G.R. No.
104482             January 22, 1996 Private respondents, however presented in evidence a "Deed of Revocation
BELINDA TAÑEDO, for herself and in representation of her brothers and
sisters, and TEOFILA CORPUZ TAÑEDO, representing her minor daughter
VERNA TAÑEDO, petitioners,
vs.
THE COURT OF APPEALS, SPOUSES RICARDO M. TAÑEDO AND TERESITA
BARERA TAÑEDO, respondents.
DECISION
PANGANIBAN, J.:
Is a sale of future inheritance valid? In multiple sales of the same real
property, who has preference in ownership? What is the probative value of
the lower court's finding of good faith in registration of such sales in the
registry of property? These are the main questions raised in this Petition for
review on certiorari under Rule 45 of the Rules of Court to set aside and
reverse the Decision1 of the Court of Appeals2 in CA-G.R. CV NO. 24987
promulgated on September 26, 1991 affirming the decision of the Regional
Trial Court, Branch 63, Third Judicial Region, Tarlac, Tarlac in Civil Case No.
6328, and its Resolution denying reconsideration thereof, promulgated on
May 27, 1992.
By the Court's Resolution on October 25, 1995, this case (along with several
others) was transferred from the First to the Third Division and after due
deliberation, the Court assigned it to the undersigned ponente for the writing
of this Decision.
The Facts
On October 20, 1962, Lazardo Tañedo executed a notarized deed of absolute
sale in favor of his eldest brother, Ricardo Tañedo, and the latter's wife,
Teresita Barera, private respondents herein, whereby he conveyed to the
latter in consideration of P1,500.00, "one hectare of whatever share I shall
have over Lot No. 191 of the cadastral survey of Gerona, Province of Tarlac
and covered by Title T-13829 of the Register of Deeds of Tarlac", the said
property being his "future inheritance" from his parents (Exh. 1). Upon the
death of his father Matias, Lazaro executed an "Affidavit of Conformity"
dated February 28, 1980 (Exh. 3) to "re-affirm, respect, acknowledge and
validate the sale I made in 1962." On January 13, 1981, Lazaro executed
another notarized deed of sale in favor of private respondents covering his
"undivided ONE TWELVE (1/12) of a parcel of land known as Lot 191 . . . "
(Exh. 4). He acknowledged therein his receipt of P10,000.00 as consideration
therefor. In February 1981, Ricardo learned that Lazaro sold the same
property to his children, petitioners herein, through a deed of sale dated
December 29, 1980 (Exh. E). On June 7, 1982, private respondents recorded
the Deed of Sale (Exh. 4) in their favor in the Registry of Deeds and the
corresponding entry was made in Transfer Certificate of Title No. 166451
(Exh. 5).
Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of
the deeds of sale executed by Lazaro in favor of private respondents covering
the property inherited by Lazaro from his father.
Petitioners claimed that their father, Lazaro, executed an "Absolute Deed of
Sale" dated December 29, 1980 (Exit. E). Conveying to his ten children his
allotted portion tinder the extrajudicial partition executed by the heirs of
Matias, which deed included the land in litigation (Lot 191).
Petitioners also presented in evidence: (1) a private writing purportedly
prepared and signed by Matias dated December 28, 1978, stating that it was
his desire that whatever inheritance Lazaro would receive from him should
be given to his (Lazaro's) children (Exh. A); (2) a typewritten document dated
March 10, 1979 signed by Lazaro in the presence of two witnesses, wherein
he confirmed that he would voluntarily abide by the wishes of his father,
Matias, to give to his (Lazaro's) children all the property he would inherit
from the latter (Exh. B); and (3) a letter dated January 1, 1980 of Lazaro to his
daughter, Carmela, stating that his share in the extrajudicial settlement of
the estate of his father was intended for his children, petitioners herein (Exh.
C).
of a Deed of Sale" dated March 12, 1981 (Exh. 6), wherein Lazaro revoked
the sale in favor of petitioners for the reason that it was "simulated or
fictitious without any consideration whatsoever".
Shortly after the case a quo was filed, Lazaro executed a sworn statement
(Exh. G) which virtually repudiated the contents of the Deed of Revocation of
a Deed of Sale (Exh. 6) and the Deed of Sale (Exh. 4) in favor of private
respondents. However, Lazaro testified that he sold the property to Ricardo,
and that it was a lawyer who induced him to execute a deed of sale in favor
of his children after giving him five pesos (P5.00) to buy a "drink" (TSN
September 18, 1985, pp. 204-205).
The trial court decided in favor of private respondents, holding that
petitioners failed "to adduce a proponderance of evidence to support (their)
claim." On appeal, the Court of Appeals affirmed the decision of the trial
court, ruling that the Deed of Sale dated January 13, 1981 (Exh. 9) was valid
and that its registration in good faith vested title in said respondents.
The Issues
Petitioners raised the following "errors" in the respondent Court, which they
also now allege in the instant Petition:
I. The trial court erred in concluding that the Contract of Sale of October 20,
1962 (Exhibit 7, Answer) is merely voidable or annulable and not void ab
initio pursuant to paragraph 2 of Article 1347 of the New Civil Code involving
as it does a "future inheritance".
II. The trial court erred in holding that defendants-appellees acted in good
faith in registering the deed of sale of January 13, 1981 (Exhibit 9) with the
Register of Deeds of Tarlac and therefore ownership of the land in question
passed on to defendants-appellees.
III. The trial court erred in ignoring and failing to consider the testimonial and
documentary evidence of plaintiffs-appellants which clearly established by
preponderance of evidence that they are indeed the legitimate and lawful
owners of the property in question.
IV. The decision is contrary to law and the facts of the case and the
conclusions drawn from the established facts are illogical and off-tangent.
From the foregoing, the issues may be restated as follows:
1. Is the sale of a future inheritance valid?
2. Was the subsequent execution on January 13, 1981 (and registration with
the Registry of Property) of a deed of sale covering the same property to the
same buyers valid?
3. May this Court review the findings of the respondent Court (a) holding that
the buyers acted in good faith in registering the said subsequent deed of sale
and (b) in "failing to consider petitioners' evidence"? Are the conclusions of
the respondent Court "illogical and off-tangent"?
The Court's Ruling
At the outset, let it be clear that the "errors" which are reviewable by this
Court in this petition for review on certiorari are only those allegedly
committed by the respondent Court of Appeals and not directly those of the
trial court, which is not a party here. The "assignment of errors" in the
petition quoted above are therefore totally misplaced, and for that reason,
the petition should be dismissed. But in order to give the parties substantial
justice we have decided to delve into the issues as above re-stated. The
errors attributed by petitioners to the latter (trial) court will be discussed
only insofar as they are relevant to the appellate court's assailed Decision
and Resolution.
The sale made in 1962 involving future inheritance is not really at issue here.
In context, the assailed Decision conceded "it may be legally correct that a
contract of sale of anticipated future inheritance is null and void."3
But to remove all doubts, we hereby categorically rule that, pursuant to
Article 1347 of the Civil Code, "(n)o contract may be entered into upon a
future inheritance except in cases expressly authorized by law."
Consequently, said contract made in 1962 is not valid and cannot be the
source of any right nor the creator of any obligation between the parties.
Hence, the "affidavit of conformity" dated February 28, 1980, insofar as it
sought to validate or ratify the 1962 sale, is also useless and, in the words of
the respondent Court, "suffers from the same infirmity." Even private
respondents in their memorandum4 concede this.
However, the documents that are critical to the resolution of this case are:
(a) the deed of sale of January 13, 1981 in favor of private respondents
covering Lazaro's undivided inheritance of one-twelfth (1/12) share in Lot No.
191, which was subsequently registered on June 7, 1982; and (b) the deed of
sale dated December 29, 1980 in favor of petitioners covering the same
property. These two documents were executed after the death of Matias
(and his spouse) and after a deed of extra-judicial settlement of his (Matias')
estate was executed, thus vesting in Lazaro actual title over said property. In
other words, these dispositions, though conflicting, were no longer infected
with the infirmities of the 1962 sale.
Petitioners contend that what was sold on January 13, 1981 was only one-
half hectare out of Lot No. 191, citing as authority the trial court's decision.
As earlier pointed out, what is on review in these proceedings by this Court is
the Court of Appeals' decision — which correctly identified the subject
matter of the January 13, 1981 sale to be the entire undivided 1/12 share of
Lazaro in Lot No. 191 and which is the same property disposed of on
December 29, 1980 in favor of petitioners.
Critical in determining which of these two deeds should be given effect is the
registration of the sale in favor of private respondents with the register of
deeds on June 7, 1982.
Article 1544 of the Civil Code governs the preferential rights of vendees in
cases of multiple sales, as follows:
Art. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person
acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person
who in good faith was first in the possession; and, in the absence thereof, to
the person who presents the oldest title, provided there is good faith.
The property in question is land, an immovable, and following the above-
quoted law, ownership shall belong to the buyer who in good faith registers
it first in the registry of property. Thus, although the deed of sale in favor of
private respondents was later than the one in favor of petitioners, ownership
would vest in the former because of the undisputed fact of registration. On
the other hand, petitioners have not registered the sale to them at all.
Petitioners contend that they were in possession of the property and that
private respondents never took possession thereof. As between two
purchasers, the one who registered the sale in his favor has a preferred right
over the other who has not registered his title, even if the latter is in actual
possession of the immovable property.5
As to third issue, while petitioners conceded the fact of registration, they
nevertheless contended that it was done in bad faith. On this issue, the
respondent Court ruled;
Under the second assignment of error, plaintiffs-appellants contend that
defendants-appellees acted in bad faith when they registered the Deed of
Sale in their favor as appellee Ricardo already knew of the execution of the
deed of sale in favor of the plaintiffs; appellants cite the testimony of plaintiff
Belinda Tañedo to the effect that defendant Ricardo Tañedo called her up on
January 4 or 5, 1981 to tell her that he was already the owner of the land in
question "but the contract of sale between our father and us were (sic)
already consumated" (pp. 9-10, tsn, January 6, 1984). This testimony is
obviously self-serving, and because it was a telephone conversation, the
deed of sale dated December 29, 1980 was not shown; Belinda merely told
her uncle that there was already a document showing that plaintiffs are the
owners (p. 80). Ricardo Tañedo controverted this and testified that he
learned for the first time of the deed of sale executed by Lazaro in favor of
his children "about a month or sometime in February 1981" (p. 111, tsn, Nov.
28, 1984). . . .6
The respondent Court, reviewing the trial court's findings, refused to
overturn the latter's assessment of the testimonial evidence, as follows;
We are not prepared to set aside the finding of the lower court upholding
Ricardo Tañedo's testimony, as it involves a matter of credibility of witnesses
which the trial judge, who presided at the hearing, was in a better position to
resolve. (Court of Appeals' Decision, p. 6.)
In this connection, we note the tenacious allegations made by petitioners,
both in their basic petition and in their memorandum, as follows:
1. The respondent Court allegedly ignored the claimed fact that respondent
Ricardo "by fraud and deceit and with foreknowledge" that the property in
question had already been sold to petitioners, made Lazaro execute the deed
of January 13, 1981;
2. There is allegedly adequate evidence to show that only 1/2 of the
purchase price of P10,000.00 was paid at the time of the execution of the
deed of sale, contrary to the written acknowledgment, thus showing bad
faith;
3. There is allegedly sufficient evidence showing that the deed of revocation
of the sale in favor of petitioners "was tainted with fraud or deceit."
4. There is allegedly enough evidence to show that private respondents "took
undue advantage over the weakness and unschooled and pitiful situation of
Lazaro Tañedo . . ." and that respondent Ricardo Tañedo "exercised moral
ascendancy over his younger brother he being the eldest brother and who
reached fourth year college of law and at one time a former Vice-Governor of
Tarlac, while his younger brother only attained first year high school . . . ;
5. The respondent Court erred in not giving credence to petitioners'
evidence, especially Lazaro Tañedo's Sinumpaang Salaysay dated July 27,
1982 stating that Ricardo Tañedo deceived the former in executing the deed
of sale in favor of private respondents.
To be sure, there are indeed many conflicting documents and testimonies as
well as arguments over their probative value and significance. Suffice it to
say, however, that all the above contentions involve questions of fact,
appreciation of evidence and credibility of witnesses, which are not proper in
this review. It is well-settled that the Supreme Court is not a trier of facts. In
petitions for review under Rule 45 of the Revised Rules of Court, only
questions of law may be raised and passed upon. Absent any whimsical or
capricious exercise of judgment, and unless the lack of any basis for the
conclusions made by the lower courts be amply demonstrated, the Supreme
Court will not disturb their findings. At most, it appears that petitioners have
shown that their evidence was not believed by both the trial and the
appellate courts, and that the said courts tended to give more credence to
the evidence presented by private respondents. But this in itself is not a
reason for setting aside such findings. We are far from convinced that both
courts gravely abused their respective authorities and judicial prerogatives.
As held in the recent case of Chua Tiong Tay vs. Court of Appeals and
Goldrock Construction and Development Corp.7
The Court has consistently held that the factual findings of the trial court, as
well as the Court of Appeals, are final and conclusive and may not be
reviewed on appeal. Among the exceptional circumstances where a
reassessment of facts found by the lower courts is allowed are when the
conclusion is a finding grounded entirely on speculation, surmises or
conjectures; when the inference made is manifestly absurd, mistaken or
impossible; when there is grave abuse of discretion in the appreciation of
facts; when the judgment is premised on a misapprehension of facts; when
the findings went beyond the issues of the case and the same are contrary to
the admissions of both appellant and appellee. After a careful study of the
case at bench, we find none of the above grounds present to justify the re-
evaluation of the findings of fact made by the courts below.

In the same vein, the ruling in the recent case of South Sea Surety and
Insurance Company, Inc. vs. Hon. Court of Appeals, et al.8 is equally
applicable to the present case:

We see no valid reason to discard the factual conclusions of the appellate

court. . . . (I)t is not the function of this Court to assess and evaluate all over
again the evidence, testimonial and documentary, adduced by the parties,
particularly where, such as here, the findings of both the trial court and the
appellate court on the matter coincide. (emphasis supplied)

WHEREFORE, the petition is DENIED and the assailed Decision of the Court of
Appeals is AFFIRMED. No Costs.

SO ORDERED.

[G.R. NO. 176474 : November 27, 2008]

