beltran.[18]Respondent
passed away on 21 March 2001,[19] but
the records do not ascertain the

identity of her legal heirs and her
legatees.
are
hereby AFFIRMED in toto.
Acting on CA-G.R. SP No.

87066, the Court of Appeals
subsequently
promulgated
its
Decision, dated 31 January 2006,
affirming the Decision dated 30 June
2003 of the Office of the President. It
held that petitioners could not have
been actual occupants of the subject
property, since actual occupancy
requires the positive act of occupying
and tilling the land, not just the
introduction of an unfinished skeletal
structure thereon. The Contract to Sell
on which petitioners based their claim
over the subject property was
executed by Miguel Socco, who was
not the owner of the said property
and, therefore, had no right to transfer
the same. Accordingly, the Court of
Appeals affirmed respondents right
over the subject property, which
was derived form
the
[20]
original allocatees thereof. The fall
o of the said Decision reads:
The Court of Appeals denied

petitioners
Motion
for
Reconsideration of its Decision in a
Resolution dated 16 August 2006.[22]
WHEREFORE,
premises considered, the
instant PETITION
FOR
REVIEW is DISMISSED.
Accordingly, the Decision
dated 30 June 2003 and the
Resolution
dated
30
December 2004 both issued
by the Office of the President
[21]
Hence, the present Petition,

wherein
petitioners
raise
the following issues:
I
WHETHER OR NOT THE
HONORABLE COURT OF
APPEALS
ERRED
IN
AFFIRMING
THE
FINDINGS
OF
THE
OFFICE
OF
THE
PRESIDENT THAT THE
SUBJECT LOT IS VACANT
AND THAT PETITIONERS
ARE
NOT
ACTUAL
OCCUPANTS
THEREOF
BY
DENYING
THE
LATTERS CLAIM THAT
THEY HAVE BEEN IN
OPEN,
CONTINUOUS,
EXCLUSIVE, NOTORIOUS
AND
AVDERSE
POSSESSION
THEREOF
SINCE 1954 OR FOR
MORE THAN THIRTY (30)
YEARS.
II
WHETHER OR NOT THE
COURT
OF
APPEALS
ERRED WHEN IT HELD
THAT
PETITIONERS
CANNOT
LEGALLY
ACQUIRE THE SUBJECT
PROPERTY AS THEY ARE
NOT
CONSIDERED
LANDLESS
AS
EVIDENCED BY A TAX
DECLARATION.
PURCHASE LOT IN
LANDED ESTATES THAT
SHE IS A FILIPINO
CITIZEN,
WHEN
IN
TRUTH AND IN FACT,
SHE IS ALREADY AN
AMERICAN NATIONAL.
[23]
III
WHETHER OR NOT THE
COURT
OF
APPEALS
ERRED
IN
HOLDING
THAT
WHATEVER
RESERVATION WE HAVE
OVER THE RIGHT OF
MYRNA
SOCCO
TO
SUCCEED WAS ALREADY
SETTLED WHEN NO LESS
THAN MIGUEL SOCCO
(PREDECESSOR-IN
INTEREST OF HEREIN
PETITIONERS)
EXECUTED HIS WAIVER
OF RIGHT DATED APRIL
19, 2005 OVER THE
SUBJECT PROPERTY IN
FAVOR
OF
MYRNA
SOCCO.
The main issue in this case is

whether or not petitioners have a
better right to the subject property
over the respondent. Petitioners claim
over the subject property is anchored
on the Contract to Sell executed
between Miguel Socco and Arturo
Reyes
on 5
September
1954. Petitioners additionally allege
that they and their predecessor-ininterest, Arturo Reyes, have been in
possession of the subject lot since
1954 for an uninterrupted period of
more than 40 years.
IV
The Court is unconvinced.
WHETHER OR NOT THE

COURT
OF
APPEALS
ERRED WHEN IT DENIED
PETITIONERS
MOTION
FOR
NEW
TRIAL
THEREBY
BRUSHING
ASIDE THE FACT THAT
MYRNA V. SOCCO-ARIZO
GROSSLY
MISREPRESENTED
IN
HER
INFORMATION
SHEET
OF
BENEFICIARIES
AND
APPLICATION
TO
Petitioners cannot derive title to

the subject property by virtue of the
Contract to Sell. It was unmistakably
stated in the Contract and made clear
to both parties thereto that the vendor,
Miguel R. Socco, was not yet the
owner of the subject property and was
merely expecting to inherit the same
as his share as a co-heir
of Constancias estate.[24] It was also
declared in the Contract itself that
Miguel R. Soccos conveyance of the

subject to the buyer, Arturo Reyes,
was a conditional sale. It is, therefore,
apparent that the sale of the subject
property in favor of Arturo Reyes was
conditioned upon the event that
Miguel Socco would actually inherit
and become the owner of the said
property. Absent such occurrence,
Miguel
R. Socco never
acquired
ownership of the subject property
which he could validly transfer to
Arturo Reyes.
Under Article 1459 of the Civil
Code on contracts of sale, The thing
must be licit and the vendor must
have a right to transfer ownership
thereof at the time it is delivered.The
law specifically requires that the
vendor must have ownership of the
property at the time it is
delivered. Petitioners claim that the
property was constructively delivered
to them in 1954 by virtue of the
Contract to Sell. However, as already
pointed out by this Court, it was
explicit in the Contract itself that, at
the time it was executed, Miguel
R.Socco was not yet the owner of the
property and was only expecting to
inherit it. Hence, there was no valid
sale from which ownership of the
subject
property
could
have
transferred from Miguel Socco to
Arturo Reyes. Without acquiring
ownership of the subject property,

