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not duty-bound to deliver the property to Julio, Jr.

The RTC found


Julio, Jr. to be a mere possessor by tolerance.
G.R. No. 191696  CA ruled in favor of Defendant Maghinang. It held that the undated
ROGELIO DANTIS vs. JULIO MAGHINANG, JR receipt was proof of the sale of the lot. It also ruled that the partial
payment of the purchase price, coupled with the delivery gave
Principle: The best evidence rule requires that the highest available degree of efficacy to the oral sale, and that Petitioner was duty-bound to
proof must be produced. For documentary evidence, the contents of a convey what had been sold after full payment of the selling price.
document are best proved by the production of the document itself to the
exclusion of secondary or substitutionary evidence. Issue: WON the pieces of evidence (affidavit and photocopy of the receipt)
submitted by the defendant are adequate proofs of the existence of the
Facts: alleged oral contract of sale of the lot in dispute.
 Petitioner Dantis filed a complaint for quieting of title and recovery
of possession against Respondent Maghinang. Petitioner alleged that Ruling:
he was the registered owner of subject land, acquiring such thru an No.
extrajudicial partition of the estate from his deceased father. That
respondent built a house on a part of his estate; that his demands for Exhibit "3," the affidavit of Ignacio, is hearsay evidence and, thus, cannot be
respondent to vacate were unheeded. accorded any evidentiary weight. Evidence is hearsay when its probative force
 Respondent Julio denied the allegations. He said that his father depends on the competency and credibility of some persons other than the
bought the land from the Petitioner’s father and that he has witness by whom it is sought to be produced. The exclusion of hearsay
succeeded to its ownership. He also claims that he was entitled to a evidence is anchored on three reasons: 1) absence of cross-examination; 2)
separate registration of said lot on the basis of the documentary absence of demeanor evidence; and 3) absence of oath. The affidavit was not
evidence of sale, and his open and uninterrupted possession of the identified and its averments were not affirmed by affiant Ignacio. Accordingly,
property. it must be excluded from the judicial proceedings being an inadmissible
 Defendant presented the ff evidence to prove the sale of land to his hearsay evidence.
father:
1. Exhibit 3 – affidavit executed by Ignacio Dantis, grandfather of the Exhibit "4," the undated handwritten receipt, is considered secondary
Petitioner of the agreement to sell such land evidence being a mere photocopy which cannot be admitted to prove the
2. Exhibit 4 – an undated handwritten receipt evidencing downpayment contents of the document. The best evidence rule requires that the highest
for said lot available degree of proof must be produced. For documentary evidence, the
 But defendant admitted that the affidavit was not signed by the contents of a document are best proved by the production of the document
alleged vendor, Emilio Dantis, the father of petitioner. Also, he itself to the exclusion of secondary or substitutionary evidence, pursuant to
admitted that the receipt he presented was admittedly a mere Rule 130, Section 3.
photocopy.
 RTC rendered its decision in favor of petitioner. RTC found that the A secondary evidence is admissible only upon compliance with Rule 130,
documents would only serve as proofs that the purchase price for the Section 5, which states that: when the original has been lost or destroyed, or
subject lot had not yet been completely paid and, hence, Rogelio was cannot be produced in court, the offeror, upon proof of its execution or
existence and the cause of its unavailability without bad faith on his part, may
prove its contents by a copy, or by a recital of its contents in some authentic This is a case of specific performance involving the sale of a parcel of land
document, or by the testimony of witnesses in the order stated. entered by the parties wherein the respondents have agreed to pay the down
payment and petitioners even executed a receipt evidencing this transaction
In the case, Defendant failed to prove the due execution of the original of and obliged themselves to cause the transfer of the title of the property under
Exhibit "4" as well as its subsequent loss. Also, his testimony was riddled with the respondents’ name. Upon transfer, the petitioners will execute an
improbabilities and contradictions which raise doubt on the veracity of his absolute Deed of Sale in favor of the respondents upon payment of the whole
evidence. When asked where the original was, Defendant’s testimony gave balance. However, petitioners have sold the subject land to a third person;
the impression that the original of the document was lost while it was in the they even ordered the cancellation of the title issued under respondent’s
possession of his parents. During cross-examination, however, he testified name and issued a Deed of Absolute Sale in favor of the third person.
that it was lost while it was in his possession. Further, Exhibit 4 would not be
an adequate proof of the existence of the alleged oral contract of sale Petitioner:
because it failed to provide a description of the subject lot, including its metes The document signified was a mere executory contract to sell, subject to
and bounds, as well as its full price or consideration. certain suspensive conditions upon payment of the
balance.

Bar Q: Respondent:
The receipt of down payment constitutes a perfected contract of sale.
X filed a complaint for quieting of title and recovery of possession against Y.
Y on his defense claims that his father bought the land from the X’s father and Trial Court:
claims its ownership. Y presented 2 pieces of evidence in court: (a) an affidavit Favored the respondents and ordered that petitioners will execute an
executed by X’s grandfather of the agreement of the sale of said land; and (b) Absolute Deed of Sale in respondents favor.
a photocopy of an undated handwritten receipt evidencing downpayment for
said lot. Y admitted that the affidavit was not signed by the alleged vendor, Court of Appeals:
X’s grandfather. Also, he admitted that the receipt he presented was Affirmed the decision of the lower court.
admittedly a mere photocopy.
Issue:
Are the pieces of evidence presented adequate to prove the alleged sale? Whether or not there was perfected contract of sale?

SUPREME COURT:
Yes.
TOPIC: Elements of a Contract of Sale
Ratio:
Coronel vs. CA Elements of a contract of sale
263 SCRA 15 Sale, by its very nature, is a consensual contract because it is perfected by
mere consent. The essential elements of a contract
Facts: of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer ownership in will definitely affect the seller's title thereto. In fact, if there had been
exchange for the price; previous delivery of the subject property, the seller's ownership or title to the
b) Determinate subject matter; and property is automatically transferred to the buyer such that, the seller will no
c) Price certain in money or its equivalent. longer have any title to transfer to any third person.

Contract to sell vs contract of sale In this case, it cannot be inferred to be a contract to sell. The receipt that was
given by petitioners made no express reservation of ownership or title to the
In a Contract to sell, it may not be considered as a Contract of Sale because subject parcel of land. Furthermore, the circumstance which prevented the
the first essential element is lacking. In a contract to sell, the prospective parties from entering into an absolute contract of sale pertained to the sellers
seller explicitly reserves the transfer of title to the prospective buyer, themselves (the certificate of title was not in their names) and not the
meaning, the prospective seller does not as yet agree or consent to transfer full payment of the purchase price. Further, they did not merely promise to
ownership of the property subject of the contract to sell until the happening sell the property to private respondent upon the fulfillment of the suspensive
of an event, which for present purposes we shall take as the full payment of condition. They even undertook to have the certificate of title changed to
the purchase price. What the seller agrees or obliges himself to do is to fulfill their names and immediately thereafter, to execute the written deed of
his promise to sell the subject property when the entire amount of the absolute sale.
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 Dizon vs CA
retained by the prospective seller without further remedies
by the prospective buyer. Upon the fulfillment of the suspensive condition FACTS:
which is the full payment of the purchase price, the prospective seller's
obligation to sell the subject property by entering into a contract of sale with 1. Respondent Overland Express Lines, Inc. entered into a contract of lease
the prospective buyer becomes demandable. with an option to buy with the petitioners involving 1,755.80 square meter
parcel of land situated in Diliman, Quezon City. The term of the lease was for
A contract to sell may thus be defined as a bilateral contract whereby the 1 year. Respondent was granted an option to purchase for the amount of
prospective seller, while expressly reserving the ownership of the subject
3,000 per square meter.
property despite delivery thereof to the prospective buyer, binds himself to
sell the said property exclusively to the prospective buyer upon fulfillment of
2. respondent failed to pay the increased rental and petitioners filed an action
the condition agreed upon, that is, full payment of the purchase price.
for ejectment.
Further, upon the fulfillment of the suspensive condition which is the full
payment of the purchase price, ownership will not automatically transfer to
3. MTC ordered respondent to vacate the leased premises and pay
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 representing rentals and or damages for reasonable compensation for the
entering into a contract of absolute sale. use and occupation of the premises during the illegal detainer.

