Case Analysis 4 (Full Text)
G.R. No. L-18563 April 27, 1963 RADIOWEALTH, INC., plaintiff-appellant, vs.
JOSE LAVIN, ET AL., defendants-appellees. Bausa, Ampil and Suarez for plaintiff-appellant. Aurelio Quitoriano for defendants-appellees. REYES, J.B.L., J.:
There being no dispute as to the facts, the Court of Appeals certified this case to us for resolution of the question of law involved therein. The facts are stated in the resolution of certification.
On 14 March 1958, the plaintiff filed a complaint in the Court of First Instance of Manila to recover from jointly and severally, the balance of the purchase price of a certain machinery, the interests thereon,
liquidated damages, and attorney's fees.
It appears that on 9 July 1958, at the City of Manila, bought from the plaintiff a model WD Howard Wet Paddy Rotavator, with its accessories, for P3,300.00, paying a down payment of P1,000.00. As stipulated, the balance which was secured by a chattel mortagage on the machinery, was payable in 12 monthly installments, the first payment of P191.67 to commence on 12 August 1956. The defendants also executed a promissory note evidencing the same account. It was, likewise, agreed that the said balance shall bear 8% interest per annum, and if not paid on the due dates, the same shall bear 12% interest per annum, aside from 20% for liquidated damages and another 20% for attorney's fees. The machinery was delivered to the defendants at their residence at Tupac, Narvacan, Ilocos Sur.
The said defendants never paid any of the 12 installments, and all became due and payable.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1äwphï1.ñët
The defendants were declared in default for their failure to file an answer, and judgment was accordingly rendered against them.
However, they filed a petition for relief from judgment, and in the course of the hearing of this petition it was discovered that — long prior to the filing of the instant complaint on March 14, 1958, plaintiff firm had, on September 30, 1957, notified the Provincial Sheriff of Ilocos Sur including the defendants themselves of the firm's desire to foreclose the chattel mortgage constituted on the rotavator. The record reveals — and on this there appears no dispute either — that in consonance with plaintiff's notification to the sheriff of its desire to foreclose on the chattel the auction sale was scheduled on December 18, 1957; that pursuant to this request for foreclosure, Deputy Sheriff Anicoche went to Narvacan, Ilocos Sur, where he found defendant Jose Lavin and upon asking the latter for the mortgaged property, the same was pointed to by Lavin; that upon being informed by the deputy
sheriff of the foreclosure of the chattel and of the deputy's intention to seize the same, Lavin offered no objection thereto; that despite such lack of objection of defendant Lavin to the foreclosure, the chattel could not be taken to Manila there being no truck to bring it; that it was understood between the sheriff and Lavin that the former would fetch a truck from Vigan to pick up the chattel from Narvacan to Manila. The record also reveals that upon reaching Vigan on December 17, 1957 (the day prior to the scheduled public sale) the deputy sheriff received a letter from plaintiff's counsel including a wire asking him (sheriff) to suspend the auction sale as the defendants-mortgagors had voluntarily agreed to surrender the chattel; that as a result of this communication, the provincial sheriff of Ilocos Sur suspended the foreclosure sale of the chattel which, incidentally, remains in the possession of defendant Lavin.
The petition for relief was granted, and the case was set for hearing on the merits on 2 March 1959. The court —
considered defendants' petition for relief as their answer to plaintiff's complaint. No further hearing was held, as the record discloses no transcript of notes taken; and the parties having ostensibly rested their case, His Honor rendered on April 8, 1959 the decision which is now the subject of this appeal,
dismissing the case without prejudice to the presentation of the proper action to recover the chattel.
The defendants do not controvert the facts, but state that the plaintiff can no longer sue on the balance of the purchase price because of its previous election of the remedy of foreclosure. The plaintiff, on the other hand, argues that it has not availed of the remedy of foreclosure since the foreclosure was not pushed through to its finality.
As defined by the Court of Appeals, the issue is "whether the plaintiff is precluded to press for collection of an account secured by a chattel mortgage, after it shall have informed the defendants of its intention to foreclose on the same mortgage and the voluntary acceptance of such step (foreclosure) by defendants-mortgagors".
The contract being a sale of machinery payable in installments, the applicable provision of law is Article 1484 of the Civil Code, which gives the vendor the option to exercise any one of the alternative remedies therein mentioned: exact fulfillment of the obligation, cancel the sale, or foreclose the chattel mortgage. But the vendor-mortgagee in the present case desisted, on its own initiative, from consummating the auction sale, without gaining any advantage or benefit, and without causing any disadvantage or harm to the vendees-mortgagors. The least that could be said is that such desistance of the plaintiff from proceeding with the auction sale was a timely disavowal that cancelled and rendered useless its previous choice to foreclose; its acts, being extrajudicial, brought no trouble upon any court, and were harmless to the defendants. For this reason, the plaintiff can not be considered as having "exercised" (the code uses the word "exercise") the remedy of foreclosure because of its incomplete implementation, and, therefore, the plaintiff is not barred from suing on the unpaid account.
While there are some American authorities holding that the mere initiation of proceedings constitutes a bind choice of remedies that precludes pursuit of alternative courses, others hold that no binding election occurs before a decision on the merits is had (18 Am. Jur. 143), or a detriment to the other party supervenes; and we think the latter to be the better rule, considering that the creditor, in desisting from a foreclosure of the chattel mortgage, and suing instead for the unpaid balance, does not assume really inconsistent positions, and considering further that detriment to the opposing party is a prerequisite to the operation of estoppel.
PREMISES CONSIDERED, the decision of the court a quo is hereby set aside, and the case is ordered remanded to the said court for further proceedings in accordance with this opinion. Costs against the
appellees.
Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.
Case 2
G.R. No. L-14475 May 30, 1961
SOUTHERN MOTORS, INC., plaintiff-appellee, vs.
ANGELO MOSCOSO, defendant-appellant. Diosdado Garingalao for plaintiff-appellee. Calixto Zaldivar for defendant-appellant. PAREDES, J.:
The case was submitted on agreed statement of facts.
On June 6, 1957, plaintiff-appellee Southern Motors, Inc. sold to
defendant-appellant Angel Moscoso one Chevrolet truck, on installment basis, for P6,445.00. Upon making a down payment, the defendant executed a promissory note for the sum of P4,915.00, representing the unpaid balance of the purchase price (Annex A, complaint), to secure the payment of which, a chattel mortgage was constituted on the truck in favor of the plaintiff (Annex B). Of said account of P4,915.00, the defendant had paid a total of P550.00, of which P110.00 was applied to the interest up to August 15, 1957, and P400.00 to the principal, thus leaving an unpaid balance of P4,475.00. The defendant failed to pay 3 installments on the balance of the purchase price.
