Professional Documents
Culture Documents
However, they filed a petition for relief from judgment, and in the
course of the hearing of this petition it was discovered that
long prior to the filing of the instant complaint on March 14, 1958,
plaintiff firm had, on September 30, 1957, notified the Provincial Sheriff
of Ilocos Sur including the defendants themselves of the firm's desire
to foreclose the chattel mortgage constituted on the rotavator. The
record reveals and on this there appears no dispute either that in
consonance with plaintiff's notification to the sheriff of its desire to
foreclose on the chattel the auction sale was scheduled on December
18, 1957; that pursuant to this request for foreclosure, Deputy Sheriff
Anicoche went to Narvacan, Ilocos Sur, where he found defendant Jose
Lavin and upon asking the latter for the mortgaged property, the same
was pointed to by Lavin; that upon being informed by the deputy
sheriff of the foreclosure of the chattel and of the deputy's intention to
seize the same, Lavin offered no objection thereto; that despite such
lack of objection of defendant Lavin to the foreclosure, the chattel
could not be taken to Manila there being no truck to bring it; that it was
understood between the sheriff and Lavin that the former would fetch
a truck from Vigan to pick up the chattel from Narvacan to Manila. The
record also reveals that upon reaching Vigan on December 17, 1957
(the day prior to the scheduled public sale) the deputy sheriff received
a letter from plaintiff's counsel including a wire asking him (sheriff) to
suspend the auction sale as the defendants-mortgagors had voluntarily
agreed to surrender the chattel; that as a result of this communication,
the provincial sheriff of Ilocos Sur suspended the foreclosure sale of the
chattel which, incidentally, remains in the possession of defendant
Lavin.
The petition for relief was granted, and the case was set for hearing on
the merits on 2 March 1959. The court
considered defendants' petition for relief as their answer to plaintiff's
complaint. No further hearing was held, as the record discloses no
transcript of notes taken; and the parties having ostensibly rested their
case, His Honor rendered on April 8, 1959 the decision which is now
the subject of this appeal,
dismissing the case without prejudice to the presentation of the proper
action to recover the chattel.
The defendants do not controvert the facts, but state that the plaintiff
can no longer sue on the balance of the purchase price because of its
previous election of the remedy of foreclosure. The plaintiff, on the
other hand, argues that it has not availed of the remedy of foreclosure
since the foreclosure was not pushed through to its finality.
Case 2
G.R. No. L-14475
The trial court on March 27, 1958, condemned the defendant to pay
the plaintiff the amount of P4,475.00 with interest at the rate of 12%
per annum from August 16, 1957, until fully paid, plus 10% thereof as
attorneys fees and costs against which defendant interposed the
present appeal, contending that the trial court erred
(1) In not finding that the attachment caused to be levied on the truck
and its immediate sale at public auction, was tantamount to the
foreclosure of the chattel mortgage on said truck; and
(2) In rendering judgment in favor of the plaintiff-appellee.
Both parties agreed that the case is governed by Article 1484 of the
new Civil Case, which provides:
ART. 1484. In a contract of sale of personal property the price of which
is payable in installments, the vendor may exercise any of the following
remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay; .
(2) Cancel the sale, should the vendee's failure to pay cover two or
more installments;
(3) Foreclose the chattel mortgage on the thing sold, if one has been
constituted, should the vendee's failure to pay cover two or more
installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement
to the contrary shall be void.
While the appellee claims that in filing the complaint, demanding
payment of the unpaid balance of the purchase price, it has availed of
the first remedy provided in said article i.e. to exact fulfillment of the
obligation (specific performance); the appellant, on the other hand,
contends that appellee had availed itself of the third remedy viz, the
foreclosure of the chattel mortgage on the truck.
The appellant argues that considering history of the law, the
circumstances leading to its enactment, the evil that the law was
intended to correct and the remedy afforded (Art. 1454-A of the old
Civil Code; Act No. 4122; Bachrach Motor Co. vs. Reyes, 62 Phil. 461,
466-469); that the appellee did not content itself by waiting for the
judgment on the complaint and then executed the judgment which
might be rendered in its favor, against the properties of the appellant;
that the appellee obtained a preliminary attachment on the subject of
the chattel mortgage itself and caused said truck to be sold at public
On April 14, 1988, the case was submitted for resolution before Judge
Reynaldo Roura, who was then temporarily detailed to preside over
Branch 82 of the RTC of Quezon City. On March 1, 1989, judgment was
handed down by Judge Roura from his regular bench at Macabebe,
Pampanga for the Quezon City branch, disposing as follows:
WHEREFORE, judgment for specific performance is hereby rendered
ordering defendant to execute in favor of plaintiffs a deed of absolute
sale covering that parcel of land embraced in and covered by Transfer
Certificate of Title No. 327403 (now TCT No. 331582) of the Registry of
Deeds for Quezon City, together with all the improvements existing
thereon free from all liens and encumbrances, and once accomplished,
to immediately deliver the said document of sale to plaintiffs and upon
receipt thereof, the plaintiffs are ordered to pay defendants the whole
balance of the purchase price amounting to P1,190,000.00 in cash.
Transfer Certificate of Title No. 331582 of the Registry of Deeds for
Quezon City in the name of intervenor is hereby canceled and declared
to be without force and effect. Defendants and intervenor and all other
persons claiming under them are hereby ordered to vacate the subject
property and deliver possession thereof to plaintiffs. Plaintiffs claim for
damages and attorneys fees, as well as the counterclaims of
defendants and intervenors are hereby dismissed.
No pronouncement as to costs.
So Ordered.
Macabebe, Pampanga for Quezon City, March 1, 1989.