On the other hand, in a conditional contract of sale, however, upon the 4. Respondent filed for a petition praying for the issuance of a restraining
fulfillment of the suspensive condition, the sale becomes absolute and this order enjoining the enforcement of the judgement and lack of its jurisdiction.
5. RTC rendered to dismissed the case while CA uphold the jurisdiction in the MANILA METAL CONTAINER CORP. v. PNB
ejectment case. It was also concluded that there was a perfected contract of
sale between the parties on the leased premises and the pursuant to the G.R. No. 166862 December 20, 2006
option to buy agreement. respondent acquired the rights of a vendee in
contract of sale.
Facts
Issue:
 Petitioner was owner of a land located in Mandaluyong and
Whether or not there is a perfected contract of sale between the parties. mortgaged said land to PNB to secure a 900k loan.
 PNB later granted petitioner a new credit accomodation of Php 1M.
 March 1981: Petitioner secured another loan from PNB amounting
Held: to 653k
 August 1982: respondent filed for extrajudicial foreclosure of the
The contract of sale is perfected at the moment there is a meeting of minds
rea estate mortgage and sought to have the property sold at a
upon the thing which is the object of the contract and upon the price. From
public autction for Php 911, 532. 21
that moment, parties reciprocally demand performance. Thus, the elements
 The property was sold in the auction in favor of PNB for Php 1M. It
of a contract are consent, object, and price in money or its equivalent. It bears
was registered in the RD of Rizal and was annotated the dorsal
stressing that the absence of any these elements negates the existence of a
portion of the Title. The period to redeem the property is to
perfected contract of sale. Sale is a consensual contract who alleges it must
expire after one year. (February 17, 1983- February 17,1984)
show its existence by competent proof.
 August 25, 1983: Petitioner requested PNB (through a ltter) to
Respodent gave 300,000 to petitioners on the erroneous presumption that extend the time to redeem or repurchase the property on
he said amount perfected a contract of sale pursuant to the contract of lease installment basis. The request was referred to its Pasay City Branch
with option to buy. There was no valid consent by the petitioners on the  Petitioner sent a letter to Pasay branch to reiterate their
supposed sale entered by Dizon, as petitioners agent. As provided in New civil request but PNB Pasay replied and said that the bank does not
code, there was no showing that petitioners consented to the act of Dizon accept “partial redemption”
nor authoried her to act on their behalf.respondent should have done was  Petitioner failed to redeem the property so a new title was issued in
ascertain the extent of authority of Dizon. Respondent cannot seek relief on favor of PNB.
the supposed agency.  Meanwhile the Special Assets Management Department (SAMD)
had prepared a statement of account of petitioner’s obligation
Wherefore, petitioners are ordered to refund to respondent the amount of
amounted to Php 1, 574, 560.47.
300,000 which they received through Dizon.
o Petitioner remitted 725k to PNB as depoit to repurchase
and with official Receipt
 SAMD recommended to PNB that they allow the petitioner to o It claimed that no contract of sale was perfected between it
repurchase the property for PHP1, 574, 560. and petitioner.
o PNB rejected and instead proposed that the property  While the case was pending, PNB demanded that petitioner vacate
be repurchased for Php 2.6M (minimum market value). the property but it refused to do so. Petitioner offered to
o PNB said that if they do not purchase the property until repurchase for P3.5M; PNB rejected because the market value of
December 15, 1984, they will sell it to other interested the property was P30M. Petitoner offered to repurchase for
buyers and the 725k deposit will be returned to them. P4.25M; PNB rejected.
 Petitioner did not agree to PNB’s offer so it sent another letter of  Trial court decided in favor of PNB.
request but PNB declined again. It sent another letter, this time  CA affirmed the decision of RTC
through a counsel.  Thus this petition.
o They stated that they already agreed with SAMD’s offer
to sell the propery for PHP 1,572,560 and that is why it Issue
had deposited the 725k.
Whether or not MMCC and PNB had entered into a perfected contract
o Petitioner warned PNB that it would seek judicial recourse
for petitioner to repurchase the
should the latter decline their offer.
 PNB infoemed the petitioner that it accepted the petitioner’s offer property from respondent.
but for 1, 931, 389.53 in cash less th 725k deposited.
Held
o On page 2 of the letter sent by PNB, the president of
petitioner should sign. However, the president did not affix NO PERFECTION.
his signature but only confirmed that the letter was
accepted. There was no meeting of the minds. Contracts are perfected by mere
 Petitioner did not respond to the letter so PNB requested petitioner consent which is manifested by the meeting of the offer and the
to submit an amended offer to repurchase. acceptance upon the thing and the cause which are to constitute the
 Petitioner rejected PNB.s offer and said that PNB is already contract. Once perfected, they bind other contracting parties and the
proscribed from increasing the price since it already accepted the obligations arising therefrom have the form of law between the
725k deposit. parties and should be complied with in good faith. The parties are bound
 PNB filed for Annulment of Mortgage and Mortgage not only to the fulfillment of what has been expressly stipulated but also to
Foreclosure, Delivery of Title or Specific Perfomance with the consequences which, according to their nature, may be in keeping with
Damages good faith, usage and law
 PNB argued that it had acquired ownership over the property after
A contract of sale is consensual in nature and is perfected upon mere
period to redeem had elapsed.
meeting of the minds. When there is merely an offer by one party without
acceptance of the other, there is no contract.
When the contract of sale is not perfected, it cannot, as an independent Before the Court is a petition for review[1] of the 10 February 2004
source of obligation, serve as a binding juridical relation between the parties Decision[2] and 4 October 2004 Resolution[3] of the Court of Appeals in CA-
G.R. CV No. 56322. The Court of Appeals reversed the 26 September 1996
There is no evidence that the SAMD was authorized by respondent's Decision[4] of the Regional Trial Court, Branch 163, Pasig, which dismissed
Board of Directors to accept petitioner's offer and sell the property for the complaint for specific performance filed by respondent Abraham Lopez
P1,574,560.47. Any acceptance by the SAMD of petitioner's offer would (Lopez) against petitioner Government Service Insurance System (GSIS).
not bind respondent
The Facts
It appears that although respondent requested petitioner to conform
to its amended counter-offer, petitioner refused and instead requested Lopez obtained a loan of P22,500 from the GSIS. To secure the loan,
respondent to reconsider its amended counter-offer. Petitioner's request Lopez mortgaged on 6 June 1982 his house and lot on No. 15 M. Cruz Street,
was ultimately rejected and respondent offered to refund its P725,000.00 Sto. Niño, Marikina, Metro Manila. When he defaulted on the loan, GSIS
deposit. foreclosed on the real estate mortgage on 6 February 1984 and obtained title
to the property under Transfer Certificate of Title (TCT) No. 125201.
In sum, then, there was no perfected contract of sale between Meanwhile, GSIS allowed Lopez to remain on the property for a monthly rent
petitioner and respondent over the subject property. of P1,200.

Thereafter, Lopez accumulated arrears in rent. Thus, in a letter dated


IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. 20 October 1986, GSIS demanded payment as follows:

Our records disclose that you have been remiss in the payment of the rentals
for the premises you are now occupying. Your arrears have accumulated to
the total sum of TWENTY TWO THOUSAND EIGHT HUNDRED PESOS
(P22,800.00) as of 9/30/86.

You are, therefore, advised to pay in full the aforementioned arrears, plus
GSIS vs Lopez 592 SCRA 456 interest, and to vacate the premises within fifteen (15) days from receipt
DECISION hereof, otherwise, this Office will be constrained to file the corresponding
legal action against you for ejectment, x x x[5]
CARPIO, J.:
When no payment was made, GSIS sent another letter dated 8 April
The Case 1988, inviting Lopez to bid for the subject property on 22 April 1988.[6] The
scheduled bidding was cancelled when Lopez obtained on 21 April 1988 a
temporary restraining order from the Regional Trial Court, Branch CLX of cashier’s/manager’s check payable to the GSIS within fifteen (15) days from
Pasig.[7] receipt of this letter, otherwise, subject property will be included in the public
auction sale of GSIS acquired properties to be conducted at some future
In a letter dated 7 July 1988, Lopez offered to repurchase the property
date.[9] (Underscoring in the original)
from the GSIS, thus:
On 22 August 1988, Lopez paid GSIS P15,500, as evidenced by a receipt
This refers to our former property at #15 M. Cruz St., Sto. Niño, Marikina,
which indicated that the amount represented “payment of 10% cash
Metro Manila which was foreclosed by the Government Service Insurance deposit.”[10]
System, Manila.
No contract of sale was executed. Instead, in notices dated 25
In this connection we would like to inform you that we are requesting your September 1989 and 18 October 1989, GSIS demanded from Lopez payment
good office to please allow us to repurchase the said property. of arrears in rent.[11] The notice of 18 October 1989 reads:
It will be highly appreciated if you could please inform us about the Our records disclose that you have been remiss in the payment of the rentals
outstanding obligation we will pay the GSIS, as of July 31, 1988.[8] for the premises you are now occupying. Your arrears have accumulated to
The GSIS, through its Acquired Assets Administration, sent a reply dated the total sum of SIXTY SIX THOUSAND PESOS (P66,000.00) as of September
2 August 1988, which reads: 30, 1989.

x x x we wish to inform you that you may be allowed to repurchase the You are, therefore, advised to pay in full the aforementioned arrears, plus
property subject to the approval by our Board of Trustees on cash basis for interest, and to vacate the premises within fifteen (15) days from receipt
an amount based on the current market value of the property plus unpaid hereof, otherwise, this Office will be constrained to file the corresponding
rentals and accrued real estate taxes, if any. legal action against you for ejectment, x x x

Thereafter, GSIS filed a complaint for ejectment against Lopez with the
Metropolitan Trial Court, Branch 76, Marikina City (MeTC).[12] The parties
Accordingly, you should put up a 10% deposit as earnest money subject to entered into a Compromise Agreement, which the MeTC approved in a
refund, should the Board reject your offer, or forfeiture should you fail to Decision dated 7 March 1991.[13] The Compromise Agreement is quoted as
come up with the terms that may be imposed by the Board. follows:

As determined by this Office, the current market value of subject property is COMPROMISE AGREEMENT
P155,000.00 and the back rentals as of July 31, 1988, amount to P62,919.80.
COME NOW the parties assisted by their respective counsels and unto
If you are, therefore, willing to repurchase your former property for the this Honorable Court most respectfully submit this Compromise Agreement
amount of P155,000.00 plus back rentals, please remit to this Office the for the approval of this Honorable Court under the following terms and
required 10% deposit earnest money ofP15,500.00 either in cash or conditions to wit:
1. The plaintiff is the owner of a two-storey residential house located of a writ of execution without the prior notice to the defendants. This
at No. 15 Marcos Cruz (G. Luna) Street, Sto. Niño, Marikina, Metro Manila. compromise agreement shall be immediately executory.[14]

