sales cases full text_07sep2013

8/12/2019 Sales Cases Full Text_07sep2013

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R. No. L-12342 August 3, 1918A. ADDISON,plaintiff-appellant, vs. MARCIANA FELIX and BALBINO TIOCO,defendants-appellees

y a public instrument dated June 11, 1914, the plaintiff sold to the defendant Marciana Felix, with the consent of her husband, the defendant Balbino Tiocrcels of land, described in the instrument. The defendant Felix paid, at the time of the execution of the deed, the sum of P3,000 on account of the purchased bound herself to pay the remainder in installments, the first of P2,000 on July 15, 1914, and the second of P5,000 thirty days after the issuance to hrtificate of title under the Land Registration Act, and further, within ten years from the date of such title P10, for each coconut tree in bearing and P5 for eac

ee not in bearing, that might be growing on said four parcels of land on the date of the issuance of title to her, with the condition that the total price shouceed P85,000. It was further stipulated that the purchaser was to deliver to the vendor 25 per centum of the value of the products that she might obtain frour parcels "from the moment she takes possession of them until the Torrens certificate of title be issued in her favor."

was also covenanted that "within one year from the date of the certificate of title in favor of Marciana Felix, this latter may rescind the present contract of pud sale, in which case Marciana Felix shall be obliged to return to me, A. A. Addison, the net value of all the products of the four parcels sold, and I shall oblturn to her, Marciana Felix, all the sums that she may have paid me, together with interest at the rate of 10 per cent per annum."

January, 1915, the vendor, A. A. Addison, filed suit in Court of First Instance of Manila to compel Marciana Felix to make payment of the first installm2,000, demandable in accordance with the terms of the contract of sale aforementioned, on July 15, 1914, and of the interest in arrears, at the stipulated rar cent per annum. The defendant, jointly with her husband, answered the complaint and alleged by way of special defense that the plaintiff had absolutely faliver to the defendant the lands that were the subject matter of the sale, notwithstanding the demands made upon him for this purpose. She therefore askee be absolved from the complaint, and that, after a declaration of the rescission of the contract of the purchase and sale of said lands, the plaintiff be ordefund the P3,000 that had been paid to him on account, together with the interest agreed upon, and to pay an indemnity for the losses and damages whifendant alleged she had suffered through the plaintiff's non-fulfillment of the contract.

e evidence adduced shows that after the execution of the deed of the sale the plaintiff, at the request of the purchaser, went to Lucena, accompaniepresentative of the latter, for the purpose of designating and delivering the lands sold. He was able to designate only two of the four parcels, and more thards of these two were found to be in the possession of one Juan Villafuerte, who claimed to be the owner of the parts so occupied by him. The plaintiff adat the purchaser would have to bring suit to obtain possession of the land (sten. notes, record, p. 5). In August, 1914, the surveyor Santamaria went to Luce request of the plaintiff and accompanied by him, in order to survey the land sold to the defendant; but he surveyed only two parcels, which are those ocainly by the brothers Leon and Julio Villafuerte. He did not survey the other parcels, as they were not designated to him by the plaintiff. In order to make this

was necessary to obtain from the Land Court a writ of injunction against the occupants, and for the purpose of the issuance of this writ the defendant, in 14, filed an application with the Land Court for the registration in her name of four parcels of land described in the deed of sale executed in her favor b

aintiff. The proceedings in the matter of this application were subsequently dismissed, for failure to present the required plans within the period of the time ar the purpose.

e trial court rendered judgment in behalf of the defendant, holding the contract of sale to be rescinded and ordering the return to the plaintiff the P3,000 pcount of the price, together with interest thereon at the rate of 10 per cent per annum. From this judgment the plaintiff appealed.

decreeing the rescission of the contract, the trial judge rested his conclusion solely on the indisputable fact that up to that time the lands sold had notgistered in accordance with the Torrens system, and on the terms of the second paragraph of clause (h) of the contract, whereby it is stipulated that ". . . withar from the date of the certificate of title in favor of Marciana Felix, this latter may rescind the present contract of purchase and sale . . . ."

e appellant objects, and rightly, that the cross-complaint is not founded on the hypothesis of the conventional rescission relied upon by the court, but on thedeliver the land sold. He argues that the right to rescind the contract by virtue of the special agreement not only did not exist from the moment of the execue contract up to one year after the registration of the land, but does not accrue until the land is registered. The wording of the clause, in fact, substantiate

ntention. The one year's deliberation granted to the purchaser was to be counted "from the date of the certificate of title ... ." Therefore the right to elect to re contract was subject to a condition, namely, the issuance of the title. The record show that up to the present time that condition has not been funsequently the defendant cannot be heard to invoke a right which depends on the existence of that condition. If in the cross-complaint it had been alleged tfillment of the condition was impossible for reasons imputable to the plaintiff, and if this allegation had been proven, perhaps the condition would havensidered as fulfilled (arts. 1117, 1118, and 1119, Civ. Code); but this issue was not presented in the defendant's answer.

owever, although we are not in agreement with the reasoning found in the decision appealed from, we consider it to be correct in its result. The record showe plaintiff did not deliver the thing sold. With respect to two of the parcels of land, he was not even able to show them to the purchaser; and as regards theo, more than two-thirds of their area was in the hostile and adverse possession of a third person.

e Code imposes upon the vendor the obligation to deliverthe thing sold. The thing is considered to be delivered when it is placed "in the hands and possese vendee." (Civ. Code, art. 1462.) It is true that the same article declares that the execution of a public instruments is equivalent to the delivery of the thing we object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such contre thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownershipand thpossession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy rchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if, notwithstanding the execution

strument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, becausnancy and enjoyment are opposed by the interposition of another will, then fiction yields to realitythe delivery has not been effected.

s Dalloz rightly says (Gen. Rep., vol. 43, p. 174) in his commentaries on article 1604 of the French Civil code, "the word "delivery" expresses a complex ide abandonment of the thing by the person who makes the delivery and the taking control of it by the person to whom the delivery is made."

e execution of a public instrument is sufficient for the purposes of the abandonment made by the vendor; but it is not always sufficient to permit prehension of the thing by the purchaser.

e supreme court of Spain, interpreting article 1462 of the Civil Code, held in its decision of November 10, 1903, (Civ. Rep., vol. 96, p. 560) that this article "clares that when the sale is made through the means of a public instrument, the execution of this latter is equivalent to the delivery of the thing sold: whict and cannot mean that this fictitious tradition necessarily implies the real tradition of the thing sold, for it is incontrovertible that, while its ownership still perte vendor (and with greater reason if it does not), a third person may be in possession of the same thing; wherefore, though, as a general rule, he who purcmeans of a public instrument should be deemed . . . to be the possessor in fact, yet this presumption gives way before proof to the contrary."


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(SGD.) DOMINGO MELAD

WITNESSES:1. (T.M.) ISIDRO MELAD2. (SGD.) FELIX DANGUILAN3. (T.M.) ILLEGIBLE

EXHIBIT 3-a is quoted as follows:13

I, DOMINGO MELAD, a resident of Centro, Penablanca, Province of Cagayan, do hereby swear and declare the truth that delivered my residential lot at Centro, Penablanca, Cagayan, to Felix Danguilan, my son-in-law because I have no child; that thought of giving him my land because he will be the one to take care of SHELTERING me or bury me when I die and this ishave thought of executing this document; that the boundaries of this lot ison the east, Cresencio Danguilan; on the north, A

Street; on the south by Pastor Lagundi and on the west, Pablo Pelagio and the area of this lot is 35 meters going south; widlength beginning west to east is 40 meters.

IN WITNESS HEREOF, I hereby sign this receipt this 18th day of December 1943.

(SGD.) DOMINGO MELAD

WITNESSES:

(SGD.) ILLEGIBLE(SGD.) DANIEL ARAO

s our view, considering the language of the two instruments, that Domingo Melad did intend to donate the properties to the petitioner, as the private respontends. We do not think, however, that the donee was moved by pure liberality. While truly donations, the conveyances were onerousdonations as the pro

ere given to the petitioner in exchange for his obligation to take care of the donee for the rest of his life and provide for his burial. Hence, it was not coverede in Article 749 of the Civil Code requiring donations of real properties to be effected through a public instrument. The case at bar comes squarely undctrine laid down in Manalo v. De Mesa,

14where the Court held:

There can be no doubt that the donation in question was made for a valuable consideration, since the donors made it conditionathe donees' bearing the expenses that might be occasioned by the death and burial of the donor Placida Manalo, a conditioobligation which the donee Gregorio de Mesa carried out in his own behalf and for his wife Leoncia Manalo; therefore, in odetermine whether or not said donation is valid and effective it should be sufficient to demonstrate that, as a contract, it embracconditions the law requires and is valid and effective, although not recorded in a public instrument.

e private respondent argues that as there was no equivalence between the value of the lands donated and the services for which they were being exchango transactions should be considered pure or gratuitous donations of real rights, hence, they should have been effected through a public instrument and novate writings. However, no evidence has been adduced to support her contention that the values exchanged were disproportionate or unequal.

n the other hand, both the trial court and the respondent court have affirmed the factual allegation that the petitioner did take care of Domingo Melad an

ranged for his burial in accordance with the condition imposed by the donor. It is alleged and not denied that he died when he was almost one hundred yeawhich would mean that the petitioner farmed the land practically by himself and so provided for the donee (and his wife) during the latter part of Domingo Me. We may assume that there was a fair exchange between the donor and the donee that made the transaction an onerous donation.

egarding the private respondent's claim that she had purchased the properties by virtue of a deed of sale, the respondent court had only the following txhibit 'E' taken together with the documentary and oral evidence shows that the preponderance of evidence is in favor of the appellants." This was, we thther superficial way of resolving such a basic and important issue.

e deed of sale was allegedly executed when the respondent was only three years old and the consideration was supposedly paid by her mother, Maria Yom her earnings as a wage worker in a factory.