On November 4, 1957, the plaintiff filed a complaint against the
defendant, to recover the unpaid balance of the promissory note. Upon plaintiff's petition, embodied in the complaint, a writ of attachment was issued by the lower court on the properties Of the defendant. Pursuant thereto, the said Chevrolet truck, and a house and lot belonging to defendant, were attached by the Sheriff of San Jose, Antique, where defendant was residing on November 25, 1957, and said truck was brought to the plaintiff's compound in Iloilo City, for safe keeping. After attachment and before the trial of the case on the merits, acting upon the plaintiff's motion dated December 23, 1957, for the
immediate sale of the mortgaged truck, the Provincial Sheriff of Iloilo on January 2, 1958, sold the truck at public auction in which plaintiff itself was the only bidder for P1,000.00. The case had not been set for hearing, then.
The trial court on March 27, 1958, condemned the defendant to pay the plaintiff the amount of P4,475.00 with interest at the rate of 12% per annum from August 16, 1957, until fully paid, plus 10% thereof as attorneys fees and costs against which defendant interposed the present appeal, contending that the trial court erred —
(1) In not finding that the attachment caused to be levied on the truck and its immediate sale at public auction, was tantamount to the
foreclosure of the chattel mortgage on said truck; and (2) In rendering judgment in favor of the plaintiff-appellee.
Both parties agreed that the case is governed by Article 1484 of the new Civil Case, which provides: —
ART. 1484. In a contract of sale of personal property the price of which is payable in installments, the vendor may exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay; . (2) Cancel the sale, should the vendee's failure to pay cover two or more installments;
(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's failure to pay cover two or more installments. In this case, he shall have no further action against the purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void.
While the appellee claims that in filing the complaint, demanding payment of the unpaid balance of the purchase price, it has availed of the first remedy provided in said article i.e. to exact fulfillment of the obligation (specific performance); the appellant, on the other hand, contends that appellee had availed itself of the third remedy viz, the foreclosure of the chattel mortgage on the truck.
The appellant argues that considering history of the law, the circumstances leading to its enactment, the evil that the law was intended to correct and the remedy afforded (Art. 1454-A of the old Civil Code; Act No. 4122; Bachrach Motor Co. vs. Reyes, 62 Phil. 461, 466-469); that the appellee did not content itself by waiting for the judgment on the complaint and then executed the judgment which might be rendered in its favor, against the properties of the appellant; that the appellee obtained a preliminary attachment on the subject of the chattel mortgage itself and caused said truck to be sold at public
auction petition, in which he was bidder for P1,000.00; the result of which, was similar to what would have happened, had it foreclosed the mortgage pursuant to the provisions of Sec. 14 of Act No. 1508
(Chattel Mortgage Law) the said appellee had availed itself of the third remedy aforequoted. In other words, appellant submits that the matter should be looked at, not by the allegations in the complaint, but by the very effect and result of the procedural steps taken and that appellee tried to camouflage its acts by filing a complaint purportedly to exact the fulfillment of an obligation petition, in an attempt to circumvent the provisions of Article 1484 of the new Civil Code. Appellant concludes that under his theory, a deficiency judgment would be without legal basis.
We do not share the views of the appellant on this matter. Manifestly, the appellee had chosen the first remedy. The complaint is an ordinary civil action for recovery of the remaining unpaid balance due on the promissory note. The plaintiff had not adopted the procedure or methods outlined by Sec. 14 of the Chattel Mortgage Law but those prescribed for ordinary civil actions, under the Rules of Court. Had appellee elected the foreclosure, it would not have instituted this case in court; it would not have caused the chattel to be attached under Rule 59, and had it sold at public auction, in the manner prescribed by Rule 39. That the herein appellee did not intend to foreclose the
mortgage truck, is further evinced by the fact that it had also attached the house and lot of the appellant at San Jose, Antique. In the case of Southern Motors, Inc. vs. Magbanua, G.R. No. L-8578, Oct. 29, 1956, we held:
By praying that the defendant be ordered to pay it the sum of
P4,690.00 together with the stipulated interest of 12% per annum from 17 March 1954 until fully paid, plus 10% of the total amount due as attorney's fees and cost of collection, the plaintiff elected to exact the fulfillment of the obligation, and not to foreclose the mortgage on the truck. Otherwise, it would not have gone to court to collect the amount as prayed for in the complaint. Had it elected to foreclose the
mortgage on the truck, all the plaintiff had to do was to cause the truck to be sold at public auction pursuant to section 14 of the Chattel
Mortgage Law. The fact that aside from the mortgaged truck, another Chevrolet truck and two parcels of land belonging to the defendant were attached, shows that the plaintiff did not intend to foreclose the mortgage.
As the plaintiff has chosen to exact the fulfillment of the defendant's obligation, the former may enforce execution of the judgment rendered in its favor on the personal and real property of the latter not exempt from execution sufficient to satisfy the judgment. That part of the
judgment against the properties of the defendant except the
mortgaged truck and discharging the writ of attachment on his other properties is erroneous.
We perceive nothing unlawful or irregular in appellee's act of attaching the mortgaged truck itself. Since herein appellee has chosen to exact the fulfillment of the appellant's obligation, it may enforce execution of the judgment that may be favorably rendered hereon, on all personal and real properties of the latter not exempt from execution sufficient to satisfy such judgment. It should be noted that a house and lot at San Jose, Antique were also attached. No one can successfully contest that the attachment was merely an incident to an ordinary civil action. (Sections 1 & 11, Rule 59; Sec. 16, Rule 39). The mortgage creditor may recover judgment on the mortgage debt and cause an execution on the mortgaged property and may cause an attachment to be issued and levied on such property, upon beginning his civil action (Tizon vs. Valdez, 48 Phil. 910-911).
IN VIEW HEREOF, the judgment appealed from hereby is affirmed, with costs against the defendant-appellant.
[G.R. No. 103577. October 7, 1996]
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL, ANNABELLE C. GONZALES (for herself and on behalf of Floraida C. Tupper, as attorney-in-fact), CIELITO A. CORONEL, FLORAIDA A.
ALMONTE, and CATALINA BALAIS MABANAG, petitioners, vs. THE COURT OF APPEALS, CONCEPCION D. ALCARAZ and RAMONA PATRICIA
ALCARAZ, assisted by GLORIA F. NOEL as attorney-in-fact, respondents. D E C I S I O N
MELO, J.:
The petition before us has its roots in a complaint for specific performance to compel herein petitioners (except the last named, Catalina Balais Mabanag) to consummate the sale of a parcel of land with its improvements located along Roosevelt Avenue in Quezon City entered into by the parties sometime in January 1985 for the price of P1,240,000.00.
