Beruflich Dokumente
Kultur Dokumente
October 2, 2001
ZENAIDA
M.
SANTOS, petitioner,
vs.
CALIXTO SANTOS, ALBERTO SANTOS, ROSA SANTOS-CARREON and
ANTONIO SANTOS, respondents.
QUISUMBING, J.:
This petition for review seeks to annul and set aside the decision date March
10, 1998 of the Court of Appeals that affirmed the decision of the Regional
Trial Court of Manila, Branch 48, dated March 17, 1993. Petitioner also seeks
to annul the resolution that denied her motion for reconsideration.
On March 17, 1993, the trial court decided in private respondents' favor, thus:
The spouses Jesus and Rosalia Santos owned a parcel of land registered
under TCT No. 27571 with an area of 154 square meters, located at Sta.
Cruz Manila. On it was a four-door apartment administered by Rosalia who
rented them out. The spouses had five children, Salvador, Calixto, Alberto,
Antonio and Rosa.
On January 19, 1959, Jesus and Rosalia executed a deed of sale of the
properties in favor of their children Salvador and Rosa. TCT No. 27571
became TCT No. 60819. Rosa in turn sold her share to Salvador on
November 20, 1973 which resulted in the issuance of a new TCT No.
113221. Despite the transfer of the property to Salvador, Rosalia continued to
lease receive rentals form the apartment units.1wphi1.nt
On November 1, 1979, Jesus died. Six years after or on January 9, 1985,
Salvador died, followed by Rosalia who died the following month. Shortly
after, petitioner Zenaida, claiming to be Salvador's heir, demanded the rent
from Antonio Hombrebueno,2 a tenant of Rosalia. When the latter refused to
pay, Zenaida filed and ejectment suit against him with the Metropolitan Trial
Court of Manila, Branch 24, which eventually decided in Zenaida's favor.
Hence, this petition where petitioner avers that the Court of Appeals erred in:
I.
SO OREDERED.3
The trial court reasoned that notwithstanding the deeds of sale transferring
the property to Salvador, the spouses Rosalia and Jesus continued to
possess the property and to exercise rights of ownership not only by
receiving the monthly rentals, but also by paying the realty taxes. Also,
Rosalia kept the owner's duplicate copy of the title even after it was already
in the name of Salvador. Further, the spouses had no compelling reason in
1959 to sell the property and Salvador was not financially capable to
purchase it. The deeds of sale were therefore fictitious. Hence, the action to
assail the same does not prescribe.4
Upon appeal, the Court of Appeals affirmed the trial court's decision dated
March 10, 1998. It held that in order for the execution of a public instrument
to effect tradition, as provided in Article 1498 of the Civil Code, 5 the vendor
shall have had control over the thing sold, at the moment of sale. It was not
enough to confer upon the purchaser the ownership and the right of
possession. The thing sold must be placed in his control. The subject deeds
of sale did not confer upon Salvador the ownership over the subject property,
because even after the sale, the original vendors remained in dominion,
control, and possession thereof. The appellate court further said that if the
reason for Salvador's failure to control and possess the property was due to
his acquiescence to his mother, in deference to Filipino custom, petitioner, at
least, should have shown evidence to prove that her husband declared the
property for tax purposes in his name or paid the land taxes, acts which
strongly indicate control and possession. The appellate court disposed:
WHEREFORE, finding no reversible error in the decision appealed
from, the same is hereby AFFIRMED. No pronouncement as to
costs.
II.
HOLDING THAT DUE EXECUTION OF A PUBLIC INSTRUMENT
IS NOT EQUIVALENT TO DELIVERY OF THE LAND IN DISPUTE.
III.
NOT FINDING THAT THE CAUSE OF ACTION OF ROSALIA
SANTOS HAD PRESCRIBED AND/OR BARRED BY LACHES.
IV.
IGNORING PETITIONER'S ALLEGATION TO THE EFFECT
THAT PLAINTIFF DR. ROSA [S.] CARREON IS NOT
DISQUALIFIED TO TESTIFY AS TO THE QUESTIONED DEEDS
OF SALE CONSIDERING THAT SALVADOR SANTOS HAS LONG
BEEN DEAD.7
In this petition, we are asked to resolve the following:
1. Are payments of realty taxes and retention of possession
indications of continued ownership by the original owners?
2. Is a sale through a public instrument tantamount to delivery of the
thing sold?
3. Did the cause of action of Rosalia Santos and her heirs prescribe?
1498, in turn, provides that when the sale is made through a public
instrument, its execution is equivalent to the delivery of the thing subject of
the contract. Petitioner avers that applying said provisions to the case,
Salvador became the owner of the subject property by virtue of the two
deeds of sale executed in his favor.
Nowhere in the Civil Code, however, does it provide that execution of a deed
of sale is a conclusive presumption of delivery of possession. The Code
merely said that the execution shall be equivalent to delivery. The
presumption
can
be
rebutted
by
clear
and
convincing
evidence.16 Presumptive delivery can be negated by the failure of the vendee
to take actual possession of the land sold.17
In Danguilan vs. IAC, 168 SCRA 22, 32 (1988), we held that for the execution
of a public instrument to effect tradition, the purchaser must be placed in
control of the thing sold. When there is no impediment to prevent the thing
sold from converting to tenancy of the purchaser by the sole will of the
vendor, symbolic delivery through the execution of a public instrument is
sufficient. But if, notwithstanding the execution of the instrument, the
purchaser cannot have the enjoyment and material tenancy nor make use of
it himself or through another in his name, then delivery has not been
effected.
As found by both the trial and appellate courts and amply supported by the
evidence on record, Salvador was never placed in control of the property.
The original sellers retained their control and possession. Therefore, there
was no real transfer of ownership.
Moreover, in Norkis Distributors, Inc. vs. CA, 193 SCRA 694, 698-699 (1991),
citing the land case of Abuan vs. Garcia, 14 SCRA 759 (1965), we held that
the critical factor in the different modes of effecting delivery, which gives legal
effect to the act is the actual intention of the vendor to deliver, and its
acceptance by the vendee. Without that intention, there is no tradition. In the
instant case, although the spouses Jesus and Rosalia executed a deed of
sale, they did not deliver the possession and ownership of the property to
Salvador and Rosa. They agreed to execute a deed of sale merely to
accommodate Salvador to enable him to generate funds for his business
venture.
