THIRD
DIVISION
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RIZALINO, substituted by his heirs,
JOSEFINA, ROLANDO and FERNANDO, ERNESTO, LEONORA, BIBIANO, JR., LIBRADO and
ENRIQUETA, all surnamed OESMER,
Petitioners, - versus
- PARAISO DEVELOPMENT CORPORATION, Respondent. |
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G.R. No. 157493 Present: YNARES-SANTIAGO, J.,
Chairperson, AUSTRIA-MARTINEZ, CALLEJO,
SR., and CHICO-NAZARIO,
JJ. Promulgated: February 5, 2007 |
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CHICO-NAZARIO, J.:
Before
this Court is a Petition for Review on Certiorari
under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to reverse
and set aside the Court of Appeals Decision[1]
dated 26 April 2002 in CA-G.R. CV No. 53130 entitled, Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, Enriqueta, Adolfo,
and Jesus, all surnamed Oesmer vs. Paraiso Development Corporation, as modified by its Resolution[2]
dated 4 March 2003, declaring the Contract to Sell valid and binding with
respect to the undivided proportionate shares of the six signatories of the
said document, herein petitioners, namely: Ernesto, Enriqueta, Librado,
Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer); and ordering them to
execute the Deed of Absolute Sale concerning their 6/8 share over the subject
parcels of land in favor of herein respondent Paraiso Development Corporation,
and to pay the latter the attorney’s fees plus costs of the suit. The assailed Decision, as modified, likewise
ordered the respondent to tender payment to the petitioners in the amount of P3,216,560.00
representing the balance of the purchase price of the subject parcels of land.
The
facts of the case are as follows:
Petitioners
Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, and Enriqueta, all surnamed
Oesmer, together with Adolfo Oesmer (Adolfo) and Jesus Oesmer (Jesus), are
brothers and sisters, and the co-owners of undivided shares of two parcels of
agricultural and tenanted land situated in Barangay Ulong Tubig, Carmona,
Cavite, identified as Lot 720 with an area of 40,507 square meters (sq. m.) and
Lot 834 containing an area of 14,769 sq. m., or a total land area of 55,276 sq.
m. Both lots are unregistered and
originally owned by their parents, Bibiano Oesmer and Encarnacion Durumpili,
who declared the lots for taxation purposes under Tax Declaration No. 3438[3]
(cancelled by I.D. No. 6064-A) for Lot 720 and Tax Declaration No. 3437[4]
(cancelled by I.D. No. 5629) for Lot 834.
When the spouses Oesmer died, petitioners, together with Adolfo and
Jesus, acquired the lots as heirs of the former by right of succession.
Respondent
Paraiso Development Corporation is known to be engaged in the real estate
business.
Sometime
in March 1989, Rogelio Paular, a resident and former
Municipal Secretary of Carmona,
Pursuant
to the said meeting, a Contract to Sell[5]
was drafted by the Executive Assistant of Sotero Lee, Inocencia Almo. On P100,000.00, payable to
Ernesto, was given as option money.
Sometime thereafter, Rizalino, Leonora, Bibiano, Jr., and Librado also signed the said Contract to Sell. However, two of the brothers, Adolfo and
Jesus, did not sign the document.
On
In
a letter[6] dated P100,000.00
given by respondent as option money.
Respondent
did not respond to the aforesaid letter.
On
During
trial, petitioner Rizalino died. Upon
motion of petitioners, the trial court issued an Order,[8]
dated
After
trial on the merits, the lower court rendered a Decision[9]
dated
WHEREFORE,
premises considered, judgment is hereby rendered in favor of herein
[respondent] Paraiso Development Corporation.
The assailed Contract to Sell is valid and binding only to the undivided
proportionate share of the signatory of this document and recipient of the
check, [herein petitioner] co-owner Ernesto
Durumpili Oesmer. The latter is hereby
ordered to execute the Contract of Absolute P10,000.00)
Pesos plus costs of suit.
