Title
Azarraga vs. Gay
Case
G.R. No. 29449
Decision Date
Dec 29, 1928
Plaintiff sold land to defendant for lump sum; defendant failed to pay installments, alleging misrepresentation. Court ruled no fraud, upheld lump sum sale, ordered payment of unpaid amounts with interest, dismissed cross-complaint.
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Case Digest (G.R. No. 29449)

Facts:

  1. Contract of Sale: On January 17, 1921, the plaintiff, Leodegario Azarraga, sold two parcels of land to the defendant, Maria Gay, for a lump sum of P47,000, payable in installments. The payment terms were:

    • P5,000 upon signing the contract.
    • P20,000 upon delivery of the Torrens title for the first parcel.
    • P10,000 upon delivery of the Torrens title for the second parcel.
    • P12,000 one year after delivery of the Torrens title for the second parcel.
  2. Partial Payments: The defendant paid P5,000 at the signing of the contract and P20,000 upon receiving the Torrens title for the first parcel. However, she failed to pay the P10,000 upon receiving the Torrens title for the second parcel in March 1921, nor did she pay the remaining P12,000 one year later.

  3. Plaintiff’s Claim: The plaintiff sought P22,000 (P10,000 + P12,000) with legal interest from April 1921 and April 1922, respectively.

  4. Defendant’s Defense: The defendant admitted purchasing the land but alleged:

    • Misrepresentation: The plaintiff falsely represented the second parcel as 98 hectares when it was only 60 hectares, leading her to agree to the price. She sought a price reduction to P38,000.
    • Additional Payments: She claimed to have paid an extra P4,000 beyond the acknowledged amounts.
    • Cross-Complaint: She sought P15,000 in damages for the malicious filing of the complaint.
  5. Plaintiff’s Reply: The plaintiff argued the sale was for a lump sum, not per hectare, and that the defendant’s claim for damages had prescribed.

  6. Trial Court Decision: The court found no fraud or misrepresentation and ordered the defendant to pay P19,300 with legal interest. The cross-complaint was dismissed.

Issue:

  1. Whether the plaintiff misrepresented the area of the second parcel, entitling the defendant to a price reduction.
  2. Whether the defendant is entitled to a reduction in price under Article 1471 of the Civil Code.
  3. Whether the defendant is liable for the unpaid amounts and interest.
  4. Whether the defendant’s cross-complaint for damages has merit.

Ruling:

  1. No Misrepresentation: The court found no evidence of deceit by the plaintiff. The defendant had access to documents (Exhibit 4) showing the second parcel’s actual area (70 hectares) before signing the contract. Her failure to verify the area was her own risk.

  2. No Price Reduction: The sale was for a lump sum, not per hectare. Under Article 1471 of the Civil Code, there is no right to a price reduction for a shortage in area when the sale is for a lump sum and the boundaries are clearly defined.

  3. Liability for Unpaid Amounts: The defendant was liable for the unpaid P19,300 with legal interest from the respective due dates.

  4. Dismissal of Cross-Complaint: The defendant’s claim for damages was dismissed as there was no evidence of malicious filing by the plaintiff.

Ratio:

  1. Lump Sum Sale: Under Article 1471 of the Civil Code, when real estate is sold for a lump sum and not at a specified price per unit of measure, there is no right to a price increase or decrease based on the actual area. The sale is based on the boundaries, not the area.

  2. No Fraud or Misrepresentation: The defendant had access to documents showing the actual area of the land. Her failure to verify the area was her own responsibility, and the plaintiff did not prevent her from conducting a thorough investigation.

  3. Interest on Unpaid Amounts: The defendant was in default for failing to pay the agreed amounts on the stipulated dates, making her liable for legal interest.

  4. Damages: The defendant’s cross-complaint for damages was dismissed as there was no evidence of malice or bad faith on the plaintiff’s part.


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