Arturo Reyes also could not have
conveyed the same to his heirs, herein
petitioners.
Petitioners, nevertheless, insist
that they physically occupied the
subject lot for more than 30 years and,
thus, they gained ownership of the
property
through
acquisitive
prescription,
citing Sandoval
v.
[25]
Insular
Government and San
Miguel Corporation v. Court of
Appeals. [26]
In Sandoval, petitioners therein
sought the enforcement of Section 54,
paragraph 6 of Act No. 926, otherwise
known as the Land Registration Act,
which required -- for the issuance of a
certificate of title to agricultural
public lands -- the open, continuous,
exclusive, and notorious possession
and occupation of the same in good
faith and under claim of ownership
for more than ten years. After
evaluating the evidence presented,
consisting of the testimonies of
several witnesses and proof that
fences were constructed around the
property, the Court in the afore-stated
case denied the petition on the ground
that petitioners failed to prove that
they exercised acts of ownership or
were in open, continuous, and
peaceful possession of the whole land,
and had caused it to be enclosed to the

exclusion of other persons. It further
decreed that whoever claims such
possession shall exercise acts of
dominion and ownership which
cannot be mistaken for the momentary
and accidental enjoyment of the
property. [27]
In San Miguel Corporation, the Court
reiterated the rule that the open,
exclusive, and undisputed possession
of alienable public land for the period
prescribed by law creates the legal
fiction whereby land ceases to be
public land and is, therefore, private
property. It stressed, however, that the
occupation of the land for 30 years
must
be conclusivelyestablished. Thus, the
evidence offered by petitioner therein
tax declarations, receipts, and the sole
testimony of the applicant for
registration, petitioners predecessorin-interest who claimed to have
occupied the land before selling it to
the
petitioner were
considered
insufficient to satisfy the quantum of
proof required to establish the claim
of possession required for acquiring
alienable public land.[28]
law. It was underscored in San Miguel

Corporation that
the
open,
continuous, exclusive, and notorious
occupation of property for more than
30 years must be no less
than conclusive, such quantum of
proof being necessary to avoid the
erroneous validation of actual
fictitious claims of possession over
the property that is being claimed.[29]
In the present case, the
evidence presented by the petitioners
falls short of being conclusive. Apart
from their self-serving statement that
they took possession of the subject
property, the only proof offered to
support their claim was a general
statement made in the letter[30] dated 4
February 2002 of Barangay Captain
Carlos Gapero, certifying that Arturo
Reyes was the occupant of the subject
property since peace time and at
present. The statement is rendered
doubtful by the fact that as early as
1997, when respondent filed her
petition for issuance of title before the
DAR, Arturo Reyes had already died
and was already represented by his
heirs, petitioners herein.
Moreover,
As in the two aforecited cases,

petitioners herein were unable to
prove actual possession of the subject
property for the period required by
the
certification
given
by Barangay Captain Gapero that
Arturo Reyes occupied the premises
for an unspecified period of time, i.e.,
since peace time until the present,

cannot
prevail
over
Legal
Officer Pinlacs more
particular
findings
in
her
Report/Recommendation. Legal
Officer Pinlac reported that petitioners
admitted that it was only in the 1970s
that they built the skeletal structure
found on the subject property. She
also referred to the averments made
by Patricia Hipolito in an Affidavit,
[31]
dated 26 February 1999, that the
structure was left unfinished because
respondent prevented petitioners from
occupying the subject property. Such
findings disprove petitioners claims
that their predecessor-in-interest,
Arturo Reyes, had been in open,
exclusive, and continuous possession
of the property since 1954. The
adverted findings were the result of
Legal Officer Pinlacs investigation in
the course of her official duties, of
matters within her expertise which
were later affirmed by the DAR
Secretary, the Office of the President,
and the Court of Appeals. The factual
findings of such administrative
officer, if supported by evidence, are
entitled to great respect.[32]
In contrast, respondents claim
over the subject property is backed by
sufficient evidence. Her predecessorsin-interest, the spouses Laquian, have
been
identified
as
the
original allocatees who have fully

paid for the subject property. The
subject property was allocated to
respondent in the extrajudicial
settlement
by
the
heirs
of Constancias estate.The document
entitled Extra-judicial Settlement of
the
Estate
of
the
Deceased Constancia Socco was not
notarized and, as a private document,
can
only
bind
the
parties
thereto.However, its authenticity was
never put into question, nor was its
legality
impugned. Moreover,
executed in 1965 by the heirs
of Constancia Socco, or more than 30
years ago, it is an ancient document
which appears to be genuine on its
face and therefore its authenticity
must be upheld.[33] Respondent has
continuously paid for the realty tax
due on the subject property, a fact
which, though not conclusive, served
to strengthen her claim over the
property.[34]
From the foregoing, it is only
proper that respondents claim over the
subject property be upheld. This
Court must, however, note that the
Order of the DAR Secretary, dated9
November 2001, which granted the
petitioners right to purchase the
property, is flawed and may be
assailed
in
the
proper
proceedings. Records show that the
DAR affirmed that respondents