(Rollo, p. 106)
A motion for reconsideration was filed by petitioners before the new
presiding judge of the Quezon City RTC but the same was denied by
Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the decision
and to render anew decision by the undersigned Presiding Judge should
be denied for the following reasons: (1) The instant case became
submitted for decision as of April 14, 1988 when the parties terminated
the presentation of their respective documentary evidence and when
the Presiding Judge at that time was Judge Reynaldo Roura. The fact
that they were allowed to file memoranda at some future date did not
change the fact that the hearing of the case was terminated before
Judge Roura and therefore the same should be submitted to him for
decision; (2) When the defendants and intervenor did not object to the
authority of Judge Reynaldo Roura to decide the case prior to the
rendition of the decision, when they met for the first time before the
undersigned Presiding Judge at the hearing of a pending incident in
Civil Case No. Q-46145 on November 11, 1988, they were deemed to
have acquiesced thereto and they are now estopped from questioning
said authority of Judge Roura after they received the decision in
question which happens to be adverse to them; (3) While it is true that
Judge Reynaldo Roura was merely a Judge-on-detail at this Branch of
the Court, he was in all respects the Presiding Judge with full authority
to act on any pending incident submitted before this Court during his
incumbency. When he returned to his Official Station at Macabebe,
Pampanga, he did not lose his authority to decide or resolve cases
submitted to him for decision or resolution because he continued as
Judge of the Regional Trial Court and is of co-equal rank with the
undersigned Presiding Judge. The standing rule and supported by
jurisprudence is that a Judge to whom a case is submitted for decision
has the authority to decide the case notwithstanding his transfer to
another branch or region of the same court (Sec. 9, Rule 135, Rule of
Court).
Coming now to the twin prayer for reconsideration of the Decision
dated March 1, 1989 rendered in the instant case, resolution of which
now pertains to the undersigned Presiding Judge, after a meticulous
examination of the documentary evidence presented by the parties,
she is convinced that the Decision of March 1, 1989 is supported by
evidence and, therefore, should not be disturbed.
IN VIEW OF THE FOREGOING, the Motion for Reconsideration and/or to
Annul Decision and Render Anew Decision by the Incumbent Presiding
Judge dated March 20, 1989 is hereby DENIED.
SO ORDERED.
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on December 16,
1991, the Court of Appeals (Buena, Gonzaga-Reyes, Abad-Santos (P),
JJ.) rendered its decision fully agreeing with the trial court.
Hence, the instant petition which was filed on March 5, 1992. The last
pleading, private respondents Reply Memorandum, was filed on
September 15, 1993. The case was, however, re-raffled to undersigned
ponente only on August 28, 1996, due to the voluntary inhibition of the
Justice to whom the case was last assigned.
Article 1544 of the Civil Code, such second buyer of the property who
may have had actual or constructive knowledge of such defect in the
sellers 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 buyers title. In case a title is issued to the
second buyer, the first buyer may seek reconveyance of the property
subject of the sale.
With the above postulates as guidelines, we now proceed to the task of
deciphering the real nature of the contract entered into by petitioners
and private respondents.
It is a canon in the interpretation of contracts that the words used
therein should be given their natural and ordinary meaning unless a
technical meaning was intended (Tan vs. Court of Appeals, 212 SCRA
586 [1992]). Thus, when petitioners declared in the said Receipt of
Down Payment that they -Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon
City, the sum of Fifty Thousand Pesos purchase price of our inherited
house and lot, covered by TCT No. 1199627 of the Registry of Deeds of
Quezon City, in the total amount of P1,240,000.00.
without any reservation of title until full payment of the entire purchase
price, the natural and ordinary idea conveyed is that they sold their
property.
When the Receipt of Down payment is considered in its entirety, it
becomes more manifest that there was a clear intent on the part of
petitioners to transfer title to the buyer, but since the transfer
certificate of title was still in the name of petitioners father, they could
not fully effect such transfer although the buyer was then willing and
able to immediately pay the purchase price. Therefore, petitionerssellers undertook upon receipt of the down payment from private
respondent Ramona P. Alcaraz, to cause the issuance of a new
certificate of title in their names from that of their father, after which,
they promised to present said title, now in their names, to the latter
and to execute the deed of absolute sale whereupon, the latter shall, in
turn, pay the entire balance of the purchase price.
The agreement could not have been a contract to sell because the
sellers herein made no express reservation of ownership or title to the
subject parcel of land. Furthermore, the circumstance which prevented
the parties from entering into an absolute contract of sale pertained to
the sellers themselves (the certificate of title was not in their names)
and not the full payment of the purchase price. Under the established
facts and circumstances of the case, the Court may safely presume
that, had the certificate of title been in the names of petitioners-sellers
at that time, there would have been no reason why an absolute
contract of sale could not have been executed and consummated right
there and then.
Moreover, unlike in a contract to sell, petitioners in the case at bar did
not merely promise to sell the property to private respondent upon the
fulfillment of the suspensive condition. On the contrary, having already
agreed to sell the subject property, they undertook to have the
certificate of title change to their names and immediately thereafter, to
execute the written deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell where the
sellers, after compliance by the buyer with certain terms and
conditions, promised to sell the property to the latter. What may be
perceived from the respective undertakings of the parties to the
contract is that petitioners had already agreed to sell the house and lot
they inherited from their father, completely willing to transfer
ownership of the subject house and lot to the buyer if the documents
were then in order. It just so happened, however, that the transfer
certificate of title was then still in the name of their father. It was more
expedient to first effect the change in the certificate of title so as to
bear their names. That is why they undertook to cause the issuance of
a new transfer of the certificate of title in their names upon receipt of
the down payment in the amount of P50,000.00. As soon as the new
certificate of title is issued in their names, petitioners were committed
to immediately execute the deed of absolute sale. Only then will the
obligation of the buyer to pay the remainder of the purchase price
arise.