Despite the offer of full payment by the petitioner to Libra for the tractor, the
immediate release could not be effected because Wilfredo Dy had obtained
financing not only for said tractor but also for a truck and Libra insisted on full
payment for both.
was seized and levied by the sheriff by virtue of the alias writ of execution
issued in Civil Case No. R-16646.
Meanwhile, Civil Case No. R-16646 entitled "Gelac Trading, Inc. v. Wilfredo
Dy", a collection case to recover the sum of P12,269.80 was pending in
another court in Cebu.
The petitioner now comes to the Court raising the following questions:
A.
B.
WHETHER OR NOT THE HONORABLE COURT OF
APPEALS EMBARKED ON MERE CONJECTURE AND
SURMISE IN HOLDING THAT THE SALE OF THE
AFORESAID TRACTOR TO PETITIONER WAS DONE IN
FRAUD OF WILFREDO DY'S CREDITORS, THERE BEING
NO EVIDENCE OF SUCH FRAUD AS FOUND BY THE
TRIAL COURT.
On April 8, 1988, the RTC rendered judgment in favor of the petitioner. The
dispositive portion of the decision reads as follows:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendant, pronouncing that the
plaintiff is the owner of the tractor, subject matter of this
case, and directing the defendants Gelac Trading
Corporation and Antonio Gonzales to return the same to the
plaintiff herein; directing the defendants jointly and severally
to pay to the plaintiff the amount of P1,541.00 as expenses
for hiring a tractor; P50,000 for moral damages; P50,000 for
exemplary damages; and to pay the cost. (Rollo, pp. 35-36)
On appeal, the Court of Appeals reversed the decision of the RTC and
dismissed the complaint with costs against the petitioner. The Court of
Appeals held that the tractor in question still belonged to Wilfredo Dy when it
C.
WHETHER OR NOT THE HONORABLE COURT OF
APPEALS MISAPPREHENDED THE FACTS AND ERRED
IN NOT SUSTAINING THE FINDING OF THE TRIAL
COURT THAT THE SALE OF THE TRACTOR BY
RESPONDENT GELAC TRADING TO ITS CORESPONDENT ANTONIO V. GONZALES ON AUGUST 2,
1980 AT WHICH TIME BOTH RESPONDENTS ALREADY
KNEW OF THE FILING OF THE INSTANT CASE WAS
VIOLATIVE OF THE HUMAN RELATIONS PROVISIONS OF
provision of Article 319 par. 2 of the Revised Penal Code. And even if no
consent was obtained from the mortgagee, the validity of the sale would still
not be affected.
The respondents claim that at the time of the execution of the deed of sale,
no constructive delivery was effected since the consummation of the sale
depended upon the clearance and encashment of the check which was
issued in payment of the subject tractor.
Thus, we see no reason why Wilfredo Dy, as the chattel mortgagor can not
sell the subject tractor. There is no dispute that the consent of Libra Finance
was obtained in the instant case. In a letter dated August 27, 1979, Libra
allowed the petitioner to purchase the tractor and assume the mortgage debt
of his brother. The sale between the brothers was therefore valid and binding
as between them and to the mortgagee, as well.
Article 1496 of the Civil Code states that the ownership of the thing sold is
acquired by the vendee from the moment it is delivered to him in any of the
ways specified in Articles 1497 to 1501 or in any other manner signing an
agreement that the possession is transferred from the vendor to the vendee.
We agree with the petitioner that Articles 1498 and 1499 are applicable in the
case at bar.
Article 1498 states:
Art. 1498. When the sale is made through a public
instrument, the execution thereof shall be equivalent to the
delivery of the thing which is the object of the contract, if
from the deed the contrary does not appear or cannot clearly
be inferred.
xxx xxx xxx
Article 1499 provides:
Article 1499. The delivery of movable property may likewise
be made by the mere consent or agreement of the
contracting parties, if the thing sold cannot be transferred to
the possession of the vendee at the time of the sale, or if the
latter already had it in his possession for any other reason.
(1463a)
The payment of the check was actually intended to extinguish the mortgage
obligation so that the tractor could be released to the petitioner. It was never
intended nor could it be considered as payment of the purchase price
because the relationship between Libra and the petitioner is not one of sale
but still a mortgage. The clearing or encashment of the check which
produced the effect of payment determined the full payment of the money
obligation and the release of the chattel mortgage. It was not determinative of
the consummation of the sale. The transaction between the brothers is
distinct and apart from the transaction between Libra and the petitioner. The
contention, therefore, that the consummation of the sale depended upon the
encashment of the check is untenable.
The sale of the subject tractor was consummated upon the execution of the
public instrument on September 4, 1979. At this time constructive delivery
was already effected. Hence, the subject tractor was no longer owned by
Wilfredo Dy when it was levied upon by the sheriff in December, 1979. Well
settled is the rule that only properties unquestionably owned by the judgment
debtor and which are not exempt by law from execution should be levied
upon or sought to be levied upon. For the power of the court in the execution
of its judgment extends only over properties belonging to the judgment
debtor. (Consolidated Bank and Trust Corp. v. Court of Appeals, G.R. No.
78771, January 23, 1991).
The respondents further claim that at that time the sheriff levied on the tractor
and took legal custody thereof no one ever protested or filed a third party
claim.
It is inconsequential whether a third party claim has been filed or not by the
petitioner during the time the sheriff levied on the subject tractor. A person
other than the judgment debtor who claims ownership or right over levied
properties is not precluded, however, from taking other legal remedies to
prosecute his claim. (Consolidated Bank and Trust Corp. v. Court of
Appeals, supra) This is precisely what the petitioner did when he filed the
action for replevin with the RTC.
Anent the second and third issues raised, the Court accords great respect
and weight to the findings of fact of the trial court. There is no sufficient
evidence to show that the sale of the tractor was in fraud of Wilfredo and
August 3, 1918
A.
A.
ADDISON, plaintiff-appellant,
vs.
MARCIANA FELIX and BALBINO TIOCO, defendants-appellees.
Thos.
D.
Aitken
Modesto Reyes and Eliseo Ymzon for appellees.
for
appellant.
FISHER, J.:
By a public instrument dated June 11, 1914, the plaintiff sold to the defendant
Marciana Felix, with the consent of her husband, the defendant Balbino
Tioco, four parcels of land, described in the instrument. The defendant Felix
As Dalloz rightly says (Gen. Rep., vol. 43, p. 174) in his commentaries on
article 1604 of the French Civil code, "the word "delivery" expresses a
complex idea . . . the abandonment of the thing by the person who makes the
delivery and the taking control of it by the person to whom the delivery is
made."
