THIRD DIVISION
PEDRO MOLINA,
Petitioner-Appellant,
G.R.
No.
125755
February 24, 2003
-versus-
HON. COURT OF
APPEALSAND SPOUSES
MARGARITO
M. FLORESAND NERISA HERRERA,
Respondents-Appellees. chanrobles virtuallaw libraryred
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D E C I S I O N
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CARPIO-MORALES,
J.: chanrobles virtuallaw libraryred
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His motion for reconsideration
having been denied, petitioner brought the present petition for review
on certiorari to set aside
the decision of April 30, 1996 of the Court
of Appeals[1]
in CA-G.R. CV No. 46107 which reversed the April 4, 1994 decision of
the
Regional Trial Court of Cavite, Branch 15[2]
in Civil Case No. NC-325 in favor of petitioner.chanrobles virtuallaw libraryred
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Petitioner Pedro Molina
and his siblings Felisa, Felix and Tomas Molina were co-owners of a
parcel
of land in Naic, Cavite registered in their names under TCT No. T-44010
of the Registry of Deeds of Cavite.[3]chanrobles virtuallaw libraryred
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On April 23, 1984,
petitioner, by Deed of Absolute Sale,[4]
conveyed to his sister Felisa his share in the co-owned property. The
sale
was not, however, registered.
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The siblings
subsequently
entered into an agreement wherein they partitioned the property as
follows:chanrobles virtuallaw libraryred
Lot No.
98-A-1 with an area of 92 square m. for FELIX MOLINA;chanrobles virtuallaw libraryred
Lot No.
98-A-2 with an area of 92 square m. for PEDRO MOLINA;chanrobles virtuallaw libraryred
Lot No.
98-A-3 with an area of 92 square m. for FELISA MOLINA;chanrobles virtuallaw libraryred
Lot No.
98-A-4 with an area of 92 square m. for TOMAS MOLINA;chanrobles virtuallaw libraryred
Lot No.
98-A-5 with an area of 43 square m. as the RIGHT OF WAY;[5]chanrobles virtuallaw libraryred
More than four years
after petitioner executed the Deed of Sale conveying his share of the
property
to his sister Felisa or on June 13, 1988, upon the request of Felisa,
he
executed another Deed of Absolute Sale[6]
in lieu of the first covering the same share in favor of Felisa’s son
private
respondent Margarito Flores and his wife private respondent Nerisa
Herrera.
The pertinent provisions of the second Deed are reproduced hereunder:chanrobles virtuallaw libraryred
x x xchanrobles virtuallaw libraryred
That the Vendor is the
absolute owner in fee simple of a ¼ portion of a parcel of land,
situated in the Poblacion, Naic, Cavite, Philippines, known as and more
specifically described as follows: chanrobles virtuallaw libraryred
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x x xchanrobles virtuallaw libraryred
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That for and in
consideration
of the sum of EIGHT THOUSAND PESOS ONLY (P8,000.00) Philippine
Currency,
receipt of which in full is hereby acknowledged by the Vendor from the
Vendee, the Vendor hereby sells, transfers and conveys and by these
presents
have (sic) sold, transferred and conveyed unto the above named Vendee,
her (sic) heirs and assigns the (1/4) square meters (sic) portion of
the
above described parcel of land, free from all kinds of liens and
encumbrances
whatsoever. (Underscoring supplied). chanrobles virtuallaw libraryred
x x xchanrobles virtuallaw libraryred
TCT No. T-170585[7]
in the name of respondent spouses covering petitioner’s share in the
co-owned
property was accordingly issued.chanrobles virtuallaw libraryred
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On September 5, 1990,
petitioner filed an action for reformation of instrument and/or
annulment
of document and title with reconveyance and damages before the Regional
Trial Court of Cavite, alleging that the Deed of Absolute Sale in favor
of respondent spouses does not express the true will and intention of
the
parties.
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Respondent spouses
maintained that their acquisition of petitioner’s share was valid,
legal
and binding.[8]chanrobles virtuallaw libraryred
After trial, finding
for petitioner, the trial court ordered the annulment of the Deed of
Absolute
Sale, disposing as follows:chanrobles virtuallaw libraryred
Wherefore, this Court
finds merit in plaintiff’s complaint and hereby orders:chanrobles virtuallaw libraryred
1. The
annulment of the contract, Absolute Deed of Sale dated June 13, 1988
among
and between the plaintiff and the defendants which is null and void;
2. The
cancellation of TCT No. 170585 of the Register of Deeds of Cavite
Province
at Trece Martires City; andchanrobles virtuallaw libraryred
3. The
defendants to pay plaintiff reasonable attorney’s fees of P5,000.00.chanrobles virtuallaw libraryred
Plus costs of suit.chanrobles virtuallaw libraryred
SO ORDERED.[9]chanrobles virtuallaw libraryred
Upon recourse to the
Court of Appeals, the trial court’s decision was reversed and the
complaint
of petitioner was dismissed, hence the present petition anchored on the
following assigned errors:chanrobles virtuallaw libraryred
I.