The undisputed facts of the case were summarized by respondent court in this wise:
On January 19, 1985, defendants-appellants Romulo Coronel, et. al. (hereinafter referred to as Coronels) executed a document entitled Receipt of Down Payment (Exh. A) in favor of plaintiff Ramona Patricia
Alcaraz (hereinafter referred to as Ramona) which is reproduced hereunder:
RECEIPT OF DOWN PAYMENT P1,240,000.00 - Total amount 50,000.00 - Down payment ---P1,190,000.00 - Balance
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty Thousand Pesos purchase price of our inherited house and lot, covered by TCT No. 119627 of the Registry of Deeds of Quezon City, in the total amount of P1,240,000.00.
We bind ourselves to effect the transfer in our names from our
deceased father, Constancio P. Coronel, the transfer certificate of title immediately upon receipt of the down payment above-stated.
On our presentation of the TCT already in or name, We will immediately execute the deed of absolute sale of said property and Miss Ramona Patricia Alcaraz shall immediately pay the balance of the
P1,190,000.00.
Clearly, the conditions appurtenant to the sale are the following: 1. Ramona will make a down payment of Fifty Thousand (P50,000.00) pesos upon execution of the document aforestated;
2. The Coronels will cause the transfer in their names of the title of the property registered in the name of their deceased father upon receipt of the Fifty Thousand (P50,000.00) Pesos down payment;
3. Upon the transfer in their names of the subject property, the
Coronels will execute the deed of absolute sale in favor of Ramona and the latter will pay the former the whole balance of One Million One Hundred Ninety Thousand (P1,190,000.00) Pesos.
On the same date (January 15, 1985), plaintiff-appellee Concepcion D. Alcaraz (hereinafter referred to as Concepcion), mother of Ramona, paid the down payment of Fifty Thousand (P50,000.00) Pesos (Exh. B, Exh. 2).
On February 6, 1985, the property originally registered in the name of the Coronels father was transferred in their names under TCT No. 327043 (Exh. D; Exh 4)
On February 18, 1985, the Coronels sold the property covered by TCT No. 327043 to intervenor-appellant Catalina B. Mabanag (hereinafter referred to as Catalina) for One Million Five Hundred Eighty Thousand (P1,580,000.00) Pesos after the latter has paid Three Hundred
Thousand (P300,000.00) Pesos (Exhs. F-3; Exh. 6-C)
For this reason, Coronels canceled and rescinded the contract (Exh. A) with Ramona by depositing the down payment paid by Concepcion in the bank in trust for Ramona Patricia Alcaraz.
On February 22, 1985, Concepcion, et. al., filed a complaint for a specific performance against the Coronels and caused the annotation of a notice of lis pendens at the back of TCT No. 327403 (Exh. E; Exh. 5).
On April 2, 1985, Catalina caused the annotation of a notice of adverse claim covering the same property with the Registry of Deeds of Quezon City (Exh. F; Exh. 6).
On April 25, 1985, the Coronels executed a Deed of Absolute Sale over the subject property in favor of Catalina (Exh. G; Exh. 7).
On June 5, 1985, a new title over the subject property was issued in the name of Catalina under TCT No. 351582 (Exh. H; Exh. 8).
(Rollo, pp. 134-136)
In the course of the proceedings before the trial court (Branch 83, RTC, Quezon City) the parties agreed to submit the case for decision solely on the basis of documentary exhibits. Thus, plaintiffs therein (now private respondents) proffered their documentary evidence accordingly marked as Exhibits A through J, inclusive of their corresponding
submarkings. Adopting these same exhibits as their own, then
defendants (now petitioners) accordingly offered and marked them as Exhibits 1 through 10, likewise inclusive of their corresponding
submarkings. Upon motion of the parties, the trial court gave them thirty (30) days within which to simultaneously submit their respective memoranda, and an additional 15 days within which to submit their corresponding comment or reply thereto, after which, the case would be deemed submitted for resolution.
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo Roura, who was then temporarily detailed to preside over Branch 82 of the RTC of Quezon City. On March 1, 1989, judgment was handed down by Judge Roura from his regular bench at Macabebe, Pampanga for the Quezon City branch, disposing as follows:
WHEREFORE, judgment for specific performance is hereby rendered ordering defendant to execute in favor of plaintiffs a deed of absolute sale covering that parcel of land embraced in and covered by Transfer Certificate of Title No. 327403 (now TCT No. 331582) of the Registry of Deeds for Quezon City, together with all the improvements existing thereon free from all liens and encumbrances, and once accomplished, to immediately deliver the said document of sale to plaintiffs and upon receipt thereof, the plaintiffs are ordered to pay defendants the whole balance of the purchase price amounting to P1,190,000.00 in cash. Transfer Certificate of Title No. 331582 of the Registry of Deeds for Quezon City in the name of intervenor is hereby canceled and declared to be without force and effect. Defendants and intervenor and all other persons claiming under them are hereby ordered to vacate the subject property and deliver possession thereof to plaintiffs. Plaintiffs claim for damages and attorneys fees, as well as the counterclaims of
defendants and intervenors are hereby dismissed. No pronouncement as to costs.
So Ordered.
Macabebe, Pampanga for Quezon City, March 1, 1989. (Rollo, p. 106)
A motion for reconsideration was filed by petitioners before the new presiding judge of the Quezon City RTC but the same was denied by Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the decision and to render anew decision by the undersigned Presiding Judge should be denied for the following reasons: (1) The instant case became
submitted for decision as of April 14, 1988 when the parties terminated the presentation of their respective documentary evidence and when the Presiding Judge at that time was Judge Reynaldo Roura. The fact that they were allowed to file memoranda at some future date did not change the fact that the hearing of the case was terminated before Judge Roura and therefore the same should be submitted to him for decision; (2) When the defendants and intervenor did not object to the authority of Judge Reynaldo Roura to decide the case prior to the
rendition of the decision, when they met for the first time before the undersigned Presiding Judge at the hearing of a pending incident in Civil Case No. Q-46145 on November 11, 1988, they were deemed to have acquiesced thereto and they are now estopped from questioning said authority of Judge Roura after they received the decision in
question which happens to be adverse to them; (3) While it is true that Judge Reynaldo Roura was merely a Judge-on-detail at this Branch of the Court, he was in all respects the Presiding Judge with full authority to act on any pending incident submitted before this Court during his incumbency. When he returned to his Official Station at Macabebe, Pampanga, he did not lose his authority to decide or resolve cases submitted to him for decision or resolution because he continued as Judge of the Regional Trial Court and is of co-equal rank with the undersigned Presiding Judge. The standing rule and supported by jurisprudence is that a Judge to whom a case is submitted for decision has the authority to decide the case notwithstanding his transfer to another branch or region of the same court (Sec. 9, Rule 135, Rule of Court).
Coming now to the twin prayer for reconsideration of the Decision dated March 1, 1989 rendered in the instant case, resolution of which now pertains to the undersigned Presiding Judge, after a meticulous examination of the documentary evidence presented by the parties, she is convinced that the Decision of March 1, 1989 is supported by evidence and, therefore, should not be disturbed.
