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Republic of the Philippines

SUPREME COURTManila

FIRST DIVISION

G.R. No. 118114 December 7, 1995

TEODORO ACAP, petitioner,vs.COURT OF APPEALS and EDY DE LOS REYES, respondents.

PADILLA, J .:

This is a petition for review on certiorari of the decision1of the Court of Appeals, 2ndDivision, in CA-G.R. No. 36177, which affirmed the decision

2of the Regional Trial Court of Himamaylan,

Negros Occidental holding that private respondent Edy de los Reyes had acquired ownership of Lot No.1130 of the Cadastral Survey of Hinigaran, Negros Occidental based on a document entitled "Declarationof Heirship and Waiver of Rights", and ordering the dispossession of petitioner as leasehold tenant of theland for failure to pay rentals.

The facts of the case are as follows:

The title to Lot No. 1130 of the Cadastral Survey of Hinigaran, Negros Occidental was evidenced by OCT

No. R-12179. The lot has an area of 13,720 sq. meters. The title was issued and is registered in the nameof spouses Santiago Vasquez and Lorenza Oruma. After both spouses died, their only son Felixbertoinherited the lot. In 1975, Felixberto executed a duly notarized document entitled "Declaration of Heirshipand Deed of Absolute Sale" in favor of Cosme Pido.

The evidence before the court a quoestablished that since 1960, petitioner Teodoro Acap had been thetenant of a portion of the said land, covering an area of nine thousand five hundred (9,500) meters. Whenownership was transferred in 1975 by Felixberto to Cosme Pido, Acap continued to be the registeredtenant thereof and religiously paid his leasehold rentals to Pido and thereafter, upon Pido's death, to hiswidow Laurenciana.

The controversy began when Pido died intestate and on 27 November 1981, his surviving heirs executeda notarized document denominated as "Declaration of Heirship and Waiver of Rights of Lot No. 1130

Hinigaran Cadastre," wherein they declared; to quote its pertinent portions, that:

. . . Cosme Pido died in the Municipality of Hinigaran, Negros Occidental, he diedintestate and without any known debts and obligations which the said parcel of land is(sic) held liable.

That Cosme Pido was survived by his/her legitimate heirs, namely: LAURENCIANAPIDO, wife, ELY, ERVIN, ELMER, and ELECHOR all surnamed PIDO; children;


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That invoking the provision of Section 1, Rule 74 of the Rules of Court, the above-mentioned heirs do hereby declare unto [sic] ourselves the only heirs of the late CosmePido and that we hereby adjudicate unto ourselves the above-mentioned parcel of land inequal shares.

Now, therefore, We LAURENCIANA3, ELY, ELMER, ERVIN and ELECHOR all

surnamed PIDO, do hereby waive, quitclaim all our rights, interests and participation overthe said parcel of landin favor of EDY DE LOS REYES, of legal age, (f)ilipino, married toVIRGINIA DE LOS REYES, and resident of Hinigaran, Negros Occidental, Philippines. . ..4(Emphasis supplied)

The document was signed by all of Pido's heirs. Private respondent Edy de los Reyes did not sign saiddocument.

It will be noted that at the time of Cosme Pido's death, title to the property continued to be registered inthe name of the Vasquez spouses. Upon obtaining the Declaration of Heirship with Waiver of Rights in hisfavor, private respondent Edy de los Reyes filed the same with the Registry of Deeds as part of a noticeof an adverse claimagainst the original certificate of title.

Thereafter, private respondent sought for petitioner (Acap) to personally inform him that he (Edy) hadbecome the new owner of the land and that the lease rentals thereon should be paid to him. Privaterespondent further alleged that he and petitioner entered into an oral lease agreement wherein petitioneragreed to pay ten (10) cavans of palayper annumas lease rental. In 1982, petitioner allegedly compliedwith said obligation. In 1983, however, petitioner refused to pay any further lease rentals on the land,prompting private respondent to seek the assistance of the then Ministry of Agrarian Reform (MAR) inHinigaran, Negros Occidental. The MAR invited petitioner to a conference scheduled on 13 October1983. Petitioner did not attend the conference but sent his wife instead to the conference. During themeeting, an officer of the Ministry informed Acap's wife about private respondent's ownership of the saidland but she stated that she and her husband (Teodoro) did not recognize private respondent's claim ofownership over the land.

On 28 April 1988, after the lapse of four (4) years, private respondent filed a complaint for recovery of

possession and damages against petitioner, alleging in the main that as his leasehold tenant, petitionerrefused and failed to pay the agreed annual rental of ten (10) cavans of palay despite repeated demands.

During the trial before the court a quo, petitioner reiterated his refusal to recognize private respondent'sownership over the subject land. He averred that he continues to recognize Cosme Pido as the owner ofthe said land, and having been a registered tenant therein since 1960, he never reneged on his rentalobligations. When Pido died, he continued to pay rentals to Pido's widow. When the latter left for abroad,she instructed him to stay in the landholding and to pay the accumulated rentalsupon her demand orreturn from abroad.

Petitioner further claimed before the trial court that he had no knowledge about any transfer or sale of thelot to private respondent in 1981 and even the following year after Laurenciana's departure for abroad. Hedenied having entered into a verbal lease tenancy contract with private respondent and that assuming

that the said lot was indeed sold to private respondent without his knowledge, R.A. 3844, as amended,grants him the right to redeem the same at a reasonable price. Petitioner also bewailed privaterespondent's ejectment action as a violation of his right to security of tenure under P.D. 27.

On 20 August 1991, the lower court rendered a decision in favor of private respondent, the dispositivepart of which reads:


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WHEREFORE, premises considered, the Court renders judgment in favor of the plaintiff,Edy de los Reyes, and against the defendant, Teodoro Acap, ordering the following, towit:

1. Declaring forfeiture of defendant's preferred right to issuance of a Certificate of LandTransfer under Presidential Decree No. 27 and his farmholdings;

2. Ordering the defendant Teodoro Acap to deliver possession of said farm to plaintiff,and;

3. Ordering the defendant to pay P5,000.00 as attorney's fees, the sum of P1,000.00 asexpenses of litigation and the amount of P10,000.00 as actual damages.

5

In arriving at the above-mentioned judgment, the trial court stated that the evidence had established thatthe subject land was "sold" by the heirs of Cosme Pido to private respondent. This is clear from thefollowing disquisitions contained in the trial court's six (6) page decision:

There is no doubt that defendant is a registered tenant of Cosme Pido. However, whenthe latter died their tenancy relations changed since ownership of said land was passed

on to his heirs who, by executing a Deed of Sale, which defendant admitted in hisaffidavit, likewise passed on their ownership of Lot 1130 to herein plaintiff (privaterespondent). As owner hereof, plaintiff has the right to demand payment of rental and thetenant is obligated to pay rentals due from the time demand is made. . . .

6

xxx xxx xxx

Certainly, the sale of the Pido family of Lot 1130 to herein plaintiff does not of itselfextinguish the relationship. There was only a change of the personality of the lessor inthe person of herein plaintiff Edy de los Reyes who being the purchaser or transferee,assumes the rights and obligations of the former landowner to the tenant Teodoro Acap,herein defendant.

7

Aggrieved, petitioner appealed to the Court of Appeals, imputing error to the lower court when it ruled thatprivate respondent acquired ownership of Lot No. 1130 and that he, as tenant, should pay rentals toprivate respondent and that failing to pay the same from 1983 to 1987, his right to a certificate of landtransfer under P.D. 27 was deemed forfeited.

The Court of Appeals brushed aside petitioner's argument that the Declaration of Heirship and Waiver ofRights (Exhibit "D"), the document relied upon by private respondent to prove his ownership to the lot,was excluded by the lower court in its order dated 27 August 1990. The order indeed noted that thedocument was not identified by Cosme Pido's heirs and was not registered with the Registry of Deeds ofNegros Occidental. According to respondent court, however, since the Declaration of Heirship and Waiverof Rights appears to have been duly notarized, no further proof of its due execution was necessary. Likethe trial court, respondent court was also convinced that the said document stands as prima facieproof of

appellee's (private respondent's) ownership of the land in dispute.

With respect to its non-registration, respondent court noted that petitioner had actual knowledge of thesubject saleof the land in dispute to private respondent because as early as 1983, he (petitioner) alreadyknew of private respondent's claim over the said land but which he thereafter denied, and that in 1982, he(petitioner) actually paid rent to private respondent. Otherwise stated, respondent court considered thisfact of rental payment in 1982 as estoppel on petitioner's part to thereafter refute private respondent'sclaim of ownership over the said land. Under these circumstances, respondent court ruled that indeedthere was deliberate refusal by petitioner to pay rent for a continued period of five years that meritedforfeiture of his otherwise preferred right to the issuance of a certificate of land transfer.


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In the present petition, petitioner impugns the decision of the Court of Appeals as not in accord with thelaw and evidence when it rules that private respondent acquired ownership of Lot No. 1130 through theaforementioned Declaration of Heirship and Waiver of Rights.

Hence, the issues to be resolved presently are the following:

1. WHETHER OR NOT THE SUBJECT DECLARATION OF HEIRSHIP AND WAIVEROF RIGHTS IS A RECOGNIZED MODE OF ACQUIRING OWNERSHIP BY PRIVATERESPONDENT OVER THE LOT IN QUESTION.

2. WHETHER OR NOT THE SAID DOCUMENT CAN BE CONSIDERED A DEED OFSALE IN FAVOR OF PRIVATE RESPONDENT OF THE LOT IN QUESTION.