The execution of a public instrument is sufficient for the purposes of the
abandonment made by the vendor; but it is not always sufficient to permit of
the apprehension of the thing by the purchaser.
The supreme court of Spain, interpreting article 1462 of the Civil Code, held
in its decision of November 10, 1903, (Civ. Rep., vol. 96, p. 560) that this
article "merely declares that when the sale is made through the means of a
public instrument, the execution of this latter is equivalent to the delivery of
the thing sold: which does not and cannot mean that this fictitious tradition
necessarily implies the real tradition of the thing sold, for it is incontrovertible
that, while its ownership still pertains to the vendor (and with greater reason if
it does not), a third person may be in possession of the same thing;
wherefore, though, as a general rule, he who purchases by means of a public
instrument should be deemed . . . to be the possessor in fact, yet this
presumption gives way before proof to the contrary."
It is evident, then, in the case at bar, that the mere execution of the
instrument was not a fulfillment of the vendors' obligation to deliver the thing
sold, and that from such non-fulfillment arises the purchaser's right to
demand, as she has demanded, the rescission of the sale and the return of
the price. (Civ. Code, arts. 1506 and 1124.)
Of course if the sale had been made under the express agreement of
imposing upon the purchaser the obligation to take the necessary steps to
obtain the material possession of the thing sold, and it were proven that she
knew that the thing was in the possession of a third person claiming to have
property rights therein, such agreement would be perfectly valid. But there is
nothing in the instrument which would indicate, even implicitly, that such was
the agreement. It is true, as the appellant argues, that the obligation was
incumbent upon the defendant Marciana Felix to apply for and obtain the
registration of the land in the new registry of property; but from this it cannot
be concluded that she had to await the final decision of the Court of Land
CRUZ, J.:
The subject of this dispute is the two lots owned by Domingo Melad which is
claimed by both the petitioner and the respondent. The trial court believed
the petitioner but the respondent court, on appeal, upheld the respondent.
The case is now before us for a resolution of the issues once and for all.
On January 29, 1962, the respondent filed a complaint against the petitioner
in the then Court of First Instance of Cagayan for recovery of a farm lot and a
residential lot which she claimed she had purchased from Domingo Melad in
1943 and were now being unlawfully withheld by the defendant. 1 In his
answer, the petitioner denied the allegation and averred that he was the
owner of the said lots of which he had been in open, continuous and adverse
At the trial, the plaintiff presented a deed of sale dated December 4, 1943,
purportedly signed by Domingo Melad and duly notarized, which conveyed
the said properties to her for the sum of P80.00. 4 She said the amount was
earned by her mother as a worker at the Tabacalera factory. She claimed to
be the illegitimate daughter of Domingo Melad, with whom she and her
mother were living when he died in 1945. She moved out of the farm only
when in 1946 Felix Danguilan approached her and asked permission to
cultivate the land and to stay therein. She had agreed on condition that he
would deliver part of the harvest from the farm to her, which he did from that
year to 1958. The deliveries having stopped, she then consulted the
municipal judge who advised her to file the complaint against Danguilan. The
plaintiff 's mother, her only other witness, corroborated this testimony. 5
For his part, the defendant testified that he was the husband of Isidra Melad,
Domingo's niece, whom he and his wife Juana Malupang had taken into their
home as their ward as they had no children of their own. He and his wife
lived with the couple in their house on the residential lot and helped Domingo
with the cultivation of the farm. Domingo Melad signed in 1941 a private
instrument in which he gave the defendant the farm and in 1943 another
private instrument in which he also gave him the residential lot, on the
understanding that the latter would take care of the grantor and would bury
him upon his death. 6 Danguilan presented three other witnesses 7 to
corroborate his statements and to prove that he had been living in the land
since his marriage to Isidra and had remained in possession thereof after
Domingo Melad's death in 1945. Two of said witnesses declared that neither
the plaintiff nor her mother lived in the land with Domingo Melad. 8
The decision of the trial court was based mainly on the issue of possession.
Weighing the evidence presented by the parties, the judge 9 held that the
defendant was more believable and that the plaintiff's evidence was
"unpersuasive and unconvincing." It was held that the plaintiff's own
declaration that she moved out of the property in 1946 and left it in the
possession of the defendant was contradictory to her claim of ownership.
She was also inconsistent when she testified first that the defendant was her
The review by the respondent court 11 of this decision was manifestly less
than thorough. For the most part it merely affirmed the factual findings of the
trial court except for an irrelevant modification, and it was only toward the
end that it went to and resolved what it considered the lone decisive issue.
The respondent court held that Exhibits 2-b and 3-a, by virtue of which
Domingo Melad had conveyed the two parcels of land to the petitioner, were
null and void. The reason was that they were donations of real property and
as such should have been effected through a public instrument. It then set
aside the appealed decision and declared the respondents the true and
lawful owners of the disputed property.
The said exhibits read as follows:
EXHIBIT 2-b is quoted as follows: 12
I, DOMINGO MELAD, of legal age, married, do hereby
declare in this receipt the truth of my giving to Felix
Danguilan, my agricultural land located at Barrio FuguMacusi, Penablanca, Province of Cagayan, Philippine
Islands; that this land is registered under my name; that I
hereby declare and bind myself that there is no one to whom
I will deliver this land except to him as he will be the one
responsible for me in the event that I will die and also for all
other things needed and necessary for me, he will be
responsible because of this land I am giving to him; that it is
true that I have nieces and nephews but they are not living
with us and there is no one to whom I will give my land
except to Felix Danguilan for he lives with me and this is the
length175 m. and the width is 150 m.
ISIDRO
FELIX
MELAD
DANGUILAN
ILLEGIBLE
a fair exchange between the donor and the donee that made the transaction
an onerous donation.
Regarding the private respondent's claim that she had purchased the
properties by virtue of a deed of sale, the respondent court had only the
following to say: "Exhibit 'E' taken together with the documentary and oral
evidence shows that the preponderance of evidence is in favor of the
appellants." This was, we think, a rather superficial way of resolving such a
basic and important issue.