2. The defendants, despite demands, failed to execute a lease contract In a letter dated 13 February 1992, GSIS-Acquired Assets Administration
and were in arrears in the payment of the reasonable compensation for the Vice-President Z. C. Beltran, Jr. wrote Lopez as follows:
use and occupancy of the said premises.
This refers to your letter of January 14, 1992 offering to buy back your former
3. To forestall their inevitable and justified eviction from the premises property located at 15 M. Cruz St., Sto. Niño, Marikina, Metro Manila.
as a result of their inexcusable failure to comply with their legitimate
obligations, the defendants have agreed to liquidate their arrearages in full Please be informed that the property now commands a current market value
of P844,000.00. Our records also show that you have incurred rental
and to execute a formal lease agreement.
arrearages of P9,600.00 from May 1991 to January 31, 1992.
4. As a manifestation of their good faith, the defendants offered a
Commission on Audit rules and our policies require that we sell our acquired
compromise settlement by paying the reasonable compensation as follows:
assets thru public bidding. We may, however, recommend an exception to
1. P30,000 payable within five (5) days from receipt of notice of Board your case, if you are willing to buy it back at its current market value at
approval; P844,000.00 plus all rental dues but unpaid, to be paid for in full and in cash
30 days from receipt of notice of Board approval. If agreeable, please inform
2. P10,000 monthly thereafter until the balance of the rental arrearages is us immediately so that we can submit your offer to our Board of Trustees for
fully paid; consideration.[15]
3. P1,200 monthly starting January 1, 1991 to December 31, 1991. There is no copy of the 14 January 1992 letter referred to in Beltran’s letter.
At any rate, Lopez, through counsel, replied on 5 March 1992, thus:

5. The defendants’ offer was recommended to the plaintiff’s Board of


Trustees and approved in toto under Board Resolution No. 55 adopted on With respect to your letter dated February 13, 1992 to my client x x x I would
February 14, 1991 with additional condition that the defendants shall be like to request your office in his behalf for a reduction of the price set by your
charged a new and reasonable rental rate based on current rates starting
office from P844,000.00 to the previous agreed price of P155,000.00.
January 1, 1992.
Way back August 2, 1988, the Acquired Assets Administration of GSIS has set
6. In case the defendants fail to comply with any of the terms and the price for said repurchase at P155,000.00 with the notice that my client
conditions hereof, and the terms and conditions of the lease contract that will may deposit a 10% earnest money of P15,500.00 x x x. Accordingly, Mr. Lopez
be executed by them, the plaintiff shall be entitled to the immediate issuance deposited said amount x x x. Mr. Lopez [has been waiting] up to the present
for your Board’s action for said repurchase x x x. Unfortunately, x x x, your
Board has not yet acted on said repurchase though he has already made the The Ruling of the Court of Appeals
required deposit.[16]
The Court of Appeals similarly found that the P15,500 paid by Lopez to
GSIS did not act on his request. Instead, it sent a notice dated 1 February GSIS was earnest deposit. According to the Court of Appeals, earnest deposit
1993 of the inclusion of the subject property in a public auction scheduled on is only a deposit of what would become earnest money or down payment
19 February 1993.[17] This prompted Lopez to file with the Regional Trial should a contract of sale be executed. It merely guarantees that the seller
Court, Branch 163, Pasig, a Complaint for Specific Performance to enjoin the would not back out of the sale. In this case, the money paid was not treated
sale of the subject property and compel GSIS to execute the necessary as proof of perfection of contract. In fact, it was made subject to refund
contract of sale upon full payment of the purchase price of P155,000.[18] should the Board of Trustees reject the offer of Lopez.

The Ruling of the Trial Court However, the Court of Appeals found that there was tacit acceptance of
Lopez’s offer to repurchase the property. Indicative of such decision of the
The trial court agreed with the contention of GSIS that there was no GSIS is its failure to refund Lopez’s deposit. The deposit was paid on 22
perfected contract of sale for lack of consent. Exhibit “A” (GSIS’ letter dated August 1988. Yet, GSIS did not refund the same even up to the time Lopez
2 August 1988) is clear that the sale shall be “subject to the approval of the filed the complaint for specific performance in February 1993. There was no
Board of Trustees.” No such approval has been secured. Therefore, despite
explanation offered for the retention of the deposit.
the payment of P15,500, the transaction could not be considered a perfected
contract of sale. The trial court found that the P15,500 was a mere deposit, The Court of Appeals also found that GSIS sought to enforce the terms
which was for the purpose of holding the inclusion of the subject property in of the contract to sell. GSIS sought to collect from Lopez arrears in rent. The
the public auction. appellate court opined that the arrears in rent were part of the repurchase
price under the contract to sell. In demanding payment of the arrears in rent,
The dispositive portion of the 26 September 1996 Decision of the trial
GSIS was in effect implementing the contract to sell.
court reads:
In addition, the Court of Appeals held that promissory estoppel would
WHEREFORE, foregoing premises considered, this Court renders operate against GSIS from backing out of its commitment to allow Lopez to
judgment in favor of defendant and against plaintiff ordering: repurchase the property at the price mentioned in its 2 August 1988 letter.
1. The dismissal of this case for lack of merit; Under the doctrine of promissory estoppel, the act and assurance given by
GSIS to Lopez to allow the latter to repurchase the property at the price
2. The plaintiff to pay defendant the sum of P30,000.00 as reimbursement indicated in its offer bind GSIS, which should not be allowed to turn around
of the expenses in the publication for the invitation to bid; and adopt an inconsistent position in its transaction with Lopez to the
prejudice of Lopez who relied upon them.
3. The plaintiff to pay defendant the sum of P20,000.00 for attorney’s fees;
In view of these findings, the Court of Appeals held that there was a
4. The cost of suit.[19]
perfected contract of sale between the parties since all the elements of such
a contract exist in this case, namely, (1) consent or meeting of the minds; THE COURT OF APPEALS ERRED IN HOLDING THERE WAS PROMISSORY
(2) determinative subject matter; and (3) price certain in money or its ESTOPPEL.[21]
equivalent. GSIS must, therefore, execute the necessary contract of sale upon
full payment in cash by Lopez of the purchase price of P155,000 plus arrears The Ruling of the Court.
in rent and real property taxes, if any. The petition is meritorious.
The dispositive portion of the 10 February 2004 Decision of the Court of The stages of a contract of sale are: (1) negotiation, starting from the
Appeals reads: time the prospective contracting parties indicate interest in the contract to
WHEREFORE, under the premises, the assailed decision of the RTC is the time the contract is perfected; (2) perfection, which takes place upon the
REVERSED and SET ASIDE. Defendant-appellee is ENJOINED from conducting concurrence of the essential elements of the sale;[22] and (3) consummation,
which commences when the parties perform their respective undertakings
the public auction of the subject property, and is further ORDERED to execute
a contract of sale in favor of plaintiff-appellant upon payment in cash of the under the contract of sale, culminating in the extinguishment of the
full purchase price of PhP155,000.00 plus arrears in rent and accrued real contract.[23]
property taxes, if any. In the present case, the parties never got past the negotiation stage.
SO ORDERED.[20] Nothing shows that the parties had agreed on any final arrangement
containing the essential elements of a contract of sale, namely, (1) consent
or the meeting of the minds of the parties; (2) object or subject matter of the
contract ; and (3) price or consideration of the sale.[24]

The 2 August 1988 letter of the GSIS cannot be classified as a perfected


The Issues contract of sale which binds the parties. The letter was in reply to Lopez’s
GSIS raises the following issues: offer to repurchase the property. Both the trial and appellate courts found
that Lopez’s offer to repurchase the property was subject to the approval of
I. the Board of Trustees of the GSIS, as explicitly stated in the 2 August 1988
GSIS’ letter. No such approval appears in the records. When there is merely
THE COURT OF APPEALS ERRED IN CONCLUDING THAT GSIS TACITLY
an offer by one party without acceptance by the other, there is no contract
ACCEPTED LOPEZ’S OFFER TO REPURCHASE UNDER THE TERMS AND
of sale.[25] Since there was no acceptance by GSIS, which can validly act only
CONDITIONS OF GSIS’ LETTER DATED 2 AUGUST 1988.
through its Board of Trustees,[26] of Lopez’s offer to repurchase the property,
II. there was no perfected contract of sale.
The Court of Appeals, however, held that there was a tacit approval by Considering that there was no perfected contract of sale, the concept
the Board of Trustees of the GSIS of Lopez’s offer to repurchase the subject of earnest money is certainly not applicable to this case. Article 1482 of the
property since GSIS never returned the P15,500 paid by Lopez. Civil Code states that: “Whenever earnest money is given in a contract of sale,
it shall be considered as part of the price and as proof of the perfection of the
This is error. The Court of Appeals overlooked the fact that in an contract.” The earnest money forms part of the consideration only if the sale
ejectment suit, GSIS and Lopez entered into a court-approved Compromise is consummated upon full payment of the purchase price.[28] Hence, there
Agreement regarding the lease of the property. The Compromise Agreement must first be a perfected contract of sale before we can speak of earnest
was approved on 7 March 1991, or almost three years after the 2 August 1988
money. As found by the trial court, the P15,500 paid by Lopez is merely a
letter. The Compromise Agreement pertinently states, thus: deposit for the exclusion of the subject property from the list of the
1. The plaintiff (GSIS) is the owner of a two-storey residential house properties to be auctioned off by GSIS.
located at No. 15 Marcos Cruz (G. Luna) Street, Sto. Niño, Marikina, Metro In principle, GSIS should return the P15,500 deposit made by Lopez since
Manila. the Board of Trustees rejected Lopez’s offer to repurchase the property, as
2. The defendants (Lopez), despite demands, failed to execute a evidenced by the Compromise Agreement where GSIS asserted its ownership
lease contract and were in arrears in the payment of the reasonable of the property. However, Lopez admittedly owes GSIS for the accumulated
compensation for the use and occupancy of the said premises. rental arrears in the sum of P16,800 as of 26 February 1993.[29] Considering
these circumstances, partial legal compensation,[30] under Articles 1278,
3. To forestall their inevitable and justified eviction from the 1279, and 1281 of the Civil Code, applies in this case. In short, both parties
premises as a result of their inexcusable failure to comply with their are creditors and debtors of each other, although in different amounts which
legitimate obligations, the defendants have agreed to liquidate their are already due and demandable. Hence, GSIS is justified in retaining the
arrearages in full and to execute a formal lease agreement.[27] P15,500 deposit and automatically applying it to Lopez’s unpaid rentals
totaling P16,800 as of 26 February 1993.
The acts of the GSIS in seeking to evict Lopez from the property and
in demanding payment of arrears in rent emphasize its ownership of the In view of the foregoing, the Court finds no need to discuss the other
subject property and clearly negate any form of approval by GSIS of Lopez’s issue raised by GSIS.
offer to repurchase the property. Likewise, Lopez’s recognition of GSIS’
ownership of the property and his status as a defaulting lessee in the WHEREFORE, the Court GRANTS the petition. The Court SETS ASIDE the
Compromise Agreement, which was entered into after Lopez’s offer to 10 February 2004 Decision and 4 October 2004 Resolution of the Court of
repurchase, undoubtedly refutes his claim of a perfected contract of sale. If Appeals in CA-G.R. CV No. 56322 and REINSTATES the 26 September 1996
Lopez was under the impression that he had a perfected contract of sale with Decision of the Regional Trial Court, Branch 163, Pasig in Civil Case No. 62890.
GSIS, which meant that Lopez could compel GSIS to perform its obligations as
SO ORDERED.
a seller, then Lopez could have objected to the Compromise Agreement.
However, Lopez assented to the contents of the Compromise Agreement. SANTOS VS. CA
GR. NO. 120820 appellant 90 days to pay the balance and obligations 2, orderingappeallee to
restore possession of property to appelant.
FACTS:

Santos spouses owned a house and lot in Better Living Subdivision, Paranaque
whichwas mortgage in Rural Bank of Salinas Inc. for a loan of P150k. The Villanueva vs CA
spouses offer to sell theproperty to Carmen Caseda for P350K of P54k as
downpayment. Parties agreed with conditionthat Caseda will pay the balance G.R. No. 107624
of the mortgage, the real state taxes, and the electric water bills.Casedas
Subject: Sales
complied with the conditions but when Santoses seeing that Casedas lack the
meansto pay the remaining installment and amortization of loan, they Doctrine: meeting of the minds as to price is essential
repossessed the house and lotand so collected rentals. Casedas offered to
pay remaining balance but was not push throughbecause Santoses wanted a Facts:
higher price. Hence, Casedas praying Santoses to execute finaldeed of This is a petition assailing the decision of the CA dismissing the appeal of the
conveyance over the property. petitioners. CA rendered that there was no contract of sale.
ISSUE: – In 1985, Gamaliel Villanueva (tenant) of a unit in the 3-door apartment
Whether there was a perfected contract of sale. building owned by defendants-spouses (now private respondents) Jose Dela
Cruz and Leonila dela Cruz located at Project 8, Quezon City.
HELD:
– About February of 1986, Dela Cruz offered said parcel of land with the 3-
No, in the absence of the transfer of ownership of the property when it was door apartment building for sale and plaintiffs, son and mother, showed
not executedby the vendor in exchange of the price paid, a contract of sale interest in the property.
was not perfected as expresslyprovided under Article 1458. Transfer of
ownership is essential element in the contract of sale, – Because said property was in arrears(overdue) in the payment of the realty
taxes, dela Cruz approached Irene Villanueva and asked for a certain amount
in its absence what transpired was “contract to sell” where in Ownership is to pay for the taxes so that the property would be cleared of any
reserved by the incumbrance.

vendor until full payment of the purchased price be made. When the – Irene Villanueva gave P10,000.00 on two occasions. It was agreed by them
petitioner repossessed thedisputed property for failure of private respondent that said P10,000.00 would form part of the sale price of P550,000.00.
to pay in full the purchased price they weremerely enforcing the contract not
rescinding it.The SC granted the petition.Summary: Casedas v santos rtc on – Dela Cruz went to plaintiff Irene Villanueva bringing with him Mr. Ben Sabio,
was dismissed, CA reversed and set aside the RTCdecision 1.granting plaintiff a tenant of one of the units in the 3-door apartment building and requested
Villanueva to allow said Sabio to purchase one-half (1/2) of the property
where the unit occupied by him pertained to which the plaintiffs consented,
so that they would just purchase the other half portion and would be paying HELD:
only P265,000.00, they having already — given an amount of P10,000.00 used – Petitioners contend that private respondents’ counsel admitted that
for paying the realty taxes in arrears. “P10,000 is partial or advance payment of the property.” Necessarily then,
there must have been an agreement as to price, hence, a perfected sale. They
– Accordingly the property was subdivided and two (2) separate titles were
secured by defendants Dela Cruz. Mr. Ben Sabio immediately made payments cite Article 1482 of the Civil Code which provides that “(w)henever earnest
money is given in a contract of sale, it shall be considered as part of the price
by installments.
and as proof of the perfection of the contract.”
– March 1987 Dela Cruz executed in favor of their co-defendants, the spouses
– Private respondents contradict this claim with the argument that “(w)hat
Guido Pili and Felicitas Pili, a Deed of Assignment of the other one-half
portion of the parcel of land wherein plaintiff Gamaliel Villanueva’s was clearly agreed (upon) between petitioners and respondents Dela Cruz
apartment unit is situated, purportedly as full payment and satisfaction of an was that the P10,000.00 primarily intended as payment for realty tax was
indebtedness obtained from defendants Pili. going to form part of the consideration of the sale if and when the transaction
would finally be consummated.” Private respondents insist that there “was
– the Transfer Certificate of Title No. 356040 was issued in the name of no clear agreement as to the true amount of consideration.”
defendants Pili on the same day.
– Dela Cruz’ testimony during the cross-examination firmly negated any price
– The plaintiffs came to know of such assignment and transfer and issuance agreement with petitioners because he and his wife quoted the price of
of a new certificate of title in favor of defendants Pili. P575,000.00 and did not agree to reduce it to P550,000.00 as claimed by
petitioner.
– plaintiff Gamaliel Villanueva complained to the barangay captain of Bahay
Turo, Quezon City, on the ground that there was already an agreement – Villanueva on cross-examination: “After the Deed of Sale relative to the
between defendants Dela Cruz and themselves that said portion of the parcel purchase of the property was prepared, Mr. dela Cruz came to me and told
of land owned by defendants Dela Cruz would be sold to him. As there was me that he talked with one of the tenants and he offered to buy the portion
no settlement arrived at, the plaintiffs elevated their complaint to this Court he was occupying if I will agree and I will cause the partition of the property
through the instant action. between us.” Villanueva said that he agreed and that the price 550,000 was
to be divided into two. (Sabio and Villanueva) *The contract which the
– RTC rendered its decision in favor of Dela Cruz. CA affirmed. appellant is referring to was not presented to the court and the appellant did
not use all effort to produce the said contract.

ISSUE: WON there was a perfected sale between Villanueva and Dela Cruz. – SC: “The price of the leased land not having been fixed, the essential
elements which give life to the contract were lacking. It follows that the lessee
cannot compel the lessor to sell the leased land to him. The price must be question after ejectment of the lessees. He also paid an ernest money of
certain, it must be real, not fictitious. A contract of sale is not void for 300,000 under the premise that it shall be forfeited in favor of severino in
uncertainty when the price, though not directly stated in terms of pesos and case of nonpayment. Severino now claims ownership over the property
centavos, can be made certain by reference to existing invoices identified in claiming that henry did not pay for the property, therefore there was no sale
the agreement. In this respect, the contract of sale is perfected. The price to speak of.
must be certain, otherwise there is no true consent between the parties.
There can be no sale without a price. Issue:

– In the instant case, however, what is dramatically clear from the evidence Whether or not there is a contract of sale perfected in this case.
is that there was no meeting of mind as to the price, expressly or impliedly, Held:
directly or indirectly.
There was a perfected contract of sale due to the second deed of sale. The
– Sale is a consensual contract. He who alleges it must show its existence by basic characteristic of an absolutely simulated or fictitious contract is that the
competent proof. Here, the very essential element of price has not been apparent contract is not really desired or intended to produce legal effects or
proven. alter the juridical situation of the parties in any way.
– Lastly, petitioners’ claim that they are ready to pay private respondents is However, in this case, the parties already undertook certain acts which were
immaterial and irrelevant as the latter cannot be forced to accept such directed towards fulfillment of their respective covenants under the second
payment, there being no perfected contract of sale in the first place. deed, indicating that they intended to give effect to their agreement. Further,
the fact that Severino executed the two deeds in question, primarily so that
petitioner could eject the tenant and enter into a loan/mortgage contract
with Philam Life, is to our mind, a strong indication that he intended to
transfer ownership of the property to petitioner. For why else would he
authorize the latter to sue the tenant for ejectment under a claim of
ownership, if he truly did not intend to sell the property to petitioner in the
Hernando R. Penalosa vs. Severino Santos
first place? Needless to state, it does not make sense for Severino to allow
G.R. No. 133749 August 23, 2001 petitioner to pursue the ejectment case, in petitioner's own name, with
petitioner arguing that he had bought the property from Severino and thus
Facts: entitled to possession thereof, if petitioner did not have any right to the
Severino sold his property to henry. Henry applied for a loan with philam life. property. Also worth noting is the fact that in the case filed by Severino's
As It was already approved pending the submission of certain documents tenant against Severino and petitioner in 1989, assailing the validity of the
such as the owners duplicate of transfer certificate of title which is in sale made to petitioner, Severino explicitly asserted in his sworn answer to
possession of severino. Henry already took possession of the property in the complaint that the sale was a legitimate transaction. He further alleged
that the ejectment case filed by petitioner against the tenant was a legitimate what was incumbent upon him. In sum, the only conclusion which can be
action by an owner against one who refuses to turn over possession of his deduced from the aforesaid circumstances is that ownership of the property
property. It should be emphasized that the non-appearance of the parties has been transferred to petitioner. WHEREFORE, the petition is GRANTED.
before the notary public who notarized the deed does not necessarily nullify
nor render the parties' transaction void ab initio. We have held previously
that the provision of Article 1358 of the New Civil Code on the necessity of a
HEIRS OF ERNESTO BIONA, NAMELY: EDITHA B. BLANCAFLOR, MARIANITA
public document is only for convenience, not for validity or enforceability.
D. DE JESUS, VILMA B. BLANCAFLOR, ELSIE B. RAMOS and PERLITA B.
Failure to follow the proper form does not invalidate a contract. Where a
CARMEN, petitioners, vs. THE COURT OF APPEALS and LEOPOLDO HILAJOS,
contract is not in the form prescribed by law, the parties can merely compel
respondents.
each other to observe that form, once the contract has been perfected.
DECISION
This is consistent with the basic principle that contracts are obligatory in
whatever form they may have been entered into, provided all essential KAPUNAN, J.:
requisites are present.
Before us is a petition for review on certiorari under Rule 45 of the Decision
The elements of a valid contract of sale under Art. 1458 of the Civil Code are: of the Court of Appeals dated March 31, 1992, reversing the decision of the
(1) consent or meeting of the minds; (2) determinate subject matter; and (3) Regional Trial Court, 11th Judicial region, Branch 26, Surallah, South Cotabato
price certain in money or its equivalent. and the Resolution dated May 26, 1992, denying the subsequent motion for
reconsideration.
In the instant case, the second deed reflects the presence of all these
elements and as such, there is already a perfected contract of sale. The non-
payment of the contract price merely results in a breach of contract for non-
performance and warrants an action for rescission or specific performance Quoting from the decision of the Court of Appeals, the antecedent facts are
under Article 1191 of the Civil Code. Be that as it may, we agree with as follows:
petitioner that although the law allows rescission as a remedy for breach of On October 23, 1953, the late Ernesto Biona, married to plaintiff-appellee
contract, the same may not be availed of by respondents in this case. To begin Soledad Biona, was awarded Homestead Patent No. V-840 over the property
with, it was Severino who prevented full payment of the stipulated price subject of this suit, a parcel of agricultural land denominated as lot 177 of
when he refused to deliver the owner's original duplicate title to Philam Life. PLS-285-D, located in Bo. 3, Banga, Cotabato, containing an area of ten (10)
His refusal to cooperate was unjustified, because as Severino himself hectares, forty-three (43) acres and sixty-eight (68) centares, Original
admitted, he signed the deed precisely to enable petitioner to acquire the Certificate of Title No. (V-2323) P-3831 was issued in his name by the Register
loan. He also knew that the property was to be given as security therefor. of Deeds of Cotabato (Exh. C). On June 3, 1954, Ernesto and Soledad Biona
Thus, it cannot be said that petitioner breached his obligation towards obtained a loan from the then Rehabilitation Finance Corporation (now the
Severino since the former has always been willing to and could comply with Development Bank of the Philippines) and put up as collateral the subject
property (Exh. 4). On June 12, 1956, Ernesto Biona died (Exh. B) leaving as his to palay and corn, was yielding three harvests annually, with an average of
heirs herein plaintiffs-appellees, namely, his wife, Soledad Estrobillo Vda. De one hundred twenty (120) sacks of corn and eighty cavans of rice per hectare;
Biona, and five daughters, Editha B. Blancaflor, Marianita B. de Jesus, Vilma that plaintiffs-appellees were deprived of its total produce amounting to
B. Blancaflor, Elsie B. Ramos and Perlita B. Carmen. P150,000.00. Plaintiffs-appellees prayed for the award of moral damages in
the sum of P50,000.00, exemplary damages in the amount of P20,000,00 and
On March 1, 1960, plaintiff-appellee Soledad Biona obtained a loan from litigation expenses in the amount of P2,000.00.
defendant-appellant in the amount of P1,000 and as security therefore, the
subject property was mortgaged. It was further agreed upon by the On September 19, 1986, defendant-appellant filed his answer with
contracting parties that for a period of two years until the debt is paid, counterclaim traversing the material allegations in the complaint and
defendant-appellant shall occupy the land in dispute and enjoy the usufruct alleging, by way of affirmative and special defenses, that: on September 11,
thereof. 1961, Soledad Biona, after obtaining the loan of P1,000.00 from defendant-
appellant, approached and begged the latter to buy the whole of Lot No. 177
The two-year period elapsed but Soledad Biona was not able to pay her since it was then at the brink of foreclosure by the Development Bank of the
indebtedness. Defendant-appellant continued occupying and cultivating the Philippines and she had no money to redeem the same nor the resources to
subject property without protest from plaintiffs-appellees. support herself and her five small children; that defendant-appellant agreed
On July 3, 1962, defendant-appellant paid the sum of P1,400.00 to the to buy the property for the amount of P4,300.00, which consideration was to
Development Bank of the Philippines to cancel the mortgage previously include the redemption price to be paid to the Development Bank of the
constituted by the Biona spouses on June 3, 1953 (Exhs. 4 and 6). Philippines; that the purchase price paid by defendant far exceeded the then
current market value of the property and defendant had to sell his own eight-
hectare parcel of land in Surallah to help Soledad Biona; that to evidence the
transaction, a deed of sale was handwritten by Soledad Biona and signed by
Thereafter, and for a period of not less than twenty-five years, defendant-
her and the defendant; that at the time of the sale, half of the portion of the
appellant continued his peaceful and public occupation of the property,
property was already submerged in water and from the years 1969 to 1984,
declaring it in his name for taxation purposes (Exhs. 10 and 11), paying real
two and one-half hectares thereof were eroded by the Allah River; that by
estate property taxes thereon (Exhs. 12, 13, 13-a to 13-e, F, G, H and I), and
virtue of his continuous and peaceful occupation of the property from the
causing the same to be tenanted (Exhs. 7, 8, 9).
time of its sale and for more than twenty- five years thereafter, defendant
On June 19, 1985, plaintiffs-appellees, filed a complaint for recovery of possesses a better right thereto subject only to the rights of the tenants
ownership, possession, accounting and damages, with a prayer for a writ of whom he had allowed to cultivate the land under the Land Reform Program
preliminary mandatory injunction and/ or restraining order against of the government; that the complaint states no cause of action; that
defendant-appellant alleging, among others, that the latter had unlawfully plaintiffs alleged right, if any, is barred by the statutes of fraud. As
been depriving them of the use, possession and enjoyment of the subject counterclaim, defendant-appellant prayed that plaintiffs-appellees be
property; that the entire parcel of land, which was devoted and highly suited ordered to execute a formal deed of sale over the subject property and to pay
him actual, moral and exemplary damages as the trial court may deem
proper. He likewise prayed for the award of attorney's fees in the sum of SO ORDERED.[2]
P10,000.00.
Dissatisfied, herein private respondent appealed to the Court of Appeals
During the hearing of the case, plaintiffs-appellees presented in evidence the which reversed the trial court's ruling. The dispositive portion reads as
testimonies of Editha Biona Blancaflor and Vilma Biona Blancaflor, and follows:
documentary exhibits A to G and their submarkings.
WHEREFORE, premises considered, the judgment appealed from is set aside
Defendant-appellant, for his part, presented the testimonies of himself and and a new one entered dismissing the complaint, and the plaintiffs-appellees
Mamerto Famular, including documentary exhibits 1 to 13, F, G, H, I, and their are ordered to execute a registrable deed of conveyance of the subject
submarkings.[1] property in favor of the defendant-appellant within ten (10) days from the
finality of this decision. With costs against plaintiffs-appellees.[3]
On January 31, 1990, the RTC rendered a decision with the following
dispositive portion: Hence, the instant petition where the following assignment of errors were
made:
I (SIC) VIEW OF THE FOREGOING, decision is hereby rendered:
I.- RESPONDENT COURT OF APPEALS ERRED IN CONCLUDING THAT THE
1. ordering the defendant to vacate possession of the lot in question to the SIGNATURE OF SOLEDAD ESTROBILLO IN THE DEED OF SALE (EXHIBIT "2"), A
extent of six-tenths (6/10) of the total area thereof and to deliver the same
PRIVATE DOCUMENT, IS GENUINE.
to the plaintiff Soledad Estrobillo Biona upon the latter's payment of the sum
of P1,000.00 TO THE FORMER IN REDEMPTION OF ITS MORTGAGE
CONSTITUTED UNDER exh. "1" of defendant;
II - RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE DEED OF
SALE (EXHIBIT 2) IS VALID AND COULD LEGALLY CONVEY TO PRIVATE
RESPONDENT OWNERSHIP AND TITLE OVER THE SUBJECT PROPERTY.
2. ordering the defendant to vacate the possession of the remaining four-
tenths (4/10) of the area of the lot in question, representing the shares of the III - RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT HEREIN
children of the late Ernesto Biona and deliver the same to said plaintiffs; the PETITIONERS HAD LOST THEIR RIGHT TO RECOVER THE SUBJECT PROPERTY
defendant shall render an accounting of the net produce of the area ordered BY VIRTUE OF THE EQUITABLE PRINCIPLE OF LACHES.
returned to the co-plaintiffs of Soledad Biona commencing from the date of
the filing of the complaint until possession thereto has been delivered to said IV- RESPONDENT COURT OF APPEALS ERRED IN NOT HOLDING THAT PRIVATE
co-plaintiffs and to deliver or pay 25% of said net produce to said co-plaintiffs; RESPONDENT'S RIGHT OF ACTION UNDER THE DEED OF SALE (EXHIBIT "2")
HAD PRESCRIBED.[4]
3. ordering the defendant to pay the costs of this suit.

The defendant's counter-claim are dismissed for lack of merit.