The counterclaim of [respondent] corporation is hereby Dismissed for lack of merit.[10]
Unsatisfied,
respondent appealed the said Decision before the Court of Appeals. On 26 April 2002, the appellate court
rendered a Decision modifying the Decision of the court a quo by declaring that the Contract to Sell is valid and binding
with respect to the undivided proportionate shares of the six signatories of
the said document, herein petitioners, namely: Ernesto, Enriqueta, Librado,
Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer). The decretal portion of the said Decision
states that:
WHEREFORE, premises considered, the
Decision of the court a quo is hereby MODIFIED. Judgment is hereby rendered in favor of herein
[respondent] Paraiso Development
Corporation. The assailed Contract to
Sell is valid and binding with respect to the undivided proportionate share of
the six (6) signatories of this document, [herein petitioners], namely,
Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed
Oesmer). The said [petitioners] are
hereby ordered to execute the Deed of Absolute Sale concerning their 6/8 share
over the subject two parcels of land and in favor of herein [respondent]
corporation, and to pay the latter the attorney’s fees in the sum of Ten
Thousand Pesos (P10,000.00) plus costs of suit.[11]
Aggrieved
by the above-mentioned Decision, petitioners filed a Motion for Reconsideration
of the same on P3,216,560.00, representing the balance of the purchase price
of the subject parcels of land. The
dispositive portion of the said Resolution reads:
WHEREFORE, premises considered, the
assailed Decision is hereby modified. Judgment is hereby rendered in favor of herein
[respondent] Paraiso Development Corporation.
The assailed Contract to Sell is valid and binding with respect to the undivided proportionate shares
of the six (6) signatories of this document, [herein petitioners], namely,
Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed
Oesmer). The said [petitioners] are
hereby ordered to execute the Deed of Absolute Sale concerning their 6/8 share
over the subject two parcels of land in favor of herein [respondent] corporation,
and to pay the latter
attorney’s fees in the sum of Ten Thousand Pesos (P10,000.00) plus costs
of suit. Respondent is likewise ordered
to tender payment to the above-named [petitioners] in the amount of Three
Million Two Hundred Sixteen Thousand Five Hundred Sixty Pesos (P3,216,560.00)
representing the balance of the purchase price of the subject two parcels of
land. [12]
Hence,
this Petition for Review on Certiorari.
Petitioners
come before this Court arguing that the Court of Appeals erred:
I. On a question of law in not holding that, the supposed Contract to Sell (Exhibit D) is not binding upon petitioner Ernesto Oesmer’s co-owners (herein petitioners Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora).
II. On a question of law in not holding that, the supposed Contract to Sell (Exhibit D) is void altogether considering that respondent itself did not sign it as to indicate its consent to be bound by its terms. Moreover, Exhibit D is really a unilateral promise to sell without consideration distinct from the price, and hence, void.
Petitioners
assert that the signatures of five of them namely: Enriqueta, Librado,
Rizalino, Bibiano, Jr., and Leonora, on the margins of the supposed Contract to
Sell did not confer authority on petitioner Ernesto as agent to sell their
respective shares in the questioned properties, and hence, for lack of written
authority from the above-named petitioners to sell their respective shares in
the subject parcels of land, the supposed Contract to Sell is void as to
them. Neither do their signatures
signify their consent to directly sell their shares in the questioned
properties. Assuming that the signatures
indicate consent, such consent was merely conditional. The effectivity of the alleged Contract to
Sell was subject to a suspensive condition, which is the approval of the sale
by all the co-owners.
Petitioners
also assert that the supposed Contract to Sell (Exhibit D), contrary to the
findings of the Court of Appeals, is not couched in simple language.
They
further claim that the supposed Contract to Sell does not bind the respondent
because the latter did not sign the said contract as to indicate its consent to
be bound by its terms. Furthermore, they
maintain that the supposed Contract to Sell is really a unilateral promise to
sell and the option money does not bind petitioners for lack of cause or
consideration distinct from the purchase price.
The
Petition is bereft of merit.
It
is true that the signatures of the five petitioners, namely: Enriqueta,
Librado, Rizalino, Bibiano, Jr., and Leonora, on the Contract to Sell did not
confer authority on petitioner Ernesto as agent authorized to sell their
respective shares in the questioned properties because of Article 1874 of the
Civil Code, which expressly provides that:
Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.
The law itself explicitly requires a written authority before
an agent can sell an immovable. The
conferment of such an authority should be in writing, in as clear and precise
terms as possible. It is worth noting
that petitioners’ signatures are found in the Contract to Sell. The Contract is absolutely silent on the
establishment of any principal-agent relationship between the five petitioners
and their brother and co-petitioner Ernesto as to the sale of the subject
parcels of land. Thus, the Contract to
Sell, although signed on the margin by the five petitioners, is not sufficient
to confer authority on petitioner Ernesto to act as their agent in selling
their shares in the properties in question.
However,
despite petitioner Ernesto’s lack of written authority from the five
petitioners to sell their shares in the subject parcels of land, the supposed Contract
to Sell remains valid and binding upon the latter.