16This was itself a suspicious circumstance, one may well wonder why the transfer was not made to the m

rself, who was after all the one paying for the lands. The sale was made out in favor of Apolonia Melad although she had been using the surname Yedaother's surname, before that instrument was signed and in fact even after she got married.

17The averment was also made that the contract was simulate

epared after Domingo Melad's death in 1945.18

It was also alleged that even after the supposed execution of the said contract, the respondent consomingo Melad the owner of the properties and that she had never occupied the same.

19

onsidering these serious challenges, the appellate court could have devoted a little more time to examining Exhibit "E" and the circumstances surroundecution before pronouncing its validity in the manner described above. While it is true that the due execution of a public instrument is presumed, the presudisputable and will yield to contradictory evidence, which in this case was not refuted.

any rate, even assuming the validity of the deed of sale, the record shows that the private respondent did not take possession of the disputed propertideed waited until 1962 to file this action for recovery of the lands from the petitioner. If she did have possession, she t ransferred the same to the petitioner in

her own sworn admission, and moved out to another lot belonging to her step-brother.20

Her claim that the petitioner was her tenant (later changministrator) was disbelieved by the trial court, and properly so, for its inconsistency. In short, she failed to show that she consummated the contract of stual delivery of the properties to her and her actual possession thereof in concept of purchaser-owner.

s was held in Garchitorena v. Almeda:21

Since in this jurisdiction it is a fundamental and elementary principle that ownership does not pass by mere stipulation but odelivery (Civil Code, Art. 1095; Fidelity and Surety Co. v. Wilson, 8 Phil. 51), and the execution of a public document doeconstitute sufficient delivery where the property involved is in the actual and adverse possession of third persons (Addison vs

38 Phil. 404; Masallo vs. Cesar, 39 Phil. 134), it becomes incontestable that even if included in the contract, the ownership property in dispute did not pass thereby to Mariano Garchitorena. Not having become the owner for lack of delivery, M


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Garchitorena cannot presume to recover the property from its present possessors. His action, therefore, is not one of revindicbut one against his vendor for specific performance of the sale to him.

the aforecited case of Fidelity and Deposit Co. v. Wilson,22

Justice Mapa declared for the Court:

Therefore, in our Civil Code it is a fundamental principle in all matters of contracts and a well- known doctrine of law that "nonpactis sed traditione dominia rerum transferuntur".In conformity with said doctrine as established in paragraph 2 of article 609 code, that "the ownership and other property rights are acquired and transmitted by law, by gift, by testate or intestate succeand, in consequence of certain contracts, by tradition". And as the logical application of this disposition article 1095 prescribfollowing: "A creditor has the rights to the fruits of a thing from the time the obligation to deliver it arises. However, he shall not aa real right" (and the ownership is surely such) "until the property has been delivered to him."

In accordance with such disposition and provisions the delivery of a thing constitutes a necessary and indispensable requisite

purpose of acquiring the ownership of the same by virtue of a contract. As Manresa states in his Commentaries on the Civil volume 10, pages 339 and 340: "Our law does not admit the doctrine of the transfer of property by mere consent but limits the ethe agreement to the due execution of the contract. ... The ownership, the property right, is only derived from the delivery of a t"

s for the argument that symbolic delivery was effected through the deed of sale, which was a public instrument, the Court has held:

The Code imposes upon the vendor the obligation to deliverthe thing sold. The thing is considered to be delivered when it is "in the hands and possession of the vendee." (Civil Code, art. 1462). It is true that the same article declares that the executiopublic instrument is equivalent to the delivery of the thing which is the object of the contract, but, in order that this symbolic dmay produce the effect of tradition, it is necessary that the vendor shall have had such controlover the thing sold that, at the mof the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownershipand thepossession. The thing sold must be placed in his control.When there is no impediment whatever to prevent the thing sold passithe tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufBut if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of theand make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposanother will, then fiction yields to reality

the delivery has not been effected. 23

ere is no dispute that it is the petitioner and not the private respondent who is in actual possession of the litigated properties. Even if the respective claimsrties were both to be discarded as being inherently weak, the decision should still incline in favor of the petitioner pursuant to the doctrine announced in Sa

spinosa v. Estejada24

where the Court announced:

If the claim of both the plaintiff and the defendant are weak, judgment must be for the defendant, for the latter being in possesspresumed to be the owner, and cannot be obliged to show or prove a better right.

HEREFORE, the decision of the respondent court is SET ASIDE and that of the trial court REINSTATED, with costs against the private respondent.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------R. No. L-21998 November 10, 1975

ALIXTO PASAGUI and FAUSTA MOSAR, plaintiffs-appellants, vs. ESTER T. VILLABLANCA, ZOSIMO VILLABLANCA, EUSTAQUIA BOCAR and CATAOCAR defendants-appellees

e only issue posed by this appeal is whether or not, from the nature of the action pleaded as appears in the allegations of the complaint, the aforesaid ace of forcible entry, within the exclusive jurisdiction of the municipal court. .

n February 4, 1963, appellants Calixto Pasagui and Fausta Mosar filed a complaint with the Court of First Instance at Tacloban City, alleging that onNovem62, for and in consideration of Two Thousand Eight Hundred Pesos (P2,800.00), they bought from appellees Eustaquia Bocar and Catalina Bocar a paricultural land with an area of 2.6814 hectares, situated in Hamindangon, Pastrana, Leyte; that the corresponding document of sale was executed, notarize same date, and recorded in the Registry of Deeds of Tacloban, Leyte on November 16, 1962; that during the first week of February, 1963, defendant spster T. Villablanca and Zosimo Villablanca, "illegally and without any right, whatsoever, took possession of the above property harvesting coconuts froconut plantation thereon, thus depriving plaintiffs" of its possession; that despite demands made by the plaintiffs upon the above-mentioned defendarrender to them the above-described property and its possession" the latter failed or refused to return said parcel of land to the former, causing them damagat Eustaquia and Catalina Bocar, vendors of the property, are included defendants in the complaint by virtue of the warranty clause contained in the documle. Plaintiffs prayed for a decision ordering defendants to surrender the possession of the parcel of land above-described to them and to pay damages

mounts specified. .

n February 21, 1963, appellees moved to dismiss the complaint on the ground that the Court of First Instance had no jurisdiction over the subject matter, theing one of forcible entry. Appellants opposed the Motion to Dismiss asserting that the action is not one for forcible entry inasmuch as in the complaint, theregation that the deprivation of possession was effected through "force, intimidation, threat, strategy or stealth." .

n May 13, 1963, the trial court issued an order dismissing the complaint for lack of jurisdiction, it appearing from the allegations in the complaint that the ce for forcible entry which belongs to the exclusive jurisdiction of the Justice of the Peace (now Municipal Court) of Pastrana, Leyte. The first Motio

econsideration was denied on May 27, 1963 and the second was likewise denied on July 5, 1963. From the aforementioned orders, appeal on a pure quesw was interposed to this Court. .

s well-settled that what determines the jurisdiction of the municipal court in a forcible entry case is the nature of the action pleaded as appears from the allegthe complaint. In ascertaining whether or not the action is one of forcible entry within the original exclusive jurisdiction of the municipal court, the avermentsmplaint and the character of the relief sought are the ones to be consulted.. 1.

the case at bar, the complaint does not allege that the plaintiffs were in physical possession of the land and have been deprived of that possession throughimidation, threat, strategy, or stealth. It simply avers that plaintiffs-appellants bought on November 12, 1962 from defendants-appellees Eustaquia Boc

atalina Bocar the parcel of land in question for the amount of P2,800.00; that a deed of sale was executed, notarized and registered;that "during this first webruary, 1963, defendants Ester T. Villablanca and her husband, Zosimo Villablanca, illegally and without any right whatsoever, took possession of the


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scribed property, harvesting coconuts from the coconut plantation therein, thus depriving of its possession herein plaintiffs, and causing them damages mount of EIGHT HUNDRED PESOS (P800.00)"; that for the purpose of enforcing the vendors' warranty in case of eviction, Eustaquia Bocar and Catalina ere also included as defendants; and, therefore, plaintiffs-appellants pray that a decision be rendered, ordering (a) defendants Ester T. Villablanca ansband, Zosimo Villablanca, "to surrender the possession of the above described property to said plaintiffs"; (b) defendants Ester T. Villablanca and her hus

osimo Villablanca, "to pay to said plaintiffs the amount of EIGHT HUNDRED PESOS (P800.00) as damages for the usurpation by them of said property"; afendants Eustaquia Bocar and Catalina Bocar "to pay the plaintiffs the amount of P2,800.00, plus incidental expenses, as provided for by Art. 1555 of th

ode, in case of eviction or loss of ownership to said above described property on the part of plaintiffs." .

s true that the execution of the deed of absolute sale in a public instrument is equivalent to delivery of the land subject of the sale.2This presumptive delive

lds true when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee. It can be negatedality that the vendees actually failed to obtain material possession of the land subject of the sale. . 3It appears from the records of the case at bar that plapellants had not acquired physical possession of the land since its purchase on November 12, 1962. As a matter of fact, their purpose in filing the compvil Case No. 3285 is precisely to "get the possession of the property."