As correctly pointed out by the Court of Appeals, the pivotal issue in the As to the authenticity of the deed of sale, we subscribe to the Court of
instant case is whether or not the deed of sale is valid and if it effectively Appeals' appreciation of evidence that private respondent has substantially
conveyed to the private respondents the subject property. proven that Soledad Biona indeed signed the deed of sale of the subject
property in his favor. His categorical statement in the trial court that he
In ruling in favor of the petitioners, the trial court refused to give weight to himself saw Soledad Estrobillo affix her signature on the deed of sale lends
the evidence of private respondent which consisted of (1) the handwritten credence. This was corroborated by another witness, Mamerto Famular.
and unnotarized deed of sale executed by Soledad Biona in favor of the Although the petitioners consider such testimony as self-serving and
private respondent; and (2) the corresponding acknowledgment receipt of
biased,[6] it can not, however, be denied that private respondent has shown
the amount of P3,500.00 as partial payment for the land in dispute. To the by competent proof that a contract of sale where all the essential elements
mind of the trial court, the signature of Soledad Biona on the deed of sale was are present for its validity was executed between the parties.[7] The burden
not genuine. There was no direct evidence to prove that Soledad Biona is on the petitioners to prove the contrary which they have dismally failed to
herself signed the document. Moreover, the deed of sale was not notarized
do. As aptly stated by the Court of Appeals:
and therefore, did not convey any rights to the vendee. The trial court also
ruled that petitioners' rights over the land have not allegedly prescribed. Having established the due execution of the subject deed of sale and the
receipt evidencing payment of the consideration, the burden now shifted to
On the other hand, the respondent Court of Appeals accepted as genuine the plaintiffs-appellees to prove by contrary evidence that the property was not
deed of sale (Exh. 2) which "sets forth in unmistakable terms that Soledad
so transferred. They were not able to do this since the very person who could
Biona agreed for the consideration of P4,500.00, to transfer to defendant- deny the due execution of the document, Soledad Biona, did not testify. She
appellant Lot 177. The fact that payment was made is evidenced by the similarly failed to take the witness stand in order to deny her signatures on
acknowledgment receipt for P3,500.00 (Exh. 3) signed by Soledad Biona, and Exhs. 2 and 3. Admitting as true that she was under medication in Manila
private respondent previous delivery of P1,000.00 to her pursuant to the while the hearing of the case was underway, it was easy enough to get her
Mutual Agreement (Exh. 1). deposition. Her non-presentation gives rise to the presumption that if her
The contract of sale between the contracting parties was consummated by testimony was taken, the same would be adverse to the claim by plaintiffs-
the delivery of the subject land to private respondent who since then had appellees.
occupied and cultivated the same continuously and peacefully until the It must also be noted that under Sec. 22 Rule 132 of our procedural law,
institution of this suit."[5] evidence respecting handwriting may also be given by a comparison, made
Given the contrary findings of the trial court and the respondent court, there by the witness or the court, with writings admitted or treated as genuine by
is a need to re-examine the evidence altogether. After a careful study, we are the party against whom the evidence is offered. Our own close scrutiny of the
inclined to agree with the findings and conclusions of the respondent court signature of Soledad Biona appearing on Exh. 1, the document admitted by
as they are more in accord with the law and evidence on record. the contending parties, reveals that it is the same as the signatures appearing
on Exhs. 2 and 3, the documents in dispute. Admittedly, as was pointed out
by the trial court, the "S" in Exhs. 2 and 3 were written in printed type while
that in Exh. 1 is in handwriting type. But a careful look at the text of Exh. 2 enforceable between the parties. We quote with favor the respondent court's
would reveal that Soledad Biona alternately wrote the letter "S" in longhand ratiocination on the matter:
and printed form. Thus, the words "Sum" and "Sept.," found in the
penultimate and last paragraphs of the document, respectively, were both xxx The trial court cannot dictate the manner in which the parties may
written in longhand, while her name appearing on first part of the document, execute their agreement, unless the law otherwise provides for a prescribed
as well as the erased word "Sept." in the last paragraph thereof were written form, which is not so in this case. The deed of sale so executed, although a
in printed form. Moreover, all doubts about the genuineness of Soledad private document, is effective as between the parties themselves and also as
the third persons having no better title, and should be admitted in evidence
Biona's signatures on Exhs. 2 and 3 are removed upon their comparison to
her signature appearing on the special power of attorney (Exh. A) presented for the purpose of showing the rights and relations of the contracting parties
in evidence by plaintiffs-appellees during trial. In said document, Soledad (Carbonell v. Court of Appeals, 69 SCRA 99; Elumbaring v. Elumbaring, 12 Phil.
Biona signed her name using the same fact that Soledad Estrobillo Biona 384). Under Art. 1356 of the Civil Code, contracts shall be obligatory in
wrote her entire name on Exh. 2 while she merely affixed her maiden name whatever form they may have been entered into provided all the essential
on the other two documents may have been due to the lesser options left to requisites for their necessary elements for a valid contract of sale were met
her when the lawyers who drafted the two documents (Exhs. 2 and 3) already when Soledad Biona agreed to sell and actually conveyed Lot 177 to
had typewritten the names "SOLEDAD ESTROBILLO" thereon whereas in Exh. defendant-appellant who paid the amount of P4,500.00 therefore. The deed
2, it was Soledad Biona herself who printed and signed her own name. Thus, of sale (Exh. 2) is not made ineffective merely because it is not notarized or
in the special power of attorney (Exh. A), Soledad Biona signed her name in does not appear in a public document. The contract is binding upon the
contracting parties, defendant-appellant and Soledad Biona, including her
the same manner it was typewritten on the document.[8]
successors-in-interest. Pursuant to Art. 1357, plaintiffs-appellees may be
compelled by defendant-appellant to execute a public document to embody
their valid and enforceable contract and for the purpose of registering the
We agree with the private respondent that all the requisites for a valid property in the latter's name (Clarin v. Rulona, 127 SCRA 512; Heirs of Amparo
contract of sale are present in the instant case. For a valuable consideration
v. Santos, 108 SCRA 43; Araneta v. Montelibano, 14 Phil. 117).[12]
of P4,500.00, Soledad Biona agreed to sell and actually conveyed the subject
property to private respondent. The fact that the deed of sale was not Finally, we find no merit in petitioners' contention that their right over the
notarized does not render the agreement null and void and without any land has not prescribed. The principle of laches was properly applied against
effect. The provision of Article 1358 of the Civil Code[9] on the necessity of a petitioner. Laches has been defined as the failure or neglect, for an
public document is only for convenience, and not for validity or unreasonable and unexplained length of time, to do that which by exercising
enforceability.[10] The observance of which is only necessary to insure its due diligence could or should have been done earlier, it is negligence or
efficacy, so that after the existence of said contract had been admitted, the omission to assert a right within a reasonable time, warranting a presumption
party bound may be compelled to execute the proper document.[11] that the party entitled to assert it has either abandoned it or declined to
Undeniably, a contract has been entered into by Soledad Biona and the assert it.[13] In the instant case, the Court of Appeals point to the
private respondent. Regardless of its form, it was valid, binding and circumstances that warrant the principle to come into play:
Laches had been defined to be such neglect or omission to assert a right taken long years, only to spring from ambush and claim title when the possessor's
in conjunction with the lapse of time and other circumstances causing efforts and the rise of land values offer an opportunity to make easy profit at
prejudice to an adverse party, as will bar him in equity (Heirs of Batiog his expense.'
Lacamen v. Heirs of Laruan, 65 SCRA 605, 609-610). In the instant suit,
Soledad Biona, at the time of the execution of the deed of sale (Exh. 2) on Thus, notwithstanding the invalidity of the sale with respect to the share of
September 11, 1961, could only alienate that portion of Lot 177 belonging to plaintiffs-appellees, the daughters of the late Ernesto Biona, they [allowed]
her, which is seven-twelfths of the entire property. She had no power or the vendee, defendant-appellant herein, to enter, occupy and possess the
property in the concept of an owner without demurrer and molestation for a
authority to dispose of the shares of her co-owners, the five daughters of the
deceased Ernesto Biona, who were entitled to an indivisible five-twelfths long period of time, never claiming the land as their own until 1985 when the
portion of the whole property. It is not disputed, however, that as early as property has greatly appreciated in value. Vigilantibus non dormientibus
1960, when Soledad Biona borrowed money from defendant-appellant (Exh. sequitas subvenit.[14]
L), the latter entered, possessed and started occupying the same in the WHEREFORE, the Petition is DENIED and the assailed Decision of the Court of
concept of an owner. He caused its cultivation through various tenants under Appeals is AFFIRMED.
Certificates of Land Transfer (Exhs. 7-9), declared the property in his name,
religiously paid taxes thereon, reaped benefits therefrom, and executed SO ORDERED.
other acts of dominion without any protest or interference from plaintiffs-
appellees for more than twenty-five years. Even when the five daughters of
the deceased Ernesto Biona were way past the age of majority, when they
could have already asserted their right to their share, no sale in defendant-
appellant's favor was ever brought or any other action was taken by them to
recover their share. Instead, they allowed defendant-appellant to peacefully
occupy the property without protest. Although it is true that no title to
registered land in derogation of that of the registered owner shall be acquired
by prescription or adverse possession as the right to recover possession of
registered land is imprescriptible, jurisprudence has laid down the rule that a
person and his heirs may lose their right to recover back the possession of
such property and title thereto by reason of laches. (Victoriano v. Court of
Appeals, 194 SCRA 19; Lola v. CA, 145 SCRA 439, 449). Indeed, it has been
ruled in the case of Miguel v. Catalino, 26 SCRA 234, 239, that:

'Courts can not look with favor at parties who, by their silence, delay and
inaction, knowingly induce another to spend time, effort and expense in
cultivating the land, paying taxes and making improvements thereof for 30
This is a petition for review on certiorari[1] to annul the Decision[2] dated 26
June 1996 of the Court of Appeals in CA-G.R. CV No. 41996. The Court of
Appeals affirmed the Decision[3] dated 18 February 1993 rendered by Branch
65 of the Regional Trial Court of Makati (trial court) in Civil Case No. 89-5174.
The trial court dismissed the case after it found that the parties executed the
Deeds of Sale for valid consideration and that the plaintiffs did not have a
cause of action against the defendants.

