Title
Dailisan vs. Court of Appeals
Case
G.R. No. 176448
Decision Date
Jul 28, 2008
Petitioner claimed ownership of 1/4 lot via valid deed of sale; respondents contested consent. SC upheld deed's validity, ruled partition proper, and ordered title issuance.

Case Digest (G.R. No. 176448)

Facts:

  • Background and Parties
    • Petitioner, Jose S. Dailisan, filed a partition action against respondents, the heirs of the "late" Federico Pugao, including Florentina Pugao, Florida Pugao-Ubaldo, Fe Pugao-Villanueva, Fernando Pugao, and Ludovico Pugao.
    • The dispute centers on the subject property identified as Lot 16, Block NB 22 of subdivision Psd-57020, located in Bago Bantay, Quezon City, covered by Transfer Certificate of Title No. 75133.
  • Transaction History and Agreements
    • Initially, petitioner and Federico Pugao agreed on the sale of one-half of the lot for ₱12,000.00.
      • Petitioner paid several installments from 1976 to 1979 totaling ₱6,000.00.
      • Federico subsequently informed him that only one-fourth of the property could be sold.
    • Due to an existing mortgage with a bank on the property, Federico was unable to deliver the title.
      • When the mortgage was released, the parties executed a deed of absolute sale on February 5, 1979.
      • Prior to that, a deed of real estate mortgage was executed as security for a ₱10,000.00 loan, which petitioner eventually paid.
  • Subsequent Developments Leading to Litigation
    • Petitioner, seeking the partition of the lot to clarify ownership, initiated an action before the RTC of Quezon City on July 8, 1993.
      • He also caused a resurvey of the property in order to facilitate the partition.
    • Federico, however, continued to resist the partition, even filing a notice of eviction against petitioner.
      • Federico claimed that petitioner was merely the husband of his niece and used the argument that he had allowed occupancy on compassionate grounds after the demolition of the couple’s house during martial law.
      • Federico further contended that the deed of absolute sale was not voluntarily executed; he alleged that in January 1992, while seriously ill, he was induced by petitioner and an attorney (Atty. Juanitas) to sign pages purporting to be part of a real estate mortgage, not a sale.
    • Federico filed a complaint for falsification and ejectment before the barangay, though without subsequent formal court action due to his failing health.
    • Federico’s death led to his substitution by his heirs (the respondents) in the ongoing case.
  • Court Proceedings and Decisions
    • The RTC of Quezon City, Branch 88 (later raffled to Branch 98), ruled in favor of petitioner on September 3, 2003.
      • The decision ordered the partition of the subject property.
      • Additional orders included the execution of necessary documents, issuance of separate TCT, award of moral and exemplary damages, and payment of attorney’s fees and costs.
    • Respondents moved for reconsideration, which was denied in January 2004.
    • Respondents appealed the RTC decision to the Court of Appeals.
      • The Court of Appeals reversed the RTC decision, holding that petitioner's action was actually for specific performance and that the deed of absolute sale was fictitious and invalid.
      • The CA noted that petitioner’s cause of action, being one for specific performance, had prescribed, and that no timely annulment of the deed was pursued by the respondents.
    • Petitioner raised arguments that his action was inherently for specific performance to compel delivery of title, contending that ownership had already passed through the execution of the deed.
  • Legislative and Contractual Considerations
    • The notarized deed of absolute sale, being a public instrument, carried the presumption of regularity.
    • Distinctions between void, voidable, and annullable contracts were central, especially regarding consent, mistake, or fraud.
      • Article 1332 of the Civil Code was cited regarding the need for full explanation of contract terms when one party cannot read or understand the language.
    • The proper cause of action for partition was emphasized by the fact that as a co-owner of undivided property, petitioner maintained the right to demand partition, a right which does not prescribe.
    • The principle under Article 1498 was applied, holding that when a sale is executed through a public instrument, it is equivalent to delivery unless the deed clearly states otherwise.

Issues:

  • Validity of the Deed of Absolute Sale
    • Whether the deed of absolute sale executed between Federico and petitioner is valid.
      • Consideration of allegations that Federico’s consent was vitiated by mistake or fraud due to his inability to understand English.
      • Examination of whether petitioner sufficiently explained the terms of the deed as required by Article 1332 of the Civil Code.
    • Whether the deed, a notarized public document presumed regular and valid, can be rebutted by evidence that is clear, strong, and convincing.
  • Prescription and Cause of Action
    • Determination of the prescriptive period applicable to petitioner’s action.
      • The contention by the CA that petitioner’s real cause of action, being one for specific performance, has prescribed.
    • Whether petitioner’s action for partition, which also serves as an action for specific performance as it seeks delivery of title through partition, is timely and outside the ambit of prescription.
    • The significance of respondents not filing a timely action to annul the deed of absolute sale within the "four (4)-year period" provided by law.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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