The deed of sale was allegedly executed when the respondent was only
three years old and the consideration was supposedly paid by her mother,
Maria Yedan from her earnings as a wage worker in a factory. 16 This was
itself a suspicious circumstance, one may well wonder why the transfer was
not made to the mother herself, who was after all the one paying for the
lands. The sale was made out in favor of Apolonia Melad although she had
been using the surname Yedan her mother's surname, before that instrument
was signed and in fact even after she got married. 17 The averment was also
made that the contract was simulated and prepared after Domingo Melad's
death in 1945. 18 It was also alleged that even after the supposed execution
of the said contract, the respondent considered Domingo Melad the owner of
the properties and that she had never occupied the same. 19
Considering these serious challenges, the appellate court could have
devoted a little more time to examining Exhibit "E" and the circumstances
surrounding its execution before pronouncing its validity in the manner
described above. While it is true that the due execution of a public instrument
is presumed, the presumption is disputable and will yield to contradictory
evidence, which in this case was not refuted.
At any rate, even assuming the validity of the deed of sale, the record shows
that the private respondent did not take possession of the disputed properties
and indeed waited until 1962 to file this action for recovery of the lands from
the petitioner. If she did have possession, she transferred the same to the
petitioner in 1946, by her own sworn admission, and moved out to another lot
belonging to her step-brother. 20 Her claim that the petitioner was her tenant
(later changed to administrator) was disbelieved by the trial court, and
properly so, for its inconsistency. In short, she failed to show that she
ANTONIO, J.:
The only issue posed by this appeal is whether or not, from the nature of the
action pleaded as appears in the allegations of the complaint, the aforesaid
action is one of forcible entry, within the exclusive jurisdiction of the municipal
court. .
On February 4, 1963, appellants Calixto Pasagui and Fausta Mosar filed a
complaint with the Court of First Instance at Tacloban City, alleging that
onNovember 15, 1962, for and in consideration of Two Thousand Eight
action may be considered as one for forcible entry, it is not only necessary
that the plaintiff should allege his prior physical possession of the property
but also that he was deprived of his possession by any of the means
provided in section 1, Rule 70 of the Revised Rules of Court, namely: force,
intimidation, threats, strategy and stealth. For, if the dispossession did not
take place by any of these means, the courts of first instance, not the
municipal courts, have jurisdictions.. 5 The bare allegation in the complaint
that the plaintiff has been "deprived" of the land of which he is and has been
the legal owner for a long period has been held to be insufficient. 6 It is true
that the mere act of a trespasser in unlawfully entering the land, planting
himself on the ground and excluding therefrom the prior possessor would
imply the use of force. In the case at bar, no such inference could be made
as plaintiffs-appellants had not claimed that they were in actual physical
possession of the property prior to the entry of the Villablancas. Moreover, it
is evident that plaintiffs-appellants are not only seeking to get the possession
of the property, but as an alternative cause of action, they seek the return of
the price and payment of damages by the vendors "in case of eviction or loss
of ownership" of the said property. It is, therefore, not the summary action of
forcible entry within the context of the Rules. .
WHEREFORE, the order of dismissal is hereby set aside, and the case
remanded to the court a quo for further proceedings. Costs against
defendants-appellees. .
G.R. No. 119745 June 20, 1997
POWER COMMERCIAL AND INDUSTRIAL CORPORATION, petitioner,
vs.
COURT OF APPEALS, SPOUSES REYNALDO and ANGELITA R.
QUIAMBAO and PHILIPPINE NATIONAL BANK, respondents.
PANGANIBAN, J.:
Is the seller's failure to eject the lessees from a lot that is the subject of a
contract of sale with assumption of mortgage a ground (1) for rescission of
The Facts
Petitioner Power Commercial & Industrial Development Corporation, an
industrial asbestos manufacturer, needed a bigger office space and
warehouse for its products. For this purpose, on January 31, 1979, it entered
into a contract of sale with the spouses Reynaldo and Angelita R. Quiambao,
herein private respondents. The contract involved a 612-sq. m. parcel of land
covered by Transfer Certificate of Title No. S-6686 located at the corner of
Bagtican and St. Paul Streets, San Antonio Village, Makati City. The parties
agreed that petitioner would pay private respondents P108,000.00 as down
payment, and the balance of P295,000.00 upon the execution of the deed of
transfer of the title over the property. Further, petitioner assumed, as part of
the purchase price, the existing mortgage on the land. In full satisfaction
thereof, he paid P79,145.77 to Respondent Philippine National Bank ("PNB"
for brevity).
On June 1, 1979, respondent spouses mortgaged again said land to PNB to
guarantee a loan of P145,000.00, P80,000.00 of which was paid to
respondent spouses. Petitioner agreed to assume payment of the loan.
On June 26, 1979, the parties executed a Deed of Absolute Sale With
Assumption of Mortgage which contained the following terms and
conditions: 3
That for and in consideration of the sum of Two Hundred
Ninety-Five Thousand Pesos (P295,000.00) Philippine
Currency, to us in hand paid in cash, and which we hereby
acknowledge to be payment in full and received to our entire
satisfaction, by POWER COMMERCIAL AND INDUSTRIAL
On March 17, 1982, petitioner filed Civil Case No. 45217 against respondent
spouses for rescission and damages before the Regional Trial Court of
Pasig, Branch 159. Then, in its reply to PNB's letter of February 19, 1982,
petitioner demanded the return of the payments it made on the ground that
its assumption of mortgage was never approved. On May 31, 1983, 8 while
this case was pending, the mortgage was foreclosed. The property was
subsequently bought by PNB during the public auction. Thus, an amended
complaint was filed impleading PNB as party defendant.
On July 12, 1990, the trial court 9 ruled that the failure of respondent spouses
to deliver actual possession to petitioner entitled the latter to rescind the sale,
and in view of such failure and of the denial of the latter's assumption of
mortgage, PNB was obliged to return the payments made by the latter. The
dispositive portion of said decision states: 10
It was our understanding that this lot was free and clear of
problems of this nature, and that the previous owner would
Issues
Petitioner contends that: (1) there was a substantial breach of the contract
between the parties warranting rescission; and (2) there was a "mistake in
payment" made by petitioner, obligating PNB to return such payments. In its
Memorandum, it specifically assigns the following errors of law on the part of
Respondent Court: 12
A. Respondent Court of Appeals gravely erred in failing to
consider in its decision that a breach of implied warranty
under Article 1547 in relation to Article 1545 of the Civil Code
applies in the case-at-bar.
B. Respondent Court of Appeals gravely erred in failing to
consider in its decision that a mistake in payment giving rise
to a situation where the principle of solutio indebiti applies is
obtaining in the case-at-bar.
No pronouncement as to costs.