There is no doubt that unlike in a contract to sell which is most
commonly entered into so as to protect the seller against a buyer who
intends to buy the property in installment by withholding ownership
over the property until the buyer effects full payment therefor, in the
contract entered into in the case at bar, the sellers were the ones who
were unable to enter into a contract of absolute sale by reason of the
fact that the certificate of title to the property was still in the name of
their father. It was the sellers in this case who, as it were, had the
impediment which prevented, so to speak, the execution of an contract
of absolute sale.
What is clearly established by the plain language of the subject
document is that when the said Receipt of Down Payment was
prepared and signed by petitioners Romulo A. Coronel, et. al., the
parties had agreed to a conditional contract of sale, consummation of
(Rollo, p. 16)
Petitioners themselves recognized that they entered into a contract of
sale subject to a suspensive condition. Only, they contend, continuing
in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of first
transferring the title to the property under their names, there could be
no perfected contract of sale. (Emphasis supplied.)
(Ibid.)
not aware that they have set their own trap for themselves, for Article
1186 of the Civil Code expressly provides that:
Art. 1186. The condition shall be deemed fulfilled when the obligor
voluntarily prevents its fulfillment.
Besides, it should be stressed and emphasized that what is more
controlling than these mere hypothetical arguments is the fact that the
condition herein referred to was actually and indisputably fulfilled on
February 6, 1985, when a new title was issued in the names of
petitioners as evidenced by TCT No. 327403 (Exh. D; Exh. 4).
The inevitable conclusion is that on January 19, 1985, as evidenced by
the document denominated as Receipt of Down Payment (Exh. A; Exh.
1), the parties entered into a contract of sale subject to the suspensive
condition that the sellers shall effect the issuance of new certificate
title from that of their fathers name to their names and that, on
February 6, 1985, this condition was fulfilled (Exh. D; Exh. 4).
We, therefore, hold that, in accordance with Article 1187 which
pertinently provides Art. 1187. The effects of conditional obligation to give, once the
condition has been fulfilled, shall retroact to the day of the constitution
of the obligation . . .
In obligations to do or not to do, the courts shall determine, in each
case, the retroactive effect of the condition that has been complied
with.
the rights and obligations of the parties with respect to the perfected
contract of sale became mutually due and demandable as of the time
of fulfillment or occurrence of the suspensive condition on February 6,
with the Registry of Deeds of Quezon City giving rise to the issuance of
a new certificate of title in the name of Catalina B. Mabanag on June 5,
1985. Thus, the second paragraph of Article 1544 shall apply.
The above-cited provision on double sale presumes title or ownership
to pass to the buyer, the exceptions being: (a) when the second buyer,
in good faith, registers the sale ahead of the first buyer, and (b) should
there be no inscription by either of the two buyers, when the second
buyer, in good faith, acquires possession of the property ahead of the
first buyer. Unless, the second buyer satisfies these requirements, title
or ownership will not transfer to him to the prejudice of the first buyer.
In his commentaries on the Civil Code, an accepted authority on the
subject, now a distinguished member of the Court, Justice Jose C. Vitug,
explains:
The governing principle is prius tempore, potior jure (first in time,
stronger in right). Knowledge by the first buyer of the second sale
cannot defeat the first buyers rights except when the second buyer
first registers in good faith the second sale (Olivares vs. Gonzales, 159
SCRA 33). Conversely, knowledge gained by the second buyer of the
first sale defeats his rights even if he is first to register, since
knowledge taints his registration with bad faith (see also Astorga vs.
Court of Appeals, G.R. No. 58530, 26 December 1984). In Cruz vs.
Cabana (G.R. No. 56232, 22 June 1984, 129 SCRA 656), it was held that
it is essential, to merit the protection of Art. 1544, second paragraph,
that the second realty buyer must act in good faith in registering his
deed of sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99,
Crisostomo vs. CA, G.R. No. 95843, 02 September 1992).
(J. Vitug, Compendium of Civil Law and Jurisprudence, 1993 Edition, p.
604).
Petitioners point out that the notice of lis pendens in the case at bar
was annotated on the title of the subject property only on February 22,
1985, whereas, the second sale between petitioners Coronels and
petitioner Mabanag was supposedly perfected prior thereto or on
February 18, 1985. The idea conveyed is that at the time petitioner
Mabanag, the second buyer, bought the property under a clean title,
she was unaware of any adverse claim or previous sale, for which
reason she is a buyer in good faith.
We are not persuaded by such argument.
In a case of double sale, what finds relevance and materiality is not
whether or not the second buyer in good faith but whether or not said
second buyer registers such second sale in good faith, that is, without
knowledge of any defect in the title of the property sold.
As clearly borne out by the evidence in this case, petitioner Mabanag
could not have in good faith, registered the sale entered into on
February 18, 1985 because as early as February 22, 1985, a notice of
lis pendens had been annotated on the transfer certificate of title in
the names of petitioners, whereas petitioner Mabanag registered the
said sale sometime in April, 1985. At the time of registration, therefore,
petitioner Mabanag knew that the same property had already been
previously sold to private respondents, or, at least, she was charged
with knowledge that a previous buyer is claiming title to the same
property. Petitioner Mabanag cannot close her eyes to the defect in
petitioners title to the property at the time of the registration of the
property.
This Court had occasions to rule that:
If a vendee in a double sale registers the sale after he has acquired
knowledge that there was a previous sale of the same property to a
third party or that another person claims said property in a previous
sale, the registration will constitute a registration in bad faith and will
not confer upon him any right. (Salvoro vs. Tanega, 87 SCRA 349
[1978]; citing Palarca vs. Director of Land, 43 Phil. 146; Cagaoan vs.
Cagaoan, 43 Phil. 554; Fernandez vs. Mercader, 43 Phil. 581.)