RESPONDENT COURT OF
APPEALS COMMITTED REVERSIBLE ERROR IN NOT HOLDING THAT THE DEED OF SALE
DO (sic) NOT EXPRESS THE TRUE INTENT AND AGREEMENT OF THE PARTIES;chanrobles virtuallaw libraryred
II.
RESPONDENT COURT OF
APPEALS COMMITTED REVERSIBLE ERROR IN NOT FINDING THE TRANSACTION TO BE
AN EQUITABLE MORTGAGE AND NOT A DEED OF SALE AND THEREFORE TRANSCENDS
THE
CORRECT APPLICATION OF ART. 1602 OF THE CIVIL CODE;chanrobles virtuallaw libraryred
III.
RESPONDENT COURT OF
APPEALS COMMITTED REVERSIBLE ERROR IN NOT HOLDING THAT THE ALLEGED SALE
WAS NOT A CONSUMATED (sic) CONTRACT OF SALE;chanrobles virtuallaw libraryred
IV.
RESPONDENT COURT OF
APPEALS COMMITTED REVERSIBLE ERROR IN NOT FINDING THAT THE PETITIONER
WAS
DEFRAUDED BY FELISA MOLINA IN SIGNING THE SIMULATED AND FICTITIOUS DEED
OF SALE.[10]chanrobles virtuallaw libraryred
Petitioner contends
that he signed the Deed of Absolute Sale through the misrepresentations
of his sister Felisa who made him believe that what he was signing was
only a receipt evidencing his indebtedness to her[11]
which, by his own admission, he had incurred on several occasions; that
Felisa took advantage of his lack of sufficient education and knowledge
of English to defraud him into selling his property; and that parol
evidence
should be admitted to prove the real nature of the transaction which he
claims was one of an equitable mortgage.chanrobles virtuallaw libraryred
Petitioner calls attention
to the consideration given for his property, P8,000.00, which he claims
is inadequate, and to his regular receipt of rentals being paid by the
lessee of the premises, one Erlinda de Guzman which circumstances are
allegedly
badges of equitable mortgage. Thus he cites Articles 1602 and 1604 of
the
Civil Code which provide:chanrobles virtuallaw libraryred
Art. 1602. The contract
shall be presumed to be an equitable mortgage, in any of the following
cases:
(1) When
the price of a sale with right to repurchase is unusually inadequate;chanrobles virtuallaw libraryred
(2) When
the vendor remains in possession as lessee or otherwise;chanrobles virtuallaw libraryred
(3) When
upon or after the expiration of the right to repurchase another
instrument
extending the period of redemption or granting a new period is executed;
(4) When
the purchaser retains for himself a part of the purchase price;chanrobles virtuallaw libraryred
(5) When
the vendor binds himself to pay the taxes on the thing sold;chanrobles virtuallaw libraryred
(6) In
any other case where it may be fairly inferred that the real intention
of the parties is that the transaction shall secure the payment of a
debt
or the performance of any other obligation.chanrobles virtuallaw libraryred
In any of the foregoing
cases, any money, fruits, or other benefit to be received by the vendee
as rent or otherwise shall be considered as interest which shall be
subject
to usury laws. chanrobles virtuallaw libraryred
Art. 1604. The provisions
of Article 1602 shall also apply to a contract purporting to be an
absolute
sale.chanrobles virtuallaw libraryred
In issue then is whether
the parties intended the Deed of Absolute Sale in favor of respondent
to
be an equitable mortgage.chanrobles virtuallaw libraryred
An equitable mortgage
is defined as one which, although lacking in some formality, or form or
words, or other requisites demanded by a statute, nevertheless reveals
the intention of the parties to charge real property as security for a
debt, and contains nothing impossible or contrary to law.[12]chanrobles virtuallaw libraryred
The intention of the
parties to an agreement is shown not necessarily by the terminology
used
therein but by all the surrounding circumstances, such as the relative
situation of the parties at the time, the attitude, acts, conduct,
declarations
of the parties, the negotiations between them leading to the deed, and
generally, all pertinent facts having a tendency to fix and determine
the
real nature of their design and understanding.[13]chanrobles virtuallaw libraryred
For the presumption
of an equitable mortgage to arise under Art. 1602, two (2) requisites
must
concur: (a) that the parties entered into a contract denominated as a
contract
of sale, and (b) that their intention was to secure an existing debt by
way of a mortgage.[14]chanrobles virtuallaw libraryred
In the case at bar,
the second requisite is conspicuously absent. Consider the following
testimony
of petitioner himself:chanrobles virtuallaw libraryred
Q: In connection with
that issue, do you remember how much you owed your sister?