HEIRS OF ARTURO REYES, represented by Evelyn R. San

Buenaventura, Petitioners, v. ELENA SOCCO-BELTRAN, Respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
assailing the Decision1 dated 31 January 2006 rendered by the Court of
Appeals in CA-G.R. SP No. 87066, which affirmed the Decision2 dated 30 June
2003 of the Office of the President, in O.P. Case No. 02-A-007, approving the
application of respondent Elena Socco-Beltran to purchase the subject
property.
The subject property in this case is a parcel of land originally identified as Lot
No. 6-B, situated in Zamora Street, Dinalupihan, Bataan, with a total area of
360 square meters. It was originally part of a larger parcel of land, measuring
1,022 square meters, allocated to the Spouses Marcelo Laquian and
Constancia Socco (Spouses Laquian), who paid for the same with Japanese
money. When Marcelo died, the property was left to his wife Constancia.
Upon Constancia's subsequent death, she left the original parcel of land,
along with her other property, with her heirs - her siblings, namely: Filomena
Eliza Socco, Isabel Socco de Hipolito, Miguel R. Socco, and Elena Socco-
Beltran.3 Pursuant to an unnotarized document entitled "Extrajudicial
Settlement of the Estate of the Deceased Constancia R. Socco," executed by
Constancia's heirs sometime in 1965, the parcel of land was partitioned into
three lots–Lot No. 6-A, Lot No. 6-B, and Lot No. 6-C.4 The subject property,
Lot No. 6-B, was adjudicated to respondent, but no title had been issued in
her name.
On 25 June 1998, respondent Elena Socco-Beltran filed an application for the
purchase of Lot No. 6-B before the Department of Agrarian Reform (DAR),
alleging that it was adjudicated in her favor in the extra-judicial settlement of
Constancia Socco's estate.5
Petitioners herein, the heirs of the late Arturo Reyes, filed their protest to
respondent's petition before the DAR on the ground that the subject
property was sold by respondent's brother, Miguel R. Socco, in favor of their
father, Arturo Reyes, as evidenced by the Contract to Sell, dated 5
September 1954, stipulating that:6
That I am one of the co-heirs of the Estate of the deceased Constancia Socco;
and that I am to inherit as such a portion of her lot consisting of Four
Hundred Square Meters (400) more or less located on the (sic) Zamora St.,
Municipality of Dinalupihan, Province of Bataan, bounded as follows:
xxx
That for or in consideration of the sum of FIVE PESOS (P5.00) per square
meter, hereby sell, convey and transfer by way of this conditional sale the
said 400 sq.m. more or less unto Atty. Arturo C. Reyes, his heirs,
administrator and assigns x x x. (Emphasis supplied.)
Petitioners averred that they took physical possession of the subject property
in 1954 and had been uninterrupted in their possession of the said property
since then.
Legal Officer Brigida Pinlac of the DAR Bataan Provincial Agrarian Reform
Office conducted an investigation, the results of which were contained in her
Report/ Recommendation dated 15 April 1999. Other than recounting the
afore-mentioned facts, Legal Officer Pinlac also made the following findings
in her Report/Recommendation:7
Further investigation was conducted by the undersigned and based on the
documentary evidence presented by both parties, the following facts were
gathered: that the house of [the] Reyes family is adjacent to the landholding
in question and portion of the subject property consisting of about 15 meters
[were] occupied by the heirs of Arturo Reyes were a kitchen and bathroom
[were] constructed therein; on the remaining portion a skeletal form made of
hollow block[s] is erected and according to the heirs of late Arturo Reyes, this
was constructed since the year (sic) 70's at their expense; that construction
of the said skeletal building was not continued and left unfinished which
according to the affidavit of Patricia Hipolito the Reyes family where (sic)
prevented by Elena Socco in their attempt of occupancy of the subject
landholding; (affidavit of Patricia Hipolito is hereto attached as Annex "F");
that Elena Socco cannot physically and personally occupy the subject
property because of the skeletal building made by the Reyes family who have
been requesting that they be paid for the cost of the construction and the
same be demolished at the expense of Elena Socco; that according to Elena
Socco, [she] is willing to waive her right on the portion where [the] kitchen
and bathroom is (sic) constructed but not the whole of Lot [No.] 6-B
adjudicated to her; that the Reyes family included the subject property to the
sworn statement of value of real properties filed before the municipality of
Dinalupihan, Bataan, copies of the documents are hereto attached as
Annexes "G" and "H"; that likewise Elena Socco has been continuously and
religiously paying the realty tax due on the said property.
In the end, Legal Officer Pinlac recommended the approval of respondent's
petition for issuance of title over the subject property, ruling that respondent
was qualified to own the subject property pursuant to Article 1091 of the
New Civil Code.8 Provincial Agrarian Reform Officer (PARO) Raynor Taroy
concurred in the said recommendation in his Indorsement dated 22 April
1999.9
In an Order dated 15 September 1999, DAR Regional Director Nestor R.
Acosta, however, dismissed respondent's petition for issuance of title over
the subject property on the ground that respondent was not an actual tiller
and had abandoned the said property for 40 years; hence, she had already
renounced her right to recover the same.10 The dispositive part of the Order
reads:
1. DISMISSING the claims of Elena Socco-Beltran, duly represented by Myrna
Socco for lack of merit;
2. ALLOCATING Lot No. 6-B under Psd-003-008565 with an area of 360
square meters, more or less, situated Zamora Street, Dinalupihan, Bataan, in
favor of the heirs of Arturo Reyes.
3. ORDERING the complainant to refrain from any act tending to disturb the
peaceful possession of herein respondents.
4. DIRECTING the MARO of Dinalupihan, Bataan to process the pertinent
documents for the issuance of CLOA in favor of the heirs of Arturo Reyes.11
Respondent filed a Motion for Reconsideration of the foregoing Order, which
was denied by DAR Regional Director Acosta in another Order dated 15
September 1999.12
Respondent then appealed to the Office of the DAR Secretary. In an Order,
dated 9 November 2001, the DAR Secretary reversed the Decision of DAR
Regional Director Acosta after finding that neither petitioners' predecessor-
in-interest, Arturo Reyes, nor respondent was an actual occupant of the
subject property. However, since it was respondent who applied to purchase
the subject property, she was better qualified to own said property as
opposed to petitioners, who did not at all apply to purchase the same.
Petitioners were further disqualified from purchasing the subject property
because they were not landless. Finally, during the investigation of Legal
Officer Pinlac, petitioners requested that respondent pay them the cost of
the construction of the skeletal house they built on the subject property. This
was construed by the DAR Secretary as a waiver by petitioners of their right
over the subject property.13 In the said Order, the DAR Secretary ordered
that:
WHEREFORE, premises considered, the September 15, 1999 Order is hereby
SET ASIDE and a new Order is hereby issued APPROVING the application to
purchase Lot [No.] 6-B of Elena Socco-Beltran.14
Petitioners sought remedy from the Office of the President by appealing the
9 November 2001 Decision of the DAR Secretary. Their appeal was docketed
as O.P. Case No. 02-A-007. On 30 June 2003, the Office of the President
rendered its Decision denying petitioners' appeal and affirming the DAR
Secretary's Decision.15 The fallo of the Decision reads:
WHEREFORE, premises considered, judgment appealed from
is AFFIRMED and the instant appeal DISMISSED.16
Petitioners' Motion for Reconsideration was likewise denied by the Office of
the President in a Resolution dated 30 September 2004.17 In the said
Resolution, the Office of the President noted that petitioners failed to allege
in their motion the date when they received the Decision dated 30 June
2003. Such date was material considering that the petitioners' Motion for
Reconsideration was filed only on 14 April 2004, or almost nine months after
the promulgation of the decision sought to be reconsidered. Thus, it ruled
that petitioners' Motion for Reconsideration, filed beyond fifteen days from
receipt of the decision to be reconsidered, rendered the said decision final
and executory.
Consequently, petitioners filed an appeal before the Court of Appeals,
docketed as CA-G.R. SP No. 87066. Pending the resolution of this case, the
DAR already issued on 8 July 2005 a Certificate of Land Ownership Award
(CLOA) over the subject property in favor of the respondent's niece and
representative, Myrna Socco-Beltran.18 Respondent passed away on 21
March 2001,19 but the records do not ascertain the identity of her legal heirs
and her legatees.
Acting on CA-G.R. SP No. 87066, the Court of Appeals subsequently
promulgated its Decision, dated 31 January 2006, affirming the Decision
dated 30 June 2003 of the Office of the President. It held that petitioners
could not have been actual occupants of the subject property, since actual
occupancy requires the positive act of occupying and tilling the land, not just
the introduction of an unfinished skeletal structure thereon. The Contract to
Sell on which petitioners based their claim over the subject property was
executed by Miguel Socco, who was not the owner of the said property and,
therefore, had no right to transfer the same. Accordingly, the Court of
Appeals affirmed respondent's right over the subject property, which was
derived form the original allocatees thereof.20 The fallo of the said Decision
reads:
WHEREFORE, premises considered, the instant PETITION FOR
REVIEW is DISMISSED. Accordingly, the Decision dated 30 June 2003 and the
Resolution dated 30 December 2004 both issued by the Office of the
President are hereby AFFIRMED in toto.21
The Court of Appeals denied petitioners' Motion for Reconsideration of its
Decision in a Resolution dated 16 August 2006.22
Hence, the present Petition, wherein petitioners raise the following issues:
I through acquisitive prescription, citing Sandoval v. Insular
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN
AFFIRMING THE FINDINGS OF THE OFFICE OF THE PRESIDENT THAT THE
SUBJECT LOT IS VACANT AND THAT PETITIONERS ARE NOT ACTUAL
OCCUPANTS THEREOF BY DENYING THE LATTER'S CLAIM THAT THEY HAVE
BEEN IN OPEN, CONTINUOUS, EXCLUSIVE, NOTORIOUS AND AVDERSE
POSSESSION THEREOF SINCE 1954 OR FOR MORE THAN THIRTY (30) YEARS.
II
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT HELD THAT
PETITIONERS "CANNOT LEGALLY ACQUIRE THE SUBJECT PROPERTY AS THEY
ARE NOT CONSIDERED LANDLESS AS EVIDENCED BY A TAX DECLARATION."
III
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT "
WHATEVER RESERVATION WE HAVE OVER THE RIGHT OF MYRNA SOCCO TO
SUCCEED WAS ALREADY SETTLED WHEN NO LESS THAN MIGUEL SOCCO
(PREDECESSOR-IN INTEREST OF HEREIN PETITIONERS) EXECUTED HIS WAIVER
OF RIGHT DATED APRIL 19, 2005 OVER THE SUBJECT PROPERTY IN FAVOR OF
MYRNA SOCCO.
IV
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DENIED
PETITIONERS MOTION FOR NEW TRIAL THEREBY BRUSHING ASIDE THE FACT
THAT MYRNA V. SOCCO-ARIZO GROSSLY MISREPRESENTED IN HER
INFORMATION SHEET OF BENEFICIARIES AND APPLICATION TO PURCHASE
LOT IN LANDED ESTATES THAT SHE IS A FILIPINO CITIZEN, WHEN IN TRUTH
AND IN FACT, SHE IS ALREADY AN AMERICAN NATIONAL.23
The main issue in this case is whether or not petitioners have a better right to
the subject property over the respondent. Petitioner's claim over the subject
property is anchored on the Contract to Sell executed between Miguel Socco
and Arturo Reyes on 5 September 1954. Petitioners additionally allege that
they and their predecessor-in-interest, Arturo Reyes, have been in
possession of the subject lot since 1954 for an uninterrupted period of more
than 40 years.
The Court is unconvinced.
Petitioners cannot derive title to the subject property by virtue of the
Contract to Sell. It was unmistakably stated in the Contract and made clear to
both parties thereto that the vendor, Miguel R. Socco, was not yet the owner
of the subject property and was merely expecting to inherit the same as his
share as a co-heir of Constancia's estate.24 It was also declared in the
Contract itself that Miguel R. Socco's conveyance of the subject to the buyer,
Arturo Reyes, was a conditional sale. It is, therefore, apparent that the sale of
the subject property in favor of Arturo Reyes was conditioned upon the
event that Miguel Socco would actually inherit and become the owner of the
said property. Absent such occurrence, Miguel R. Socco never acquired
ownership of the subject property which he could validly transfer to Arturo
Reyes.
Under Article 1459 of the Civil Code on contracts of sale, "The thing must be
licit and the vendor must have a right to transfer ownership thereof at the
time it is delivered." The law specifically requires that the vendor must have
ownership of the property at the time it is delivered. Petitioners claim that
the property was constructively delivered to them in 1954 by virtue of the
Contract to Sell. However, as already pointed out by this Court, it was explicit
in the Contract itself that, at the time it was executed, Miguel R. Socco was
not yet the owner of the property and was only expecting to inherit it.
Hence, there was no valid sale from which ownership of the subject property
could have transferred from Miguel Socco to Arturo Reyes. Without acquiring
ownership of the subject property, Arturo Reyes also could not have
conveyed the same to his heirs, herein petitioners.
Petitioners, nevertheless, insist that they physically occupied the subject lot
for more than 30 years and, thus, they gained ownership of the property
Government 25 and San Miguel Corporation v. Court of Appeals.26
In Sandoval, petitioners therein sought the enforcement of Section 54,
paragraph 6 of Act No. 926, otherwise known as the Land Registration Act,
which required - - for the issuance of a certificate of title to agricultural public
lands - - the open, continuous, exclusive, and notorious possession and
occupation of the same in good faith and under claim of ownership for more
than ten years. After evaluating the evidence presented, consisting of the
testimonies of several witnesses and proof that fences were constructed
around the property, the Court in the afore-stated case denied the petition
on the ground that petitioners failed to prove that they exercised acts of
ownership or were in open, continuous, and peaceful possession of the
whole land, and had caused it to be enclosed to the exclusion of other
persons. It further decreed that whoever claims such possession shall
exercise acts of dominion and ownership which cannot be mistaken for the
momentary and accidental enjoyment of the property.27
In San Miguel Corporation, the Court reiterated the rule that the open,
exclusive, and undisputed possession of alienable public land for the period
prescribed by law creates the legal fiction whereby land ceases to be public
land and is, therefore, private property. It stressed, however, that the
occupation of the land for 30 years must be conclusively established. Thus,
the evidence offered by petitioner therein - tax declarations, receipts, and
the sole testimony of the applicant for registration, petitioner's predecessor-
in-interest who claimed to have occupied the land before selling it to the
petitioner - were considered insufficient to satisfy the quantum of proof
required to establish the claim of possession required for acquiring alienable
public land.28
As in the two aforecited cases, petitioners herein were unable to prove
actual possession of the subject property for the period required by law. It
was underscored in San Miguel Corporation that the open, continuous,
exclusive, and notorious occupation of property for more than 30 years must
be no less than conclusive, such quantum of proof being necessary to avoid
the erroneous validation of actual fictitious claims of possession over the
property that is being claimed.29
In the present case, the evidence presented by the petitioners falls short of
being conclusive. Apart from their self-serving statement that they took
possession of the subject property, the only proof offered to support their
claim was a general statement made in the letter30 dated 4 February 2002
of Barangay Captain Carlos Gapero, certifying that Arturo Reyes was the
occupant of the subject property "since peace time and at present." The
statement is rendered doubtful by the fact that as early as 1997, when
respondent filed her petition for issuance of title before the DAR, Arturo
Reyes had already died and was already represented by his heirs, petitioners
herein.
Moreover, the certification given by Barangay Captain Gapero that Arturo
Reyes occupied the premises for an unspecified period of time, i.e., since
peace time until the present, cannot prevail over Legal Officer Pinlac's more
particular findings in her Report/Recommendation. Legal Officer Pinlac
reported that petitioners admitted that it was only in the 1970s that they
built the skeletal structure found on the subject property. She also referred
to the averments made by Patricia Hipolito in an Affidavit,31 dated 26
February 1999, that the structure was left unfinished because respondent
prevented petitioners from occupying the subject property. Such findings
disprove petitioners' claims that their predecessor-in-interest, Arturo Reyes,
had been in open, exclusive, and continuous possession of the property since
1954. The adverted findings were the result of Legal Officer Pinlac's
investigation in the course of her official duties, of matters within her
expertise which were later affirmed by the DAR Secretary, the Office of the
President, and the Court of Appeals. The factual findings of such
administrative officer, if supported by evidence, are entitled to great
respect.32
is valid, there is clearly no need for the respondent to purchase the subject
property, despite the application for the purchase of the property
erroneously filed by respondent. The only act which remains to be performed
is the issuance of a title in the name of her legal heirs, now that she is
deceased.
Moreover, the Court notes that the records have not clearly established the
right of respondent's representative, Myrna Socco-Arizo, over the subject
property. Thus, it is not clear to this Court why the DAR issued on 8 July 2005
a CLOA36 over the subject property in favor of Myrna Socco-Arizo.
Respondent's death does not automatically transmit her rights to the
property to Myrna Socco-Beltran. Respondent only authorized Myrna Socco-
Arizo, through a Special Power of Attorney37 dated 10 March 1999, to
represent her in the present case and to administer the subject property for
her benefit. There is nothing in the Special Power of Attorney to the effect
that Myrna Socco-Arizo can take over the subject property as owner thereof
upon respondent's death. That Miguel V. Socco, respondent's only nephew,
the son of the late Miguel R. Socco, and Myrna Socco-Arizo's brother,
executed a waiver of his right to inherit from respondent, does not
automatically mean that the subject property will go to Myrna Socco-Arizo,
absent any proof that there is no other qualified heir to respondent's estate.
Thus, this Decision does not in any way confirm the issuance of the CLOA in
favor of Myrna Socco-Arizo, which may be assailed in appropriate
proceedings.
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. The assailed
Decision of the Court of Appeals in CA-G.R. SP No. 87066, promulgated on 31
January 2006, is AFFIRMED with MODIFICATION. This Court withholds the
confirmation of the validity of title over the subject property in the name of
Myrna Socco-Arizo pending determination of respondent's legal heirs in
appropriate proceedings. No costs.
SO ORDERED.

In contrast, respondent's claim over the subject property is backed by

sufficient evidence. Her predecessors-in-interest, the spouses Laquian, have
been identified as the original allocatees who have fully paid for the subject
property. The subject property was allocated to respondent in the
extrajudicial settlement by the heirs of Constancia's estate. The document
entitled "Extra-judicial Settlement of the Estate of the Deceased Constancia
Socco" was not notarized and, as a private document, can only bind the
parties thereto. However, its authenticity was never put into question, nor
was its legality impugned. Moreover, executed in 1965 by the heirs of
Constancia Socco, or more than 30 years ago, it is an ancient document
which appears to be genuine on its face and therefore its authenticity must
be upheld.33 Respondent has continuously paid for the realty tax due on the
subject property, a fact which, though not conclusive, served to strengthen
her claim over the property.34