Petitioner argues that the Regional Trial Court, in its order dated 7 August 1990, explicitly excluded thedocument marked as Exhibit "D" (Declaration of Heirship, etc.) as private respondent's evidence becauseit was not registered with the Registry of Deeds and was not identified by anyone of the heirs of CosmePido. The Court of Appeals, however, held the same to be admissible, it being a notarized document,hence, aprima facie proof of private respondents' ownership of the lot to which it refers.

Petitioner points out that the Declaration of Heirship and Waiver of Rights is not one of the recognizedmodes of acquiring ownership under Article 712 of the Civil Code. Neither can the same be considered adeed of sale so as to transfer ownership of the land to private respondent because no consideration isstated in the contract (assuming it is a contract or deed of sale).

Private respondent defends the decision of respondent Court of Appeals as in accord with the evidenceand the law. He posits that while it may indeed be true that the trial court excluded his Exhibit "D" which isthe Declaration of Heirship and Waiver of Rights as part of his evidence, the trial court declared himnonetheless owner of the subject lot based on other evidence adduced during the trial, namely, the noticeof adverse claim (Exhibit "E") duly registered by him with the Registry of Deeds, which contains thequestioned Declaration of Heirship and Waiver of Rights as an integral part thereof.

We find the petition impressed with merit.

In the first place, an asserted right or claim to ownership or a real right over a thing arising from a juridicalact, however justified, is notper sesufficient to give rise to ownership over the res. That right or title mustbe completed by fulfilling certain conditions imposed by law. Hence, ownership and real rights areacquired only pursuant to a legal mode or process. While title is the juridical justification, mode is theactual process of acquisition or transfer of ownership over a thing in question.

8

Under Article 712 of the Civil Code, the modes of acquiring ownership are generally classified into two (2)classes, namely, the original mode(i.e., through occupation, acquisitive prescription, law or intellectualcreation) and the derivative mode (i.e., through succession mortis causa or tradition as a result of certaincontracts, such as sale, barter, donation, assignment or mutuum).

In the case at bench, the trial court was obviously confused as to the nature and effect of the Declarationof Heirship and Waiver of Rights, equating the same with a contract (deed) of sale. They are not thesame.

In a Contract of Sale, one of the contracting parties obligates himself to transfer the ownership of and todeliver a determinate thing, and the other party to pay a price certain in money or its equivalent.

9

Upon the other hand, a declaration of heirship and waiver of rights operates as a public instrument whenfiled with the Registry of Deeds whereby the intestate heirs adjudicate and divide the estate left by the


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decedent among themselves as they see fit. It is in effect an extrajudicial settlement between the heirsunder Rule 74 of the Rules of Court.

10

Hence, there is a marked difference between a saleof hereditary rights and a waiver of hereditary rights.The first presumes the existence of a contract or deed of sale between the parties.

11The second is,

technically speaking, a mode of extinction of ownership where there is an abdication or intentional

relinquishment of a known right with knowledge of its existence and intention to relinquish it, in favor ofother persons who are co-heirs in the succession .12

Private respondent, being then a stranger to thesuccession of Cosme Pido, cannot conclusively claim ownership over the subject lot on the sole basis ofthe waiver document which neither recites the elements of either a sale,

13or a donation,

14or any other

derivative mode of acquiring ownership.

Quite surprisingly, both the trial court and public respondent Court of Appeals concluded that a "sale"transpired between Cosme Pido's heirs and private respondent and that petitioner acquired actualknowledge of said sale when he was summoned by the Ministry of Agrarian Reform to discuss privaterespondent's claim over the lot in question. This conclusion has no basis both in fact and in law.

On record, Exhibit "D", which is the "Declaration of Heirship and Waiver of Rights" was excludedby thetrial court in its order dated 27 August 1990because the document was neither registered with the

Registry of Deeds nor identified by the heirs of Cosme Pido. There is no showing that private respondenthad the same document attached to or made part of the record. What the trial court admitted was Annex"E", a notice of adverse claim filed with the Registry of Deeds which contained the Declaration of Heirshipwith Waiver of rights and was annotated at the back of the Original Certificate of Title to the land inquestion.

A notice of adverse claim, by its nature, does not however prove private respondent's ownership over thetenanted lot. "A notice of adverse claim is nothing but a notice of a claim adverse to the registered owner,the validity of which is yet to be established in court at some future date, and is no better than a notice oflis pendenswhich is a notice of a case already pending in court."

15

It is to be noted that while the existence of said adverse claim was duly proven, there is no evidencewhatsoever that a deed of sale was executed between Cosme Pido's heirs and private respondent

transferring the rights of Pido's heirs to the land in favor of private respondent. Private respondent's rightor interest therefore in the tenanted lot remains an adverse claim which cannot by itself be sufficient tocancel the OCT to the land and title the same in private respondent's name.

Consequently, while the transaction between Pido's heirs and private respondent may be bindingon both parties, the right of petitioner as a registered tenant to the land cannot be perfunctorilyforfeited on a mere allegation of private respondent's ownership without the corresponding proofthereof.

Petitioner had been a registered tenant in the subject land since 1960 and religiously paid lease rentalsthereon. In his mind, he continued to be the registered tenant of Cosme Pido and his family (after Pido'sdeath), even if in 1982, private respondent allegedly informed petitioner that he had become the newowner of the land.

Under the circumstances, petitioner may have, in good faith, assumed such statement of privaterespondent to be true and may have in fact delivered 10 cavans of palay as annual rental for 1982 toprivate respondent. But in 1983, it is clear that petitioner had misgivings over private respondent's claimof ownership over the said land because in the October 1983 MAR conference, his wife Laurencianacategorically denied all of private respondent's allegations. In fact, petitioner even secured a certificatefrom the MAR dated 9 May 1988 to the effect that he continued to be the registered tenant of Cosme Pidoand not of private respondent. The reason is that private respondent never registeredthe Declaration ofHeirship with Waiver of Rights with the Registry of Deeds or with the MAR. Instead, he (private


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respondent) sought to do indirectly what could not be done directly, i.e., file a notice of adverse claim onthe said lot to establish ownership thereover.

It stands to reason, therefore, to hold that there was no unjustified or deliberate refusal by petitioner topay the lease rentals or amortizations to the landowner/agricultural lessor which, in this case, privaterespondent failed to establish in his favor by clear and convincing evidence.

16

Consequently, the sanction of forfeiture of his preferred right to be issued a Certificate of Land Transferunder P.D. 27 and to the possession of his farmholdings should not be applied against petitioners, sinceprivate respondent has not established a cause of action for recovery of possession against petitioner.

WHEREFORE, premises considered, the Court hereby GRANTS the petition and the decision of theCourt of Appeals dated 1 May 1994 which affirmed the decision of the RTC of Himamaylan, NegrosOccidental dated 20 August 1991 is hereby SET ASIDE. The private respondent's complaint for recoveryof possession and damages against petitioner Acap is hereby DISMISSED for failure to properly state acause of action, without prejudice to private respondent taking the proper legal steps to establish the legalmode by which he claims to have acquired ownership of the land in question.

SO ORDERED.

Davide, Jr., Bellosillo, Kapunan and Hermosisima, Jr., JJ., concur.

[Syllabus]

THIRD DIVISION

[G.R. No. 103577. October 7, 1996]

ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL,ANNABELLE C. GONZALES (for herself and on behalf of Floraida C. Tupper, as attorney-in-fact), CIELITO A. CORONEL, FLORAIDA A. ALMONTE, and CATALINA BALAISMABANAG,petitioners, vs. THE COURT OF APPEALS, CONCEPCION D. ALCARAZ andRAMONA PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as attorney-in-fact,respondents.

D E C I S I O N

MELO,J.:

The petition before us has its roots in a complaint for specific performance to compel hereinpetitioners (except the last named, Catalina Balais Mabanag) to consummate the sale of a parcelof land with its improvements located along Roosevelt Avenue in Quezon City entered into bythe parties sometime in January 1985 for the price of P1,240,000.00.

The undisputed facts of the case were summarized by respondent court in this wise:
http://sc.judiciary.gov.ph/jurisprudence/1996/syllabus/oct/103577_syl.htmhttp://sc.judiciary.gov.ph/jurisprudence/1996/syllabus/oct/103577_syl.htmhttp://sc.judiciary.gov.ph/jurisprudence/1996/syllabus/oct/103577_syl.htm


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On January 19, 1985, defendants-appellants Romulo Coronel, et. al. (hereinafter referred to asCoronels) executed a document entitled Receipt of Down Payment (Exh. A) in favor ofplaintiff Ramona Patricia Alcaraz (hereinafter referred to as Ramona) which is reproducedhereunder:

RECEIPT OF DOWN PAYMENT

P1,240,000.00 - Total amount

50,000.00 - Down payment

------------------------------------------

P1,190,000.00 - Balance

Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty

Thousand Pesos purchase price of our inherited house and lot, covered by TCT No. 119627 ofthe Registry of Deeds of Quezon City, in the total amount of P1,240,000.00.

We bind ourselves to effect the transfer in our names from our deceased father, Constancio P.

Coronel, the transfer certificate of title immediately upon receipt of the down payment above-

stated.

On our presentation of the TCT already in or name, We will immediately execute the deed of

absolute sale of said property and Miss Ramona Patricia Alcaraz shall immediately pay the

balance of the P1,190,000.00.

