You are on page 1of 3

Mariano vs CA (1993) Facts: • • • • • • • • • • Petitioner, Julia Ang Eng Mariano, claims that the appellate court erred in declaring

the Deed of Sale executed in her favor by the private respondents, the spouses Faustino, as null and void and the TCT no.156493 in her name cancelled. Private respondents claim, however, that they were tricked by petitioner into signing over their property to her. A question arises: Is parol evidence admissible to resolve the controversy between the parties? Yes, it is admissible. Petitioner claims that the private respondents approached her for a loan of P250,000.00 on the security of a mortgage on their lot located at Deparo, Kalookan City and covered by TCT No. 129613 in their names. They secured another loan of P250,000.00 on the basis of the same security. Forseeing their inability to pay this when they become due, private respondents sold the same parcel of land mortgaged to petitioner for an additional P320,550.00 Thus, a deed of sale was drawn up on said date and a new TCT No. 156493 issued in petitioner's name. However, the private respondents refused to turn over possession of the land to her and instead sued her for annulment of deed of sale and damages. On the other hand, private respondents' story is that all they wanted was to transform their small piece of land, which they had inherited from their parents, into a subdivision. They looked for financiers who would be able to lend them money for their project and petitioner expressed her desire to help them. Being unschooled farmers, and relying completely on the trust and confidence they have on petitioner, they signed the prepared mortgage forms that petitioner told them to sign. First mortgage: for P250,000.00 with the condition that they were to construct a house on said lot so that they would be able to secure another P250,000.00 with the house and lot as security. They received, however, only P150,000.00 for the first mortgage. Second mortgage: for another P250,000.00 for which they received again only P150,000.00. petitioner told them that she could easily secure a bank loan of P1,000,000.00 for their project but they had to sign over their property to her as the bank would require that the property be in her name for the loan to be processed. Thus, trusting her completely, they signed a prepared deed of sale which petitioner handed over to them for their signature. When they discovered that there was no loan and that they were being asked to vacate their land, they took petitioner to court. Private respondents sued petitioner for annulment of the deed of sale and the cancellation of the Transfer Certificate of Title in her name. The trial court, however, dismissed their complaint relying on the validity of the deed of sale as the best evidence of the transaction between the parties On appeal, the appellate court saw otherwise

• •

Issue: can parol evidence be admitted to show that the Deed of Sale, which petitioner claims truly represented the contract between the parties and "drawn up with all the solemnities prescribed by law" and properly notarized, a sham transaction as claimed by the private respondents? Held: Yes Ratio:

A similar question cropped up in Pagsuyuin vs. Intermediate Appellate Court 6 where this Court ruled as follows: The rule on parol evidence recognizes the following exceptions: (a) where a mistake or imperfection of the writing, or its failure to express the true intent and agreement of the parties, or the validity of the agreement is put in issue by the pleadings; (b) . . . (Sec. 7, Rule 130). As can be clearly gleaned from the foregoing, the rule making a writing the exclusive evidence of the agreement therein stated, is not applicable when the validity of such agreement is the fact in dispute. A contract may be annulled where the consent of one of the contracting parties was procured by mistake, fraud, intimidation, violence or undue influence (Art. 1330, New Civil Code). In fact, as early as 1919 in

550. a domestic corporation • The three co-owners agreed to have the whole parcel subdivided into small lots and then sold. the PARTIES OF THE FIRST PART (meaning Angela and Antonio) shall be bound by this contract as long as the PARTY OF THE SECOND PART.00. for purposes of reference we are reproducing them below: (9) This contract shall remain in full force and effect during all the time that it may be necessary for the PARTY OF THE SECOND PART to fully sell the said property in small and subdivided lots and to fully collect the purchase prices due thereon. The share of Nieves was offered for sale to her sister and her brother but both declined to buy it.) is hereby given full power and authority to sign for and in behalf of all the said co-owners of said property all contracts of sale and deeds of sale of the lots into which this property might be subdivided. the powers herein vested to the PARTY OF THE SECOND PART may. the proceeds of the sale to be later divided among them. Tuason vs Tuason (1951) Facts: • In 1941 the sisters Angela I. she might be suspected of having taken advantage of her daughter. Her own words make out a case of fraud which she practiced upon the private respondents. • Because of the importance of paragraphs 9. 40 Phil. is controlled by the members of the Araneta family. who are stockholders of the said corporation at the time of the signing of this contract and/or their lawful heirs. but failing in this. Cantiveros. she offered to sell her 1/3 portion. and dispositions of this contract. interest or participation therein without first giving preference to the other co-owners to purchase and acquire the same under the same terms and conditions as those offered by any other prospective purchaser. delegate any of its powers under this contract to any of its officers. this Court laid down the rule that where the validity of the agreement is the issue. no instrument is so sacred when tainted with fraud as to place it beyond the scrutiny of extrinsic evidence. 11 and 15 of the contract (Exh. the GREGORIO ARANETA.00 on the property in her name and that whatever private respondents owed her would be deducted from the proceeds of the loan with the private respondents assuming the payment thereof. corroborated by petitioner when she testified on cross-examination that the real intention of the parties in the execution of the deed of sale was to secure a loan of P1. (11) The PARTY OF THE SECOND PART (meaning Araneta Inc. private respondents would have had to kiss their cause of action goodbye. saying that if the property later increased in value. parol evidence may be introduced to establish illegality or fraud. in fact.. Vagilidad. 209. in common. each owning an undivided 1/3 portion.000.the case of Bough v. terms. INC. under its own responsibility and risk. No such testimony was given by the petitioner in the trial court and her corroborating testimony cited in the footnote shows why — there is no such loan. • The offer was later made to their mother but the old lady also declined to buy. provided. alienate or dispose of his ownership. Moreover. then such sale to a third party shall be made subject to all the conditions. held a parcel of land in Sampaloc. Should none of the co-owners of the property subject-matter of this contract exercise the said preference to acquire or purchase the same. (15) No co-owner of the property subject-matter of this contract shall sell. xxx xxx xxx While the writing itself may have been accompanied by the most solemn formalities. Upon their word that private respondents had signed the deed of sale in their presence and had received the consideration of P320. 28 SCRA 393 [1969]). namely. it being understood and agreed that said lots may be rented while there are no purchasers thereof.. Manila. petitioner could have easily rebutted and belied private respondents' negative averment in the trial court. employees or to third persons. the deed of sale was a scheme to get the property from private respondents. • Finally. Tuason and Nieves Tuason de Barreto and their brother Antonio Tuason Jr. • Nieves wanted and asked for a partition of the common property. 7 Private respondents' version was. All she had to do was to present the Notary Public who notarized the Deed of Sale and the two witnesses to the deed. 6). . This evidence overcomes the known presumption fraus est odiosa et non praesumenda (Yturralde v.000. the share of Nieves was sold to Gregorio Araneta Inc.

