G.R. No. 169523 - Lima Land, Inc. vs. Cuevas

On March 17, 1975, Lina Calilap-Asmeron (the petitioner) and her brother, Celedonio Calilap, constituted a real estate mortgage over two parcels of land covered by TCT Nos. T-164117 and T-160929 in Bulacan to secure a loan obligation with the Development Bank of the Philippines (DBP).
When the principal obligation remained unpaid, DBP foreclosed the mortgage and subsequently acquired the mortgaged properties as the highest bidder.
The one-year redemption period for the foreclosed properties expired on September 1, 1981.

The petitioner maintained that DBP had accorded her a preferential right to repurchase the property covered by TCT No. T-164117.
In August 1982, she initiated negotiations with DBP, offering a downpayment of ₱15,000.00 to buy back the property; however, an executive officer insisted on a full payment of ₱55,500.00 within ten days.
Believing that one lot would be released after paying two quarterly amortizations on the other lot, she ultimately signed a deed of conditional sale covering both lots for a total of ₱157,000.00.
Despite her repeated requests after paying quarterly amortizations (totaling ₱40,000.00) for the release of the lot covered by TCT No. T-164117, DBP repeatedly denied her request.
On August 7, 1985, DBP unilaterally rescinded the deed of conditional sale, and subsequently, on November 25, 1987, sold the lot covered by TCT No. T-164117 to Pablo Cruz.
Even after the petitioner filed her complaint to annul the sale, respondents Emerenciana Cabantog and Eni S.P. Atienza purchased the property from Cruz, leading to their impleading as additional defendants.

DBP contended that the petitioner’s true intention was to repurchase both lots on an installment basis, a fact duly evidenced by her written communications.
The petitioner sent a letter dated September 14, 1981, expressing her interest to reacquire both properties on installment terms, and followed it with telegrams on September 15, 1981, and November 16, 1981, confirming her intent.
On August 31, 1982, she further reiterated her intention in writing, offering to pay ₱55,500.00 as a downpayment with a five-year quarterly amortization plan for a total of ₱157,000.00.
DBP accepted the offer on September 14, 1982, and accordingly executed the deed of conditional sale on January 21, 1983, incorporating clear payment terms including the amount, interest, and the schedule for amortizations.
Although the petitioner paid the first installment punctually, she later incurred delays and missed six quarterly amortizations.
Following her defaults, DBP, after sending demand letters and telegrams, formally rescinded the deed of conditional sale and applied for a writ of possession on November 17, 1986, which was subsequently granted.

The Regional Trial Court (RTC) in Branch 11, Malolos, Bulacan, dismissed the petitioner’s case on December 28, 1994, holding that her communications clearly indicated her intention to repurchase both lots, and that she had acquiesced to the contractual terms.
The Court of Appeals (CA) affirmed the RTC’s decision on June 21, 2002, ruling that:

DBP validly rescinded the deed of conditional sale pursuant to its stipulations;
The petitioner failed to present sufficient testimonial or documentary evidence to prove she had been misled or that her nonpayment was merely slight; and
The subsequent sales—first to Pablo Cruz and then to Cabantog and Atienza—were valid.

Failing to give due weight to the petitioner’s testimonial evidence alleging that she was misled into signing the deed of conditional sale.
Upholding DBP’s rescission of the conditional sale, notwithstanding the petitioner’s contention that she had already paid around two-thirds (₱100,000.00 out of ₱157,000.00) of the total consideration.

Whether the petitioner was entitled to invoke Article 1332 of the Civil Code in light of her claim that she lacked full understanding of the deed due to her alleged lack of legal and technical knowledge.

Whether DBP validly exercised its contractual right of rescission upon the petitioner’s default in the payment of the quarterly amortizations.

Whether the appeal improperly raised questions of fact rather than strictly questions of law, in contravention of Rule 45 of the Rules of Court.