A: Yes, your Honor.chanrobles virtuallaw libraryred
Q: How much?chanrobles virtuallaw libraryred
A: Ten thousand
(P10,000.00)
pesos, your Honor.chanrobles virtuallaw libraryred
Q: Do you have any copy
of that agreement of your loan?chanrobles virtuallaw libraryred
A: None, sir.chanrobles virtuallaw libraryred
Q: How did you receive
that amount of money?chanrobles virtuallaw libraryred
A: Little by little,
sir. Month by month (buwan buwan), sir.chanrobles virtuallaw libraryred
Q: And how long did
you receive that amount of ten thousand (P10,000.00) pesos?chanrobles virtuallaw libraryred
A: Ten months. Every
month, I was allowed to received (sic) P1,000.00.chanrobles virtuallaw libraryred
Q: You did not put up
any collateral to your loan? Did you?chanrobles virtuallaw libraryred
A: None, your Honor.
(Emphasis and underscoring supplied).[15]chanrobles virtuallaw libraryred
That the alleged loan
was received in installments of P1,000.00 per month for ten months or a
total of P10,000.00 in fact indicates that the transaction was not one
of a loan but of sale on installment.chanrobles virtuallaw libraryred
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The alleged inadequacy
of the price harped upon by petitioner does not by itself support the
conclusion
that the property was not at all sold or that the contract was one of a
loan.[16]chanrobles virtuallaw libraryred
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In any event, no proof
was presented to show that the value of the 92 sq. m. property located
in Naic, Cavite was, at the time the Deed was executed in 1988,
considerably
higher than the therein stated purchase price P8,000.00.chanrobles virtuallaw libraryred
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As for petitioner’s
continued receipt of rentals due on the property from its current
lessee
this Court finds the same as did the appellate court, to be a gesture
of
generosity, kinship and leniency from his relatives, he being jobless
and
without visible means of support.[17]chanrobles virtuallaw libraryred
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Petitioner argues,
nevertheless, that assuming arguendo that a contract of sale was
entered
into, it was not consummated as the entire purchase price was not paid.[18]
Assuming that to be so albeit, by the Deed in question petitioner
acknowledged
receipt of the P8,000.00 purchase price, it does not by itself bar the
transfer of the ownership or possession of the property, much less
dissolve
the contract of sale.[19]
The contract remains but the payment of the price is a resolutory
condition,
and the remedy of the seller is to exact fulfillment or, in case of a
substantial
breach, to rescind the contract under Article 1191 of the Civil Code[20]
which provides:chanrobles virtuallaw libraryred
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Art. 1191. The power
to rescind obligations is implied in reciprocal ones, in case one of
the
obligors should not comply with what is incumbent upon him.
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The injured party may
choose between the fulfillment and the rescission of the obligation,
with
the payment of damages in either case. He may also seek rescission,
even
after he has chosen fulfillment, if the latter should become
impossible.chanrobles virtuallaw libraryred
The court shall decree
the rescission claimed, unless there be just cause authorizing the
fixing
of a period.chanrobles virtuallaw libraryred
This is understood to
be without prejudice to the rights of third persons who have acquired
the
thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.chanrobles virtuallaw libraryred
That petitioner, prior
to the execution of the impugned Deed, signed receipts identically
denominated
as "Kasunduan" under which he acknowledged receiving sums of money as
payment
for his property, which receipts were worded in the vernacular and
could
not have been mistaken or misunderstood for anything else other than as
evidence of the sale of his property, seals the case against him. It
confirms
this Court’s earlier observation that the transaction indicated was one
of sale on installment. Thus each of the receipts - Kasunduan[21]
provides:chanrobles virtuallaw libraryred
Ako si PEDRO MOLINA,
balo, may sapat na gulang, Pilipino, naninirahan sa Naik, Kabite, ay
tumanggap
ng halagang one thousand (P1,000) sa aking kapatid na si FELISA S.