and sent to her checks covering her receive the same. The contract (Exh. By virtue of the document Exh. and both had every opportunity to go over and compare them and decide on the advisability of or disadvantage in entering into the contract (Exh. the parties thereto practically and substantially entered into a contract of partnership as the best and most expedient means of eventually dissolving the co-ownership. 11 and 15 which we have reproduced. 6) and we agree with the trial court that in the main the terms of both contracts are similar and practically the same. According to the evidence Araneta. the pertinent papers. 6. under which the parties by agreement may agree to keep the thing undivided for a period not exceeding 10 years. or 2. We find from the evidence as was done by the trial court that of the 64. . being a member of the Board of Directors of the Company at the time that Exhibit "6" was executed. Each may. while the great bulk of 97.600 sq. is a mere incident to the main object of dissolving the co-owners. m. Moreover. shall be valid. only 1. could not be disposed of within the four years left of the ten-years period fixed by Art. an agreement to keep the thing undivided for a specified length of time. "L") referred to by appellant where the parties thereto in express terms entered into partnership.5 per cent of the entire area remained unsold at the time of the trial in the year 1947. 6) should be declared null and void because its terms. and even assuming that Art. there should be no fear that the remaining 1.5 per cent had already been sold. demand the partition of the thing held in common. 6) far from violating the legal provision that forbids a co-owner being obliged to remain a party to the community.400 Held: No Ratio: We have examined Exh. This period may be a new agreement.928. 6). a broker.265. we find no valid ground for the partition insisted upon the appellant. the partnership is in the process of being dissolved and is about to be dissolved.. We agree with the trial court that the provisions of Art. The obligation imposed in the contract to preserve the coownership until all the lots shall have been sold. 6) for the very reason that Art.538. 400 is not applicable. which is the total area of the parcel held in common.. m. No co-owner shall be obliged to remain a party to the community.• Angela notified Araneta. 400. Looking at the case from a practical standpoint as did the trial court. at the time of the trial. Antonio Araneta was an official of the Araneta Inc.. We repeat that we see no violation of Art. that because of alleged breach of the terms of the "Memorandum of Agreement" (Exh. Inc. particularly paragraphs 9. Nevertheless. he was not the party with which Angela contracted. 400 of the Civil Code are not applicable. 400 of the Civil Code in the parties entering into the contract (Exh. had spent about P117. although this object is not expressed in so many words in Exh. 400 of the Civil Code were applicable.000 in improvement and had received as proceeds on the sale of the lots the respectable sum of P1. Issue: W/N said contract should be declared null and void in violation of art. the copies of both contracts were shown to the plaintiff Angela and her husband. This aspect of the contract is very similar to and was perhaps based on the other agreement or contract (Exh. precisely has for its purpose and object the dissolution of the co-ownership and of the community by selling the parcel held in common and dividing the proceeds of the sale among the co-owners. As well observed by the court below.600 sq. m. 6) and abuse of powers granted to it in the document. 6. the life of said partnership to end when the object of its creation shall have been attained. at any time. which for the purposes of reference we quote below: ART. "L" and compared the same with the contract (Exh. violate the provisions of Art.48. not exceeding ten years. 400. she had decided to rescind said contract and she asked that the property held in common be partitioned.6 sq. that although Atty. Araneta Inc. and that he committed no breach of trust. But the main contention of the appellant is that the contract (Exh. and that as a matter of fact. as correctly found by the trial court. 400 of the Civil Code.