Clearly, the conditions appurtenant to the sale are the following:

1. Ramona will make a down payment of Fifty Thousand (P50,000.00) pesos uponexecution of the document aforestated;

2. The Coronels will cause the transfer in their names of the title of the property registeredin the name of their deceased father upon receipt of the Fifty Thousand (P50,000.00) Pesos downpayment;

3. Upon the transfer in their names of the subject property, the Coronels will execute thedeed of absolute sale in favor of Ramona and the latter will pay the former the whole balance of

One Million One Hundred Ninety Thousand (P1,190,000.00) Pesos.

On the same date (January 15, 1985), plaintiff-appellee Concepcion D. Alcaraz (hereinafterreferred to as Concepcion), mother of Ramona, paid the down payment of Fifty Thousand(P50,000.00) Pesos (Exh. B, Exh. 2).

On February 6, 1985, the property originally registered in the name of the Coronels father wastransferred in their names under TCT No. 327043 (Exh. D; Exh 4)


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On February 18, 1985, the Coronels sold the property covered by TCT No. 327043 to intervenor-appellant Catalina B. Mabanag (hereinafter referred to as Catalina) for One Million FiveHundred Eighty Thousand (P1,580,000.00) Pesos after the latter has paid Three HundredThousand (P300,000.00) Pesos (Exhs. F-3; Exh. 6-C)

For this reason, Coronels canceled and rescinded the contract (Exh. A) with Ramona bydepositing the down payment paid by Concepcion in the bank in trust for Ramona PatriciaAlcaraz.

On February 22, 1985, Concepcion, et. al., filed a complaint for a specific performance againstthe Coronels and caused the annotation of a notice of lis pendensat the back of TCT No. 327403(Exh. E; Exh. 5).

On April 2, 1985, Catalina caused the annotation of a notice of adverse claim covering the sameproperty with the Registry of Deeds of Quezon City (Exh. F; Exh. 6).

On April 25, 1985, the Coronels executed a Deed of Absolute Sale over the subject property infavor of Catalina (Exh. G; Exh. 7).

On June 5, 1985, a new title over the subject property was issued in the name of Catalina underTCT No. 351582 (Exh. H; Exh. 8).

(Rollo, pp. 134-136)

In the course of the proceedings before the trial court (Branch 83, RTC, Quezon City) the partiesagreed to submit the case for decision solely on the basis of documentary exhibits. Thus,plaintiffs therein (now private respondents) proffered their documentary evidence accordingly

marked as Exhibits A through J, inclusive of their corresponding submarkings. Adoptingthese same exhibits as their own, then defendants (now petitioners) accordingly offered andmarked them as Exhibits 1 through 10, likewise inclusive of their correspondingsubmarkings. Upon motion of the parties, the trial court gave them thirty (30) days within whichto simultaneously submit their respective memoranda, and an additional 15 days within which tosubmit their corresponding comment or reply thereto, after which, the case would be deemedsubmitted for resolution.

On April 14, 1988, the case was submitted for resolution before Judge Reynaldo Roura, who wasthen temporarily detailed to preside over Branch 82 of the RTC of Quezon City. On March 1,1989, judgment was handed down by Judge Roura from his regular bench at Macabebe,

Pampanga for the Quezon City branch, disposing as follows:

WHEREFORE, judgment for specific performance is hereby rendered ordering defendant toexecute in favor of plaintiffs a deed of absolute sale covering that parcel of land embraced in andcovered by Transfer Certificate of Title No. 327403 (now TCT No. 331582) of the Registry ofDeeds for Quezon City, together with all the improvements existing thereon free from all liensand encumbrances, and once accomplished, to immediately deliver the said document of sale toplaintiffs and upon receipt thereof, the plaintiffs are ordered to pay defendants the whole balance


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of the purchase price amounting to P1,190,000.00 in cash. Transfer Certificate of Title No.331582 of the Registry of Deeds for Quezon City in the name of intervenor is hereby canceledand declared to be without force and effect. Defendants and intervenor and all other personsclaiming under them are hereby ordered to vacate the subject property and deliver possessionthereof to plaintiffs. Plaintiffs claim for damages and attorneys fees, as well as the

counterclaims of defendants and intervenors are hereby dismissed.

No pronouncement as to costs.

So Ordered.

Macabebe, Pampanga for Quezon City, March 1, 1989.

(Rollo, p. 106)

A motion for reconsideration was filed by petitioners before the new presiding judge of the

Quezon City RTC but the same was denied by Judge Estrella T. Estrada, thusly:

The prayer contained in the instant motion, i.e., to annul the decision and to render anew decisionby the undersigned Presiding Judge should be denied for the following reasons: (1) The instantcase became submitted for decision as of April 14, 1988 when the parties terminated thepresentation of their respective documentary evidence and when the Presiding Judge at that timewas Judge Reynaldo Roura. The fact that they were allowed to file memoranda at some futuredate did not change the fact that the hearing of the case was terminated before Judge Roura andtherefore the same should be submitted to him for decision; (2) When the defendants andintervenor did not object to the authority of Judge Reynaldo Roura to decide the case prior to therendition of the decision, when they met for the first time before the undersigned Presiding Judge

at the hearing of a pending incident in Civil Case No. Q-46145 on November 11, 1988, theywere deemed to have acquiesced thereto and they are now estopped from questioning saidauthority of Judge Roura after they received the decision in question which happens to beadverse to them; (3) While it is true that Judge Reynaldo Roura was merely a Judge-on-detail atthis Branch of the Court, he was in all respects the Presiding Judge with full authority to act onany pending incident submitted before this Court during his incumbency. When he returned tohis Official Station at Macabebe, Pampanga, he did not lose his authority to decide or resolvecases submitted to him for decision or resolution because he continued as Judge of the RegionalTrial Court and is of co-equal rank with the undersigned Presiding Judge. The standing rule andsupported by jurisprudence is that a Judge to whom a case is submitted for decision has theauthority to decide the case notwithstanding his transfer to another branch or region of the samecourt (Sec. 9, Rule 135, Rule of Court).

Coming now to the twin prayer for reconsideration of the Decision dated March 1, 1989 renderedin the instant case, resolution of which now pertains to the undersigned Presiding Judge, after ameticulous examination of the documentary evidence presented by the parties, she is convincedthat the Decision of March 1, 1989 is supported by evidence and, therefore, should not bedisturbed.


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IN VIEW OF THE FOREGOING, the Motion for Reconsideration and/or to Annul Decisionand Render Anew Decision by the Incumbent Presiding Judge dated March 20, 1989 is herebyDENIED.

SO ORDERED.

Quezon City, Philippines, July 12, 1989.

(Rollo, pp. 108-109)

Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of Appeals(Buena, Gonzaga-Reyes, Abad-Santos (P), JJ.) rendered its decision fully agreeing with the trialcourt.

Hence, the instant petition which was filed on March 5, 1992. The last pleading, privaterespondents Reply Memorandum, was filed on September 15, 1993. The case was, however, re-

raffled to undersignedponenteonly on August 28, 1996, due to the voluntary inhibition of theJustice to whom the case was last assigned.

While we deem it necessary to introduce certain refinements in the disquisition of respondentcourt in the affirmance of the trial courts decision, we definitely find the instant petition bereftof merit.

The heart of the controversy which is the ultimate key in the resolution of the other issues in thecase at bar is the precise determination of the legal significance of the document entitledReceipt of Down Payment which was offered in evidence by both parties. There is no disputeas to the fact that the said document embodied the binding contract between Ramona Patricia

Alcaraz on the one hand, and the heirs of Constancio P. Coronel on the other, pertaining to aparticular house and lot covered by TCT No. 119627, as defined in Article 1305 of the CivilCode of the Philippines which reads as follows:

Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself,with respect to the other, to give something or to render some service.

While, it is the position of private respondents that the Receipt of Down Payment embodied aperfected contract of sale, which perforce, they seek to enforce by means of an action for specificperformance, petitioners on their part insist that what the document signified was a mereexecutory contract to sell, subject to certain suspensive conditions, and because of the absence of

Ramona P. Alcaraz, who left for the United States of America, said contract could not possiblyripen into a contract of absolute sale.

Plainly, such variance in the contending parties contention is brought about by the way eachinterprets the terms and/or conditions set forth in said private instrument. Withal, based onwhatever relevant and admissible evidence may be available on record, this Court, as were thecourts below, is now called upon to adjudge what the real intent of the parties was at the time thesaid document was executed.


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A contract to sell may thus be defined as a bilateral contract whereby the prospective seller,while expressly reserving the ownership of the subject property despite delivery thereof to theprospective buyer, binds himself to sell the said property exclusively to the prospective buyerupon fulfillment of the condition agreed upon, that is, full payment of the purchase price.

A contract to sell as defined hereinabove, may not even be considered as a conditional contractof sale where the seller may likewise reserve title to the property subject of the sale until thefulfillment of a suspensive condition, because in a conditional contract of sale, the first elementof consent is present, although it is conditioned upon the happening of a contingent event whichmay or may not occur. If the suspensive condition is not fulfilled, the perfection of the contractof sale is completely abated (cf.Homesite and Housing Corp. vs. Court of Appeals, 133 SCRA777 [1984]). However, if the suspensive condition is fulfilled, the contract of sale is therebyperfected, such that if there had already been previous delivery of the property subject of the saleto the buyer, ownership thereto automatically transfers to the buyer by operation of law withoutany further act having to be performed by the seller.

In a contract to sell, upon the fulfillment of the suspensive condition which is the full payment ofthe purchase price, ownership will not automatically transfer to the buyer although the propertymay have been previously delivered to him. The prospective seller still has to convey title to theprospective buyer by entering into a contract of absolute sale.