IN VIEW OF THE FOREGOING, the Motion for Reconsideration and/or to Annul Decision and Render Anew Decision by the Incumbent Presiding Judge dated March 20, 1989 is hereby DENIED.
SO ORDERED.
Quezon City, Philippines, July 12, 1989. (Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of Appeals (Buena, Gonzaga-Reyes, Abad-Santos (P), JJ.) rendered its decision fully agreeing with the trial court.
Hence, the instant petition which was filed on March 5, 1992. The last pleading, private respondents Reply Memorandum, was filed on
September 15, 1993. The case was, however, re-raffled to undersigned ponente only on August 28, 1996, due to the voluntary inhibition of the Justice to whom the case was last assigned.
While we deem it necessary to introduce certain refinements in the disquisition of respondent court in the affirmance of the trial courts decision, we definitely find the instant petition bereft of merit.
The heart of the controversy which is the ultimate key in the resolution of the other issues in the case at bar is the precise determination of the legal significance of the document entitled Receipt of Down Payment which was offered in evidence by both parties. There is no dispute as to the fact that the said document embodied the binding contract between Ramona Patricia Alcaraz on the one hand, and the heirs of Constancio P. Coronel on the other, pertaining to a particular house and lot covered by TCT No. 119627, as defined in Article 1305 of the Civil Code of the Philippines which reads as follows:
Art. 1305. 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.
While, it is the position of private respondents that the Receipt of Down Payment embodied a perfected contract of sale, which perforce, they seek to enforce by means of an action for specific performance,
petitioners on their part insist that what the document signified was a mere executory contract to sell, subject to certain suspensive
conditions, and because of the absence of Ramona P. Alcaraz, who left for the United States of America, said contract could not possibly ripen into a contract of absolute sale.
Plainly, such variance in the contending parties contention is brought about by the way each interprets the terms and/or conditions set forth in said private instrument. Withal, based on whatever relevant and admissible evidence may be available on record, this Court, as were the courts below, is now called upon to adjudge what the real intent of the parties was at the time the said document was executed.
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:
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.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale because the first essential element is lacking. In a contract 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 sellers 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 of 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 condition which 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.
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 fulfillment of the suspensive condition such as the full payment of the purchase price, for instance, cannot be deemed a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance of the property. There is no double sale in such case. Title to the property will transfer to the buyer after registration because there is no defect in the owner-sellers title per se, but the latter, of course, may be sued for damages by the intending buyer.
In a conditional contract of sale, however, upon the fulfillment of the suspensive condition, the sale becomes absolute and this will definitely affect the sellers title thereto. In fact, if there had been previous
delivery of the subject property, the sellers 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 sellers 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 buyers title. In case a title is issued to the second buyer, the first buyer may seek reconveyance of the property subject of the sale.
With the above postulates as guidelines, we now proceed to the task of deciphering the real nature of the contract entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the words used therein should be given their natural and ordinary meaning unless a technical meaning was intended (Tan vs. Court of Appeals, 212 SCRA 586 [1992]). Thus, when petitioners declared in the said Receipt of Down Payment that they
--Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty Thousand Pesos purchase price of our inherited house and lot, covered by TCT No. 1199627 of the Registry of Deeds of Quezon City, in the total amount of P1,240,000.00.
without any reservation of title until full payment of the entire purchase price, the natural and ordinary idea conveyed is that they sold their property.
When the Receipt of Down payment is considered in its entirety, it becomes more manifest that there was a clear intent on the part of petitioners to transfer title to the buyer, but since the transfer
certificate of title was still in the name of petitioners father, they could not fully effect such transfer although the buyer was then willing and able to immediately pay the purchase price. Therefore, petitioners-sellers undertook upon receipt of the down payment from private respondent Ramona P. Alcaraz, to cause the issuance of a new
certificate of title in their names from that of their father, after which, they promised to present said title, now in their names, to the latter and to execute the deed of absolute sale whereupon, the latter shall, in turn, pay the entire balance of the purchase price.
The agreement could not have been a contract to sell because the sellers herein made no express reservation of ownership or title to the subject parcel of land. Furthermore, the circumstance which prevented the parties from entering into an absolute contract of sale pertained to the sellers themselves (the certificate of title was not in their names) and not the full payment of the purchase price. Under the established
facts and circumstances of the case, the Court may safely presume that, had the certificate of title been in the names of petitioners-sellers at that time, there would have been no reason why an absolute
contract of sale could not have been executed and consummated right there and then.
Moreover, unlike in a contract to sell, petitioners in the case at bar did not merely promise to sell the property to private respondent upon the fulfillment of the suspensive condition. On the contrary, having already agreed to sell the subject property, they undertook to have the
certificate of title change to their names and immediately thereafter, to execute the written deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell where the sellers, after compliance by the buyer with certain terms and
conditions, promised to sell the property to the latter. What may be perceived from the respective undertakings of the parties to the
contract is that petitioners had already agreed to sell the house and lot they inherited from their father, completely willing to transfer
ownership of the subject house and lot to the buyer if the documents were then in order. It just so happened, however, that the transfer certificate of title was then still in the name of their father. It was more expedient to first effect the change in the certificate of title so as to bear their names. That is why they undertook to cause the issuance of a new transfer of the certificate of title in their names upon receipt of the down payment in the amount of P50,000.00. As soon as the new certificate of title is issued in their names, petitioners were committed to immediately execute the deed of absolute sale. Only then will the obligation of the buyer to pay the remainder of the purchase price arise.
There is no doubt that unlike in a contract to sell which is most
commonly entered into so as to protect the seller against a buyer who intends to buy the property in installment by withholding ownership over the property until the buyer effects full payment therefor, in the contract entered into in the case at bar, the sellers were the ones who were unable to enter into a contract of absolute sale by reason of the fact that the certificate of title to the property was still in the name of their father. It was the sellers in this case who, as it were, had the impediment which prevented, so to speak, the execution of an contract of absolute sale.
What is clearly established by the plain language of the subject document is that when the said Receipt of Down Payment was prepared and signed by petitioners Romulo A. Coronel, et. al., the parties had agreed to a conditional contract of sale, consummation of
which is subject only to the successful transfer of the certificate of title from the name of petitioners father, Constancio P. Coronel, to their names.
The Court significantly notes that this suspensive condition was, in fact, fulfilled on February 6, 1985 (Exh. D; Exh. 4). Thus, on said date, the conditional contract of sale between petitioners and private
respondent Ramona P. Alcaraz became obligatory, the only act required for the consummation thereof being the delivery of the property by means of the execution of the deed of absolute sale in a public
instrument, which petitioners unequivocally committed themselves to do as evidenced by the Receipt of Down Payment.
Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to the case at bench. Thus,
Art. 1475. 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.
