FIRST DIVISION
[G.R. No. 121200.
GLORIA A. SAMEDRA LACANILAO and PLUTARCO CADURNIGARA, petitioners,
vs. COURT OF APPEALS, EUSEBIO C. ENCARNACION and Sps. RAMON and TERESITA A.
ACEBO, respondents.
D E C I S I O N
PADILLA, J.:
This is a petition for review on certiorari under Rule 45
of the Rules of Court of the decision*
of the Court of Appeals in CA-G.R. CV No. 22952 dated
The facts are not in dispute:
Private respondent Eusebio C. Encarnacion (hereinafter,
Encarnacion) owned a parcel of residential land in Iriga St., La Loma, Quezon
City with an area of 160 square meters.
In the 1950s, a house was constructed on a 100 square meter portion of
said lot by Deogracia la Torre, with the consent of Encarnacion. The house was eventually bought by Gloria A.
S. Lacanilao and her common-law husband, Pablo, where they established their
residence. On
Since then petitioners Lacanilao and Cadurnigara have been in possession of the lot under contracts of lease with owner Encarnacion and had religiously paid rentals thereon up to November 1988.
In November 1987, Encarnacion offered to sell the lot to
Lacanilao and Cadumigara. After months
of negotiation, Encarnacion agreed, by mid-May 1988, to sell the property to
petitioners for P120,000.00. Since
petitioners were not ready to pay the whole amount, they requested for an
extension of one (1) month, or up to
Meanwhile, on
Petitioners failed to pay the purchase price of P120,000.00 on
On
Aggrieved, petitioners filed a complaint with the barangay for
alleged violation of tenant's right to purchase the lot under Sec. 6, P.D.
1517. After failing to secure any
settlement of the controversy, petitioners stopped paying rentals on the lot
and filed a complaint before the Regional Trial Court, Branch 66,
After trial, the trial court rendered judgment dismissing the complaint, the dispositive part of which reads:
"WHEREFORE, judgment is hereby rendered dismissing the complaint.
On the counterclaim, plaintiffs are hereby ordered jointly and severally:
a. to pay Eusebio C. Encarnacion the sum of P10,000.00 as moral damages and P5,000.00 as exemplary damages;
b. to pay the spouses Ramon and Teresita Acebo the sum of P10,000.00 as moral damages, and P5,000.00 as exemplary damages;
c. to pay the spouses Acebos the sum of P5,000.00 as and for attorney's fees." (RTC Branch 86, Q.C. Decision, p.7; Rollo, p.16)
The evidence before the trial court show that Encarnacion denied having agreed to sell his property to petitioners. On the other hand, petitioners offered only parole evidence to establish that Encarnacion "verbally agreed to sell the lot in question."
Applying Articles 1358 and 1403 No. 2(e) of the Civil Code, the trial court ruled that even assuming arguendo that the parties (Encarnacion and petitioners) entered into a verbal contract to sell, the contract is, however, unenforceable. Hence, there is no basis to annul the deed of sale between Encarnacion and the Acebos.
On appeal, the Court of Appeals affirmed the trial court's decision but deleted the award of damages and attorney's fees in favor of private respondents.
In their petition at bar, petitioners allege that the Court of Appeals erred:
I
"X X X WHEN IT FAILED TO HOLD THE DEFENDANTS SPOUSES ACEBO WERE NOT IN GOOD FAITH WHEN THEY BOUGHT THE PROPERTY BEING FULLY AWARE PLAINTIFFS HAVE SUBSTANTIAL INTEREST AND WERE IRREPARABLY PREJUDICE(D) BY THE SALE IN THEIR FAVOR."
II
'X X X WHEN IT HELD,
THE APPELLANT FAILED TO PAY THE PURCHASE PRICE TO APPELLEE ENCARNACION; HENCE,
THE SAID APPELLEE DID NOT AGREE TO THE SALE."[1]
The petition is not impressed with merit.
It is readily apparent that petitioners are raising issues of
fact in their petition. In a petition for
review under Rule 45 only questions of law may be raised and they must be
distinctly set forth. The general rule
is that findings of fact of the lower courts (including the Court of Appeals)
are final and conclusive and will not be reviewed on appeal except (1) when the
conclusion is a finding grounded entirely on speculations surmises or
conjectures; (2) when the inference made is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion; (4) when the judgment
is based on a misapprehension of facts; and (5) when the Court of Appeals, in
making its findings went beyond the issues of the case and the same are
contrary to the admission of both appellant and appellee.[2]
In the case at bar, the question of law is whether or not petitioners, on the basis of a verbal contract to sell by Encarnacion, obtained an enforceable right to buy Encarnacion's property superior to that of the Acebos who claim the same property by virtue of a deed of absolute sale in their favor executed by Encarnacion.
It is well established that where the seller promised to execute
a deed of absolute sale upon completion of payment of the purchase price by the
buyer, the agreement is a contract to sell.[3]
In contracts to sell, where ownership is retained by the seller until payment
of the price in full, such payment is a positive suspensive condition, failure
of which is not really a breach but an event that prevents the obligation of
the vendor to convey title in accordance with Article 1184 of the Civil Code.[4]
Article 1545 of the Civil Code also provides that "where the obligation of either party to a contract of sale is subject to any condition which is not performed, such party may refuse to proceed with the contract or he may waive performance of the condition."
The Court upholds the findings of the Court of Appeals that private respondent Encarnacion verbally agreed to sell the lot to petitioners for P120,000.00 to be paid on 15 June, 1988 and that petitioners failed to pay on said date through no fault of Encarnacion who thereupon proceeded to extrajudicially terminate the oral contract.
The Court also notes that while the contract between petitioners and Encarnacion was unenforceable under Article 1403 2(e) of the Civil Code, petitioners were allowed to prove its existence and to demand specific performance because private respondents did not invoke said law in their pleadings and even cross-examined petitioners on the existence of the verbal contract.
But assuming arguendo that private respondents waived the operation of the statute of frauds, petitioners still failed to discharge the burden of presenting evidence to prove that they were ready to fulfill the condition (of full payment) imposed on the obligation to sell. This factual matter has been amply resolved by the CA in favor of private respondents and can no longer be disturbed on appeal.
The Court is not unmindful of the fact that petitioners have been occupying the lot as lessees for almost three (3) decades. They could have obtained a right of first refusal in their contracts of lease with Encarnacion or could have consigned the purchase price in court when Encarnacion allegedly refused to execute the deed of sale in their favor.
This Court, while aware of its equity jurisdiction, is first and foremost, a court of law. Hence, while equity might tilt on the side of the petitioners, the same cannot be enforced so as to overrule a positive provision of law in favor of private respondents.
WHEREFORE, premises considered, the petition is hereby
DENIED and the decision of the Court of Appeals, for lack of any reversible
error, is AFFIRMED in toto.
SO ORDERED.
Bellosillo, Vitug, Kapunan, and
Hermosisima, Jr., JJ., concur.