As can be clearly gleaned from the contract
itself, it is not only petitioner Ernesto who signed the said Contract to Sell;
the other five petitioners also personally affixed their signatures thereon. Therefore, a written authority is no longer
necessary in order to sell their shares in the subject parcels of land because,
by affixing their signatures on the Contract to Sell, they were not selling
their shares through an agent but, rather, they were selling the same directly
and in their own right.
The
Court also finds untenable the following arguments raised by petitioners to the
effect that the Contract to Sell is not binding upon them, except to Ernesto,
because: (1) the signatures of five of the petitioners do not signify their
consent to sell their shares in the questioned properties since petitioner
Enriqueta merely signed as a witness to the said Contract to Sell, and that the
other petitioners, namely: Librado, Rizalino, Leonora, and Bibiano, Jr., did
not understand the importance and consequences of their action because of their
low degree of education and the contents of the aforesaid contract were not
read nor explained to them; and (2) assuming that the signatures indicate
consent, such consent was merely conditional, thus, the effectivity of the
alleged Contract to Sell was subject to a suspensive condition, which is the
approval by all the co-owners of the sale.
It
is well-settled that contracts are perfected by mere consent, upon the
acceptance by the offeree of the offer made by the offeror. From that moment, the parties are bound not
only to the fulfillment of what has been expressly stipulated but also to all
the consequences which, according to their nature, may be in keeping with good
faith, usage and law. To produce a
contract, the acceptance must not qualify the terms of the offer. However, the acceptance may be express or
implied. For a contract to arise, the
acceptance must be made known to the offeror.
Accordingly, the acceptance can be withdrawn or revoked before it is
made known to the offeror.[13]
In
the case at bar, the Contract to Sell was perfected when the petitioners
consented to the sale to the respondent of their shares in the subject parcels
of land by affixing their signatures on the said contract. Such signatures show their acceptance of what
has been stipulated in the Contract to Sell and such acceptance was made known
to respondent corporation when the duplicate copy of the Contract to Sell was
returned to the latter bearing petitioners’ signatures.
As
to petitioner Enriqueta’s claim that she merely signed as a witness to the said
contract, the contract itself does not say so.
There was no single indication in the said contract that she signed the
same merely as a witness. The fact that her signature appears on the right-hand
margin of the Contract to Sell is insignificant. The contract indisputably referred to the
“Heirs of Bibiano and Encarnacion Oesmer,” and since there is no showing that
Enriqueta signed the document in some other capacity, it can be safely assumed
that she did so as one of the parties to the sale.
Emphasis should also be given to the
fact that petitioners Ernesto and Enriqueta concurrently signed the Contract to
Sell. As the Court of Appeals mentioned
in its Decision,[14] the
records of the case speak of the fact that petitioner Ernesto, together with
petitioner Enriqueta, met with the representatives of the respondent in order
to finalize the terms and conditions of the Contract to Sell. Enriqueta affixed her signature on the said
contract when the same was drafted. She
even admitted that she understood the undertaking that she and petitioner
Ernesto made in connection with the contract.
She likewise disclosed that pursuant to the terms embodied in the
Contract to Sell, she updated the payment of the real property taxes and
transferred the Tax Declarations of the questioned properties in her name.[15] Hence, it cannot be gainsaid that she merely
signed the Contract to Sell as a witness because she did not only actively
participate in the negotiation and execution of the same, but her subsequent
actions also reveal an attempt to comply with the conditions in the said
contract.
With
respect to the other petitioners’ assertion that they did not understand the
importance and consequences of their action because of their low degree of
education and because the contents of the aforesaid contract were not read nor
explained to them, the same cannot be sustained.
We
only have to quote the pertinent portions of the Court of Appeals Decision,
clear and concise, to dispose of this issue.
Thus,
First,
the Contract to Sell is couched in such a simple language which is undoubtedly
easy to read and understand. The terms
of the Contract, specifically the amount of P100,000.00 representing the
option money paid by [respondent] corporation, the purchase price of P60.00
per square meter or the total amount of P3,316,560.00 and a brief
description of the subject properties are well-indicated thereon that any
prudent and mature man would have known the nature and extent of the
transaction encapsulated in the document that he was signing.
Second, the following circumstances, as testified by the witnesses and as can be gleaned from the records of the case clearly indicate the [petitioners’] intention to be bound by the stipulations chronicled in the said Contract to Sell.