It is essential to distinguish between a contract to sell and a conditional contract of sale speciallyin cases where the subject property is sold by the owner not to the party the seller contractedwith, but to a third person, as in the case at bench. In a contract to sell, there being no previoussale of the property, a third person buying such property despite the fulfillment of the suspensivecondition such as the full payment of the purchase price, for instance, cannot be deemed a buyerin bad faith and the prospective buyer cannot seek the relief of reconveyance of the property.

There is no double sale in such case. Title to the property will transfer to the buyer afterregistration because there is no defect in the owner-sellers titleper se, but the latter, of course,may be sued for damages by the intending buyer.

In a conditional contract of sale, however, upon the fulfillment of the suspensive condition, thesale becomes absolute and this will definitely affect the sellers title thereto. In fact, if there hadbeen previous delivery of the subject property, the sellers ownership or title to the property isautomatically transferred to the buyer such that, the seller will no longer have any title to transferto any third person. Applying Article 1544 of the Civil Code, such second buyer of the propertywho may have had actual or constructive knowledge of such defect in the sellers title, or at leastwas charged with the obligation to discover such defect, cannot be a registrant in good faith.Such second buyer cannot defeat the first buyers title. In case a title is issued to the secondbuyer, the first buyer may seek reconveyance of the property subject of the sale.

With the above postulates as guidelines, we now proceed to the task of deciphering the realnature of the contract entered into by petitioners and private respondents.

It is a canon in the interpretation of contracts that the words used therein should be given theirnatural and ordinary meaning unless a technical meaning was intended (Tan vs. Court of


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were committed to immediately execute the deed of absolute sale. Only then will the obligationof the buyer to pay the remainder of the purchase price arise.

There is no doubt that unlike in a contract to sell which is most commonly entered into so as toprotect the seller against a buyer who intends to buy the property in installment by withholding

ownership over the property until the buyer effects full payment therefor, in the contract enteredinto in the case at bar, the sellers were the ones who were unable to enter into a contract ofabsolute sale by reason of the fact that the certificate of title to the property was still in the nameof their father. It was the sellers in this case who, as it were, had the impediment whichprevented, so to speak, the execution of an contract of absolute sale.

What is clearly established by the plain language of the subject document is that when the saidReceipt of Down Payment was prepared and signed by petitioners Romulo A. Coronel, et. al.,the parties had agreed to a conditional contract of sale, consummation of which is subject only tothe successful transfer of the certificate of title from the name of petitioners father, ConstancioP. Coronel, to their names.

The Court significantly notes that this suspensive condition was, in fact, fulfilled on February 6,1985 (Exh. D; Exh. 4). Thus, on said date, the conditional contract of sale betweenpetitioners and private respondent Ramona P. Alcaraz became obligatory, the only act requiredfor the consummation thereof being the delivery of the property by means of the execution of thedeed of absolute sale in a public instrument, which petitioners unequivocally committedthemselves to do as evidenced by the Receipt of Down Payment.

Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to the caseat bench. Thus,

Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon thething which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the provisionsof the law governing the form of contracts.

Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment orloss of those already acquired, shall depend upon the happening of the event which constitutesthe condition.

Since the condition contemplated by the parties which is the issuance of a certificate of title in

petitioners names was fulfilled on February 6, 1985, the respective obligations of the partiesunder the contract of sale became mutually demandable, that is, petitioners, as sellers, wereobliged to present the transfer certificate of title already in their names to private respondentRamona P. Alcaraz, the buyer, and to immediately execute the deed of absolute sale, while thebuyer on her part, was obliged to forthwith pay the balance of the purchase price amounting toP1,190,000.00.


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It is also significant to note that in the first paragraph in page 9 of their petition, petitionersconclusively admitted that:

3. The petitioners-sellers Coronel bound themselves to effect the transfer in our namesfrom our deceased father Constancio P. Coronel, the transfer certificate of title immediately upon

receipt of the downpayment above-stated". The sale was still subject to this suspensivecondition. (Emphasis supplied.)

(Rollo, p. 16)

Petitioners themselves recognized that they entered into a contract of sale subject to a suspensivecondition. Only, they contend, continuing in the same paragraph, that:

. . . Had petitioners-sellers not compliedwith this condition of first transferring the title to theproperty under their names, there could be no perfected contract of sale. (Emphasis supplied.)

(Ibid.)

not aware that they have set their own trap for themselves, for Article 1186 of the Civil Codeexpressly provides that:

Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents itsfulfillment.

Besides, it should be stressed and emphasized that what is more controlling than these merehypothetical arguments is the fact that the condition herein referred to was actually andindisputably fulfilled on February 6, 1985, when a new title was issued in the names of

petitioners as evidenced by TCT No. 327403 (Exh. D; Exh. 4).

The inevitable conclusion is that on January 19, 1985, as evidenced by the documentdenominated as Receipt of Down Payment (Exh. A; Exh. 1), the parties entered into acontract of sale subject to the suspensive condition that the sellers shall effect the issuance ofnew certificate title from that of their fathers name to their names and that, on February 6, 1985,this condition was fulfilled (Exh. D; Exh. 4).

We, therefore, hold that, in accordance with Article 1187 which pertinently provides -

Art. 1187. The effects of conditional obligation to give, once the condition has been fulfilled,

shall retroact to the day of the constitution of the obligation . . .

In obligations to do or not to do, the courts shall determine, in each case, the retroactive effect ofthe condition that has been complied with.

the rights and obligations of the parties with respect to the perfected contract of sale becamemutually due and demandable as of the time of fulfillment or occurrence of the suspensive


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condition on February 6, 1985. As of that point in time, reciprocal obligations of both seller andbuyer arose.

Petitioners also argue there could been no perfected contract on January 19, 1985 because theywere then not yet the absolute owners of the inherited property.

We cannot sustain this argument.

Article 774 of the Civil Code defines Succession as a mode of transferring ownership as follows:

Art. 774. Succession is a mode of acquisition by virtue of which the property, rights andobligations to the extent and value of the inheritance of a person are transmitted through hisdeath to another or others by his will or by operation of law.

Petitioners-sellers in the case at bar being the sons and daughters of the decedent Constancio P.Coronel are compulsory heirs who were called to succession by operation of law. Thus, at the

point their father drew his last breath, petitioners stepped into his shoes insofar as the subjectproperty is concerned, such that any rights or obligations pertaining thereto became binding andenforceable upon them. It is expressly provided that rights to the succession are transmitted fromthe moment of death of the decedent (Article 777, Civil Code; Cuison vs. Villanueva, 90 Phil.850 [1952]).

Be it also noted that petitioners claim that succession may not be declared unless the creditorshave been paid is rendered moot by the fact that they were able to effect the transfer of the title tothe property from the decedents name to their names on February 6, 1985.

Aside from this, petitioners are precluded from raising their supposed lack of capacity to enter

into an agreement at that time and they cannot be allowed to now take a posture contrary to thatwhich they took when they entered into the agreement with private respondent Ramona P.Alcaraz. The Civil Code expressly states that:

Art. 1431. Through estoppel an admission or representation is rendered conclusive upon theperson making it, and cannot be denied or disproved as against the person relying thereon.

Having represented themselves as the true owners of the subject property at the time of sale,petitioners cannot claim now that they were not yet the absolute owners thereof at that time.

Petitioners also contend that although there was in fact a perfected contract of sale between them

and Ramona P. Alcaraz, the latter breach her reciprocal obligation when she rendered impossiblethe consummation thereof by going to the United States of America, without leaving her address,telephone number, and Special Power of Attorney (Paragraphs 14 and 15, Answer withCompulsory Counterclaim to the Amended Complaint, p. 2; Rollo, p. 43), for which reason, sopetitioners conclude, they were correct in unilaterally rescinding the contract of sale.

We do not agree with petitioners that there was a valid rescission of the contract of sale in theinstant case. We note that these supposed grounds for petitioners rescission, are mere


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allegations found only in their responsive pleadings, which by express provision of the rules, aredeemed controverted even if no reply is filed by the plaintiffs (Sec. 11, Rule 6, Revised Rules ofCourt). The records are absolutely bereft of any supporting evidence to substantiate petitionersallegations. We have stressed time and again that allegations must be proven by sufficientevidence (Ng Cho Cio vs. Ng Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan, 2 SCRA 598

[1961]). Mere allegation is not an evidence (Lagasca vs. De Vera, 79 Phil. 376 [1947]).

Even assuming arguendothat Ramona P. Alcaraz was in the United States of America onFebruary 6, 1985, we cannot justify petitioners-sellers act of unilaterally and extrajudiciallyrescinding the contract of sale, there being no express stipulation authorizing the sellers toextrajudicially rescind the contract of sale. (cf.Dignos vs. CA, 158 SCRA 375 [1988]; Tagubavs. Vda. De Leon, 132 SCRA 722 [1984])

Moreover, petitioners are estopped from raising the alleged absence of Ramona P. Alcarazbecause although the evidence on record shows that the sale was in the name of Ramona P.Alcaraz as the buyer, the sellers had been dealing with Concepcion D. Alcaraz, Ramonas

mother, who had acted for and in behalf of her daughter, if not also in her own behalf. Indeed,the downpayment was made by Concepcion D. Alcaraz with her own personal Check (Exh. B;Exh. 2) for and in behalf of Ramona P. Alcaraz. There is no evidence showing that petitionersever questioned Concepcions authority to represent Ramona P. Alcaraz when they accepted herpersonal check. Neither did they raise any objection as regards payment being effected by athird person. Accordingly, as far as petitioners are concerned, the physical absence of RamonaP. Alcaraz is not a ground to rescind the contract of sale.

Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her obligationto pay the full purchase price is concerned. Petitioners who are precluded from setting up thedefense of the physical absence of Ramona P. Alcaraz as above-explained offered no proof

whatsoever to show that they actually presented the new transfer certificate of title in their namesand signified their willingness and readiness to execute the deed of absolute sale in accordancewith their agreement. Ramonas corresponding obligation to pay the balance of the purchaseprice in the amount of P1,190,000.00 (as buyer) never became due and demandable and,therefore, she cannot be deemed to have been in default.

Article 1169 of the Civil Code defines when a party in a contract involving reciprocal obligationsmay be considered in default, to wit:

Art. 1169. Those obliged to deliver or to do something, incur in delay from the time the obligeejudicially or extrajudicially demands from them the fulfillment of their obligation.

x x x

In reciprocal obligations, neither party incurs in delay if the other does not comply or is notready to comply in a proper manner with what is incumbent upon him. From the momentone of the parties fulfill his obligation, delay by the other begins. (Emphasis supplied.)


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There is thus neither factual nor legal basis to rescind the contract of sale between petitioners andrespondents.

With the foregoing conclusions, the sale to the other petitioner, Catalina B. Mabanag, gave riseto a case of double sale where Article 1544 of the Civil Code will apply, to wit:

Art. 1544. If the same thing should have been sold to different vendees, the ownership shall betransferred to the person who may have first taken possession thereof in good faith, if it shouldbe movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who ingood faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith wasfirst in the possession; and, in the absence thereof to the person who presents the oldest title,provided there is good faith.

The record of the case shows that the Deed of Absolute Sale dated April 25, 1985 as proof of thesecond contract of sale was registered with the Registry of Deeds of Quezon City giving rise tothe issuance of a new certificate of title in the name of Catalina B. Mabanag on June 5, 1985.Thus, the second paragraph of Article 1544 shall apply.

The above-cited provision on double sale presumes title or ownership to pass to the buyer, theexceptions being: (a) when the second buyer, in good faith, registers the sale ahead of the firstbuyer, and (b) should there be no inscription by either of the two buyers, when the second buyer,in good faith, acquires possession of the property ahead of the first buyer. Unless, the secondbuyer satisfies these requirements, title or ownership will not transfer to him to the prejudice of

the first buyer.

In his commentaries on the Civil Code, an accepted authority on the subject, now a distinguishedmember of the Court, Justice Jose C. Vitug, explains:

The governing principle isprius tempore, potior jure(first in time, stronger in right).Knowledge by the first buyer of the second sale cannot defeat the first buyers rights exceptwhen the second buyer first registers in good faith the second sale (Olivares vs. Gonzales, 159SCRA 33). Conversely, knowledge gained by the second buyer of the first sale defeats his rightseven if he is first to register, since knowledge taints his registration with bad faith (see alsoAstorga vs. Court of Appeals, G.R. No. 58530, 26 December 1984). In Cruz vs. Cabana (G.R.

No. 56232, 22 June 1984, 129 SCRA 656), it was held that it is essential, to merit the protectionof Art. 1544, second paragraph, that the second realty buyer must act in good faith in registeringhis deed of sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R.No. 95843, 02 September 1992).(J. Vitug, Compendium of Civil Law and Jurisprudence, 1993 Edition, p. 604).

Petitioners point out that the notice of lis pendensin the case at bar was annotated on the title ofthe subject property only on February 22, 1985, whereas, the second sale between petitioners


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Coronels and petitioner Mabanag was supposedly perfected prior thereto or on February 18,1985. The idea conveyed is that at the time petitioner Mabanag, the second buyer, bought theproperty under a clean title, she was unaware of any adverse claim or previous sale, for whichreason she is a buyer in good faith.

We are not persuaded by such argument.

In a case of double sale, what finds relevance and materiality is not whether or not the secondbuyer in good faith but whether or not said second buyer registers such second sale in good faith,that is, without knowledge of any defect in the title of the property sold.

As clearly borne out by the evidence in this case, petitioner Mabanag could not have in goodfaith, registered the sale entered into on February 18, 1985 because as early as February 22,1985, a notice of lis pendenshad been annotated on the transfer certificate of title in the names ofpetitioners, whereas petitioner Mabanag registered the said sale sometime in April, 1985. At thetime of registration, therefore, petitioner Mabanag knew that the same property had already been

previously sold to private respondents, or, at least, she was charged with knowledge that aprevious buyer is claiming title to the same property. Petitioner Mabanag cannot close her eyesto the defect in petitioners title to the property at the time of the registration of the property.

This Court had occasions to rule that:

If a vendee in a double sale registers the sale after he has acquired knowledge that there was aprevious sale of the same property to a third party or that another person claims said property in aprevious sale, the registration will constitute a registration in bad faith and will not confer uponhim any right. (Salvoro vs. Tanega, 87 SCRA 349 [1978]; citing Palarca vs. Director of Land,43 Phil. 146; Cagaoan vs. Cagaoan, 43 Phil. 554; Fernandez vs. Mercader, 43 Phil. 581.)

Thus, the sale of the subject parcel of land between petitioners and Ramona P. Alcaraz, perfectedon February 6, 1985, prior to that between petitioners and Catalina B. Mabanag on February 18,1985, was correctly upheld by both the courts below.

Although there may be ample indications that there was in fact an agency between Ramona asprincipal and Concepcion, her mother, as agent insofar as the subject contract of sale isconcerned, the issue of whether or not Concepcion was also acting in her own behalf as a co-buyer is not squarely raised in the instant petition, nor in such assumption disputed betweenmother and daughter. Thus, We will not touch this issue and no longer disturb the lower courtsruling on this point.

WHEREFORE, premises considered, the instant petition is hereby DISMISSED and theappealed judgment AFFIRMED.

SO ORDERED.

Narvasa, C.J. (Chairman), Davide, Jr., and Francisco, JJ., concur.


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Panganiban, J., no part.

THIRD DIVISION

[G.R. No. 112330. August 17, 1999]

SPS. HENRY CO AND ELIZABETH CO AND MELODY CO,petitioners, vs.COURT OFAPPEALS AND MRS. ADORACION CUSTODIO, represented by her Attorney-in-fact,TRINIDAD KALAGAYAN, respondents.

D E C I S I O N

GONZAGA-REYES,J.:

Before us is a Petition for Review on Certiorariof the decision of the Court of Appealsi[1]inCA-G.R. CV No. 32972 entitled MRS. ADORACION CUSTODIO, represented by her

Attorney-in-fact, TRINIDAD KALAGAYAN vs. SPS. HENRY CO AND ELIZABETH COAND MELODY CO.

The following facts as found by the lower court and adopted by the Court of Appeals areundisputed:

xxx sometime on October 9, 1984, plaintiff entered into a verbal contract with defendant for herpurchase of the latters house and lot located at 316 Beata St., New Alabang Village,Muntinlupa, Metro Manila, for and in consideration of the sum of $100,000.00. One weekthereafter, and shortly before she left for the United States, plaintiff paid to the defendants theamounts of $1,000.00 and P40,000.00 as earnest money, in order that the same may be reserved

for her purchase, said earnest money to be deducted from the total purchase price. The purchaseprice of $100,000.00 is payable in two payments $40,000.00 on December 4, 1984 and thebalance of $60,000.00 on January 5, 1985. On January 25, 1985, although the period of paymenthad already expired, plaintiff paid to the defendant Melody Co in the United States, the sum of$30,000.00, as partial payment of the purchase price. Defendants counsel, Atty. LeopoldoCotaco, wrote a letter to the plaintiff dated March 15, 1985, demanding that she pay the balanceof $70,000.00 and not receiving any response thereto, said lawyer wrote another letter to plaintiffdated August 8, 1986, informing her that she has lost her option to purchase the propertysubject of this case and offered to sell her another property.

Under date of September 5 (1986), Atty. Estrella O. Laysa, counsel for plaintiff, wrote a letter to

Atty. Leopoldo Cotaco informing him that plaintiff is now ready to pay the remaining balance tocomplete the sum of $100,000.00, the agreed amount as selling price and on October 24, 1986,plaintiff filed the instant complaint.ii[2]

The Regional Trial Court (RTC) ruled in favor of private respondent Adoracion Custodio(CUSTODIO) and ordered the petitioner spouses Henry and Elizabeth Co (COS) to refund theamount of $30,000.00 in CUSTODIOs favor. The dispositive portion of the RTCs decisionreads:


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WHEREFORE, the Court hereby orders:

1. that the earnest money of $1,000.00 and P40,000.00 is hereby forfeited in favor of thedefendants, and

2. the defendants are ordered to remit to plaintiff the peso equivalent of THIRTYTHOUSAND ($30,000.00) U.S. DOLLARS, at the prevailing rate of exchange at the time ofpayment.

Costs against plaintiff.