From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition. Since the condition contemplated by the parties which is the issuance of a certificate of title in petitioners names was fulfilled on February 6, 1985, the respective obligations of the parties under the contract of sale became mutually demandable, that is, petitioners, as sellers, were obliged to present the transfer certificate of title already in their names to private respondent Ramona P. Alcaraz, the buyer, and to
immediately execute the deed of absolute sale, while the buyer on her part, was obliged to forthwith pay the balance of the purchase price amounting to P1,190,000.00.
It is also significant to note that in the first paragraph in page 9 of their petition, petitioners conclusively admitted that:
3. The petitioners-sellers Coronel bound themselves to effect the transfer in our names from our deceased father Constancio P. Coronel, the transfer certificate of title immediately upon receipt of the
downpayment above-stated". The sale was still subject to this suspensive condition. (Emphasis supplied.)
(Rollo, p. 16)
Petitioners themselves recognized that they entered into a contract of sale subject to a suspensive condition. Only, they contend, continuing in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of first transferring the title to the property under their names, there could be no perfected contract of sale. (Emphasis supplied.)
(Ibid.)
not aware that they have set their own trap for themselves, for Article 1186 of the Civil Code expressly provides that:
Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
Besides, it should be stressed and emphasized that what is more
controlling than these mere hypothetical arguments is the fact that the condition herein referred to was actually and indisputably fulfilled on February 6, 1985, when a new title was issued in the names of
petitioners as evidenced by TCT No. 327403 (Exh. D; Exh. 4).
The inevitable conclusion is that on January 19, 1985, as evidenced by the document denominated as Receipt of Down Payment (Exh. A; Exh. 1), the parties entered into a contract of sale subject to the suspensive condition that the sellers shall effect the issuance of new certificate title from that of their fathers name to their names and that, on February 6, 1985, this condition was fulfilled (Exh. D; Exh. 4). We, therefore, hold that, in accordance with Article 1187 which pertinently provides
-Art. 1187. The effects of conditional obligation to give, once the
condition has been fulfilled, shall retroact to the day of the constitution of the obligation . . .
In obligations to do or not to do, the courts shall determine, in each case, the retroactive effect of the condition that has been complied with.
the rights and obligations of the parties with respect to the perfected contract of sale became mutually due and demandable as of the time of fulfillment or occurrence of the suspensive condition on February 6,
1985. As of that point in time, reciprocal obligations of both seller and buyer arose.
Petitioners also argue there could been no perfected contract on
January 19, 1985 because they were then not yet the absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a mode of transferring ownership as follows:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent and value of the
inheritance of a person are transmitted through his death to another or others by his will or by operation of law.
Petitioners-sellers in the case at bar being the sons and daughters of the decedent Constancio P. Coronel are compulsory heirs who were called to succession by operation of law. Thus, at the point their father drew his last breath, petitioners stepped into his shoes insofar as the subject property is concerned, such that any rights or obligations pertaining thereto became binding and enforceable upon them. It is expressly provided that rights to the succession are transmitted from the moment of death of the decedent (Article 777, Civil Code; Cuison vs. Villanueva, 90 Phil. 850 [1952]).
Be it also noted that petitioners claim that succession may not be declared unless the creditors have been paid is rendered moot by the fact that they were able to effect the transfer of the title to the
property from the decedents name to their names on February 6, 1985. Aside from this, petitioners are precluded from raising their supposed lack of capacity to enter into an agreement at that time and they cannot be allowed to now take a posture contrary to that which they took when they entered into the agreement with private respondent Ramona P. Alcaraz. The Civil Code expressly states that:
Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or
disproved as against the person relying thereon.
Having represented themselves as the true owners of the subject property at the time of sale, petitioners cannot claim now that they were not yet the absolute owners thereof at that time.
Petitioners also contend that although there was in fact a perfected contract of sale between them and Ramona P. Alcaraz, the latter breach her reciprocal obligation when she rendered impossible the consummation thereof by going to the United States of America, without leaving her address, telephone number, and Special Power of Attorney (Paragraphs 14 and 15, Answer with Compulsory
Counterclaim to the Amended Complaint, p. 2; Rollo, p. 43), for which reason, so petitioners conclude, they were correct in unilaterally rescinding the contract of sale.
We do not agree with petitioners that there was a valid rescission of the contract of sale in the instant case. We note that these supposed grounds for petitioners rescission, are mere allegations found only in their responsive pleadings, which by express provision of the rules, are deemed controverted even if no reply is filed by the plaintiffs (Sec. 11, Rule 6, Revised Rules of Court). The records are absolutely bereft of any supporting evidence to substantiate petitioners allegations. We have stressed time and again that allegations must be proven by sufficient evidence (Ng Cho Cio vs. Ng Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan, 2 SCRA 598 [1961]). Mere allegation is not an evidence (Lagasca vs. De Vera, 79 Phil. 376 [1947]).
Even assuming arguendo that Ramona P. Alcaraz was in the United States of America on February 6, 1985, we cannot justify petitioners-sellers act of unilaterally and extrajudicially rescinding the contract of sale, there being no express stipulation authorizing the sellers to
extrajudicially rescind the contract of sale. (cf. Dignos vs. CA, 158 SCRA 375 [1988]; Taguba vs. Vda. De Leon, 132 SCRA 722 [1984])
Moreover, petitioners are estopped from raising the alleged absence of Ramona P. Alcaraz because although the evidence on record shows that the sale was in the name of Ramona P. Alcaraz as the buyer, the sellers had been dealing with Concepcion D. Alcaraz, Ramonas mother, who had acted for and in behalf of her daughter, if not also in her own behalf. Indeed, the down payment was made by Concepcion D. Alcaraz with her own personal Check (Exh. B; Exh. 2) for and in behalf of
Ramona P. Alcaraz. There is no evidence showing that petitioners ever questioned Concepcions authority to represent Ramona P. Alcaraz when they accepted her personal check. Neither did they raise any objection as regards payment being effected by a third person.
Accordingly, as far as petitioners are concerned, the physical absence of Ramona P. Alcaraz is not a ground to rescind the contract of sale. Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her obligation to pay the full purchase price is concerned. Petitioners who are precluded from setting up the defense of the
physical absence of Ramona P. Alcaraz as above-explained offered no proof whatsoever to show that they actually presented the new
transfer certificate of title in their names and signified their willingness and readiness to execute the deed of absolute sale in accordance with their agreement. Ramonas corresponding obligation to pay the balance of the purchase price in the amount of P1,190,000.00 (as buyer) never became due and demandable and, therefore, she cannot be deemed to have been in default.
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal obligations may be considered in default, to wit: Art. 1169. Those obliged to deliver or to do something, incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.
x x x
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfill his obligation, delay by the other begins. (Emphasis supplied.)
There is thus neither factual nor legal basis to rescind the contract of sale between petitioners and respondents.