The Court's Ruling
SO ORDERED.
On appeal by respondent-spouses and PNB, Respondent Court of Appeals
reversed the trial court. In the assailed Decision, it held that the deed of sale
between respondent spouses and petitioner did not obligate the former to
eject the lessees from the land in question as a condition of the sale, nor was
the occupation thereof by said lessees a violation of the warranty against
eviction. Hence, there was no substantial breach to justify the rescission of
said contract or the return of the payments made. The dispositive portion of
said Decision reads: 11
WHEREFORE, the Decision appealed from is hereby
REVERSED and the complaint filed by Power Commercial
and Industrial Development Corporation against the spouses
should have expressly stipulated so. In Ang vs. C.A., 18 rescission was sought
on the ground that the petitioners had failed to fulfill their obligation "to
remove and clear" the lot sold, the performance of which would have given
rise to the payment of the consideration by private respondent. Rescission
was not allowed, however, because the breach was not substantial and
fundamental to the fulfillment by the petitioners of the obligation to sell.
As stated, the provision adverted to in the contract pertains to the usual
warranty against eviction, and not to a condition that was not met.
The terms of the contract are so clear as to leave no room for any other
interpretation. 19
Furthermore, petitioner was well aware of the presence of the tenants at the
time it entered into the sales transaction. As testified to by
Reynaldo, 20 petitioner's counsel during the sales negotiation even undertook
the job of ejecting the squatters. In fact, petitioner actually filed suit to eject
the occupants. Finally, petitioner in its letter to PNB of December 23, 1980
admitted that it was the "buyer(s) and new owner(s) of this lot."
Effective Symbolic Delivery
The Court disagrees with petitioner's allegation that the respondent spouses
failed to deliver the lot sold. Petitioner asserts that the legal fiction of
symbolic delivery yielded to the truth that, at the execution of the deed of
sale, transfer of possession of said lot was impossible due to the presence of
occupants on the lot sold. We find this misleading.
Although most authorities consider transfer of ownership as the primary
purpose of sale, delivery remains an indispensable requisite as our law does
not admit the doctrine of transfer of property by mere consent. 21 The Civil
Code provides that delivery can either be (1) actual (Article 1497) or (2)
constructive (Articles 1498-1501). Symbolic delivery (Article 1498), as a
species of constructive delivery, effects the transfer of ownership through the
execution of a public document. Its efficacy can, however, be prevented if the
vendor does not possess control over the thing sold, 22 in which case this
legal fiction must yield to reality.
because the facts of the case do not show that the requisites for such breach
have been satisfied. A breach of this warranty requires the concurrence of
the following circumstances:
(1) The purchaser has been deprived of the whole or part of the thing sold;
(2) This eviction is by a final judgment;
(3) The basis thereof is by virtue of a right prior to the sale made by the
vendor; and
(4) The vendor has been summoned and made co-defendant in the suit for
eviction at the instance of the vendee.25
In the absence of these requisites, a breach of the warranty against
eviction under Article 1547 cannot be declared.
Petitioner argues in its memorandum that it has not yet ejected the
occupants of said lot, and not that it has been evicted therefrom. As correctly
pointed out by Respondent Court, the presence of lessees does not
constitute an encumbrance of the land, 26 nor does it deprive petitioner of its
control thereof.
We note, however, that petitioner's deprivation of ownership and control
finally occurred when it failed and/or discontinued paying the amortizations
on the mortgage, causing the lot to be foreclosed and sold at public auction.
But this deprivation is due to petitioner's fault, and not to any act attributable
to the vendor-spouses.
Because petitioner failed to impugn its integrity, the contract is presumed,
under the law, to be valid and subsisting.
Absence of Mistake In Payment
Contrary to the contention of petitioner that a return of the payments it made
to PNB is warranted under Article 2154 of the Code, solutio indebiti does not
apply in this case. This doctrine applies where: (1) a payment is made when
there exists no binding relation between the payor, who has no duty to pay,
30 June 1989
RECEIPT
April 9, 2003
CONFORME:
ENCARNACION
Seller
TOMAS
K.
Buyer
VALDES
CHUA
x x x.7
In the morning of 13 July 1989, Chua secured from Philippine Bank of
Commerce ("PBCom") a manager's check for P480,000.00. Strangely, after
securing the manager's check, Chua immediately gave PBCom a verbal stop
payment order claiming that this manager's check for P480,000.00 "was lost
and/or misplaced."8 On the same day, after receipt of Chua's verbal order,
PBCom Assistant VicePresident Julie C. Pe notified in writing9 the PBCom
Operations Group of Chua's stop payment order.
In the afternoon of 13 July 1989, Chua and Valdes-Choy met with their
respective counsels to execute the necessary documents and arrange the
payments.10 Valdes-Choy as vendor and Chua as vendee signed two Deeds
of Absolute Sale ("Deeds of Sale"). The first Deed of Sale covered the house
and lot for the purchase price of P8,000,000.00. 11 The second Deed of Sale
covered the furnishings, fixtures and movable properties contained in the
house for the purchase price of P2,800,000.00. 12 The parties also computed
the capital gains tax to amount to P485,000.00.
On 14 July 1989, the parties met again at the office of Valdes-Choy's
counsel. Chua handed to Valdes-Choy the PBCom manager's check for
P485,000.00 so Valdes-Choy could pay the capital gains tax as she did not
have sufficient funds to pay the tax. Valdes-Choy issued a receipt showing
SELLING PRICE
P10,800
EARNEST MONEY
P100,000.00
PARTIAL PAYMENT
485,000.00
585,
BALANCE
DUE
ENCARNACION VALDEZ-CHOY
TO
P10,215
80,000.0
x x x.13
On the same day, 14 July 1989, Valdes-Choy, accompanied by Chua,
deposited the P485,000.00 manager's check to her account with Traders
Royal Bank. She then purchased a Traders Royal Bank manager's check for
P480,000.00 payable to the Commissioner of Internal Revenue for the capital
gains tax. Valdes-Choy and Chua returned to the office of Valdes-Choy's
counsel and handed the Traders Royal Bank check to the counsel who
undertook to pay the capital gains tax. It was then also that Chua showed to
Valdes-Choy a PBCom manager's check for P10,215,000.00 representing
the balance of the purchase price. Chua, however, did not give this PBCom
manager's check to Valdes-Choy because the TCT was still registered in the
name of Valdes-Choy. Chua required that the Property be registered first in
his name before he would turn over the check to Valdes-Choy. This angered
Valdes-Choy who tore up the Deeds of Sale, claiming that what Chua
required was not part of their agreement.14
On the same day, 14 July 1989, Chua confirmed his stop payment order by
submitting to PBCom an affidavit of loss 15 of the PBCom Manager's Check
for P480,000.00. PBCom Assistant Vice-President Pe, however, testified that
the manager's check was nevertheless honored because Chua subsequently
verbally advised the bank that he was lifting the stop-payment order due to
his "special arrangement" with the bank.16
On 15 July 1989, the deadline for the payment of the balance of the
purchase price, Valdes-Choy suggested to her counsel that to break the
impasse Chua should deposit in escrow the P10,215,000.00 balance. 17 Upon
such deposit, Valdes-Choy was willing to cause the issuance of a new TCT in
the name of Chua even without receiving the balance of the purchase price.