4In order that an action may be considered as one for forcible entry, it is not only nec

at the plaintiff should allege his prior physical possession of the property but also that he was deprived of his possession by any of the means provided in s

Rule 70 of the Revised Rules of Court, namely: force, intimidation, threats, strategy and stealth. For, if the dispossession did not take place by any ofeans, the courts of first instance, not the municipal courts, have jurisdictions. . 5The bare allegation in the complaint that the plaintiff has been "deprived"nd of which he is and has been the legal owner for a long period has been held to be insufficient.

6It is true that the mere act of a trespasser in unlawfully e

e land, planting himself on the ground and excluding therefrom the prior possessor would imply the use of force. In the case at bar, no such inference coade as plaintiffs-appellants had not claimed that they were in actual physical possession of the property prior to the entry of the Villablancas. Moreover, it is eat plaintiffs-appellants are not only seeking to get the possession of the property, but as an alternative cause of action, they seek the return of the pricyment of damages by the vendors "in case of eviction or loss of ownership" of the said property. It is, therefore, not the summary action of forcible entry witntext of the Rules. .

HEREFORE, the order of dismissal is hereby set aside, and the case remanded to the court a quo for further proceedings.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------R. No. 92989 July 8, 1991

ERFECTO DY, JR. petitioner, vs. CA, GELAC TRADING INC., and ANTONIO V. GONZALES, respondents

is is a petition for review on certiorariseeking the reversal of the March 23, 1990 decision of the Court of Appeals which ruled that the petitioner's purchasrm tractor was not validly consummated and ordered a complaint for its recovery dismissed.

e facts as established by the records are as follows:

e petitioner, Perfecto Dy and Wilfredo Dy are brothers. Sometime in 1979, Wilfredo Dy purchased a truck and a farm tractor through financing extended bnance and Investment Corporation (Libra). Both truck and tractor were mortgaged to Libra as security for the loan.

e petitioner wanted to buy the tractor from his brother so on August 20, 1979, he wrote a letter to Libra requesting that he be allowed to purchase from Wilfree said tractor and assume the mortgage debt of the latter.

a letter dated August 27, 1979, Libra thru its manager, Cipriano Ares approved the petitioner's request.

us, on September 4, 1979, Wilfredo Dy executed a deed of absolute sale in favor of the petitioner over the tractor in question.

this time, the subject tractor was in the possession of Libra Finance due to Wilfredo Dy's failure to pay the amortizations.

espite the offer of full payment by the petitioner to Libra for the tractor, the immediate release could not be effected because Wilfredo Dy had obtained financly for said tractor but also for a truck and Libra insisted on full payment for both.

e petitioner was able to convince his sister, Carol Dy-Seno, to purchase the truck so that full payment could be made for both. On November 22, 1979, aeck was issued in the amount of P22,000.00 in favor of Libra, thus settling in full the indebtedness of Wilfredo Dy with the financing firm. Payment havingfected through an out-of-town check, Libra insisted that it be cleared first before Libra could release the chattels in question.

eanwhile, Civil Case No. R-16646 entitled "Gelac Trading, Inc.v.Wilfredo Dy", a collection case to recover the sum of P12,269.80 was pending in another cebu.

n the strength of an aliaswrit of execution issued on December 27, 1979, the provincial sheriff was able to seize and levy on the tractor which was in the preLibra in Carmen, Cebu. The tractor was subsequently sold at public auction where Gelac Trading was the lone bidder. Later, Gelac sold the tractor to one

ockholders, Antonio Gonzales.

was only when the check was cleared on January 17, 1980 that the petitioner learned about GELAC having already taken custody of the subject tonsequently, the petitioner filed an action to recover the subject tractor against GELAC Trading with the Regional Trial Court of Cebu City.

n April 8, 1988, the RTC rendered judgment in favor of the petitioner. The dispositive portion of the decision reads as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant, pronouncing that the plaintiffowner of the tractor, subject matter of this case, and directing the defendants Gelac Trading Corporation and Antonio Gonzreturn the same to the plaintiff herein; directing the defendants jointly and severally to pay to the plaintiff the amount of P1,541expenses for hiring a tractor; P50,000 for moral damages; P50,000 for exemplary damages; and to pay the cost. (Rollo, pp. 35-3

n appeal, the Court of Appeals reversed the decision of the RTC and dismissed the complaint with costs against the petitioner. The Court of Appeals held thactor in question still belonged to Wilfredo Dy when it was seized and levied by the sheriff by virtue of the alias writ of execution issued in Civil Case No. R-16

e petitioner now comes to the Court raising the following questions:


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A.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS MISAPPREHENDED THE FACTS AND ERRED IN NOTAFFIRMING THE TRIAL COURT'S FINDING THAT OWNERSHIP OF THE FARM TRACTOR HAD ALREADY PASSED TO HEPETITIONER WHEN SAID TRACTOR WAS LEVIED ON BY THE SHERIFF PURSUANT TO ANALIASWRIT OF EXECUTIONISSUED IN ANOTHER CASE IN FAVOR OF RESPONDENT GELAC TRADING INC.

B.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS EMBARKED ON MERE CONJECTURE AND SURMISE INHOLDING THAT THE SALE OF THE AFORESAID TRACTOR TO PETITIONER WAS DONE IN FRAUD OF WILFREDO DY'SCREDITORS, THERE BEING NO EVIDENCE OF SUCH FRAUD AS FOUND BY THE TRIAL COURT.

C.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS MISAPPREHENDED THE FACTS AND ERRED IN NOTSUSTAINING THE FINDING OF THE TRIAL COURT THAT THE SALE OF THE TRACTOR BY RESPONDENT GELAC TRADITO ITS CO-RESPONDENT ANTONIO V. GONZALES ON AUGUST 2, 1980 AT WHICH TIME BOTH RESPONDENTS ALREAKNEW OF THE FILING OF THE INSTANT CASE WAS VIOLATIVE OF THE HUMAN RELATIONS PROVISIONS OF THE CIVICODE AND RENDERED THEM LIABLE FOR THE MORAL AND EXEMPLARY DAMAGES SLAPPED AGAINST THEM BY THETRIAL COURT. (Rollo, p. 13)

e respondents claim that at the time of the execution of the deed of sale, no constructive delivery was effected since the consummation of the sale depon the clearance and encashment of the check which was issued in payment of the subject tractor.

the case of Servicewide Specialists Inc.v.Intermediate Appellate Court. (174 SCRA 80 [1989]), we stated that:

xxx xxx xxx

The rule is settled that the chattel mortgagor continues to be the owner of the property, and therefore, has the power to alienasame; however, he is obliged under pain of penal liability, to secure the written consent of the mortgagee. Thus, the instrummortgage are binding, while they subsist, not only upon the parties executing them but also upon those who later, by purchaotherwise, acquire the properties referred to therein.