Thus, the sale of the subject parcel of land between petitioners and
Ramona P. Alcaraz, perfected on February 6, 1985, prior to that
between petitioners and Catalina B. Mabanag on February 18, 1985,
was correctly upheld by both the courts below.
Although there may be ample indications that there was in fact an
agency between Ramona as principal and Concepcion, her mother, as
agent insofar as the subject contract of sale is concerned, the issue of
whether or not Concepcion was also acting in her own behalf as a cobuyer is not squarely raised in the instant petition, nor in such
assumption disputed between mother and daughter. Thus, We will not
touch this issue and no longer disturb the lower courts ruling on this
point.
WHEREFORE, premises considered, the instant petition is hereby
DISMISSED and the appealed judgment AFFIRMED.
Case No. 4
lived there. No copy of the petition was served on their overseer Felix
Lontok. The petition was heard without opposition, and on April 16,
1948 the court issued a decree In favor of defendant over the land in
question. In 1950, armed with this decree, defendant wrested the
possession of the land from plaintiffs and reaped the harvest there
from of some 20 to 25 cavanes of palay since that year. In the
meantime, defendant mortgaged the land to Philippine National Bank.
Attempts were made to settle the controversy amicably, and when this
Proved in the present action was taken by the plaintiffs.
Plaintiffs' theory, therefore, may be stated as follows: The land in
question was originally a portion of a bigger parcel of land whose area
was found to be 30.5285 hectares which was purchased by Jose T.
Paterno, as administrator of the estate of Maximino Molo Agustin
Paterno at an auction sale involving the properties of Esteban Villa.
This land was later adjudicated to Concepcion Paterno Vda. de Padilla,
who, upon her death, bequeathed it, together with other lands, to
plaintiffs.
Defendant's evidence, on the other hand, discloses on June 25, 1881
Baltazar de Villa owned, among a parcel of land of the following
description: "La tercera partida de candidad de unos veinte cavanes
aproximados de semilla de palay, cuyos confines, al Este las tierras de
Da Antonia de Villa, al Oeste las de Don Vicente de Villa, al Norte el Rio
denominado Lawaye, y al Sur las tierras de Da. Paula de Mercado con
riachuelo denominado Lapa en Medio," (Possessory informacion Exhibit
6-a.) Baltazar de Villa is the father of Esteban de Villa and de Villa,
while Pia de Villa is the mother of Jose V. Salud, defendant herein.
In 1912, Jose T. Paterno, as administrator of the estate of Maximino
Molo Agustin Paterno, bought at an auction sale certain lands
belonging to Esteban de Villa pursuant to a levy in execution issued to
enforce a judgment obtained against Esteban de Villa. Among the
lands so purchased was one described as follows: "No. 5. Terreno en
dicho barrio de Libato, de 1200 metros cuadrados de superficie,
lindante al Norte rio Lawaye; al Este Francisco Marasigan; al Sur estero
Lapa; y al Oeste Benedicto de Villa.".1awphl.nt
After Pia de Villa acquired the parcel of land covered by the possessory
information Exhibit 6-A from her father Baltazar, she immediately
entered into its possession with the exception of some portions thereof
which she later sold, and continued in said possession until her death.
Of said land, Pia donated a portion containing 12 hectares to Vicente
de Villa; sold another containing 8 hectares to Antonio Adapon; and a
portion thereof situated on the eastern portion part containing an area
of 5 hectares was transmitted by succession to her son Jose V. Salud.
Another factor that argues against plaintiffs' claim is the fact that the
inventory and partition of the estate of Maximino Molo Agustin Paterno
does not show that the land in question was ever transmitted to
Concepcion Paterno Vda. de Padilla, plaintiffs' predecessor-in-interest.
Nor does the inventory of the estate of the late Concepcion Paterno de
Padilla, which includes all her real properties in Batangas, makes any
mention of the property in question. For this reason, the Court of
Appeals could bring its mind to conform to the claim of plaintiffs the
land in question is the one included in the action sale held in 1912 of
the properties of Esteban de Villa and which was later handed down to
them by their predecessor-in-interest Concepcion Paterno Vda. de
Padilla, as may be seen from the following comment:.
... Moreover, the inventory and partition of the estate of Maximino Molo
Agustin Paterno, shows that the property in question was never
transmitted to said Concepcion de Padilla (Exhibits HH-1 & HH-39). The
inventory of Concepcion de Padilla's estate, which included all her real
properties in tangos, failed to mention the property in question.
(Exhibit 3). The inventory mentioned properties of various areas,
registered under the Torrens system in the name of Concepcion
Paterno; and the property in question was not then registered under
the Torrens system. It was shown that this inventory was presented by
her administratrix before the probate court and the same was
approved by said court, without the objection of the plaintiffs,
notwithstanding their awareness of the pendency of the administration
proceedings. Again, in the project of partition Concepcion de Padilla's
estate (Exhibit 4), wherein various properties in Batangas were
adjudicated to the plaintiffs, the property in question was not included.
It is worthy to note that plaintiffs, the administratrix and other
instituted heirs, signed the said project of partition, which was
presented to and approved by the court (Exhibit 5). Again, it is
conceded that the project was denominated "partial" project of
partition. But this does not refer to any undiscovered "residuary estate"
in Batangas, not adjudicated to the plaintiffs, but the interest and
participation of the deceased testatrix on the properties under
administration in cases Nos. 46058 to 46063, CFI of Manila - to the
testate estate of Concepcion's husband Narciso Padilla (Exh. 4 clause
11). They do not refer to the properties of Concepcion de Padilla in
Batangas, for as far her Batangas properties are concerned, the project
of partition was complete. In fact, answering the question "Are you
sure that all properties within the jurisdiction of the province of
Batangas, left by your aunt Concepcion Paterno Vda. de Padilla were
enumerated in that inventory?", plaintiff Antonio Paterno said: "Yes"
(t.s.n. p. 117 March 19, 1953), which inventory heretofore stated, does
not include the property in question (Exhibit 3). If, as alleged by
plaintiff Antonio Paterno, early as 1929 or 1930, he already knew of his
continued possessing and administer it. Plaintiffs' claim that the land in
question was mortgaged to the Paternos by the De Villa family who
owed some money to Maximino Molo Agustin Paterno whose mortgage
was foreclosed and the property sold at public auction cannot be
entertained, for the evidence reveals that it was Esteban de Villa alone,
and not Pia de Villa, again whom the execution was levied upon and
that the property sold were those of Esteban de Villa which, already
stated, do not include the property in question.