predecessors-in-interest,
Marcelo Laquian and Constancia Soc
co, having been identified as the
original allocatee, have fully paid for
the subject property as provided under
an agreement to sell. By the nature of
a contract or agreement to sell, the
title over the subject property is
transferred to the vendee upon the full
payment
of
the
stipulated
consideration. Upon the full payment
of the purchase price, and absent any
showing that the allocatee violated the
conditions
of
the
agreement,
ownership of the subject land should
be conferred upon the allocatee.
[35]
Since the extrajudicial partition
transferring Constancia Soccos interes
t in the subject land to the respondent
is valid, there is clearly no need for
the respondent to purchase the subject
property, despite the application for
the purchase of the property
erroneously filed by respondent. The
only act which remains to be
performed is the issuance of a title in
the name of her legal heirs, now that
she is deceased.
Moreover, the Court notes that
the records have not clearly
established the right of respondents
representative, Myrna Socco-Arizo,
over the subject property. Thus, it is
not clear to this Court why the DAR
issued on 8 July 2005 a CLOA[36] over

the subject property in favor of
Myrna Socco-Arizo. Respondents
death does not automatically transmit
her rights to the property to
Myrna Socco-Beltran. Respondent
only authorized Myrna Socco-Arizo,
through a Special Power of
Attorney[37] dated 10 March 1999, to
represent her in the present case and
to administer the subject property for
her benefit. There is nothing in the
Special Power of Attorney to the
effect that Myrna Socco-Arizo can
take over the subject property as
owner thereof upon respondents
death. That
Miguel
V. Socco,
respondents only nephew, the son of
the late Miguel R. Socco, and
Myrna Socco-Arizosbrother, executed
a waiver of his right to inherit from
respondent, does not
automatically
mean that the subject property will go
to Myrna Socco-Arizo, absent any
proof that there is no other qualified
heir to respondents estate. Thus, this
Decision does not in any way confirm
the issuance of the CLOA in favor of
Myrna Socco-Arizo, which may be
assailed in appropriate proceedings.
IN
VIEW
OF
THE
FOREGOING, the instant Petition
is DENIED. The assailed Decision of
the Court of Appeals in CA-G.R. SP
No. 87066, promulgated on 31
January
2006,
is AFFIRMED with MODIFICATI
ON. This Court withholds the
confirmation of the validity of title
over the subject property in the name
of
Myrna Socco-Arizopending
determination of respondents legal
heirs in appropriate proceedings. No
costs.
Before us is petitioners' Motion for

Reconsideration of our Decision dated July
28, 2008 where we affirmed the Decision
dated October 17, 2001 and the Resolution
dated August 7, 2003 of the Court of Appeals
(CA) in CA-G.R. CV No. 48498.
Records show that while the land was
registered in the name of petitioner Rogelia in
1984, respondents complaint for
reconveyance was filed in 1991, which was
within the 10-year prescriptive period.
We ruled that since petitioners bought the

property when it was still an unregistered
land, the defense of having purchased the
property in good faith is unavailing. We
affirmed the Regional Trial Court (RTC) in
finding that petitioners should pay
MINITA V. CHICO-NAZARIO
respondents their corresponding share in the
Associate Justice produce of the subject land from the time they
were deprived thereof until the possession is
restored to them.
SO ORDERED.
Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 159578
February 18, 2009
ROGELIA DACLAG and ADELINO DACLAG

(deceased), substituted by RODEL M.
DACLAG, and ADRIAN M.
DACLAG, Petitioners,
vs.
ELINO MACAHILIG, ADELA MACAHILIG,
CONRADO MACAHILIG, LORENZA HABER
and BENITA DEL ROSARIO, Respondents.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
In their Motion for Reconsideration, petitioners

contend that the 10-year period for
reconveyance is applicable if the action is
based on an implied or a constructive trust;
that since respondents' action for
reconveyance was based on fraud, the action
must be filed within four years from the
discovery of the fraud, citing Gerona v. De
Guzman,1 which was reiterated in Balbin v.
Medalla.2
We do not agree.
In Caro v. Court of Appeals,3 we have explicitly
held that "the prescriptive period for the
reconveyance of fraudulently registered
real property is 10 years reckoned from the
date of the issuance of the certificate of
title x x x."4
However, notwithstanding petitioners'
unmeritorious argument, the Court deems it
necessary to make certain clarifications. We
have earlier ruled that respondents' action for
reconveyance had not prescribed, since it was

filed within the 10-year prescriptive period.
However, a review of the factual antecedents
of the case shows that respondents' action for
reconveyance was not even subject to
prescription.
The deed of sale executed by Maxima in favor
of petitioners was null and void, since Maxima
was not the owner of the land she sold to
petitioners, and the one-half northern portion
of such land was owned by respondents.
Being an absolute nullity, the deed is subject
to attack anytime, in accordance with Article
1410 of the Civil Code that an action to
declare the inexistence of a void contract does
not prescribe. Likewise, we have consistently
ruled that when there is a showing of such
illegality, the property registered is deemed to
be simply held in trust for the real owner by
the person in whose name it is registered, and
the former then has the right to sue for the
reconveyance of the property.5 An action for
reconveyance based on a void contract is
imprescriptible.6 As long as the land wrongfully
registered under the Torrens system is still in
the name of the person who caused such
registration, an action in personam will lie to
compel him to reconvey the property to the
real owner.7 In this case, title to the property is
in the name of petitioner Rogelia; thus, the
trial court correctly ordered the reconveyance
of the subject land to respondents.
Petitioners next contend that they are
possessors in good faith, thus, the award of
damages should not have been imposed.
They further contend that under Article 544, a
possessor in good faith is entitled to the fruits
received before the possession is legally
interrupted; thus, if indeed petitioners are
jointly and severally liable to respondents for
the produce of the subject land, the liability
should be reckoned only for 1991 and not
1984.
We find partial merit in this argument.
Article 528 of the Civil Code provides that