With the foregoing conclusions, the sale to the other petitioner,
Catalina B. Mabanag, gave rise to a case of double sale where Article 1544 of the Civil Code will apply, to wit:
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the
absence thereof to the person who presents the oldest title, provided there is good faith.
The record of the case shows that the Deed of Absolute Sale dated April 25, 1985 as proof of the second contract of sale was registered
with the Registry of Deeds of Quezon City giving rise to the issuance of a new certificate of title in the name of Catalina B. Mabanag on June 5, 1985. Thus, the second paragraph of Article 1544 shall apply.
The above-cited provision on double sale presumes title or ownership to pass to the buyer, the exceptions being: (a) when the second buyer, in good faith, registers the sale ahead of the first buyer, and (b) should there be no inscription by either of the two buyers, when the second buyer, in good faith, acquires possession of the property ahead of the first buyer. Unless, the second buyer satisfies these requirements, title or ownership will not transfer to him to the prejudice of the first buyer. In his commentaries on the Civil Code, an accepted authority on the subject, now a distinguished member of the Court, Justice Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge by the first buyer of the second sale cannot defeat the first buyers rights except when the second buyer first registers in good faith the second sale (Olivares vs. Gonzales, 159 SCRA 33). Conversely, knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register, since
knowledge taints his registration with bad faith (see also Astorga vs. Court of Appeals, G.R. No. 58530, 26 December 1984). In Cruz vs. Cabana (G.R. No. 56232, 22 June 1984, 129 SCRA 656), it was held that it is essential, to merit the protection of Art. 1544, second paragraph, that the second realty buyer must act in good faith in registering his deed of sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R. No. 95843, 02 September 1992).
(J. Vitug, Compendium of Civil Law and Jurisprudence, 1993 Edition, p. 604).
Petitioners point out that the notice of lis pendens in the case at bar was annotated on the title of the subject property only on February 22, 1985, whereas, the second sale between petitioners Coronels and petitioner Mabanag was supposedly perfected prior thereto or on February 18, 1985. The idea conveyed is that at the time petitioner Mabanag, the second buyer, bought the property under a clean title, she was unaware of any adverse claim or previous sale, for which reason she is a buyer in good faith.
We are not persuaded by such argument.
In a case of double sale, what finds relevance and materiality is not whether or not the second buyer in good faith but whether or not said
second buyer registers such second sale in good faith, that is, without knowledge of any defect in the title of the property sold.
As clearly borne out by the evidence in this case, petitioner Mabanag could not have in good faith, registered the sale entered into on February 18, 1985 because as early as February 22, 1985, a notice of lis pendens had been annotated on the transfer certificate of title in the names of petitioners, whereas petitioner Mabanag registered the said sale sometime in April, 1985. At the time of registration, therefore, petitioner Mabanag knew that the same property had already been previously sold to private respondents, or, at least, she was charged with knowledge that a previous buyer is claiming title to the same property. Petitioner Mabanag cannot close her eyes to the defect in petitioners title to the property at the time of the registration of the property.
This Court had occasions to rule that:
If a vendee in a double sale registers the sale after he has acquired knowledge that there was a previous sale of the same property to a third party or that another person claims said property in a previous sale, the registration will constitute a registration in bad faith and will not confer upon him any right. (Salvoro vs. Tanega, 87 SCRA 349 [1978]; citing Palarca vs. Director of Land, 43 Phil. 146; Cagaoan vs. Cagaoan, 43 Phil. 554; Fernandez vs. Mercader, 43 Phil. 581.)
Thus, the sale of the subject parcel of land between petitioners and Ramona P. Alcaraz, perfected on February 6, 1985, prior to that between petitioners and Catalina B. Mabanag on February 18, 1985, was correctly upheld by both the courts below.
Although there may be ample indications that there was in fact an agency between Ramona as principal and Concepcion, her mother, as agent insofar as the subject contract of sale is concerned, the issue of whether or not Concepcion was also acting in her own behalf as a co-buyer is not squarely raised in the instant petition, nor in such
assumption disputed between mother and daughter. Thus, We will not touch this issue and no longer disturb the lower courts ruling on this point.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED and the appealed judgment AFFIRMED.
G.R. No. L-15620 September 30, 1963 ANTONIO M. PATERNO, ET AL., petitioners, vs.
JOSE V. SALUD, respondent
Montenegro, Madayag and Viola for petitioners. Laurel Law Offices for respondent.
BAUTISTA ANGELO, J.:
Antonio Paterno and his sister Margarita Paterno Vda. de Javier brought on November 8, 1952 before the Court of First Instance of Batangas an action to recover from Jose V. Salud a parcel of land containing an area of 5 hectares situated in San Juan de Bolbok, Batangas, as well as the value of the crops harvested therefrom since 1950 and damages. Defendant claims to be the owner of the land which plaintiffs seek to recover having been in adverse possession thereof since 1890 and having registered it in his name Registration Case No. 23 of the same court on April 16, 1940 for which he obtained a torrens title. By way of counterclaim, defendant seeks in turn to recover plaintiffs a strip of land with an area of 1-1/2 hectares also situated in the same
municipality.
On May 31, 1954, after the reception of the evidence the court a quo rendered judgment ordering defends reconvey to plaintiffs the land mentioned in their complaint free from any lien or incumbrance, to pay P2,000.00 as moral damages, P224.00 as Actual damages and
P2,000.00 as attorney's fees, plus costs of suit. The court dismissed defendant's counterclaim.
When the case was taken to the Court of Appeals, decision was
reversed. The court not only dismissed plaintiffs' complaint but ordered them to reconvey to defend the land subject-matter of his counterclaim consisting 1-1/2 hectares, with costs. Plaintiffs interposed the present petition for review.
It appears from plaintiffs' evidence that on March 1912, Jose T. Paterno, as administrator of the estate Maximino Molo Agustin Paterno, acquired at an auction sale certain parcels of land that were levied in execution belonging to Esteban de Villa, among others, one of following
cuadrados de superficie, lindante al Norte rio Lawaye; al Este Francisco Marasigan; al Sur estero Lapa; y al Oeste Benedicto de Villa." From 1915 to 1927 Paterno leased this parcel of land together with the other parcels acquired at the auction sale to Esteban de Villa and Pia de Villa. In 1924, Paterno desiring have all the lands so acquired registered under the Registration Act, ordered their survey as described in the tax declarations and in the notice of sale, and it was discovered that the area of parcel No. 5 was not 1,200 sq. m. as described therein but 30.5285 hectares.
In March, 1926, Paterno sought the registration of lands acquired in the auction sale in the name of estate of Maximino Molo Agustin Paterno but parcel 5 was not included because its plan had not yet been a proved when the petition for registration was filed. In 1927, all these lands were adjudicated to Concepcion Paterno Vda. de Padilla,
daughter of the late Maximino Molo Agustin Paterno as her share in the estate. In that year, the lease of the lands to the De Villas was not renewed and so their possession was returned to the Paternos who appointed Felix Lontok as their overseer. Sometime thereafter,
apparently acceding to the plea of the De Villas, Concepcion Paterno agreed to retain only the eastern portion of the land, with an area of 5 hectares, leaving the rest with an area of 25 hectares to be subdivided between the De Villas.