We believe, however, that the Court of Appeals erred in declaring
defendant owner of the parcel of land claimed in his counterclaim. The
evidence shows that plaintiff predecessor-in-interest Concepcion
Paterno Vda. de Villa secured in 1928 Original Certificate of Title No. 49
over a parcel of land of which the land involved here was a part. This
parcel of land was originally acquired by the Paternos in 1912. This was
leased to Esteban Villa and Pia de Villa from 1917 to 1925; surveyed
Jose T. Paterno on September 25, 1924; was the subject of petition for
registration by the Paternos in 1926, due notice of which was given to
the De Villas, and upon the death of Concepcion Paterno Vda. de
Padilla, it was transmitted to plaintiffs by succession. Since the land in
question was registered in the name of the Paternos in 1928 and it was
only on November 19, 1952, date of defendant' answer, that he sought
its reconveyance to him, that title became indefeasible under Section
38, Act No. 496, a amended by Act No. 3630. Here there is no proof of
irregularity in the issuance of the title, nor in the proceeding incident
thereto, nor is there any claim that fraud intervened in the issuance of
said title. Even then, the period of one year within which intrinsic fraud
can be claimed has long expired. This land should, therefore, be
adjudicated to plaintiffs.
WHEREFORE, the decision appealed from is modified in the sense that
the land claimed in the complaint belongs to defendant and therefore
the complaint should be dismissed. With regard to defendant's
counterclaim, the land therein claimed should be adjudicated to
plaintiffs. No costs.
Bengzon. C.J., Concepcion, Barrera, Dizon, Regala and Makalintal, JJ.,
concur.
Padilla, Labrador, Reyes, J.B.L., and Paredes, JJ., took no part.
Case 5
G.R. No. L-43683
vs.
URBANO EUSTAQUIO, defendant-appellee.
Jose Agbulos for appellant.
Urbano Eustaquio in his own behalf.
IMPERIAL, J.:
This is an appeal taken by the plaintiff corporation from the judgment
of the Court of First Instance of Manila dismissing its complaint, without
costs.
The plaintiff brought the action against the defendant to obtain the
possession of an automobile mortgaged by the latter, and to recover
the balance owing upon a note executed by him, the interest thereon,
attorney's fees, expenses of collection, and the costs. The defendant
was duly summoned, but he failed to appear or file his answer,
wherefore he was declared in default and the appealed judgment was
rendered accordingly.
The plaintiff sold the defendant a De Soto car, Sedan, for the price of
which, P595, he executed in its favor the note of May 22, 1934. Under
this note, the defendant undertook to pay the car in twelve monthly
installments, with 12 percent interest per annum, and likewise agreed
that, should he fail to pay any monthly installment together with
interest, the remaining installment would become due and payable,
and the defendant shall pay 20 per cent upon the principal owning as
attorney's fees, expenses of collection which the plaintiff might incur,
and the costs. To guarantee the performance of his obligation under
the note, the defendant on the same date mortgaged the purchased
car in favor of the plaintiff, and bound himself under the same
conditions stipulated in the note relative to the monthly installments,
interest, attorney's fees, expenses of collection, and costs. The
mortgage deed was registered on June 11, 1934, in the office of the
register of deeds of the Province of Rizal. On the 22d of the same
month, the defendant paid P43.75 upon the first installment, and
thereafter failed to pay any of the remaining installments. In
accordance with the terms of the mortgage, the plaintiff called upon
the sheriff to take possession of the car, but the defendant refused to
yield possession thereof, whereupon, the plaintiff brought the replevin
sought and thereby succeeded in getting possession of the car. The car
was sold at public auction to the plaintiff for P250, the latter incurring
legal expenses in the amount of P10.68, According to the liquidation
filed by the plaintiff, the defendant was still indebted in the amount of
P342.20, interest at 12 per cent from November 20, 1934, P110.25 as
attorney's fees, and the costs.
one has been given on the property. The basis of the first option is the
Civil Code. The basis of the last two option is Act No. 4122, amendatory
of the Civil Code. And the proviso to the right to foreclose is, that if the
vendor has chosen this remedy, he shall have no further action against
the purchaser for the recovery of any unpaid balance owing by the
same. In other words, as we see it, the Act does no more than qualify
the remedy.
Most constitutional issues are determined by the court's approach to
them. The proper approach in cases of this character should be to
resolve all presumptions in favor of the validity of an act in the absence
of a clear conflict between it and the constitution. All doubts should be
resolved in its favor.
The controlling purpose of Act No. 4122 is revealed to be to close the
door to abuses committed in connection with the foreclosure of chattel
mortgages when sales were payable in installments. The public policy,
obvious from the statute, was defined and established by legislative
authority. It is for the courts to perpetuate it.
We are of the opinion that the Legislative may change judicial methods
and remedies for the enforcement of contracts, as it has done by the
enactment of Act No. 4122, without unduly interfering with the
obligation of the contract, without sanctioning class legislation, and
without a denial of the equal protection of the laws. We rule that Act
No. 4122 is valid and enforceable. As a consequence, the errors
assigned by the appellant are overruled, and the judgment affirmed,
the costs of this instance to be taxed against the losing party.
