Republic of the
SUPREME COURT
THIRD DIVISION
|
SPS.
RAMON LEQUIN and VIRGINIA LEQUIN, Petitioners, -
versus - SPS.
RAYMUNDO VIZCONDE and SALOME LEQUIN VIZCONDE, Respondents. |
|
G.R. No. 177710 Present: CARPIO,
J., Chairperson, CHICO-NAZARIO, VELASCO,
JR., NACHURA,
and PERALTA,
JJ. Promulgated: October
12, 2009 |
x-----------------------------------------------------------------------------------------x
D E C I S I O N
VELASCO, JR., J.:
The Case
This
is an appeal under Rule 45 from the Decision[1]
dated July 20, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 83595, which
declared the Kasulatan ng Bilihang Tuluyan ng Lupa[2] (Kasulatan) valid as between the
parties, but required respondents to return the amount of PhP 50,000 to
petitioners. Also assailed is the
March 30, 2007 CA Resolution[3] denying
petitioners’ motion for reconsideration.
The Facts
Petitioner
Ramon Lequin, husband of petitioner Virginia Lequin, is the brother of
respondent Salome L. Vizconde and brother-in-law of respondent Raymundo
Vizconde. With this consanguine and
affinity relation, the instant case developed as follows:
In
1995, petitioners, residents of
In
1997, respondents represented to petitioners that they had also bought from
Carlito de Leon a 1,012-square meter lot adjacent to petitioners’ property and
built a house thereon. As later
confirmed by de Leon, however, the 1,012-square meter lot claimed by
respondents is part of the 10,115-square meter lot petitioners bought from him.
Petitioners believed the story of respondents, since it was Raymundo who
negotiated the sale of their lot with de Leon. With the consent of respondents, petitioners
then constructed their house on the 500-square meter half-portion of the 1,012
square-meter lot claimed by respondents, as this was near the road. Respondents’ residence is on the remaining
512 square meters of the lot.
Given
this situation where petitioners’ house stood on a portion of the lot allegedly
owned by respondents, petitioners consulted a lawyer, who advised them that the
1,012-square meter lot be segregated from the subject lot whose title they own
and to make it appear that they are selling to respondents 512 square meters
thereof. This sale was embodied in the
February 12, 2000 Kasulatan where it was made to appear that respondents
paid PhP 15,000 for the purchase of the 512-square meter portion of the subject
lot. In reality, the consideration of
PhP 15,000 was not paid to petitioners. Actually,
it was petitioners who paid respondents PhP 50,000 for the 500-square meter
portion where petitioners built their house on, believing respondents’
representation that the latter own the 1,012-square meter lot.
In July 2000, petitioners tried to develop the
dried up canal located between their 500-square meter lot and the public road. Respondents objected, claiming ownership of
said dried up canal or sapang
patay.
This
prompted petitioners to look into the ownership of the dried up canal and the
1,012 square-meter lot claimed by respondents.
Carlito de Leon told petitioners that what he had sold to respondents
was the dried up canal or sapang patay and that the 1,012-square meter
lot claimed by respondents really belongs to petitioners.
Thus,
on July 13, 2001, petitioners filed a Complaint[4]
for Declaration of Nullity of Contract, Sum of Money and Damages against
respondents with the Regional Trial Court (RTC), Branch 28 in Cabanatuan City,
praying, among others, for the declaration of the February 12, 2000 Kasulatan
as null and void ab initio, the return of PhP 50,000 they paid to
respondents, and various damages. The
case was docketed as Civil Case No. 4063.
The Ruling of the RTC
On
July 5, 2004, after due trial on the merits with petitioners presenting three witnesses
and respondents only one witness, the trial court rendered a Decision[5] in
favor of petitioners. The decretal portion reads:
WHEREFORE,
viewed from the foregoing, judgment is hereby rendered in favor of the
plaintiffs and against the defendants as follows:
1.
Declaring the KASULATAN NG TULUYANG
BILIHAN dated
2.
