FIRST DIVISION
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CORAZON L. ESCUETA,
assisted by her husband EDGAR ESCUETA, IGNACIO E. RUBIO, THE HEIRS OF LUZ R.
BALOLOY, namely, ALEJANDRINO R. BALOLOY and BAYANI R. BALOLOY,
Petitioners, |
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G.R. No. 137162 Present: PUNO, C.J., Chairperson, SANDOVAL-GUTIERREZ, AZCUNA, and |
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- versus - |
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GARCIA, JJ. |
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Promulgated: January 24, 2007 |
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RUFINA LIM, |
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Respondent. |
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DECISION
AZCUNA, J.:
This is an
appeal by certiorari[1]
to annul and set aside the Decision and Resolution of
the Court of Appeals (CA)
dated
The facts[2]
appear as follows:
Respondent Rufina Lim filed an
action to remove cloud on, or quiet title to, real property, with preliminary
injunction and issuance of [a hold-departure order] from the
In her amended complaint, respondent
averred inter alia that she bought
the hereditary shares (consisting of 10 lots) of Ignacio Rubio [and] the heirs
of Luz Baloloy, namely: Alejandrino, Bayani, and other co-heirs; that said
vendors executed a contract of sale dated April 10, 1990 in her favor; that
Ignacio Rubio and the heirs of Luz Baloloy received [a down payment] or earnest
money in the amount of P102,169.86 and P450,000, respectively;
that it was agreed in the contract of sale that the vendors would secure
certificates of title covering their respective hereditary shares; that the balance
of the purchase price would be paid to each heir upon presentation of their
individual certificate[s] of [title]; that Ignacio Rubio refused to receive the
other half of the down payment which is P[100,000]; that Ignacio Rubio
refused and still refuses to deliver to [respondent] the certificates of title
covering his share on the two lots; that with respect to the heirs of Luz
Baloloy, they also refused and still refuse to perform the delivery of the two
certificates of title covering their share in the disputed lots; that respondent
was and is ready and willing to pay Ignacio Rubio and the heirs of Luz Baloloy
upon presentation of their individual certificates of title, free from whatever
lien and encumbrance;
As to petitioner Corazon Escueta, in spite of her knowledge that the disputed lots have already been sold by Ignacio Rubio to respondent, it is alleged that a simulated deed of sale involving said lots was effected by Ignacio Rubio in her favor; and that the simulated deed of sale by Rubio to Escueta has raised doubts and clouds over respondent’s title.
In their separate amended answers, petitioners denied the material allegations of the complaint and alleged inter alia the following:
For the heirs of Luz Baloloy (Baloloys for brevity):
Respondent has no cause of action, because the subject contract of sale has no more force and effect as far as the Baloloys are concerned, since they have withdrawn their offer to sell for the reason that respondent failed to pay the balance of the purchase price as orally promised on or before May 1, 1990.
For petitioners Ignacio Rubio (Rubio for brevity) and Corazon Escueta (Escueta for brevity):
Respondent has no cause of action,
because Rubio has not entered into a contract of sale with her; that he has
appointed his daughter Patricia Llamas to be his attorney-in-fact and not in
favor of Virginia Rubio Laygo Lim (Lim for brevity) who was the one who
represented him in the sale of the disputed lots in favor of respondent; that
the P100,000 respondent claimed he received as down payment for the lots
is a simple transaction by way of a loan with Lim.
The Baloloys failed to appear at the
pre-trial. Upon motion of respondent,
the trial court declared the Baloloys in default. They then filed a motion to lift the order
declaring them in default, which was denied by the trial court in an order
dated
IN VIEW OF THE FOREGOING, judgment
is hereby rendered in favor of [respondent] and against [petitioners, heirs] of
Luz R. Balolo[y], namely: Alejandrino Baloloy and Bayani Baloloy. The [petitioners] Alejandrino Baloloy and
Bayani Baloloy are ordered to immediately execute an [Absolute] Deed of Sale
over their hereditary share in the properties covered by TCT No. 74392 and TCT
No. 74394, after payment to them by [respondent] the amount of P[1,050,000]
or consignation of said amount in Court.
[For] failure of [petitioners] Alejandrino Baloloy and Bayani Baloloy to
execute the Absolute Deed of Sale over their hereditary share in the property
covered by TCT No. T-74392 and TCT No. T-74394 in favor of [respondent], the
Clerk of Court is ordered to execute the necessary Absolute Deed of Sale in
behalf of the Baloloys in favor of [respondent,] with a consideration of P[1,500,000]. Further[,] [petitioners] Alejandrino Baloloy
and Bayani Baloloy are ordered to jointly and severally pay [respondent] moral
damages in the amount of P[50,000] and P[20,000] for attorney’s
fees. The adverse claim annotated at the
back of TCT No. T-74392 and TCT No. T-74394[,] insofar as the shares of
Alejandrino Baloloy and Bayani Baloloy are concerned[,] [is] ordered cancelled.
With costs against [petitioners] Alejandrino Baloloy and Bayani Baloloy.
SO ORDERED.[3]
The Baloloys filed a petition for relief
from judgment and order dated
Trial on the merits ensued between
respondent and Rubio and Escueta. After trial,
the trial court rendered its assailed Decision, as follows:
IN VIEW OF THE FOREGOING, the complaint [and] amended complaint are dismissed
against [petitioners]
Corazon L. Escueta, Ignacio
E. Rubio[,] and the Register of Deeds. The counterclaim of [petitioners] [is] also dismissed. However, [petitioner] Ignacio E. Rubio is ordered to return to the [respondent], Rufina Lim[,] the amount of P102,169.80[,] with interest at the
rate of six percent (6%) per annum from April 10, [1990] until the same is fully
paid. Without pronouncement as to costs.
SO ORDERED.[4]
On appeal, the
CA affirmed the trial court’s order and partial
decision, but reversed the later decision. The dispositive
portion of its assailed Decision reads:
WHEREFORE, upon all the foregoing
premises considered, this Court rules:
1. the appeal of the Baloloys from the Order denying the
Petition for Relief from Judgment and Orders dated
2. the Decision dismissing [respondent’s] complaint is REVERSED and SET
ASIDE
and a new one is entered. Accordingly,
a. the validity of the subject contract of sale in favor of [respondent] is upheld.
b. Rubio is directed to execute a Deed of Absolute Sale
conditioned upon the payment of the balance of the purchase price by [respondent] within 30 days from the
receipt of the entry of judgment of this Decision.
c. the contracts of sale between Rubio and Escueta
involving Rubio’s share in the disputed properties is declared NULL and VOID.
d. Rubio and Escueta are ordered to pay jointly and
severally the
[respondent]
the amount of P[20,000] as moral damages
and P[20,000] as attorney’s
fees.
3. the appeal of Rubio and Escueta on the denial of their
counterclaim is DISMISSED.
SO ORDERED.[5]
Petitioners’
Motion for Reconsideration of the CA
Decision was denied. Hence, this petition.
The issues are:
I
THE HONORABLE COURT OF
APPEALS ERRED IN DENYING THE PETITION FOR RELIEF FROM JUDGMENT FILED BY THE
BALOLOYS.
II
THE HONORABLE COURT OF
APPEALS ERRED IN REINSTATING
THE COMPLAINT AND IN AWARDING MORAL DAMAGES AND ATTORNEY’S FEES IN FAVOR OF
RESPONDENT RUFINA L. LIM CONSIDERING THAT:
A. IGNACIO
E. RUBIO IS NOT BOUND BY THE CONTRACT OF
B. THE
CONTRACT ENTERED INTO BETWEEN RUFINA LIM AND VIRGINIA LAYGO-LIM IS A CONTRACT
TO SELL AND NOT A CONTRACT OF
C. RUFINA
LIM FAILED TO FAITHFULLY COMPLY WITH HER OBLIGATIONS UNDER THE CONTRACT TO SELL
THEREBY WARRANTING THE CANCELLATION THEREOF.
D. CORAZON
L. ESCUETA ACTED IN UTMOST GOOD FAITH IN ENTERING INTO THE CONTRACT OF
III
THE CONTRACT OF
IV
THE HONORABLE COURT OF
APPEALS ERRED IN DISMISSING PETITIONERS’ COUNTERCLAIMS.
Briefly, the issue is whether the
contract of sale between petitioners and respondent is valid.
Petitioners
argue, as follows:
First, the CA did not consider the
circumstances surrounding petitioners’ failure to appear at the pre-trial and
to file the petition for relief on time.
As
to the failure to appear at the pre-trial, there was fraud, accident and/or
excusable neglect, because petitioner Bayani was in the
Furthermore,
petitioner Alejandrino was not clothed with a power of attorney to appear on
behalf of Bayani at the pre-trial conference.
Second, the sale by
Dealing
with an assumed agent, respondent should ascertain not only the fact of agency,
but also the nature and extent of the former’s authority. Besides,
The
amount encashed by Rubio represented not the down payment, but the payment of
respondent’s debt. His acceptance and
encashment of the check was not a ratification of the contract of sale.
Third, the contract between respondent
and
Fourth, Respondent failed to faithfully fulfill her part of the obligation. Thus, Rubio had the right to sell his
properties to Escueta who exercised due diligence in ascertaining ownership of
the properties sold to her. Besides, a
purchaser need not inquire beyond what appears in a
The petition lacks
merit.
The contract of sale between petitioners
and respondent is valid.
Bayani Baloloy was
represented by his attorney-in-fact, Alejandrino Baloloy. In the Baloloys’ answer to the original
complaint and amended complaint, the allegations relating to the personal
circumstances of the Baloloys are clearly admitted.
“An admission,
verbal or written, made by a party in the course of the proceedings in the same
case, does not require proof.”[6] The “factual
admission in the pleadings on record [dispenses]
with the need x x x to present evidence to
prove the admitted fact.”[7] It cannot,
therefore, “be
controverted by the party
making such admission,
and [is]
conclusive”[8]
as to them. All proofs submitted by them “contrary
thereto or inconsistent therewith should be ignored whether objection is
interposed by a party or not.”[9] Besides, there is no
showing that a palpable mistake has been committed in their
admission or that no admission has been made by them.
Pre-trial is
mandatory.[10] The notices of pre-trial
had been sent to both the
Baloloys and their former counsel
of record. Being
served with notice, he is
“charged with the duty of
notifying the party represented by him.”[11] He must “see to it that his client receives
such notice and attends the pre-trial.”[12] What the Baloloys and their former counsel
have alleged instead in their Motion to Lift
Order of As In Default dated December 11, 1991 is the belated receipt of Bayani
Baloloy’s special power of attorney in favor of
their former counsel, not that they have
not received the notice or been
informed of the scheduled pre-trial. Not having
raised
the ground of
lack of a special power of attorney
in their
motion, they are now deemed to have waived it.
Certainly, they cannot raise it at this late stage of the proceedings. For lack of
representation, Bayani Baloloy
was properly declared in
default.
Section 3 of Rule 38 of the Rules of
Court states:
SEC.
3. Time for filing petition;
contents and verification.
– A petition provided for in
either of the preceding sections of this Rule must be verified, filed within
sixty (60) days after the
petitioner learns of the judgment, final order, or other proceeding to be set
aside, and not more than six (6) months after such judgment or final order was
entered, or such proceeding was taken; and must be accompanied with affidavits
showing the fraud, accident, mistake, or excusable negligence relied upon, and
the facts constituting the petitioner’s good and substantial cause of action or
defense, as the case may be.
There is no
reason for the Baloloys to ignore the effects of the above-cited rule. “The 60-day period is reckoned from the time
the party acquired knowledge of the order, judgment or proceedings and not from
the date he actually read the same.”[13] As aptly put by
the appellate court:
The
evidence on record as far as this issue is concerned shows that Atty. Arsenio Villalon, Jr., the former counsel of
record of the Baloloys received a copy of the partial decision dated
The Baloloys[,]
apparently in an attempt to cure the lapse of the aforesaid reglementary period
to file a petition for relief from judgment[,]
included in its petition the two Orders dated
Furthermore,
no fraud, accident, mistake, or excusable
negligence exists in order that the
petition for relief may be granted.[14] There is no proof of extrinsic
fraud that “prevents
a party from having a trial x x x
or from presenting all of his case to the court”[15]
or an “accident
x x x which ordinary prudence could not have guarded against,
and by reason of which the party applying has probably been impaired in his
rights.”[16] There is
also no proof of either a “mistake
x x x of law”[17]
or an excusable
negligence “caused by failure to receive notice
of x x x the trial x x x that
it would not be necessary for him to take an active
part in the case x x x by relying on another person to
attend to the case for him, when such other person x
x x was chargeable with that
duty x x x, or by other circumstances
not involving fault of the moving party.”[18]
Article 1892 of the Civil Code
provides:
Art. 1892. The agent may appoint a substitute if the principal has not prohibited him from doing so; but he shall be responsible for the acts of the substitute:
(1) When he was not given the power
to appoint one x x x.
Applying the above-quoted provision to
the special power of attorney executed by Ignacio Rubio
in favor of his daughter Patricia Llamas,
it is clear that she
is not prohibited from
appointing a substitute.
By authorizing Virginia Lim
to sell the subject properties, Patricia
merely acted within the limits of the
authority given by her father, but
she will have
to be “responsible
for the acts of the sub-agent,”[19]
among which is precisely the sale of the subject properties in favor of
respondent.
Even assuming
that Virginia Lim has no authority to sell the subject properties, the contract
she executed in favor of respondent is not void, but simply
unenforceable, under the
second paragraph of Article 1317 of the Civil Code
which reads:
Art.
1317. x x x
A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party.
Ignacio Rubio merely denies
the contract of sale. He claims,
without substantiation, that what he received was a loan, not the down payment
for the sale of the subject properties. His acceptance and encashment of the check,
however, constitute ratification
of the contract of sale and “produce
the effects of an express power of agency.”[20] “[H]is action
necessarily implies that he waived his right of action to avoid the contract,
and, consequently, it also implies the tacit, if not express, confirmation of
the said sale effected” by Virginia Lim in favor of
respondent.
Similarly, the Baloloys have ratified
the contract of sale when they accepted and enjoyed its benefits. “The doctrine of
estoppel applicable to petitioners here is not only that which prohibits a
party from assuming inconsistent positions, based on the principle of election,
but that which precludes him from repudiating an obligation voluntarily assumed
after having accepted benefits therefrom. To countenance
such repudiation would be contrary to equity, and would put a premium on fraud
or misrepresentation.”[21]
Indeed, Virginia
Lim and respondent have
entered into a contract of sale. Not only has
the title to the subject properties passed to the latter upon
delivery of the thing sold, but
there is also no
stipulation in the contract that
states the ownership is to be reserved
in or “retained by the vendor until
full payment of the price.”[22]
Applying Article
1544 of the Civil Code, a second
buyer of the property who may have had actual or constructive knowledge
of such defect in the seller’s title, or at least was
charged with the obligation to discover such
defect, cannot be a registrant in good faith. Such second
buyer cannot defeat the first buyer’s
title. In
case a title is issued to the second buyer, the first buyer may seek
reconveyance of the property subject of the sale.[23] Even the argument that a purchaser need not inquire beyond
what appears in a
Nothing
in the contract “prevents the obligation of the
vendor to convey title from becoming effective”[24]
or gives “the vendor the right to unilaterally resolve the
contract the moment the buyer fails to pay within a fixed period.”[25] Petitioners
themselves have failed to deliver their individual certificates of title, for
which reason it is obvious that respondent cannot be expected to pay the
stipulated taxes, fees, and expenses.
“[A]ll
the elements of a valid contract of sale under
Article 1458 of the Civil Code are present, such as: (1)
consent or meeting of the minds; (2) determinate subject matter; and (3) price
certain in money or its equivalent.”[26] Ignacio Rubio, the Baloloys, and their
co-heirs sold their hereditary shares for a price certain to which
respondent agreed to buy and pay for the subject
properties. “The
offer and the acceptance are concurrent, since the minds of the contracting
parties meet in the terms of the agreement.”[27]
In fact, earnest money has been given
by respondent. “[I]t
shall be considered as part of the price and as proof of the
perfection of the contract.[28] It constitutes
an advance payment to “be
deducted from the total price.”[29]
Article 1477 of
the same Code also states that “[t]he
ownership of the thing sold shall be transferred to the vendee upon actual or
constructive delivery thereof.”[30] In the present case,
there is actual delivery as manifested
by acts simultaneous with and subsequent to the contract of sale when
respondent not only took possession
of the subject properties but also allowed
their use as parking terminal for jeepneys and buses. Moreover, the
execution itself of the contract of sale is
constructive delivery.
Consequently, Ignacio
Rubio could no longer sell the subject
properties to Corazon Escueta, after having sold them to
respondent.
“[I]n a contract of sale, the
vendor loses ownership over the property and cannot recover it until and unless
the contract is resolved or rescinded x x x.”[31] The records do not show that Ignacio Rubio
asked for a rescission of the contract. What he adduced was
a belated revocation of the special power of attorney he executed in favor of
Patricia Llamas. “In the sale of immovable property,
even though it may have been stipulated that upon failure to pay the price at
the time agreed upon the rescission of the contract shall of right take place,
the vendee may pay, even after the expiration of the period, as long as no
demand for rescission of the contract has been made upon him either judicially
or by a notarial act.”[32]
WHEREFORE,
the petition is DENIED. The
Decision and Resolution of the Court
of Appeals in CA-G.R.
CV No. 48282, dated
SO
ORDERED.
ADOLFO S. AZCUNA
Associate Justice
WE
CONCUR:
REYNATO S. PUNO
Chairperson
Chief Justice
ANGELINA SANDOVAL-GUTIERREZ RENATO C. CORONA
Associate Justice
Associate Justice
CANCIO C. GARCIA
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution, it is hereby certified that the conclusions in the above Decision
had been 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] RULES OF COURT, Rule 45.
[2] Rollo, pp. 70-73; CA Decision, pp. 2-5.
[3]
[4] Records, p. 122; RTC Decision, p. 8.
[5] Rollo, p. 83; CA Decision, p. 15. All caps copied verbatim.
[6] RULES OF COURT, Rule 129, Sec. 4.
[7] Luzon Development Bank v. Conquilla, G.R. No. 163338,
[8] Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corp., G.R. No. 152228, September 23, 2005, 470 SCRA 650, 667, citing Elayda v. CA, G.R. No. 49327, July 18, 1991, 199 SCRA 349, 353.
[9] Republic v. Sarabia, G.R. No. 157847, August 25, 2005, 468 SCRA
142, 150, citing Santiago v. De los
[10] RULES OF COURT, Rule 18, Sec. 2.
[11] RULES OF COURT, Rule 18, Sec. 3.
[12] I F. Regalado, REMEDIAL LAW COMPENDIUM 286-287 (8th rev. ed., 2002).
[13]
[14] RULES OF COURT, Rule 38, Sec. 1.
[15] Palu-ay v. CA, 355 Phil. 94, 102-103 (1998) and Anuran v. Aquino, 38 Phil. 29, 32-33, 36 (1918).
[16] Sunico v. Villapando, 14 Phil. 352, 355 (1909), citing the old Code of
Civil Procedure, Sec. 145, Subsec. 1.
[17] Rili v. Chunaco, 87 Phil. 545, 546-547 (1950).
[18] Fernandez v. Tan Tiong Tick, 111 Phil. 773, 779 (1961).
[19] Serona v. CA, 440 Phil. 508, 521 (2002).
[20] Gutierrez
Hermanos v.
[21] Saura Import & Export Co., Inc. v. Solidum, 133 Phil. 505, 512 (1968).
[22] Salazar
v. CA, 327 Phil. 944, 955 (1996), citing Pingol v. CA, G.R. No. 102909, September 6, 1993, 226 SCRA 118,
126; Visayan Sawmill Co., Inc. v. CA,
G.R. No. 83851, March 3, 1993, 219 SCRA 378, 389; Jacinto v. Kaparaz, G.R. No. 81158, May 22, 1992, 209 SCRA 246,
254; and Luzon Brokerage Co., Inc. v.
Maritime Building Co., Inc., 150 Phil. 114, 125-126 (1972).
[23] Coronel v. CA, 331 Phil. 294, 311 (1996).
[24] Salazar v. CA, supra at 955.
[25] Adelfa Properties, Inc. v. CA, 310 Phil. 623, 637 (1995), citing Pingol v. CA, supra at 127.
[26] Dignos v. CA, G.R. No. 59266, February 29, 1988, 158 SCRA 375, 382-383, in relation to Article 1475 of the Civil Code, which provides:
Art.
1475. The contract of sale is perfected at the moment there is a meeting of
minds upon the thing which is the object of the contract and upon the price.
From
that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.
[27] Adelfa
Properties, Inc. v. CA, supra at 641, quoting McMillan v. Philadelphia Co., 28 A. 220, 220-221,
[28] CIVIL CODE, Art. 1482.
[29] Adelfa Properties, Inc. v. CA, supra at 646.
[30] Dignos v. CA, supra at 383.
[31] Salazar v. CA, supra.
[32] CIVIL CODE, Art. 1592.