Valdes-Choy believed this was the only way she could protect herself if the
certificate of title is transferred in the name of the buyer before she is fully
paid. Valdes-Choy's counsel promised to relay her suggestion to Chua and
his counsel, but nothing came out of it.
On 17 July 1989, Chua filed a complaint for specific performance against
Valdes-Choy which the trial court dismissed on 22 November 1989. On 29
November 1989, Chua re-filed his complaint for specific performance with
Applying the provisions of Article 1191 of the new Civil Code, since
this is an action for specific performance where the plaintiff, as
vendee, wants to pursue the sale, and in order that the fears of the
defendant may be allayed and still have the sale materialize,
judgment is hereby rendered:
I. 1. Ordering the defendant to deliver to the Court not later than five
(5) days from finality of this decision:
a. the owner's duplicate copy of TCT No. 162955 registered
in her name;
b. the covering tax declaration and the latest tax receipt
evidencing payment of real estate taxes;
c. the two deeds of sale prepared by Atty. Mark Bocobo on
July 13, 1989, duly executed by defendant in favor of the
plaintiff, whether notarized or not; and
2. Within five (5) days from compliance by the defendant of the
above, ordering the plaintiff to deliver to the Branch Clerk of Court of
this Court the sum of P10,295,000.00 representing the balance of
the consideration (with the sum of P80,000.00 for stamps already
included);
3. Ordering the Branch Clerk of this Court or her duly authorized
representative:
a. to make representations with the BIR for the payment of
capital gains tax for the sale of the house and lot (not to
include the fixtures) and to pay the same from the funds
deposited with her;
b. to present the deed of sale executed in favor of the
plaintiff, together with the owner's duplicate copy of TCT No.
162955, real estate tax receipt and proof of payment of
capital gains tax, to the Makati Register of Deeds;
II. In the event that specific performance cannot be done for reasons
or causes not attributable to the plaintiff, judgment is hereby
rendered ordering the defendant:
SO ORDERED.18
Valdes-Choy appealed to the Court of Appeals which reversed the decision
of the trial court. The Court of Appeals handed down a new judgment,
disposing as follows:
WHEREFORE, the decision appealed from is hereby REVERSED
and SET ASIDE, and another one is rendered:
(1) Dismissing Civil Case No. 89-5772;
(2) Declaring the amount of P100,000.00, representing
earnest money as forfeited in favor of defendant-appellant;
(3) Ordering defendant-appellant to return/refund the amount
of P485,000.00 to plaintiff-appellee without interest;
(4) Dismissing defendant-appellant's compulsory counterclaim; and
In reversing the trial court, the Court of Appeals ruled that Chua's stance to
pay the full consideration only after the Property is registered in his name
was not the agreement of the parties. The Court of Appeals noted that there
is a whale of difference between the phrases "all papers are in proper order"
as written on the Receipt, and "transfer of title" as demanded by Chua.
Contrary to the findings of the trial court, the Court of Appeals found that all
the papers were in order and that Chua had no valid reason not to pay on the
agreed date. Valdes-Choy was in a position to deliver the owner's duplicate
copy of the TCT, the signed Deeds of Sale, the tax declarations, and the
latest realty tax receipt. The Property was also free from all liens and
encumbrances.
The Court of Appeals declared that the trial court erred in considering Chua's
showing to Valdes-Choy of the PBCom manager's check for P10,215,000.00
as compliance with Chua's obligation to pay on or before 15 July 1989. The
Court of Appeals pointed out that Chua did not want to give up the check
unless "the property was already in his name." 20 Although Chua
demonstrated his capacity to pay, this could not be equated with actual
payment which he refused to do.
The Court of Appeals did not consider the non-payment of the capital gains
tax as failure by Valdes-Choy to put the papers "in proper order." The Court
of Appeals explained that the payment of the capital gains tax has no bearing
on the validity of the Deeds of Sale. It is only after the deeds are signed and
notarized can the final computation and payment of the capital gains tax be
made.
The Issues
In his Memorandum, Chua raises the following issues:
1. WHETHER THERE IS A PERFECTED CONTRACT OF SALE OF
IMMOVABLE PROPERTY;
It is true that Article 1482 of the Civil Code provides that "[W]henever earnest
money is given in a contract of sale, it shall be considered as part of the price
and proof of the perfection of the contract." However, this article speaks of
earnest money given in a contract of sale. In this case, the earnest money
was given in a contract to sell. The Receipt evidencing the contract to sell
stipulates that the earnest money is a forfeitable deposit, to be forfeited if the
sale is not consummated should Chua fail to pay the balance of the purchase
price. The earnest money forms part of the consideration only if the sale is
consummated upon full payment of the purchase price. If there is a contract
of sale, Valdes-Choy should have the right to compel Chua to pay the
balance of the purchase price. Chua, however, has the right to walk away
from the transaction, with no obligation to pay the balance, although he will
forfeit the earnest money. Clearly, there is no contract of sale. The earnest
money was given in a contract to sell, and thus Article 1482, which speaks of
a contract of sale, is not applicable.
Since the agreement between Valdes-Choy and Chua is a mere contract to
sell, the full payment of the purchase price partakes of a suspensive
condition. The non-fulfillment of the condition prevents the obligation to sell
from arising and ownership is retained by the seller without further remedies
by the buyer.30 Article 1592 of the Civil Code permits the buyer to 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.
