G.R. No.

216573, April 18, 2016

Leonora Sasa-Akiyama (Petitioner) v Spouses Romeo and Teresita Casal (Respondents)
Third Division
Ponente:
Nature of Action: Complaint for the declaration of nullity of the Second Contract to Sell.
FACTS:
Petitioner Leonora Sasa-Akiyama bought a house and lot located in Multinational Village
Subdivision, Moonwalk, Paraaque City (the subject property) from respondent spouses Romeo and
Teresita Casal for P1,700,000, the amount of P300,000 payable upon contract signing and the balance
payable in monthly installments. The terms of the agreements are embodied under the first Contract to
Sell. After paying the stipulated down-payment, petitioner made periodic, albeit irregular, installment
payments. However, respondents allegedly thereafter refused to accept petitioner's monthly payments
since the latter breached their contract by failing to pay her monthly amortizations on time. To settle the
impasse between them, the parties executed on June 25, 2003 another Contract to Sell (Second Contract
to Sell) wherein petitioner obligated herself to pay this time the principal amount of for the same property
with 2% interest per month, for three years inclusive of interest, and 5% penalty interest on late payments
Petitioner then remitted payments until August 2004, albeit demand notices were already sent on April 22,
2004 and June 18, 2004. However, on January 6, 2005, petitioner filed a suit for Specific Performance
with Damages against respondents with the Regional Trial Court (RTC) claiming that as of August 2004,
she already paid the total amount of P2,270,500 to respondents, the figure representing the principal
obligation and monthly interest of 2%. She contended that the interest and penalty charges are
unconscionable, exorbitant, and inequitable, and that by reason thereof, she overpaid P530,788 since the
principal obligation was only for P1,700,000. Petitioner then filed an Amended Complaint, praying for
the declaration of nullity of the Second Contract to Sell instead. The RTC upheld the validity of the
Second Contract to Sell and dismissed the complaint for lack of merit. The CA affrmed with modication
the trial court's Decision. It deleted the unconscionable 5% monthly penalty interest under the Second
Contract to Sell. Petitioner submits that her consent to the Second Contract to Sell was vitiated since, as
alleged, she signed it under threat of forfeiture of payments made under the First Contract to Sell and
ejectment from the subject property.

ISSUE:
Whether or not the consent of petitioner in entering the second Contract to Sell was vitiated.

RULING:
No. None of the elements which vitiate consent obtain under the premises.
To secure the annulment of the Second Contract to Sell, petitioner must prove the existence of
elements which vitiate consent as provided in Article 1390 of the Civil Code, which states:
ART. 1390. The following contracts are voidable or annullable, even though there may have been
no damage to the contracting parties:
xxx xxx xxx
(2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or
fraud. Under Article 1335 6 of the Code, there is intimidation when one of the contracting parties
is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his
person or property, or upon the person or property of his spouse, descendants or ascendants, to
give his consent. A threat to enforce one's claim through competent authority, if the claim is just
or legal, does not vitiate consent.
On the other hand, Article 1331 9 of the Civil Code provides that the mistake which vitiates
consent should refer to the substance of the thing which is the object of the contract, or to those
conditions which have principally moved one or both parties to enter into the contract. To

invalidate consent on the ground of mistake, the error must be real and not one that could have
been avoided by the party alleging it. The error must arise from facts unknown to him. He cannot
allege an error which refers to a fact known to him or which he should have known by ordinary
diligent examination of the facts. An error so patent and obvious that nobody could have made it,
or one which could have been avoided by ordinary prudence, cannot be invoked by the one who
made it in order to annul his contract. Finally, the succeeding Article 1338 of the Code states that
there is fraud when, through insidious words or machinations of one of the contracting parties, the
other is induced to enter into a contract which, without them, he would not have agreed to.
None of the elements which vitiate consent obtain under the premises. Respondents' threats of forfeiture
of petitioner's payments or her ejectment from the property, if this be the case, are insufficient to show
that they employed intimidation upon her. Apart from petitioner's self-serving testimony, the records are
bereft of evidence showing that respondents deprived her of her freewill or left her with no choice but to
sign the contract. In addition, the mistake petitioner alludes to refers to the amount of the balance of the
principal obligation under the First Contract to Sell that was used in determining the purchase price under
the Second Contract to Sell. However, petitioner could have easily avoided this mistake by exercising
ordinary diligence, since all the facts and information necessary for the determination of the alleged
proper amount were available to her. She could have raised the alleged discrepancy had she been vigilant
in ascertaining the remaining balance of the total payments due under the First Contract to Sell.
For the same reason, petitioner's claim that respondents employed fraud in making her sign the second
contract does not hold water. Fraud is never presumed.