possession acquired in good faith does not
lose this character, except in a case and from
the moment facts exist which show that the
possessor is not unaware that he possesses
the thing improperly or wrongfully. Possession
in good faith ceases from the moment defects
in the title are made known to the possessors,
by extraneous evidence or by suit for recovery
of the
property by the true owner. Whatever may be
the cause or the fact from which it can be
deduced that the possessor has knowledge of
the defects of his title or mode of acquisition, it
must be considered sufficient to show bad
faith.8 Such interruption takes place upon
service of summons.9
lawphil.net
Article 544 of the same Code provides that a

possessor in good faith is entitled to the fruits
only so long as his possession is not legally
interrupted. Records show that petitioners
received a summons together with
respondents' complaint on August 5,
1991;10 thus, petitioners' good faith ceased on
the day they received the summons.
Consequently, petitioners should pay
respondents 10 cavans of palay per annum
beginning August 5, 1991 instead of 1984.
Finally, petitioner would like this Court to look
into the finding of the RTC that "since Maxima
died in October 1993, whatever charges and
claims petitioners may recover from her
expired with her"; and that the proper person
to be held liable for damages to be awarded
to respondents should be Maxima Divison or
her estate, since she misrepresented herself
to be the true owner of the subject land.
We are not persuaded.
Notably, petitioners never raised this issue in
their appellants' brief or in their motion for
reconsideration filed before the CA. In fact,
they never raised this matter before us when
they filed their petition for review. Thus,
petitioners cannot raise the same in this
motion for reconsideration without offending

the basic rules of fair play, justice and due
process, specially since Maxima was not
substituted at all by her heirs after the
promulgation of the RTC Decision.
WHEREFORE, petitioners Motion for
Reconsideration is PARTLY GRANTED. The
Decision of the Court of Appeals dated July
28, 2008 is MODIFIED only with respect to
prescription as discussed in the text of herein
Resolution, and the dispositive portion of the
Decision is MODIFIED to the effect that
petitioners are ordered to pay respondents 10
cavans of palay per annum beginning August
5, 1991 instead of 1984.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
Acting Chairperson
SECOND DIVISION
[A.C. No. 3046. October 26, 1998]
REGALADO
DAROY,
complainant,
vs. ATTY.
ESTEBAN
ABECIA, respondent.
DECISION
MENDOZA, J.:
This refers to the complaint for

malpractice filed by Regalado Daroy (now
deceased) against Esteban Abecia, a member
of the Bar. Complainant Daroy accused

respondent Abecia of having forged his
signature in a deed of absolute sale by
means of which the latter was able to
transfer a parcel of land in Opol, Misamis
Oriental, first to Jose Gangay and eventually
to his (respondents) wife Nena Abecia.
The facts of the instant case are as
follows:
Respondent Abecia was counsel of
complainant Daroy in a case for forcible
entry before the Municipal Trial Court of
Opol, Misamis Oriental.[1] Judgment was
rendered in favor of complainant as plaintiff
in the ejectment case, ordering the
defendants to pay damages, attorneys fees,
and the costs of the suit. To satisfy the
judgment, the sheriff sold at public auction
on March 25, 1971 a parcel of land
belonging to one of the defendants to
complainant Daroy as highest bidder
for P1,250.00. Upon failure of the
defendants to redeem the land, its ownership
was consolidated in complainant Daroy.
Complainant Daroy claimed that
respondent Abecia forged his signature in a
deed of absolute sale, dated March 31, 1971,
transferring the subject parcel of land to Jose
Gangay purportedly for the sum ofP1,250.00
and that in a fictitious deed of absolute sale,
dated April 17, 1971, it was made to appear
that Gangay in turn conveyed the land to
Nena Abecia, wife of respondent Abecia, for
the sum ofP1,350.00.[2] Complainant alleged
that he entrusted the title to the land (TCT
No. T-315) to Abecia as his counsel
and allowed him to take possession of the
land upon the latters request. By means of
the forged deed of sale, Abecia was able to
obtain new transfer certificates of title, first
in the name of Gangay and then in that of
Mrs. Abecia, from the Registry of Deeds of
Misamis Oriental.[3] Daroy claimed he
discovered the fraud only in 1984.
Daroy submitted in evidence a report of

the National Bureau of Investigation, which
had examined the deed of sale in favor of
Jose Gangay, showing that Daroys signature
in the deed of sale had been written by a
different hand. In addition, Daroy presented
the affidavit, executed on August 10, 1988,
of Anita Gangay, wife of Jose Gangay, in
which she retracted an earlier affidavit
executed on June 5, 1985. In the first
affidavit, she stated that she had bought the
land in question from Regalado Daroy and
then sold it to her sister Nena Abecia, wife
of respondent Esteban. Now, in her present
affidavit, it is stated that she did not buy the
land from Daroy nor later sell it to Nena
Abecia and that she really did not know
anything about the controversy between
Regalado Daroy and Esteban Abecia, both
of whom are her brothers-in-law. (It appears
that Mrs. Conchita Daroy, Mrs. Anita
Gangay, and Mrs. Nena Abecia are sisters,
although Conchita Daroy and Regalado
Daroy are not married but lived together in a
common-law relationship.)
A complaint for falsification of public
document was also filed against respondent
Abecia in the Office of the City Prosecutor
of Cagayan de Oro which, however,
dismissed the same.[4] On appeal, then
Undersecretary of Justice Silvestre H. Bello
III reversed on May 6, 1988 the findings of
the City Prosecutor of Cagayan de Oro and
consequently ordered the filing of the
corresponding information in court.
[5]
Accordingly, City Prosecutor Rodolfo R.
Waga filed an information for falsification
of public document, dated June 30, 1988,
with the Regional Trial Court of Misamis
Oriental.[6]
Respondent Abecia was unable to attend
the hearings. He asked for their transfer to
Cagayan de Oro on the ground that he did
not have the means to travel, but his request
was apparently denied sub silencio as the
Commission continued the hearings in