As
to [petitioner] Ernesto, there is no dispute as to his intention to effect the
alienation of the subject property as he in fact was the one who initiated the
negotiation process and culminated the same by affixing his signature on the Contract
to Sell and by taking receipt of the amount of P100,000.00 which formed
part of the purchase price.
x x x x
As to [petitioner] Librado, the [appellate court] finds it preposterous that he willingly affixed his signature on a document written in a language (English) that he purportedly does not understand. He testified that the document was just brought to him by an 18 year old niece named Baby and he was told that the document was for a check to be paid to him. He readily signed the Contract to Sell without consulting his other siblings. Thereafter, he exerted no effort in communicating with his brothers and sisters regarding the document which he had signed, did not inquire what the check was for and did not thereafter ask for the check which is purportedly due to him as a result of his signing the said Contract to Sell. (TSN, 28 September 1993, pp. 22-23)
The [appellate court] notes that Librado is a 43 year old family man (TSN, 28 September 1993, p. 19). As such, he is expected to act with that ordinary degree of care and prudence expected of a good father of a family. His unwitting testimony is just divinely disbelieving.
The
other [petitioners] (Rizalino, Leonora and Bibiano Jr.) are likewise bound by
the said Contract to Sell. The theory
adopted by the [petitioners] that because of their low degree of education,
they did not understand the contents of the said Contract to Sell is devoid of
merit. The [appellate court] also notes that
Adolfo (one of the co-heirs who did not sign) also possess the same degree of
education as that of the signing co-heirs (TSN, 15 October 1991, p. 19). He, however, is employed at the Provincial
Treasury Office at Trece Martirez,
The Supreme Court in the case of Cecilia Mata v. Court of Appeals (207 SCRA 753 [1992]), citing the case of Tan Sua Sia v. Yu Baio Sontua (56 Phil. 711), instructively ruled as follows:
“The Court does not accept the petitioner’s claim that she did not understand the terms and conditions of the transactions because she only reached Grade Three and was already 63 years of age when she signed the documents. She was literate, to begin with, and her age did not make her senile or incompetent. x x x.
At any rate, Metrobank had no obligation to explain the documents to the petitioner as nowhere has it been proven that she is unable to read or that the contracts were written in a language not known to her. It was her responsibility to inform herself of the meaning and consequence of the contracts she was signing and, if she found them difficult to comprehend, to consult other persons, preferably lawyers, to explain them to her. After all, the transactions involved not only a few hundred or thousand pesos but, indeed, hundreds of thousands of pesos.
As the Court has held:
x x x The rule
that one who signs a contract is presumed to know its contents has been applied
even to contracts of illiterate persons on the ground that if such persons are
unable to read, they are negligent if they fail to have the contract read to
them. If a person cannot read the
instrument, it is as much his duty to procure some reliable persons to read and
explain it to him, before he signs it, as it would be to read it before he signed
it if he were able to do and his failure to obtain a reading and explanation of
it is such gross negligence as will estop from avoiding it on the ground that
he was ignorant of its contents.”[16]
That
the petitioners really had the intention to dispose of their shares in the
subject parcels of land, irrespective of whether or not all of the heirs
consented to the said Contract to Sell, was unveiled by Adolfo’s testimony as
follows:
ATTY. GAMO: This alleged agreement between you and your other brothers and sisters that unless everybody will agree, the properties would not be sold, was that agreement in writing?
WITNESS: No sir.
ATTY. GAMO: What you are saying is that when your brothers and sisters except Jesus and you did not sign that agreement which had been marked as [Exhibit] “D”, your brothers and sisters were grossly violating your agreement.
WITNESS: Yes, sir, they violated what we have agreed upon.[17]
We
also cannot sustain the allegation of the petitioners that assuming the
signatures indicate consent, such consent was merely conditional, and that, the
effectivity of the alleged Contract to Sell was subject to the suspensive
condition that the sale be approved by all the co-owners. The Contract to Sell is clear enough. It is a cardinal rule in the interpretation
of contracts that if the terms of a contract are clear and leave no doubt upon
the intention of the contracting parties, the literal meaning of its
stipulation shall control.[18] The terms of the Contract to Sell made no mention of the condition that before it can
become valid and binding, a unanimous consent of all the heirs is
necessary. Thus, when the language of
the contract is explicit, as in the present case, leaving no doubt as to the
intention of the parties thereto, the literal meaning of its stipulation is
controlling.
In addition, the petitioners, being
owners of their respective undivided shares in the subject properties, can
dispose of their shares even without the consent of all the co-heirs. Article 493 of the Civil Code expressly
provides:
Article 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. [Emphases supplied.]
Consequently, even without the
consent of the two co-heirs, Adolfo and Jesus, the Contract to Sell is still
valid and binding with respect to the 6/8 proportionate shares of the
petitioners, as properly held by the appellate court.