The Facts:

The Court of Appeals summarized the facts of the case as follows:

Defendant spouses Leonardo Joaquin and Feliciana Landrito are the parents
of plaintiffs Consolacion, Nora, Emma and Natividad as well as of defendants
Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, and Gavino, all surnamed
JOAQUIN. The married Joaquin children are joined in this action by their
respective spouses.

Sought to be declared null and void ab initio are certain deeds of sale of real
property executed by defendant parents Leonardo Joaquin and Feliciana
Landrito in favor of their co-defendant children and the corresponding
certificates of title issued in their names, to wit:

Buenaventura vs CA 1. Deed of Absolute Sale covering Lot 168-C-7 of subdivision plan (LRC) Psd-
256395 executed on 11 July 1978, in favor of defendant Felicitas Joaquin, for
[G.R. No. 126376. November 20, 2003] a consideration of P6,000.00 (Exh. C), pursuant to which TCT No. [36113/T-
172] was issued in her name (Exh. C-1);
DECISION
2. Deed of Absolute Sale covering Lot 168-I-3 of subdivision plan (LRC) Psd-
CARPIO, J.:
256394 executed on 7 June 1979, in favor of defendant Clarita Joaquin, for a
The Case consideration of P1[2],000.00 (Exh. D), pursuant to which TCT No. S-109772
was issued in her name (Exh. D-1);
3 Deed of Absolute Sale covering Lot 168-I-1 of subdivision plan (LRC) Psd- c) Thirdly, the deeds of sale do not reflect and express the true intent of the
256394 executed on 12 May 1988, in favor of defendant spouses Fidel parties (vendors and vendees); and
Joaquin and Conchita Bernardo, for a consideration of P54,[3]00.00 (Exh. E),
d) Fourthly, the purported sale of the properties in litis was the result of a
pursuant to which TCT No. 155329 was issued to them (Exh. E-1);
deliberate conspiracy designed to unjustly deprive the rest of the compulsory
4. Deed of Absolute Sale covering Lot 168-I-2 of subdivision plan (LRC) Psd- heirs (plaintiffs herein) of their legitime.
256394 executed on 12 May 1988, in favor of defendant spouses Artemio
Joaquin and Socorro Angeles, for a consideration of P[54,3]00.00 (Exh. F), - XXI -
pursuant to which TCT No. 155330 was issued to them (Exh. F-1); and Necessarily, and as an inevitable consequence, Transfer Certificates of Title
5. Absolute Sale of Real Property covering Lot 168-C-4 of subdivision plan Nos. 36113/T-172, S-109772, 155329, 155330, 157203 [and 157779] issued
by the Registrar of Deeds over the properties in litis xxx are NULL AND VOID
(LRC) Psd-256395 executed on 9 September 1988, in favor of Tomas Joaquin,
for a consideration of P20,000.00 (Exh. G), pursuant to which TCT No. 157203 AB INITIO.
was issued in her name (Exh. G-1). Defendants, on the other hand aver (1) that plaintiffs do not have a cause of
[6. Deed of Absolute Sale covering Lot 168-C-1 of subdivision plan (LRC) Psd- action against them as well as the requisite standing and interest to assail
256395 executed on 7 October 1988, in favor of Gavino Joaquin, for a their titles over the properties in litis; (2) that the sales were with sufficient
consideration of P25,000.00 (Exh. K), pursuant to which TCT No. 157779 was considerations and made by defendants parents voluntarily, in good faith,
issued in his name (Exh. K-1).] and with full knowledge of the consequences of their deeds of sale; and (3)
that the certificates of title were issued with sufficient factual and legal
In seeking the declaration of nullity of the aforesaid deeds of sale and basis.[4] (Emphasis in the original)
certificates of title, plaintiffs, in their complaint, aver:
The Ruling of the Trial Court
The deeds of sale, Annexes C, D, E, F, and G, [and K] are simulated as they are,
are NULL AND VOID AB INITIO because
Before the trial, the trial court ordered the dismissal of the case against
defendant spouses Gavino Joaquin and Lea Asis.[5] Instead of filing an Answer
a) Firstly, there was no actual valid consideration for the deeds of sale xxx with their co-defendants, Gavino Joaquin and Lea Asis filed a Motion to
over the properties in litis; Dismiss.[6] In granting the dismissal to Gavino Joaquin and Lea Asis, the trial
court noted that compulsory heirs have the right to a legitime but such right
b) Secondly, assuming that there was consideration in the sums reflected in
is contingent since said right commences only from the moment of death of
the questioned deeds, the properties are more than three-fold times more the decedent pursuant to Article 777 of the Civil Code of the Philippines.[7]
valuable than the measly sums appearing therein;
After trial, the trial court ruled in favor of the defendants and dismissed the Upon this point, there is no question that plaintiffs-appellants, like their
complaint. The trial court stated: defendant brothers and sisters, are compulsory heirs of defendant spouses,
Leonardo Joaquin and Feliciana Landrito, who are their parents. However,
In the first place, the testimony of the defendants, particularly that of the xxx their right to the properties of their defendant parents, as compulsory heirs,
father will show that the Deeds of Sale were all executed for valuable is merely inchoate and vests only upon the latters death. While still alive,
consideration. This assertion must prevail over the negative allegation of defendant parents are free to dispose of their properties, provided that such
plaintiffs. dispositions are not made in fraud of creditors.
And then there is the argument that plaintiffs do not have a valid cause of Plaintiffs-appellants are definitely not parties to the deeds of sale in question.
action against defendants since there can be no legitime to speak of prior to Neither do they claim to be creditors of their defendant parents.
the death of their parents. The court finds this contention tenable. In Consequently, they cannot be considered as real parties in interest to assail
determining the legitime, the value of the property left at the death of the the validity of said deeds either for gross inadequacy or lack of consideration
testator shall be considered (Art. 908 of the New Civil Code). Hence, the or for failure to express the true intent of the parties. In point is the ruling of
legitime of a compulsory heir is computed as of the time of the death of the
the Supreme Court in Velarde, et al. vs. Paez, et al., 101 SCRA 376, thus:
decedent. Plaintiffs therefore cannot claim an impairment of their legitime
while their parents live. The plaintiffs are not parties to the alleged deed of sale and are not principally
or subsidiarily bound thereby; hence, they have no legal capacity to challenge
All the foregoing considered, this case is DISMISSED. their validity.
In order to preserve whatever is left of the ties that should bind families Plaintiffs-appellants anchor their action on the supposed impairment of their
together, the counterclaim is likewise DISMISSED. legitime by the dispositions made by their defendant parents in favor of their
No costs. defendant brothers and sisters. But, as correctly held by the court a quo, the
legitime of a compulsory heir is computed as of the time of the death of the
SO ORDERED.[8] decedent. Plaintiffs therefore cannot claim an impairment of their legitime
while their parents live.

The Ruling of the Court of Appeals


With this posture taken by the Court, consideration of the errors assigned by
The Court of Appeals affirmed the decision of the trial court. The appellate
plaintiffs-appellants is inconsequential.
court ruled:
WHEREFORE, the decision appealed from is hereby AFFIRMED, with costs
To the mind of the Court, appellants are skirting the real and decisive issue in
against plaintiffs-appellants.
this case, which is, whether xxx they have a cause of action against appellees.
SO ORDERED.[9]
Hence, the instant petition. Petitioners Complaint betrays their motive for filing this case. In their
Complaint, petitioners asserted that the purported sale of the properties in
Issues litis was the result of a deliberate conspiracy designed to unjustly deprive the
Petitioners assign the following as errors of the Court of Appeals: rest of the compulsory heirs (plaintiffs herein) of their legitime. Petitioners
strategy was to have the Deeds of Sale declared void so that ownership of the
1. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE CONVEYANCE lots would eventually revert to their respondent parents. If their parents die
IN QUESTION HAD NO VALID CONSIDERATION. still owning the lots, petitioners and their respondent siblings will then co-
own their parents estate by hereditary succession.[11]
2. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT EVEN ASSUMING
THAT THERE WAS A CONSIDERATION, THE SAME IS GROSSLY INADEQUATE. It is evident from the records that petitioners are interested in the properties
subject of the Deeds of Sale, but they have failed to show any legal right to
3. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE DEEDS OF SALE
the properties. The trial and appellate courts should have dismissed the
DO NOT EXPRESS THE TRUE INTENT OF THE PARTIES.
action for this reason alone. An action must be prosecuted in the name of the
4. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE CONVEYANCE real party-in-interest.[12]
WAS PART AND PARCEL OF A CONSPIRACY AIMED AT UNJUSTLY DEPRIVING
[T]he question as to real party-in-interest is whether he is the party who
THE REST OF THE CHILDREN OF THE SPOUSES LEONARDO JOAQUIN AND
would be benefitted or injured by the judgment, or the party entitled to the
FELICIANA LANDRITO OF THEIR INTEREST OVER THE SUBJECT PROPERTIES.
avails of the suit.
5. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT PETITIONERS HAVE
xxx
A GOOD, SUFFICIENT AND VALID CAUSE OF ACTION AGAINST THE PRIVATE
RESPONDENTS.[10] In actions for the annulment of contracts, such as this action, the real parties
are those who are parties to the agreement or are bound either principally or
The Ruling of the Court
subsidiarily or are prejudiced in their rights with respect to one of the
We find the petition without merit. contracting parties and can show the detriment which would positively result
to them from the contract even though they did not intervene in it (Ibaez v.
We will discuss petitioners legal interest over the properties subject of the Hongkong & Shanghai Bank, 22 Phil. 572 [1912]) xxx.
Deeds of Sale before discussing the issues on the purported lack of
consideration and gross inadequacy of the prices of the Deeds of Sale. These are parties with a present substantial interest, as distinguished from a
mere expectancy or future, contingent, subordinate, or consequential
Whether Petitioners have a legal interest over the properties subject of the interest. The phrase present substantial interest more concretely is meant
Deeds of Sale such interest of a party in the subject matter of the action as will entitle him,
under the substantive law, to recover if the evidence is sufficient, or that he
has the legal title to demand and the defendant will be protected in a obligation under an existing valid contract while the latter prevents the
payment to or recovery by him.[13] existence of a valid contract.[15]