In 1943, Concepcion Paterno died leaving all the lands she owned in Batangas, including the one in question, to plaintiffs as her heirs. Hence, from 1927, when the lease to the De Villas was terminated, to 1949, plaintiffs had been in possession of the lot with an area of 5 hectares first thru their overseer Felix Lontok, who later became
himself its lessee. In 1950, however, defendant wrested the possession of the land in question from plaintiffs in the manner they explained during the trial of the case.
Thus, according to plaintiffs, defendant secured in 1931 a plan for the land in question which was approved by the Bureau of Lands. In 1946, he declared this property for taxation under Tax Declaration No. 2209. This was later cancelled by Tax Declaration No. 4410 with the excuse that it was a correction of Tax Declaration No. 19566. In 1947,
defendant filed a petition for registration of the land omitting to
mention therein the claims of Jose T. Paterno and Concepcion Paterno although in the plan on which his petition for registration was based it was stated that the land described therein was identical to, that
surveyed for Concepcion Paterno and was part of a much larger tract of land surveyed for Jose T. Paterno. Defendant was ordered to amend his petition by including these two as claimants. This he did but he gave their addresses as San Juan, Batangas, although he knew they never
lived there. No copy of the petition was served on their overseer Felix Lontok. The petition was heard without opposition, and on April 16, 1948 the court issued a decree In favor of defendant over the land in question. In 1950, armed with this decree, defendant wrested the possession of the land from plaintiffs and reaped the harvest there from of some 20 to 25 cavanes of palay since that year. In the
meantime, defendant mortgaged the land to Philippine National Bank. Attempts were made to settle the controversy amicably, and when this Proved in the present action was taken by the plaintiffs.
Plaintiffs' theory, therefore, may be stated as follows: The land in question was originally a portion of a bigger parcel of land whose area was found to be 30.5285 hectares which was purchased by Jose T. Paterno, as administrator of the estate of Maximino Molo Agustin Paterno at an auction sale involving the properties of Esteban Villa. This land was later adjudicated to Concepcion Paterno Vda. de Padilla, who, upon her death, bequeathed it, together with other lands, to plaintiffs.
Defendant's evidence, on the other hand, discloses on June 25, 1881 Baltazar de Villa owned, among a parcel of land of the following description: "La tercera partida de candidad de unos veinte cavanes aproximados de semilla de palay, cuyos confines, al Este las tierras de Da Antonia de Villa, al Oeste las de Don Vicente de Villa, al Norte el Rio denominado Lawaye, y al Sur las tierras de Dña. Paula de Mercado con riachuelo denominado Lapa en Medio," (Possessory informacion Exhibit 6-a.) Baltazar de Villa is the father of Esteban de Villa and de Villa, while Pia de Villa is the mother of Jose V. Salud, defendant herein. In 1912, Jose T. Paterno, as administrator of the estate of Maximino Molo Agustin Paterno, bought at an auction sale certain lands
belonging to Esteban de Villa pursuant to a levy in execution issued to enforce a judgment obtained against Esteban de Villa. Among the lands so purchased was one described as follows: "No. 5. Terreno en dicho barrio de Libato, de 1200 metros cuadrados de superficie,
lindante al Norte rio Lawaye; al Este Francisco Marasigan; al Sur estero Lapa; y al Oeste Benedicto de Villa.".1awphîl.nèt
After Pia de Villa acquired the parcel of land covered by the possessory information Exhibit 6-A from her father Baltazar, she immediately
entered into its possession with the exception of some portions thereof which she later sold, and continued in said possession until her death. Of said land, Pia donated a portion containing 12 hectares to Vicente de Villa; sold another containing 8 hectares to Antonio Adapon; and a portion thereof situated on the eastern portion part containing an area of 5 hectares was transmitted by succession to her son Jose V. Salud.
On April 16, 1948, defendant Salud sought the registration of this parcel of land, together with others that belonged to him, for which he secured a torrens title in the manner outlined elsewhere in this
decision.
We may, therefore, say that defendant's theory is as follows: Neither the land in question, nor the larger tract of land containing 30.5285 hectares of which it was originally a part, was included in the auction in 1912 of the properties of Esteban de Villa, and so none was
transmitted by plaintiffs' predecessor-in-interest to Concepcion Vda. de Padilla, nor devised or transmitted by the, latter to plaintiffs. Plaintiffs failed to identify the parcel of land which they claim to be their own. The land in question belonged to defendant's mother Pia de Villa, from whom he derived his title. And the land which properly belong to
plaintiffs is the strip of 1,200 sq. m. on the eastern edge of another property belonging to defendant which was used by the Paternos as a road to the provincial highway, which land was the one bought at the auction sale in 1912.
Predicated upon the evidence presented by both parties in relation to the issues raised by them, the Court of Appeals reached the following conclusion:.
After a careful perusal of the proofs of record, we are of the firm belief that the land in question and the bigger Parcel of 30.5285 hectares of which it was originally a part, were not included in the auction in 1912 of the properties of Esteban de Villa; that these lands were not
transmitted by Maximino Molo Agustin Paterno to Concepcion P. de Padilla; that the land in question was not devised or transmitted by Concepcion de Padilla to plaintiffs; and that plaintiffs failed to identify conclusively the land in question over which they claim ownership; that the land in question belonged to defendant's mother Pia de Villa, from whom he derived his title; and that plaintiffs' land is the strip of 1,200 square meters used by them as a road from other property belonging to them, to the Provincial highway.
The evidence of record fully justifies the above finding. It appears that among the lands bought by the administrator of the estate of Maximino Molo Agustin Pat at the auction sale of the properties of Esteban de Villa which was of particular interest in this case is the described in the notice of sale as follows. "No. 5. Terreno en dicho barrio de Libato, de 1200 metros cuadrados superficie, lindante al Norte rio Lawaya; al Este Francisco Marasigan; al Sur estero Lapa; y al Oeste Benedicto de Villa." This land only carries an area of 1,200 sq. m. There is nothing to show that this forms part an original parcel of land containing an area of 30.528 hectares which in 1912 also belonged to Esteban de Villa. The
only thing that plaintiffs claim to bolster up their contention is that when this parcel of land was survey in 1924, together with other parcels of land bought in auction sale, as a preparatory step for their registration under the Land Registration Act, it was discovered the parcel No. 5, which was sold to them by the sheriff in 1912, had an area of not only 1,200 sq. m. but 30.528 hectares, which claim
certainly is untenable because a piece of land having an area of 1,200 sq. m. cannot be said be identical to one having an area of 30.5285 hectares which is more than 250 times bigger. Contrary to plaintiffs' contention, the boundaries of the two properties are not also the same. The identical and natural boundaries are only on the north and south - Lawaye river on the north and Lapa creek on the south; there being no natural boundaries on the east and west, as there are on the sides merely names of adjoining owners. There is no evidence that these adjoining owners do not own other land which adjoin other properties of Esteban de Villa al these rivers. This great difference in area was not satisfactorily explained.
