G.R. No. 32894 - Angelo vs. Pacheco

On July 14, 1920, the plaintiff, Leocadia Angelo, executed a deed of sale (Exhibit 3) conveying a parcel of land measuring approximately 659 hectares in Paniqui, Tarlac, along with five carabaos, to the defendant, Cipriano Pacheco, for a total price of P13,500.
The payment arrangement involved an advance of P5,500, with the remaining balance of P8,000 to be paid on or before March 1921.
The deed of sale contained an express waiver clause where the defendant relinquished his right to warranty in case of eviction, stating:

“It is hereby also covenanted and agreed by both parties that the vendee waives warranty in case of eviction from the property sold, to which he has a right by virtue of this sale, against the vendor Leocadia Angelo.”

In 1924, when the defendant sought to remove a prohibitory clause contained in Exhibit 3 to enable freer disposal of the land, the plaintiff signed another deed (Exhibit 4) on June 18, 1924.
The second deed reiterated the waiver clause in similar terms:

“It is also covenanted and agreed by both parties that the vendee, Cipriano Pacheco, waives warranty in case of eviction from the property sold, to which he has a right by virtue of this sale, and undertakes to recognize any lien on said property.”

On the same day, the defendant executed a promissory note (Exhibit A) for P8,000, with a real estate mortgage as security (Exhibit B).

Prior to the sale under Exhibit 3, on July 2, 1920, the plaintiff had initiated registration proceedings against the land, a fact known to the defendant as he was informed by Attorney Natividad regarding the probable opponents.
The defendant took charge of the registration process, while the plaintiff abstained from involvement; this led to a judgment on September 20, 1923, decreeing the registration of the land in the plaintiff’s name, with a subsequent decree issued on July 18, 1924.
Shortly after the execution of Exhibit 4 and related documents, on October 6, 1924, a motion for the review of the decree was filed by the Director of Lands and two groups of private opponents.
Cipriano Pacheco, by then in possession of a certificate of title, filed his answers to the review petitions on May 25, 1925.
The reviewing court set aside the decree and the transfer certificate of title on June 23, 1925, a decision subsequently appealed, resulting in the Supreme Court’s affirmation on December 31, 1926, with an incidental ruling granting Lucia F. de Valle Cruz a lien on the land for P15,000.

Following the review proceedings, Lucia F. de Valle Cruz initiated a separate action against the defendant and obtained judgment in the Court of First Instance of Tarlac (Civil Case No. 2459) on January 31, 1928, confirming the mortgage credit of P15,000 along with an agreed interest rate.

The pivotal issue was whether the plaintiff, as the vendor, was still bound by the warranty obligation in view of the defendant’s formal and express waiver of warranty for eviction, despite any complexities arising from the registration and review proceedings.
The defendant challenged the validity of the waiver by alleging that it was not executed with full knowledge of the risks—and further contended that the waiver should be void if procured in bad faith per Article 1476 of the Civil Code.
However, the record evidenced that the plaintiff acted in good faith, having acquired the land believing Pedro Eugenio (from whom she bought it) was the rightful owner.

Whether the defendant’s express and formal waiver of his right to warranty in case of eviction, as clearly stated in the deeds of sale (Exhibits 3 and 4), effectively extinguished the plaintiff’s warranty obligation.
Whether the alleged bad faith by the plaintiff, as contended by the defendant regarding the sale of land she did not possess or fully own, could nullify the waiver under Article 1476 of the Civil Code.
Whether the defendant’s failure to notify the plaintiff or have her participate in the reopening of the decree—despite being in danger of losing the property—affects the warranty obligation of the vendor under Article 1481 of the Civil Code.