From the foregoing, it is only proper that respondent's claim over the subject
property be upheld. This Court must, however, note that the Order of the
DAR Secretary, dated 9 November 2001, which granted the petitioner's right
to purchase the property, is flawed and may be assailed in the proper
proceedings. Records show that the DAR affirmed that respondent's
predecessors-in-interest, Marcelo Laquian and Constancia Socco, having
been identified as the original allocatee, have fully paid for the subject
property as provided under an agreement to sell. By the nature of a contract
G.R. No. L-31271 April 29, 1974
or agreement to sell, the title over the subject property is transferred to the
vendee upon the full payment of the stipulated consideration. Upon the full ROMEO MARTINEZ and LEONOR SUAREZ, spouses, petitioners-appellants,
payment of the purchase price, and absent any showing that the allocatee vs. HON. COURT OF APPEALS, SECRETARY and UNDERSECRETARY OF PUBLIC
violated the conditions of the agreement, ownership of the subject land WORKS & COMMUNICATIONS, Respondents-Appellees.
should be conferred upon the allocatee.35 Since the extrajudicial partition
transferring Constancia Socco's interest in the subject land to the respondent Flores Macapagal, Ocampo and Balbastro for petitioners-appellants.
Office of the Solicitor General Felix Q. Antonio, Acting Assistant Solicitor
General Dominador L. Quiroz and Solicitor Concepcion T. Agapinan for
respondents-appellees.
ESGUERRA, J.:
Petition for review by certiorari of the judgment of the Court of Appeals
dated November 17, 1969 in its CA-G.R. 27655-R which reverses the
judgment of the Court of First Instance of Pampanga in favor of petitioners-
appellants against the Secretary and Undersecretary of Public Works &
Communications in the case instituted to annul the order of November 25,
1958 of respondent Secretary of Public Works & Communications directing
the removal by the petitioners of the dikes they had constructed on Lot No.
15856 of the Register of Deeds of Pampanga, which order was issued
pursuant to the provisions of Republic Act No. 2056. The dispositive portion
of the judgment of reversal of the Court of Appeals reads as follows:
IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment appealed from
is hereby reversed, and another entered: [1] upholding the validity of the
decision reached by the respondent officials in the administrative case; [2]
dissolving the injunction issued by the Court below; and [3] cancelling the
registration of Lot No. 2, the disputed area, and ordering its reconveyance to
the public domain. No costs in this instance.
The background facts are stated by the Court of Appeals as follows:
The spouses Romeo Martinez and Leonor Suarez, now petitioners-appellees,
are the registered owners of two (2) parcels of land located in Lubao,
Pampanga, covered by transfer certificate of title No. 15856 of the Register
of Deeds of the said province. Both parcels of land are fishponds. The
property involved in the instant case is the second parcel mentioned in the
above-named transfer certificate of title.
The disputed property was originally owned by one Paulino Montemayor,
who secured a "titulo real" over it way back in 1883. After the death of
Paulino Montemayor the said property passed to his successors-in-interest,
Maria Montemayor and Donata Montemayor, who in turn, sold it, as well as
the first parcel, to a certain Potenciano Garcia.
Because Potenciano Garcia was prevented by the then municipal president of
Lubao, Pedro Beltran, from restoring the dikes constructed on the contested
property, the former, on June 22, 1914, filed Civil Case No. 1407 with the
Court of First Instance against the said Pedro Beltran to restrain the latter in
his official capacity from molesting him in the possession of said second
parcel, and on even date, applied for a writ of preliminary injunction, which
was issued against said municipal president. The Court, by decision
promulgated June 12, 1916, declared permanent the preliminary injunction,
which, decision, on appeal, was affirmed by the Supreme Court on August 21,
1918. From June 22, 1914, the dikes around the property in question
remained closed until a portion thereof was again opened just before the
outbreak of the Pacific War.
On April 17, 1925. Potenciano Garcia applied for the registration of both
parcels of land in his name, and the Court of First Instance of Pampanga,
sitting as land registration court, granted the registration over and against
the opposition of the Attorney-General and the Director of Forestry.
Pursuant to the Court's decision, original certificate of title No. 14318,
covering said parcels 1 and 2 was issued to the spouses Potenciano Garcia
and Lorenza Sioson.
These parcels of land were subsequently bought by Emilio Cruz de Dios in
whose name transfer certificate of title No. 1421 was first issued on
November 9, 1925.
Thereafter, the ownership of these properties changed hands until eventually
they were acquired by the herein appellee spouses who hold them by virtue
of transfer certificate of title No. 15856.
To avoid any untoward incident, the disputants agreed to refer the matter to
the Committee on Rivers and Streams, by then composed of the Honorable
Pedro Tuason, at that time Secretary of Justice, as chairman, and the
Honorable Salvador Araneta and Vicente Orosa, Secretary of Agriculture and
National Resources and Secretary of Public Works and Communications,
respectively, as members. This committee thereafter appointed a Sub-
Committee to investigate the case and to conduct an ocular inspection of the
contested property, and on March 11, 1954, said Sub-Committee submitted
its report to the Committee on Rivers and Streams to the effect that Parcel
No. 2 of transfer certificate of title No. 15856 was not a public river but a
private fishpond owned by the herein spouses.
On July 7, 1954, the Committee on Rivers and Streams rendered its decision
the dispositive part of which reads:
"In view of the foregoing considerations, the spouses Romeo Martinez and
Leonor Suarez should be restored to the exclusive possession, use and
enjoyment of the creek in question which forms part of their registered
property and the decision of the courts on the matter be given full force and
effect."
The municipal officials of Lubao, led by Acting Mayor Mariano Zagad,
apparently refused to recognize the above decision, because on September
1, 1954, the spouses Romeo Martinez and Leonor Suarez instituted Civil Case
No. 751 before the Court of First Instance of Pampanga against said Mayor
Zagad, praying that the latter be enjoined from molesting them in their
possession of their property and in the construction of the dikes therein. The
writ of preliminary injunction applied for was issued against the respondent
municipal Mayor, who immediately elevated the injunction suit for review to
the Supreme Court, which dismissed Mayor Zagad's petition on September 7,
1953. With this dismissal order herein appellee spouses proceeded to
construct the dikes in the disputed parcel of land.
Some four (4) years later, and while Civil Case No. 751 was still pending the
Honorable Florencio Moreno, then Secretary of Public Works and
Communications, ordered another investigation of the said parcel of land,
directing the appellees herein to remove the dikes they had constructed, on
the strength of the authority vested in him by Republic Act No. 2056,
approved on June 13, 1958, entitled "An Act To Prohibit, Remove and/or
Demolish the Construction of Dams. Dikes, Or Any Other Walls In Public
Navigable Waters, Or Waterways and In Communal Fishing Grounds, To
Regulate Works in Such Waters or Waterways And In Communal Fishing
Grounds, And To Provide Penalties For Its Violation, And For Other Purposes.
1 The said order which gave rise to the instant proceedings, embodied a
threat that the dikes would be demolished should the herein appellees fail to
comply therewith within thirty (30) days.
The spouses Martinez replied to the order by commencing on January 2,
1959 the present case, which was decided in their favor by the lower Court in
a decision dated August 10, 1959, the dispositive part of which reads:
"WHEREFORE, in view of the foregoing considerations, the Court hereby
declares the decision, Exhibit S, rendered by the Undersecretary of Public
Works and Communications null and void; declares the preliminary
injunction, hereto for issued, permanent, and forever enjoining both
respondents from molesting the spouses Romeo Martinez and Leonor Suarez
in their possession, use and enjoyment of their property described in Plan
Psu-9992 and referred to in their petition."
"Without pronouncement as to costs."
"SO ORDERED."
As against this judgment respondent officials of the Department of Public
Works and Communications took the instant appeal, contending that the
lower Court erred:
1. In holding that then Senator Rogelio de la Rosa, complainant in the
administrative case, is not an interested party and his letter-complaint dated
August 15, 1958 did not confer jurisdiction upon the respondent
Undersecretary of Public Works and Communications to investigate the said
administrative case;
2. In holding that the duty to investigate encroachments upon public rivers
conferred upon the respondent Secretary under Republic Act No. 7056
cannot be lawfully delegated by him to his subordinates;
3. In holding that the investigation ordered by the respondent Secretary in
this case is illegal on the ground that the said respondent Secretary has
arrogated unto himself the power, which he does not possess, of reversing,
making nugatory, and setting aside the two lawful decisions of the Court
Exhibits K and I, and even annulling thereby, the one rendered by the highest
Tribunal of the land;
4. In not sustaining respondent's claim that petitioners have no cause of
action because the property in dispute is a public river and in holding that the
said claim has no basis in fact and in law;
5. In not passing upon and disposing of respondent's counterclaim;  1. That destined to the public use, such as roads, canals, rivers, torrents,
6. In not sustaining respondent's claim that the petition should not have
been entertained on the ground that the petitioners have not exhausted
administrative remedies; and
7. In holding that the decision of the respondents is illegal on the ground that
it violates the principles that laws shall have no retroactive effect unless the
contrary is provided and in holding that the said Republic Act No. 2056 is
unconstitutional on the ground that respondents' threat of prosecuting
petitioners under Section 3 thereof for acts done four years before its
enactment renders the said law ex post facto.
The Court of Appeals sustained the above-mentioned assignment of errors
committed by the Court of First Instance of Pampanga and, as previously
stated, reversed the judgment of the latter court. From this reversal this
appeal by certiorari was taken, and before this Court, petitioners-appellants
assigned the following errors allegedly committed by the Court of Appeals:
1. THE COURT OF APPEALS ERRED IN DECLARING IN THE INSTANT CASE THAT
PARCEL NO. 2 OF TRANSFER CERTIFICATE OF TITLE NO. 15856 IS A PUBLIC
RIVER AND ORDERING THE CANCELLATION OF ITS REGISTRATION BECAUSE
THIS CONSTITUTES A COLLATERAL ATTACK ON A TORRENS TITLE IN
VIOLATION OF THE LAW AND THE WELL-SETTLED JURISPRUDENCE ON THE
MATTER.
2. THE COURT OF APPEALS ERRED IN REOPENING AND RE-LITIGATING THE
ISSUE AS TO WHETHER OR NOT LOT NO. 2 OF TRANSFER CERTIFICATE OF
TITLE NO. 15856 REGISTER OF DEEDS OF PAMPANGA, IS A PUBLIC RIVER
NOTWITHSTANDING THE FACT THAT THIS ISSUE HAS BEEN LONG RESOLVED
AND SETTLED BY THE LAND REGISTRATION COURT OF PAMPANGA IN LAND
REGISTRATION PROCEEDING NO. 692 AND IS NOW RES JUDICATA.
3. THE COURT OF APPEALS ERRED IN ORDERING THE CANCELLATION OF THE
REGISTRATION OF LOT NO. 2 OF TRANSFER CERTIFICATE OF TITLE NO. 15856
NOTWITHSTANDING THE FACT THAT THE TORRENS TITLE COVERING IT HAS
BEEN VESTED IN THE PETITIONERS WHO ARE THE SEVENTH OF THE
SUCCESSIVE INNOCENT PURCHASERS THEREOF AND WHO IN PURCHASING
THE SAME RELIED ON THE PRINCIPLE THAT THE PERSONS DEALING WITH
REGISTERED LAND NEED NOT GO BEHIND THE REGISTER TO DETERMINE THE
CONDITION OF THE PROPERTY.
The 1st and 2nd assignment of errors, being closely related, will be taken up
together.
The ruling of the Court of Appeals that Lot No. 2 covered by Transfer
Certificate of Title No. 15856 of the petitioners-appellants is a public stream
and that said title should be cancelled and the river covered reverted to
public domain, is assailed by the petitioners-appellants as being a collateral
attack on the indefeasibility of the torrens title originally issued in 1925 in
favor of the petitioners-appellants' predecessor-in-interest, Potenciano
Garcia, which is violative of the rule of res judicata. It is argued that as the
decree of registration issued by the Land Registration Court was not re-
opened through a petition for review filed within one (1) year from the entry
of the decree of title, the certificate of title issued pursuant thereto in favor
of the appellants for the land covered thereby is no longer open to attack
under Section 38 of the Land Registration Act (Act 496) and the jurisprudence
on the matter established by this Tribunal. Section 38 of the Land
Registration Act cited by appellants expressly makes a decree of registration,
which ordinarily makes the title absolute and indefeasible, subject to the
exemption stated in Section 39 of the said Act among which are: "liens,
claims or rights arising or existing under the laws or Constitution of the
United States or of the Philippine Islands which the statute of the Philippine
Islands cannot require to appear of record in the registry."
At the time of the enactment of Section 496, one right recognized or existing
under the law is that provided for in Article 339 of the old Civil Code which
reads as follows:
Property of public ownership is:
ports, and bridges constructed by the State, and banks shores, roadsteads,
and that of a similar character. (Par. 1)
The above-mentioned properties are parts of the public domain intended for
public use, are outside the commerce of men and, therefore, not subject to
private appropriation. ( 3 Manresa, 6th ed. 101-104.)
In Ledesma v. Municipality of Iloilo, 49 Phil. 769, this Court held:
A simple possession of a certificate of title under the Torrens system does
not necessarily make the possessor a true owner of all the property
described therein. If a person obtains title under the Torrens system which
includes by mistake or oversight, lands which cannot be registered under the
Torrens system, he does not by virtue of said certificate alone become the
owner of the land illegally included.
In Mercado v. Municipal President of Macabebe, 59 Phil. 592, it was also said:
It is useless for the appellant now to allege that she has obtained certificate
of title No. 329 in her favor because the said certificate does not confer upon
her any right to the creek in question, inasmuch as the said creek, being of
the public domain, is included among the various exceptions enumerated in
Section 39 of Act 496 to which the said certificate is subject by express
provision of the law.
The same ruling was laid down in Director of Lands v. Roman Catholic Bishop
of Zamboanga, 61 Phil. 644, as regards public plaza.
In Dizon, et al. v. Rodriguez, et al., G.R. No. L-20300-01 and G.R. No. L-20355-
56, April 30, 1965, 20 SCRA 704, it was held that the incontestable and
indefeasible character of a Torrens certificate of title does not operate when
the land covered thereby is not capable of registration.
It is, therefore, clear that the authorities cited by the appellants as to the
conclusiveness and incontestability of a Torrens certificate of title do not
apply here. The Land Registration Court has no jurisdiction over non-
registerable properties, such as public navigable rivers which are parts of the
public domain, and cannot validly adjudge the registration of title in favor of
a private applicant. Hence, the judgment of the Court of First Instance of
Pampanga as regards the Lot No. 2 of Certificate of Title No. 15856 in the
name of petitioners-appellants may be attacked at any time, either directly
or collaterally, by the State which is not bound by any prescriptive period
provided for by the Statute of Limitations (Article 1108, par. 4, new Civil
Code). The right of reversion or reconveyance to the State of the public
properties fraudulently registered and which are not capable of private
appropriation or private acquisition does not prescribe. (Republic v. Ramona
Ruiz, et al., G.R. No. L-23712, April 29, 1968, 23 SCRA 348; Republic v. Ramos,
G.R. No. L-15484, January 31, 1963, 7 SCRA 47.)
When it comes to registered properties, the jurisdiction of the Secretary of
Public Works & Communications under Republic Act 2056 to order the
removal or obstruction to navigation along a public and navigable creek or
river included therein, has been definitely settled and is no longer open to
question (Lovina v. Moreno, G.R. No L-17821, November 29, 1963, 9 SCRA
557; Taleon v. Secretary of Public Works & Communications G.R. No. L- principle that rivers are parts of the public domain for public use and not
24281, May 16, 1961, 20 SCRA 69, 74). capable of private appropriation or acquisition by prescription.

The evidence submitted before the trial court which was passed upon by the FOR ALL THE FOREGOING, the judgment of the Court of Appeals appealed
respondent Court of Appeals shows that Lot No. 2 (Plan Psu 992) of Transfer from is in accordance with law, and the same is hereby affirmed with costs
Certificate of Title No. 15856, is a river of the public domain. The technical against the petitioners-appellants.
description of both Lots Nos. 1 and 2 appearing in Original Certificate of Title
No. 14318 of the Register of Deeds of Pampanga, from which the present
Transfer Certificate of Title No. 15856 was derived, confirms the fact that Lot
No. 2 embraced in said title is bounded practically on all sides by rivers. As
held by the Court of First Instance of Pampanga in Civil Case No. 1247 for
injunction filed by the petitioners' predecessors-in-interest against the
Municipal Mayor of Lubao and decided in 1916 (Exh. "L"), Lot No. 2 is a
branch of the main river that has been covered with water since time
immemorial and, therefore, part of the public domain. This finding having
been affirmed by the Supreme Court, there is no longer any doubt that Lot
No. 2 of Transfer Certificate of Title No. 15856 of petitioners is a river which
is not capable of private appropriation or acquisition by prescription.
(Palanca v. Com. of the Philippines, 69 Phil. 449; Meneses v. Com. of the
Philippines, 69 Phil. 647). Consequently, appellants' title does not include
said river.

II

As regards the 3rd assignment of error, there is no weight in the appellants'

argument that, being a purchaser for value and in good faith of Lot No. 2, the
nullification of its registration would be contrary to the law and to the
applicable decisions of the Supreme Court as it would destroy the stability of
the title which is the core of the system of registration. Appellants cannot be
deemed purchasers for value and in good faith as in the deed of absolute
conveyance executed in their favor, the following appears:

6. Que la segunda parcela arriba descrita y mencionada esta actualmente

abierta, sin malecones y excluida de la primera parcela en virtud de la Orden
Administrative No. 103, tal como fue enmendada, del pasado regimen o
Gobierno.

7. Que los citados compradores Romeo Martinez y Leonor Suarez se

encargan de gestionar de las autoridades correspondientes para que la citada
segunda parcela pueda ser convertida de nuevo en pesqueria, corriendo a
cuenta y cargo de los mismos todos los gastos.

8. Que en el caso de que dichos compradores no pudiesen conseguir sus

propositos de convertir de nuevo en pesquera la citada segunda parcela, los
aqui vendedores no devolveran ninguna cantidad de dinero a los referidos
compradores; este es, no se disminuiriat el precio de esta venta. (Exh. 13-a,
p. 52, respondents record of exhibits)

These stipulations were accepted by the petitioners-appellants in the same

conveyance in the following terms:

Romeo Martinez y Leonor Suarez, mayores de edad, filipinos y residentes en

al Barrio de Julo Municipio de Malabon, Provincia de Rizal, por la presente,
declaran que estan enterados del contenido de este documento y lo aceptan
en los precisos terminos en que arriba uedan consignados. (Exh. 13-a, ibid)

Before purchasing a parcel of land, it cannot be contended that the

appellants who were the vendees did not know exactly the condition of the
land that they were buying and the obstacles or restrictions thereon that
may be put up by the government in connection with their project of
converting Lot No. 2 in question into a fishpond. Nevertheless, they willfully
and voluntarily assumed the risks attendant to the sale of said lot. One who
buys something with knowledge of defect or lack of title in his vendor cannot
claim that he acquired it in good faith (Leung Lee v. Strong Machinery Co., et
al., 37 Phil. 664).

