[G.R. No. 135634.

May 31, 2000] with the consent of the former owner, Juan San Andres, he took
possession of the same and introduced improvements thereon
HEIRS OF JUAN SAN ANDRES (VICTOR S. ZIGA) and as early as 1964.
SALVACION S. TRIA, petitioners, vs. VICENTE
RODRIGUEZ, respondent . As proof of the sale to him of 509 square meters, respondent
attached to his answer a receipt (Exh. 2)[5] signed by the late
DECISION Juan San Andres, which reads in full as follows:Missdaa

MENDOZA, J .: Received from Vicente Rodriguez the sum

of Five Hundred (P500.00) Pesos
representing an advance payment for a
This is a petition for review on certiorari of the decision of the
residential lot adjoining his previously paid
Court of Appeals[1] reversing the decision of the Regional Trial
lot on three sides excepting on the frontage
Court, Naga City, Branch 19, in Civil Case No. 87-1335, as well
with the agreed price of Fifteen (15.00)
as the appellate courts resolution denying reconsideration. Slxsc
Pesos per square meter and the payment of
the full consideration based on a survey
The antecedent facts are as follows: shall be due and payable in five (5) years
period from the execution of the formal deed
Juan San Andres was the registered owner of Lot No. 1914-B-2 of sale; and it is agreed that the expenses of
situated in Liboton, Naga City. On September 28, 1964, he sold survey and its approval by the Bureau of
a portion thereof, consisting of 345 square meters, to Lands shall be borne by Mr. Rodriguez.
respondent Vicente S. Rodriguez for P2,415.00. The sale is
evidenced by a Deed of Sale.[2] Naga City, September 29, 1964.

Upon the death of Juan San Andres on May 5, 1965, Ramon Noted:
San Andres was appointed judicial administrator of the (Sgd.)
decedents estate in Special Proceedings No. R-21, RTC, VICENTE RODRIGUEZ
Branch 19, Naga City. Ramon San Andres engaged the services Vendee
of a geodetic engineer, Jose Peero, to prepare a consolidated
plan (Exh. A) of the estate. Engineer Peero also prepared a
Respondent also attached to his answer a letter of judicial
sketch plan of the 345-square meter lot sold to respondent.
administrator Ramon San Andres (Exh. 3),[6] asking payment of
From the result of the survey, it was found that respondent had
the balance of the purchase price. The letter reads:
enlarged the area which he purchased from the late Juan San
Andres by 509 square meters.[3]
Dear Inting,
[4]
Accordingly, the judicial administrator sent a letter, dated July
27, 1987, to respondent demanding that the latter vacate the Please accommodate my request for Three
portion allegedly encroached by him. However, respondent Hundred (P300.00) Pesos as I am in need of
refused to do so, claiming he had purchased the same from the funds as I intimated to you the other day.
late Juan San Andres. Thereafter, on November 24, 1987, the
judicial administrator brought an action, in behalf of the estate of We will just adjust it with whatever balance
Juan San Andres, for recovery of possession of the 509-square you have payable to the subdivision.
meter lot. Slxmis
Thanks.
In his Re-amended Answer filed on February 6, 1989,
respondent alleged that apart from the 345-square meter lot Vicente Rodriguez
which had been sold to him by Juan San Andres on September Penafrancia Subdivision, Naga City
28, 1964, the latter likewise sold to him the following day the P.S.
remaining portion of the lot consisting of 509 square meters, You can let bearer Enrique del Castillo sign
with both parties treating the two lots as one whole parcel with a for the amount.
total area of 854 square meters. Respondent alleged that the full Received One Hundred Only
payment of the 509-square meter lot would be effected within
five (5) years from the execution of a formal deed of sale after a
survey is conducted over said property. He further alleged that
Respondent deposited in court the balance of the purchase balance of the purchase price payable within five years from the
price amounting to P7,035.00 for the aforesaid 509-square execution of the deed of sale. The dispositive portion of its
meter lot. Sdaadsc decisions reads:

While the proceedings were pending, judicial administrator IN VIEW OF ALL THE FOREGOING, the
Ramon San Andres died and was substituted by his son Ricardo judgment appealed from is hereby
San Andres. On the other hand, respondent Vicente Rodriguez REVERSED and SET ASIDE and a new one
died on August 15, 1989 and was substituted by his heirs. [7] entered DISMISSING the complaint and
rendering judgment against the plaintiff-
Petitioner, as plaintiff, presented two witnesses. The first appellee:
witness, Engr. Jose Peero,[8] testified that based on his survey
conducted sometime between 1982 and 1985, respondent had 1. to accept the P7,035.00 representing the
enlarged the area which he purchased from the late Juan San balance of the purchase price of the portion
Andres by 509 square meters belonging to the latters estate. and which is deposited in court under
According to Peero, the titled property (Exh. A-5) of respondent Official Receipt No. 105754 (page 122,
was enclosed with a fence with metal holes and barbed wire, Records);
while the expanded area was fenced with barbed wire and
bamboo and light materials. Rtcspped 2. to execute the formal deed of sale over
the said 509 square meter portion of Lot
The second witness, Ricardo San Andres,[9] administrator of the 1914-B-2 in favor of appellant Vicente
estate, testified that respondent had not filed any claim before Rodriguez;
Special Proceedings No. R-21 and denied knowledge of Exhibits
2 and 3. However, he recognized the signature in Exhibit 3 as 3. to pay the defendant-appellant the
similar to that of the former administrator, Ramon San Andres. amount of P50,000.00 as damages and
Finally, he declared that the expanded portion occupied by the P10,000.00 attorneys fees as stipulated by
family of respondent is now enclosed with barbed wire fence them during the trial of this case; and
unlike before where it was found without fence.
4. to pay the costs of the suit.
On the other hand, Bibiana B. Rodriguez,[10] widow of
respondent Vicente Rodriguez, testified that they had purchased SO ORDERED.
the subject lot from Juan San Andres, who was their compadre,
on September 29, 1964, at P15.00 per square meter. According
to her, they gave P500.00 to the late Juan San Andres who later Hence, this petition. Petitioner assigns the following errors as
affixed his signature to Exhibit 2. She added that on March 30, having been allegedly committed by the trial court: Sclaw
1966, Ramon San Andres wrote them a letter asking for
P300.00 as partial payment for the subject lot, but they were I.THE HON. COURT OF APPEALS ERRED
able to give him only P100.00. She added that they had paid the IN HOLDING THAT THE DOCUMENT
total purchase price of P7,035.00 on November 21, 1988 by (EXHIBIT "2") IS A CONTRACT TO SELL
depositing it in court. Bibiana B. Rodriquez stated that they had DESPITE ITS LACKING ONE OF THE
been in possession of the 509-square meter lot since 1964 ESSENTIAL ELEMENTS OF A CONTRACT,
when the late Juan San Andres signed the receipt. (Exh. 2) NAMELY, OBJECT CERTAIN AND
Lastly, she testified that they did not know at that time the exact SUFFICIENTLY DESCRIBED.
area sold to them because they were told that the same would
be known after the survey of the subject lot. Korte II.THE HON. COURT OF APPEALS ERRED
IN HOLDING THAT PETITIONER IS
On September 20, 1994, the trial court [11] rendered judgment in OBLIGED TO HONOR THE PURPORTED
favor of petitioner. It ruled that there was no contract of sale to CONTRACT TO SELL DESPITE NON-
speak of for lack of a valid object because there was no FULFILLMENT BY RESPONDENT OF THE
sufficient indication in Exhibit 2 to identify the property subject of CONDITION THEREIN OF PAYMENT OF
the sale, hence, the need to execute a new contract. THE BALANCE OF THE PURCHASE
PRICE.
Respondent appealed to the Court of Appeals, which on April
21, 1998 rendered a decision reversing the decision of the trial III.THE HON. COURT OF APPEALS
court. The appellate court held that the object of the contract ERRED IN HOLDING THAT
was determinable, and that there was a conditional sale with the CONSIGNATION WAS VALID DESPITE
 NON-COMPLIANCE WITH THE
MANDATORY REQUIREMENTS
THEREOF.
IV.THE HON. COURT OF APPEALS
ERRED IN HOLDING THAT LACHES AND
PRESCRIPTION DO NOT APPLY TO
RESPONDENT WHO SOUGHT
INDIRECTLY TO ENFORCE THE
PURPORTED CONTRACT AFTER THE
LAPSE OF 24 YEARS.
The petition has no merit.
First. Art. 1458 of the Civil Code provides:
By the contract of sale one of the
contracting parties obligates himself to
transfer the ownership of and to deliver a
determinate thing, and the other to pay
therefor a price certain in money or its
equivalent.
A contract of sale may be absolute or
conditional.
As thus defined, the essential elements of sale are the following:
a) Consent or meeting of the minds, that is,
consent to transfer ownership in exchange
for the price;
b) Determinate subject matter; and,
c) Price certain in money or its equivalent.[12]
As shown in the receipt, dated September 29, 1964, the late
Juan San Andres received P500.00 from respondent as
"advance payment for the residential lot adjoining his previously
paid lot on three sides excepting on the frontage;" the agreed
purchase price was P15.00 per square meter; and the full
amount of the purchase price was to be based on the results of
a survey and would be due and payable in five (5) years from
the execution of a deed of sale.
Petitioner contends, however, that the "property subject of the
sale was not described with sufficient certainty such that there is
a necessity of another agreement between the parties to finally
ascertain the identity, size and purchase price of the property
which is the object of the alleged sale."[13] He argues that the
"quantity of the object is not determinate as in fact a survey is
needed to determine its exact size and the full purchase price
therefor."[14] In support of his contention, petitioner cites the
following provisions of the Civil Code: Sclex
Art. 1349. The object of every contract must
be determinate as to its kind. The fact that
the quantity is not determinable shall not be
an obstacle to the existence of a contract,
provided it is possible to determine the
same without the need of a new contract
between the parties.
Art. 1460 . . . The requisite that a thing be
determinate is satisfied if at the time the
contract is entered into, the thing is capable
of being made determinate without the
necessity of a new and further agreement
between the parties.
Petitioners contention is without merit. There is no dispute that
respondent purchased a portion of Lot 1914-B-2 consisting of
345 square meters. This portion is located in the middle of Lot
1914-B-2, which has a total area of 854 square meters, and is
clearly what was referred to in the receipt as the "previously paid
lot." Since the lot subsequently sold to respondent is said to
adjoin the "previously paid lot" on three sides thereof, the
subject lot is capable of being determined without the need of
any new contract. The fact that the exact area of these adjoining
residential lots is subject to the result of a survey does not
detract from the fact that they are determinate or determinable.
As the Court of Appeals explained:[15]
Concomitantly, the object of the sale is
certain and determinate. Under Article 1460
of the New Civil Code, a thing sold is
determinate if at the time the contract is
entered into, the thing is capable of being
determinate without necessity of a new or
further agreement between the parties.
Here, this definition finds realization.
Appellees Exhibit "A" (page 4, Records)
affirmingly shows that the original 345 sq. m.
portion earlier sold lies at the middle of Lot
1914-B-2 surrounded by the remaining
portion of the said Lot 1914-B-2 on three (3)
sides, in the east, in the west and in the
north. The northern boundary is a 12 meter
road. Conclusively, therefore, this is the only
remaining 509 sq. m. portion of Lot 1914-B-
2 surrounding the 345 sq. m. lot initially
purchased by Rodriguez. It is quite defined,
determinate and certain. Withal, this is the
same portion adjunctively occupied and
possessed by Rodriguez since September
29, 1964, unperturbed by anyone for over
 twenty (20) years until appellee instituted
this suit.
Thus, all of the essential elements of a contract of sale are
present, i.e., that there was a meeting of the minds between the
parties, by virtue of which the late Juan San Andres undertook
to transfer ownership of and to deliver a determinate thing for a
price certain in money. As Art. 1475 of the Civil Code
provides: Xlaw
The contract of sale is perfected at the
moment there is a meeting of minds upon
the thing which is the object of the contract
and upon the price. . . .
That the contract of sale is perfected was confirmed by the
former administrator of the estates, Ramon San Andres, who
wrote a letter to respondent on March 30, 1966 asking for
P300.00 as partial payment for the subject lot. As the Court of
Appeals observed:
Without any doubt, the receipt profoundly
speaks of a meeting of the mind between
San Andres and Rodriguez for the sale of
the property adjoining the 345 square meter
portion previously sold to Rodriguez on its
three (3) sides excepting the frontage. The
price is certain, which is P15.00 per square
meter. Evidently, this is a perfected contract
of sale on a deferred payment of the
purchase price. All the pre-requisite
elements for a valid purchase transaction
are present. Sale does not require any
formal document for its existence and
validity. And delivery of possession of land
sold is a consummation of the sale (Galar
vs. Husain, 20 SCRA 186 [1967]). A private
deed of sale is a valid contract between the
parties (Carbonell v. CA, 69 SCRA 99
[1976]). Xsc
In the same vein, after the late Juan R. San
Andres received the P500.00 downpayment
on March 30, 1966, Ramon R. San Andres
wrote a letter to Rodriguez and received
from Rodriguez the amount of P100.00
(although P300.00 was being requested)
deductible from the purchase price of the
subject portion. Enrique del Castillo,
Ramons authorized agent, correspondingly
signed the receipt for the P100.00. Surely,
this is explicitly a veritable proof of the sale
over the remaining portion of Lot 1914-B-2
and a confirmation by Ramon San Andres of
the existence thereof.[16]
There is a need, however, to clarify what the Court of Appeals
said is a conditional contract of sale. Apparently, the appellate
court considered as a "condition" the stipulation of the parties
that the full consideration, based on a survey of the lot, would be
due and payable within five (5) years from the execution of a
formal deed of sale. It is evident from the stipulations in the
receipt that the vendor Juan San Andres sold the residential lot
in question to respondent and undertook to transfer the
ownership thereof to respondent without any qualification,
reservation or condition. In Ang Yu Asuncion v. Court of Appeals,
[17]
we held: Sc
In Dignos v. Court of Appeals (158 SCRA 375), we have said
that, although denominated a "Deed of Conditional Sale," a sale
is still absolute where the contract is devoid of any proviso that
title is reserved or the right to unilaterally rescind is stipulated,
e.g., until or unless the price is paid. Ownership will then be
transferred to the buyer upon actual or constructive delivery
(e.g., by the execution of a public document) of the property
sold. Where the condition is imposed upon the perfection of the
contract itself, the failure of the condition would prevent such
perfection. If the condition is imposed on the obligation of a
party which is not fulfilled, the other party may either waive the
condition or refuse to proceed with the sale. (Art. 1545, Civil
Code)
Thus, in one case, when the sellers declared in a "Receipt of
Down Payment" that they received an amount as purchase price
for a house and lot without any reservation of title until full
payment of the entire purchase price, the implication was that
they sold their property.[18] In Peoples Industrial and Commercial
Corporation v. Court of Appeals,[19] it was stated:
A deed of sale is considered absolute in nature where there is
neither a stipulation in the deed that title to the property sold is
reserved in the seller until full payment of the price, nor one
giving the vendor the right to unilaterally resolve the contract the
moment the buyer fails to pay within a fixed period. Scmis
Applying these principles to this case, it cannot be gainsaid that
the contract of sale between the parties is absolute, not
conditional. There is no reservation of ownership nor a
stipulation providing for a unilateral rescission by either party. In
fact, the sale was consummated upon the delivery of the lot to
respondent.[20] Thus, Art. 1477 provides that the ownership of
the thing sold shall be transferred to the vendee upon the actual
or constructive delivery thereof.
The stipulation that the "payment of the full consideration based
on a survey shall be due and payable in five (5) years from the
execution of a formal deed of sale" is not a condition which
affects the efficacy of the contract of sale. It merely provides the
manner by which the full consideration is to be computed and
the time within which the same is to be paid. But it does not
affect in any manner the effectivity of the contract.
Consequently, the contention that the absence of a formal deed
of sale stipulated in the receipt prevents the happening of a sale
has no merit.
Second. With respect to the contention that the Court of
Appeals erred in upholding the validity of a consignation of
P7,035.00 representing the balance of the purchase price of the
lot, nowhere in the decision of the appellate court is there any
mention of consignation. Under Art. 1257 of this Civil Code,
consignation is proper only in cases where an existing obligation
is due. In this case, however, the contracting parties agreed that
full payment of purchase price shall be due and payable within
five (5) years from the execution of a formal deed of sale. At the
time respondent deposited the amount of P7,035.00 in the court,
no formal deed of sale had yet been executed by the parties,
and, therefore, the five-year period during which the purchase
price should be paid had not commenced. In short, the purchase
price was not yet due and payable.
This is not to say, however, that the deposit of the purchase
price in the court is erroneous. The Court of Appeals correctly
ordered the execution of a deed of sale and petitioners to accept
the amount deposited by respondent.
Third. The claim of petitioners that the price of P7,035.00 is
iniquitous is untenable. The amount is based on the agreement
of the parties as evidenced by the receipt (Exh. 2). Time and
again, we have stressed the rule that a contract is the law
between the parties, and courts have no choice but to enforce
such contract so long as they are not contrary to law, morals,
good customs or public policy. Otherwise, courts would be
interfering with the freedom of contract of the parties. Simply
put, courts cannot stipulate for the parties nor amend the latters
agreement, for to do so would be to alter the real intentions of
the contracting parties when the contrary function of courts is to
give force and effect to the intentions of the parties. Misspped
Fourth. Finally, petitioners argue that respondent is barred by
prescription and laches from enforcing the contract. This
contention is likewise untenable. The contract of sale in this
case is perfected, and the delivery of the subject lot to
respondent effectively transferred ownership to him. For this
reason, respondent seeks to comply with his obligation to pay
the full purchase price, but because the deed of sale is yet to be
executed, he deemed it appropriate to deposit the balance of
the purchase price in court. Accordingly, Art. 1144 of the Civil
Code has no application to the instant case.[21] Considering that
a survey of the lot has already been conducted and approved by
the Bureau of Lands, respondents heirs, assigns or successors-
in-interest should reimburse the expenses incurred by herein
petitioners, pursuant to the provisions of the contract. Spped
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED with the modification that respondent is ORDERED
to reimburse petitioners for the expenses of the
survey.JosppeSO ORDERED.
G.R. No. L-24732 April 30, 1968
PIO SIAN MELLIZA, petitioner,
vs.
CITY OF ILOILO, UNIVERSITY OF THE PHILIPPINES
and THE COURT APPEALS, respondents.
Cornelio P. Ravena for petitioner.
Office of the Solicitor General for respondents.
BENGZON, J.P., J.:
Juliana Melliza during her lifetime owned, among other
properties, three parcels of residential land in Iloilo City
registered in her name under Original Certificate of Title No.
3462. Said parcels of land were known as Lots Nos. 2, 5 and
1214. The total area of Lot No. 1214 was 29,073 square meters.
On November 27, 1931 she donated to the then Municipality of
Iloilo, 9,000 square meters of Lot 1214, to serve as site for the
municipal hall. 1 The donation was however revoked by the
parties for the reason that the area donated was found
inadequate to meet the requirements of the development plan of
the municipality, the so-called "Arellano Plan". 2
Subsequently, Lot No. 1214 was divided by Certeza Surveying
Co., Inc. into Lots 1214-A and 1214-B. And still later, Lot 1214-B
was further divided into Lots 1214-B-1, Lot 1214-B-2 and Lot
1214-B-3. As approved by the Bureau of Lands, Lot 1214-B-1
with 4,562 square meters, became known as Lot 1214-B; Lot
1214-B-2, with 6,653 square meters, was designated as Lot
1214-C; and Lot 1214-B-13, with 4,135 square meters, became
Lot 1214-D.
On November 15, 1932 Juliana Melliza executed an instrument
without any caption containing the following:
Que en consideracion a la suma total de SEIS MIL
CUATRO CIENTOS VEINTIDOS PESOS (P6,422.00),
moneda filipina que por la presente declaro haber
recibido a mi entera satisfaccion del Gobierno
Municipal de Iloilo, cedo y traspaso en venta real y
difinitiva a dicho Gobierno Municipal de Iloilo los lotes
y porciones de los mismos que a continuacion se
especifican a saber: el lote No. 5 en toda su
extension; una porcion de 7669 metros cuadrados del
lote No. 2, cuya porcion esta designada como sub-
lotes Nos. 2-B y 2-C del piano de subdivision de
dichos lotes preparado por la Certeza Surveying Co.,
Inc., y una porcion de 10,788 metros cuadrados del
lote No. 1214 — cuya porcion esta designada como
 sub-lotes Nos. 1214-B-2 y 1214-B-3 del mismo plano
de subdivision.
Asimismo nago constar que la cesion y traspaso que
ariba se mencionan es de venta difinitiva, y que para
la mejor identificacion de los lotes y porciones de los
mismos que son objeto de la presente, hago constar
que dichos lotes y porciones son los que necesita el
Gobierno Municipal de Iloilo para la construccion de
avenidas, parques y City Hall site del Municipal
Government Center de iloilo, segun el plano Arellano.
On January 14, 1938 Juliana Melliza sold her remaining interest
in Lot 1214 to Remedios Sian Villanueva who thereafter
obtained her own registered title thereto, under Transfer
Certificate of Title No. 18178. Remedios in turn on November 4,
1946 transferred her rights to said portion of land to Pio Sian
Melliza, who obtained Transfer Certificate of Title No. 2492
thereover in his name. Annotated at the back of Pio Sian
Melliza's title certificate was the following:
... (a) that a portion of 10,788 square meters of Lot
1214 now designated as Lots Nos. 1214-B-2 and
1214-B-3 of the subdivision plan belongs to the
Municipality of Iloilo as per instrument dated
November 15, 1932....
On August 24, 1949 the City of Iloilo, which succeeded to the
Municipality of Iloilo, donated the city hall site together with the
building thereon, to the University of the Philippines (Iloilo
branch). The site donated consisted of Lots Nos. 1214-B, 1214-
C and 1214-D, with a total area of 15,350 square meters, more
or less.
Sometime in 1952, the University of the Philippines enclosed the
site donated with a wire fence. Pio Sian Melliza thereupon made
representations, thru his lawyer, with the city authorities for
payment of the value of the lot (Lot 1214-B). No recovery was
obtained, because as alleged by plaintiff, the City did not have
funds (p. 9, Appellant's Brief.)
The University of the Philippines, meanwhile, obtained Transfer
Certificate of Title No. 7152 covering the three lots, Nos. 1214-
B, 1214-C and 1214-D.
On December 10, 1955 Pio Sian Melliza filed an action in the
Court of First Instance of Iloilo against Iloilo City and the
University of the Philippines for recovery of Lot 1214-B or of its
value.
The defendants answered, contending that Lot 1214-B was
included in the public instrument executed by Juliana Melliza in
favor of Iloilo municipality in 1932. After stipulation of facts and
trial, the Court of First Instance rendered its decision on August
15, 1957, dismissing the complaint. Said court ruled that the
instrument executed by Juliana Melliza in favor of Iloilo
municipality included in the conveyance Lot 1214-B. In support
of this conclusion, it referred to the portion of the instrument
stating:
Asimismo hago constar que la cesion y traspaso que
arriba se mencionan es de venta difinitiva, y que para
la major identificacion de los lotes y porciones de los
mismos que son objeto de la presente, hago constar
que dichos lotes y porciones son los que necesita el
Gobierno municipal de Iloilo para la construccion de
avenidas, parques y City Hall site del Municipal
Government Center de Iloilo, segun el plano Arellano.
and ruled that this meant that Juliana Melliza not only sold Lots
1214-C and 1214-D but also such other portions of lots as were
necessary for the municipal hall site, such as Lot 1214-B. And
thus it held that Iloilo City had the right to donate Lot 1214-B to
the U.P.
Pio Sian Melliza appealed to the Court of Appeals. In its
decision on May 19, 1965, the Court of Appeals affirmed the
interpretation of the Court of First Instance, that the portion of
Lot 1214 sold by Juliana Melliza was not limited to the 10,788
square meters specifically mentioned but included whatever was
needed for the construction of avenues, parks and the city hall
site. Nonetheless, it ordered the remand of the case for
reception of evidence to determine the area actually taken by
Iloilo City for the construction of avenues, parks and for city hall
site.
The present appeal therefrom was then taken to Us by Pio Sian
Melliza. Appellant maintains that the public instrument is clear
that only Lots Nos. 1214-C and 1214-D with a total area of
10,788 square meters were the portions of Lot 1214 included in
the sale; that the purpose of the second paragraph, relied upon
for a contrary interpretation, was only to better identify the lots
sold and none other; and that to follow the interpretation
accorded the deed of sale by the Court of Appeals and the Court
of First Instance would render the contract invalid because the
law requires as an essential element of sale, a "determinate"
object (Art. 1445, now 1448, Civil Code).
Appellees, on the other hand, contend that the present appeal
improperly raises only questions of fact. And, further, they argue
that the parties to the document in question really intended to
include Lot 1214-B therein, as shown by the silence of the
vendor after Iloilo City exercised ownership thereover; that not
to include it would have been absurd, because said lot is
contiguous to the others admittedly included in the conveyance,
lying directly in front of the city hall, separating that building from
Lots 1214-C and 1214-D, which were included therein. And,
finally, appellees argue that the sale's object was determinate,
because it could be ascertained, at the time of the execution of
the contract, what lots were needed by Iloilo municipality for
avenues, parks and city hall site "according to the Arellano
Plan", since the Arellano plan was then already in existence.
The appeal before Us calls for the interpretation of the public
instrument dated November 15, 1932. And interpretation of such
contract involves a question of law, since the contract is in the
nature of law as between the parties and their successors-in-
interest.
At the outset, it is well to mark that the issue is whether or not
the conveyance by Juliana Melliza to Iloilo municipality included
that portion of Lot 1214 known as Lot 1214-B. If not, then the
same was included, in the instrument subsequently executed by
Juliana Melliza of her remaining interest in Lot 1214 to
Remedios Sian Villanueva, who in turn sold what she
thereunder had acquired, to Pio Sian Melliza. It should be
stressed, also, that the sale to Remedios Sian Villanueva —
from which Pio Sian Melliza derived title — did not specifically
designate Lot 1214-B, but only such portions of Lot 1214 as
were not included in the previous sale to Iloilo
municipality (Stipulation of Facts, par. 5, Record on Appeal, p.
23). And thus, if said Lot 1214-B had been included in the prior
conveyance to Iloilo municipality, then it was excluded from the
sale to Remedios Sian Villanueva and, later, to Pio Sian Melliza.
The point at issue here is then the true intention of the parties as
to the object of the public instrument Exhibit "D". Said issue
revolves on the paragraph of the public instrument aforequoted
and its purpose, i.e., whether it was intended merely to further
describe the lots already specifically mentioned, or whether it
was intended to cover other lots not yet specifically mentioned.
First of all, there is no question that the paramount intention of
the parties was to provide Iloilo municipality with lots sufficient or
adequate in area for the construction of the Iloilo City hall site,
with its avenues and parks. For this matter, a previous donation
for this purpose between the same parties was revoked by
them, because of inadequacy of the area of the lot donated.
Secondly, reading the public instrument in toto, with special
reference to the paragraphs describing the lots included in the
sale, shows that said instrument describes four parcels of land
by their lot numbers and area; and then it goes on to further
describe, not only those lots already mentioned, but the
lots object of the sale, by stating that said lots are the ones
needed for the construction of the city hall site, avenues and
parks according to the Arellano plan. If the parties intended
merely to cover the specified lots — Lots 2, 5, 1214-C and
1214-D, there would scarcely have been any need for the next
paragraph, since these lots are already plainly and very clearly
described by their respective lot number and area. Said next
paragraph does not really add to the clear description that was
already given to them in the previous one.
It is therefore the more reasonable interpretation, to view it as
describing those other portions of land contiguous to the lots
aforementioned that, by reference to the Arellano plan, will be
found needed for the purpose at hand, the construction of the
city hall site.
Appellant however challenges this view on the ground that the
description of said other lots in the aforequoted second
paragraph of the public instrument would thereby be legally
insufficient, because the object would allegedly not be
determinate as required by law.
Such contention fails on several counts. The requirement of the
law that a sale must have for its object a determinate thing, is
fulfilled as long as, at the time the contract is entered into, the
object of the sale is capable of being made determinate without
the necessity of a new or further agreement between the parties
(Art. 1273, old Civil Code; Art. 1460, New Civil Code). The
specific mention of some of the lots plus the statement that the
lots object of the sale are the ones needed for city hall site,
avenues and parks, according to the Arellano plan, sufficiently
provides a basis, as of the time of the execution of the contract,
for rendering determinate said lots without the need of a new
and further agreement of the parties.
The Arellano plan was in existence as early as 1928. As stated,
the previous donation of land for city hall site on November 27,
1931 was revoked on March 6, 1932 for being inadequate in
area under said Arellano plan. Appellant claims that although
said plan existed, its metes and bounds were not fixed until
1935, and thus it could not be a basis for determining the lots
sold on November 15, 1932. Appellant however fails to consider
that the area needed under that plan for city hall site was then
already known; that the specific mention of some of the lots
covered by the sale in effect fixed the corresponding location of
the city hall site under the plan; that, therefore, considering the
said lots specifically mentioned in the public instrument Exhibit
"D", and the projected city hall site, with its area, as then shown
in the Arellano plan (Exhibit 2), it could be determined which,
and how much of the portions of land contiguous to those
specifically named, were needed for the construction of the city
hall site.
And, moreover, there is no question either that Lot 1214-B is
contiguous to Lots 1214-C and 1214-D, admittedly covered by
the public instrument. It is stipulated that, after execution of the
contract Exhibit "D", the Municipality of Iloilo possessed it
together with the other lots sold. It sits practically in the heart of
the city hall site. Furthermore, Pio Sian Melliza, from the
stipulation of facts, was the notary public of the public
instrument. As such, he was aware of its terms. Said instrument
was also registered with the Register of Deeds and such
registration was annotated at the back of the corresponding title
certificate of Juliana Melliza. From these stipulated facts, it can
be inferred that Pio Sian Melliza knew of the aforesaid terms of
the instrument or is chargeable with knowledge of them; that
knowing so, he should have examined the Arellano plan in
relation to the public instrument Exhibit "D"; that, furthermore, he
should have taken notice of the possession first by the
Municipality of Iloilo, then by the City of Iloilo and later by the
University of the Philippines of Lot 1214-B as part of the city hall
site conveyed under that public instrument, and raised proper
objections thereto if it was his position that the same was not G.R. No. L-22487 May 21, 1969
included in the same. The fact remains that, instead, for twenty
long years, Pio Sian Melliza and his predecessors-in-interest, ASUNCION ATILANO, CRISTINA ATILANO, ROSARIO
did not object to said possession, nor exercise any act of ATILANO, assisted by their respective husbands,
possession over Lot 1214-B. Applying, therefore, principles of HILARIO ROMANO, FELIPE BERNARDO, and MAXIMO
civil law, as well as laches, estoppel, and equity, said lot must LACANDALO, ISABEL ATILANO and GREGORIO
necessarily be deemed included in the conveyance in favor of ATILANO, plaintiffs-appellees,
Iloilo municipality, now Iloilo City. vs.
LADISLAO ATILANO and GREGORIO M.
WHEREFORE, the decision appealed from is affirmed insofar as ATILANO, defendants-appellants.
it affirms that of the Court of First Instance, and the complaint in
this case is dismissed. No costs. So ordered. Climaco and Azcarraga for plaintiff-appellee.
T. de los Santos for defendants-appellants.