Therefore, this Court finds no error
in the findings of the Court of Appeals that all the petitioners who were
signatories in the Contract to Sell are bound thereby.
The final arguments of petitioners
state that the Contract to Sell is void altogether considering that respondent
itself did not sign it as to indicate its consent to be bound by its terms; and
moreover, the Contract to Sell is really a unilateral promise to sell without
consideration distinct from the price, and hence, again, void. Said arguments must necessarily fail.
The Contract to Sell is not void
merely because it does not bear the signature of the respondent
corporation. Respondent corporation’s
consent to be bound by the terms of the contract is shown in the uncontroverted
facts which established that there was partial performance by respondent of its
obligation in the said Contract to Sell when it tendered the amount of P100,000.00
to form part of the purchase price, which was accepted and acknowledged
expressly by petitioners. Therefore, by
force of law, respondent is required to complete the payment to enforce the
terms of the contract. Accordingly,
despite the absence of respondent’s signature in the Contract to Sell, the
former cannot evade its obligation to pay the balance of the purchase
price.
As a final point, the Contract to
Sell entered into by the parties is not a unilateral promise to sell merely
because it used the word option money when it referred to the amount of P100,000.00,
which also form part of the purchase price.
Settled is the rule that in the
interpretation of contracts, the ascertainment of the intention of the
contracting parties is to be discharged by looking to the words they used to
project that intention in their contract, all the words, not just a particular
word or two, and words in context, not words standing alone.[19]
In
the instant case, the consideration of P100,000.00 paid by respondent to
petitioners was referred to as “option money.”
However, a careful examination of the words used in the contract
indicates that the money is not option money but earnest money. “Earnest money” and “option money” are not
the same but distinguished thus: (a) earnest money is part of the purchase
price, while option money is the money given as a distinct consideration for an
option contract; (b) earnest money is given only where there is already a sale,
while option money applies to a sale not yet perfected; and, (c) when earnest
money is given, the buyer is bound to pay the balance, while when the would-be
buyer gives option money, he is not required to buy, but may even forfeit it
depending on the terms of the option.[20]
The
sum of P100,000.00 was part of the purchase price. Although the same was denominated as “option
money,” it is actually in the nature of earnest money or down payment when
considered with the other terms of the contract. Doubtless, the agreement is not a mere
unilateral promise to sell, but, indeed, it is a Contract to Sell as both the
trial court and the appellate court declared in their Decisions.
WHEREFORE,
premises considered, the Petition is DENIED,
and the Decision and
Resolution of the Court of Appeals dated 26 April 2002 and 4 March 2003,
respectively, are AFFIRMED, thus, (a) the Contract to Sell is DECLARED
valid and binding with respect to the undivided proportionate shares in the
subject parcels of land of the six signatories of the said document, herein
petitioners Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora
(all surnamed Oesmer); (b) respondent is ORDERED to tender payment to
petitioners in the amount of P3,216,560.00 representing the balance of
the purchase price for the latter’s shares in the subject parcels of land; and
(c) petitioners are further ORDERED to execute in favor of respondent
the Deed of Absolute Sale covering their shares in the subject parcels of land
after receipt of the balance of the purchase price, and to pay respondent
attorney’s fees plus costs of the suit. Costs
against petitioners.
SO
ORDERED.
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MINITA V. CHICO-NAZARIOAssociate Justice |
WE
CONCUR:
CONSUELO YNARES – SANTIAGO
Associate Justice
Chairperson
Associate Justice Associate Justice
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ATTESTATION
I attest that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO
S. PUNO
Chief Justice
[1] Penned by Associate Justice Andres B. Reyes, Jr. with Associate Justices Conrado M. Vasquez, Jr., and Mario L. Guariña III, concurring, rollo, pp. 31-44.
[2]
[3] Rollo, p. 58.
[4]
[5]
[6] Records, p. 44.
[7] Rollo, pp. 53-57.
[8]
[9] Penned by Judge Edelwina C. Pastoral; rollo, pp. 69-73.
[10]
[11]
[12]
[13] Jardine
Davies, Inc. v. Court of Appeals, 389
Phil. 204, 212 (2000).
[14] Rollo, pp. 31-44.
[15] TSN,
[16] Rollo, pp. 36-40.
[17] TSN,
[18] German Marine Agencies, Inc. v. National Labor Relations Commission, 403 Phil. 572, 588-589 (2001).
[19]
Limson v. Court of Appeals, G.R. No. 135929,
[20]