The ruling that a purchaser of a registered property cannot go beyond the

record to make inquiries as to the legality of the title of the registered owner, G.R. No. 135634 May 31, 2000
but may rely on the registry to determine if there is no lien or encumbrances
over the same, cannot be availed of as against the law and the accepted HEIRS OF JUAN SAN ANDRES (VICTOR S. ZIGA) and SALVACION S.
TRIA, petitioners,
vs.
VICENTE RODRIGUEZ, respondent.
MENDOZA, J.:
This is a petition for review on certiorari of the decision of the Court of
Appeals 1 reversing the decision of the Regional Trial Court, Naga City, Branch
19, in Civil Case No. 87-1335, as well as the appellate court's resolution
denying reconsideration.
The antecedent facts are as follows:
Juan San Andres was the registered owner of Lot No. 1914-B-2 situated in
Liboton, Naga City. On September 28, 1964, he sold a portion thereof,
consisting of 345 square meters, to respondent Vicente S. Rodriguez for
P2,415.00. The sale is evidenced by a Deed of Sale. 2
Upon the death of Juan San Andres on May 5, 1965, Ramon San Andres was
appointed judicial administrator of the decedent's estate in Special
Proceedings No. R-21, RTC, Branch 19, Naga City. Ramon San Andres engaged
the services of a geodetic engineer, Jose Peñero, to prepare a consolidated
plan (Exh. A) of the estate. Engineer Peñero also prepared a sketch plan of
the 345-square meter lot sold to respondent. From the result of the survey, it
was found that respondent had enlarged the area which he purchased from
the late Juan San Andres by 509 square meters. 3
Accordingly, the judicial administrator sent a letter, 4 dated July 27, 1987, to
respondent demanding that the latter vacate the portion allegedly
encroached by him. However, respondent refused to do so, claiming he had
purchased the same from the late Juan San Andres. Thereafter, on November
24, 1987, the judicial administrator brought an action, in behalf of the estate
of Juan San Andres, for recovery of possession of the 509-square meter lot.
In his Re-amended Answer filed on February 6, 1989, respondent alleged that
apart from the 345-square meter lot which had been sold to him by Juan San
Andres on September 28, 1964, the latter likewise sold to him the following
day the remaining portion of the lot consisting of 509 square meters, with
both parties treating the two lots as one whole parcel with a total area of 854
square meters. Respondent alleged that the full payment of the 509-square
meter lot would be effected within five (5) years from the execution of a
formal deed of sale after a survey is conducted over said property. He further
alleged that with the consent of the former owner, Juan San Andres, he took
possession of the same and introduced improvements thereon as early as
1964.
As proof of the sale to him of 509 square meters, respondent attached to his
answer a receipt (Exh. 2) 5 signed by the late Juan San Andres, which reads in
full as follows:
Received from Vicente Rodriguez the sum of Five Hundred (P500.00) Pesos
representing an advance payment for a residential lot adjoining his
previously paid lot on three sides excepting on the frontage with the agreed
price of Fifteen (15.00) Pesos per square meter and the payment of the full
consideration based on a survey shall be due and payable in five (5) years
period from the execution of the formal deed of sale; and it is agreed that
the expenses of survey and its approval by the Bureau of Lands shall be
borne by Mr. Rodriguez.
Naga City, September 29, 1964.
(Sgd.)
JUAN R. SAN ANDRES
Vendor
Noted:
(Sgd.)
VICENTE RODRIGUEZ
Vendee
Respondent also attached to his answer a letter of judicial administrator
Ramon San Andres (Exh. 3), 6 asking payment of the balance of the purchase
price. The letter reads:
Dear Inting,
Please accommodate my request for Three Hundred (P300.00) Pesos as I am
in need of funds as I intimated to you the other day.
We will just adjust it with whatever balance you have payable to the
subdivision.
Thanks.
Sincerely,
(Sgd.)
RAMON SAN ANDRES
Vicente Rodriguez
Penafrancia Subdivision, Naga City
P.S.
You can let bearer Enrique del Castillo sign for the amount.
Received One Hundred Only
(Sgd.)
RAMON SAN ANDRES
3/30/66
Respondent deposited in court the balance of the purchase price amounting
to P7,035.00 for the aforesaid 509-square meter lot.
While the proceedings were pending, judicial administrator Ramon San
Andres died and was substituted by his son Ricardo San Andres. On the other
band, respondent Vicente Rodriguez died on August 15, 1989 and was
substituted by his heirs. 7
Petitioner, as plaintiff, presented two witnesses. The first witness, Engr. Jose
Peñero, 8 testified that based on his survey conducted sometime between
1982 and 1985, respondent had enlarged the area which he purchased from
the late Juan San Andres by 509 square meters belonging to the latter's
estate. According to Peñero, the titled property (Exh. A-5) of respondent was
enclosed with a fence with metal holes and barbed wire, while the expanded
area was fenced with barbed wire and bamboo and light materials.
The second witness, Ricardo San Andres, 9 administrator of the estate,
testified that respondent had not filed any claim before Special Proceedings
No. R-21 and denied knowledge of Exhibits 2 and 3. However, he recognized
the signature in Exhibit 3 as similar to that of the former administrator,
Ramon San Andres. Finally, he declared that the expanded portion occupied
by the family of respondent is now enclosed with barbed wire fence unlike
before where it was found without fence.
On the other hand, Bibiana B. Rodriguez, 10 widow of respondent Vicente
Rodriguez, testified that they had purchased the subject lot from Juan San
Andres, who was their compadre, on September 29, 1964, at P15.00 per
square meter. According to her, they gave P500.00 to the late Juan San
Andres who later affixed his signature to Exhibit 2. She added that on March
30, 1966; Ramon San Andres wrote them a letter asking for P300.00 as partial
payment for the subject lot, but they were able to give him only P100.00. She
added that they had paid the total purchase price of P7,035.00 on November
21, 1988 by depositing it in court. Bibiana B. Rodriquez stated that they had
been in possession of the 509-square meter lot since 1964 when the late
Juan San Andres signed the receipt. (Exh. 2) Lastly, she testified that they did
not know at that time the exact area sold to them because they were told
that the same would be known after the survey of the subject lot.
On September 20, 1994, the trial court 11 rendered judgment in favor of
petitioner. It ruled that there was no contract of sale to speak of for lack of a
valid object because there was no sufficient indication in Exhibit 2 to identify
the property subject of the sale, hence, the need to execute a new contract.
Respondent appealed to the Court of Appeals, which on April 21, 1998
rendered a decision reversing the decision of the trial court. The appellate
court held that the object of the contract was determinable, and that there
was a conditional sale with the balance of the purchase price payable within
five years from the execution of the deed of sale. The dispositive portion of
its decision's reads:
IN VIEW OF ALL THE FOREGOING, the judgment appealed from is hereby
REVERSED and SET ASIDE and a new one entered DISMISSING the complaint
and rendering judgment against the plaintiff-appellee:
1. to accept the P7,035.00 representing the balance of the purchase price of
the portion and which is deposited in court under Official Receipt No. 105754
(page 122, Records);
2. to execute the formal deed of sale over the said 509 square meter portion
of Lot 1914-B-2 in favor of appellant Vicente Rodriguez;
3. to pay the defendant-appellant the amount of P50,000.00 as damages and
P10,000.00 attorney's fees as stipulated by them during the trial of this case;
and
4. to pay the costs of the suit.
SO ORDERED.
Hence, this petition. Petitioner assigns the following errors as having been
allegedly committed by the trial court:
I. THE HON. COURT OF APPEALS ERRED IN HOLDING THAT THE DOCUMENT
(EXHIBIT "2") IS A CONTRACT TO SELL DESPITE ITS LACKING ONE OF THE
ESSENTIAL ELEMENTS OF A CONTRACT, NAMELY, OBJECT CERTAIN AND
SUFFICIENTLY DESCRIBED.
II. THE HON. COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER IS
OBLIGED TO HONOR THE PURPORTED CONTRACT TO SELL DESPITE NON-
FULFILLMENT BY RESPONDENT OF THE CONDITION THEREIN OF PAYMENT OF
THE BALANCE OF THE PURCHASE PRICE.
III. THE HON. COURT OF APPEALS ERRED IN HOLDING THAT CONSIGNATION
WAS VALID DESPITE NON-COMPLIANCE WITH THE MANDATORY
REQUIREMENTS THEREOF.
IV. THE HON. COURT OF APPEALS ERRED IN HOLDING THAT LACHES AND
PRESCRIPTION DO NOT APPLY TO RESPONDENT WHO SOUGHT INDIRECTLY
TO ENFORCE THE PURPORTED CONTRACT AFTER THE LAPSE OF 24 YEARS.
The petition has no merit.
First. Art. 1458 of the Civil Code provides:
By the contract of sale one of the contracting parties obligates himself to
transfer the ownership of and to deliver a determinate thing, and the other
to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
As thus defined, the essential elements of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer ownership in
exchange for the price;
b) Determinate subject matter; and,
c) Price certain in money or its equivalent. 12
As shown in the receipt, dated September 29, 1964, the late Juan San Andres
received P500.00 from respondent as "advance payment for the residential
lot adjoining his previously paid lot on three sides excepting on the frontage;
the agreed purchase price was P15.00 per square meter; and the full amount
of the purchase price was to be based on the results of a survey and would
be due and payable in five (5) years from the execution of a deed of sale.
Petitioner contends, however, that the "property subject of the sale was not
described with sufficient certainty such that there is a necessity of another
agreement between the parties to finally ascertain the identity; size and
purchase price of the property which is the object of the alleged sale." 1 He
argues that the "quantity of the object is not determinate as in fact a survey
is needed to determine its exact size and the full purchase price
therefor" 14 In support of his contention, petitioner cites the following
provisions of the Civil Code:
Art. 1349. The object of every contract must be determinate as to its kind.
The fact that the quantity is not determinable shall not be an obstacle to the
existence of a contract, provided it is possible to determine the same without
the need of a new contract between the parties.
Art. 1460. . . . The requisite that a thing be determinate is satisfied if at the
time the contract is entered into, the thing is capable of being made
determinate without the necessity of a new and further agreement between
the parties.
Petitioner's contention is without merit. There is no dispute that respondent
purchased a portion of Lot 1914-B-2 consisting of 345 square meters. This
portion is located in the middle of Lot 1914-B-2, which has a total area of 854
square meters, and is clearly what was referred to in the receipt as the
"previously paid lot." Since the lot subsequently sold to respondent is said to
adjoin the "previously paid lot" on three sides thereof, the subject lot is
capable of being determined without the need of any new contract. The fact
that the exact area of these adjoining residential lots is subject to the result
of a survey does not detract from the fact that they are determinate or
determinable. As the Court of Appeals explained: 15
Concomitantly, the object of the sale is certain and determinate. Under
Article 1460 of the New Civil Code, a thing sold is determinate if at the time
the contract is entered into, the thing is capable of being determinate
without necessity of a new or further agreement between the parties. Here,
this definition finds realization.
Appellee's Exhibit "A" (page 4, Records) affirmingly shows that the original
345 sq. m. portion earlier sold lies at the middle of Lot 1914-B-2 surrounded
by the remaining portion of the said Lot 1914-B-2 on three (3) sides, in the
east, in the west and in the north. The northern boundary is a 12 meter road.
Conclusively, therefore, this is the only remaining 509 sq. m. portion of Lot
1914-B-2 surrounding the 345 sq. m. lot initially purchased by Rodriguez. It is
quite difined, determinate and certain. Withal, this is the same portion
adjunctively occupied and possessed by Rodriguez since September 29, 1964,
unperturbed by anyone for over twenty (20) years until appellee instituted
this suit.
Thus, all of the essential elements of a contract of sale are present, i.e., that
there was a meeting of the minds between the parties, by virtue of which the
late Juan San Andres undertook to transfer ownership of and to deliver a
determinate thing for a price certain in money. As Art. 1475 of the Civil Code
provides:
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. . . .
That the contract of sale is perfected was confirmed by the former
administrator of the estates, Ramon San Andres, who wrote a letter to
respondent on March 30, 1966 asking for P300.00 as partial payment for the
subject lot. As the Court of Appeals observed:
Without any doubt, the receipt profoundly speaks of a meeting of the mind
between San Andres and Rodriguez for the sale of the property adjoining the
345 square meter portion previously sold to Rodriguez on its three (3) sides
excepting the frontage. The price is certain, which is P15.00 per square
meter. Evidently, this is a perfected contract of sale on a deferred payment
of the purchase price. All the pre-requisite elements for a valid purchase
transaction are present. Sale does not require any formal document for its
existence and validity. And delivery of possession of land sold is a
consummation of the sale (Galar vs. Husain, 20 SCRA 186 [1967]). A private
deed of sale is a valid contract between the parties (Carbonell v. CA, 69 SCRA
99 [1976]).
In the same vein, after the late Juan R. San Andres received the P500.00
downpayment on March 30, 1966, Ramon R. San Andres wrote a letter to
Rodriguez and received from Rodriguez the amount of P100.00 (although
P300.00 was being requested) deductible from the purchase price of the
subject portion. Enrique del Castillo, Ramon's authorized agent,
correspondingly signed the receipt for the P100.00. Surely, this is explicitly a
veritable proof of he sale over the remaining portion of Lot 1914-B-2 and a
confirmation by Ramon San Andres of the existence thereof. 16
There is a need, however, to clarify what the Court of Appeals said is a
conditional contract of sale. Apparently, the appellate court considered as a
"condition" the stipulation of the parties that the full consideration, based on
a survey of the lot, would be due and payable within five (5) years from the
execution of a formal deed of sale. It is evident from the stipulations in the
receipt that the vendor Juan San Andres sold the residential lot in question to
respondent and undertook to transfer the ownership thereof to respondent
without any qualification, reservation or condition. In Ang Yu Asuncion
v. Court of Appeals, 17 we held:
In Dignos v. Court of Appeals (158 SCRA 375), we have said that, although
denominated a "Deed of Conditional Sale," a sale is still absolute where the
contract is devoid of any proviso that title is reserved or the right to
unilaterally rescind is stipulated, e.g., until or unless the price is paid.
Ownership will then be transferred to the buyer upon actual or constructive
delivery (e.g., by the execution of a public document) of the property sold.
Where the condition is imposed upon the perfection of the contract itself,
the failure of the condition would prevent such perfection. If the condition is
imposed on the obligation of a party which is not fulfilled, the other party
may either waive the condition or refuse to proceed with the sale. (Art. 1545,
Civil Code).
Thus, in. one case, when the sellers declared in a "Receipt of Down Payment"
that they received an amount as purchase price for a house and lot without
any reservation of title until full payment of the entire purchase price, the
implication was that they sold their property. 18 In People's Industrial
Commercial Corporation v. Court of Appeals, 19 it was stated:
A deed of sale is considered absolute in nature where there is neither a
stipulation in the deed that title to the property sold is reserved in the seller
until full payment of the price, nor one giving the vendor the right to
unilaterally resolve the contract the moment the buyer fails to pay within a
fixed period.
Applying these principles to this case, it cannot be gainsaid that the contract
of sale between the parties is absolute, not conditional. There is no
reservation of ownership nor a stipulation providing for a unilateral
rescission by either party. In fact, the sale was consummated upon the
delivery of the lot to respondent. 20 Thus, Art. 1477 provides that the
ownership of the thing sold shall be transferred to the vendee upon the
actual or constructive delivery thereof.
The stipulation that the "payment of the full consideration based on a survey
shall be due and payable in five (5) years from the execution of a formal deed
of sale" is not a condition which affects the efficacy of the contract of sale. It
merely provides the manner by which the full consideration is to be
computed and the time within which the same is to be paid. But it does not
affect in any manner the effectivity of the contract. Consequently, the
contention that the absence of a formal deed of sale stipulated in the receipt
prevents the happening of a sale has no merit.
Second. With respect to the contention that the Court of Appeals erred in
upholding the validity of a consignation of P7,035.00 representing the
balance of the purchase price of the lot, nowhere in the decision of the
appellate court is there any mention of consignation. Under Art. 1257 of this
Civil Code, consignation is proper only in cases where an existing obligation is
due. In this case, however, the contracting parties agreed that full payment
of purchase price shall be due and payable within five (5) years from the
execution of a formal deed of sale. At the time respondent deposited the
amount of P7,035.00 in the court, no formal deed of sale had yet been
executed by the parties, and, therefore, the five-year period during which the
purchase price should be paid had not commenced. In short, the purchase
price was not yet due and payable.
This is not to say, however, that the deposit of the purchase price in the
court is erroneous. The Court of Appeals correctly ordered the execution of a
deed of sale and petitioners to accept the amount deposited by respondent.
Third. The claim of petitioners that the price of P7,035.00 is iniquitous is
untenable. The amount is based on the agreement of the parties as
evidenced by the receipt (Exh. 2). Time and again, we have stressed the rule
that a contract is the law between the parties, and courts have no choice but
to enforce such contract so long as they are not contrary to law, morals,
good customs or public policy. Otherwise, court would be interfering with
the freedom of contract of the parties. Simply put, courts cannot stipulate for
the parties nor amend the latter's agreement, for to do so would be to alter
the real intentions of the contracting parties when the contrary function of
courts is to give force and effect to the intentions of the parties.
Fourth. Finally, petitioners argue that respondent is barred by prescription
and laches from enforcing the contract. This contention is likewise
untenable. The contract of sale in this case is perfected, and the delivery of
the subject lot to respondent effectively transferred ownership to him. For
this reason, respondent seeks to comply with his obligation to pay the full
purchase price, but because the deed of sale is yet to be executed, he
deemed it appropriate to deposit the balance of the purchase price in court.
Accordingly, Art. 1144 of the Civil Code has no application to the instant
case. 21 Considering that a survey of the lot has already been conducted and
approved by the Bureau of Lands, respondent's heirs, assign or successors-in-
interest should reimburse the expenses incurred by herein petitioners,
pursuant to the provisions of the contract.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with the
modification that respondent is ORDERED to reimburse petitioners for the
expenses of the survey.
SO ORDERED.
G.R. No. L-24732             April 30, 1968
PIO SIAN MELLIZA, petitioner,
vs.
CITY OF ILOILO, UNIVERSITY OF THE PHILIPPINES and THE COURT
APPEALS, respondents.
Cornelio P. Ravena for petitioner.
Office of the Solicitor General for respondents.
BENGZON, J.P., J.:
Juliana Melliza during her lifetime owned, among other properties, three
parcels of residential land in Iloilo City registered in her name under Original
Certificate of Title No. 3462. Said parcels of land were known as Lots Nos. 2,
5 and 1214. The total area of Lot No. 1214 was 29,073 square meters.
On November 27, 1931 she donated to the then Municipality of Iloilo, 9,000
square meters of Lot 1214, to serve as site for the municipal hall. 1 The
donation was however revoked by the parties for the reason that the area
donated was found inadequate to meet the requirements of the
development plan of the municipality, the so-called "Arellano Plan". 2
Subsequently, Lot No. 1214 was divided by Certeza Surveying Co., Inc. into
Lots 1214-A and 1214-B. And still later, Lot 1214-B was further divided into
Lots 1214-B-1, Lot 1214-B-2 and Lot 1214-B-3. As approved by the Bureau of
Lands, Lot 1214-B-1 with 4,562 square meters, became known as Lot 1214-B;
Lot 1214-B-2, with 6,653 square meters, was designated as Lot 1214-C; and
Lot 1214-B-13, with 4,135 square meters, became Lot 1214-D.
On November 15, 1932 Juliana Melliza executed an instrument without any
caption containing the following:
Que en consideracion a la suma total de SEIS MIL CUATRO CIENTOS
VEINTIDOS PESOS (P6,422.00), moneda filipina que por la presente declaro
haber recibido a mi entera satisfaccion del Gobierno Municipal de Iloilo, cedo
y traspaso en venta real y difinitiva a dicho Gobierno Municipal de Iloilo los
lotes y porciones de los mismos que a continuacion se especifican a saber: el
lote No. 5 en toda su extension; una porcion de 7669 metros cuadrados del
lote No. 2, cuya porcion esta designada como sub-lotes Nos. 2-B y 2-C del
piano de subdivision de dichos lotes preparado por la Certeza Surveying Co.,
Inc., y una porcion de 10,788 metros cuadrados del lote No. 1214 — cuya
porcion esta designada como sub-lotes Nos. 1214-B-2 y 1214-B-3 del mismo
plano de subdivision.
Asimismo nago constar que la cesion y traspaso que ariba se mencionan es
de venta difinitiva, y que para la mejor identificacion de los lotes y porciones
de los mismos que son objeto de la presente, hago constar que dichos lotes y
porciones son los que necesita el Gobierno Municipal de Iloilo para la
construccion de avenidas, parques y City Hall site del Municipal Government
Center de iloilo, segun el plano Arellano.
On January 14, 1938 Juliana Melliza sold her remaining interest in Lot 1214 to
Remedios Sian Villanueva who thereafter obtained her own registered title
thereto, under Transfer Certificate of Title No. 18178. Remedios in turn on
November 4, 1946 transferred her rights to said portion of land to Pio Sian
Melliza, who obtained Transfer Certificate of Title No. 2492 thereover in his
name. Annotated at the back of Pio Sian Melliza's title certificate was the
following:
... (a) that a portion of 10,788 square meters of Lot 1214 now designated as
Lots Nos. 1214-B-2 and 1214-B-3 of the subdivision plan belongs to the
Municipality of Iloilo as per instrument dated November 15, 1932....
On August 24, 1949 the City of Iloilo, which succeeded to the Municipality of
Iloilo, donated the city hall site together with the building thereon, to the
University of the Philippines (Iloilo branch). The site donated consisted of
Lots Nos. 1214-B, 1214-C and 1214-D, with a total area of 15,350 square
meters, more or less.
Sometime in 1952, the University of the Philippines enclosed the site
donated with a wire fence. Pio Sian Melliza thereupon made representations,
thru his lawyer, with the city authorities for payment of the value of the lot
(Lot 1214-B). No recovery was obtained, because as alleged by plaintiff, the
City did not have funds (p. 9, Appellant's Brief.)
The University of the Philippines, meanwhile, obtained Transfer Certificate of
Title No. 7152 covering the three lots, Nos. 1214-B, 1214-C and 1214-D.
On December 10, 1955 Pio Sian Melliza filed an action in the Court of First
Instance of Iloilo against Iloilo City and the University of the Philippines for
recovery of Lot 1214-B or of its value.
The defendants answered, contending that Lot 1214-B was included in the
public instrument executed by Juliana Melliza in favor of Iloilo municipality in
1932. After stipulation of facts and trial, the Court of First Instance rendered
its decision on August 15, 1957, dismissing the complaint. Said court ruled
that the instrument executed by Juliana Melliza in favor of Iloilo municipality
included in the conveyance Lot 1214-B. In support of this conclusion, it
referred to the portion of the instrument stating:
Asimismo hago constar que la cesion y traspaso que arriba se mencionan es
de venta difinitiva, y que para la major identificacion de los lotes y porciones
de los mismos que son objeto de la presente, hago constar que dichos lotes y
porciones son los que necesita el Gobierno municipal de Iloilo para la
construccion de avenidas, parques y City Hall site del Municipal Government
Center de Iloilo, segun el plano Arellano.
and ruled that this meant that Juliana Melliza not only sold Lots 1214-C and
1214-D but also such other portions of lots as were necessary for the
municipal hall site, such as Lot 1214-B. And thus it held that Iloilo City had the
right to donate Lot 1214-B to the U.P.
Pio Sian Melliza appealed to the Court of Appeals. In its decision on May 19,
1965, the Court of Appeals affirmed the interpretation of the Court of First
Instance, that the portion of Lot 1214 sold by Juliana Melliza was not limited
to the 10,788 square meters specifically mentioned but included whatever
was needed for the construction of avenues, parks and the city hall site.
Nonetheless, it ordered the remand of the case for reception of evidence to
determine the area actually taken by Iloilo City for the construction of
avenues, parks and for city hall site.
The present appeal therefrom was then taken to Us by Pio Sian Melliza.
Appellant maintains that the public instrument is clear that only Lots Nos.
1214-C and 1214-D with a total area of 10,788 square meters were the
portions of Lot 1214 included in the sale; that the purpose of the second
paragraph, relied upon for a contrary interpretation, was only to better
identify the lots sold and none other; and that to follow the interpretation
accorded the deed of sale by the Court of Appeals and the Court of First
Instance would render the contract invalid because the law requires as an
essential element of sale, a "determinate" object (Art. 1445, now 1448, Civil
Code).
Appellees, on the other hand, contend that the present appeal improperly
raises only questions of fact. And, further, they argue that the parties to the
document in question really intended to include Lot 1214-B therein, as
shown by the silence of the vendor after Iloilo City exercised ownership
thereover; that not to include it would have been absurd, because said lot is
contiguous to the others admittedly included in the conveyance, lying
directly in front of the city hall, separating that building from Lots 1214-C and
1214-D, which were included therein. And, finally, appellees argue that the
sale's object was determinate, because it could be ascertained, at the time of
the execution of the contract, what lots were needed by Iloilo municipality
for avenues, parks and city hall site "according to the Arellano Plan", since
the Arellano plan was then already in existence.
The appeal before Us calls for the interpretation of the public instrument
dated November 15, 1932. And interpretation of such contract involves a
question of law, since the contract is in the nature of law as between the
parties and their successors-in-interest.
At the outset, it is well to mark that the issue is whether or not the
conveyance by Juliana Melliza to Iloilo municipality included that portion of
Lot 1214 known as Lot 1214-B. If not, then the same was included, in the
instrument subsequently executed by Juliana Melliza of her remaining
interest in Lot 1214 to Remedios Sian Villanueva, who in turn sold what she
thereunder had acquired, to Pio Sian Melliza. It should be stressed, also, that
the sale to Remedios Sian Villanueva — from which Pio Sian Melliza derived
title — did not specifically designate Lot 1214-B, but only such portions of Lot
1214 as were not included in the previous sale to Iloilo
municipality (Stipulation of Facts, par. 5, Record on Appeal, p. 23). And thus,
if said Lot 1214-B had been included in the prior conveyance to Iloilo
municipality, then it was excluded from the sale to Remedios Sian Villanueva
and, later, to Pio Sian Melliza.
The point at issue here is then the true intention of the parties as to the
object of the public instrument Exhibit "D". Said issue revolves on the
paragraph of the public instrument aforequoted and its purpose, i.e.,
whether it was intended merely to further describe the lots already
specifically mentioned, or whether it was intended to cover other lots not yet
specifically mentioned.
First of all, there is no question that the paramount intention of the parties
was to provide Iloilo municipality with lots sufficient or adequate in area for
the construction of the Iloilo City hall site, with its avenues and parks. For this
matter, a previous donation for this purpose between the same parties was
revoked by them, because of inadequacy of the area of the lot donated.
Secondly, reading the public instrument in toto, with special reference to the
paragraphs describing the lots included in the sale, shows that said
instrument describes four parcels of land by their lot numbers and area; and
then it goes on to further describe, not only those lots already mentioned,
but the lots object of the sale, by stating that said lots are the ones needed
for the construction of the city hall site, avenues and parks according to the
Arellano plan. If the parties intended merely to cover the specified lots —
Lots 2, 5, 1214-C and 1214-D, there would scarcely have been any need for
the next paragraph, since these lots are already plainly and very clearly
described by their respective lot number and area. Said next paragraph does
not really add to the clear description that was already given to them in the
previous one.
And, moreover, there is no question either that Lot 1214-B is contiguous to
Lots 1214-C and 1214-D, admittedly covered by the public instrument. It is
stipulated that, after execution of the contract Exhibit "D", the Municipality
of Iloilo possessed it together with the other lots sold. It sits practically in the
heart of the city hall site. Furthermore, Pio Sian Melliza, from the stipulation
of facts, was the notary public of the public instrument. As such, he was
aware of its terms. Said instrument was also registered with the Register of
Deeds and such registration was annotated at the back of the corresponding
title certificate of Juliana Melliza. From these stipulated facts, it can be
inferred that Pio Sian Melliza knew of the aforesaid terms of the instrument
or is chargeable with knowledge of them; that knowing so, he should have
examined the Arellano plan in relation to the public instrument Exhibit "D";
that, furthermore, he should have taken notice of the possession first by the
Municipality of Iloilo, then by the City of Iloilo and later by the University of
the Philippines of Lot 1214-B as part of the city hall site conveyed under that
public instrument, and raised proper objections thereto if it was his position
that the same was not included in the same. The fact remains that, instead,
for twenty long years, Pio Sian Melliza and his predecessors-in-interest, did
not object to said possession, nor exercise any act of possession over Lot
1214-B. Applying, therefore, principles of civil law, as well as laches,
estoppel, and equity, said lot must necessarily be deemed included in the
conveyance in favor of Iloilo municipality, now Iloilo City.
WHEREFORE, the decision appealed from is affirmed insofar as it affirms that
of the Court of First Instance, and the complaint in this case is dismissed. No
costs. So ordered.