Pasig, Metro Manila. As a result only his
counsel was present at the hearings.[7]
As respondent reiterated his request for
the transfer of venue, it was agreed at the
hearing of January 30, 1989 that respondents
answer, dated August 3, 1987, and the
affidavits of his witnesses as well as his own
would be considered as their direct
testimonies.[8]
In his answer, respondent Esteban
Abecia maintained that on March 31, 1971,
Regalado Daroy sold the land in question to
Jose Gangay, and the latter in turn sold the
land to Nena Abecia on April 17, 1971. He
cited the sheriffs return, dated August 6,
1973, in which it was stated that on August
4, 1993 Regalado Daroy and his assignee
Nena Abecia were . . . placed in actual
possession of the parcel of land subject
matter of the Deed of Conveyance and
Possession.[9] He also referred to the
resolution of the Assistant Provincial Fiscal
of Misamis Oriental, who dismissed the
complaint for grave coercion and malicious
mischief filed by Gertrudes De Bajuyo, one
of the defendants in the ejectment case,
against Regalado Daroy and Nena Abecia
for the demolition of her house, precisely on
the basis of the right of Mrs. Nena
Abecia . . . as assignee to do whatever she
wants to do of the things she owns.[10]
On July 15, 1993, Commissioner
Plaridel C. Jose rendered a report finding
respondent Abecia guilty of malpractice and
recommending his disbarment. In his report,
Commissioner Jose stated:[11]
. . . In the course of his law practice, the

respondent handled several cases in
behalf of the complainant Regalado
Daroy, among which is Civil Case No.
3288, wherein a parcel of land located
at Opol, Misamis Oriental covered by
TCT No. T-15924 (TCT No. T-315)

was the subject of litigation. In the
course of handling the same, the
complainant entrusted to the respondent
the pertinent documents necessary in
the said case which included his said
TCT No. T-15924.
In the year 1971, without the
knowledge of the complainant, a
document entitled Deed of Sale dated
March 31, 1971 was executed and
notarized by Notary Public Erasmo G.
Damasing as Doc. No. 68, Page No. 16,
Book No. VIII, Series of 1971, which
appears to have been signed by
complainant Regalado Daroy, thereby
conveying the said property in favor of
a certain Jose Gangay, married to Anita
Basmayor, by virtue of which TCT No.
T-15925 was issued in the name of Jose
Gangay.
Two weeks thereafter, under date of
April 17, 1971, the said Jose Gangay
executed a Deed of Sale of the same
property in favor of Mrs. Nena Abecia,
the wife of the respondent, by virtue of
which TCT No. T-15926 was issued in
the name of Nena Abecia, married to
Atty. Esteban Abecia, the respondent.
Sometime in the year 1984, the
complainant discovered that his said
property was already in the name of
Mrs. Nena Abecia and Atty. Esteban
Abecia.
....
The foregoing evidence sufficiently
proved respondents acts complained of
in the present case . . . . The significant

fact is that the herein respondent was
instrumental and responsible for
falsifying the signature of his client,
complainant Daroy, in the deed of
conveyance in favor of Jose Gangay,
for which he is at present criminally
charged in Criminal Case No. 88-443
before the Regional Trial Court of
Misamis Oriental.
In an unclear manner, respondent tried
to justify his act by alleging that the
transfer of his clients property to his
wife was proper because he allegedly
was not paid for his professional
services. Such allegation, even if true,
would not exculpate him from
liability. A lawyer who executed with
his client a deed transferring ownership
over a parcel of land involved in a
pending litigation as his attorneys fees
violates the rule prohibiting the
purchase of property in litigation by a
lawyer from his client.
. . . What is saddening is the fact that he
is presently an incumbent labor arbiter
of the National Labor Relations
Commission with the delicate
responsibility of administering justice
to the parties before him. . . . The
Commission has no alternative but to
recommend his disbarment. It is
likewise recommended that the
National Labor Relations Commission
be furnished with these findings for its
guidance and appropriate action.
The Board of Governors of the
Integrated Bar of the Philippines in
Resolution No. XI-94-072, dated March 26
1994,[12] approved the report but reduced the

penalty to indefinite suspension.
Respondent Abecia filed a Motion for
Reconsideration and/or Appeal. Among
other things, he contends that:[13]
....
1. The Commission on Bar Discipline
erred when it held that complainant had
no knowledge of the execution of the
Deed of Absolute Sale on March 31,
1971 before Notary Public Erasmo G.
Damasing.
Complainant very well knew of the
execution of the deed of sale as shown
in the Sheriffs Return of Service
(Respondents Annex 9) dated August 6,
1973, where he declared that he was
accompanied by the complainant and
his assignee, Nena Abecia, in
implementing the Deed of Conveyance
and Possession on August 4, 1973. The
Deputy Sheriff even went as far as
declaring that the land was already in
the name of complainants assignee.
Paragraph 2 of the said Sheriffs Return
of Service is herein quoted verbatim:
2. The undersigned then proceeded to
the parcel of land which is the subject
Possession together with purchaser
Regalado Daroy, his assignee Nena
Abecia, Atty. Esteban Abecia, Ex-LTC
Registrar Clemente Quiblat, P.M.
Salazar, and the Police Sgt. of Opol,
Misamis Oriental, Felix
Abejuela. Regalado Daroy and his
assignee, Nena Abecia, were then
formally placed in actual and physical
possession of the parcel of land subject