Petitioners do not have any legal interest over the properties subject of the Petitioners failed to show that the prices in the Deeds of Sale were absolutely
Deeds of Sale. As the appellate court stated, petitioners right to their parents simulated. To prove simulation, petitioners presented Emma Joaquin Valdozs
properties is merely inchoate and vests only upon their parents death. While testimony stating that their father, respondent Leonardo Joaquin, told her
still living, the parents of petitioners are free to dispose of their properties. In that he would transfer a lot to her through a deed of sale without need for
their overzealousness to safeguard their future legitime, petitioners forget her payment of the purchase price.[16] The trial court did not find the
that theoretically, the sale of the lots to their siblings does not affect the value allegation of absolute simulation of price credible. Petitioners failure to prove
of their parents estate. While the sale of the lots reduced the estate, cash of absolute simulation of price is magnified by their lack of knowledge of their
equivalent value replaced the lots taken from the estate. respondent siblings financial capacity to buy the questioned lots.[17] On the
other hand, the Deeds of Sale which petitioners presented as evidence plainly
Whether the Deeds of Sale are void for lack of consideration showed the cost of each lot sold. Not only did respondents minds meet as to
Petitioners assert that their respondent siblings did not actually pay the prices the purchase price, but the real price was also stated in the Deeds of Sale. As
stated in the Deeds of Sale to their respondent father. Thus, petitioners ask of the filing of the complaint, respondent siblings have also fully paid the price
the court to declare the Deeds of Sale void. to their respondent father.[18]

A contract of sale is not a real contract, but a consensual contract. As a Whether the Deeds of Sale are void
consensual contract, a contract of sale becomes a binding and valid contract for gross inadequacy of price
upon the meeting of the minds as to price. If there is a meeting of the minds
of the parties as to the price, the contract of sale is valid, despite the manner Petitioners ask that assuming that there is consideration, the same is grossly
of payment, or even the breach of that manner of payment. If the real price inadequate as to invalidate the Deeds of Sale.
is not stated in the contract, then the contract of sale is valid but subject to
reformation. If there is no meeting of the minds of the parties as to the price, Articles 1355 of the Civil Code states:
because the price stipulated in the contract is simulated, then the contract is Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall
void.[14] Article 1471 of the Civil Code states that if the price in a contract of not invalidate a contract, unless there has been fraud, mistake or undue
sale is simulated, the sale is void. influence. (Emphasis supplied)
It is not the act of payment of price that determines the validity of a contract Article 1470 of the Civil Code further provides:
of sale. Payment of the price has nothing to do with the perfection of the
contract. Payment of the price goes into the performance of the contract. Art. 1470. Gross inadequacy of price does not affect a contract of sale, except
Failure to pay the consideration is different from lack of consideration. The as may indicate a defect in the consent, or that the parties really intended a
former results in a right to demand the fulfillment or cancellation of the donation or some other act or contract. (Emphasis supplied)
Petitioners failed to prove any of the instances mentioned in Articles 1355
and 1470 of the Civil Code which would invalidate, or even affect, the Deeds
of Sale. Indeed, there is no requirement that the price be equal to the exact BUENAVENTURA VS CA
value of the subject matter of sale. All the respondents believed that they 416 SCRA 263
received the commutative value of what they gave. As we stated in Vales v.
FACTS:
Villa:[19]
Defendant spouses Leonardo Joaquin and Feliciana Landrito are the parents
Courts cannot follow one every step of his life and extricate him from bad of plaintiffs Consolacion, Nora, Emma and Natividad as well as of defendants
bargains, protect him from unwise investments, relieve him from one-sided Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, and Gavino, all surnamed
contracts, or annul the effects of foolish acts. Courts cannot constitute JOAQUIN. (Note: So there are two sets of children here.)
themselves guardians of persons who are not legally incompetent. Courts
operate not because one person has been defeated or overcome by another, Sought to be declared null and void ab initio are certain deeds of sale of real
but because he has been defeated or overcome illegally. Men may do foolish property executed by Leonardo Joaquin and Feliciana Landrito in favor of
things, make ridiculous contracts, use miserable judgment, and lose money their co-defendant children and the corresponding certificates of title issued
by them indeed, all they have in the world; but not for that alone can the law in their names.
intervene and restore. There must be, in addition, a violation of the law, the
commission of what the law knows as an actionable wrong, before the courts The plaintiffs in this case sought for the declaration of nullity of the six deeds
are authorized to lay hold of the situation and remedy it. (Emphasis in the of sale and certificates of title in favor of the defendants.
original)
They alleged that certain deed of sale were null and void ab initio because
Moreover, the factual findings of the appellate court are conclusive on the they are simulated.
parties and carry greater weight when they coincide with the factual findings
of the trial court. This Court will not weigh the evidence all over again unless They said that: a. Firstly, there was no actual valid consideration for the deeds
there has been a showing that the findings of the lower court are totally of sale xxx over the properties in litis; b. Secondly, assuming that there was
devoid of support or are clearly erroneous so as to constitute serious abuse consideration in the sums reflected in the questioned deeds, the properties
of discretion.[20] In the instant case, the trial court found that the lots were are more than three-fold times more valuable than the measly sums
sold for a valid consideration, and that the defendant children actually paid appearing therein; c. Thirdly, the deeds of sale do not reflect and express the
true intent of the parties (vendors and vendees); and d. Fourthly, the
the purchase price stipulated in their respective Deeds of Sale. Actual
purported sale of the properties in litis was the result of a deliberate
payment of the purchase price by the buyer to the seller is a factual finding conspiracy designed to unjustly deprive the rest of the compulsory heirs
that is now conclusive upon us. (plaintiffs herein) of their legitime.

WHEREFORE, we AFFIRM the decision of the Court of Appeals in toto.


Defendants, on the other hand aver (1) that plaintiffs do not have a cause of
SO ORDERED. action against them as well as the requisite standing and interest to assail
their titles over the properties in litis; (2) that the sales were with sufficient cancellation of the obligation under an existing valid contract while the latter
considerations and made by defendants parents voluntarily, in good faith, prevents the existence of a valid contract.
and with full knowledge of the consequences of their deeds of sale; and (3)
that the certificates of title were issued with sufficient factual and legal basis.

Petitioners failed to show that the prices in the Deeds of Sale were
RTC ruled in favor of the defendants (respondents in this case) and dismissed
the complaint. Upon appeal, the CA upheld RTC’s ruling. absolutely simulated.

To prove simulation, petitioners presented Emma Joaquin Valdoz’s testimony


ISSUES: stating that their father, respondent Leonardo Joaquin, told her that he
1. Whether the Deeds of Sale are void for lack of consideration. NO would transfer a lot to her through a deed of sale without need for her
payment of the purchase price. The trial court did not find the allegation of
2. Whether the Deeds of Sale are void for gross inadequacy of price. NO
absolute simulation of price credible.
HELD:
Petitioners’ failure to prove absolute simulation of price is magnified by their
1ST ISSUE: THERE WAS A CONSIDERATION. lack of knowledge of their respondent siblings’ financial capacity to buy the
questioned lots. On the other hand, the Deeds of Sale which petitioners
If there is a meeting of the minds of the parties as to the price, the contract presented as evidence plainly showed the cost of each lot sold. Not only did
of sale is valid, despite the manner of payment, or even the breach of that respondents’ minds meet as to the purchase price, but the real price was also
manner of payment. If the real price is not stated in the contract, then the stated in the Deeds of Sale. As of the filing of the complaint, respondent
contract of sale is valid but subject to reformation. If there is no meeting of siblings have also fully paid the price to their respondent father.
the minds of the parties as to the price, because the price stipulated in the
contract is simulated, then the contract is void. Article 1471 of the Civil Code 2ND ISSUE: THE GENERAL RULE IS THAT INADEQUACY OF CONSIDERATION
states that if the price in a contract of sale is simulated, the sale is void. SHALL NOT INVALIDATE A CONTRACT.

Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall
not invalidate a contract, unless there has been fraud, mistake or undue
It is not the act of payment of price that determines the validity of a contract influence.
of sale.
Article 1470 of the Civil Code further provides:
Payment of the price has nothing to do with the perfection of the
contract. Payment of the price goes into the performance of the Art. 1470. Gross inadequacy of price does not affect a contract of sale, except
contract. Failure to pay the consideration is different from lack of as may indicate a defect in the consent, or that the parties really intended a
consideration. The former results in a right to demand the fulfillment or donation or some other act or contract. (Emphasis supplied)
Petitioners failed to prove any of the instances mentioned in Articles
1355 and 1470 of the Civil Code which would invalidate, or even affect, the
Deeds of Sale. Indeed, there is no requirement that the price be equal to the
exact value of the subject matter of sale. All the respondents believed that
they received the commutative value of what they gave.

Ruling: In the instant case, the trial court found that the lots were sold for a
valid consideration, and that the defendant children actually paid the
purchase price stipulated in their respective Deeds of Sale. Actual payment of
the purchase price by the buyer to the seller is a factual finding that is now
conclusive upon us. WHEREFORE, we AFFIRM the decision of the Court of
Appeals in toto.

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