It is therefore the more reasonable interpretation, to view it as describing

those other portions of land contiguous to the lots aforementioned that, by
reference to the Arellano plan, will be found needed for the purpose at hand,
the construction of the city hall site.

Appellant however challenges this view on the ground that the description of
said other lots in the aforequoted second paragraph of the public instrument
would thereby be legally insufficient, because the object would allegedly not
be determinate as required by law.

Such contention fails on several counts. The requirement of the law that a
sale must have for its object a determinate thing, is fulfilled as long as, at the
time the contract is entered into, the object of the sale is capable of being
made determinate without the necessity of a new or further agreement
between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil Code).
The specific mention of some of the lots plus the statement that the lots
object of the sale are the ones needed for city hall site, avenues and
parks, according to the Arellano plan, sufficiently provides a basis, as of the
time of the execution of the contract, for rendering determinate said lots
without the need of a new and further agreement of the parties.

The Arellano plan was in existence as early as 1928. As stated, the previous
donation of land for city hall site on November 27, 1931 was revoked on
March 6, 1932 for being inadequate in area under said Arellano plan.
Appellant claims that although said plan existed, its metes and bounds were
not fixed until 1935, and thus it could not be a basis for determining the lots
sold on November 15, 1932. Appellant however fails to consider that
the area needed under that plan for city hall site was then already known;
that the specific mention of some of the lots covered by the sale in effect
G.R. No. L-22487               May 21, 1969
fixed the corresponding location of the city hall site under the plan; that,
therefore, considering the said lots specifically mentioned in the public ASUNCION ATILANO, CRISTINA ATILANO, ROSARIO ATILANO, assisted by
instrument Exhibit "D", and the projected city hall site, with its area, as then their respective husbands, HILARIO ROMANO, FELIPE BERNARDO, and
shown in the Arellano plan (Exhibit 2), it could be determined which, and MAXIMO LACANDALO, ISABEL ATILANO and GREGORIO ATILANO, plaintiffs-
how much of the portions of land contiguous to those specifically named, appellees,
were needed for the construction of the city hall site.
vs.
LADISLAO ATILANO and GREGORIO M. ATILANO, defendants-appellants.
Climaco and Azcarraga for plaintiff-appellee.
T. de los Santos for defendants-appellants.
MAKALINTAL, J.:
In 1916 Eulogio Atilano I acquired, by purchase from one Gerardo Villanueva,
lot No. 535 of the then municipality of Zamboanga cadastre. The vendee
thereafter obtained transfer certificate of title No. 1134 in his name. In 1920
he had the land subdivided into five parts, identified as lots Nos. 535-A, 535-
B, 535-C, 535-D and 535-E, respectively. On May 18 of the same year, after
the subdivision had been effected, Eulogio Atilano I, for the sum of P150.00,
executed a deed of sale covering lot No. 535-E in favor of his brother Eulogio
Atilano II, who thereupon obtained transfer certificate of title No. 3129 in his
name. Three other portions, namely lots Nos. 535-B, 535-C and 535-D, were
likewise sold to other persons, the original owner, Eulogio Atilano I, retaining
for himself only the remaining portion of the land, presumably covered by
the title to lot No. 535-A. Upon his death the title to this lot passed to
Ladislao Atilano, defendant in this case, in whose name the corresponding
certificate (No. T-5056) was issued.
On December 6, 1952, Eulogio Atilano II having become a widower upon the
death of his wife Luisa Bautista, he and his children obtained transfer
certificate of title No. 4889 over lot No. 535-E in their names as co-owners.
Then, on July 16, 1959, desiring to put an end to the co-ownership, they had
the land resurveyed so that it could properly be subdivided; and it was then
discovered that the land they were actually occupying on the strength of the
deed of sale executed in 1920 was lot No. 535-A and not lot 535-E, as
referred to in the deed, while the land which remained in the possession of
the vendor, Eulogio Atilano I, and which passed to his successor, defendant
Ladislao Atilano, was lot No. 535-E and not lot No. 535-A.
setting and by its physical metes and bounds, and not by the mere lot
number assigned to it in the certificate of title. In the particular case before
us, the portion correctly referred to as lot No. 535-A was already in the
possession of the vendee, Eulogio Atilano II, who had constructed his
residence therein, even before the sale in his favor even before the
subdivision of the entire lot No. 535 at the instance of its owner, Eulogio
Atillano I. In like manner the latter had his house on the portion correctly
identified, after the subdivision, as lot No. 535-E, even adding to the area
thereof by purchasing a portion of an adjoining property belonging to a
different owner. The two brothers continued in possession of the respective
portions the rest of their lives, obviously ignorant of the initial mistake in the
designation of the lot subject of the 1920 until 1959, when the mistake was
discovered for the first time.
The real issue here is not adverse possession, but the real intention of the
parties to that sale. From all the facts and circumstances we are convinced
that the object thereof, as intended and understood by the parties, was that
specific portion where the vendee was then already residing, where he
reconstructed his house at the end of the war, and where his heirs, the
plaintiffs herein, continued to reside thereafter: namely, lot No. 535-A; and
that its designation as lot No. 535-E in the deed of sale was simple mistake in
the drafting of the document.1âwphi1.ñet The mistake did not vitiate the
consent of the parties, or affect the validity and binding effect of the contract
between them. The new Civil Code provides a remedy for such a situation by
means of reformation of the instrument. This remedy is available when,
there having been a meeting of the funds of the parties to a contract, their
true intention is not expressed in the instrument purporting to embody the
agreement by reason of mistake, fraud, inequitable conduct on accident (Art.
1359, et seq.) In this case, the deed of sale executed in 1920 need no longer
reformed. The parties have retained possession of their respective properties
conformably to the real intention of the parties to that sale, and all they
should do is to execute mutual deeds of conveyance.

On January 25, 1960, the heirs of Eulogio Atilano II, who was by then also
deceased, filed the present action in the Court of First Instance of
Zamboanga, alleging, inter alia, that they had offered to surrender to the
defendants the possession of lot No. 535-A and demanded in return the
possession of lot No. 535-E, but that the defendants had refused to accept
the exchange. The plaintiffs' insistence is quite understandable, since lot No.
535-E has an area of 2,612 square meters, as compared to the 1,808 square-
meter area of lot No. 535-A.
WHEREFORE, the judgment appealed from is reversed. The plaintiffs are
ordered to execute a deed of conveyance of lot No. 535-E in favor of the
defendants, and the latter in turn, are ordered to execute a similar
document, covering lot No. 595-A, in favor of the plaintiffs. Costs against the
latter.

In their answer to the complaint the defendants alleged that the reference to
lot No. 535-E in the deed of sale of May 18, 1920 was an involuntary error;
that the intention of the parties to that sale was to convey the lot correctly
identified as lot No. 535-A; that since 1916, when he acquired the entirety of
lot No. 535, and up to the time of his death, Eulogio Atilano I had been
possessing and had his house on the portion designated as lot No. 535-E,
after which he was succeeded in such possession by the defendants herein;
and that as a matter of fact Eulogio Atilano I even increased the area under
his possession when on June 11, 1920 he bought a portion of an adjoining
lot, No. 536, from its owner Fruto del Carpio. On the basis of the foregoing
allegations the defendants interposed a counterclaim, praying that the
plaintiffs be ordered to execute in their favor the corresponding deed of
transfer with respect to lot No. 535-E.

The trial court rendered judgment for the plaintiffs on the sole ground that
since the property was registered under the Land Registration Act the
defendants could not acquire it through prescription. There can be, of
course, no dispute as to the correctness of this legal proposition; but the
defendants, aside from alleging adverse possession in their answer and
counterclaim, also alleged error in the deed of sale of May 18, 1920, thus:
"Eulogio Atilano 1.o, por equivocacion o error involuntario, cedio y traspaso a
su hermano Eulogio Atilano 2.do el lote No. 535-E en vez del Lote No. 535-
G.R. No. 74470 March 8, 1989
A."lawphi1.ñet
NATIONAL GRAINS AUTHORITY and WILLLAM CABAL, petitioners
The logic and common sense of the situation lean heavily in favor of the
vs.
defendants' contention. When one sells or buys real property — a piece of
THE INTERMEDIATE APPELLATE COURT and LEON SORIANO, respondents.
land, for example — one sells or buys the property as he sees it, in its actual
Cordoba, Zapanta, Rola & Garcia for petitioner National Grains Authority.
Plaridel Mar Israel for respondent Leon Soriano.
MEDIALDEA, J.:
This is a petition for review of the decision (pp. 9-21, Rollo) of the
Intermediate Appellate Court (now Court of Appeals) dated December 23,
1985 in A.C. G.R. CV No. 03812 entitled, "Leon Soriano, Plaintiff- Appellee
versus National Grains Authority and William Cabal, Defendants Appellants",
which affirmed the decision of the Court of First Instance of Cagayan, in Civil
Case No. 2754 and its resolution (p. 28, Rollo) dated April 17, 1986 which
denied the Motion for Reconsideration filed therein.
The antecedent facts of the instant case are as follows:
Petitioner National Grains Authority (now National Food Authority, NFA for
short) is a government agency created under Presidential Decree No. 4. One
of its incidental functions is the buying of palay grains from qualified farmers.
On August 23, 1979, private respondent Leon Soriano offered to sell palay
grains to the NFA, through William Cabal, the Provincial Manager of NFA
stationed at Tuguegarao, Cagayan. He submitted the documents required by
the NFA for pre-qualifying as a seller, namely: (1) Farmer's Information Sheet
accomplished by Soriano and certified by a Bureau of Agricultural Extension
(BAEX) technician, Napoleon Callangan, (2) Xerox copies of four (4) tax
declarations of the riceland leased to him and copies of the lease contract
between him and Judge Concepcion Salud, and (3) his Residence Tax
Certificate. Private respondent Soriano's documents were processed and
accordingly, he was given a quota of 2,640 cavans of palay. The quota noted
in the Farmer's Information Sheet represented the maximum number of
cavans of palay that Soriano may sell to the NFA.
In the afternoon of August 23, 1979 and on the following day, August 24,
1979, Soriano delivered 630 cavans of palay. The palay delivered during
these two days were not rebagged, classified and weighed. when Soriano
demanded payment of the 630 cavans of palay, he was informed that its
payment will be held in abeyance since Mr. Cabal was still investigating on an
information he received that Soriano was not a bona tide farmer and the
palay delivered by him was not produced from his farmland but was taken
from the warehouse of a rice trader, Ben de Guzman. On August 28, 1979,
Cabal wrote Soriano advising him to withdraw from the NFA warehouse the
630 cavans Soriano delivered stating that NFA cannot legally accept the said
delivery on the basis of the subsequent certification of the BAEX technician,
Napoleon Callangan that Soriano is not a bona fide farmer.
Instead of withdrawing the 630 cavans of palay, private respondent Soriano
insisted that the palay grains delivered be paid. He then filed a complaint for
specific performance and/or collection of money with damages on November
2, 1979, against the National Food Authority and Mr. William Cabal,
Provincial Manager of NFA with the Court of First Instance of Tuguegarao,
and docketed as Civil Case No. 2754.
Meanwhile, by agreement of the parties and upon order of the trial court,
the 630 cavans of palay in question were withdrawn from the warehouse of
NFA. An inventory was made by the sheriff as representative of the Court, a
representative of Soriano and a representative of NFA (p. 13, Rollo).
On September 30, 1982, the trial court rendered judgment ordering
petitioner National Food Authority, its officers and agents to pay respondent
Soriano (as plaintiff in Civil Case No. 2754) the amount of P 47,250.00
representing the unpaid price of the 630 cavans of palay plus legal interest
thereof (p. 1-2, CA Decision). The dispositive portion reads as follows:
WHEREFORE, the Court renders judgment in favor of the plaintiff and against
the defendants National Grains Authority, and William Cabal and hereby
orders:
1. The National Grains Authority, now the National Food Authority, its
officers and agents, and Mr. William Cabal, the Provincial Manager of the
National Grains Authority at the time of the filing of this case, assigned at
Tuguegarao, Cagayan, whomsoever is his successors, to pay to the plaintiff
Leon T. Soriano, the amount of P47,250.00, representing the unpaid price of
the palay deliveries made by the plaintiff to the defendants consisting of 630
cavans at the rate Pl.50 per kilo of 50 kilos per cavan of palay;
2. That the defendants National Grains Authority, now National Food
Authority, its officer and/or agents, and Mr. William Cabal, the Provincial
Manager of the National Grains Authority, at the time of the filing of this case
assigned at Tuguegarao, Cagayan or whomsoever is his successors, are
likewise ordered to pay the plaintiff Leon T. Soriano, the legal interest at the
rate of TWELVE (12%) percent per annum, of the amount of P 47,250.00
from the filing of the complaint on November 20, 1979, up to the final
payment of the price of P 47,250.00;
3. That the defendants National Grains Authority, now National Food
Authority, or their agents and duly authorized representatives can now
withdraw the total number of bags (630 bags with an excess of 13 bags) now
on deposit in the bonded warehouse of Eng. Ben de Guzman at Tuguegarao,
Cagayan pursuant to the order of this court, and as appearing in the written
inventory dated October 10, 1980, (Exhibit F for the plaintiff and Exhibit 20
for the defendants) upon payment of the price of P 47,250.00 and TWELVE
PERCENT (12%) legal interest to the plaintiff,
4. That the counterclaim of the defendants is hereby dismissed;
5. That there is no pronouncement as to the award of moral and exemplary
damages and attorney's fees; and
6. That there is no pronouncement as to costs.
SO ORDERED (pp. 9-10, Rollo)
Petitioners' motion for reconsideration of the decision was denied on
December 6, 1982.
Petitioners' appealed the trial court's decision to the Intermediate Appellate
Court. In a decision promulgated on December 23, 1986 (pp. 9-21, Rollo) the
then Intermediate Appellate Court upheld the findings of the trial court and
affirmed the decision ordering NFA and its officers to pay Soriano the price of
the 630 cavans of rice plus interest. Petitioners' motion for reconsideration
of the appellate court's decision was denied in a resolution dated April 17,
1986 (p. 28, Rollo).
Hence, this petition for review filed by the National Food Authority and Mr.
William Cabal on May 15, 1986 assailing the decision of the Intermediate
Appellate Court on the sole issue of whether or not there was a contract of
sale in the case at bar.
Petitioners contend that the 630 cavans of palay delivered by Soriano on
August 23, 1979 was made only for purposes of having it offered for sale.
Further, petitioners stated that the procedure then prevailing in matters of
palay procurement from qualified farmers were: firstly, there is a rebagging
wherein the palay is transferred from a private sack of a farmer to the NFA
sack; secondly, after the rebagging has been undertaken, classification of the
palay is made to determine its variety; thirdly, after the determination of its
variety and convinced that it passed the quality standard, the same will be
weighed to determine the number of kilos; and finally, it will be piled inside
the warehouse after the preparation of the Warehouse Stock Receipt (WSP)
indicating therein the number of kilos, the variety and the number of bags.
Under this procedure, rebagging is the initial operative act signifying
acceptance, and acceptance will be considered complete only after the
preparation of the Warehouse Stock Receipt (WSR). When the 630 cavans of
palay were brought by Soriano to the Carig warehouse of NFA they were only
offered for sale. Since the same were not rebagged, classified and weighed in
accordance with the palay procurement program of NFA, there was no
acceptance of the offer which, to petitioners' mind is a clear case of
solicitation or an unaccepted offer to sell.
The petition is not impressed with merit. SO ORDERED.