Possession. Regalado Daroy and his
assignee, Nena Abecia, then asserted
their ownership of the parcel of land by
making use of the improvements found
on the land such as the young coconuts
and bananas. As a matter of fact the
parcel of land is already in the name of
Nena Abecia per Transfer Certificate of
Title No. T-15926 entered in the
Register of Deeds of Cagayan de Oro
City on June 18, 1973 at 1:00
P.M. (Underscoring Ours).
Likewise, in Office File No. 419-74 of
the Office of the Provincial Fiscal
(Respondents Annex 10) dated April
18, 1974, wherein complainant
Regalado Daroy was the accused, then
4th Asst. Fiscal Alejo G. Rola referred
to Nena Abecia as the owner of the
subject property by virtue of her being
the assignee and/or transferee of the
rights of Regalado Daroy.
Furthermore, in Criminal Case No. 88443 before Branch 25 of the RTC of
Misamis Oriental, complainant testified
in open court that he came to know of
the Deed of Absolute Sale (Exhibit A)
when the sheriff awarded the land to
him (TSN, p. 3. Oct. 4, 1989). The
Sheriffs Deed of Conveyance and
Possession, however, was executed by
the Provincial Sheriffs way back in
April 11, 1972.
How indeed can complainant now have
the temerity to claim that he discovered
that the subject property was
transferred only in 1984? And how
could the Commission on Bar

Discipline have overlooked the above
evidence and believed the complainant
hook, line and sinker?
2. The Commission on Bar Discipline
erred in not giving credence and weight
to the testimony/sworn statement of the
Notary Public (Respondents Annex 4)
and the instrumental witnesses to the
execution of the questioned Deed of
Absolute Sale (Respondents Annexes 5
and 6). Between the Notary Public and
the complainant, the Notary Public,
who is known for his unquestioned
integrity, honesty and probity, is more
believable. In fact, Notary Public
Erasmo G. Damasing, then the
incumbent vice-mayor, went on to
become the congressman of Cagayan
de Oro City. And between the positive
identification of the complainant as the
person who executed the instrument by
the Notary Public (and the instrumental
witnesses) and the assertion of the
alleged handwriting expert, the positive
identification must prevail especially
since the questioned signature of
complainant has as many strokes as the
sample signatures in the documents
submitted for comparison.
Respondents motion is well taken. As
already stated, the land in question was
purchased by complainant at the sheriffs sale
held on March 25, 1971. The land was
owned by Gertrudes de Bajuyo, wife of one
of the defendants in the action for forcible
entry. Upon the lapse of one year and the
failure of the owner to redeem the land, its
ownership was consolidated in the name of
complainant Regalado Daroy.In his sheriffs
Return of Service issued on August 6,
1973 - long before the complaint in this case

was filed on May 25, 1987 Deputy Sheriff
Eufrosino P. Castillo stated that when he
finally transferred the land to the buyer, he
placed in possession of the land not only the
buyer, Regalado Daroy, but also the latters
assignee, Nena Abecia, in whose name the
title to the land had in fact been
transferred. The Deputy Sheriff said in his
report:[14]
2. The undersigned then

proceeded to the parcel of
land which is the subject
matter of the Deed of
Conveyance and Possession
together with purchaser
Regalado Daroy, his
assignee Nena Abecia, Atty.
Esteban Abecia, Ex-LTC
Registrar Clemente Quiblat,
P.M. Salazar, and the Police
Sgt. of Opol, Misamis
Oriental, Felix
Abejuela. Regalado Daroy
and his assignee, Nena
Abecia, were then formally
place in actual and physical
possession of the parcel of
land subject of the Deed of
Conveyance and
Possession. Regalado Daroy
and his assignee, Nena
Abecia, then asserted their
ownership of the parcel of
land by making use of the
improvements found in the
land such as the young
coconuts and bananas. As a
matter of fact the parcel of
land is already in the name
of Nena Abecia per Transfer
Certificate of Title No. T-
15926 entered in the

Register of Deeds at
Cagayan de Oro City on
June 18, 1973 at 1:00 P.M.
3. At about 2:00 P.M. of the
same day, August 4, 1973,
the undersigned
accompanied with police
Sgt. Felex Abejuela of Opol
Police Department and P.M.
Salazar went to the house of
Restituto Bajuyo at
Mulugan, Opol, Mis. Or.
The undersigned explained
to Restituto Bajuyo
that Regalado Daroy and his
assignee Nena Abecia were
already placed in actual and
physical possession of the
parcel of land subject matter
of the Deed of Conveyance
and Possession and
admonished him not to
molest Regalado Daroy and
his assignee or anybody
appointed by them to take
care of the aforecited parcel
of land. He was warned that
any violation will be
contrary to law and will
subject him to court
punishment.
It would appear, therefore, that as early
as August 4, 1973 Daroy already knew that
title to the land had already been transferred
in
the
name
of
respondents
wife. Complainants claim that he came to
know of such transfer only in 1984 is thus
belied. Nor does it appear that the transfer
was made without his knowledge and
consent. To the contrary, the sheriffs return