MAKALINTAL, J.:

In 1916 Eulogio Atilano I acquired, by purchase from one

Gerardo Villanueva, lot No. 535 of the then municipality of
Zamboanga cadastre. The vendee thereafter obtained transfer
certificate of title No. 1134 in his name. In 1920 he had the land
subdivided into five parts, identified as lots Nos. 535-A, 535-B,
535-C, 535-D and 535-E, respectively. On May 18 of the same
year, after the subdivision had been effected, Eulogio Atilano I,
for the sum of P150.00, executed a deed of sale covering lot No.
535-E in favor of his brother Eulogio Atilano II, who thereupon
obtained transfer certificate of title No. 3129 in his name. Three
other portions, namely lots Nos. 535-B, 535-C and 535-D, were
likewise sold to other persons, the original owner, Eulogio
Atilano I, retaining for himself only the remaining portion of the
land, presumably covered by the title to lot No. 535-A. Upon his
death the title to this lot passed to Ladislao Atilano, defendant in
this case, in whose name the corresponding certificate (No. T-
5056) was issued.

On December 6, 1952, Eulogio Atilano II having become a

widower upon the death of his wife Luisa Bautista, he and his
children obtained transfer certificate of title No. 4889 over lot No.
535-E in their names as co-owners. Then, on July 16, 1959,
desiring to put an end to the co-ownership, they had the land
resurveyed so that it could properly be subdivided; and it was
then discovered that the land they were actually occupying on
the strength of the deed of sale executed in 1920 was lot No.
535-A and not lot 535-E, as referred to in the deed, while the
land which remained in the possession of the vendor, Eulogio
Atilano I, and which passed to his successor, defendant
Ladislao Atilano, was lot No. 535-E and not lot No. 535-A.
On January 25, 1960, the heirs of Eulogio Atilano II, who was by
then also deceased, filed the present action in the Court of First
Instance of Zamboanga, alleging, inter alia, that they had offered
to surrender to the defendants the possession of lot No. 535-A
and demanded in return the possession of lot No. 535-E, but
that the defendants had refused to accept the exchange. The
plaintiffs' insistence is quite understandable, since lot No. 535-E
has an area of 2,612 square meters, as compared to the 1,808
square-meter area of lot No. 535-A.
In their answer to the complaint the defendants alleged that the
reference to lot No. 535-E in the deed of sale of May 18, 1920
was an involuntary error; that the intention of the parties to that
sale was to convey the lot correctly identified as lot No. 535-A;
that since 1916, when he acquired the entirety of lot No. 535,
and up to the time of his death, Eulogio Atilano I had been
possessing and had his house on the portion designated as lot
No. 535-E, after which he was succeeded in such possession by
the defendants herein; and that as a matter of fact Eulogio
Atilano I even increased the area under his possession when on
June 11, 1920 he bought a portion of an adjoining lot, No. 536,
from its owner Fruto del Carpio. On the basis of the foregoing
allegations the defendants interposed a counterclaim, praying
that the plaintiffs be ordered to execute in their favor the
corresponding deed of transfer with respect to lot No. 535-E.
1920 until 1959, when the mistake was discovered for the first
time.
The real issue here is not adverse possession, but the real
intention of the parties to that sale. From all the facts and
circumstances we are convinced that the object thereof, as
intended and understood by the parties, was that specific
portion where the vendee was then already residing, where he
reconstructed his house at the end of the war, and where his
heirs, the plaintiffs herein, continued to reside thereafter:
namely, lot No. 535-A; and that its designation as lot No. 535-E
in the deed of sale was simple mistake in the drafting of the
document.1âwphi1.ñet The mistake did not vitiate the consent of
the parties, or affect the validity and binding effect of the
contract between them. The new Civil Code provides a remedy
for such a situation by means of reformation of the instrument.
This remedy is available when, there having been a meeting of
the funds of the parties to a contract, their true intention is not
expressed in the instrument purporting to embody the
agreement by reason of mistake, fraud, inequitable conduct on
accident (Art. 1359, et seq.) In this case, the deed of sale
executed in 1920 need no longer reformed. The parties have
retained possession of their respective properties conformably
to the real intention of the parties to that sale, and all they
should do is to execute mutual deeds of conveyance.

The trial court rendered judgment for the plaintiffs on the sole WHEREFORE, the judgment appealed from is reversed. The
ground that since the property was registered under the Land plaintiffs are ordered to execute a deed of conveyance of lot No.
Registration Act the defendants could not acquire it through 535-E in favor of the defendants, and the latter in turn, are
prescription. There can be, of course, no dispute as to the ordered to execute a similar document, covering lot No. 595-A,
correctness of this legal proposition; but the defendants, aside in favor of the plaintiffs. Costs against the latter.
from alleging adverse possession in their answer and
counterclaim, also alleged error in the deed of sale of May 18,
1920, thus: "Eulogio Atilano 1.o, por equivocacion o error
involuntario, cedio y traspaso a su hermano Eulogio Atilano 2.do
el lote No. 535-E en vez del Lote No. 535-A."lawphi1.ñet

The logic and common sense of the situation lean heavily in

favor of the defendants' contention. When one sells or buys real
property — a piece of land, for example — one sells or buys the
property as he sees it, in its actual setting and by its physical
metes and bounds, and not by the mere lot number assigned to
it in the certificate of title. In the particular case before us, the
portion correctly referred to as lot No. 535-A was already in the
possession of the vendee, Eulogio Atilano II, who had
constructed his residence therein, even before the sale in his
favor even before the subdivision of the entire lot No. 535 at the
instance of its owner, Eulogio Atillano I. In like manner the latter
had his house on the portion correctly identified, after the
subdivision, as lot No. 535-E, even adding to the area thereof by
purchasing a portion of an adjoining property belonging to a
different owner. The two brothers continued in possession of the
respective portions the rest of their lives, obviously ignorant of
the initial mistake in the designation of the lot subject of the