While there are authorities that uphold the proposition that in
identifying a particular piece of land its boundaries and not the area are the main factors to be considered,1 however, this only holds true when the boundaries given are, sufficiently certain and the identity of the land proved by the boundaries clearly indicates that an erroneous statement concerning the area can be disregarded or ignored.
Otherwise, the area stated in the document should be followed.2 Thus, in a case where a petitioner claimed in his application to be entitled to the registration of a parcel of land whose area after the survey turned out to be 626 hectares while the grant given to him only mentions 92 hectares, the court rejected the claim after laying down the following principle: "While the proposition of law laid down by the court below may be true to the effect that natural boundaries will prevail over area, yet when the land sought to be registered is almost seven times as much as that described in the deed, the evidence as to natural
boundaries must be very clear and convincing before that rule can be applied."3 (Emphasis supplied) Plaintiffs' contention was, therefore, properly rejected by the Court of Appeals it appearing that it is only on the north and south sides of the property in question where the natural boundaries are identical because on the east and west there are no natural boundaries but only the names of adjoining owners who were not shown not to own other properties adjoining those of Esteban de Villa. The discrepancy in the measurement of the two pieces of land is so great that there could hardly be any room to suppose that a 30-hectare land area might have been wrongly or inaccurately estimated to be only 1,200 sq. m.
Another factor that argues against plaintiffs' claim is the fact that the inventory and partition of the estate of Maximino Molo Agustin Paterno does not show that the land in question was ever transmitted to
Concepcion Paterno Vda. de Padilla, plaintiffs' predecessor-in-interest. Nor does the inventory of the estate of the late Concepcion Paterno de Padilla, which includes all her real properties in Batangas, makes any mention of the property in question. For this reason, the Court of Appeals could bring its mind to conform to the claim of plaintiffs the land in question is the one included in the action sale held in 1912 of the properties of Esteban de Villa and which was later handed down to them by their predecessor-in-interest Concepcion Paterno Vda. de Padilla, as may be seen from the following comment:.
... Moreover, the inventory and partition of the estate of Maximino Molo Agustin Paterno, shows that the property in question was never
transmitted to said Concepcion de Padilla (Exhibits HH-1 & HH-39). The inventory of Concepcion de Padilla's estate, which included all her real properties in tangos, failed to mention the property in question.
(Exhibit 3). The inventory mentioned properties of various areas, registered under the Torrens system in the name of Concepcion Paterno; and the property in question was not then registered under the Torrens system. It was shown that this inventory was presented by her administratrix before the probate court and the same was
approved by said court, without the objection of the plaintiffs,
notwithstanding their awareness of the pendency of the administration proceedings. Again, in the project of partition Concepcion de Padilla's estate (Exhibit 4), wherein various properties in Batangas were
adjudicated to the plaintiffs, the property in question was not included. It is worthy to note that plaintiffs, the administratrix and other
instituted heirs, signed the said project of partition, which was presented to and approved by the court (Exhibit 5). Again, it is conceded that the project was denominated "partial" project of
partition. But this does not refer to any undiscovered "residuary estate" in Batangas, not adjudicated to the plaintiffs, but the interest and participation of the deceased testatrix on the properties under administration in cases Nos. 46058 to 46063, CFI of Manila - to the testate estate of Concepcion's husband Narciso Padilla (Exh. 4 clause 11). They do not refer to the properties of Concepcion de Padilla in Batangas, for as far her Batangas properties are concerned, the project of partition was complete. In fact, answering the question "Are you sure that all properties within the jurisdiction of the province of Batangas, left by your aunt Concepcion Paterno Vda. de Padilla were enumerated in that inventory?", plaintiff Antonio Paterno said: "Yes" (t.s.n. p. 117 March 19, 1953), which inventory heretofore stated, does not include the property in question (Exhibit 3). If, as alleged by
aunt Concepcion's desire to have all her Batangas properties
registered, it not satisfactorily explained why he or his aunt had not commenced registration proceedings of the land under consideration, notwithstanding the fact that he received the plan, surveyor's
certificate and technical description of the land (Exhibits B, 1 and B-2), after the death of his aunt in 1943 and that the property was
allegedly adjudicated to him in 1946. This coupled with the other facts and factors heretofore discussed, can only, mean that plaintiffs did not acquire the land in question from their aunt Concepcion de Padilla. Plaintiffs tried to trace the history of the land in question thru an elaborate exposition of the chain of tax declarations covering it since 1923, but this cannot help them any as long as the fundamental question relative to the identity of the land is not resolved. And here, as we have said, this is not the case. The lower court emphasized the circumstance that the Tax Declaration No. 8100 in the name of Pia de Villa (Exhibit KK-8) which superseded Exhibit KK-7 was cancelled in 1922 by Tax Declaration No. 8388 in the name of Jose T. Paterno. But it should be noted that said Tax Declaration No. 8388 was in the following year 1923 cancelled partially by Tax Declaration No. 8624 in the name of Pia de Villa, which declares an area of 25.6876 hectares and by Tax Declaration No. 8623 in the name of Jose T. Paterno which declares an area of 1,200 sq. m., assessed at P30.00, and for which the tax paid was only P0.26. The position of plaintiffs is rendered more doubtful by the fact that Pia de Villa and not Esteban de Villa was the declared owner in 1918 of the large tract of land of which the 5 hectares in question forms part as shown by the very diagram made by plaintiffs. This can only mean that after the auction sale in 1912, Pia de Villa was the owner of the entire property in 1918, and that what was sold to Jose T. Paterno was in fact another land of 1,200 sq. m. owned by Esteban de Villa.
On the other hand, defendant has proven that the property in question belonged to his mother Pia de Villa from whom he derived his title. The original parcel of land described in the possessory information title Exhibit 6-a was inherited by Pia de Villa upon the death of her father Baltazar de Villa. Pia's ownership was even admitted by Plaintiffs. Pia commenced possession of said land and continued therein until her death except with regard to certain portions which he disposed of to wit: by donation to Vicente de Villa (1-1/2 hectares), by sale to
Bonifacio Hernandez (5 hectares), and by mortgage to one Adapon (8 hectares), thereby leaving her five hectares on easternmost portion to her son Jose V. Salud which is land in question. She declared said piece of land in name for taxation purposes and as early as 1914 she paid the taxes thereon. Even when she was still alive Pia already