suggests that Daroy had agreed to such
transfer. Hence, the references to Mrs.
Abecia as Daroys assignee.
It appears further that as a consequence
of the demolition of the former owners
house, complainant and Mrs. Abecia were
charged, together with Deputy Sheriff
Eufrosino
P. Castillo, with
grave
coercion/malicious mischief in the Office of
the Provincial Fiscal of Misamis Oriental. In
his resolution, dated April 18, 1974,
dismissing the charges, Assistant Provincial
Fiscal Alejo G. Rola stated, among other
things:[15]
The undersigned despite the declaration

of complainant Gertrudes de Bajuyo
corroborated by the testimony of
Josefina Jaraula that she was
intimidated by a PC soldier, is of the
opinion that such evidence is
insufficient to warrant a belief that such
an act was in fact done by Sgt. Abalos,
because the other witnesses for the
complainant namely, Lito Ejina and
Jose Jaime never mentioned that there
was such intimidation employed by
Sgt. Abalos at the time despite the fact
that these two (2) aforenamed
witnesses, were present at the time and
on the date Josefina Jaraula was
around. The undersigned is however of
the considered opinion that the house
occupied by complainant Gertrudes de
Bajuyo was demolished by
respondents, but such an act is a right
of Mrs. Nena Abecia in her capacity as
an assignee to do whatever she wants to
do of the thing she owns. Furthermore,
the allegation of complainant regarding
the intimidation made against her by
the PC Sgt. corroborated by the other
witness Josefina Jaraula is insufficient

to offset the presumption of regularity
of performance of an official duty by a
public officer, apart from the fact that
the testimony of Gertrudes Bajuyo and
Josefina Jaraula are of dubious
credibility.
Like the sheriffs return made in 1973,
this resolution of the Assistant Provincial
Fiscal rendered the following year (1974)
belies complainants allegation that the land
in question was transferred to Mrs. Abecia
without his knowledge and consent and that
he came to know about it only in 1984.
The aforementioned documents were
attached to the answer of respondent
Esteban Abecia. However, despite the
parties agreement made at the hearing held
on January 30, 1989, that the said
documents would be considered the
evidence of respondent Abecia, they were
not even mentioned in the report of the
Commissioner who investigated the case.
Indeed, what appears to have happened
in this case is that the parties thought that
because the land had been acquired by
complainant at a public sale held in order to
satisfy a judgment in his favor in a case in
which respondent was complainants
counsel, the latter could not acquire the
land. The parties apparently had in mind Art.
1491 of the Civil Code which provides, in
pertinent parts, as follows:
ART. 1491. The following persons

cannot acquire by purchase, even at a
public or judicial auction, either in
person or through the mediation of
another:
....
(5) Justices, judges, prosecuting

attorneys, clerks of superior and
inferior courts, and other officers and
employees connected with the
administration of justice, the property
and rights in litigation or levied upon
an execution before the court within
whose jurisdiction or territory they
exercise their respective functions; this
prohibition includes the act of
acquiring by assignment and shall
apply to lawyers, with respect to the
property and rights which may be the
object of any litigation in which they
may take part by virtue of their
profession.[16]
Of course, the parties were mistaken in
thinking that respondent could not validly
acquire the land. In Guevara v. Calalang,
[17]
on facts similar to those in this case, we
held that the prohibition in Art. 1491 does
not apply to the sale of a parcel of land,
acquired by a client to satisfy a judgment in
his favor, to his attorney as long as the
property was not the subject of the
litigation. For indeed, while
judges,
prosecuting attorneys, and others connected
with the administration of justice are
prohibited from acquiring property or rights
in litigation or levied upon in execution, the
prohibition with respect to attorneys in the
case extends only to property and rights
which may be the object of any litigation in
which they may take part by virtue of their
profession.
The point is, the parties in this case
thought the transfer of the land to
respondent Abecia was prohibited and so
they contrived a way whereby the land
would be sold to Jose Gangay, whose wife
Anita is the sister of Mrs. Nena Abecia, and
then Gangay would sell the land to Mrs.
Abecia. As Jose Gangay stated in his

affidavit of March 6, 1985:[18]
4. T - Ano ba ang iyong masasabi tungkol sa
nangyari?
S - Sinabihan ako ni Atty. Esteban Abecia,
sapagkat siya raw ang abogado sa
lupang pinagkaguluhan, hindi maari na
siya ang nakalagay na nagbili ng upa sa
kanyang cliente na si Regalado Daroy,
dahil laban raw sa kanilang batas sa
mga abogado, kaya sinabihan ako ni
Atty. Esteban Abecia na maari bang
gamitin niya ang pangalan ko na ako
raw ang nakabili sa lupa ni Regalado
Daroy at paglipas raw ng isang taon, ay
kanya ng ilipat sa pangalan sa
documento at tituto hanggang sa
pangalan ng kanyang asawa na si Nena
Abecia.
5.T - Sumagot ka ba sa hiling ni Atty.
Esteban Abecia?
S - Opo, pumayag ako dahil silang dalawa, si
Regalado Daroy at si Atty. Esteban
Abecia ay aking mga bilas, sapagkat
ang isat-isa naming mga asawa ay
magkakapatid.
6. T - Ano man ang nangyari pagkatapos
noon?
S - Isang araw, ay pumunta si Atty. Esteban
Abecia sa amin at sinama niya ako doon
kay Atty. Wilfredo Linaac upang ipa
tunayan ang aking pangalan doon sa
documento sa pagbili, at dahil doon,
iyong documento sa pabili ay na
notariohan ni Atty. Wilfredo Linaac.
7. T - Binayaran ba kayo ni Nena Abecia at
ni Atty. Esteban Abecia sa pera na
naghaga ng isang libo tatlong daan at
limang[pung] pesos (P1,350.00) na
iyong ang halaga sa lupa.
S - Wala.
8. T - Ipakita ko sa iyo itong documento ng
pagbili at may takda ng petsa na Abril
17, 1971 notariadad ni Atty. Wilfredo
Linaac Signes sa Doc. No. 333, Pahina
48, Aklat No. VI; taon series sa 1971;