Article 1458 of the Civil Code of the Philippines defines sale as a contract
whereby one of the contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing, and the other party to pay
therefore a price certain in money or its equivalent. A contract, on the other
hand, is a meeting of minds between two (2) persons whereby one binds
himself, with respect to the other, to give something or to render some
service (Art. 1305, Civil Code of the Philippines). The essential requisites of
contracts are: (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 (Art. 1318, Civil Code of the Philippines.

In the case at bar, Soriano initially offered to sell palay grains produced in his
farmland to NFA. When the latter accepted the offer by noting in Soriano's
Farmer's Information Sheet a quota of 2,640 cavans, there was already a
meeting of the minds between the parties. The object of the contract, being
the palay grains produced in Soriano's farmland and the NFA was to pay the
same depending upon its quality. The fact that the exact number of cavans of
palay to be delivered has not been determined does not affect the perfection
of the contract. Article 1349 of the New Civil Code provides: ". . .. The fact
that the quantity is not determinate shall not be an obstacle to the existence
of the contract, provided it is possible to determine the same, without the
need of a new contract between the parties." In this case, there was no need
for NFA and Soriano to enter into a new contract to determine the exact
number of cavans of palay to be sold. Soriano can deliver so much of his
produce as long as it does not exceed 2,640 cavans.

In its memorandum (pp. 66-71, Rollo) dated December 4, 1986, petitioners

further contend that there was no contract of sale because of the absence of
an essential requisite in contracts, namely, consent. It cited Section 1319 of
the Civil Code which states: "Consent is manifested by the meeting of the
offer and the acceptance of the thing and the cause which are to constitute
the contract. ... " Following this line, petitioners contend that there was no
consent because there was no acceptance of the 630 cavans of palay in
question.

The above contention of petitioner is not correct Sale is a consensual

contract, " ... , there is perfection when there is consent upon the subject
matter and price, even if neither is delivered." (Obana vs. C.A., L-36249,
March 29, 1985, 135 SCRA 557, 560) This is provided by Article 1475 of the
Civil Code which states:

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.

xxx

The acceptance referred to which determines consent is the acceptance of

the offer of one party by the other and not of the goods delivered as
contended by petitioners.

From the moment the contract of sale is perfected, it is incumbent upon the
parties to comply with their mutual obligations or "the parties may
reciprocally demand performance" thereof. (Article 1475, Civil Code, 2nd
par.).

The reason why NFA initially refused acceptance of the 630 cavans of palay
delivered by Soriano is that it (NFA) cannot legally accept the said delivery
because Soriano is allegedly not a bona fide farmer. The trial court and the
appellate court found that Soriano was a bona fide farmer and therefore, he
was qualified to sell palay grains to NFA.

Both courts likewise agree that NFA's refusal to accept was without just
cause. The above factual findings which are supported by the record should
not be disturbed on appeal.

ACCORDINGLY, the instant petition for review is DISMISSED. The assailed [G.R. No. 105387. November 11, 1993.]
decision of the then Intermediate Appellate Court (now Court of Appeals) is
affirmed. No costs. JOHANNES SCHUBACK & SONS PHILIPPINE TRADING
CORPORATION, Petitioner, v. THE HON. COURT OF APPEALS, RAMON SAN
JOSE, JR., doing business under the name and style "PHILIPPINE SJ
INDUSTRIAL TRADING," respondents.
Hernandez, Velicaria, Vibar & Santiago for Petitioner.
Ernesto M. Tomaneng for Private Respondent.
DECISION
ROMERO, J.:
In this petition for review on certiorari, petitioner questions the reversal by
the Court of Appeals 1 of the trial court’s ruling that a contract of sale had
been perfected between petitioner and private respondent over bus spare
parts.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
The facts as quoted from the decision of the Court of Appeals are as
follows:jgc:chanrobles.com.ph
"Sometime in 1981, defendant 2 established contact with plaintiff 3 through
the Philippine Consulate General in Hamburg, West Germany, because he
wanted to purchase MAN bus spare parts from Germany. Plaintiff
communicated with its trading partner, Johannes Schuback and Sohne
Handelsgesellschaft m.b.n. & Co. (Schuback Hamburg) regarding the spare
parts defendant wanted to order.
On October 16, 1981, defendant submitted to plaintiff a list of the parts
(Exhibit B) he wanted to purchase with specific part numbers and
description. Plaintiff referred the list to Schuback Hamburg for quotations.
Upon receipt of the quotations, plaintiff sent to defendant a letter dated 25
November, 1981 (Exh. C) enclosing its offer on the items listed by defendant.
On December 4, 1981, defendant informed plaintiff that he preferred
genuine to replacement parts, and requested that he be given a 15%
discount on all items (Exh. D).
On December 17, 1981, plaintiff submitted its formal offer (Exh. E) containing
the item number, quantity, part number, description, unit price and total to
defendant. On December 24, 1981, defendant informed plaintiff of his desire
to avail of the prices of the parts at that time and enclosed its Purchase
Order No. 0101 dated 14 December 1981 (Exhs. F to F-4). Said Purchase
Order contained the item number, part number and description. Defendant
promised to submit the quantity per unit he wanted to order on December
28 or 29 (Exh. F).
On December 29, 1981, defendant personally submitted the quantities he
wanted to Mr. Dieter Reichert, General Manager of plaintiff, at the latter’s
residence (t.s.n., 13 December, 1984, p. 36). The quantities were written in
ink by defendant in the same Purchase Order previously submitted. At the
bottom of said Purchase Order, defendant wrote in ink above his signature:
‘NOTE: Above P.O. will include a 3% discount. The above will serve as our
initial P.O.’ (Exhs. G to G-3-a).
Plaintiff immediately ordered the items needed by defendant from Schuback
Hamburg to enable defendant to avail of the old prices. Schuback Hamburg
in turn ordered (Order No. 12204) the items from NDK, a supplier of MAN
spare parts in West Germany. On January 4, 1982, Schuback Hamburg sent
plaintiff a proforma invoice (Exhs. N-1 to N-3) to be used by defendant in
applying for a letter of credit. Said invoice required that the letter of credit be
opened in favor of Schuback Hamburg. Defendant acknowledged receipt of
the invoice (t.s.n., 19 December 1984, p. 40).
An order confirmation (Exhs. I, I-1) was later sent by Schuback Hamburg to
plaintiff which was forwarded to and received by defendant on February 3,
1981 (t.s.n., 13 Dec. 1984, p. 42).
On February 16, 1982, plaintiff reminded defendant to open the letter of
credit to avoid delay in shipment and payment of interest (Exh. J). Defendant
replied, mentioning, among others, the difficulty he was encountering in
securing the required dollar allocations and applying for the letter of credit,
procuring a loan and looking for a partner-financier, and of finding ways ‘to
proceed with our orders’ (Exh. K).
In the meantime, Schuback Hamburg received invoices from NDK for partial
deliveries on Order No. 12204 (Direct Interrogatories, 07 Oct. 1985, p. 3).
Schuback Hamburg paid NDK. The latter confirmed receipt of payments
made on February 16, 1984 (Exh. C-Deposition).
On October 18, 1982, plaintiff again reminded defendant of his order and
advised that the case may be endorsed to its lawyers (Exh. L). Defendant
replied that he did not make any valid Purchase Order and that there was no
definite contract between him and plaintiff (Exh. M). Plaintiff sent a rejoinder
explaining that there is a valid Purchase Order and suggesting that defendant
either proceed with the order and open a letter of credit or cancel the order
and pay the cancellation fee of 30% F.O.B. value, or plaintiff will endorse the
case to its lawyers (Exh. N).
Schuback Hamburg issued a Statement of Account (Exh. P) to plaintiff
enclosing therewith Debit Note (Exh. O) charging plaintiff 30% cancellation
fee, storage and interest charges in the total amount of DM 51,917.81. Said
amount was deducted from plaintiff’s account with Schuback Hamburg
(Direct Interrogatories, 07 October, 1985).
Demand letters sent to defendant by plaintiff’s counsel dated March 22,
1983 and June 9, 1983 were to no avail (Exhs. R and S)."cralaw virtua1aw
library
Consequently, petitioner filed a complaint for recovery of actual or
compensatory damages, unearned profits, interest, attorney’s fees and costs
against private Respondent.chanrobles.com.ph : virtual law library
In its decision dated June 13, 1988, the trial court 4 ruled in favor of
petitioner by ordering private respondent to pay petitioner, among others,
actual compensatory damages in the amount of DM 51,917.81, unearned
profits in the amount of DM 14,061.07, or their peso equivalent.
Thereafter, private respondent elevated his case before the Court of Appeals.
On February 18, 1992, the appellate court reversed the decision of the trial
court and dismissed the complaint of petitioner. It ruled that there was no
perfection of contract since there was no meeting of the minds as to the
price between the last week of December 1981 and the first week of January
1982.
The issue posed for resolution is whether or not a contract of sale has been
perfected between the parties.
We reverse the decision of the Court of Appeals and reinstate the decision of
the trial court. It bears emphasizing that a "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 . . ." 5
Article 1319 of the Civil Code states: "Consent is manifested by the meeting
of the offer and acceptance upon the thing and the cause which are to
constitute the contract. The offer must be certain and the acceptance
absolute. A qualified acceptance constitutes a counter offer." The facts
presented to us indicate that consent on both sides has been manifested.
 for respondent to avail of the said old prices since the perfection of the
The offer by petitioner was manifested on December 17, 1981 when contract would arise much later, or after the end of the year 1981, or when
petitioner submitted its proposal containing the item number, quantity, part he finally opens the letter of credit." 6
number, description, the unit price and total to private Respondent. On
December 24, 1981, private respondent informed petitioner of his desire to WHEREFORE, the petition is GRANTED and the decision of the trial court
avail of the prices of the parts at that time and simultaneously enclosed its dated June 13, 1988 is REINSTATED with modification.
Purchase Order No. 0101 dated December 14, 1981. At this stage, a meeting
of the minds between vendor and vendee has occurred, the object of the SO ORDERED.
contract being the spare parts and the consideration, the price stated in
petitioner’s offer dated December 17, 1981 and accepted by the respondent
on December 24, 1981.

Although said purchase order did not contain the quantity he wanted to
order, private respondent made good his promise to communicate the same
on December 29, 1981. At this juncture, it should be pointed out that private
respondent was already in the process of executing the agreement
previously reached between the parties.

Below Exh. G-3, marked as Exhibit G-3-A, there appears this statement made
by private respondent: "Note. above P.O. will include a 3% discount. The
above will serve as our initial P.O." This notation on the purchase order was
another indication of acceptance on the part of the vendee, for by requesting
a 3% discount, he implicitly accepted the price as first offered by the vendor.
The immediate acceptance by the vendee of the offer was impelled by the
fact that on January 1, 1982, prices would go up, as in fact, the petitioner
informed him that there would be a 7% increase effective January 1982. On
the other hand, concurrence by the vendor with the said discount requested
by the vendee was manifested when petitioner immediately ordered the
items needed by private respondent from Schuback Hamburg which in turn
ordered from NDK, a supplier of MAN spare parts in West Germany.

When petitioner forwarded its purchase order to NDK, the price was still
pegged at the old one. Thus, the pronouncement of the Court of Appeals that
there was no confirmed price on or about the last week of December 1981
and/or the first week of January 1982 was erroneous.

While we agree with the trial court’s conclusion that indeed a perfection of
the contract was reached between the parties, we differ as to the exact date
when it occurred, for perfection took place, not on December 29, 1981, but
rather on December 24, 1981. Although the quantity to be ordered was
made determinate only on December 29, 1981, quantity is immaterial in the
perfection of a sales contract. What is of importance is the meeting of the
minds as to the object and cause, which from the facts disclosed, show that
as of December 24, 1981, these essential elements had already concurred.

On the part of the buyer, the situation reveals that private respondent failed
to open an irrevocable letter of credit without recourse in favor of Johannes
Schuback of Hamburg, Germany. This omission, however, does not prevent
the perfection of the contract between the parties, for the g of a letter of
credit is not to be deemed a suspensive condition. The facts herein do not
show that petitioner reserved title to the goods until private respondent had
opened a letter of credit. Petitioner, in the course of its dealings with private
respondent, did not incorporate any provision declaring their contract of sale
without effect until after the fulfillment of the act of opening a letter of
credit.

The opening of a letter of credit in favor of a vendor is only a mode of

payment. It is not among the essential requirements of a contract of sale
enumerated in Article 1305 and 1474 of the Civil Code, the absence of any of
which will prevent the perfection of the contract from taking place.

To adopt the Court of Appeals’ ruling that the contract of sale was
dependent on the opening of a letter of credit would be untenable from a
pragmatic point of view because private respondent would not be able to
avail of the old prices which were open to him only for a limited period of
time. This explains why private respondent immediately placed the order
with petitioner which, in turn promptly contacted its trading partner in
Germany. As succinctly stated by petitioner, "it would have been impossible G.R. No. 149750               June 16, 2003
AURORA ALCANTARA-DAUS, Petitioner,
vs.
Spouses HERMOSO and SOCORRO DE LEON, Respondents.
DECISION
PANGANIBAN, J.:
While a contract of sale is perfected by mere consent, ownership of the thing
sold is acquired only upon its delivery to the buyer. Upon the perfection of
the sale, the seller assumes the obligation to transfer ownership and to
deliver the thing sold, but the real right of ownership is transferred only "by
tradition" or delivery thereof to the buyer.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court,
seeking to set aside the February 9, 2001 Decision and the August 31, 2001
Resolution of the Court of Appeals2 (CA) in CA-GR CV No. 47587. The
dispositive portion of the assailed Decision reads as follows:
"WHEREFORE, premises considered, the decision of the trial court is hereby
REVERSED, and judgment rendered:
1. Declaring null and void and of no effect, the [D]eed of [A]bsolute [S]ale
dated December 6, 1975, the [D]eed of [E]xtra-judicial [P]artition and
[Q]uitclaim dated July 1, 1985, and T.C.T. No. T-31262;
2. Declaring T.C.T. No. 42238 as valid and binding;
3. Eliminating the award of ₱5,000.00 each to be paid to defendants-
appellees."3
The assailed Resolution4 denied petitioner’s Motion for Reconsideration.
The Facts
The antecedents of the case were summarized by the Regional Trial Court
(RTC) and adopted by the CA as follows:
"This is a [C]omplaint for annulment of documents and title, ownership,
possession, injunction, preliminary injunction, restraining order and
damages.
"[Respondents] alleged in their [C]omplaint that they are the owners of a
parcel of land hereunder described as follows, to wit:
‘A parcel of land (Lot No. 4786 of the Cadastral Survey of San Manuel)
situated in the Municipality of San Manuel, Bounded on the NW., by Lot No.
4785; and on the SE., by Lot Nos. 11094 & 11096; containing an area of Four
Thousand Two Hundred Twelve (4,212) sq. m., more or less. Covered by
Original Certificate of Title No. 22134 of the Land Records of Pangasinan.’
which [Respondent] Hermoso de Leon inherited from his father Marcelino de
Leon by virtue of a [D]eed of [E]xtra-judicial [P]artition. Sometime in the early
1960s, [respondents] engaged the services of the late Atty. Florencio Juan to
take care of the documents of the properties of his parents. Atty. Juan let
them sign voluminous documents. After the death of Atty. Juan, some
documents surfaced and most revealed that their properties had been
conveyed by sale or quitclaim to [Respondent] Hermoso’s brothers and
sisters, to Atty. Juan and his sisters, when in truth and in fact, no such
conveyances were ever intended by them. His signature in the [D]eed of
[E]xtra-judicial [P]artition with [Q]uitclaim made in favor of x x x Rodolfo de
Leon was forged. They discovered that the land in question was sold by x x x
Rodolfo de Leon to [Petitioner] Aurora Alcantara. They demanded annulment
of the document and reconveyance but defendants refused x x x.
x x x           x x x          x x x
"[Petitioner] Aurora Alcantara-Daus [averred] that she bought the land in
question in good faith and for value on December 6, 1975. [She] has been in
continuous, public, peaceful, open possession over the same and has been
appropriating the produce thereof without objection from anyone."5
On August 23, 1994, the RTC (Branch 48) of Urdaneta, Pangasinan6 rendered
its Decision7 in favor of herein petitioner. It ruled that respondents’ claim was
barred by laches, because more than 18 years had passed since the land was
sold. It further ruled that since it was a notarial document, the Deed of
Extrajudicial Partition in favor of Rodolfo de Leon was presumptively
authentic.
Ruling of the Court of Appeals
In reversing the RTC, the CA held that laches did not bar respondents from
pursuing their claim.1âwphi1 Notwithstanding the delay, laches is a doctrine
in equity and may not be invoked to resist the enforcement of a legal right.
The appellate court also held that since Rodolfo de Leon was not the owner
of the land at the time of the sale, he could not transfer any land rights to
petitioner. It further declared that the signature of Hermoso de Leon on the
Deed of Extrajudicial Partition and Quitclaim -- upon which petitioner bases
her claim -- was a forgery. It added that under the above circumstances,
petitioner could not be said to be a buyer in good faith.1âwphi1
Hence, this Petition.8
The Issues
Petitioner raises the following issues for our consideration:
"1. Whether or not the Deed of Absolute Sale dated December 6, 1975
executed by Rodolfo de Leon (deceased) over the land in question in favor of
petitioner was perfected and binding upon the parties therein?
"2. Whether or not the evidentiary weight of the Deed of Extrajudicial
Partition with Quitclaim, executed by [R]espondent Hermoso de Leon, Perlita
de Leon and Carlota de Leon in favor of Rodolfo de Leon was overcome by
more than [a] preponderance of evidence of respondents?
"3. Whether or not the possession of petitioner including her predecessor-in-
interest Rodolfo de Leon over the land in question was in good faith?
"4. And whether or not the instant case initiated and filed by respondents on
February 24, 1993 before the trial court has prescribed and respondents are
guilty of laches?"9
The Court’s Ruling
The Petition has no merit.
First Issue:
Validity of the Deed of Absolute Sale
Petitioner argues that, having been perfected, the Contract of Sale executed
on December 6, 1975 was thus binding upon the parties thereto.
A contract of sale is consensual. It is perfected by mere consent,10 upon a
meeting of the minds11 on the offer and the acceptance thereof based on
subject matter, price and terms of payment.12 At this stage, the seller’s
ownership of the thing sold is not an element in the perfection of the
contract of sale.
The contract, however, creates an obligation on the part of the seller to
transfer ownership and to deliver the subject matter of the contract.13 It is
during the delivery that the law requires the seller to have the right to
transfer ownership of the thing sold.14 In general, a perfected contract of sale
cannot be challenged on the ground of the seller’s non-ownership of the
thing sold at the time of the perfection of the contract.15
Further, even after the contract of sale has been perfected between the
parties, its consummation by delivery is yet another matter. It is through
tradition or delivery that the buyer acquires the real right of ownership over
the thing sold.16
Undisputed is the fact that at the time of the sale, Rodolfo de Leon was not Article 1141 of the New Civil Code provides that real actions over immovable
the owner of the land he delivered to petitioner. Thus, the consummation of properties prescribe after thirty years. This period for filing an action is
the contract and the consequent transfer of ownership would depend on interrupted when a complaint is filed in court.30 Rodolfo de Leon alleged that
whether he subsequently acquired ownership of the land in accordance with the land had been allocated to him by his brother Hermoso de Leon in March
Article 1434 of the Civil Code.17 Therefore, we need to resolve the issue of the 1963,31 but that the Deed of Extrajudicial Partition assigning the contested
authenticity and the due execution of the Extrajudicial Partition and land to the latter was executed only on September 16, 1963.32 In any case,
Quitclaim in his favor. the Complaint to recover the land from petitioner was filed on February 24,
1993,33 which was within the 30-year prescriptive period.
Second Issue:
On the claim of laches, we find no reason to reverse the ruling of the CA.
Authenticity of the Extrajudicial Partition Laches is based upon equity and the public policy of discouraging stale
claims.34 Since laches is an equitable doctrine, its application is controlled by
Petitioner contends that the Extrajudicial Partition and Quitclaim is
equitable considerations.35 It cannot be used to defeat justice or to
authentic, because it was notarized and executed in accordance with law.
perpetuate fraud and injustice.36 Thus, the assertion of laches to thwart the
She claims that there is no clear and convincing evidence to set aside the
claim of respondents is foreclosed, because the Deed upon which petitioner
presumption of regularity in the issuance of such public document. We
bases her claim is a forgery.
disagree.
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED.
As a general rule, the due execution and authenticity of a document must be
Costs against petitioner.
reasonably established before it may be admitted in evidence.18 Notarial
documents, however, may be presented in evidence without further proof of SO ORDERED.
their authenticity, since the certificate of acknowledgment is prima facie
evidence of the execution of the instrument or document involved.19 To
contradict facts in a notarial document and the presumption of regularity in
its favor, the evidence must be clear, convincing and more than merely
preponderant.20