However, Article 1592 does not apply to a contract to sell where the seller
reserves the ownership until full payment of the price. 31
Third and Fourth Issues: Withholding of Payment of
Balance of the Purchase Price and Forfeiture of the Earnest Money
the
Chua insists that he was ready to pay the balance of the purchase price but
withheld payment because Valdes-Choy did not fulfill her contractual
obligation to put all the papers in "proper order." Specifically, Chua claims
that Valdes-Choy failed to show that the capital gains tax had been paid after
he had advanced the money for its payment. For the same reason, he
contends that Valdes-Choy may not forfeit the earnest money even if he did
not pay on time.
Third, Valdes-Choy retained possession of the certificate of title and all other
documents relative to the sale. When Chua refused to pay Valdes-Choy the
balance of the purchase price, Valdes-Choy also refused to turn-over to
Chua these documents.28 These are additional proof that the agreement did
not transfer to Chua, either by actual or constructive delivery, ownership of
the Property.29
law nor in the contract to sell as evidenced by the Receipt. Thus, at this point
Chua was not ready, able and willing to pay the full purchase price which is
his obligation under the contract to sell. Chua was also not in a position to
assume the principal obligation of a vendee in a contract of sale, which is
also to pay the full purchase price at the agreed time. Article 1582 of the Civil
Code provides that
Art. 1582. The vendee is bound to accept delivery and to pay the
price of the thing sold at the time and place stipulated in the contract.
x x x. (Emphasis supplied)
In this case, the contract to sell stipulated that Chua should pay the balance
of the purchase price "on or before 15 July 1989." The signed Deeds of Sale
also stipulated that the buyer shall pay the balance of the purchase price
upon signing of the deeds. Thus, the Deeds of Sale, both signed by Chua,
state as follows:
Deed of Absolute Sale covering the lot:
xxx
For and in consideration of the sum of EIGHT MILLION PESOS
(P8,000,000.00), Philippine Currency,receipt of which in full is hereby
acknowledged by the VENDOR from the VENDEE, the VENDOR
sells, transfers and conveys unto the VENDEE, his heirs, successors
and assigns, the said parcel of land, together with the improvements
existing thereon, free from all liens and encumbrances. 34 (Emphasis
supplied)
Deed of Absolute Sale covering the furnishings:
xxx
For and in consideration of the sum of TWO MILLION EIGHT
HUNDRED THOUSAND PESOS (P2,800,000.00), Philippine
Currency, receipt of which in full is hereby acknowledged by the
VENDOR from the VENDEE, the VENDOR sells, transfers and
conveys unto the VENDEE, his heirs, successors and assigns, the
said furnitures, fixtures and other movable properties thereon, free
from all liens and encumbrances.35 (Emphasis supplied)
The buyer has more interest in having the capital gains tax paid immediately
since this is a pre-requisite to the issuance of a new Torrens title in his name.
Nevertheless, as far as the government is concerned, the capital gains tax
remains a liability of the seller since it is a tax on the seller's gain from the
sale of the real estate.Payment of the capital gains tax, however, is not a
pre-requisite to the transfer of ownership to the buyer. The transfer of
ownership takes effect upon the signing and notarization of the deed of
absolute sale.
The recording of the sale with the proper Registry of Deeds 37 and the transfer
of the certificate of title in the name of the buyer are necessary only to bind
third parties to the transfer of ownership. 38 As between the seller and the
buyer, the transfer of ownership takes effect upon the execution of a public
instrument conveying the real estate. 39 Registration of the sale with the
Registry of Deeds, or the issuance of a new certificate of title, does not
confer ownership on the buyer. Such registration or issuance of a new
certificate of title is not one of the modes of acquiring ownership. 40
In this case, Valdes-Choy was ready, able and willing to submit to Chua all
the papers that customarily would complete the sale, and to pay as well the
capital gains tax. On the other hand, Chua's condition that a new TCT be first
issued in his name before he pays the balance of P10,215,000.00,
DECISION
future claims and/or liability from any person or entity within thirty
(30) days from April 12, 1988. Towards this end, the OWNER shall
endeavor to provide the BROKER the documents/papers, which are
necessary and proper to carry out this objective;
The OWNERS warrant that the titles of the two properties are free
and clear from any and all obligations and claims, whether past or
present, from any bank or financial institution or any other creditor, or
third persons;
7. The BROKER shall undertake to pay any and all taxes and
assessments imposed and/or charged over the two (2) parcels of
land including the payment of capital gains tax and secure tax
clearance from the proper government agency/ies within thirty (30)
days from April 12, 1988. Official receipts of payments thereof shall
be presented and delivered to CAPITAL BANK;
The payment of any taxes and assessments on the two parcels of
land may be advanced by CAPITAL BANK provided that TATIC
SQUARE will execute a Promissory Note in favor of CAPITAL BANK
in the amount corresponding thereto. The amount covered by this
Promissory Note shall be deducted from the balance of the purchase
price payable by TATIC SQUARE to the OWNERS;
8. The BROKER and TATIC SQUARE shall undertake to remove any
and all occupants/tenants of the two (2) parcels of land whether
legally or illegally residing thereat within sixty (60) days from April 12,
1988 with the assistance and cooperation of the OWNERS;
9. Any and all expenses to be incurred in complying with the
undertakings mentioned in paragraphs 6, 7 and 8 shall be deducted
from the purchase price of the two parcels of land, the expenses of
which is estimated to be SEVEN HUNDRED NINETY THOUSAND
PESOS (P790,000.00). If the said amount of P790,000.00 would not
be sufficient, the other expenses connected therewith shall be taken
and/or deducted from the amount due the BROKER. 3
On the same day, the Spouses Flores executed a deed of absolute sale over
the two parcels of land for the price of P5,700,000.00 in favor of TATIC. 4 The
Spouses Flores, thereafter, turned over the custody of the owner's copy of
their titles to the Bank.5
between petitioner VELI, as vendor, and the respondent, as vendee, over the
property covered by TCT No. 241846. Under the April 13, 1988 MOA
executed by the Spouses Flores, Tobias, TATIC and the Bank, the Spouses
Flores and Tobias obliged themselves to spend for and cause the registration
of the first deed of absolute sale, to cause the issuance of the torrens titles
over the property to and under the name of TATIC, as vendee, and to pay the
capital gains tax on the said sales. Tobias and TATIC bound and obliged
themselves to cause the eviction of the tenants/occupants on the property
within sixty days from April 12, 1988, with the assistance of the Spouses
Flores. On the other hand, under the April 14, 1988 agreement of TATIC and
petitioner VELI, TATIC obliged itself to spend for the registration of the
second deed of absolute sale and the issuance of the titles over the property
to and under the name of petitioner VELI, and to cause the eviction of the
tenants/occupants from the property within sixty days from April 12, 1988.