In his brief counsel for the plaintiff advances no new arguments which
have not already been considered in the Reyes case, and we see no
reason for reaching a different conclusion now. The law seeks to
remedy an evil which the Legislature wished to suppress; this
legislative body has power to promulgate the law; the law does not
completely deprive vendors on the installment basis of a remedy, but
requires them to elect among three alternative remedies; the law, on
the other hand, does not completely exonerate the purchasers, but
only limits their liabilities and, finally, there is no vested right when a
procedural law is involved, wherefore the Legislature could enact Act
No. 4122 without violating the aforesaid organic law.
III. In its last assignment of error plaintiff contends that, even granting
that Act No. 4122 is valid, the court should have ordered the defendant
to pay at least the stipulated interest, attorney's fees, and the costs.
This question involves the interpretation of the pertinent portion of the
law, reading: "However, if the vendor has chosen to foreclose the
mortgage he shall have no further action against the purchaser for the
recovery of any unpaid balance owing by the same, and any
agreement to the contrary shall be null and void." This paragraph, as
its language shows, refers to the mortgage contract executed by the
parties, whereby the purchaser mortgages the chattel sold to him on
the installment basis in order to guarantee the payment of its price,
and the words "any unpaid balance" should be interpreted as having
reference to the deficiency judgment to which the mortgagee may be
entitled where, after the mortgaged chattel is sold at public auction,
the proceeds obtained therefrom are insufficient to cover the full
amount of the secured obligations which, in the case at bar as shown
by the note and by the mortgage deed, include interest on the
principal, attorney's fees, expenses of collection, and the costs. The
fundamental rule which should govern the interpretation of laws is to
ascertain the intention and meaning of the Legislature and to give
effect thereto. (Sec. 288, Code of Civil Procedure; U. S. vs. Toribio, 15
Phil., 85; U. S. vs. Navarro, 19 Phil., 134; De Jesus vs. City of Manila, 29
Phil., 73; Borromeo vs. Mariano, 41 Phil., 322; People vs. Concepcion,
44 Phil., 126.) Were it the intention of the Legislature to limit its
meaning to the unpaid balance of the principal, it would have so
stated. We hold, therefore, that the assignment of error is untenable.
In view of the foregoing, the appealed judgment is affirmed, with the
costs of this instance to the plaintiff and appellant. So ordered.
Avancea, C.J., Villa-Real, Abad Santos, Diaz, Laurel and Concepcion,
JJ., concur.
Case 6
G.R. No. 193787
April 7, 2014
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2
dated May 12, 2010 and the Resolution3 dated September 15, 2010 of
the Court of Appeals (CA) in CA G.R. CV No. 92113 which affirmed the
Decision4 dated July 8, 2008 of the Regional Trial Court of Binangonan,
Rizal, Branch 69 (RTC) that dismissed Civil Case Nos. 03-022 and 05003 for reconveyance, annulment of sale, deed of real estate
mortgage, foreclosure and certificate of sale, and damages.
The Facts
The property subject of this case is a parcel of land with an area of
20,862 square meters (sq. m.), located in Sitio Tagpos, Barangay
Tayuman, Binangonan, Rizal, known as Lot 18089.5
On July 21, 1977, petitioners-spouses Jose C. Roque and Beatriz dela
Cruz Roque (Sps. Roque) and the original owners of the then
unregistered Lot 18089 namely, Velia R. Rivero (Rivero), Magdalena
Aguilar, Angela Gonzales, Herminia R. Bernardo, Antonio Rivero, Araceli
R. Victa, Leonor R. Topacio, and Augusto Rivero (Rivero, et al.)
executed a Deed of Conditional Sale of Real Property6 (1977 Deed of
Conditional Sale) over a 1,231-sq. m. portion of Lot 18089 (subject
portion) for a consideration of P30,775.00. The parties agreed that Sps.
Roque shall make an initial payment of P15,387.50 upon signing, while
the remaining balance of the purchase price shall be payable upon the
registration of Lot 18089, as well as the segregation and the
concomitant issuance of a separate title over the subject portion in
their names. After the deeds execution, Sps. Roque took possession
and introduced improvements on the subject portion which they
utilized as a balut factory.7
On August 12, 1991, Fructuoso Sabug, Jr. (Sabug, Jr.), former Treasurer
of the National Council of Churches in the Philippines (NCCP), applied
for a free patent over the entire Lot 18089 and was eventually issued
Original Certificate of Title (OCT) No. M-59558 in his name on October
21, 1991. On June 24, 1993, Sabug, Jr. and Rivero, in her personal
capacity and in representation of Rivero, et al., executed a Joint
Affidavit9 (1993 Joint Affidavit), acknowledging that the subject portion
belongs to Sps. Roque and expressed their willingness to segregate the
same from the entire area of Lot 18089.
that the property has not yet passed to the hands of an innocent
purchaser for value.50
Sps. Roque claim that the subject portion covered by the 1977 Deed of
Conditional Sale between them and Rivero, et al. was wrongfully
included in the certificates of title covering Lot 18089, and, hence,
must be segregated therefrom and their ownership thereof be
confirmed. The salient portions of the said deed state:
DEED OF CONDITIONAL SALE OF REAL PROPERTY
KNOW ALL MEN BY THESE PRESENTS:
xxxx
That for and in consideration of the sum of THIRTY THOUSAND SEVEN
HUNDRED SEVENTY FIVE PESOS (P30,775.00), Philippine Currency,
payable in the manner hereinbelow specified, the VENDORS do hereby
sell, transfer and convey unto the VENDEE, or their heirs, executors,
administrators, or assignors, that unsegregated portion of the above
lot, x x x.