Ordering the defendants:
(a) to return to the plaintiffs the amount of
FIFTY THOUSAND PESOS which they have paid in the simulated deed of sale plus an
interest of 12% per annum to commence from the date of the filing of this case;
(b) To pay the plaintiffs moral damages in the
amount of Php50,000.00;
(c) To pay exemplary damages of Php50,000.00;
(d) To pay attorney’s fees in the amount of
Php10,000.00; and
(e)
To pay the costs of suit.
SO
ORDERED.[6]
The
RTC found the Kasulatan allegedly conveying 512 square meters to
respondents to be null and void due to: (1) the vitiated consent of petitioners
in the execution of the simulated contract of sale; and (2) lack of consideration,
since it was shown that while petitioners were ostensibly conveying to
respondents 512 square meters of their property, yet the consideration of PhP
15,000 was not paid to them and, in fact, they were the ones who paid
respondents PhP 50,000. The RTC held
that respondents were guilty of fraudulent misrepresentation.
Aggrieved,
respondents appealed the above RTC Decision to the CA.
The Ruling
of the CA
The
appellate court viewed the case otherwise.
On July 20, 2006, it rendered the assailed Decision granting respondents’
appeal and declaring as valid the Kasulatan. The fallo reads:
WHEREFORE,
premises considered, the Appeal is GRANTED.
The Kasulatan ng Bilihang Tuluyan dated
SO
ORDERED.[7]
In
reversing and vacating the RTC Decision, the CA found no simulation in the
contract of sale, i.e., Kasulatan.
Relying on Manila Banking Corporation v. Silverio,[8] the
appellate court pointed out that an absolutely simulated contract takes place
when the parties do not intend at all to be bound by it, and that it is
characterized by the fact that the apparent contract is not really desired or
intended to produce legal effects or in any way alter the juridical situation
of the parties. It read the sale
contract (Kasulatan) as clear and unambiguous, for respondents (spouses
Vizconde) were the buyers and petitioners (spouses Lequin) were the
sellers. Such being the case, petitioners
are, to the CA, the owners of the 1,012-square meter lot, and as owners they
conveyed the 512-square meter portion to respondents.
The
CA viewed petitioners’ claim that they executed the sale contract to make it
appear that respondents bought the property as mere gratuitous allegation. Besides,
the sale contract was duly notarized with respondents claiming the 512-square meter
portion they bought from petitioners and not the whole 1,012-square meter lot as
alleged by petitioners.
Moreover,
the CA dismissed allegations of fraud and machinations against respondents to
induce petitioners to execute the sale contract, there being no evidence to
show how petitioners were defrauded and much less the machinations used by
respondents. It ratiocinated that the
allegation of respondents telling petitioners that they own the 1,012-square meter
lot and for which petitioners sold them 512 square meters thereof does not fall
in the concept of fraud. Anent the PhP
50,000 petitioners paid to respondents for the 500-square meter portion of the
1,012-square meter lot claimed by respondents, the CA ruled that the receipt spoke
for itself and, thus, required respondents to return the amount to petitioners.
On
March 30, 2007, the CA denied petitioners’ Motion for Reconsideration of the above decision through the assailed resolution. Hence, petitioners went to this Court.
The Issues
I
THE
HONORABLE COURT OF APPEALS, WITH ALL DUE RESPECT, ERRED IN NOT CLEARLY STATING
IN THE ASSAILED DECISION AND RESOLUTION THE FACTS AND LAW ON WHICH THE SAME
WERE BASED;
II
THE
HONORABLE COURT OF APPEALS, WITH ALL DUE RESPECT, ERRED IN NOT GIVING DUE
CREDENCE TO THE FINDINGS OF FACTS OF THE TRIAL COURT AND HOW THE LATTER
APPRECIATED THE TESTIMONIES GIVEN BY THE WITNESSES;
III
THE
HONORABLE COURT OF APPEALS, WITH ALL DUE RESPECT, ERRED IN FINDING THAT THERE
WAS NO FRAUD ON THE PART OF THE RESPONDENT-VIZCONDES;
IV
THE
HONORABLE COURT OF APPEALS, WITH ALL DUE RESPECT, ERRED IN CONSIDERING THAT THE
KASULATAN NG BILIHANG TULUYAN IS A VALID CONTRACT OF
V
THE
HONORABLE COURT OF APPEALS, WITH ALL DUE RESPECT, ERRED IN NOT CONSIDERING THAT
THE RESPONDENTS DID NOT HAVE THE FINANCIAL CAPACITY TO PURCHASE THE
The
Court’s Ruling
The petition is meritorious.