ano mang ang kaugnayan nito sa
documento ng pagbili?
S - Ang lahat na mga papiles sa sinasabi
ninyo ay wala akong nalalaman, ang
nalaman ko lang noon akoy dinala ni
Atty. Esteban Abecia sa oficina ni Atty.
Wilfredo Linaac tinanong ako kong
aking pirma iyong sa sa documento.
The sale of the land to Gangay may be

fictitious and, therefore, void, but that
complainant Regalado Daroy intended to
convey the land ultimately to respondent
Esteban Abecia appears to be the case.
It is true that the NBI found the
signature of Regalado Daroy on the deed of
sale made in favor of Jose Gangay to have
been forged. But Erasmo Damasing, the
notary public who notarized the deed,
affirmed that Daroy and his wife appeared
before him on March 31, 1971 and, in his
presence, signed the document in question.
[19]
Daisy Felicilda likewise stated in an
affidavit executed on February 17, 1986 that
she was a witness to the execution of the
deed of sale and that she saw Daroy signing
the deed of sale.[20]
Daroy never denied these claims of the
notary public and a witness to the execution
of the deed of sale. Nor was the NBI writing
expert ever called to testify on his finding
that the signature of Daroy in the deed of
sale appeared to have been signed by a
different hand. The finding that the deed of
sale was forged was simply implied from the
report of the NBI writing expert. As
complainant, Daroy had the burden of
proving that contrary to the recital in the
jurat he and his wife never appeared before
the notary public and acknowledged the
deed to be their voluntary act.
WHEREFORE, the resolution dated
March 26, 1994, of the IBP Board of
Governors is RECONSIDERED and the
complaint against respondent

Abecia is DISMISSED.
Esteban
SO ORDERED.
Melo, (Acting
Chairman),
Puno, and Martinez, JJ., concur.

Sales Cases Prelim

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Sales Cases Prelim

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[G.R. No. 109125. December 2, 1994.

Assailed, in this petition for review, is the decision

"On July 29, 1987 a Second Amended Complaint

interposing a special defense of lack of cause of

"WHEREFORE, judgment is hereby rendered in

"In resume, there was no meeting of the minds

economy today. We find no reason not to grant

"1. That for and in consideration of the sum of

"On August 30, 1991, respondent Judge issued an

"Presented before the Court is a Motion for

"WHEREFORE, let there be Writ of Execution

implement said Writ of Execution ordering the

We affirm the decision of the appellate court.

something or to render some service (Art. 1305,

Until the contract is perfected, it cannot, as an

A not too recent development in real estate

"Art. 1458. By the contract of sale one of the

constructive delivery (e.g., by the execution of a

(1) If the period is not itself founded upon or

before its acceptance, or, if an acceptance has

(2) If the period has a separate consideration, a

binding juridical relation with another but also on

"Finally, the questioned writ of execution is in

Even on the premise that such right of first

It is likewise quite obvious to us that the decision

The final judgment in Civil Case No. 87-41058, it

cralaw virtua1aw library

WHEREFORE, we UPHOLD the Court of Appeals in

The civil cases before the [Regional Trial Court of

of Luis A. Pujalte on October 29, 1945 and

WHEREFORE, premises considered, judgment is

No. 39488 in the name of plaintiffs herein and

WHEREFORE, in light of all the foregoing, the

Petitioners filed a Motion for Reconsideration, but

I. THE HONORABLE COURT OF APPEALS ERRED

and the appellee;

IV. THE HONORABLE COURT OF APPEALS ERRED

(a) When the findings are grounded entirely on

We review the factual and legal issues of this case

Reliance by the trial and appellate courts on

(a) The two (or more sales) transactions must

deed of sale dated June 20, 1958. It is settled

before him a number corresponding to the one in

This certificate of title is hereby cancelled (sic)

Emerenciana A.S. de Sylianteng, filing the

administration is null and void and title does not

Appellees' [herein petitioners'] predicament is

to different persons covering the same land in

proportional to and in approximation of the

This is a Petition for Review

Tinaggap ko ngayong araw na ito kay Engr.

Subsequent to the execution of the said

Following the pre-trial conference without the

Consequently, Guillermo and Mario initiated an

WHEREFORE, premises considered[,] the instant

On appeal, the Court of Appeals, in its

In the course of the trial, Guillermo died and he

WHEREFORE, the decision dated March 24, 1999

Petitioners Heirs of Reynaldo are now before this

To pay appellants P50,000.00 as

To pay attorney's fees and

ASSUMING THAT THERE IS A CONTRACT OF

In seeking modification of the appellate court's

WHEREFORE, [Reynaldo's] Motion for