TATIC did not bind itself to pay the capital gains tax for the said sale.
Indeed, under the third deed of absolute sale, petitioner VELI did not oblige
itself to spend for the registration of the said deed; to secure a torrens title
over the property to and under the name of the respondent; or to cause the
eviction of the tenants/occupants on the property. Nevertheless, petitioner
VELI is liable for the said expenses because, under Article 1487 16 of the New
Civil Code, the expenses for the registration of the sale should be shouldered
by the vendor unless there is a stipulation to the contrary. In the absence of
any stipulation of the parties relating to the expenses for the registration of
the sale and the transfer of the title to the vendee, Article 1487 shall be
applied in a supplementary manner.17
Under Article 149518 of the New Civil Code, petitioner VELI, as the vendor, is
obliged to transfer title over the property and deliver the same to the vendee.
While Article 149819 of the New Civil Code provides that the execution of a
notarized deed of absolute sale shall be equivalent to the delivery of the
property subject of the contract, the same shall not apply if, from the deed,
the contrary does not appear or cannot clearly be inferred. In the present
case, the respondent and petitioner VELI agreed that the latter would cause
the eviction of the tenants/occupants and deliver possession of the property.
It is clear that at the time the petitioner executed the deed of sale in favor of
the respondent, there were tenants/occupants in the property. It cannot, thus,
be concluded that, through the execution of the third deed of sale, the
property was thereby delivered to the respondent.
Petitioner VELI is obliged to cause the eviction of the tenants/occupants
unless there is a contrary agreement of the parties. Indeed, under the
addendum executed by petitioner VELI and the respondent, the latter was
corporations and, therefore, exempt from the payment of capital gains tax for
any sale or exchange or disposition of property.
While it is true that the respondent acquired the rights and interests of TATIC
under the first deed of sale and that of petitioner VELI under the second deed
of sale by virtue of the deed of assignment of rights executed by the
petitioners and the respondent, the latter cannot enforce the terms and
conditions of the said deeds. It must be stressed that there is no showing in
the records that the Spouses Flores, Tobias and TATIC conformed to the said
deed of assignment of rights or that the same was registered in the office of
the Register of Deeds in accordance with Article 1625 20 of the New Civil
Code.
It is settled that only laws existing at the time of the execution of a contract
are applicable thereto and not later statutes, unless the latter are specifically
intended to have retroactive effect. 23 When the first and second deeds of
absolute sale took place in 1988, the 1977 National Internal Revenue Code
(NIRC), as amended by Batas Pambansa Blg. 37 and
Liable
Executive Order No. 237 was still in effect. Under Sections 21(e) 24 and
34(h)25 of the 1977 NIRC, as amended, the Spouses Flores, as vendors,
were liable for the payment of capital gains tax. In the second sale, however,
TATIC was not similarly liable because while Article 1487 of the Civil Code
provides that the seller is obliged to pay the capital gains tax based on its
obligation to transfer title over the property to the vendee under Sections
21(e) and 34(h) of the 1977 NIRC, the payment of capital gains tax from the
sale, exchange of disposition of real property devolved only upon individual
taxpayers. In fact, the Bureau of Internal Revenue (BIR), in response to the
queries of several corporations which had sold, exchanged or disposed of
their real properties, more particularly in BIR Ruling Nos. 159 (September
13, 1985), 127 (July 12, 1983), 191 (November 15, 1983), 195 (November
15, 1983), 60 (May 12, 1986), 177 (September 17, 1986), and 415-87
(December 23, 1987), definitely ruled that the corporations were exempt from
the payment of capital gains tax. Their income from the sale or exchange or
disposition of real property was treated as ordinary income, and was taxed
as such. One of the opinions of the BIR Commissioner reads:
Ruling
September 13, 1985
No.
159
for
We agree with the petitioners' contention that petitioner VELI is not liable for
the payment of capital gains tax for the third deed of sale. A capital gains tax
is a final tax assessed on the presumed gain derived by citizens and resident
aliens, as well as estates and trusts, from the sale or exchange of real
property.22 Under the first sale, per the agreement of the Spouses Flores,
TATIC, and Tobias, the said spouses were obliged to pay the capital gains
tax. However, under the deed of absolute sale for the second sale, TATIC
was not obliged to pay the said tax. The Court notes that in answer to the
respondent's demand letter, petitioner VELI claimed that such tax could not
be assessed against it or against TATIC for the reason that they are
Gentlemen:
In reply to your letter dated September 11, 1985, I have the honor to
inform you that Revenue Regulations No. 8-79 implementing Section
34(h) of the Tax Code, as amended by Batas Pambansa Blg. 37 is
explicit that only natural persons or individuals are liable to the final
capital gains tax prescribed therein. Such being the case, the gains
derived by your client, the Religious of the Virgin Mary from the sale
of its real property in Balanga, Bataan, is not subject to the final
capital gains tax prescribed by Section 34(h) of the Tax Code, as
amended by Batas Pambansa Blg. 37 but to the ordinary corporate
ANCHETA
This is the reason why, in the second sale, neither TATIC nor petitioner VELI
paid any capital gains tax. Similarly, in the third sale, i.e., between petitioner
VELI and the respondent, petitioner VELI, being a corporation, was not
obliged to pay the capital gains tax. However, petitioner VELI, as seller,
should have included in its ordinary income tax return, whatever gain or loss
it incurred with respect to the sale of the property in dispute, pursuant to
Section 24(a)26 of the 1977 NIRC, as amended.
We do not agree with the ruling of the CA that, under Section 24(d) of the
1997 NIRC, previously Section 34(h) of the 1977 NIRC, petitioner VELI is
obliged to pay capital gains tax for its sale of the property to the respondent.
Section 34(h) of the 1977 NIRC, as amended by B.P. Blg. 37 reads as
follows:
(h) The provision of paragraph (b) of this Section to the contrary
notwithstanding, net capital gains from the sale or other disposition
of real property by citizens of the Philippines or resident alien
individuals shall be subject to the final income tax rates prescribed
as follows:
NET CAPITAL GAINS RATES
On the first P100,000 or less 10%
On any amount over P100,000 20%
Such tax shall be in lieu of the tax imposed under Section 21 of this
Code; Provided, however, That the tax liability, if any, on gains from
sales or other dispositions of real property to the government or any