SO ORDERED.iii[3]

Not satisfied with the decision, the COS appealed to the Court of Appeals which affirmed thedecision of the RTC. Hence, this appeal where the COS assign as sole error the following:

PETITIONER RESPECTFULLY SUBMITS THAT RESPONDENT COURT OFAPPEALS HAS DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD WITHLAW AND THE APPLICABLE DECISIONS OF THE SUPREME COURT.iv[4]

The COS argue that the Court of Appeals erred in ruling that CUSTODIO could still exercise heroption to pay the balance of the purchase price of the property. The COS claim that CUSTODIOwas in default since she failed to pay after a demand was made by the petitioners in their March15, 1985 letterv[5]. The COS claim that they never granted CUSTODIO an extension of time toexercise the option contrary to the finding of the Court of Appeals that a thirty (30) day periodof time was granted to her in their August 8, 1986 lettervi[6]. Said period refers to another optionwhich the COS gave CUSTODIO to buy another piece of property and not the Beata property as

they could no longer hold the Beata property for CUSTODIO. In fact, said letter specificallystates that CUSTODIO lost her option to purchase the subject property; that the COS werewilling to apply the payments already made to the payment of the second property; and that ifCUSTODIO failed to purchase the second property within thirty (30) days, she would forfeit herprevious payments. Since CUSTODIO manifested her readiness to exercise her option to paythe balance of the purchase price of the Beata property and not the second property, hermanifestation was no longer of any legal effect as this option was no longer available to her.This being the case, the Court of Appeals should have ruled that the COS properly rescindedtheir contract with CUSTODIO over the Beata property pursuant to Article 1191vii[7]of theCivil Code and should have further ordered her to pay them damages consequent to therescission. Moreover, even assuming that they waived the deadline by accepting the payment of$30,000.00 on January 26, 1986, CUSTODIO still failed to pay the remaining balance of$70,000.00. Her offer to pay the remaining balance came too late as the option given to her hadalready been lost. In addition, the Court of Appeals also erred in ordering the COS to return the$30,000.00 dollars since the August 8, 1986 letter warned CUSTODIO that if the she did notexercise her option within thirty days, she would lose her option and other rights and anypayments made shall be forfeited. Finally, the COS claim that the Court of Appeals erred in notgranting them attorneys fees when the law allows recovery therefor considering that by the


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defendants act or omission, the plaintiff is compelled to litigate with third persons or to incurexpenses to protect his rights.viii[8]

The core issue is whether or not the Court of Appeals erred in ordering the COS to return the$30,000.00 paid by CUSTODIO pursuant to the option granted to her over the Beata property?

We rule in the negative.

The COS main argument is that CUSTODIO lost her option over the Beata property and herfailure to exercise said option resulted in the forfeiture of any amounts paid by her pursuant tothe August letter.

An option is a contract granting a privilege to buy or sell within an agreed time and at adetermined price. It is a separate and distinct contract from that which the parties may enter intoupon the consummation of the option. It must be supported by consideration.ix[9]An optioncontract conforms with the second paragraph of Article 1479 of the Civil Codex[10]which

reads:

Article 1479. xxx

An accepted unilateral promise to buy or to sell a determinate thing for a price certain is bindingupon the promissor if the promise is supported by a consideration distinct from the price.

However, the March 15, 1985 letterxi[11]sent by the COS through their lawyer to theCUSTODIO reveals that the parties entered into a perfected contract of sale and not an optioncontract.

A contract of sale is a consensual contract and is perfected at the moment there is a meeting ofthe minds upon the thing which is the object of the contract and upon the price. From thatmoment the parties may reciprocally demand performance subject to the provisions of the lawgoverning the form of contracts.xii[12]The elements of a valid contract of sale under Article1458 of the Civil Code are (1) consent or meeting of the minds; (2) determinate subject matter;and (3) price certain in money or its equivalent.xiii[13]As evidenced by the March 15, 1985letter, all three elements of a contract of sale are present in the transaction between thepetitioners and respondent. CUSTODIOs offer to purchase the Beata property, subject of thesale at a price of $100,000.00 was accepted by the COS. Even the manner of payment of theprice was set forth in the letter. Earnest money in the amounts of US$1,000.00 and P40,000.00was already received by the COS. Under Article 1482xiv[14]of the Civil Code, earnest money

given in a sale transaction is considered part of the purchase price and proof of the perfection ofthe sale.xv[15]

Despite the fact that CUSTODIOs failure to pay the amounts of US$ 40,000.00 and US$60,000.00 on or before December 4, 1984 and January 5, 1985 respectively was a breach of herobligation under Article 1191xvi[16]of the Civil Code, the COS did not sue for either specificperformance or rescission of the contract. The COS were of the mistaken belief thatCUSTODIO had lost her option over the Beata property when she failed to pay the remaining


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balance of $70,000.00 pursuant to their August 8, 1986 letter. In the absence of an expressstipulation authorizing the sellers to extrajudicially rescind the contract of sale, the COS cannotunilaterally and extrajudicially rescind the contract of sale.xvii[17] Accordingly, CUSTODIOacted well within her rights when she attempted to pay the remaining balance of $70,000.00 tocomplete the sum owed of $100,000.00 as the contract was still subsisting at that time. When the

COS refused to accept said payment and to deliver the Beata property, CUSTODIO immediatelysued for the rescission of the contract of sale and prayed for the return of the $30,000.00 she hadinitially paid.

Under Article 1385xviii[18]of the Civil Code, rescission creates the obligation to return thethings which were the object of the contract but such rescission can only be carried out when theone who demands rescission can return whatever he may be obliged to restore. This principlehas been applied to rescission of reciprocal obligations under Article 1191 of the CivilCode.xix[19]The Court of Appeals therefore did not err in ordering the COS to return theamount of $30,000.00 to CUSTODIO after ordering the rescission of the contract of sale over theBeata property. We quote with approval the Court of Appeals decision to wit:

Since it has been shown that the appelleewho was not in default, was willing to perform part ofthe contract while the appellants were not, rescission of the contract is in order. The power torescind obligations is implied in reciprocal ones, in case one of the obligors should not complywith what is incumbent upon him, (Article 1191, same Code). Rescission creates the obligationto return the things which were the object of the contract, together with their fruits, and the pricewith its interest x x x x (Article 1385, same Code).

In the case at bar, the property involved has not been delivered to the appellee. She has thereforenothing to return to the appellants. The price received by the appellants has to be returned to theappellee as aptly ruled by the lower court, for such is a consequence of rescission, which is to

restore the parties in their former situations.

No error was committed by the lower court when it did not award attorneys fees to theappellants for as has been shown, the appellees complaint is not unfounded.xx[20]

We cannot uphold the forfeiture clause contained in the petitioners August 8, 1986 letter. Itappears that such condition was unilaterally imposed by the COS and was not agreed to byCUSTODIO. It cannot therefore be considered as part of the contract of sale as it lacks theconsent of CUSTODIO.xxi[21]

Finally, the Court of Appeals did not err in not awarding the COS attorneys fees. Althoughattorneys fees may be awarded if the claimant is compelled to litigate with third persons or toincur expenses to protect his interest by reason of an unjustified act or omission of the party fromwhom it is soughtxxii[22], we find that CUSTODIOs act clearly was not unjustified.

WHEREFORE, the instant petition is hereby DENIED, and the appealed decision of the Courtof Appeals is AFFIRMED.

SO ORDERED.


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Melo, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.

G.R. No. , Aguinaldo v. Esteban and Sarmiento, 135 SCRA

645

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

DECISION

April 15, 1985

G.R. No. L-27289JUAN AGUINALDO, Substituted by MARINA and PRIMITIVO AGUINALDO , plaintiffs-appellants,vs.JOSE ESTEBAN and FRANCISCA SARMIENTO, defendants-appellees.

Crisostomo M. Diokno for plaintiff-appellants. Andres Franco for defendants-appellees.

RELOVA, J.:

In Civil Case No. 6977, the Court of First Instance of Rizal declared the contract, entitled:"Sanglaan ng Isang Lupa na Patuluyan Ipaaari," valid and binding contract of sale and dismissedthe complaint as well as the counterclaim with costs against the plaintiff. From said judgment ofthe lower court, appeal was taken to this Court, "the same involving, as it does, a question oflaw." (p. 25, Rollo)

Plaintiff Juan Aguinaldo in his complaint alleged, among others, that on June 23, 1958,defendants, through fraud, deceit and misrepresentations and exercising undue pressure,influence and advantage, procured the thumbmark of Jose Aguinaldo, father of plaintiff, to beaffixed on subject contract; that defendants caused the cancellation of Tax Declaration No. 4004,

Rizal (1948) in the name of Jose Aguinaldo and the issuance in lieu thereof of Tax DeclarationNo. 10725-Rizal in the names of defendant spouses; that the document in question on which JoseAguinaldo affixed his thumbmark is not true and genuine, as the thumbmark appearing thereon isa forgery; that it contains terms and conditions which partake the nature of "pacto comisario"which render same null and void; that it does not fix a period for the payment of the loan nordoes it state the duration of the mortgage; that plaintiff is the sole successor-in-interest and legalheir of Jose Aguinaldo who died intestate in October 1960; that defendants having no right towin and possess the property in question are withholding the possession thereof from plaintiff


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and consequently deprived plaintiff of the fruits of said property; and that by reason of thewillfull and malevolent acts of defendants, plaintiff suffered moral and actual damages in theamount of P4,000.00.

In their answer, defendants claim absolute ownership of subject property upon the death of Jose

Aguinaldo in October 1960 on the theory that the document in controversy is one of sale and notone of mortgage.

The parties, through their respective counsels, agreed to submit the case for decision solely onwhether the contract in question, Annex "A" of the complaint, is one of mortgage or of sale.

When plaintiff Juan Aguinaldo died intestate on August 6, 1965, his heirs, namely: Marina andPrimitivo, both surnamed Aguinaldo, petitioned the trial court that they be substituted as partyplaintiffs in lieu of their deceased father.

It is the position of plaintiffs-appellants that the document in question, Annex "A" of the

complaint, is null and void because it contains stipulations which partake of the nature of "pactocomisario." On the other hand, the defendants contend that the contract is a valid sale and, assuch, it passed the title to them.