G.R. No. L-68741 January 28, 1988
NATIONAL GRAINS AUTHORITY, plaintiff-appellee,
vs.
INTERMEDIATE APPELLATE COURT, MELECIO
MAGCAMIT, NENA COSICO and EMELITA
MAGCAMIT, defendants-appellants.
PARAS, J.:
This is a petition for review of the decision of the then
Intermediate Appellate Court * (now Court of Appeals) dated
January 31, 1984, reversing the decision of the Court of First
Instance of Laguna and San Pablo City, 8th Judicial District,
Branch III, and of the resolution dated August 28, 1984 denying
the motion for reconsideration filed thereof.
The undisputed facts of this case as found by the Trial Court
and the Intermediate Appellate Court are as follows:
On December 2,1971, the spouses Paulino Vivas and Engracia
Lizards, as owners of a parcel of land situated in Bo. San
Francisco, Victoria, Laguna, comprising more or less 105,710
square meters, sold for P30,000.00 said property in favor of
spouses Melencio Magcamit and Nena Cosico, and Amelita
Magcamit (herein private respondents) as evidenced by
"Kasulatan Ng Bilihang Mabiling Muli." This sale with right to
repurchase was recorded in the Office of the Register of Deeds
of Laguna on December 6,1971 under Act No. 3344. On
January 31,1972 the sale was made absolute by the spouses
Vivas and Lizardo in favor of the private respondents for the
sum of P90,000.00; P50,000.00 of which was paid upon the
execution of the instrument, entitled "Kasulatan Ng Bilihan
Tuluyan," after being credited with the P30,000.00 consideration
of the "Kasulatan Ng Mabibiling Muli," and the balance of
P40,000.00 was to be paid the moment that the certificate of title
is issued. From the execution of said Kasulatan, private
respondent have remained in peaceful, adverse and open
possession of subject property.
On February 26, 1975, an Original Certificate of Title No. T-1728
covering the property in question was issued to and in the name
of the spouses Vivas and Lizardo without the knowledge of the
private respondents and on April 30, 1975, said Spouses
executed a Special Power of Attorney in favor of Irenea Ramirez
authorizing the latter to mortgage the property with the
petitioner, National Grains Authority.
On May 2, 1974, the counsel for the petitioner wrote the
Provincial Sheriff in Sta. Cruz, Laguna, requesting for the
extrajudicial foreclosure of the mortgage executed by Irenea
Ramirez on May 18, 1975, covering, among others, the property
involved in this case covered by OCT No. T-1728, for unpaid
indebtedness in the amount of P63,948.80 in favor of the
petitioner.
On May 31, 1974, the Provincial Sheriff caused the issuance of
the notice of sale of the property in question, scheduling the
public auction sale on June 28, 1974. The petitioner was the
highest and successful bidder so that a Certificate of Sale was
issued in its favor on the same date by the Provincial Sheriff.
On July 10, 1974, the petitioner in its capacity as attorney-in-fact
of the mortgagor sold the subject real property in favor of itself.
By virtue of the deed of absolute sale, TCT No. T-75171 of the
Register of Deeds for the Province of Laguna was issued in the
name of the petitioner on July 16, 1974. It was only in July 1974,
that private respondents learned that a title in the name of the
Vivas spouses had been issued covering the property in
question and that the same property had been mortgaged in
favor of the petitioner. Private respondent Nena Magcamit
offered to pay the petitioner NGA the amount of P40,000.00
which is the balance of the amount due the Vivas spouses under
the terms of the absolute deed of sale but the petitioner refused
to accept the payment. On July 31, 1974, counsel for private
respondents made a formal demand on the spouses Vivas and
Lizardo to comply with their obligation under the terms of the
absolute deed of sale; and soon after reiterated to the NGA, the
offer to pay the balance of P40,000.00 due under the absolute
deed of sale. On August 13, 1974 petitioner in its reply informed
counsel of private respondents that petitioner is now the owner
of the property in question and has no intention of disposing of
the same.
The private respondents, who as previously stated, are in
possession of subject property were asked by petitioner to
vacate it but the former refused. Petitioner filed a suit for
ejectment against private respondents in the Municipal Court of
Victoria, Laguna, but the case was dismissed.
On June 4, 1975, private respondents filed a complaint before
the then Court of First Instance of Laguna and San Pablo City,
Branch III, San Pablo City, against the petitioner and the
spouses Vivas and Lizardo, praying, among others, that they be
declared the owners of the property in question and entitled to
continue in possession of the same, and if the petitioner is
declared the owner of the said property, then, to order it to
reconvey or transfer the ownership to them under such terms
and conditions as the court may find just, fair and equitable
under the premises. (Record on Appeal, pp. 2-11).
In its answer to the complaint, the petitioner (defendant therein)
maintained that it was never a privy to any transaction between
the private respondents (plaintiffs therein) and the spouses
Paulino Vivas and Engracia Lizardo that it is a purchaser in
good faith and for value of the property formerly covered by
OCT No. 1728; and that the title is now indefeasible, hence,
private respondents' cause of action has' already prescribed.
(Record on Appeal, pp. 16-22).
After due hearing, the trial court ** rendered its decision on
March 17, 1981, in favor of the petitioner, the dispositive portion
of said judgment reading as follows:
WHEREFORE, judgment is hereby rendered
as follows:
(1) declaring defendant National Grains
Authority the lawful owner of the property in
question by virtue of its indefeasible title to
the same;
(2) ordering plaintiffs to turn over possession
of the land to defendant National Grains
Authority;
(3) ordering defendants-spouses Paulino
Vivas and Engracia Lizardo to pay plaintiffs
the sum of P56,000.00 representing the
amount paid pursuant to the Kasulatan Ng
Bilihang Tuluyan marked Exhibit "3", with
legal interest thereon from January 31, 1972
until the amount is paid, to pay an additional
amount of P5,000.00 for and as attorney's
fees, an additional amount of Pl0,000.00 as
moral damages, another amount of
P5,000.00 by way of exemplary damages
and to pay the costs of this suit. (Rollo, P.
35).
The private respondents interposed an appeal from the decision
of the trial court to the Intermediate Appellate Court.
After proper proceedings, the appellate court rendered its
decision on January 31, 1984, reversing and setting aside the
decision of the trial court as follows:
WHEREFORE, the decision of the lower
court is hereby reversed and set aside and
another one is rendered ordering the
National Grains Authority to execute a deed
of reconveyance sufficient in law for
purposes of registration and cancellation of
transfer Certificate of Title No. T-75171 and
the issuance of another title in the names of
plaintiff-appellants, and ordering defendants-
appellees Paulino Vivas and Engracia
Lizardo to pay the National Grains Authority
the sum of P78,375.00 (Exh. 3) within thirty
(30) days from the receipts of the writ of
execution. No damages and costs. (Rollo, p.
19).
The petitioner filed a motion for reconsideration of the said
decision but the same was denied. (Rollo, p. 26).
Hence, this petition.
In the resolution of May 20, 1985, the petition was given due
course and the parties were required to submit simultaneous
memoranda (Rollo, p. 128). The memorandum for the petitioner
was filed on July 3, 1985 (Rollo, p. 129) while the memorandum
for the private respondents was filed on August 26, 1985 1 Rollo
p. 192).
The main issue in this case is whether or not violation of the
terms of the agreement between the spouses Vivas and Lizardo,
the sellers, and private respondents, the buyers, to deliver the
certificate of title to the latter, upon its issuance, constitutes a
breach of trust sufficient to defeat the title and right acquired by
petitioner NGA, an innocent purchaser for value.
It is undisputed that: (1) there are two deeds of sale of the same
land in favor of private respondents, namely: (a) the conditional
sale with right to repurchase or the 'Kasulatan Ng Bilihang
Mabibiling Muli" which was registered under Act 3344 and (b)
the deed of absolute sale or "Kasulatan ng Bilihang Tuluyan"
which was not registered; (2) the condition that the Certificate of
Title will be delivered to the buyers upon its issuance and upon
payment of the balance of P40,000.00 is contained in the deed
of absolute sale; and (3) the land in question at the time of the
execution of both sales was not yet covered by the Torrens
System of registration.
It is axiomatic, that while the registration of the conditional sale
with right of repurchase may be binding on third persons, it is by
provision of law "understood to be without prejudice to third
party who has better right" (Section 194 of the Administrative
Code, as amended by Act No. 3344). In this case, it will be
noted that the third party NGA, is a registered owner under the
Torrens System and has obviously a better right than private
respondents and that the deed of absolute sale with the
suspensive condition is not registered and is necessarily binding
only on the spouses Vivas and Lizardo and private respondents.
In their complaint at the Regional Trial Court, private
respondents prayed among others, for two alternative reliefs,
such as: (a) to be declared the owners of the property in
question or (b) to order the declared owner to reconvey or
transfer the ownership of the property in their favor.
Private respondents claim a better right to the property in
question by virtue of the Conditional Sale, later changed to a
deed of Absolute Sale which although unregistered under the
Torrens System allegedly transferred to them the ownership and
the possession of the property in question. In fact, they argue
that they have been and are still in possession of the same
openly, continuously, publicly under a claim of ownership
adverse to all other claims since the purchase on December 2,
1971 (Rollo, p. 165). It is stressed that not until the month of
July, 1974 did the plaintiff learn that a title had been issued
covering the property in question (Rollo, p. 15).
Time and time again, this Court has ruled that the proceedings
for the registration of title to land under the Torrens System is an
action in rem not in personam, hence, personal notice to all
claimants of the res is not necessary in order that the court may
have jurisdiction to deal with and dispose of the res. Neither
may lack of such personal notice vitiate or invalidate the decree
or title issued in a registration proceeding, for the State, as
sovereign over the land situated within it, may provide for the
adjudication of title in a proceeding in rem or one in the nature of
or akin a to proceeding in rem which shall be binding upon all
persons, known or unknown (Moscoso vs. Court of appeals, 128
SCRA 719 [1984], citing: City of Manila vs. Lack, et al., 19 Phil.
324, 337; Roxas vs. Enriquez, 29 Phil. 31; Director of Lands vs.
Roman Catholic Archbishop of Manila, 41 Phil. 120; Aguilar vs.
Caogdan, 105 Phil. 661). It is thus evident that respondents'
right over the property was barred by res judicata when the
decree of registration was issued to spouses Vivas and Lizards.
It does not matter that they may have had some right even the
right of ownership, BEFORE the grant of the Torrens Title.
Thus, under Section 44 of P.D. 1529, every registered owner
receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land
taking a certificate of title for value and in good faith, shall hold
the same free from all encumbrances except those noted on the
certificate and any of the encumbrances which may be
subsisting, and enumerated in the law. Under said provision,
claims and liens of whatever character, except those mentioned
by law as existing, against the land prior to the issuance of
certificate of title, are cut off by such certificate if not noted
thereon, and the certificate so issued binds the whole world,
including the government (Aldecoa and Co. vs. Warner Barns &
Co., 30 Phil. 209 [1915]; Snyder vs. Fiscal of Cebu and Avila, 42
Phil. 766 [1922]). Under said ruling, if the purchaser is the only
party who appears in the deeds and the registration of titles in
the property registry, no one except such purchaser may be
deemed by law to be the owner of the properties in question
(Ibid). Moreover, no title to registered land in derogation to that
of the registered owner shall be acquired by prescription or
adverse possession (Umbay vs. Alecha, 135 SCRA 427 [1985]).
It does not appear that private respondents' claim falls under
any of the exceptions provided for under Section 44 of P.D. 1529
which can be enforced against petitioner herein.
Thus, it has been invariably restated by this Court, that "The real
purpose of the Torrens System is to quiet title to land and to stop
forever any question as to its legality. "Once a title is registered,
the owner may rest secure, without the necessity of waiting in
the portals of the court, or sitting on the "mirador su casato,"
avoid the possibility of losing his land." "An indirect or collateral
attack on a Torrens Title is not allowed (Dominga vs. Santos, 55
Phil. 361; Singian vs. Manila Railroad, 62 Phil. 467)."
The only exception to this rule is where a person obtains a
certificate of title to a land belonging to another and he has full
knowledge of the rights of the true owner. He is then considered
as guilty of fraud and he may be compelled to transfer the land
to the defrauded owner so long as the property has not passed
to the hands of an innocent purchaser for value (Angeles vs.
Sania, 66 Phil. 444 [1938], emphasis supplied).
It will be noted that the spouses Vivas and Lizardo never
committed any fraud in procuring the registration of the property
in question. On the contrary, their application for registration
which resulted in the issuance of OCT No. 1728 was with
complete knowledge and implied authority of private
respondents who retained a portion of the consideration until the
issuance to said spouses of a certificate of title applied for under
the Torrens Act and the corresponding delivery of said title to
them. The question therefore, is not about the validity of OCT
No. 1728 but in the breach of contract between private
respondents and the Vivas spouses. Petitioner NGA was never
a privy to this transaction. Neither was it shown that it had any
knowledge at the time of the execution of the mortgage, of the
existence of the suspensive condition in the deed of absolute
sale much less of its violation. Nothing appeared to excite
suspicion. The Special Power of Attorney was regular on its
face; the OCT was in the name of the mortgagor and the NGA
was the highest bidder in the public auction. Unquestionably,
therefore, the NGA is an innocent purchaser for value, first as an
innocent mortgagee under Section 32 of P.D. 1529 and later as
innocent purchaser for value in the public auction sale.
Private respondents claim that NGA did not even field any
representative to the land which was not even in the possession
of the supposed mortgagors, nor present any witness to prove
its allegations in the ANSWER nor submit its DEED OF
MORTGAGE to show its being a mortgages in good faith and for
value (Rollo, p. 110).
Such contention is, however, untenable. Well settled is the rule
that all persons dealing with property covered by a torrens
certificate of title are not required to go beyond what appears on
the face of the title. When there is nothing on the certificate of
title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not
required to explore further than what the torrens title upon its
face indicates in quest for any hidden defect or inchoate right
that may subsequently defeat his right thereto (Centeno vs.
Court of Appeals, 139 SCRA 545 [1985]). G.R. No. 105387 November 11, 1993

More specifically, the Court has ruled that a bank is not required
before accepting a mortgage to make an investigation of the title
of the property being given as security (Phil. National
Cooperative Bank vs. Carandang Villalon, 139 SCRA 570
[1985]), and where innocent third persons like mortgagee relying
on the certificate of title acquire rights over the property, their
rights cannot be disregarded (Duran vs. IAC, 138 SCRA 489
[1985]).
Under the circumstances, the Regional Trial Court could not
have erred in ruling that plaintiffs (private respondents herein)
complaint insofar as it prays that they be declared owners of the
land in question can not prosper in view of the doctrine of
indefeasibility of title under the Torrens System, because it is an
established principle that a petition for review of the decree of
registration will not prosper even if filed within one year from the
entry of the decree if the title has passed into the hands of an
innocent purchaser for value (Pres. Decree No. 1529, Sec. 32).
The setting aside of the decree of registration issued in land
registration proceedings is operative only between the parties to
the fraud and the parties defrauded and their privies, but not
against acquirers in good faith and for value and the successors
in interest of the latter; as to them the decree shall remain in full
force and effect forever (Domingo vs. The Mayon Realty Corp.
et al., 102 Phil. 32 [19571). Assuming, therefore, that there was
fraud committed by the sellers against the buyers in the instant
case, petitioner NGA who was not privy therein cannot be made
to suffer the consequences thereof As correctly declared by the
trial court, the National Grains Authority is the lawful owner of
the property in question by virtue of its indefeasible title.
As to private respondents' alternative prayer that the declared
owner be ordered to reconvey or transfer the ownership of the
property in their favor, it is clear that there is absolutely no
reason why petitioner, an innocent purchaser for value, should
reconvey the land to the private respondents.
PREMISES CONSIDERED, the decision of the Court of Appeals
is REVERSED and SET ASIDE, and the decision of the Court of
First Instance of Laguna and San Pablo City, now Regional Trial
Court, is REINSTATED.
SO ORDERED.
JOHANNES SCHUBACK & SONS PHILIPPINE TRADING
CORPORATION, petitioner,
vs.
THE HON. COURT OF APPEALS, RAMON SAN JOSE,
JR., doing business under the name and style
"PHILIPPINE SJ INDUSTRIAL TRADING," respondents.
Hernandez, Velicaria, Vibar & Santiago for petitioner.
Ernesto M. Tomaneng for private respondent.
ROMERO, J.:
In this petition for review on certiorari, petitioner questions the
reversal by the Court of Appeals 1 of the trial court's ruling that a
contract of sale had been perfected between petitioner and
private respondent over bus spare parts.
The facts as quoted from the decision of the Court of Appeals
are as follows:
Sometime in 1981, defendant 2 established
contact with plaintiff 3 through the Philippine
Consulate General in Hamburg, West
Germany, because he wanted to purchase
MAN bus spare parts from Germany.
Plaintiff communicated with its trading
partner. Johannes Schuback and Sohne
Handelsgesellschaft m.b.n. & Co. (Schuback
Hamburg) regarding the spare parts
defendant wanted to order.
On October 16, 1981, defendant submitted
to plaintiff a list of the parts (Exhibit B) he
wanted to purchase with specific part
numbers and description. Plaintiff referred
the list to Schuback Hamburg for quotations.
Upon receipt of the quotations, plaintiff sent
to defendant a letter dated 25 November,
1981 (Exh. C) enclosing its offer on the
items listed by defendant.