That the aforesaid amount shall be paid in two installments, the first
installment which is in the amount of __________ (P15,387.50) and the
balance in the amount of __________ (P15,387.50), shall be paid as soon
as the described portion of the property shall have been registered
under the Land Registration Act and a Certificate of Title issued
accordingly;
That as soon as the total amount of the property has been paid and the
Certificate of Title has been issued, an absolute deed of sale shall be
executed accordingly;
x x x x51
Examining its provisions, the Court finds that the stipulation abovehighlighted shows that the 1977 Deed of Conditional Sale is actually in
the nature of a contract to sell and not one of sale contrary to Sps.
Roques belief.52 In this relation, it has been consistently ruled that
where the seller promises to execute a deed of absolute sale upon the
completion by the buyer of the payment of the purchase price, the
contract is only a contract to sell even if their agreement is
denominated as a Deed of Conditional Sale,53 as in this case. This
treatment stems from the legal characterization of a contract to sell,
that is, a bilateral contract whereby the prospective seller, while
expressly reserving the ownership of the subject property despite
cannot raise an issue for the first time on appeal as this would
contravene the basic rules of fair play and justice. In any event, such
claims appear to involve questions of fact which are generally
prohibited under a Rule 45 petition.69
With the conclusions herein reached, the Court need not belabor on the
other points raised by the parties, and ultimately finds it proper to
proceed with the denial of the petition.
WHEREFORE, the petition is DENIED. The Decision dated May 12, 2010
and the Resolution dated September 15, 2010 of the Court of Appeals
in CAG.R. CV No. 92113 are hereby AFFIRMED.
Case No. 7
[G.R. No. 152219. October 25, 2004]
NUTRIMIX FEEDS CORPORATION, petitioner, vs. COURT OF APPEALS and
SPOUSES EFREN AND MAURA EVANGELISTA, respondents.
DECISION
CALLEJO, SR., J.:
For review on certiorari is the Decision[1] of the Court of Appeals in CAG.R. CV No. 59615 modifying, on appeal, the Joint Decision[2] of the
Regional Trial Court of Malolos, Bulacan, Branch 9, in Civil Case No.
1026-M-93[3] for sum of money and damages with prayer for issuance
of writ of preliminary attachment, and Civil Case No. 49-M-94[4] for
damages. The trial court dismissed the complaint of the respondents,
ordering them to pay the petitioner the unpaid value of the assorted
animal feeds delivered to the former by the latter, with legal interest
thereon from the filing of the complaint, including attorneys fees.
The Factual Antecedents
On April 5, 1993, the Spouses Efren and Maura Evangelista, the
respondents herein, started to directly procure various kinds of animal
feeds from petitioner Nutrimix Feeds Corporation. The petitioner gave
the respondents a credit period of thirty to forty-five days to postdate
checks to be issued in payment for the delivery of the feeds. The
accommodation was made apparently because of the company
presidents close friendship with Eugenio Evangelista, the brother of
respondent Efren Evangelista. The various animal feeds were paid and
covered by checks with due dates from July 1993 to September 1993.
Initially, the respondents were good paying customers. In some
instances, however, they failed to issue checks despite the deliveries
The petitioner resolutely avers that the testimony of Dr. Diaz can
hardly be considered as conclusive evidence of hidden defects that can
be attributed to the petitioner. Parenthetically, the petitioner asserts,
assuming that the sample feeds were taken from a sealed sack bearing
the brand name Nutrimix, it cannot decisively be presumed that these
were the same feeds brought to the respondents farm and given to
their chickens and hogs for consumption.
It is the contention of the respondents that the appellate court
correctly ordered the dismissal of the complaint in Civil Case No. 1026M-93. They further add that there was sufficient basis for the CA to
hold the petitioner guilty of breach of warranty thereby releasing the
respondents from paying their outstanding obligation.
The Ruling of the Court
Oft repeated is the rule that the Supreme Court reviews only errors of
law in petitions for review on certiorari under Rule 45. However, this
rule is not absolute. The Court may review the factual findings of the
CA should they be contrary to those of the trial court. Conformably, this
Court may review findings of facts when the judgment of the CA is
premised on a misapprehension of facts.[25]
The threshold issue is whether or not there is sufficient evidence to
hold the petitioner guilty of breach of warranty due to hidden defects.
The petition is meritorious.
The provisions on warranty against hidden defects are found in Articles
1561 and 1566 of the New Civil Code of the Philippines, which read as
follows:
Art. 1561. The vendor shall be responsible for warranty against hidden
defects which the thing sold may have, should they render it unfit for
the use for which it is intended, or should they diminish its fitness for
such use to such an extent that, had the vendee been aware thereof,
he would not have acquired it or would have given a lower price for it;
but said vendor shall not be answerable for patent defects or those
which may be visible, or for those which are not visible if the vendee is
an expert who, by reason of his trade or profession, should have known
them.
Art. 1566. The vendor is responsible to the vendee for any hidden
faults or defects in the thing sold, even though he was not aware
thereof.
This provision shall not apply if the contrary has been stipulated, and
the vendor was not aware of the hidden faults or defects in the thing
sold.
A hidden defect is one which is unknown or could not have been known
to the vendee.[26] Under the law, the requisites to recover on account
of hidden defects are as follows:
(a) the defect must be hidden;
(b) the defect must exist at the time the sale was made;
(c) the defect must ordinarily have been excluded from the contract;
(d) the defect, must be important (renders thing UNFIT or considerably
decreases FITNESS);
(e) the action must be instituted within the statute of limitations.[27]
In the sale of animal feeds, there is an implied warranty that it is
reasonably fit and suitable to be used for the purpose which both
parties contemplated.[28] To be able to prove liability on the basis of
breach of implied warranty, three things must be established by the
respondents. The first is that they sustained injury because of the
product; the second is that the injury occurred because the product
was defective or unreasonably unsafe; and finally, the defect existed
when the product left the hands of the petitioner.[29] A manufacturer
or seller of a product cannot be held liable for any damage allegedly
caused by the product in the absence of any proof that the product in
question was defective.[30] The defect must be present upon the
delivery or manufacture of the product;[31] or when the product left
the sellers or manufacturers control;[32] or when the product was sold
to the purchaser;[33] or the product must have reached the user or
consumer without substantial change in the condition it was sold.