Hereunder is the contract in question:

SANGLAAN NG ISANG LUPA-CANAVERAL NA PATULOYAN IPAAARI

HAYAG SA SINO MAN MAKAKABASA:

Na, ako JOSE AGUINALDO, Pilipino, balo, may karampatan gulang, tubo at naninirahan sa Bo.

Bambang, Tagig, Rizal, Kapuluan Pilipinas, sa pamamagitan nito ay

ISINASAYSAY KO AT PINAGTITIBAY:

1. Na, sarili at tunay kong pagaari dahil sa ipinagkaloob sa akin ng aking amain MartinConcepcion (patay) ang isang parcelang lupa-canaveral, at ang lupang ito ay napagkikilala atnauligiran ng mga pagaaring lupa ng mga kahangganan kagaya ng mga sumusunod:

Isang parcelang lupa-canaveral na nasa pook ng Bo. Bambang, Tagig, Rizal, at siyang lupangnakatala sa Tax Declaration No. 4004-Rizal (1948), sa Tanggapan ng Tasador ng lupa salalawigan ng RizaL Pasig, RizaL at valor ameliarado ng P70.00 at napaloob sa mga pagaaring

lupa ng mga kahangganan kagaya ng mga sumusunod: Sa Norte, Antonio Silvestre at PedroSarmiento; sa Este, Don-lingo Luga; sa Sur, Dionisio Dionisio at Pedro Sarmiento, at sa Weste,Tomas Cruz

2. Na, alang-alang sa halagang LIMANG DAAN AT APATNAPUNG PISO (P540.00), salapingPilipino na sa kasalukuyan ay ating ginagamit, ay natanggap ko na, sa hindi biglaan kung hindiLIMANGPUNG SENTIMOS (P0.50) lamang araw-araw magbuhat pa nuong Marzo 26, 1955, atang kabuuang halaga ng halagang nabanggit sa itaas nito, sa oras na ito, ay kusang loob kong


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tinanggap sa magasawang JOSE ESTEBAN at FRANCISCA SARMIENTO, mga Pilipino, maykarampatan gulang, naninirahan at may padalahan sulat sa Bo. Bambang, Tagig, Rizal, ayISINASANGLA AT PATULOYAN IPAARI KO sa nasabing magasawa ang lupang nobanggitko sa itaas, sa aming mga kasunduan kagaya ng mga sumusunod:

NA AKO, JOSE AGUINALDO AY PAKAKANIN HABANG NABUBUHAY NGMAGASAWANG JOSE ESTEBAN AT FRANCISCA SARMIENTO, 0 NG KANILANGKAHALILI AT TAGAPAGMANA, AT BILANG KABAYARAN NAMAN SA HALAGANGLIMANG DAAN AT APATNAPUNG PISO (P540.00) AT PAGPAPAKAIN SA AKIN NGMAGASAWANG JOSE ESTEBAN AT FRANCISCA SARMIENTO, ORAS NA AKO AYMAMATAY SILA (JOSE ESTEBAN AT FRANCISCA SARMIENTO) NA ANG LUBOSANMAGMAMAYARI NG AKING LUPANG ISINANGLANG ITO SA KANILA, SAPAGKATANG LAHAT NG AKING KARAPATAN SA LUPA, NGAYON PA AYIPINAGKAKALOOB KO SA KANILA SA ILALIM NG KASUNDUAN.

3. Na, ang lupa-canaveral na isinasangla ko sa pamamagitan ng kasulatan ito na ipaaring

patuluyan ay pinamomosiyonan ng mag-asawang Jose Esteban at Francisco Sarmiento, nuongpang Marzo 26, 1955.

4. Na, ang lupang akin binabanggit sa kasulatan ito, ay hindi ko ipinagkakautang sa kanino mantao, na maliban sa magasawang Jose Esteban at Francisca Samiento.

5. Na, ang lupa kong ito na siyang nakatala sa Tax Declaration No. 4004-Rizal (1948), ay hindinakatala sa bisa ng Batas Blg. 496 o maging sa Hipotecaria Espanola, at napagkasunduan angkasulatan ito, ay nais ipatala sa bisa ng Batas Blg. 3344, at sinusugan.

SA KATUNAYAN NG LAHAT KONG IPINAHAYAG SA DOKUMENTONG ITO, ay

inilagda ko ang aking pangalan at apelyedo dito sa Lunsod ng Maynila, Pilipinas, ngayong ika______ ng Hunyo 1958, sa harap ng dalawang saksi.

(Thumbmark)JOSE AGUINALDONagsangla

SUMASANGAYON SA MGA ALITUNTUNIN:

(Sgd.) JOSE ESTEBANPinagsanglaan

(Sgd.) FRANCISCA SARMIENTOPinagsanglaan

MGA SAKSI:

(Sgd.) Illegible(Sgd.) Eugenia S. Relon


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successors; and the Provincial Assessor of Rizal is directed to cancel Tax Declaration No. 10725(Rizal) in the name of defendants-appellees, Jose Esteban and Francisco Sarmiento, and in lieuthereof issue another in the name of the deceased plaintiff Juan Aguinaldo's heirs, MarinaAguinaldo and Primitivo Aguinaldo.

SO ORDERED.

Teehankee (Chairman), Plana, Gutierrez, Jr., De la Fuente and Alampay, JJ., concur.

FIRST DIVISION

[G.R. No. 83974. August 17, 1998]

SPOUSES NARCISO RONGAVILLA and DOLORES RONGAVILLA,petitioners, vs.COURT OF APPEALS AND MERCEDES DELA CRUZ AND FLORENCIA DELA CRUZ,respondents.

D E C I S I O N

QUISUMBING, J.:

For review on appeal by certiorariare the Decisionxxiii[1]of the Court of Appeals in CA-G.R. CV No. 06543, promulgated on March 11, 1988, and the Resolutionxxiv[2]datedJune 28, 1988, denying petitioner's motion for reconsideration.

The appealed decision affirmed in totothe judgment of the Regional Trial Court ofPasay City in Civil Case No. LP-8790-P, which disposed of the controversy as follows:

"WHEREFORE, judgment is hereby rendered declaring void and inexistent the Deed ofAbsolute Sale (Exh. "I") dated June 3, 1976 allegedly executed by plaintiffs in favor ofdefendant spouses, which document is now particulary identified as Doc, No. 164; Pageno. 34; Book No. I; Series of 1976 in the Notarial Register of Arcadio Espiritu, a NotaryPublic for and in Province of Cavite. Further, defendant spouses are hereby ordered -

a. To reconvey to the plaintiffs, free from all liens and encumbrances, the propertycovered by Transfer Certificate of Title No. S-28903 of the Registry of Deeds for theProvince of Rizal;

b. . To pay to plaintiffs the sum of P5,000.00 as attorney's fees; and

c. To pay the cost of the suit."xxv[3]

As gleaned from the record, the private parties are closely related. Plaintiffs below, nowthe private respondents, are the aunts of herein petitioner Dolores Rongavilla. Bothspinsters, they earn their livelihood as embroiderers ("magbuburda") and dressmakers;although unschooled in English, they are however able to read and write in Tagalog.


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Since they are of advanced age (Mercedes de la Cruz, 60 and Florencia de la Cruz,71), their day to day activities were confined mostly close to home.

The property subject of this controversy between kith and kin is a parcel of land,located in Manuyo, Las Pias, Rizal (now Metro Manila) owned by private respondents,

in the proportion of one-half (1/2)pro-indiviso,with another niece named JuanitaJimenez as co-owner of the other one-half. The whole parcel consisted of 131 squaremeters and was covered by Original Certificate of Title (OCT) No. 5415 of the Registerof Deeds of the Province of Rizal. This OCT, as well as the Transfer Certificate of Title(TCT) No. S-28903 after the parcel was subdivided, was kept in the possession ofJuanita Jimenez, who is the elder sister of Dolores Rongavilla.

Although the basic fact situation here might appear all too familiar, the legal controversyitself is notable for having passed through the entire channel of the justicesystem.xxvi[4]The present petition before us was given due course perResolutionxxvii[5]dated June 26, 1989; but it was denied on September 20, 1989, for

non-compliance with certain requirements;xxviii[6]although, upon motion forreconsideration by the petitioners showing compliance, it was reinstatedxxix[7]onSeptember 2, 1991.

Considering the circumstances in this case, including the relationship of the parties, itbehooves this Court now to examine closely and carefully the questioned judgment andthe record below. For the Court could not but be mindful of the codal admonition that:

"In all contractual, property or other relations, when one of the parties is at adisadvantage on account of his moral dependence, ignorance, indigence, mentalweakness, tender age, or other handicap, the courts must vigilant for his protection."

(Art. 24, Civil Code)

From the facts found below, it appears that in the month of May, 1976, the privaterespondents borrowed the amount of two thousand (P2,000) from the petitioners for thepurpose of having their (respondents') dilapidated rooftop repaired.

A month later, petitioner Dolores Rongavilla and her sister Juanita Jimenez visited theiraunt's home, bringing with them a document for the signature of their aunts. Thedocument is admittedly typewritten in English. When asked in Tagalog by one of theaunts, respondent Mercedes de la Cruz, what the paper was all about, DoloresRongavilla answered also in Tagalog, that it was just a document to show that the

private respondents had a debt amounting to P2,000. On account of that representation,private respondent signed the document.

In September 1980, or after a lapse of over four years, petitioner Dolores Rongavillawent to private respondents' place and asked them to vacate the parcel in question,claiming that she and her husband were already the new owners of the land.


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Surprised by petitioners' moves, private respondents with the help of friends went to theOffice of the Register of Deeds of the Province of Rizal to verify the matter. Theydiscovered that their Certificate of Title had been cancelled and a new one, TransferCertificate of Title No. S-28903, had been issued in favor of petitioners. They furtherdiscovered that said parcel of land had been mortgaged with the Cavite Development

Bank by the petitioners. It was only then that the private respondents realized that thedocument they had previously been asked by their nieces to sign was a deed of sale.

On February 3, 1981, private respondents filed with the Court of First Instance, nowRegional Trial Court, of Pasay City the sworn complaintxxx[8]to have the purporteddeed of sale declared void and inexistent, for being fictitious and simulated, andsecured by means of fraud and misrepresentation. They alleged that they did not selltheir property in question to the defendants; that they did not receive any considerationon the supposed sale; that their Original Certificate of Title was cancelled and TCT No.S-28903 was issued in favor of defendants (herein petitioners), who thereaftermortgaged said title for a total of P40,000.00 to the damage and prejudice of the

plaintiffs. They also claimed moral and exemplary damages, as the court mightdetermine.

Petitioners duly filed their answerxxxi[9]after the denial of their motion to dismiss,alleging that plaintiffs (now the private respondents) sold their parcel of land voluntarily,that there was consent to the deed of sale, that there was sufficient considerationtherefor and that the document on the sale was complete in itself and in due form,enabling the Register of deeds to cancel their old TCT and issue a new one. Petitionersfurther stated that private respondent were fully appraised by the Notary Public, Atty.

Arcadio G. Espiritu, on what the document was all about, and having understood theexplanation made by said Notary Public, they voluntarily affixed their signatures on said

document. Petitioners also asserted as affirmative and/or special defenses thatprescription had set in and that private respondents no longer had a cause of action,and that the deed of sale contained all the pre-requisites of a contract, namely consentof the parties, consideration or a price certain, and determinate thing or object; andcould no longer be annulled. They also claimed moral and exemplary damages.

The trial court's judgment, quoted at the outset, being adverse to the petitioners, theyseasonably appealed. And after their rebuff at the appellate level, they come now tothis Court on certiorariunder Rule 45 of the Rules of Court, citing the following groundsfor their petition:

"(1) It is clear and patent error of the Court of Appeals to declare as 'void and inexistentthe Deed of Absolute Sale (Exhibit 1) dated June 3, 1976.

(2) The Court of Appeals committed grave error of law in holding that the action todeclare nullity of the Deed of Absolute Sale (Exhibit 1) does not prescribe.

(3) The Court of Appeals committed grave abuse of discretion in relying on a purportedCertificate of Bureau of Internal Revenue which was not offered in evidence.


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(4) The Court of Appeals committed grave error of law and abuse of discretion andgrave abuse of discretion amounting to lack or excess of jurisdiction in ordering thepetitioners to reconvey the subject parcel of land to the private respondents."xxxii[10]

With a slight variation but consistent with the grounds they have relied on petitioners

raise in their Memorandumxxxiii[11]the following:

"ISSUES

1. Did the Court of Appeals commit a clear and patent error in declaring as 'voidand inexistent' the Deed of Absolute Sale (Exhibit 1) dated June 3, 1976?

2. Did the Court of Appeals commit grave error in holding that the action to annulthe Deed of Sale (Exhibit 1) does not prescribe?

3. Did the Court of Appeals commit grave abuse of discretion in relying on a

purported Certificate of the Bureau of Internal Revenue which was not offered inevidence?

4. Did the Court of Appeals commit grave error of law and grave abuse of discretionamounting to lack of jurisdiction or in excess of jurisdiction in ordering petitionersto reconvey the subject parcel of land to the private respondents?"

These issues may be synthesized into one: Did the respondent Court of Appealscommit reversible error when it upheld the trial court's judgment that the disputed Deedof Sale (Exhibit "1") is void and inexistent?

To resolve this pivotal issue, it must be noted that private respondents, as plaintiffsbelow, based their complaint to declare the disputed deed void and inexistent on twofundamental grounds: (1) lack of consent and (2) want of consideration. Under oath,they strongly denied selling or even just agreeing to sell, their parcel of land to theirniece and nephew-in-law. During the hearing, they also denied going to and appearingbefore the Notary Public who prepared the deed of sale. They also vehemently deniedreceiving any consideration for the alleged sale. They added that their signatures on thepurported deed of sale were obtained by fraud and misrepresentation as petitioners hadmisled them to believe the document was just a paper to evidence a debt of P2,000they obtained to buy G.I sheets for the repair of their leaking roof.xxxiv[12]Privaterespondents were shocked and got sick when they were told by petitioners that they

(respondents) were no longer the owners of the land.xxxv[13]

On these two points of consent and consideration, the trial court found that:

"x x x. A careful analysis and meticulous evaluation of the evidence on record hasconvinced the Court that the sale of their property to the defendants was farthest fromthe plaintiffs' minds. The Court believes that when plaintiffs voluntarily signed thedocument which turned out to be a deed of sale, they were misled by defendant


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Dissatisfied, petitioners now seek from this Court the reversal of the judgment below.They insist in their petition before us that the deed is valid; and that because of thestatute of limitations, after the lapse of four years from its execution and registration, itcould no longer be annulled.

They assert that "the presumption that contracts are presumed to be valid and to besupported by lawful and good consideration of one dollar is just as effectual andvaluable as a larger sum stipulated or paid''.xxxix[17]

They further assert that since private respondents signed the Deed of Sale, as a publicinstrument, the truth of the recitals therein embodied could only be impugned anddisproved, not by mere preponderance of evidence, but by evidence of the "the clearestand most satisfactory character, convincing and overwhelming.'"xl[18]Petitioners furtherstate that since they have been the ones paying real estate taxes on the property, ratherthan their aunts, the latter by their acts had confirmed the deed executed by them.xli[19]

Despite the petitioners' insistence that the deed of sale is presumed valid and, beingregistered, could not be disturbed anymore, we however find their arguments andratiocination less than persuasive. While petitioners would not want the deed of sale tobe impugned, they themselves contradict the recitals therein. On the vital point ofconsideration, they and their witnesses, namely Juanita Jimenez and Atty. ArcadioEspiritu repeatedly declared that the true consideration paid for the sale of the land wasnot P2,000 as stated in their own Exhibit "l", the Deed of Sale, but in factP7,800.00.xlii[20]

Petitioner Dolores Rongavilla herself on cross-examination testified as follows:

"Atty. Rodriguez:

Q. You stated that you were present when this was explained by the notary public, how didthe notary public explain this deed of sale in English or Tagalog?

A. It was explained by the notary public that the property is being sold by them to us andthat the consideration was only P2,000.00 as appearing in the document in order thatwe may be able to save for the payment of taxes and documentary stamps.

Q. Did the plaintiffs not say anything when the notary public according to you explainedthat instead of P7,800.00, P2,000.00 will be stated in the document?

A. They did not say anything because we gave to them the amount of the considerationagreed between us the sum of P7,800.00. (t.s.n., Sept. 2, 1982, pp. 9-10)"xliii[21]

By their own testimony, the petitioners are pictured as not exactly averse to bending thetruth, particularly the purported consideration. Sadly, the irony of it is that while theyclaimed they were regulary paying taxes on the land in question they had no secondthoughts stating at the trial and later on appeal that they had resorted to doctoring the


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price stated in the disputed Deed of Sale, allegedly "to save on taxes". That admissionsurely opens the door to questions on the integrity, genuineness and veracity of saidpublic instrument.

Thus, the trial court could not be said to err in asserting that "while it is true that public

documents are presumed genuine and regular under the provisions of the Rules ofCourt, this presumption is a rebuttable presumption which may be overcome by clear,strong and convincing evidence."xliv[22]

Moreover, Exhibit "l", the deed itself, shows that contrary to the testimony of the notarypublic, who appeared as a witness for petitioners, what was originally typed therein wasthe amount of "Three Thousand Pesos (P3,000)", which later on was substituted by thehandwritten amount now of Two Thousand Pesos (P2,000)."xlv[23]There is no need tospeculate on the motivation for this alteration. The notary public might have just wantedto further save on taxes, rather than short-change the coffers of the government. But,again, the whole fabric of petitioners' claim to the sanctity of the deed as public

instrument had thereby been shredded.

If as petitioners claimed on trial, the price paid was P7,800 while their deed showed onlyP2,000, after the amount of P3,000 in the deed was altered, one may well inquire: whichfigure could this Court believe? Could one say that the trial and the appellate courtsboth erred in holding that no consideration passed from the buyer to the seller?

But petitioners herein would further take to task the appellate court for grave abuse ofdiscretion, as well as for a reversible error, in having relied on the "purportedCertification of the Bureau of Internal Revenue which was not offered in evidence".Since this is a petition under Rule 45, however, we will not dwell on the alleged grave

abuse of discretion but limit our observation to the alleged error of law. The BIRcertificate was the subject of the testimony of witnesses at the hearing where bothparties took full advantage of the opportunity for direct and cross-examination as well asrebuttal and sur-rebuttal.xlvi[24]On the witness stand, private respondents as plaintiffsbelow denied that they had any tax account number nor even residence certificates.They were supported by their witnesses, testifying also under oath. They contradictedthe claim of the petitioners' lawyer-notary public, that the disputed deed of sale wascomplete and in due form and w

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