The absence of the written consent of the mortgagee to the sale of the mortgaged property in favor of a third person, therefore, not the validity of the sale but only the penal liability of the mortgagor under the Revised Penal Code and the binding effect osale on the mortgagee under the Deed of Chattel Mortgage.

xxx xxx xxx

e mortgagor who gave the property as security under a chattel mortgage did not part with the ownership over the same. He had the right to sell it although hder the obligation to secure the written consent of the mortgagee or he lays himself open to criminal prosecution under the provision of Article 319 par. 2

evised Penal Code. And even if no consent was obtained from the mortgagee, the validity of the sale would still not be affected.

us, we see no reason why Wilfredo Dy, as the chattel mortgagor can not sell the subject tractor. There is no dispute that the consent of Libra Financtained in the instant case. In a letter dated August 27, 1979, Libra allowed the petitioner to purchase the tractor and assume the mortgage debt of his brothele between the brothers was therefore valid and binding as between them and to the mortgagee, as well.

ticle 1496 of the Civil Code states that the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways spArticles 1497 to 1501 or in any other manner signing an agreement that the possession is transferred from the vendor to the vendee. We agree with the peat Articles 1498 and 1499 are applicable in the case at bar.

ticle 1498 states:

Art. 1498. When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of thwhich is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.

xxx xxx xxx

ticle 1499 provides:

Article 1499. The delivery of movable property may likewise be made by the mere consent or agreement of the contracting pathe thing sold cannot be transferred to the possession of the vendee at the time of the sale, or if the latter already had it possession for any other reason. (1463a)

the instant case, actual delivery of the subject tractor could not be made. However, there was constructive delivery already upon the execution of the strument pursuant to Article 1498 and upon the consent or agreement of the parties when the thing sold cannot be immediately transferred to the possessionndee. (Art. 1499)

e respondent court avers that the vendor must first have control and possession of the thing before he could transfer ownership by constructive delivery. H

as Libra Finance which was in possession of the subject tractor due to Wilfredo's failure to pay the amortization as a preliminary step to foreclosure. As mort


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has the right of foreclosure upon default by the mortgagor in the performance of the conditions mentioned in the contract of mortgage. The law implies thortgagee is entitled to possess the mortgaged property because possession is necessary in order to enable him to have the property sold.

hile it is true that Wilfredo Dy was not in actual possession and control of the subject tractor, his right of ownership was not divested from him upon his deither could it be said that Libra was the owner of the subject tractor because the mortgagee can not become the owner of or convert and appropriate to himsoperty mortgaged. (Article 2088, Civil Code) Said property continues to belong to the mortgagor. The only remedy given to the mortgagee is to have said pld at public auction and the proceeds of the sale applied to the payment of the obligation secured by the mortgagee. ( SeeMartinez v. PNB, 93 Phil. 76953]) There is no showing that Libra Finance has already foreclosed the mortgage and that it was the new owner of the subject tractor. Undeniably, Libra gnsent to the sale of the subject tractor to the petitioner. It was aware of the transfer of rights to the petitioner.

here a third person purchases the mortgaged property, he automatically steps into the shoes of the original mortgagor. (SeeIndustrial Finance Corp. v. A7 SCRA 521 [1989]). His right of ownership shall be subject to the mortgage of the thing sold to him. In the case at bar, the petitioner was fully aware isting mortgage of the subject tractor to Libra. In fact, when he was obtaining Libra's consent to the sale, he volunteered to assume the remaining balanceortgage debt of Wilfredo Dy which Libra undeniably agreed to.

e payment of the check was actually intended to extinguish the mortgage obligation so that the tractor could be released to the petitioner. It was never intr could it be considered as payment of the purchase price because the relationship between Libra and the petitioner is not one of sale but still a mortgage

earing or encashment of the check which produced the effect of payment determined the full payment of the money obligation and the release of the ortgage. It was not determinative of the consummation of the sale. The transaction between the brothers is distinct and apart from the transaction betweend the petitioner. The contention, therefore, that the consummation of the sale depended upon the encashment of the check is untenable.

e sale of the subject tractor was consummated upon the execution of the public instrument on September 4, 1979. At this time constructive delivery was afected. Hence, the subject tractor was no longer owned by Wilfredo Dy when it was levied upon by the sheriff in December, 1979. Well settled is the rule thoperties unquestionably owned by the judgment debtor and which are not exempt by law from execution should be levied upon or sought to be levied upoe power of the court in the execution of its judgment extends only over properties belonging to the judgment debtor. (Consolidated Bank and Trust Corp. v. Cppeals, G.R. No. 78771, January 23, 1991).

e respondents further claim that at that time the sheriff levied on the tractor and took legal custody thereof no one ever protested or filed a third party claim.

s inconsequential whether a third party claim has been filed or not by the petitioner during the time the sheriff levied on the subject tractor. A person other thdgment debtor who claims ownership or right over levied properties is not precluded, however, from taking other legal remedies to prosecute his onsolidated Bank and Trust Corp. v. Court of Appeals, supra) This is precisely what the petitioner did when he filed the action for replevin with the RTC.

nent the second and third issues raised, the Court accords great respect and weight to the findings of fact of the trial court. There is no sufficient evidence toat the sale of the tractor was in fraud of Wilfredo and creditors. While it is true that Wilfredo and Perfecto are brothers, this fact alone does not give rise esumption that the sale was fraudulent. Relationship is not a badge of fraud (Goquiolay v. Sycip, 9 SCRA 663 [1963]). Moreover, fraud can not be presumust be established by clear convincing evidence.

e agree with the trial court's findings that the actuations of GELAC Trading were indeed violative of the provisions on human relations. As found by the triaELAC knew very well of the transfer of the property to the petitioners on July 14, 1980 when it received summons based on the complaint for replevin filed wTC by the petitioner. Notwithstanding said summons, it continued to sell the subject tractor to one of its stockholders on August 2, 1980.

HEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals promulgated on March 23, 1990 is SET ASIDE and the decision

egional Trial Court dated April 8, 1988 is REINSTATED.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------R. No. 119745 June 20, 1997

OWER COMMERCIAL AND INDUSTRIAL CORP, petitioner, vs. CA, SPOUSES REYNALDO and ANGELITA R. QUIAMBAO and PNB, respondents

the seller's failure to eject the lessees from a lot that is the subject of a contract of sale with assumption of mortgage a ground (1) for rescission of such cod (2) for a return by the mortgagee of the amortization payments made by the buyer who assumed such mortgage?

etitioner posits an affirmative answer to such question in this petition for review on certiorari of the March 27, 1995 Decision 1

of the Court of Appeals, vision, in CA-G.R. CV Case No. 32298 upholding the validity of the contract of sale with assumption of mortgage and absolving the mortgagee from the liabturning the mortgage payments already made.

2

The Facts

etitioner Power Commercial & Industrial Development Corporation, an industrial asbestos manufacturer, needed a bigger office space and warehouse oducts. For this purpose, on January 31, 1979, it entered into a contract of sale with the spouses Reynaldo and Angelita R. Quiambao, herein private respone contract involved a 612-sq. m. parcel of land covered by Transfer Certificate of Title No. S-6686 located at the corner of Bagtican and St. Paul Street

ntonio Village, Makati City. The parties agreed that petitioner would pay private respondents P108,000.00 as down payment, and the balance of P295,000.0e execution of the deed of transfer of the title over the property. Further, petitioner assumed, as part of the purchase price, the existing mortgage on the landtisfaction thereof, he paid P79,145.77 to Respondent Philippine National Bank ("PNB" for brevity).

n June 1, 1979, respondent spouses mortgaged again said land to PNB to guarantee a loan of P145,000.00, P80,000.00 of which was paid to respoouses. Petitioner agreed to assume payment of the loan.

n June 26, 1979, the parties executed a Deed of Absolute Sale With Assumption of Mortgage which contained the following terms and conditions:3

That for and in consideration of the sum of Two Hundred Ninety-Five Thousand Pesos (P295,000.00) Philippine Currency, tohand paid in cash, and which we hereby acknowledge to be payment in full and received to our entire satisfaction, by POCOMMERCIAL AND INDUSTRIAL DEVELOPMENT CORPORATION, a 100% Filipino Corporation, organized and existing undby virtue of Philippine Laws with offices located at 252-C Vito Cruz Extension, we hereby by these presents SELL, TRANSFE


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CONVEY by way of absolute sale the above described property with all the improvements existing thereon unto the said Commercial and Industrial Development Corporation, its successors and assigns, free from all liens and encumbrances.

We hereby certify that the aforesaid property is not subject to nor covered by the provisions of the Land Reform Code thehaving no agricultural lessee and/or tenant.

We hereby also warrant that we are the lawful and absolute owners of the above described property, free from any lien encumbrance, and we hereby agree and warrant to defend its title and peaceful possession thereof in favor of the said Commercial and Industrial Development Corporation, its successors and assigns, against any claims whatsoever of any and apersons; subject, however, to the provisions hereunder provided to wit:

That the above described property is mortgaged to the Philippine National Bank, Cubao, Branch, Quezon City for the amount ohundred forty-five thousand pesos, Philippine, evidenced by document No. 163, found on page No. 34 of Book No. XV, Series o

of Notary Public L. Altamirano registered with the Register of Deeds of Pasig (Makati), Rizal . . . ;

That the said Power Commercial and Industrial Development Corporation assumes to pay in full the entire amount of thmortgage above described plus interest and bank charges, to the said mortgagee bank, thus holding the herein vendor free frclaims by the said bank;

That both parties herein agree to seek and secure the agreement and approval of the said Philippine National Bank to the hereof this property, hereby agreeing to abide by any and all requirements of the said bank, agreeing that failure to do so shall givebank first lieu (sic) over the herein described property.

n the same date, Mrs. C.D. Constantino, then General Manager of petitioner-corporation, submitted to PNB said deed with a formal application for assumportgage.