Tracing the defect to the petitioner requires some evidence that there
was no tampering with, or changing of the animal feeds. The nature of
the animal feeds makes it necessarily difficult for the respondents to
prove that the defect was existing when the product left the premises
of the petitioner.
A review of the facts of the case would reveal that the petitioner
delivered the animal feeds, allegedly containing rat poison, on July 26,
1993; but it is astonishing that the respondents had the animal feeds
examined only on October 20, 1993, or barely three months after their
broilers and hogs had died. On cross-examination, respondent Maura
Evangelista testified in this manner:
Atty. Cruz:
Q Madam Witness, you said in the last hearing that believing that the
250 bags of feeds delivered to (sic) the Nutrimix Feeds Corporation on
August 2, 1993 were poison (sic), allegedly your husband Efren
Evangelista burned the same with the chicken[s], is that right?
A Yes, Sir. Some, Sir.
Q And is it not a fact, Madam Witness, that you did not, as according to
you, used (sic) any of these deliveries made on August 2, 1993?
A We were able to feed (sic) some of those deliveries because we did
not know yet during that time that it is the cause of the death of our
chicks (sic), Sir.
Q But according to you, the previous deliveries were not used by you
because you believe (sic) that they were poison (sic)?
A Which previous deliveries, Sir[?]
Q Those delivered on July 26 and 22 (sic), 1993?
A Those were fed to the chickens, Sir. This is the cause of the death of
the chickens.
Q And you stated that this last delivery on August 2 were poison (sic)
also and you did not use them, is that right?
Atty. Roxas:
That is misleading.
Atty. Cruz:
She stated that.
Atty. Roxas:
She said some were fed because they did not know yet of the
poisoning.
Court:
And when the chickens died, they stopped naturally feeding it to the
chickens.
Atty. Cruz:
Q You mean to say, Madam Witness, that although you believe (sic)
that the chickens were allegedly poisoned, you used the same for
feeding your animals?
A We did not know yet during that time that the feeds contained
poison, only during that time when we learned about the same after
the analysis.
Q Therefore you have known only of the alleged poison in the Nutrimix
Feeds only after you have caused the analysis of the same?
A Yes, Sir.
Q When was that, Madam Witness?
A I cannot be sure about the exact time but it is within the months of
October to November, Sir.
Q So, before this analysis of about October and November, you were
not aware that the feeds of Nutrimix Feeds Corporation were, according
to you, with poison?
A We did not know yet that it contained poison but we were sure that
the feeds were the cause of the death of our animals.[34]
We find it difficult to believe that the feeds delivered on July 26 and 27,
1993 and fed to the broilers and hogs contained poison at the time
they reached the respondents. A difference of approximately three
months enfeebles the respondents theory that the petitioner is guilty
of breach of warranty by virtue of hidden defects. In a span of three
months, the feeds could have already been contaminated by outside
factors and subjected to many conditions unquestionably beyond the
control of the petitioner. In fact, Dr. Garcia, one of the witnesses for the
respondents, testified that the animal feeds submitted to her for
laboratory examination contained very high level of aflatoxin, possibly
caused by mold (aspergillus flavus).[35] We agree with the contention
of the petitioner that there is no evidence on record to prove that the
animal feeds taken to the various governmental agencies for
laboratory examination were the same animal feeds given to the
respondents broilers and hogs for their consumption. Moreover, Dr.
Diaz even admitted that the feeds that were submitted for analysis
came from a sealed bag. There is simply no evidence to show that the
feeds given to the animals on July 26 and 27, 1993 were identical to
those submitted to the expert witnesses in October 1993.
Q Now, you mentioned that shortly before July 26 and 27, 1993,
various types of Nutrimix feeds were delivered to you like chicks
booster mash, broiler starter mash and hog finisher or hog grower
mash. What is the reason for simultaneous deliveries of various types
of feeds?
A Because we used to mix all those together in one feeding, Sir.
Q And what is the reason for mixing the chick booster mash with
broiler starter mash?
A So that the chickens will get fat, Sir.
Re-Cross Examination
Atty. Cruz:
Q Madam Witness, is it not a fact that the mixing of these feeds by you
is your own concuction (sic) and without the advice of a veterinarian
expert to do so?
A That is common practice among raisers to mix two feeds, Sir.
Q By yourself, Madam Witness, who advised you to do the mixing of
these two types of feeds for feeding your chickens?
A That is common practice of chicken raisers, Sir.[38]
Even more surprising is the fact that during the meeting with Nutrimix
President Mr. Bartolome, the respondents claimed that their animals
were plagued by disease, and that they needed more time to settle
their obligations with the petitioner. It was only after a few months that
the respondents changed their justification for not paying their
unsettled accounts, claiming anew that their animals were poisoned
with the animal feeds supplied by the petitioner. The volte-face of the
respondents deserves scant consideration for having been conjured as
a mere afterthought.
In essence, we hold that the respondents failed to prove that the
petitioner is guilty of breach of warranty due to hidden defects. It is,
likewise, rudimentary that common law places upon the buyer of the
product the burden of proving that the seller of the product breached
its warranty.[39] The bevy of expert evidence adduced by the
respondents is too shaky and utterly insufficient to prove that the
Nutrimix feeds caused the death of their animals. For these reasons,
the expert testimonies lack probative weight. The respondents case of