The issues boil down to two core questions:
whether or not the Kasulatan covering
the 512 square-meter lot is a valid contract of sale; and who is the legal
owner of the other 500 square-meter lot.
We find for petitioners.
The trial court found, inter alia,
lack of consideration in the contract of sale while the appellate court, in
reversing the decision of the trial court, merely ruled that the contract of
sale is not simulated. With the contrary
rulings of the courts a quo, the Court is impelled to review the records
to judiciously resolve the petition.
It is true that this Court is not a trier of facts,
but there are recognized exceptions to this general rule,
such as when the appellate court had ignored, misunderstood, or misinterpreted
cogent facts and circumstances which, if considered, would change the outcome
of the case; or when its findings were totally devoid of support; or when its
judgment was based on a misapprehension of facts.[10]
As may be noted, the CA, without
going into details, ruled that the contract of sale was not simulated, as it was
duly notarized, and it clearly showed petitioners as sellers, and respondents
as buyers, of the 512-square meter lot, subject matter of the sale. But the CA misappreciated the evidence duly
adduced during the trial on the merits.
As established during the trial, petitioners
bought the entire subject property consisting of 10,115 square meters from Carlito
de Leon. The title of the subject
property was duly transferred to petitioners’ names. Respondents, on the other hand, bought the
dried up canal consisting of 1,012 square meters from de Leon. This dried up canal is adjacent to the
subject property of petitioners and is the lot or area between the subject
property and the public road (Sto.
The affidavit or Sinumpaang
Salaysay[11] of de
Leon attests to the foregoing facts.
Moreover, de Leon’s testimony in court confirmed and established such
facts. These were neither controverted
nor assailed by respondents who did not present any countervailing evidence.
Before this factual clarification was
had, respondents, however, made a claim against petitioners in 1997—when
subject lot was re-surveyed by petitioners—that respondents also bought a 1,012
square-meter lot from de Leon. Undeniably,
the 1,012 square meters was a portion of the 10,115 square meters which de Leon
sold to petitioners.
Obviously, petitioners respected
respondents’ claim—if not, to maintain peace and harmonious relations—and
segregated the claimed portion. Whether bad
faith or ill-will was involved or an honest erroneous belief by respondents on
their claim, the records do not show.
The situation was further complicated by the fact that both parties
built their respective houses on the 1,012 square-meter portion claimed by
respondents, it being situated near the public road.
To resolve the impasse on
respondents’ claim over 1,012 square meters of petitioners’ property and the
latter’s house built thereon, and to iron out their supposed respective rights,
petitioners consulted a notary public, who advised and proposed the solution of
a contract of sale which both parties consented to and is now the object of the
instant action. Thus, the contract of
sale was executed on February 12, 2000 with petitioners, being the title
holders of the subject property who were ostensibly selling to respondents 512
square meters of the subject property while at the same time paying PhP 50,000
to respondents for the other 500 square-meter portion.
From the above considerations, we conclude
that the appellate court’s finding that there was no fraud or fraudulent machinations
employed by respondents on petitioners is bereft of factual evidentiary support.
We sustain petitioners’ contention that respondents employed fraud and
machinations to induce them to enter into the contract of sale. As such, the CA’s finding of fact must give way
to the finding of the trial court that the Kasulatan
has to be annulled for vitiated consent.