4

n February 15, 1980, PNB informed respondent spouses that, for petitioner's failure to submit the papers necessary for approval pursuant to the former'sted January 15, 1980, the application for assumption of mortgage was considered withdrawn; that the outstanding balance of P145,000.00 was deemed fud demandable; and that said loan was to be paid in full within fifteen (15) days from notice.

5

etitioner paid PNB P41,880.45 on June 24, 1980 and P20,283.14 on December 23, 1980, payments which were to be applied to the outstanding loaecember 23, 1980, PNB received a letter from petitioner which reads:

6

With regard to the presence of the people who are currently in physical occupancy of the (l)ot . . . it is our desire as buyers anowners of this lot to make use of this lot for our own purpose, which is why it is our desire and intention that all the people whcurrently physically present and in occupation of said lot should be removed immediately.

For this purpose we respectfully request that . . . our assumption of mortgage be given favorable consideration, and that the moand title be transferred to our name so that we may undertake the necessary procedures to make use of this lot ourselves.

It was our understanding that this lot was free and clear of problems of this nature, and that the previous owner would be respo

for the removal of the people who were there. Inasmuch as the previous owner has not been able to keep his commitment, it necessary for us to take legal possession of this lot inorder (sic) to take physical possession.

n February 19, 1982, PNB sent petitioner a letter as follows:7

(T)his refers to the loan granted to Mr. Reynaldo Quiambao which was assumed by you on June 4, 1979 for P101,500.00. It wrenewed on December 24, 1980 to mature on June 4, 1981.

A review of our records show that it has been past due from last maturity with interest arrearages amounting to P25,826.08February 19, 1982. The last payment received by us was on December 24, 1980 for P20,283. 14. In order to place your accocurrent form, we request you to remit payments to cover interest, charges, and at least part of the principal.

n March 17, 1982, petitioner filed Civil Case No. 45217 against respondent spouses for rescission and damages before the Regional Trial Court of Pasig, B9. Then, in its reply to PNB's letter of February 19, 1982, petitioner demanded the return of the payments it made on the ground that its assumption of mo

as never approved. On May 31, 1983, 8

while this case was pending, the mortgage was foreclosed. The property was subsequently bought by PNB duriblic auction. Thus, an amended complaint was filed impleading PNB as party defendant.

n July 12, 1990, the trial court9

ruled that the failure of respondent spouses to deliver actual possession to petitioner entitled the latter to rescind the sale,ew of such failure and of the denial of the latter's assumption of mortgage, PNB was obliged to return the payments made by the latter. The dispositive porid decision states:

10

IN VIEW OF ALL THE FOREGOING, the Court hereby renders judgment in favor of plaintiff and against defendants:

(1) Declaring the rescission of the Deed of Sale with Assumption of Mortgage executed between plaintiff and defendants SpQuiambao, dated June 26, 1979;

(2) Ordering defendants Spouses Quiambao to return to plaintiff the amount of P187,144.77 (P108,000.00 plus P79,145.77) witinterest of 12%per annumfrom date of filing of herein complaint, that is, March 17, 1982 until the same is fully paid;


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(3) Ordering defendant PNB to return to plaintiff the amount of P62,163.59 (P41,880.45 and P20,283.14) with 12% interest thfrom date of herein judgment until the same is fully paid.

No award of other damages and attorney's fees, the same not being warranted under the facts and circumstances of the case.

The counterclaim of both defendants spouses Quiambao and PNB are dismissed for lack of merit.

n appeal by respondent-spouses and PNB, Respondent Court of Appeals reversed the trial court. In the assailed Decision, it held that the deed of sale bespondent spouses and petitioner did not obligate the former to eject the lessees from the land in question as a condition of the sale, nor was the occupation tsaid lessees a violation of the warranty against eviction. Hence, there was no substantial breach to justify the rescission of said contract or the return

yments made.

ence, the recourse to this Court.

Issues

etitioner contends that: (1) there was a substantial breach of the contract between the parties warranting rescission; and (2) there was a "mistake in payade by petitioner, obligating PNB to return such payments. In its Memorandum, it specifically assigns the following errors of law on the part of Respondent C

A. Respondent Court of Appeals gravely erred in failing to consider in its decision that a breach of implied warranty under Articlin relation to Article 1545 of the Civil Code applies in the case-at-bar.

B. Respondent Court of Appeals gravely erred in failing to consider in its decision that a mistake in payment giving rise to a siwhere the principle of solutio indebitiapplies is obtaining in the case-at-bar.

The Court's Ruling

e petition is devoid of merit. It fails to appreciate the difference between a condition and a warranty and the consequences of such distinction.

Conspicuous Absence of an Imposed Condition

e alleged "failure" of respondent spouses to eject the lessees from the lot in question and to deliver actual and physical possession thereof cannot be conssubstantial breach of a condition for two reasons: first, such "failure" was not stipulated as a condition whether resolutory or suspensive in the contracond, its effects and consequences were not specified either.

13

e provision adverted to by petitioner does not impose a condition or an obligation to eject the lessees from the lot. The deed of sale provides in part:14

We hereby also warrant that we are the lawful and absolute owners of the above described property, free from any lien encumbrance, and we hereby agree and warrant to defend its title and peaceful possession thereof in favor of the said Commercial and Industrial Development Corporation, its successors and assigns, against any claims whatsoever of any and a

persons; subject, however, to the provisions hereunder provided to wit:

y his own admission, Anthony Powers, General Manager of petitioner-corporation, did not ask the corporation's lawyers to stipulate in the contract that Respeynaldo was guaranteeing the ejectment of the occupants, because there was already a proviso in said deed of sale that the sellers were guaranteeiaceful possession by the buyer of the land in question.

15Any obscurity in a contract, if the above-quoted provision can be so described, must be con

ainst the party who caused it.16

Petitioner itself caused the obscurity because it omitted this alleged condition when its lawyer drafted said contract.

he parties intended to impose on respondent spouses the obligation to eject the tenants from the lot sold, it should have included in the contract a provision that referred to in Romero vs.Court of Appeals,

17where the ejectment of the occupants of the lot sold by private respondent was the operative act which s

otion the period of petitioner's compliance with his own obligation, i.e., to pay the balance of the purchase price. Failure to remove the squatters withpulated period gave the other party the right to either refuse to proceed with the agreement or to waive that condition of ejectment in consonance with Articlthe Civil Code. In the case cited, the contract specifically stipulated that the ejectment was a condition to be fulfilled; otherwise, the obligation to pay the ba

ould not arise. This is not so in the case at bar.

bsent a stipulation therefor, we cannot say that the parties intended to make its nonfulfillment a ground for rescission. If they did intend this, their contract ve expressly stipulated so. InAng vs. C.A.,

18rescission was sought on the ground that the petitioners had failed to fulfill their obligation "to remove and cle

sold, the performance of which would have given rise to the payment of the consideration by private respondent. Rescission was not allowed, however, bee breach was not substantial and fundamental to the fulfillment by the petitioners of the obligation to sell.

s stated, the provision adverted to in the contract pertains to the usual warranty against eviction, and not to a condition that was not met.

e terms of the contract are so clear as to leave no room for any other interpretation.19

rthermore, petitioner was well aware of the presence of the tenants at the time it entered into the sales transaction. As testified to by Reynaldo,20

petitunsel during the sales negotiation even undertook the job of ejecting the squatters. In fact, petitioner actually filed suit to eject the occupants. Finally, petitioletter to PNB of December 23, 1980 admitted that it was the "buyer(s) and new owner(s) of this lot."

Effective Symbolic Delivery


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e Court disagrees with petitioner's allegation that the respondent spouses failed to deliver the lot sold. Petitioner asserts that the legal fiction of symbolic delded to the truth that, at the execution of the deed of sale, transfer of possession of said lot was impossible due to t he presence of occupants on the lot sod this misleading.

though most authorities consider transfer of ownership as the primary purpose of sale, delivery remains an indispensable requisite as our law does not adctrine of transfer of property by mere consent.

21The Civil Code provides that delivery can either be (1) actual (Article 1497) or (2) constructive (Articles

01). Symbolic delivery (Article 1498), as a species of constructive delivery, effects the transfer of ownership through the execution of a public documeficacy can, however, be prevented if the vendor does not possess control over the thing sold,

22in which case this legal fiction must yield to reality.

e key word is control, notpossession, of the land as petitioner would like us to believe. The Court has consistently held that:23

. . . (I)n order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had suchover the thing sold that . . . its material delivery could have been made. It is not enough to confer upon the purchaser the own

and the rightof possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent thsold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and mtenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are oppothe interposition of another will, then fiction yields to reality the delivery has not been effected.

onsidering that the deed of sale between the parties did not stipulate or infer otherwise, delivery was effected through the execution of said deed. The lot soen placed under the control of petitioner; thus, the filing of the ejectment suit was subsequently done. It signified that its new owner intended to obtain for itsterminate said occupants' actual possession thereof. Prior physical delivery or possession is not legally required and the execution of the deed of sale is duivalent to delivery.

24 This deed operates as a formal or symbolic delivery of the property sold and authorizes the buyer to use the document as p

wnership. Nothing more is required.

Requisites of Breach of Warranty Against Eviction

bvious to us in the ambivalent stance of petitioner is its failure to establish any breach of the warranty against eviction. Despite its protestation that its acquis

e lot was to enable it to set up a warehouse for its asbestos products and that failure to deliver actual possession thereof defeated this purpose, still no brearranty against eviction can be appreciated because the facts of the case do not show that the requisites for such breach have been satisfied. A breach arranty requires the concurrence of the following circumstances:

) The purchaser has been deprived of the whole or part of the thing sold;

) This eviction is by a final judgment;

) The basis thereof is by virtue of a right prior to the sale made by the vendor; and

) The vendor has been summoned and made co-defendant in the suit for eviction at the instance of the vendee.25

In the absence of these requisites, a breach of the warranty against eviction under Article 1547 cannot be declared.

etitioner argues in its memorandum that it has not yet ejected the occupants of said lot, and not that it has been evicted therefrom. As correctly pointed espondent Court, the presence of lessees does not constitute an encumbrance of the land,

26nor does it deprive petitioner of its control thereof.

e note, however, that petitioner's deprivation of ownership and control finally occurred when it failed and/or discontinued paying the am ortizations on the mousing the lot to be foreclosed and sold at public auction. But this deprivation is due to petitioner's fault, and not to any act attributable to the vendor-spouses.

ecause petitioner failed to impugn its integrity, the contract is presumed, under the law, to be valid and subsisting.

Absence of Mistake In Payment

ontrary to the contention of petitioner that a return of the payments it made to PNB is warranted under Article 2154 of the Code, solutio indebiti does not as case. This doctrine applies where: (1) a payment is made when there exists no binding relation between the payor, who has no duty to pay, and the persoceived the payment, and (2) the payment is made through mistake, and not through liberality or some other cause.

27

this case, petitioner was under obligation to pay the amortizations on the mortgage under the contract of sale and the deed of real estate mortgage. Unded of sale (Exh. "2"),

28both parties agreed to abide by any and all the requirements of PNB in connection with the real estate mortgage. Petitioner was awa

e deed of mortgage (Exh. "C") made it solidarily and, therefore, primarily29

liable for the mortgage obligation:30

(e) The Mortgagor shall neither lease the mortgaged property. . . nor sell or dispose of the same in any manner, without the wconsent of the Mortgagee. However, if not withstanding this stipulation and during the existence of this mortgage, the propertymortgaged, or any portion thereof, is . . . sold, it shall be the obligation of the Mortgagor to impose as a condition of the sale, alieor encumbrance that the vendee, or the party in whose favor the alienation or encumbrance is to be made, should take the prsubject to the obligation of this mortgage in the same terms and condition under which it is constituted, it being understood thMortgagor is not in any manner relieved of his obligation to the Mortgagee under this mortgage by such sale, alienatencumbrance; on the contrary both the vendor and the vendee, or the party in whose favor the alienation or encumbrance is shall be jointly and severally liable for said mortgage obligations. . . .

Therefore, it cannot be said that it did not have a duty to pay to PNB the amortization on the mortgage.


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so, petitioner insists that its payment of the amortization was a mistake because PNB disapproved its assumption of mortgage after it failed to submcessary papers for the approval of such assumption.

ut even if petitioner was a third party in regard to the mortgage of the land purchased, the payment of the loan by petitioner was a condition clearly imposedntract of sale. This fact alone disproves petitioner's insistence that there was a "mistake" in payment. On the contrary, such payments were necessary to pinterest as a "the buyer(s) and new owner(s) of the lot."

e quasi-contract of solutio indebiti is one of the concrete manifestations of the ancient principle that no one shall enrich himself unjustly at the expense of aBut as shown earlier, the payment of the mortgage was an obligation petitioner assumed under the contract of sale. There is no unjust enrichment whe

ansaction, as in this case, is quid pro quo, value for value.

told, respondent Court did not commit any reversible error which would warrant the reversal of the assailed Decision.

HEREFORE, the petition is hereby DENIED, and the assailed Decision is AFFIRMED.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

R. No. L-40195 May 29, 1987CTORIA R. VALLARTA, petitioner, vs. CA and HON JUDGE FRANCISCO LLAMAS, Pasay City Court, respondents

e petitioner seeks a reversal of the Court of Appeals decision dated December 13, 1974 affirming the Trial Court's judgment convicting her of estafa. We de petition initially but granted a motion for reconsideration and gave the petition due course.

s found by the trial court and the Court of Appeals, Rosalinda Cruz, the private offended party, and accused Victoria Vallarta are long time friends and buquaintances. On November 20, 1968, Cruz entrusted to Victoria Vallarta seven pieces of jewelry. In December of the same year, Vallarta decided to buyms, exchanged one item with another, and issued a post-dated check in the amount of P5,000 dated January 30, 1969. Rosalinda Cruz deposited said chece bank. However, upon presentment, the check was dishonored and Cruz was informed that Vallarta's account had been closed. Cruz apprised Vallarta shonor and the latter promised to give another check. Later, Vallarta pleaded for more time. Still later, she started avoiding Cruz. Hence, this criminal actiostituted.

ased on the foregoing facts, both the trial court and the Court of Appeals found Vallarta guilty beyond reasonable doubt of the crime of estafa.

E affirm.

etitioner is charged under Art. 315 (2) (d) as amended by Rep. Act No. 4885, of the Revised Penal Code, which penalizes any person who shall defraud ab)y postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein wefficient to cover the amount of the check."

y virtue of Rep. Act No. 4885, "(t)he failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from rectice from the bank and/or the payee or holder that said check has been dishonored for lack or insufficiency of funds" is deemed prima facie evidence ofnstituting false pretense or fraudulent act.

o constitute estafa under this provision the act of post-dating or issuing a check in payment of an obligation must be the efficient cause of defraudation, and ashould be either prior to, or simultaneous with the act of fraud. The offender must be able to obtain money or property from the offended party because suance of a check whether post-dated or not. That is, the latter would not have parted with his money or other property were it not for the issuance of the ewise, the check should not be, issued in payment of a pre-existing obligation (People v. Lilius, 59 Phil. 339 [1933]).

seeking acquittal, petitioner stresses that the transaction between her and Cruz was a "sale or return," perfected and consummated on November 20, 1968e seven pieces of jewelry were delivered. The check issued in December 1968 was therefore in payment of a pre-existing obligation. Thus, even if shonored, petitioner claims that she can only be held civilly liable, but not criminally liable under Art. 315 (2) (d), Revised Penal Code. She also argues thatte, what prompted Cruz to deliver the jewelry was the social standing of petitioner Vallarta and not the postdated check.

he thus assigns as errors the finding of that Court a quo that the jewelries were entrusted on November 20, 1968, but the sale wasperfected in Decembed the finding that there was deceit in the issuance of the postdated check.

order to arrive at the proper characterization of the transaction between Vallarta and Cruz, that is, whether it was a "sale or return" or some other transactiocessary to determine the intention of the parties.

e following excerpts from the transcript of stenographic notes are significant:

I. Direct Examination of Rosalinda Cruz

Q: Now, what happened with that business transaction of yours with Mrs. Vallarta?

A: After that and after shefinally agreed to buy two sets and changed the ruby ring with another ring, sheme postdated check; I waited for January 30, 1969. 1 deposited the check in the Security Bank. And afterknew (learned) that it was closed account (TSN, June 29, 1972, p. 9) (Emphasis supplied).

II. Cross-Examination of Rosalinda Cruz

Q: Now, you mentioned about certain jewelries in Exh. "A. Could you tell under your oath whether all the jewlisted here (Exh. "A") were taken by Mrs. Vallarta at one single instance?


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A: Yes, Sir. It was on one (1) day when I entrusted them to her so she can select what she wants.

III. Cross-Examination of Rosalinda Cruz

COURT: But could you still recall or you cannot recall whether you agreed to reduce the cost to Five ThoEight Hundred ( P5,800.00) Pesos?

A Yes, Sir. I agreed to reduce it to Five Thousand Eight Hundred (P5,800.00) Pesos, Sir, when I went to sin her house to finalize what jewelries she wanted (Id. at p. 26).

ote that Vallarta changed the ruby ring because it was not acceptable to her, and chose another ring. Likewise, the price to be paid for the jewelry was reed upon only in December 1968. Thus, there was a meeting of the minds between the parties as to the object of the contract and the consideration the

ly in December 1968, the same time that the check was issued. The delivery made on November 20, 1968 was only for the purpose of enabling Vallarta tohat jewelry she wanted.

operly, then, the transaction entered into by Cruz and Vallarta was not a "sale or return." Rather, it was a "sale on approval " (also called " sale on acceptaale on trial." or "sale on satisfaction" [CIVIL CODE, art. 1502]). In a "sale or return," the ownership passes to the buyer on delivery (CIVIL CODE, art. 1502bsequent return of the goods reverts ownership in the seller [CIVIL CODE, art. 1502]). Delivery, or tradition. as a mode of acquiring ownership mustnsequenceof a contract (CIVIL CODE, art. 712), e.g. sale.

there was no meeting of the minds on November 20, 1968, then, as of that date, there was yet no contract of sale which could be the basis of delivery or traus, the delivery made on November 20, 1968 was not a delivery for purposes of transferring ownership the prestation incumbent on the vendor. If owner the jewelry was not transmitted on that date, then it could have been transmitted only in December 1968, the date when the check was issued. In which c

as a "sale on approval" since ownership passed to the buyer. Vallarta, only when she signified her approval or acceptance to the seller, Cruz, and the pricreed upon.

us, when the check which later bounced was issued, it was not in payment of a pre-existing obligation. Instead the issuance of the check was simultaneoue transfer of ownership over the jewelry. But was the check issued simultaneously with the fraud?

epublic Act No. 4885, amending Art. 315 (2) (d), Revised Penal Code, establishes aprima facieevidence of deceit upon proof that the drawer of the check faposit the amount necessary to cover his check within three (3) days from receipt of notice of dishonor for lack or insufficiency of funds.

dmittedly, (1) the check was dishonored as Vallarta's account had been earlier closed; (2) she was notified by Cruz of the dishonor: and, (3) Vallarta failed togood within three days. Deceit is therefore presumed.

etitioner lays stress on her being an alumna of a reputable school, on her having a husband who is a bank manager, and on the big land-holdings of her fathgues that it was these qualifications and not the post-dated check which prompted Cruz to deliver the jewelry (Rollo, pp. 78-79: Motion for Reconsideration, ). Hence, there was no deceit. It is thus suggested that a person of petitioner's social standing cannot be guilty of deceit, at least in so far as issuing bouecks is concerned. This reasoning does not merit serious consideration. If accepted, it could result in a law that falls unequally on persons depending ocial position.

d Cruz part with the jewelry solely because she knew Vallarta to be rich, or did she do so because of the check issued to her? As the trial court and the Co

ppeals found, petitioner was able to obtain the jewelry because she issued the check. Her failure to deposit the necessary amount to cover it within three daytice of dishonor created theprima facie presumption established by the amendatory law, Rep. Act No. 4885, which she failed to rebut.

etitioner, however, contends that Rep. Act No. 4885 is unconstitutional. She claims that even as the presumption of deceit established by Rep. Act No. 4ated under the guise of being prima facie. It is in effect a conclusive presumption, because after the prosecution has proved that: (1) the check hasshonored; (2) notice has been given to the drawer; and, (3) three days from notice, the check is not funded or the obligation is not paid, the accused is heldus, it is alleged, the constitutional presumption of innocence is violated.

ontrary to petitioner's assertion, the presumption of deceit under Rep. Act No. 4885 is not conclusive. It is rebuttable. For instance, We ruled in the case ofVillapando (56 Phil. 31 [1931]) that good faith is a defense to a charge of estafa by postdating a check, as when the drawer, foreseeing his inability to paeck at maturity, made an arrangement with his creditor as to the manner of payment of the debt.*

oreover, it is now well settled that "there is no constitutional objection to the passage of a law providing that the presumption of innocence may be overcomntrary presumption founded upon the experience of human conduct, and enacting what evidence shall be sufficient to overcome such presumption of innoeople v. Mingoa, 92 Phil. 856 [1953] at 858-59, citing I COOLEY, A TREATISE ON THE CONSTITUTIONAL LIMITATIONS, 639-641). And the "legislatur

act that when certain facts have been proved they shall be prima facie evidence of the existence of the guilt of the accused and shift the burden of proof prere be a rational connection between the facts proved and the ultimate fact presumed so that the inference of the one from proof of the others is not unreasd arbitrary because of lack of connection between the two in common experience" (People v. Mingoa, supra. See also US v. Luling, 34 Phil. 725 [1916]).

ere can be no doubt that the "postdating or issuing of a check in payment of an obligation when the offender had no funds in the bank, or his funds depoerein were not sufficient to cover the amount of the check," is a false pretense or a fraudulent act. It is so characterized by Art. 315 (2) (d), Revised Penal Cepublic Act No. 4885 does nothing more than limit the period within which the drawer/issuer must pay the creditor.

etitioner also argues that Rep. Act No. 4885 violates the constitutional injunction against imprisonment for non-payment of debt. Ironically, she does not que constitutionality of Art. 315 (2) (d), Revised Penal Code, which defines the crime she is being accused of, and provides for its punishment. In fact, she cone constitutionality of the latter statute. She further concedes that a person may be imprisoned for "criminal fraud" covered by Art. 315 (2) of the Revisedode.

People v. Sabio(No. L-45490, November 20, 1978, 86 SCRA 568), this Court ruled that Rep. Act No. 4885 has not changed the rule established in Art. 315or to the amendment; that Republic Act No. 4885 merely established the prima facie evidence of deceit, and eliminated the requirement that the drawer info

yee that he had no funds in the bank or the funds deposited by him were not sufficient to cover the amount of the check. Thus, even with the amend


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roduced by Rep. Act No. 4885 it is still criminal fraud or deceit in the issuance of a check which is made punishable under the Revised Penal Code, and nn-payment of the debt.

etitioner also assigns as error the denial by the trial court of her motion for reconsideration. Her motion was directed at the finding of the trial court that no payere made. Alleging that a check drawn by one Sison was given by petitioner to Cruz in payment of the rubber check, petitioner claims that had her motconsideration been granted, she would have called to the witness stand the Branch Manager of Security Bank and Trust Company, Pasay City, where the as allegedly deposited by Cruz, for said bank manager to Identify the owner-holder of the savings account to which the amount in Sison's check had been crief for Petitioner, p. 46).

ranting that the bank manager's testimony would have been as alleged by petitioner, Our decision would remain. As correctly observed by both the trial coue Court of Appeals (Court of Appeals Decision, pp. 2-3), the payments petitioner allegedly made were not shown to have any relevance to the obligaestion.

HEREFORE, finding no error in the assailed decision of the Court of Appeals, the same is AFFIRMED.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------R. No. L-16394 December 17, 1966

OSE SANTA ANA, JR. and LOURDES STO. DOMINGO,petitioners, vs. ROSA HERNANDEZ,respondent

ppeal from the decision of the Court of Appeals in its Case CA-G.R. No. 20582-R, in effect reversing the decision of the Court of First Instance of Bulacavil Case No. 1036.

e petitioners herein, spouses Jose Santa Ana, Jr. and Lourdes Sto. Domingo, owned a 115,850-square meter parcel of land situated in barrio Balasinaria, Bulacan, and covered by Transfer Certificate of Title No. T-3598. On 28 May 1954, they sold two (2) separate portions of the land for P11,000.00 to thespondent Rosa Hernandez. These portions were described in the deed of sale as follows:

Bahaguing nasa gawing Hilagaan. Humahanga sa Hilaga, kina Maria Perez, at Aurelio Perez; sa Timugan, sa lupang kasanib; sa Silangkay Mariano Flores at Emilio Ignacio; sa Kanluran, kay Cornelio Ignacio; Mayroong (12,500), m.c. humigit kumulang.

Bahaguing nasa gawing Silanganan Humahanga sa Hilagaan, sa kay Rosa Hernandez; sa Silanganan, kay Domingo Hernandez at AHernandez; sa Timugan, sa Sta. Maria-Tigbi Road; at sa Kanluran, sa lupang kasanib (Jose Sta. Ana, Jr.), mayroong (26,500) mcuadrados, humigit kumulang.

ter the sale (there were two other previous sales to different vendees of other portions of the land), the petitioners-spouses caused the preparation of a subdan, Psd-43187, was approved on 13 January 1955 by the Director of Lands. Rosa Hernandez, however, unlike the previous vendees, did not conform to thd refused to execute an agreement of subdivision and partition for registration with the Register of Deeds of Bulacan; and she, likewise, refused to vacaeas that she had occupied. Instead, she caused the preparation of a different subdivision plan, which was approved by the D irector of Lands on 24 Februaryis plan, Psd-42844, tallied with the areas that the defendant, Rosa Hernandez, had actually occupied.

n 28 February 1955, herein petitioners-spouses filed suit against respondent Rosa Hernandez in the Court of First Instance of Bulacan, claiming thafendant was occupying an excess of 17,000 square meters in area of what she had bought from them. Defendant Rosa Hernandez, on the other hand, cat the alleged excess, was part of the areas that she bought.

e trial court observed:

The only question, therefore, to be determined by the Court is whether or not the plaintiffs had sold two portions without clear boundariwith exact areas (12,500 sq. m. and 26,000 sq. m.) at the rate of P.29 per square meter or, as defendant Rosa Hernandez claimed, two pothe areas of which were not definite but which were well defined on the land and with definite boundaries and sold for the lump sP11,000.00.

nding for the plaintiffs, the said court ordered the defendant, among other things, to vacate "the excess portions actually occupied by her and to conficupation only to Lots 4-a and 4-b as shown in the plan, Exhibit E, of the plaintiffs . . .," referring to Psd-43187.

ot satisfied with the judgment, defendant Hernandez appealed to the Court of Appeals.

e Court of Appeals dismissed the complaint and declared Rosa Hernandez the owner of lots 4-a and 4-b in her plan, Psd-42844, upon the following findings

The contract between appellees and appellant (Exhibit D) provided for the sale of two separate portions of the same land for the consideration of P11,000.00. Appellee Jose Santa Ana, Jr. said the transaction was by a unit of measure or per square meter, and that althe actual total purchase price of the two parcels of land was P11,300.00 at P0.29 per square meter the parties agreed to the sale reduced price of P11,000.00. The appellant denied this claim of appellees. Gonzalo V. Ignacio, the notarial officer before the contract was executed, failed to corroborate Sta. Ana upon this point. Upon the contrary, Ignacio testified that appellant complained to him aappellees to the effect that the areas stated in the contract were less than the actual areas of the parcels of land being sold and here wethe notarial officer's own words:

"That the area stated in the document will not be the one to prevail but the one to prevail is the boundary of the land which you aknow." (p. 74, Innocencio).

Sta. Ana is the nephew of the appellant, and the former's assurance probably appeased the latter against insisting in the correction of thestated in the contract of sale.

Two witnesses testified for the appellant. Jesus Policarpio divulged that the same parcels of land involved in this case were previously offhim by the appellees for the single purchase price of P12,000.00. Julio Hernandez stated that his sister, the herein appellant, had oP10,000.00 as against the appellees' price of P12,000.00, and that he was able to persuade the parties to meet halfway on the


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Furthermore the previous conveyances made by the appellees for other portions of the same property (Exhibits B and C) are also fosums.

The difference in area of 17,000 square meters is about one-half of the total area of the two parcels of land stated in the document, but nthis alone may we infer gross mistake on the part of appellees. The appellees admit the lands in question were separated from the rest oproperty by a long and continuous "pilapil" or dike, and there is convincing proof to show that the bigger lot (Lot 4-a) was wholly tenanappellees by Ciriaco Nicolas and Santiago Castillo and the smaller lot (Lot 4-b) was wholly tenanted for said appellees by Gregorio GatcThese facts support the theory that the two parcels of land sold to the appellant were identified by the conspicuous boundaries and the exarea each tenant used to till for the vendors. Again, appellees should not be heard to complain about the deficiency in the area becauregistered owners and possessors of the entire land since 1949 they can rightly be presumed to have acquired a good estimate of the valareas of the portions they subsequently sold.

e Court of Appeals concluded by applying to the case Article 1542 of the new Civil Code:

In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no incredecrease of the price, although there be greater or less area or number than that stated in the contract.

The same rule shall be applied when two or more immovables are sold for a single price; but if, besides mentioning the boundaries, windispensable in every conveyance of real estate, its area or number should be designated in the contract, the vendor shall be bound to all that is included within said boundaries, even when it exceeds the area or number specified in the contract; and, should he not be ableso, he shall suffer a reduction in the price, in proportion to what is lacking in the area or number, unless the contract is rescinded becauvendee does not accede to the failure to deliver what has been stipulated.

d declared Rosa Hernandez the owner of the whole of lots 4-a and 4-b of her own subdivision Plan Psd-42844, notwithstanding their increased area as comthat specified in the deed of sale.

turn, the Sta. Ana spouses appealed to this Court, assigning the following errors:

The Court of Appeals committed a grave error of law when it departed from the accepted and usual course of judicial proceedings, by distthe findings of fact of the trial court, made upon conflicting testimonies of the witnesses for the plaintiffs, now in the petitioners, andefendant, now the respondent, Rosa Hernandez.

The Court of Appeals committed a grave error of law when it held that the deed of sale, Exhibit D, was for a lump sum, despite the fact tboundaries given therein were not sufficiently certain and the boundaries indicated did not clearly identify the land, thereby erroneously dea question of substance in a way not in accord with law and the applicable decisions of this Honorable Court.

n the face of the foregoing assignments of error and the petitioners' discussions thereabout, their position can be summarized as follows: that the Court of Ared in substituting its own findings of fact for that of the trial court's, without strong and cogent reasons for the substitution, contrary to the rule that appellateall not disturb the findings of fact of trial courts in the absence of such strong and cogent reasons; and that Article 1542 of the Civil Code of the Philippinest apply, allegedly because the boundaries, as shown in the deed of sale, are not definite.

the first assignment of error, the petitioner spouses complain against the failure of the Court of Appeals to accept the findings of fact made by the Court ostance. The credibility of witnesses and the weighing of conflicting evidence are matters within the exclusive authority of the Court of Appeals, and it cessarily bound by the conclusions of the trial court. Both the Judiciary Act (R.A. 296, section 29) and the Rules of Court (Rule 45, section 2) only allow a decisions of the Court of Appeals on questions of law; and numerous decisions of this Court have invariably and repeatedly held that findings of fact by theAppeals are conclusive and not reviewable by the Supreme Court (Galang vs. Court of Appeals, L-17248, 29 January 1962; Fonacier vs. Court of Appea

hil. 418, 421; and cases therein cited; Onglengco vs. Ozaeta, 70 Phil. 43; Nazareno vs. Magwagi, 71 Phil. 101). Barring, therefore, a showing that the finmplained of are totally devoid of support in the record, or that they are so glaringly erroneous as to constitute serious abuse of discretion, such findingsand, for this Court is not expected or required to examine and contrast the oral and documentary evidence submitted by the parties. As pointed out by formestice Moran in his Comments on the Rules of Court (1963 Ed., Vol. 2, p. 412), the law creating the Court of Appeals was intended mainly to take away fro

upreme Court the work of examining the evidence, and confine its task for the determination of questions which do not call for the reading and study of tranntaining the testimony of witnesses.

e first assignment of error must, therefore, be overruled. We now turn to the second.

espite the incontestable fact that the deed of sale in favor of Rosa Hernandez recites a price in a lump sum (P11,000.00) for both lots (Annex "C", Complain App., p. 21), appellants insist that the recited area should be taken as controlling. They combat the application of Article 1542 of the Civil Code, on the gat the boundaries given in the deed are indefinite. They point out that the southern boundary of the small parcel is merely given as "lupang kasanib" and th

me occurs with the western boundary of the bigger lot, which is recited as "lupang kasanib (Jose Sta. Ana, Jr.)". The Court of Appeals, however, found as at

the two parcels of land sold to appellant (i.e., appellee herein, Rosa Hernandez) were identified by the conspicuous boundaries. (Emsupplied)

nsisting in a long and continuous pilapil or dike that separated the lands in question from the rest of the property. On the basis of such findings, that can nestioned at this stage, for reasons already shown, it is unquestionable that the sale made was of a definite and identified tract, a corpus certum, that obligandors to deliver to the buyer all the land within the boundaries, irrespective of whether its real area should be greater or smaller than what is recited in theoyena vs. Tambunting, 1 Phil. 490; Teran vs. Villanueva, 56 Phil. 677; Azarraga vs. Gay, 52 Phil. 599; Mondragon vs. Santos, 87 Phil. 471). And this is part

ue where, as in the case now before this Court, the area given is qualified to be approximate only ("humigit kumulang", i.e., more or less Rec. on App., p. 22)

o hold the buyer to no more than the area recited on the deed, it must be made clear therein that the sale was made by unit of measure at a definite price foit.

If the defendant intended to buy by the meter be should have so stated in the contract (Goyena vs. Tambunting, supra).


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e ruling of the Supreme Court of Spain, in construing Article 1471 of the Spanish Civil Code (copied verbatim in our Article 1542) is highly persuasive thtween the absence of a recital of a given price per unit of measurement, and the specification of the total area sold, the former must prevail and determinplicability of the norms concerning sales for a lump sum.

e Civil Code's rule as to sales "a cuerpo cierto"was not modified by Act 496, section 58, prohibiting the issuance of a certificate of title to a grantee of pagistered tract until a subdivision plan and technical description are duly approved by the Director of Lands, and authorizing only the entry of a memorandumantor's certificate of title in default of such plan. The latter provision is purely a procedural directive to Registers of Deeds that does not attempt to govern thevendor and vendee inter se, that remain controlled by the Civil Code of the Philippines. It does not even bar the registration of the contract itself to bind the l

HEREFORE, the decision of the Court of Appeals, in its case No. 20582-R, is hereby affirmed.--------------------------------------------------------------------------------------------------------------------------------------------------------------------------R. No. L-29972 January 26, 1976

OSARIO CARBONELL, petitioner, vs. CA, JOSE PONCIO, EMMA INFANTE and RAMON INFANTE, respondents

etitioner seeks a review of the resolution of the Court of Appeals (Special Division of F

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