The CA ruled that the signature of Hermoso de Leon on the Extrajudicial

Partition and Quitclaim was forged. However, this factual finding is in conflict
with that of the RTC. While normally this Court does not review factual
issues,21 this rule does not apply when there is a conflict between the
holdings of the CA and those of the trial court,22 as in the present case.

After poring over the records, we find no reason to reverse the factual
finding of the appellate court. A comparison of the genuine signatures of
Hermoso de Leon23 with his purported signature on the Deed of Extrajudicial
Partition with Quitclaim24 will readily reveal that the latter is a forgery. As
aptly held by the CA, such variance cannot be attributed to the age or the
mechanical acts of the person signing.25

Without the corroborative testimony of the attesting witnesses, the lone

account of the notary regarding the due execution of the Deed is insufficient
to sustain the authenticity of this document. He can hardly be expected to
dispute the authenticity of the very Deed he notarized.26 For this reason, his
testimony was -- as it should be --minutely scrutinized by the appellate court,
and was found wanting.

Third Issue:

Possession in Good Faith

Petitioner claims that her possession of the land is in good faith and that,
consequently, she has acquired ownership thereof by virtue of prescription.
We are not persuaded.

It is well-settled that no title to registered land in derogation of that of the

registered owner shall be acquired by prescription or adverse
possession.27 Neither can prescription be allowed against the hereditary
successors of the registered owner, because they merely step into the shoes
of the decedent and are merely the continuation of the personality of their
predecessor in interest.28 Consequently, since a certificate of
registration29 covers it, the disputed land cannot be acquired by prescription
regardless of petitioner’s good faith.

Fourth Issue:

Prescription of Action and Laches

G.R. No. 116635 July 24, 1997
Petitioner also argues that the right to recover ownership has prescribed,
CONCHITA NOOL and GAUDENCIO ALMOJERA, petitioner,
and that respondents are guilty of laches. Again, we disagree.
vs.
COURT OF APPEALS, ANACLETO NOOL and EMILIA NEBRE, respondents.

PANGANIBAN, J.:
A contract of repurchase arising out of a contract of sale where the seller did
not have any title to the property "sold" is not valid. Since nothing was sold,
then there is also nothing to repurchase.
Statement of the Case
This postulate is explained by this Court as it resolves this petition for review
on certiorari assailing the January 20, 1993 Decision1 of Respondent Court of
Appeals2 in CA-G.R. CV No. 36473, affirming the decision3 of the trial
court4 which disposed as follows:5
WHEREFORE, judgment is hereby rendered dismissing the complaint for no
cause of action, and hereby:
1. Declaring the private writing, Exhibit "C", to be an option to sell, not
binding and considered validly withdrawn by the defendants for want of
consideration;
2. Ordering the plaintiffs to return to the defendants the sum of P30,000.00
plus interest thereon at the legal rate, from the time of filing of defendants'
counterclaim until the same is fully paid;
3. Ordering the plaintiffs to deliver peaceful possession of the two hectares
mentioned in paragraph 7 of the complaint and in paragraph 31 of
defendants' answer (counterclaim);
4. Ordering the plaintiffs to pay reasonable rents on said two hectares at
P5,000.00 per annum or at P2,500.00 per cropping from the time of judicial
demand mentioned in paragraph 2 of the dispositive portion of this decision,
until the said two hectares shall have been delivered to the defendants; and
5. To pay the costs.
SO ORDERED.
The Antecedent Facts
The facts, which appear undisputed by the parties, are narrated by the Court
of Appeals as follows:
Two (2) parcels of land are in dispute and litigated upon here. The first has an
area of 1 hectare. It was formerly owned by Victorino Nool and covered by
Transfer Certificate of Title No. T-74950. With an area of 3.0880 hectares, the
other parcel was previously owned by Francisco Nool under Transfer
Certificate of Title No. T-100945. Both parcel's are situated in San Manuel,
Isabela. The plaintiff spouses, Conchita Nool and Gaudencio Almojera, now
the appellants, seek recovery of the aforementioned parcels of land from the
defendants, Anacleto Nool, a younger brother of Conchita, and Emilia Nebre,
now the appellees.
In their complaint, plaintiff-appellants alleged inter alia that they are the
owners of subject parcels of land, and they bought the same from Conchita's
other brothers, Victorino Nool and Francisco Nool; that as plaintiffs were in
dire need of money, they obtained a loan from the Ilagan Branch of the
Development Bank of the Philippines, in Ilagan, Isabela, secured by a real
estate mortgage on said parcels of land, which were still registered in the
names of Victorino Nool and Francisco Nool, at the time, and for the failure
of plaintiffs to pay the said loan, including interest and surcharges, totaling
P56,000.00, the mortgage was foreclosed; that within the period of
redemption, plaintiffs contacted defendant Anacleto Nool for the latter to
redeem the foreclosed properties from DBP, which the latter did; and as a
result, the titles of the two (2) parcels of land in question were transferred to
Anacleto Nool; that as part of their arrangement or understanding, Anacleto
Nool agreed to buy from plaintiff Conchita Nool the two (2) parcels of land
under controversy, for a total price of P100,000.00, P30,000.00 of which
price was paid to Conchita, and upon payment of the balance of P14,000.00,
plaintiffs were to regain possession of the two (2) hectares of land, which
amounts defendants failed to pay, and the same day the said
arrangement6 was made; another covenant7 was entered into by the parties,
whereby defendants agreed to return to plaintiffs the lands in question, at
anytime the latter have the necessary amount; that plaintiffs asked the
defendants to return the same but despite the intervention of the Barangay
Captain of their place, defendants refused to return the said parcels of land
to plaintiffs; thereby impelling them (plaintiffs) to come to court for relief.
In their Answer, defendants-appellees theorized that they acquired the lands
in question from the Development Bank of the Philippines, through
negotiated sale, and were misled by plaintiffs when defendant Anacleto Nool
signed the private writing, agreeing to return subject lands when plaintiffs
have the money to redeem the same; defendant Anacleto having been made
to believe, then, that his sister, Conchita, still had the right to redeem the
said properties.
The pivot of inquiry here, as aptly observed below, is the nature and
significance of the private document, marked Exhibit "D" for plaintiffs, which
document has not been denied by the defendants, as defendants even
averred in their Answer that they gave an advance payment of P30,000.00
therefor, and acknowledged that they had a balance of P14,000.00 to
complete their payment. On this crucial issue, the lower court adjudged the
said private writing (Exhibit "D") as an option to sell not binding upon and
considered the same validly withdrawn by defendants for want of
consideration; and decided the case in the manner above-mentioned.
There is no quibble over the fact that the two (2) parcels of land in dispute
were mortgaged to the Development Bank of the Philippines, to secure a
loan obtained by plaintiffs from DBP (Ilagan Branch), Ilagan, Isabela. For the
non-payment of said loan, the mortgage was foreclosed and in the process,
ownership of the mortgaged lands was consolidated in DBP (Exhibits 3 and 4
for defendants). After DBP became the absolute owner of the two parcels of
land, defendants negotiated with DBP and succeeded in buying the same. By
virtue of such sale by DBP in favor of defendants, the titles of DBP were
cancelled and the corresponding Transfer Certificates of Title (Annexes "C"
and "D" to the Complaint) issued to the defendants.8
It should be stressed that Manuel S. Mallorca, authorized officer of DBP,
certified that the one-year redemption period was from March 16, 1982 up
to March 15, 1983 and that the mortgagors' right of redemption was not
exercised within this period.9 Hence, DBP became the absolute owner of said
parcels of land for which it was issued new certificates of title, both entered
on May 23, 1983 by the Registry of Deeds for the Province of
Isabela. 10 About two years thereafter, on April 1, 1985, DBP entered into a
Deed of Conditional Sale 11 involving the same parcels of land with Private
Respondent Anacleto Nool as vendee. Subsequently, the latter was issued
new certificates of title on February 8, 1988. 12
The Court of Appeals ruled: 13
WHEREFORE, finding no reversible error infirming it, the appealed Judgment
is hereby AFFIRMED in toto. No pronouncement as to costs.
The Issues
Petitioners impute to Respondent Court the following alleged "errors":
1. The Honorable Court of Appeals, Second Division has misapplied the legal
import or meaning of Exhibit "C" in a way contrary to law and existing
jurisprudence in stating that it has no binding effect between the parties and
considered validly withdrawn by defendants-appellees for want of
consideration.
2. The Honorable Court of Appeals, Second Division has miserably failed to
give legal significance to the actual possession and cultivation and
appropriating exclusively the palay harvest of the two (2) hectares land
pending the payment of the remaining balance of fourteen thousand pesos
(P14,000.00) by defendants-appellees as indicated in Exhibit "C".
3. The Honorable Court of Appeals has seriously erred in affirming the
decision of the lower court by awarding the payment of rents per annum and
the return of P30,000.00 and not allowing the plaintiffs-appellants to re-
acquire the four (4) hectares, more or less upon payment of one hundred
thousand pesos (P100,000.00) as shown in Exhibit "D". 14
The Court's Ruling
The petition is bereft of merit.
First Issue: Are Exhibits "C" and "D" Valid and Enforceable?
The petitioner-spouses plead for the enforcement of their agreement with
private respondents as contained in Exhibits "C" and "D," and seek damages
for the latter's alleged breach thereof. In Exhibit C, which was a private
handwritten document labeled by the parties as Resibo ti Katulagan or
Receipt of Agreement, the petitioners appear to have "sold" to private
respondents the parcels of land in controversy covered by TCT No. T-74950
and TCT No. T-100945. On the other hand, Exhibit D, which was also a private
handwritten document in Ilocano and labeled as Kasuratan, private
respondents agreed that Conchita Nool "can acquire back or repurchase later
on said land when she has the money." 15
In seeking to enforce her alleged right to repurchase the parcels of land,
Conchita (joined by her co-petitioner-husband) invokes Article 1370 of the
Civil Code which mandates that "(i)f the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the literal
meaning of its stipulations shall control." Hence, petitioners contend that the
Court of Appeals erred in affirming the trial court's finding and conclusion
that said Exhibits C and D were "not merely voidable but utterly void and
inexistent."
We cannot sustain petitioners' view. Article 1370 of the Civil Code is
applicable only to valid and enforceable contracts. The Regional Trial Court
and the Court of Appeals ruled that the principal contract of sale contained in
Exhibit C and the auxiliary contract of repurchase in Exhibit D are both void.
This conclusion of the two lower courts appears to find support in Dignos
vs. Court of Appeals, 16 where the Court held:
Be that as it may, it is evident that when petitioners sold said land to the
Cabigas spouses, they were no longer owners of the same and the sale is null
and void.
In the present case, it is clear that the sellers no longer had any title to the
parcels of land at the time of sale. Since Exhibit D, the alleged contract of
repurchase, was dependent on the validity of Exhibit C, it is itself void. A void
contract cannot give rise to a valid one. 17 Verily, Article 1422 of the Civil
Code provides that "(a) contract which is the direct result of a previous illegal
contract, is also void and inexistent."
We should however add that Dignos did not cite its basis for ruling that a
"sale is null and void" where the sellers "were no longer the owners" of the
property. Such a situation (where the sellers were no longer owners) does
not appear to be one of the void contracts enumerated in Article 1409 of the
Civil Code. 18 Moreover, the Civil Code 19 itself recognizes a sale where the
goods are to be "acquired . . . by the seller after the perfection of the
contract of sale," clearly implying that a sale is possible even if the seller was
not the owner at the time of sale, provided he acquires title to the property
later on.
In the present case however, it is likewise clear that the sellers can no longer
deliver the object of the sale to the buyers, as the buyers themselves have
already acquired title and delivery thereof from the rightful owner, the DBP.
Thus, such contract may be deemed to be inoperative 20 and may thus fall, by
analogy, under item no. 5 of Article 1409 of the Civil Code: "Those which
contemplate an impossible service." Article 1459 of the Civil Code provides
that "the vendor must have a right to transfer the ownership thereof [object
of the sale] at the time it is delivered." Here, delivery of ownership is no
longer possible. It has become impossible.
Furthermore, Article 1505 of the Civil Code provides that "where goods are
sold by a person who is not the owner thereof, and who does not sell them
under authority or with consent of the owner, the buyer acquires no better
title to the goods than the seller had, unless the owner of the goods is by his
conduct precluded from denying the seller's authority to sell." Here, there is
no allegation at all that petitioners were authorized by DBP to sell the
property to the private respondents. Jurisprudence, on the other hand,
teaches us that "a person can sell only what he owns or is authorized to sell;
the buyer can as a consequence acquire no more than what the seller can
legally transfer." 21 No one can give what he does not have — nono dat quod
non habet. On the other hand, Exhibit D presupposes that petitioners could
repurchase the property that they "sold" to private respondents. As
petitioners "sold" nothing, it follows that they can also "repurchase" nothing.
Nothing sold, nothing to repurchase. In this light, the contract of repurchase
is also inoperative — and by the same analogy, void.
Contract of Repurchase
Dependent on Validity of Sale
As borne out by the evidence on record, the private respondents bought the
two parcels of land directly from DBP on April 1, 1985 after discovering that
petitioners did not own said property, the subject of Exhibits C and D
executed on November 30, 1984. Petitioners, however, claim that they can
exercise their alleged right to "repurchase" the property, after private
respondents had acquired the same from DBP. 22 We cannot accede to this,
for it clearly contravenes the intention of the parties and the nature of their
agreement. Exhibit D reads:
WRITING
Nov. 30, 1984
That I, Anacleto Nool have bought from my sister Conchita Nool a land an
area of four hectares (4 has.) in the value of One Hundred Thousand
(100,000.00) Pesos. It is our agreement as brother and sister that she
can acquire back or repurchase later on said land when she has the money.
[Emphasis supplied].
As proof of this agreement we sign as brother and sister this written
document this day of Nov. 30, 1984, at District 4, San Manuel, Isabela.
Sgd ANACLETO NOOL
Anacleto Nool
Sgd Emilio Paron
Witness
Sgd Conchita Nool
Conchita Nool 23
One "repurchases" only what one has previously sold. In other words, the
right to repurchase presupposes a valid contract of sale between
the same parties. Undisputedly, private respondents acquired title to the
property from DBP, and not from petitioners.
Assuming arguendo that Exhibit D is separate and distinct from Exhibit C and
is not affected by the nullity of the latter, still petitioners do not thereby
acquire a right to repurchase the property. In that scenario, Exhibit D ceases
to be a "right to repurchase" ancillary and incidental to the contract of sale;
rather, it becomes an accepted unilateral promise to sell. Article 1479 of the
Civil Code, however, provides that "an accepted unilateral promise to buy or
sell a determinate thing for a price certain is binding upon the promissor if
the promise is supported by a consideration distinct from the price." In the
present case, the alleged written contract of repurchase contained in Exhibit
D is bereft of any consideration distinct from the price. Accordingly, as an
independent contract, it cannot bind private respondents. The ruling
in Diamante vs. CA 24 supports this. In that case, the Court through Mr.
Justice Hilario G. Davide, Jr. explained:
Article 1601 of the Civil Code provides:
Conventional redemption shall take place when the vendor reserves the right
to repurchase the thing sold, with the obligation to comply with the
provisions of article 1616 and other stipulations which may have been agreed
upon.
In Villarica, et al. Vs. Court of Appeals, et al., decided on 29 November 1968,
or barely seven (7) days before the respondent Court promulgated its
decisions in this case, this Court, interpreting the above Article, held:
The right of repurchase is not a right granted the vendor by the vendee in a
subsequent instrument, but is a right reserved by the vendor in the same
instrument of sale as one of the stipulations of the contract. Once the
instrument of absolute sale is executed, the vendor can not longer reserve
the right to repurchase, and any right thereafter granted the vendor by the
vendee in a separate instrument cannot be a right of repurchase but some
other right like the option to buy in the instant case. . . .
In the earlier case of Ramos, et al. vs. Icasiano, et al., decided in 1927, this
Court had already ruled that "an agreement to repurchase becomes a
promise to sell when made after the sale, because when the sale is made
without such an agreement, the purchaser acquires the thing sold absolutely,
and if he afterwards grants the vendor the right to purchase, it is a new
contract entered into by the purchaser, as absolute owner already of the
object. In that case the vendor has nor reserved to himself the right to
repurchase.
In Vda. De Cruzo, et al. vs. Carriaga, et al. this Court found another occasion
to apply the foregoing principle.
Hence, the Option to Repurchase executed by private respondent in the
present case, was merely a promise to sell, which must be governed by Article
1479 of the Civil Code which reads as follows:
Art. 1479. A promise to buy and sell a determinate thing for a price certain is
reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a
price certain is binding upon the promissor if the promise is supported by a
consideration distinct from the price.
Right to Repurchase Based on
Homestead or Trust Non-Existent
Petitioners also base their alleged right to repurchase on (1) Sec. 119 of the
Public Land Act 25 and (2) an implied trust relation as "brother and sister." 26
The Court notes that Victorino Nool and Francisco Nool mortgaged the land
to DBP. The brothers, together with Conchita Nool and Anacleto Nool, were
all siblings and heirs qualified to repurchase the two parcels of land under
Sec. 119 of the Public Land Act which provides that "(e)very conveyance of
land acquired under the free patent or homestead provisions, when proper,
shall be subject to repurchase by the applicant, his widow or legal heirs,
within a period of five years from the date of conveyance." Assuming the
applicability of this statutory provision to the case at bar, it is indisputable
that Private Respondent Anacleto Nool already repurchased from DBP the
contested properties. Hence, there was no more right of repurchase that his
sister Conchita or brothers Victorino and Francisco could exercise. The
properties were already owned by an heir of the homestead grantee and the
rationale of the provision to keep homestead lands within the family of the
grantee was thus fulfilled. 27
Petitioners argue that "when Anacleto Nool took the possession of the two
hectares, more or less, and let the other two hectares to be occupied and
cultivated by plaintiffs-appellant, Anacleto Nool cannot later on disclaim the
terms or contions (sic) agreed upon and his actuation is within the ambit of
estoppel . . . 28 We disagree. The private respondents cannot be estopped
from raising the defense of nullity of contract, specially in this case where
they acted in good faith, believing that indeed petitioners could sell the two
parcels of land in question. Article 1410 of the Civil Code mandates that
"(t)he action or defense for the declaration of the inexistence of a contract
does not prescribe." It is a well-settled doctrine that "as between parties to a
contract, validity cannot be given to it by estoppel if it is prohibited by law or
it is against public policy (19 Am. Jur. 802). It is not within the competence of
any citizen to barter away what public policy by law seeks to
preserve." 29 Thus, it is immaterial that private respondents initially acted to
implement the contract of sale, believing in good faith that the same was
valid. We stress that a contract void at inception cannot be validated by
ratification or prescription and certainly cannot be binding on or enforceable
against private respondents. 30
Third Issue: Return of P30,000.00 with Interest
and Payment of Rent
Petitioners further argue that it would be a "miscarriage of justice" to order
them (1) to return the sum of P30,000.00 to private respondents when
allegedly it was Private Respondent Anacleto Nool who owed the former a
balance of P14,000.00 and (2) to order petitioners to pay rent when they
"were allowed to cultivate the said two hectares." 31
We are not persuaded. Based on the previous discussion, the balance of
P14,000.00 under the void contract of sale may not be enforced. Petitioners
are the ones who have an obligation to return what they unduly and
improperly received by reason of the invalid contract of sale. Since they
cannot legally give title to what they "sold," they cannot keep the money
paid for the object of the sale. It is basic that "(e)very person who through an
act of 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." 32 Thus, if a void contract has already "been
performed, the restoration of what has been given is in order." 33 Corollarily
and as aptly ordered by respondent appellate court, interest thereon will run
only from the time of private respondents' demand for the return of this
amount in their counterclaim. 34 In the same vein, petitioners' possession and
cultivation of the two hectares are anchored on private respondents'
tolerance. Clearly, the latter's tolerance ceased upon their counterclaim and
demand on the former to vacate. Hence, their right to possess and cultivate
the land ipso facto ceased.
WHEREFORE, the petition is DENIED and the assailed Decision of the Court of
Appeals affirming that of the trial court is hereby AFFIRMED.
SO ORDERED.