Anent the first main issue as to
whether the Kasulatan over the
512-square meter lot is voidable for vitiated consent, the answer is in the
affirmative.
A contract, as defined in the Civil
Code, is a meeting of minds, with respect to the other, to give something or to
render some service.[12] For a contract to be valid, it must have
three essential elements: (1) consent of the contracting parties; (2) object
certain which is the subject matter of the contract; and (3) cause of the obligation
which is established.
The requisites of consent are (1) it
should be intelligent or with an exact notion of the matter to which it refers;
(2) it should be free; and (3) it should be spontaneous. In De
Jesus v. Intermediate Appellate Court,[13]
it was explained that intelligence in consent is vitiated by error, freedom by
violence, intimidation or undue influence, and spontaneity by fraud.
Article (Art.) 1330 of the Civil Code
provides that when consent is given through fraud, the contract is voidable.
Tolentino defines fraud as “every
kind of deception whether in the form of insidious machinations, manipulations,
concealments or misrepresentations, for the purpose of leading another party
into error and thus execute a particular act.”[14] Fraud has a “determining influence” on the
consent of the prejudiced party, as he is misled by a false appearance of
facts, thereby producing error on his part in deciding whether or not to agree
to the offer.
One form of fraud is
misrepresentation through insidious words or machinations. Under Art. 1338 of the Civil Code, there is
fraud when, through insidious words or machinations of one of the contracting
parties, the other is induced to enter into a contract which without them he would
not have agreed to. Insidious words or
machinations constituting deceit are those that ensnare, entrap, trick, or
mislead the other party who was induced to give consent which he or she would
not otherwise have given.
Deceit is also present when one
party, by means of concealing or omitting to state material facts, with intent
to deceive, obtains consent of the other party without which, consent could not
have been given. Art. 1339 of the Civil
Code is explicit that failure to disclose facts when there is a duty to reveal
them, as when the parties are bound by confidential relations, constitutes
fraud.
From the factual milieu, it is clear
that actual fraud is present in this case.
The sale between petitioners and de Leon over the 10,115 square-meter
lot was negotiated by respondent Raymundo Vizconde. As such, Raymundo was fully
aware that what petitioners bought was the entire 10,115 square meters and that
the 1,012-square meter lot which he claims he
also bought from de
There was vitiated consent on the
part of petitioners. There was fraud in
the execution of the contract used on petitioners which affected their consent. Petitioners’ reliance and belief on the
wrongful claim by respondents operated as a concealment of a material fact in
their agreeing to and in readily executing the contract of sale, as advised and
proposed by a notary public. Believing
that Carlito de Leon indeed sold a 1,012-square meter portion of the subject property
to respondents, petitioners signed the contract of sale based on respondents’
representations. Had petitioners known,
as they eventually would sometime in late 2000 or early 2001 when they made the
necessary inquiry from Carlito de Leon, they would not have entered or signed
the contract of sale, much less pay PhP 50,000 for a portion of the subject lot
which they fully own. Thus, petitioners’
consent was vitiated by fraud or fraudulent machinations of Raymundo. In the eyes of the law, petitioners are the
rightful and legal owners of the subject 512 square-meter lot anchored on their
purchase thereof from de Leon. This
right must be upheld and protected.
On the issue of lack of
consideration, the contract of sale or Kasulatan states that respondents
paid petitioners PhP 15,000 for the 512-square meter portion, thus:
Na kaming magasawang Ramon Lequin at Virginia R.
