Case Digest (G.R. No. 167874)
Facts:
In May 1992, Danilo R. Napala offered to purchase from Spouses Carmen S. Tongson and Jose C. Tongson a 364-square meter parcel of land in Davao City (TCT No. 143020) for ₱3,000,000, leading to a Memorandum of Agreement dated 8 May 1992. On 2 December 1992, a Deed of Absolute Sale prepared by Napala’s counsel indicated a consideration of only ₱400,000, prompting Mrs. Tongson’s protest. Napala assured her he would pay all taxes so that the net amount of ₱3,000,000 would reach the sellers. To match the deed, the parties executed a second memorandum reflecting the ₱400,000 price. Upon signing, Napala paid ₱200,000 in cash and delivered a post-dated Philippine National Bank check for ₱2,800,000, after which TCT No. 143020 was cancelled in favor of Emergency Pawnshop Bula, Inc. (EPBI). When the check was dishonored for “insufficient funds,” repeated demands by the Spouses Tongson for payment or reconveyance went unheeded. Consequently, they filed a Complaint for Annulment of ContractCase Digest (G.R. No. 167874)
Facts:
- Parties and Property
- Spouses Carmen S. Tongson and Jose C. Tongson (later substituted by their children) owned a 364-sqm lot in Davao City covered by TCT No. 143020.
- Emergency Pawnshop Bula, Inc. (EPBI), represented by Danilo R. Napala, offered to purchase the lot for ₱3,000,000 in May 1992.
- Memoranda of Agreement and Deed of Sale
- On 8 May 1992, the parties executed a Memorandum of Agreement stating a ₱3,000,000 selling price (Exhibit “B”).
- On 2 December 1992, a Deed of Absolute Sale was prepared indicating a consideration of only ₱400,000 (Exhibit “C”).
- A second Memorandum of Agreement was executed to “jibe” the selling price in the deed with ₱400,000.
- Payment and Transfer of Title
- Upon signing the Deed of Absolute Sale, Napala paid ₱200,000 in cash and issued a post-dated Philippine National Bank check for ₱2,800,000 (Exhibit “D”).
- TCT No. 143020 was canceled and TCT No. T-186128 issued in the name of EPBI (Exhibit “F”).
- Dishonor of Check and Judicial Proceedings
- The PNB check was dishonored due to “insufficient funds.”
- On 11 February 1993, the Spouses Tongson filed a Complaint for Annulment of Contract and Damages, praying also for temporary and preliminary injunctions (Regional Trial Court, Davao City, Civil Case No. 21,858-93).
- Respondents answered, alleging valid delivery of the ₱2,800,000 check evidenced by a Spouses Tongson receipt and claiming no basis for the complaint.
- At pre-trial, Napala admitted issuing the check; the Spouses Tongson admitted receipting it. Trial ensued.
Issues:
- Whether the contract of sale can be annulled based on the fraud employed by Napala.
- Whether the Court of Appeals erred in reducing the amount of damages awarded by the trial court.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)