The claim of a trust relation is likewise without merit. The records show that
private respondents did not purchase the contested properties from DBP in
trust for petitioners. The former, as previously mentioned, in fact bought the
land from DBP upon realization that the latter could not validly sell the same.
Obviously, petitioners bought it for themselves. There is no evidence at all in
the records that they bought the land in trust for private respondents. The
G.R. No. 136054            September 5, 2001
fact that Anacleto Nool was the younger brother of Conchita Nool and that
they signed a contract of repurchase, which as discussed earlier was void, HEIRS OF SEVERINA SAN MIGUEL, namely: MAGNO LAPINA, PACENCIA
does not prove the existence of an implied trust in favor of petitioners. LAPINA, MARCELO LAPINA, SEVERINO LAPINA, ROSARIO LAPINA,
FRANCISCO LAPINA, CELIA LAPINA assisted by husband RODOLFO
Second Issue: No Estoppel in Impugning the
TOLEDO, petitioners,
Validity of Void Contracts
vs.
THE HONORABLE COURT OF APPEALS, DOMINADOR SAN MIGUEL,
GUILLERMO F. SAN ARTEMIO F. SAN MIGUEL, PACIENCIA F. SAN MIGUEL,
CELESTINO, assisted by husband, ANTERO CELESTINO, represented by their
Attorney-in-Fact ENRICO CELESTINO, AUGUSTO SAN MIGUEL, ANTONIO
SAN MIGUEL, RODOLFO SAN MIGUEL, CONRADO SAN MIGUEL and LUCITA
SAN MIGUEL, respondents.
PARDO, J.:
The Case
The case is a petition for review on certiorari1 of the decision of the Court of
Appeals,2 affirming that of the Regional Trial Court, Cavite, Branch 19,
Bacoor3 ordering petitioners, Heirs of Severina San Miguel (hereafter,
"Severina's heirs") to surrender to respondents Dominador San Miguel, et al.
(hereafter, "Dominador, et al."), Transfer Certificate of Title No. 223511 and
further directing Severina's heirs to pay for the capital gains and related
expenses for the transfer of the two (2) lots to Dominador, et al.
The Facts
This case involves a parcel of land originally claimed by Severina San Miguel
(petitioners' predecessor-in-interest, hereafter, "Severina"). The land is
situated in Panapan, Bacoor, Cavite with an area of six hundred thirty two
square meters (632 sq. m.), more or less.
Without Severina's knowledge, Dominador managed to cause the subdivision
of the land into three (3) lots, to wit:4
"LRC Psu-1312 - with an area of 108 square meters;
"LRC Psu-1313 - Lot 1, with an area of 299 square meters;
"LRC Psu-1313 - Lot 2, with an area of 225 square meters."
On September 25, 1974, Dominador, et al. filed a petition with the Court of
First Instance, Cavite, as a land registration court, to issue title over Lots 1
and 2 of LRC Psu-1313, in their names.5
On July 19, 1977, the Land Registration Commission (hereafter "LRC")
rendered a decision directing the issuance of Original Certificate of Title No.
0-1816 in the names of Dominador, et al.
On or about August 22, 1978, Severina filed with the Court of First Instance
of Cavite a petition for review of the decision alleging that the land
registration proceedings were fraudulently concealed by Dominador from
her.6
On December 27, 1982, the court resolved to set aside the decision of July
19, 1977, and declared Original Certificate of Title No. 0-1816 as null and
void.
On July 13, 1987, the Register of Deeds of Cavite issued Transfer Certificate
of Title No. T-223511 in the names of Severina and her heirs.7
On February 15, 1990, the trial court issued an order in favor of Severina's
heirs, to wit:8
"WHEREFORE, as prayed for, let the writ of possession previously issued in
favor of petitioner Severina San Miguel be implemented."
However, the writ was returned unsatisfied.
On November 28, 1991, the trial court ordered:9
"WHEREFORE, as prayed for, let an alias writ of demolition be issued in favor
of petitioners, Severina San Miguel."
Again, the writ was not satisfied.
On August 6, 1993, Severina's heirs, decided not to pursue the writs of
possession and demolition and entered into a compromise with Dominador,
et al. According to the compromise, Severina's heirs were to sell the subject
lots10 to Dominador, et al. for one and a half million pesos (P1.5 M) with the
delivery of Transfer Certificate of Title No. T-223511 (hereafter, "the
certificate of title") conditioned upon the purchase of another lot 11 which
was not yet titled at an additional sum of three hundred thousand pesos
(P300,000.00). The salient features of the compromise (hereafter
"kasunduan") are:12
"5. Na ang Lot 1 at Lot 2, plano LRC Psu-1313 na binabanggit sa itaas na
ipinagkasundo ng mga tagapagmana ni Severina San Miguel na kilala sa
kasulatang ito sa taguring LAPINA (representing Severina's heirs), na ilipat sa
pangalan nina SAN MIGUEL (representing Dominador's heirs) alang alang sa
halagang ISANG MILYON AT LIMANG DAANG LIBONG PISO (P1,500,000.00)
na babayaran nina SAN MIGUEL kina LAPINA;
"6. Na si LAPINA at SAN MIGUEL ay nagkakasundo na ang lote na sakop ng
plano LRC-Psu-1312, may sukat na 108 metro cuadrado ay ipagbibili na rin
kina SAN MIGUEL sa halagang TATLONG DAANG LIBONG PISO (P300,000.00);
"7. Na kinikilala ni SAN MIGUEL na ang tunay na may-ari ng nasabing lote na
sakop ng plano LRC Psu-1312 ay sina LAPINA at sila na ang magpapatitulo
nito at sina LAPINA ay walang pananagutan sa pagpapatitulo nito at sa
paghahabol ng sino mang tao;
"8. Na ang nasabing halaga na TATLONG DAANG LIBONG PISO (P300,000.00)
ay babayaran nina SAN MIGUEL kina LAPINA sa loob ng dalawang (2) buwan
mula sa petsa ng kasulatang ito at kung hindi mabayaran nina SAN MIGUEL
ang nasabing halaga sa takdang panahon ay mawawalan ng kabuluhan ang
kasulatang ito;
"9. Na sina LAPINA at SAN MIGUEL ay nagkakadunso (sic) rin na ang owner's
copy ng Transfer Certificate of Title No. T-223511 na sumasakop sa Lots 1 at
2, plano LRC Psu-1313 ay ilalagay lamang nina LAPINA kina SAN MIGUEL
pagkatapos mabayaran ang nabanggit na P300,000.00"
On the same day, on August 6, 1993, pursuant to the kasunduan, Severina's
heirs and Dominador, et al. executed a deed of sale designated as "kasulatan
sa bilihan ng lupa."13
On November 16, 1993, Dominador, et al. filed with the trial court,14 Branch
19, Bacoor, Cavite, a motion praying that Severina's heirs deliver the owner's
copy of the certificate of title to them.15
In time, Severina's heirs opposed the motion stressing that under
the kasunduan, the certificate of title would only be surrendered upon
Dominador, et al.'s payment of the amount of three hundred thousand pesos
(P300,000.00) within two months from August 6, 1993, which was not
complied with.16
Dominador, et al. admitted non-payment of three hundred thousand pesos
(P300,000.00) for the reason that Severina's heirs have not presented any
proof of ownership over the untitled parcel of land covered by LRC-Psu-1312.
Apparently, the parcel of land is declared in the name of a third party, a
certain Emiliano Eugenio.17
Dominador, et al. prayed that compliance with the kasunduan be deferred
until such time that Severina's heirs could produce proof of ownership over
the parcel of land.18
Severina's heirs countered that the arguments of Dominador, et al. were
untenable in light of the provision in the kasunduan where Dominador, et al.
admitted their ownership over the parcel of land, hence dispensing with the
requirement that they produce actual proof of title over it.19 Specifically, they
called the trial court's attention to the following statement in
the kasunduan:20
"7. Na kinikilala ni SAN MIGUEL na ang tunay na may-ari ng nasabing lote na
sakop ng plano LRC Psu-1312 ay sina LAPINA at sila na ang magpapatitulo
nito at sina LAPINA ay walang pananagutan sa pagpapatitulo nito at sa
paghahabol ng sino mang tao;"
According to Severina's heirs, since Dominador, et al. have not paid the
amount of three hundred thousand pesos (P300,000.00), then they were
justified in withholding release of the certificate of title.21
The trial court conducted no hearing and then rendered judgment based on
the pleadings and memoranda submitted by the parties.
The Trial Court's Ruling
22
On June 27, 1994, the trial court issued an order to wit:
"WHEREFORE, finding the Motion to Order to be impressed with merit, the
defendants-oppositors-vendors Heirs of Severina San Miguel are hereby
ordered to surrender to the movant-plaintiffs-vendees-Heirs of Dominador
San Miguel the Transfer Certificates of Title No. 223511 and for herein
defendants-oppositors-vendors to pay for the capital gains and related
expenses for the transfer of the two lots subject of the sale to herein
movants-plaintiffs-vendees-Heirs of Dominador San Miguel."
"SO ORDERED."
On July 25, 1994, Severina's heirs filed with the trial court a motion for
reconsideration of the afore-quoted order.23
On January 23, 1995, the trial court denied the motion for reconsideration
for lack of merit and further ordered:24
"x x x . . . Considering that the Lots 1 and 2 covered by TCT No. T-223511 had
already been paid since August 6, 1993 by the plaintiffs-vendees Dominador
San Miguel, et al. (Vide, Kasulatan sa Bilihan ng Lupa, Rollo, pp. 174-176),
herein defendants-vendors-Heirs of Severina San Miguel is hereby ordered
(sic) to deliver the aforesaid title to the former (Dominador San Miguel, et
al.) within thirty (30) days from receipt of this order. In case the defendants-
vendors-Heirs of Severina San Miguel fail and refuse to do the same, then the
Register of Deeds of Cavite is ordered to immediately cancel TCT No. T-
223511 in the name of Severina San Miguel and issue another one in the
name of plaintiffs Dominador San Miguel, et al.
"Also send a copy of this Order to the Register of Deeds of the Province of
Cavite, Trece Martires City, for her information and guidance.
"SO ORDERED."
On February 7, 1995, Severina's heirs appealed the orders to the Court of
Appeals.25
The Court of Appeals' Ruling
On June 29, 1998, the Court of Appeals promulgated a decision denying the
appeal, and affirming the decision of the trial court. The Court of Appeals
added that the other matters raised in the petition were "extraneous" to
the kasunduan.26 The Court of Appeals upheld the validity of the contract of
sale and sustained the parties' freedom to contract. The Court of Appeals
decided, thus:27
"WHEREFORE, the decision appealed from is hereby AFFIRMED.
"SO ORDERED."
On August 4, 1998, Severina's heirs filed with the Court of Appeals a motion
for reconsideration of the above decision.28 On October 14, 1998, the Court
of Appeals denied the motion for reconsideration for lack of merit.29
Hence, this appeal.30
The Issues
Severina's heirs submit that the Court of Appeals erred and committed grave
abuse of discretion: First, when it held that the kasunduan had no effect on
the "kasulatan sa bilihan ng lupa." Second, when it ordered them to
surrender the certificate of title to Dominador, et al., despite non-compliance
with their prior obligations stipulated under the kasunduan. Third, when it
did not find that the kasunduan was null and void for having been entered
into by Dominador, et al. fraudulently and in bad faith.31
We find the above issues raised by Severina's heirs to be factual. The
question whether the prerequisites to justify release of the certificate of title
to Dominador, et al. have been complied with is a question of fact.32
However, we sift through the arguments and identify the main legal issue,
which is whether Dominador, et al. may be compelled to pay the three
hundred thousand pesos (P300,000.00) as agreed upon in the kasunduan (as
a pre-requisite for the release of the certificate of title), despite Severina's
heirs' lack of evidence of ownership over the parcel of land covered by LRC
Psu-1312.
The Court's Ruling
We resolve the issue in the negative, and find the petition without merit.
Severina's heirs anchor their claim on the kasunduan, stressing on their
freedom to stipulate and the binding effect of contracts. This argument is
misplaced.33 The Civil Code provides:
ARTICLE 1306. The contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient provided they
are not contrary to law, morals, good customs, public order or public policy
(italics ours).
It is basic that the law is deemed written into every contract.34 Although a
contract is the law between the parties, the provisions of positive law which
regulate contracts are deemed written therein and shall limit and govern the
relations between the parties.35 The Civil Code provisions on "sales" state:
ARTICLE 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and
the other to pay a price certain in money or its equivalent. . . .
ARTICLE 1459. The thing must be licit and the vendor must have a right to
transfer the ownership thereof at the time it is delivered.
ARTICLE 1495. The vendor is bound to transfer the ownership of and deliver,
as well as warrant the thing which is the object of sale (emphasis ours).
True, in contracts of sale, the vendor need not possess title to the thing sold
at the perfection of the contract.36 However, the vendor must possess title
and must be able to transfer title at the time of delivery. In a contract of sale,
title only passes to the vendee upon full payment of the stipulated
consideration, or upon delivery of the thing sold.37
Under the facts of the case, Severina's heirs are not in a position to transfer
title. Without passing on the question of who actually owned the land
covered by LRC Psu -1312, we note that there is no proof of ownership in
favor of Severina's heirs. In fact, it is a certain Emiliano Eugenio, who holds a
tax declaration over the said land in his name.38 Though tax declarations do
not prove ownership of the property of the declarant, tax declarations and
receipts can be strong evidence of ownership of land when accompanied by
possession for a period sufficient for prescription.39 Severina's heirs have
nothing to counter this document.
Therefore, to insist that Dominador, et al. pay the price under such
circumstances would result in Severina's heirs' unjust enrichment.40 Basic is
the principle in law, "Niguno non deue enriquecerse tortizamente condano de
otro."41 The essence of a sale is the transfer of title or an agreement to
transfer it for a price actually paid or promised.42 In Nool v. Court of
Appeals,43 we held that if the sellers cannot deliver the object of the sale to
the buyers, such contract may be deemed to be inoperative. By analogy, such
a contract may fall under Article 1405, No. 5 of the Civil Code, to wit:
ARTICLE 1405. The following contracts are inexistent and void from the
beginning: . . .
(5) Those which contemplate an impossible service.
xxx           xxx           xxx

Severina's heirs insist that delivery of the certificate of title is predicated on a

condition — payment of three hundred thousand pesos (P300,000.00) to
cover the sale of Lot 3 of LRO Psu 1312. We find this argument not
meritorious. The condition cannot be honored for reasons afore-discussed.
Article 1183 of the Civil Code provides that,

"Impossible conditions, those contrary to good customs or public policy and

those prohibited by law shall annul the obligation which depends upon them.
If the obligation is divisible, that part thereof which is not affected by the
impossible or unlawful condition shall be valid, x x x"

Hence, the non-payment of the three hundred thousand pesos (P300,000.00)

is not a valid justification for refusal to deliver the certificate of title.

Besides, we note that the certificate of title covers Lots 1 and 2 of LRC Psu-
1313, which were fully paid for by Dominador, et al. Therefore, Severina's
heirs are bound to deliver the certificate of title covering the lots.

The Fallo

WHEREFORE, the petition is DENIED and the decision of the Court of Appeals
in CA-G.R. CV No. 48430 is AFFIRMED in toto.

No costs.

SO ORDERED.