Lequin, nawang may sapat na gulang, pilipino at nakatira sa 9 Diamond Court,
Brixton Ville Subdivision, Camarin, Kalookan City, alang-alang sa halagang
LABINGLIMANG LIBONG PISO (P 15,000.00) salaping pilipino na binayaran sa
amin ng buong kasiyahang loob namin ng magasawang Raymundo Vizconde at Salome
Lequin, nawang may sapat na gulang, pilipino at nakatira sa Sto. Rosario,
Aliaga, Nueva Ecija, ay amin naman ngayon inilipat, ibinigay at ipinagbili ng
bilihang tuluyan sa naulit na magasawang Raymundo Vizconde at Salome Lequin, at
sa kanilang mga tagapagmana ang x x x.[15]
On its face, the above contract of
sale appears to be supported by a valuable consideration. We, however, agree with the trial court’s
finding that this is a simulated sale and unsupported by any consideration, for
respondents never paid the PhP 15,000 purported purchase price.
Section 9 of Rule 130 of the Revised
Rules on Evidence gives both the general rule and exception as regards written
agreements, thus:
SEC. 9. Evidence
of written agreements.—When the terms of an agreement have been reduced to
writing, it is considered as containing all the terms agreed upon and there can
be, between the parties and their successors in interest, no evidence of such
terms other than the contents of the written agreement.
However, a party may present evidence to modify,
explain or add to the terms of the written agreement if he puts in issue in his
pleading:
(a) An
intrinsic ambiguity, mistake or imperfection in written agreement;
(b) The
failure of the written agreement to express the true intent and agreement of
the parties thereto;
(c) The
validity of the written agreement; or
(d) The
existence of other terms agreed to by the parties or their successors in
interest after the execution of the written agreement.
The term “agreement” includes wills.
The second exception provided for the
acceptance of parol evidence applies to the instant case. Lack of consideration was proved by
petitioners’ evidence aliunde showing that the Kasulatan did not
express the true intent and agreement of the parties. As explained above, said sale contract was
fraudulently entered into through the misrepresentations of respondents causing
petitioners’ vitiated consent.
Moreover, the evidence of petitioners
was uncontroverted as respondents failed to adduce any proof that they indeed
paid PhP 15,000 to petitioners. Indeed,
having asserted their purchase of the 512-square meter portion of petitioners
based on the Kasulatan, it behooves upon respondents to prove such affirmative
defense of purchase. Unless the party
asserting the affirmative defense of an issue sustains the burden of proof, his
or her cause will not succeed. If he or
she fails to establish the facts of which the matter asserted is predicated,
the complainant is entitled to a verdict or decision in his or her favor.[16]
In the instant case, the record is
bereft of any proof of payment by respondents and, thus, their affirmative
defense of the purported purchase of the 512-square meter portion fails. Thus, the clear finding of the trial court:
2. x x x [I]t
was established by the plaintiffs [petitioners] that they were the ones who
paid the defendants the amount of FIFTY THOUSAND PESOS (Php50,000.00) and
execute a deed of sale also in favor of the defendants. In a simple logic, where can you find a
contract that a VENDOR will convey his real property and at the same time pay
the VENDEE a certain amount of money without receiving anything in return?[17]
There can be no doubt that the
contract of sale or Kasulatan lacked the essential element of consideration. It is a well-entrenched rule that where the
deed of sale states that the purchase price has been paid but in fact has never
been paid, the deed of sale is null and void ab initio for lack of consideration.[18] Moreover, Art. 1471 of the Civil Code, which
provides that “if the price is simulated, the sale is void,” also applies to
the instant case, since the price purportedly paid as indicated in the contract
of sale was simulated for no payment was actually made.[19]
Consideration and consent are essential
elements in a contract of sale. Where a
party’s consent to a contract of sale is vitiated or where there is lack of
consideration due to a simulated price, the contract is null and void ab
initio.
Anent the second issue, the PhP
50,000 paid by petitioners to respondents as consideration for the transfer of
the 500-square meter lot to petitioners must be restored to the latter. Otherwise, an unjust enrichment situation ensues.
The facts clearly show that the 500-square meter lot is legally owned by
petitioners as shown by the testimony of de Leon; therefore, they have no legal
obligation to pay PhP 50,000 therefor. Art.