MOLINA
bilang tanda na ipinagbibili ko sa kanya ang aking kaparte sa lupang
minana
naming sa aming mga magulang, nakilala bilang Lote Numero 98-A na may
titulo
Numero T-44010 na nasa Kalye ZAMORA NAIK, KABITE, x x xchanrobles virtuallaw libraryred
Additionally, petitioner
affixed his signature on the Deed after its contents were sufficiently
explained to him in the vernacular, which was witnessed by two other
persons
of legal age and duly acknowledged before a notary public. Ironically,
petitioner’s own witness, Nemecio Molina, who was likewise a witness to
the execution of the Deed, belied his claim of having no knowledge of
the
contents of the subject instrument when he took the witness stand:chanrobles virtuallaw libraryred
Q: Now, before the said
document was signed by the parties, do you know what was done by the
Notary
Public, Mariano Villanueva?
A: Yes, sir.chanrobles virtuallaw libraryred
Q: What was done by
Notary Public Mariano Villanueva before the parties signed the document?
A: He read the document
to Pedro Molina.chanrobles virtuallaw libraryred
Q: In what vernacular
did Atty. Villanueva use the reading of the document, Tagalog or
English?
A: In English, your
Honor.chanrobles virtuallaw libraryred
Q: You mean to say that
Notary Public Mariano Villanueva was reading the contents of the sale
of
the document which is in English?
A: Yes, sir.chanrobles virtuallaw libraryred
Q: And that is all what
(sic) Atty. Villanueva did before he required the parties to sign?chanrobles virtuallaw libraryred
A: He told her
secretary
to translate it in Tagalog.[22]
(Underscoring
supplied).chanrobles virtuallaw libraryred
More. Another witness
to the document, Atty. Edwina Mendoza, testified that prior to the
execution
of the Deed, the parties thereto approached her "to tell [her] that
sometime
in the future, they will have to execute a deed of conveyance because
they
are entering to (sic) this kind of transaction,"[23]
adding that when petitioner was informed that he would actually be
selling
his property, the latter readily acceded.[24]chanrobles virtuallaw libraryred
In fine, this Court
finds that the parties to the Deed were fully aware of its contents and
meaning, and that there were no acts done or events that occurred prior
to, simultaneous to, or after the execution of the Deed that would
indicate
the intention of any of the parties to have been otherwise than to sell
the property to respondent spouses.chanrobles virtuallaw libraryred
WHEREFORE, the Petition
is hereby DENIED. The Decision of the Court of Appeals in CA-G.R. CV
No.
46107 dated April 30, 1996 is hereby AFFIRMED.cralaw:red
SO ORDERED.chanrobles virtuallaw libraryred
Puno, J., (Chairman),
Panganiban and Sandoval-Gutierrez, JJ., concur.
Corona, J., on
leave.chan
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____________________________
Endnotes:
[1]
Records at 93-102.chanrobles virtuallaw libraryred
[2]
Id. at 103-109.chanrobles virtuallaw libraryred
[3]
Exhibit [A,] Records at 53.chanrobles virtuallaw libraryred
[4]
Exhibit [2,] Records at 28.chanrobles virtuallaw libraryred
[5]
Rollo at 7.chanrobles virtuallaw libraryred
[6]
Exhibit [3,] Records at 29.chanrobles virtuallaw libraryred
[7]
Exhibit [C,] Records at 55.chanrobles virtuallaw libraryred
[8]
Records at 13.chanrobles virtuallaw libraryred
[9]
Records at 109.chanrobles virtuallaw libraryred
[10]
Rollo at 6.chanrobles virtuallaw libraryred
[11]
TSN, January 24, 1991 at 9.chanrobles virtuallaw libraryred
[12]
Matanguihan v. Court of Appeals, 275 SCRA 381, 390 (1997) (citation
omitted).chanrobles virtuallaw libraryred
[13]
Reyes v. Court of Appeals, 339 SCRA 97, 103 (2000)chanrobles virtuallaw libraryred
[14]
Reyes, 339 SCRA 104.chanrobles virtuallaw libraryred
[15]
TSN, January 24, 1991 at 13.chanrobles virtuallaw libraryred
[16]
Cachola, Sr. v. Court of Appeals, 208 SCRA 496, 501 (1992).chanrobles virtuallaw libraryred
[17]
Records at 101.chanrobles virtuallaw libraryred
[18]
Rollo at 17.chanrobles virtuallaw libraryred
[19]
Ocampo v. Court of Appeals, 233 SCRA 551, 560 (1994).chanrobles virtuallaw libraryred
[20]
Villaflor v. Court of Appeals, 280 SCRA 297, 339 (1997) (citation
omitted).chanrobles virtuallaw libraryred
[21]
Exhibits [1,] [1-A] - [I] at 18-27.chanrobles virtuallaw libraryred
[22]
TSN, March 20, 1991 at 9.chanrobles virtuallaw libraryred
[23]
TSN, October 23, 1991 at 16.chanrobles virtuallaw libraryred
[24]
Id. at 18.chanrobles virtuallaw libraryred |