On December 4, 1981, defendant informed

plaintiff that he preferred genuine to
replacement parts, and requested that he be
given 15% on all items (Exh. D).
On December 17, 1981, plaintiff submitted
its formal offer (Exh. E) containing the item
number, quantity, part number, description,
unit price and total to defendant. On
December, 24, 1981, defendant informed
plaintiff of his desire to avail of the prices of
the parts at that time and enclosed
Purchase Order No. 0101 dated 14
December 1981 (Exh. F to F-4). Said
Purchase Order contained the item number,
part number and description. Defendant
promised to submit the quantity per unit he
wanted to order on December 28 or 29 (Exh.
F).
On December 29, 1981, defendant
personally submitted the quantities he
wanted to Mr. Dieter Reichert, General
Manager of plaintiff, at the latter's residence
(t.s.n., 13 December, 1984, p. 36). The
quantities were written in ink by defendant in
the same Purchase Order previously
submitted. At the bottom of said Purchase
Order, defendant wrote in ink above his
signature: "NOTE: Above P.O. will include a
3% discount. The above will serve as our
initial P.O." (Exhs. G to G-3-a).
Plaintiff immediately ordered the items
needed by defendant from Schuback
Hamburg to enable defendant to avail of the
old prices. Schuback Hamburg in turn
ordered (Order No. 12204) the items from
NDK, a supplier of MAN spare parts in West
Germany. On January 4, 1982, Schuback
Hamburg sent plaintiff a proforma invoice
(Exhs. N-1 to N-3) to be used by defendant
in applying for a letter of credit. Said invoice
required that the letter of credit be opened in
favor of Schuback Hamburg. Defendant
acknowledged receipt of the invoice (t.s.n.,
19 December 1984, p. 40).
An order confirmation (Exhs. I, I-1) was later
sent by Schuback Hamburg to plaintiff which
was forwarded to and received by defendant
on February 3, 1981 (t.s.n., 13 Dec. 1984, p.
42).
On February 16, 1982, plaintiff reminded
defendant to open the letter of credit to
avoid delay in shipment and payment of
interest (Exh. J). Defendant replied,
mentioning, among others, the difficulty he
was encountering in securing: the required
dollar allocations and applying for the letter
of credit, procuring a loan and looking for a
partner-financier, and of finding ways 'to
proceed with our orders" (Exh. K).
In the meantime, Schuback Hamburg
received invoices from, NDK for partial
deliveries on Order No.12204 (Direct
Interrogatories., 07 Oct, 1985, p. 3).
Schuback Hamburg paid NDK. The latter
confirmed receipt of payments made on
February 16, 1984 (Exh.C-Deposition).
On October 18, 1982, Plaintiff again
reminded defendant of his order and
advised that the case may be endorsed to
its lawyers (Exh. L). Defendant replied that
he did not make any valid Purchase Order
and that there was no definite contract
between him and plaintiff (Exh. M). Plaintiff
sent a rejoinder explaining that there is a
valid Purchase Order and suggesting that
defendant either proceed with the order and
open a letter of credit or cancel the order
and pay the cancellation fee of 30% of
F.O.B. value, or plaintiff will endorse the
case to its lawyers (Exh. N).
Schuback Hamburg issued a Statement of
Account (Exh. P) to plaintiff enclosing
therewith Debit Note (Exh. O) charging
plaintiff 30% cancellation fee, storage and
interest charges in the total amount of DM
51,917.81. Said amount was deducted from
plaintiff's account with Schuback Hamburg
(Direct Interrogatories, 07 October, 1985).
Demand letters sent to defendant by
plaintiff's counsel dated March 22, 1983 and
June 9, 1983 were to no avail (Exhs R and
S).
Consequently, petitioner filed a complaint for recovery of actual
or compensatory damages, unearned profits, interest, attorney's
fees and costs against private respondent.
In its decision dated June 13, 1988, the trial court 4 ruled in favor
of petitioner by ordering private respondent to pay petitioner,
among others, actual compensatory damages in the amount of
DM 51,917.81, unearned profits in the amount of DM 14,061.07,
or their peso equivalent.
Thereafter, private respondent elevated his case before the
Court of Appeals. On February 18, 1992, the appellate court
reversed the decision of the trial court and dismissed the
complaint of petitioner. It ruled that there was no perfection of
contract since there was no meeting of the minds as to the price
between the last week of December 1981 and the first week of
January 1982.
The issue posed for resolution is whether or not a contract of
sale has been perfected between the parties.
We reverse the decision of the Court of Appeals and reinstate
the decision of the trial court. It bears emphasizing that a
"contract of sale is perfected at the moment there is a meeting
of minds upon the thing which is the object of the contract and
upon the price. . . . " 5
Article 1319 of the Civil Code states: "Consent is manifested by
the meeting of the offer and acceptance upon the thing and the
cause which are to constitute the contract. The offer must be
certain and the acceptance absolute. A qualified acceptance
constitutes a counter offer." The facts presented to us indicate
that consent on both sides has been manifested.
The offer by petitioner was manifested on December 17, 1981
when petitioner submitted its proposal containing the item
number, quantity, part number, description, the unit price and
total to private respondent. On December 24, 1981, private
respondent informed petitioner of his desire to avail of the prices
of the parts at that time and simultaneously enclosed its
Purchase Order No. 0l01 dated December 14, 1981. At this
stage, a meeting of the minds between vendor and vendee has
occurred, the object of the contract: being the spare parts and
the consideration, the price stated in petitioner's offer dated
December 17, 1981 and accepted by the respondent on
December 24,1981.
Although said purchase order did not contain the quantity he
wanted to order, private respondent made good, his promise to
communicate the same on December 29, 1981. At this juncture,
it should be pointed out that private respondent was already in
the process of executing the agreement previously reached
between the parties.
Below Exh. G-3, marked as Exhibit G-3-A, there appears this
statement made by private respondent: "Note. above P.O. will
include a 3% discount. The above will serve as our initial P.O."
This notation on the purchase order was another indication of
acceptance on the part of the vendee, for by requesting a 3%
discount, he implicitly accepted the price as first offered by the
vendor. The immediate acceptance by the vendee of the offer
was impelled by the fact that on January 1, 1982, prices would
go up, as in fact, the petitioner informed him that there would be
a 7% increase, effective January 1982. On the other hand,
concurrence by the vendor with the said discount requested by
the vendee was manifested when petitioner immediately
ordered the items needed by private respondent from Schuback
Hamburg which in turn ordered from NDK, a supplier of MAN
spare parts in West Germany.
When petitioner forwarded its purchase order to NDK, the price
was still pegged at the old one. Thus, the pronouncement of the
Court Appeals that there as no confirmed price on or about the
last week of December 1981 and/or the first week of January
1982 was erroneous.
While we agree with the trial court's conclusion that indeed a
perfection of contract was reached between the parties, we
differ as to the exact date when it occurred, for perfection took
place, not on December 29, 1981. Although the quantity to be
ordered was made determinate only on December 29, 1981,
quantity is immaterial in the perfection of a sales contract. What
is of importance is the meeting of the minds as to
the object and cause, which from the facts disclosed, show that
as of December 24, 1981, these essential elements had already
occurred.
On the part of the buyer, the situation reveals that private
respondent failed to open an irrevocable letter of credit without
recourse in favor of Johannes Schuback of Hamburg, Germany.
This omission, however. does not prevent the perfection of the
contract between the parties, for the opening of the letter of
credit is not to be deemed a suspensive condition. The facts
herein do not show that petitioner reserved title to the goods
until private respondent had opened a letter of credit. Petitioner,
in the course of its dealings with private respondent, did not
incorporate any provision declaring their contract of sale without
effect until after the fulfillment of the act of opening a letter of
credit.
The opening of a etter of credit in favor of a vendor is only a
mode of payment. It is not among the essential requirements of
a contract of sale enumerated in Article 1305 and 1474 of the
Civil Code, the absence of any of which will prevent the
perfection of the contract from taking place.
To adopt the Court of Appeals' ruling that the contract of sale
was dependent on the opening of a letter of credit would be
untenable from a pragmatic point of view because private
respondent would not be able to avail of the old prices which
were open to him only for a limited period of time. This explains
why private respondent immediately placed the order with
petitioner which, in turn promptly contacted its trading partner in
Germany. As succinctly stated by petitioner, "it would have been
impossible for respondent to avail of the said old prices since
the perfection of the contract would arise much later, or after the
end of the year 1981, or when he finally opens the letter of
credit." 6
WHEREFORE, the petition is GRANTED and the decision of the
trial court dated June 13, 1988 is REINSTATED with
modification.
SO ORDERED.
[G.R. No. 149750. June 16, 2003]
AURORA ALCANTARA-DAUS, petitioner , vs . Spouses
HERMOSO and SOCORRO DE
LEON, respondents .
DECISION
PANGANIBAN, J .:
While a contract of sale is perfected by mere consent,
ownership of the thing sold is acquired only upon its delivery to
the buyer. Upon the perfection of the sale, the seller assumes
the obligation to transfer ownership and to deliver the thing sold,
but the real right of ownership is transferred only by tradition or
delivery thereof to the buyer.
The Case
Before us is a Petition for Review[1] under Rule 45 of the
Rules of Court, seeking to set aside the February 9, 2001
Decision and the August 31, 2001 Resolution of the Court of
Appeals[2](CA) in CA-GR CV No. 47587. The dispositive portion
of the assailed Decision reads as follows:
WHEREFORE, premises considered, the decision of the trial
court is hereby REVERSED, and judgment rendered:
1. Declaring null and void and of no effect, the
[D]eed of [A]bsolute [S]ale dated December 6,
1975, the [D]eed of [E]xtra-judicial [P]artition and
[Q]uitclaim dated July 1, 1985, and T.C.T. No. T-
31262;
2. Declaring T.C.T. No. 42238 as valid and binding;
3. Eliminating the award of P5,000.00 each to be
paid to defendants-appellees.[3]
The assailed Resolution[4] denied petitioners Motion for
Reconsideration.
The Facts
The antecedents of the case were summarized by the
Regional Trial Court (RTC) and adopted by the CA as follows:
This is a [C]omplaint for annulment of documents and title,
ownership, possession, injunction, preliminary injunction,
restraining order and damages.
[Respondents] alleged in their [C]omplaint that they are the
owners of a parcel of land hereunder described as follows, to
wit:
A parcel of land (Lot No. 4786 of the Cadastral Survey of San
Manuel) situated in the Municipality of San Manuel, Bounded on
the NW., by Lot No. 4785; and on the SE., by Lot Nos. 11094 &
11096; containing an area of Four Thousand Two Hundred
Twelve (4,212) sq. m., more or less. Covered by Original
Certificate of Title No. 22134 of the Land Records of
Pangasinan.
which [Respondent] Hermoso de Leon inherited from his father
Marcelino de Leon by virtue of a [D]eed of [E]xtra-judicial
[P]artition. Sometime in the early 1960s, [respondents] engaged
the services of the late Atty. Florencio Juan to take care of the
documents of the properties of his parents. Atty. Juan let them
sign voluminous documents. After the death of Atty. Juan, some
documents surfaced and most revealed that their properties had
been conveyed by sale or quitclaim to [Respondent] Hermosos
brothers and sisters, to Atty. Juan and his sisters, when in truth
and in fact, no such conveyances were ever intended by
them. His signature in the [D]eed of [E]xtra-judicial [P]artition
with [Q]uitclaim made in favor of x x x Rodolfo de Leon was
forged. They discovered that the land in question was sold by x
x x Rodolfo de Leon to [Petitioner] Aurora Alcantara. They
demanded annulment of the document and reconveyance but
defendants refused x x x.
xxxxxxxxx
[Petitioner] Aurora Alcantara-Daus [averred] that she bought the
land in question in good faith and for value on December 6,
1975. [She] has been in continuous, public, peaceful, open
possession over the same and has been appropriating the
produce thereof without objection from anyone.[5]
On August 23, 1994, the RTC (Branch 48) of Urdaneta,
Pangasinan[6] rendered its Decision[7] in favor of herein
petitioner. It ruled that respondents claim was barred by laches,
because more than 18 years had passed since the land was
sold. It further ruled that since it was a notarial document, the
Deed of Extrajudicial Partition in favor of Rodolfo de Leon was
presumptively authentic.
 Ruling of the Court of Appeals
In reversing the RTC, the CA held that laches did not bar
respondents from pursuing their claim. Notwithstanding the
delay, laches is a doctrine in equity and may not be invoked to
resist the enforcement of a legal right.
The appellate court also held that since Rodolfo de Leon
was not the owner of the land at the time of the sale, he could
not transfer any land rights to petitioner. It further declared that
the signature of Hermoso de Leon on the Deed of Extrajudicial
Partition and Quitclaim -- upon which petitioner bases her claim
-- was a forgery. It added that under the above circumstances,
petitioner could not be said to be a buyer in good faith.
Hence, this Petition.[8]
The Issues
Petitioner raises the following issues for our consideration:
1. Whether or not the Deed of Absolute Sale dated December 6,
1975 executed by Rodolfo de Leon (deceased) over the land in
question in favor of petitioner was perfected and binding upon
the parties therein?
2. Whether or not the evidentiary weight of the Deed of
Extrajudicial Partition with Quitclaim, executed by [R]espondent
Hermoso de Leon, Perlita de Leon and Carlota de Leon in favor
of Rodolfo de Leon was overcome by more than [a]
preponderance of evidence of respondents?
3. Whether or not the possession of petitioner including her
predecessor-in-interest Rodolfo de Leon over the land in
question was in good faith?
4. And whether or not the instant case initiated and filed by
respondents on February 24, 1993 before the trial court has
prescribed and respondents are guilty of laches? [9]
The Courts Ruling
The Petition has no merit.
First Issue:
Validity of the Deed of Absolute Sale
Petitioner argues that, having been perfected, the
Contract of Sale executed on December 6, 1975 was thus
binding upon the parties thereto.
A contract of sale is consensual. It is perfected by mere
consent,[10] upon a meeting of the minds[11] on the offer and the
acceptance thereof based on subject matter, price and terms of
payment.[12] At this stage, the sellers ownership of the thing sold
is not an element in the perfection of the contract of sale.
The contract, however, creates an obligation on the part of
the seller to transfer ownership and to deliver the subject matter
of the contract.[13] It is during the delivery that the law requires
the seller to have the right to transfer ownership of the thing
sold.[14] In general, a perfected contract of sale cannot be
challenged on the ground of the sellers non-ownership of the
thing sold at the time of the perfection of the contract. [15]
Further, even after the contract of sale has been perfected
between the parties, its consummation by delivery is yet another
matter. It is through tradition or delivery that the buyer acquires
the real right of ownership over the thing sold. [16]
Undisputed is the fact that at the time of the sale, Rodolfo
de Leon was not the owner of the land he delivered to
petitioner. Thus, the consummation of the contract and the
consequent transfer of ownership would depend on whether he
subsequently acquired ownership of the land in accordance with
Article 1434 of the Civil Code. [17] Therefore, we need to resolve
the issue of the authenticity and the due execution of the
Extrajudicial Partition and Quitclaim in his favor.
Second Issue:
Authenticity of the Extrajudicial Partition
Petitioner contends that the Extrajudicial Partition and
Quitclaim is authentic, because it was notarized and executed in
accordance with law. She claims that there is no clear and
convincing evidence to set aside the presumption of regularity in
the issuance of such public document. We disagree.
As a general rule, the due execution and authenticity of a
document must be reasonably established before it may be
admitted in evidence.[18] Notarial documents, however, may be
presented in evidence without further proof of their authenticity,
since the certificate of acknowledgment is prima facie evidence
of the execution of the instrument or document involved. [19] To
contradict facts in a notarial document and the presumption of
regularity in its favor, the evidence must be clear, convincing
and more than merely preponderant.[20]
The CA ruled that the signature of Hermoso de Leon on
the Extrajudicial Partition and Quitclaim was forged. However,
this factual finding is in conflict with that of the RTC.While
normally this Court does not review factual issues, [21] this rule
does not apply when there is a conflict between the holdings of
the CA and those of the trial court,[22] as in the present case.
After poring over the records, we find no reason to reverse
the factual finding of the appellate court. A comparison of the
genuine signatures of Hermoso de Leon [23] with his purported
signature on the Deed of Extrajudicial Partition with
Quitclaim[24] will readily reveal that the latter is a forgery. As aptly
held by the CA, such variance cannot be attributed to the age or
the mechanical acts of the person signing.[25]
Without the corroborative testimony of the attesting
witnesses, the lone account of the notary regarding the due
execution of the Deed is insufficient to sustain the authenticity of
this document. He can hardly be expected to dispute the
authenticity of the very Deed he notarized. [26] For this reason, his
testimony was -- as it should be --minutely scrutinized by the
appellate court, and was found wanting.
On the claim of laches, we find no reason to reverse the
ruling of the CA. Laches is based upon equity and the public
policy of discouraging stale claims. [34] Since laches is an
equitable doctrine, its application is controlled by equitable
considerations.[35] It cannot be used to defeat justice or to
perpetuate fraud and injustice. [36] Thus, the assertion of laches
to thwart the claim of respondents is foreclosed, because the
Deed upon which petitioner bases her claim is a forgery.
WHEREFORE, the Petition is DENIED and the assailed
Decision AFFIRMED. Costs against petitioner.
SO ORDERED.

Third Issue:
Possession in Good Faith

Petitioner claims that her possession of the land is in good

faith and that, consequently, she has acquired ownership thereof
by virtue of prescription. We are not persuaded.
It is well-settled that no title to registered land in
derogation of that of the registered owner shall be acquired by
prescription or adverse possession.[27] Neither can prescription
be allowed against the hereditary successors of the registered
owner, because they merely step into the shoes of the decedent
and are merely the continuation of the personality of their
predecessor in interest.[28] Consequently, since a certificate of
registration[29] covers it, the disputed land cannot be acquired by
prescription regardless of petitioners good faith.

Fourth Issue:
Prescription of Action and Laches

Petitioner also argues that the right to recover ownership

has prescribed, and that respondents are guilty of laches. Again,
we disagree.
Article 1141 of the New Civil Code provides that real
actions over immovable properties prescribe after thirty
years. This period for filing an action is interrupted when a
complaint is filed in court. [30] Rodolfo de Leon alleged that the
land had been allocated to him by his brother Hermoso de Leon
in March 1963,[31] but that the Deed of Extrajudicial Partition
assigning the contested land to the latter was executed only on
September 16, 1963.[32] In any case, the Complaint to recover
the land from petitioner was filed on February 24, 1993, [33] which
was within the 30-year prescriptive period.

[G.R. No. 116635. July 24, 1997]
CONCHITA NOOL and GAUDENCIO
ALMOJERA, petitioner, vs. COURT OF
APPEALS, ANACLETO NOOL and EMILIA
NEBRE, respondents.
DECISION
PANGANIBAN, J .:
A contract of repurchase arising out of a contract of sale
where the seller did not have any title to the property sold is not
valid. Since nothing was sold, then there is also nothing to
repurchase.
Statement of the Case
This postulate is explained by this Court as it resolves this
petition for review on certiorari assailing the January 20, 1993
Decision[1] of Respondent Court of Appeals [2] in CA-G.R. CV No.
36473, affirming the decision[3] of the trial court[4] which disposed
as follows:[5]
WHEREFORE, judgment is hereby rendered
dismissing the complaint for no cause of action, and
hereby:
1. Declaring the private writing,
Exhibit C, to be an option to
sell, not binding and considered
validly withdrawn by the
defendants for want of
consideration;
2. Ordering the plaintiffs to return to
the defendants the sum
of P30,000.00 plus interest
thereon at the legal rate, from
the time of filing of defendants
counterclaim until the same is
fully paid;
3. Ordering the plaintiffs to deliver
peaceful possession of the two
hectares mentioned in
paragraph 7 of the complaint
and in paragraph 31 of
defendants answer
(counterclaim);
4. Ordering the plaintiffs to pay
reasonable rents on said two
hectares at P5,000.00 per
annum or at P2,500.00 per
cropping from the time of
judicial demand mentioned in
paragraph 2 of the dispositive
portion of this decision, until the
said two hectares shall have
been delivered to the
defendants; and
5. To pay the costs.
SO ORDERED.
The Antecedent Facts
The facts, which appear undisputed by the parties, are
narrated by the Court of Appeals as follows:
Two (2) parcels of land are in dispute and litigated
upon here. The first has an area of 1 hectare . It was
formerly owned by Victorino Nool and covered by
Transfer Certificate of Title No. T-74950. With an
area of 3.0880 hectares, the other parcel was
previously owned by Francisco Nool under Transfer
Certificate of Title No. T-100945. Both parcels are
situated in San Manuel, Isabela. The plaintiff
spouses, Conchita Nool and Gaudencio Almojera,
now the appellants, seek recovery of the
aforementioned parcels of land from the defendants,
Anacleto Nool, a younger brother of Conchita, and
Emilia Nebre, now the appellees.
In their complaint, plaintiff-appellants alleged inter alia that they
are the owners of subject parcels of land, and they bought the
same from Conchitas other brothers, Victorino Nool and
Francisco Nool; that as plaintiffs were in dire need of money,
they obtained a loan from the Iligan Branch of the Development
Bank of the Philippines, in Ilagan, Isabela, secured by a real
estate mortgage on said parcels of land, which were still
registered in the names of Victorino Nool and Francisco Nool, at
the time, and for the failure of plaintiffs to pay the said loan,
including interest and surcharges, totaling P56,000.00, the
mortgage was foreclosed; that within the period of redemption,
plaintiffs contacted defendant Anacleto Nool for the latter to
redeem the foreclosed properties from DBP, which the latter did;
and as a result, the titles of the two (2) parcels of land in
question were transferred to Anacleto Nool; that as part of their
arrangement or understanding, Anacleto Nool agreed to buy
from the plaintiff Conchita Nool the two (2) parcels of land under
controversy, for a total price of P100,000.00, P30,000.00 of
which price was paid to Conchita, and upon payment of the
balance of P14,000.00, plaintiffs were to regain possession of
the two (2) hectares of land, which amounts defendants failed to
pay, and the same day the said arrangement[6] was made;
another covenant[7] was entered into by the parties, whereby
defendants agreed to return to plaintiffs the lands in question, at
anytime the latter have the necessary amount; that plaintiffs
asked the defendants to return the same but despite the
intervention of the Barangay Captain of their place, defendants
refused to return the said parcels of land to plaintiffs; thereby
impelling them (plaintiffs) to come to court for relief.
In their answer defendants-appellees theorized that
they acquired the lands in question from the
Development Bank of the Philippines, through
negotiated sale, and were misled by plaintiffs when
defendant Anacleto Nool signed the private writing
agreeing to return subject lands when plaintiffs have
the money to redeem the same; defendant Anacleto
having been made to believe, then, that his sister,
Conchita, still had the right to redeem the said
properties.
The pivot of inquiry here, as aptly observed below, is
the nature and significance of the private document,
marked Exhibit D for plaintiffs, which document has
not been denied by the defendants, as defendants
even averred in their Answer that they gave an
advance payment of P30,000.00 therefor, and
acknowledged that they had a balance
of P14,000.00 to complete their payment. On this
crucial issue, the lower court adjudged the said
private writing (Exhibit D) as an option to sell not
binding upon and considered the same validly
withdrawn by defendants for want of consideration;
and decided the case in the manner
abovementioned.
There is no quibble over the fact that the two (2) parcels of land
in dispute were mortgaged to the Development Bank of the
Philippines, to secure a loan obtained by plaintiffs from DBP
(Ilagan Branch), Ilagan, Isabela. For the non-payment of said
loan, the mortgage was foreclosed and in the process,
ownership of the mortgaged lands was consolidated in DBP
(Exhibits 3 and 4 for defendants). After DBP became the
absolute owner of the two parcels of land, defendants
negotiated with DBP and succeeded in buying the same. By
virtue of such sale by DBP in favor of defendants, the titles of
DBP were cancelled and corresponding Transfer Certificates of
Title (Annexes C and D to the complaint) issued to the
dependants.[8]
It should be stressed that Manuel S. Mallorca, authorized
officer of DBP, certified that the one-year redemption period was
from March 16, 1982 up to March 15, 1983 and that the
Mortgagors right of redemption was not exercised within this
period.[9] Hence, DBP became the absolute owner of said
parcels of land for which it was issued new certificates of title,
both entered on May 23, 1983 by the Registry of Deeds for the
Province of Isabela.[10] About two years thereafter, on April 1,
1985, DBP entered into a Deed of Conditional Sale [11] involving
the same parcels of land with Private Respondent Anacleto Nool
as vendee. Subsequently, the latter was issued new certificates
of title on February 8, 1988.[12]
The Court of Appeals ruled:[13]
WHEREFORE, finding no reversible error infirming it,
the appealed Judgment is hereby AFFIRMED in
toto. No pronouncement as to costs.
The Issues
Petitioners impute to Respondent Court the following
alleged errors:
1. The Honorable Court of Appeals, Second
Division has misapplied the legal import or
meaning of Exhibit C in a way contrary to law
and existing jurisprudence in stating that it has
no binding effect between the parties and
considered validly withdrawn by defendants-
appellees for want of consideration.
2. The Honorable Court of Appeals, Second
Division has miserably failed to give legal
significance to the actual possession and
cultivation and appropriating exclusively the
palay harvest of the two (2) hectares land
pending the payment of the remaining balance
of fourteen thousand pesos (P14,000.00) by
defendants-appellees as indicated in Exhibit C.
3. The Honorable Court of Appeals has seriously
erred in affirming the decision of the lower court by
awarding the payment of rents per annum and the
return of P30,000.00 and not allowing the plaintiffs-
appellants to re-acquire the four (4) hectares, more
or less upon payment of one hundred thousand
pesos (P100,000.00) as shown in Exhibit D.[14]
The Courts Ruling
The petition is bereft of merit.
First Issue: Are Exhibits C and D Valid and Enforceable?
The petitioner-spouses plead for the enforcement of their
agreement with private respondents as contained in Exhibits C
and D, and seek damages for the latters alleged breach
thereof. In Exhibit C, which was a private handwritten document
labeled by the parties as Resibo ti Katulagan or Receipt of
Agreement, the petitioners appear to have sold to private
respondents the parcels of land in controversy covered by TCT
No. T-74950 and TCT No. T-100945. On the other hand, Exhibit
D, which was also a private handwritten document in Ilocano
and labeled as Kasuratan, private respondents agreed that
Conchita Nool can acquire back or repurchase later on said land
when she has the money.[15]
In seeking to enforce her alleged right to repurchase the
parcels of land, Conchita (joined by her co-petitioner-husband)
invokes Article 1370 of the Civil Code which mandates that (i)f
the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its
stipulation shall control. Hence, petitioners contend that the
Court of Appeals erred in affirming the trial courts finding and
conclusion that said Exhibits C and D were not merely voidable
but utterly void and inexistent.
We cannot sustain petitioners view. Article 1370 of the
Civil Code is applicable only to valid and enforceable
contracts. The Regional Trial Court and the Court of Appeals
ruled that the principal contract of sale contained in Exhibit C
and the auxilliary contract of repurchase in Exhibit D are both
void. This conclusion of the two lower courts appears to find
support in Dignos vs. Court of Appeals,[16] where the Court held:
Be that as it may, it is evident that when petitioners
sold said land to the Cabigas spouses, they were no
longer owners of the same and the sale is null and
void.
In the present case, it is clear that the sellers no longer
had any title to the parcels of land at the time of sale. Since
Exhibit D, the alleged contract of repurchase, was dependent on
the validity of Exhibit C, it is itself void. A void contract cannot
give rise to a valid one.[17] Verily, Article 1422 of the Civil Code
provides that (a) contract which is the direct result of a previous
illegal contract, is also void and inexistent.
We should however add that Dignos did not cite its basis
for ruling that a sale is null and void where the sellers were no
longer the owners of the property. Such a situation (where the
sellers were no longer owners) does not appear to be one of the
void contracts enumerated in Article 1409 of the Civil Code.
[18]
Moreover, the Civil Code[19] itself recognizes a sale where the
goods are to be acquired x x x by the seller after the perfection
of the contract of sale, clearly implying that a sale is possible
even if the seller was not the owner at the time of sale, provided
he acquires title to the property later on.
In the present case however, it is likewise clear that the
sellers can no longer deliver the object of the sale to the buyers,
as the buyers themselves have already acquired title and
delivery thereof from the rightful owner, the DBP. Thus, such
contract may be deemed to be inoperative [20] and may thus fall,
by analogy, under item no. 5 of Article 1409 of the Civil
Code: Those which contemplate an impossible service. Article
1459 of the Civil Code provides that the vendor must have a
right to transfer the ownership thereof [object of the sale] at the
time it is delivered. Here, delivery of ownership is no longer
possible. It has become impossible.
Furthermore, Article 1505 of the Civil Code provides that
where goods are sold by a person who is not the owner thereof,
and who does not sell them under authority or with consent of
the owner, the buyer acquires no better title to the goods than
the seller had, unless the owner of the goods is by his conduct
precluded from denying the sellers authority to sell. Here, there
is no allegation at all that petitioners were authorized by DBP to
sell the property to the private respondents. Jurisprudence, on
the other hand, teaches us that a person can sell only what he
owns or is authorized to sell; the buyer can as a consequence
acquire no more than what the seller can legally transfer. [21] No
one can give what he does not have neno dat quod non
habet. On the other hand, Exhibit D presupposes that petitioners
could repurchase the property that they sold to private
respondents. As petitioners sold nothing, it follows that they can
also repurchase nothing. Nothing sold, nothing to repurchase. In
this light, the contract of repurchase is also inoperative and by
the same analogy, void.
Contract of Repurchase
Dependent on Validity of Sale
As borne out by the evidence on record, the private
respondents bought the two parcels of land directly from DBP on
April 1, 1985 after discovering that petitioners did not own said
property, the subject of Exhibits C and D executed on November
30, 1984. Petitioners, however, claim that they can exercise
their alleged right to repurchase the property, after private
respondents had acquired the same from DBP.[22] We cannot
accede to this, for it clearly contravenes the intention of the
parties and the nature of their agreement. Exhibit D reads:
WRITING
Nov. 30, 1984
That I, Anacleto Nool have bought from my sister
Conchita Nool a land an area of four hectares (4
has.) in the value of One Hundred Thousand
(100,000.00) Pesos. It is our agreement as brother
 and sister that she can acquire back or
repurchase later on said land when she has the
money. [Underscoring supplied]
As proof of this agreement we sign as brother and
sister this written document this day of Nov. 30,
1984, at District 4, San Manuel, Isabela.
Sgd ANACLETO NOOL
Anacleto Nool
Sgd Emilio Paron
Witness
Sgd Conchita Nool
Conchita Nool[23]
One repurchases only what one has previously sold. In
other words, the right to repurchase presupposes a valid
contract of sale between the same parties. Undisputedly, private
respondents acquired title to the property from DBP, and not
from the petitioners.
Assuming arguendo that Exhibit D is separate and distinct
from Exhibit C and is not affected by the nullity of the latter, still
petitioners do not thereby acquire a right to repurchase the
property. In that scenario, Exhibit D ceases to be a right to
repurchase ancillary and incidental to the contract of sale;
rather, it becomes an accepted unilateral promise to sell. Article
1479 of the Civil Code, however, provides that an accepted
unilateral promise to buy or sell a determinate thing for a price
certain is binding upon the promissor if the promise is supported
by a consideration distinct from the price. In the present case,
the alleged written contract of repurchase contained in Exhibit D
is bereft of any consideration distinct from the price. Accordingly,
as an independent contract, it cannot bind private
respondents. The ruling in Diamante vs. CA[24] supports this. In
that case, the Court through Mr. Justice Hilario G. Davide, Jr.
explained:
Article 1601 of the Civil Code provides:
Conventional redemption shall take place
when the vendor reserves the right to
repurchase the thing sold, with the
obligation to comply with the provisions of
article 1616 and other stipulations which
may have been agreed upon.
In Villarica, et al. Vs. Court of Appeals, et
al., decided on 29 November 1968, or
barely seven (7) days before the
respondent Court promulgated its
decisions in this case, this Court,
interpreting the above Article, held:
The right of repurchase is not a right
granted the vendor by the vendee in a
subsequent instrument, but is a right
reserved by the vendor in the same
instrument of sale as one of the
stipulations of the contract. Once the
instrument of absolute sale is executed,
the vendor can not longer reserve the
right to repurchase, and any right
thereafter granted the vendor by the
vendee in a separate instrument cannot
be a right of repurchase but some other
right like the option to buy in the instant
case. x x x.
In the earlier case of Ramos, et al. vs.
Icasiano, et al., decided in 1927, this
Court had already ruled that an
agreement to repurchase becomes a
promise to sell when made after the sale,
because when the sale is made without
such an agreement, the purchaser
acquires the thing sold absolutely, and if
he afterwards grants the vendor the right
to repurchase, it is a new contract
entered into by the purchaser, as
absolute owner already of the object. In
that case the vendor has nor reserved to
himself the right to repurchase.
In Vda. De Cruzo, et al. vs. Carriaga, et
al. this Court found another occasion to
apply the foregoing principle.
Hence, the Option to Repurchase executed by
private respondent in the present case, was merely a
promise to sell, which must be governed by Article
1479 of the Civil Code which reads as follows:
Art. 1479. A promise to buy and sell a
determinate thing for a price certain is
reciprocally demandable.
An accepted unilateral promise to buy or
to sell a determinate thing for a price
certain is binding upon the promissor if
the promise is supported by a
consideration distinct from the price.
Right to Repurchase Based on
Homestead or Trust Non-Existent
Petitioners also base their alleged right to repurchase on
(1) Sec. 119 of the Public Land Act [25] and (2) an implied trust
relation as brother and sister.[26]
 The Court notes that Victorino Nool and Francisco Nool
mortgaged the land to DBP. The brothers, together with
Conchita Nool and Anacleto Nool, were all siblings and heirs
qualified to repurchase the two parcels of land under Sec. 119 of
the Public Land Act which provides that (e)very conveyance of
land acquired under the free patent or homestead provisions,
when proper, shall be subject to repurchase by the applicant, his
widow or legal heirs, within a period of five years from the date
of conveyance.Assuming the applicability of this statutory
provision to the case at bar, it is indisputable that Private
Respondent Anacleto Nool already repurchased from DBP the
contested properties. Hence, there was no more right of
repurchase that his sister Conchita or brothers Victorino and
Francisco could exercise. The properties were already owned
by an heir of the homestead grantee and the rationale of the of
the provision to keep homestead lands within the family of the
grantee was thus fulfilled.[27]
The claim of a trust relation is likewise without merit. The
records show that private respondents did not purchase the
contested properties from DBP in trust for petitioners.The
former, as previously mentioned, in fact bought the land from
DBP upon realization that the latter could not validly sell the
same. Obviously, petitioners bought it for themselves. There is
no evidence at all in the records that they bought the land in
trust for private respondents. The fact that Anacleto Nool was
the younger brother of Conchita Nool and that they signed a
contract of repurchase, which as discussed earlier was void,
does not prove the existence of an implied trust in favor of
petitioners.
Second Issue: No Estoppel in Impugning the
Validity of Void Contracts
cannot be binding on or enforceable against private
respondents.[30]
Third Issue: Return of P30,000.00 with Interest
and Payment of Rent
Petitioners further argue that it would be a miscarriage of
justice to order them (1) to return the sum of P30,000.00 to
private respondents when allegedly it was Private Respondent
Anacleto Nool who owed the former a balance of P14,000.00
and (2) to order petitioners to pay rent when they were allowed
to cultivate the said two hectares.[31]
We are not persuaded. Based on the previous discussion,
the balance of P14,000.00 under the void contract of sale may
not be enforced. Petitioners are the ones who have an
obligation to return what they unduly and improperly received by
reason of the invalid contract of sale. Since they cannot legally
give title to what they sold, they cannot keep the money paid for
the object of the sale. It is basic that (e)very person who through
an act of performance by another, or any other means, acquires
or comes into possession of something at the expense of the
latter without just or legal ground, shall return the same. [32] Thus,
if a void contract has already been performed, the restoration of
what has been given is in order.[33] Corollarily and as aptly
ordered by respondent appellate court, interest thereon will run
only from the time of private respondents demand for the return
of this amount in their counterclaim. [34] In the same vein,
petitioners possession and cultivation of the two hectares are
anchored on private respondents tolerance.Clearly, the latters
tolerance ceased upon their counterclaim and demand on the
former to vacate. Hence, their right to possess and cultivate the
land ipso facto ceased.

Petitioners argue that when Anacleto Nool took the WHEREFORE, the petition is DENIED and the assailed
possession of the two hectares, more or less, and let the other Decision of the Court of Appeals affirming that of the trial court is
two hectares to be occupied and cultivated by plaintiffs- hereby AFFIRMED.
appellants, Anacleto Nool cannot later on disclaim the terms or SO ORDERED.
contions (sic) agreed upon and his actuation is within the ambit
of estoppel x x x.[28] We disagree. The private respondents
cannot be estopped from raising the defense of nullity of
contract, specially in this case where they acted in good faith,
believing that indeed petitioners could sell the two parcels of
land in question. Article 1410 of the Civil Code mandates that
(t)he action or defense for the declaration of the inexistence of a
contract does not prescribe. It is well-settled doctrine that as
between parties to a contract, validity cannot be given to it by
estoppel if it is prohibited by law or it is against public policy (19
Am. Jur. 802). It is not within the competence of any citizen to
barter away what public policy by law seeks to preserve.
[29]
Thus, it is immaterial that private respondents initially acted to
implement the contract of sale, believing in good faith that the
same was valid. We stress that a contract void at inception
cannot be validated by ratification or prescription and certainly

[G.R. No. 136054. September 5, 2001]
HEIRS OF SEVERINA SAN MIGUEL, namely: MAGNO
LAPINA, PACENCIA LAPINA, MARCELO
LAPINA, SEVERINO LAPINA, ROSARIO
LAPINA, FRANCISCO LAPINA, CELIA LAPINA
assisted by husband RODOLFO
TOLEDO, petitioners , vs . THE HONORABLE
COURT OF APPEALS, DOMINADOR SAN
MIGUEL, GUILLERMO F. SAN MIGUEL,
PACIENCIA F. SAN MIGUEL, CELESTINO,
assisted by husband, ANTERO CELESTINO,
represented by their Attorney-in-Fact ENRICO
CELESTINO, AUGUSTO SAN MIGUEL,
ANTONIO SAN MIGUEL, RODOLFO SAN
MIGUEL, CONRADO SAN MIGUEL and LUCITA
SAN MIGUEL, respondents.
DECISION
PARDO, J .:
The Case
The case is a petition for review on certiorari[1] of the
decision of the Court of Appeals, [2] affirming that of the Regional
Trial Court, Cavite, Branch 19, Bacoor[3] ordering petitioners,
Heirs of Severina San Miguel (hereafter, Severinas heirs) to
surrender to respondents Dominador San Miguel, et al.
(hereafter, Dominador, et al.), Transfer Certificate of Title No.
223511 and further directing Severinas heirs to pay for the
capital gains and related expenses for the transfer of the two (2)
lots to Dominador, et al.
The Facts
This case involves a parcel of land originally claimed by
Severina San Miguel (petitioners predecessor-in-interest,
hereafter, Severina). The land is situated in Panapan, Bacoor,
Cavite with an area of six hundred thirty two square meters (632
sq. m.), more or less.
Without Severinas knowledge, Dominador managed to
cause the subdivision of the land into three (3) lots, to wit: [4]
LRC Psu 1312 - with an area of 108 square meters;
LRC Psu -1313 - Lot 1, with an area of 299 square meters;
LRC Psu -1313 - Lot 2, with an area of 225 square meters.
On September 25, 1974, Dominador, et al. filed a petition
with the Court of First Instance, Cavite, as a land registration
court, to issue title over Lots 1 and 2 of LRC Psu-1313, in their
names.[5]
On July 19, 1977, the Land Registration Commission
(hereafter LRC) rendered a decision directing the issuance of
Original Certificate of Title No. 0-1816 in the names of
Dominador, et al.
On or about August 22, 1978, Severina filed with the Court
of First Instance of Cavite a petition for review of the decision
alleging that the land registration proceedings were fraudulently
concealed by Dominador from her.[6]
On December 27, 1982, the court resolved to set aside
the decision of July 19, 1977, and declared Original Certificate
of Title No. 0-1816 as null and void.
On July 13, 1987, the Register of Deeds of Cavite issued
Transfer Certificate of Title No. T-223511 in the names of
Severina and her heirs.[7]
On February 15, 1990, the trial court issued an order in
favor of Severinas heirs, to wit:[8]
WHEREFORE, as prayed for, let the writ of possession
previously issued in favor of petitioner Severina San Miguel be
implemented.
However, the writ was returned unsatisfied.
On November 28, 1991, the trial court ordered:[9]
WHEREFORE, as prayed for, let an alias writ of demolition be
issued in favor of petitioners, Severina San Miguel.
Again, the writ was not satisfied.
On August 6, 1993, Severinas heirs, decided not to pursue
the writs of possession and demolition and entered into a
compromise with Dominador, et al. According to the
compromise, Severinas heirs were to sell the subject lots [10] to
Dominador, et al. for one and a half million pesos (P1.5 M) with
the delivery of Transfer Certificate of Title No. T-223511
(hereafter, the certificate of title) conditioned upon the purchase
of another lot[11] which was not yet titled at an additional sum of
three hundred thousand pesos (P300,000.00). The salient
features of the compromise (hereafter kasunduan) are:[12]
5. Na ang Lot 1 at Lot 2, plano LRCPsu-1313 na binabanggit sa
itaas na ipinagkasundo ng mga tagapagmana ni Severina San
Miguel na kilala sa kasulatang ito sa
taguring LAPINA(representing Severinas heirs), na ilipat sa
pangalan nina SAN MIGUEL (representing Dominadors heirs)
alang alang sa halagang ISANG MILYON AT LIMANG DAANG
LIBONG PISO (P1,500,000.00) na babayaran nina SAN
MIGUEL kina LAPINA;
6. Na si LAPINA at SAN MIGUEL ay nagkakasundo na ang lote
na sakop ng plano LRC- Psu-1312, may sukat na 108 metro
cuadrado ay ipagbibili na rin kina SAN MIGUEL sa halagang
TATLONG DAANG LIBONG PISO (P300,000.00);
7. Na kinikilala ni SAN MIGUEL na ang tunay na may-ari ng
nasabing lote na sakop ng plano LRC Psu-1312 ay
sina LAPINA at sila na ang magpapatitulo nito at
sina LAPINA ay walang pananagutan sa pagpapatitulo nito at
sa paghahabol ng sino mang tao;
8. Na ang nasabing halaga na TATLONG DAANG LIBONG
PISO (P300,000.00) ay babayaran nina SAN
MIGUEL kina LAPINA sa loob ng dalawang (2) buwan mula sa
petsa ng kasulatang ito at kung hindi mabayaran nina SAN
MIGUEL ang nasabing halaga sa takdang panahon ay
mawawalan ng kabuluhan ang kasulatang ito;
9. Na sina LAPINA at SAN MIGUEL ay nagkakadunso (sic) rin
na ang owners copy ng Transfer Certificate of Title No. T-
223511 na sumasakop sa Lots 1 at 2, plano LRC Psu-1313 ay
ilalagay lamang nina LAPINA kina SAN MIGUEL pagkatapos
mabayaran ang nabanggit na P300,000.00
On the same day, on August 6, 1993, pursuant to
the kasunduan, Severinas heirs and Dominador, et al. executed
a deed of sale designated as kasulatan sa bilihan ng lupa.[13]
On November 16, 1993, Dominador, et al. filed with the
trial court,[14] Branch 19, Bacoor, Cavite, a motion praying that
Severinas heirs deliver the owners copy of the certificate of title
to them.[15]
In time, Severinas heirs opposed the motion stressing that
under the kasunduan, the certificate of title would only be
surrendered upon Dominador, et al.s payment of the amount of
three hundred thousand pesos (P300,000.00) within two months
from August 6, 1993, which was not complied with.[16]
Dominador, et al. admitted non-payment of three hundred
thousand pesos (P300,000.00) for the reason that Severinas
heirs have not presented any proof of ownership over the
untitled parcel of land covered by LRC- Psu-1312. Apparently,
the parcel of land is declared in the name of a third party, a
certain Emiliano Eugenio.[17]
Dominador, et al. prayed that compliance with
the kasunduan be deferred until such time that Severinas heirs
could produce proof of ownership over the parcel of land. [18]
Severinas heirs countered that the arguments of
Dominador, et al. were untenable in light of the provision in
the kasunduan where Dominador, et al. admitted their
ownership over the parcel of land, hence dispensing with the
requirement that they produce actual proof of title over it.
[19]
Specifically, they called the trial courts attention to the
following statement in the kasunduan:[20]
7. Na kinikilala ni SAN MIGUEL na ang tunay na may-ari ng
nasabing lote na sakop ng plano LRC Psu-1312 ay
sina LAPINA at sila na ang magpapatitulo nito at
sina LAPINA ay walang pananagutan sa pagpapatitulo nito at
sa paghahabol ng sino mang tao;
According to Severinas heirs, since Dominador, et al. have
not paid the amount of three hundred thousand pesos
(P300,000.00), then they were justified in withholding release of
the certificate of title.[21]
The trial court conducted no hearing and then rendered
judgment based on the pleadings and memoranda submitted by
the parties.
The Trial Courts Ruling
On June 27, 1994, the trial court issued an order to wit: [22]
WHEREFORE, finding the Motion to Order to be impressed with
merit, the defendants-oppositors-vendors Heirs of Severina San
Miguel are hereby ordered to surrender to the movant-plaintiffs-
vendees-Heirs of Dominador San Miguel the Transfer
Certificates of Title No. 223511 and for herein defendants-
oppositors-vendors to pay for the capital gains and related
expenses for the transfer of the two lots subject of the sale to
herein movants-plaintiffs-vendees-Heirs of Dominador San
Miguel.
SO ORDERED.
On July 25, 1994, Severinas heirs filed with the trial court
a motion for reconsideration of the afore-quoted order.[23]
On January 23, 1995, the trial court denied the motion for
reconsideration for lack of merit and further ordered: [24]
xxx...Considering that the Lots 1 and 2 covered by TCT No. T-
223511 had already been paid since August 6, 1993 by the
plaintiffs-vendees Dominador San Miguel, et al. (Vide, Kasulatan
sa Bilihan ng Lupa, Rollo, pp. 174-176), herein defendants-
vendors-Heirs of Severina San Miguel is hereby ordered ( sic) to
deliver the aforesaid title to the former (Dominador San Miguel,
et al.) within thirty (30) days from receipt of this order. In case
the defendants-vendors-Heirs of Severina San Miguel fail and
refuse to do the same, then the Register of Deeds of Cavite is
ordered to immediately cancel TCT No. T-223511 in the name of
Severina San Miguel and issue another one in the name of
plaintiffs Dominador San Miguel, et al.
Also send a copy of this Order to the Register of Deeds of the
Province of Cavite, Trece Martires City, for her information and
guidance.
SO ORDERED.
On February 7, 1995, Severinas heirs appealed the orders
to the Court of Appeals.[25]
The Court of Appeals Ruling
On June 29, 1998, the Court of Appeals promulgated a
decision denying the appeal, and affirming the decision of the
trial court. The Court of Appeals added that the other matters
raised in the petition were extraneous to the kasunduan.[26] The
Court of Appeals upheld the validity of the contract of sale and
sustained the parties freedom to contract. The Court of Appeals
decided, thus:[27]
WHEREFORE, the decision appealed from is hereby
AFFIRMED.
SO ORDERED.
On August 4, 1998, Severinas heirs filed with the Court of
Appeals a motion for reconsideration of the above decision. [28]
On October 14, 1998, the Court of Appeals denied the
motion for reconsideration for lack of merit.[29]
Hence, this appeal.[30]
The Issues
Severinas heirs submit that the Court of Appeals erred
and committed grave abuse of discretion: First, when it held
that the kasunduan had no effect on the kasulatan sa bilihan ng
lupa. Second, when it ordered them to surrender the certificate
of title to Dominador, et al., despite non-compliance with their
prior obligations stipulated under the kasunduan. Third, when it
did not find that the kasunduan was null and void for having
been entered into by Dominador, et al. fraudulently and in bad
faith.[31]
We find the above issues raised by Severinas heirs to be
factual. The question whether the prerequisites to justify release
of the certificate of title to Dominador, et al. have been complied
with is a question of fact.[32]
However, we sift through the arguments and identify the
main legal issue, which is whether Dominador, et al. may be
compelled to pay the three hundred thousand pesos
(P300,000.00) as agreed upon in the kasunduan (as a pre-
requisite for the release of the certificate of title), despite
Severinas heirs lack of evidence of ownership over the parcel of
land covered by LRC Psu-1312.
The Courts Ruling
We resolve the issue in the negative, and find the petition
without merit.
Severinas heirs anchor their claim on the kasunduan,
stressing on their freedom to stipulate and the binding effect of
contracts. This argument is misplaced.[33] The Civil
Code provides:
Article 1306. The contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem
convenient provided they are not contrary to law, morals, good
customs, public order or public policy (underscoring ours).
It is basic that the law is deemed written into every
contract.[34] Although a contract is the law between the parties,
the provisions of positive law which regulate contracts are
deemed written therein and shall limit and govern the relations
between the parties.[35] The Civil Code provisions on sales state:
Article 1458. By the contract of sale one of the contracting
parties obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other to pay a price certain
in money or its equivalent. xxx
Article 1459. The thing must be licit and the vendor must have a
right to transfer the ownership thereof at the time it is delivered.
Article 1495. The vendor is bound to transfer the ownership of
and deliver, as well as warrant the thing which is the object of
sale (underscoring ours).
True, in contracts of sale, the vendor need not possess
title to the thing sold at the perfection of the contract.
[36]
However, the vendor must possess title and must be able to
transfer title at the time of delivery. In a contract of sale, title only WHEREFORE, the petition is DENIED and the decision
passes to the vendee upon full payment of the stipulated of the Court of Appeals in CA-G. R. CV No. 48430 is
consideration, or upon delivery of the thing sold. [37] AFFIRMED in toto.
Under the facts of the case, Severinas heirs are not in a No costs.
position to transfer title. Without passing on the question of who
actually owned the land covered by LRC Psu -1312, we note SO ORDERED.
that there is no proof of ownership in favor of Severinas heirs. In
fact, it is a certain Emiliano Eugenio, who holds a tax declaration
over the said land in his name. [38] Though tax declarations do not
prove ownership of the property of the declarant, tax
declarations and receipts can be strong evidence of ownership
of land when accompanied by possession for a period sufficient
for prescription.[39] Severinas heirs have nothing to counter this
document.
Therefore, to insist that Dominador, et al. pay the price
under such circumstances would result in Severinas heirs unjust
enrichment.[40] Basic is the principle in law, Niguno non
deueenriquecerse tortizamente condano de otro.[41] The essence
of a sale is the transfer of title or an agreement to transfer it for a
price actually paid or promised.[42] In Nool v. Court of Appeals,
[43]
we held that if the sellers cannot deliver the object of the sale
to the buyers, such contract may be deemed to be
inoperative. By analogy, such a contract may fall under Article
1405, No. 5 of the Civil Code, to wit:

Article 1405. The following contracts are inexistent and void

from the beginning: xxx

(5) Those which contemplate an impossible service.

Severinas heirs insist that delivery of the certificate of title

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

Impossible conditions, those contrary to good customs or public

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

Hence, the non-payment of the three hundred thousand

pesos (P300,000.00) is not a valid justification for refusal to
deliver the certificate of title.
Besides, we note that the certificate of title covers Lots 1
and 2 of LRC Psu-1313, which were fully paid for by Dominador,
et al. Therefore, Severinas heirs are bound to deliver the
certificate of title covering the lots.
The Fallo