22 of the Civil Code provides that “every person who through an act or
performance by another, or any other means, acquires or comes into possession
of something at the expense of the latter without just or legal ground, shall
return the same to him.” Considering
that the 512 square-meter lot on which respondents’ house is located is clearly
owned by petitioners, then the Court declares petitioners’ legal ownership over
said 512 square-meter lot. The amount of
PhP 50,000 should only earn interest at the legal rate of 6% per annum from the
date of filing of complaint up to finality of judgment and not 12% since such
payment is neither a loan nor a forbearance of credit.[20] After finality of decision, the amount of PhP
50,000 shall earn interest of 12% per annum until fully paid.
The award of moral and exemplary
damages must be reinstated in view of the fraud or fraudulent machinations
employed by respondents on petitioners. The grant of damages in the concept of
attorney’s fees in the amount of PhP 10,000 must be maintained considering that
petitioners have to incur litigation expenses to protect their interest in
conformity to Art. 2208(2)[21]
of the Civil Code.
Considering that respondents have
built their house over the 512-square meter portion legally owned by
petitioners, we leave it to the latter what course of action they intend to
pursue in relation thereto. Such is not
an issue in this petition.
WHEREFORE, the
instant petition is hereby GRANTED. Accordingly, the CA Decision dated July 20,
2006 and Resolution dated March 30, 2007 in CA-G.R. CV No. 83595 are hereby REVERSED
and SET ASIDE. The Decision of the RTC, Branch 28 in
No pronouncement as to costs.
SO ORDERED.
PRESBITERO
J. VELASCO, JR.
Associate Justice
WE
CONCUR:
Associate Justice
Chairperson
MINITA V.
Associate Justice
Associate Justice
DIOSDADO M.
PERALTA
Associate Justice
I attest 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.
Pursuant to Section 13,
Article VIII of the Constitution, and the Division Chairperson’s Attestation, I
certify 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.
LEONARDO
A. QUISUMBING
Acting Chief Justice
[1] Rollo, pp. 55-63. Penned by Associate Justice Eliezer R. Delos Santos and concurred in by Associate Justices Fernanda Lampas Peralta and Myrna Dimaranan Vidal.
[2]
[3]
[4]
[5]
[6]
[7]
[8] G.R. No. 132887, August 11, 2005, 466 SCRA 438.
[9] Rollo, p. 25-26.
[10] Delos Santos v. Court of Appeals, G.R. No. 169498, December 11, 2008; citing Emco Plywood Corporation v. Abelgas, G.R. No. 148532, April 14, 2004, 427 SCRA 496, 515.
[11] Rollo, p. 118.
[15] Translated as follows:
We,
spouses Ramon Lequin and Virginia R. Lequin, of legal age, Filipino and
residents of
[16] U-Bix Corporation v. Bandiola, G.R. No. 157168, June 26, 2007, 525 SCRA 566, 581; citing Aznar Brothers Realty Company v. Aying, G.R. No. 144773, May 16, 2005, 458 SCRA 496, 512.
[17] Rollo, p. 103.
[18] Montecillo v. Reynes, G.R. No. 138018, July 26, 2002, 385 SCRA 244, 256; citing Ocejo Perez & Co. v. Flores, 40 Phil. 921 (1920); as reiterated in Mapalo v. Mapalo, Nos. L-21489 & L-21628, May 19, 1966, 17 SCRA 114.
[19] See Vda. De Catindig v. Heirs of Catalina Roque, No. L-23777, November 26, 1976, 74 SCRA 83; see also Yu Bun Guan v. Ong, G.R. No. 144735, October 18, 2001, 367 SCRA 559; Rongavilla v. Court of Appeals, G.R. No. 83974, August 14, 1998, 294 SCRA 289.
[20] Sunga-Chan v. Court of Appeals, G.R. No. 164401, June 25, 2008, 555 SCRA 275, 287-289; citing Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, July 12, 1994, 234 SCRA 78 and Reformina v. Tomol, Jr., No. L-59096, October 11, 1985, 139 SCRA 260.
[21] Art. 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered, except:
x x x x
(2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest.