Case Summary (G.R. No. 137162)
Key Dates
- April 10, 1990: Contract of Sale executed in favor of Lim
- July 23, 1993: RTC issues partial decision against Baloloy heirs
- September 16, 1994: RTC denies Baloloys’ petition for relief from judgment
- October 26, 1998 & January 11, 1999: CA Decision and Resolution in CA-G.R. CV No. 48282
- January 24, 2007: Supreme Court Decision
Applicable Law
- 1987 Philippine Constitution
- Civil Code of the Philippines (Arts. 1317, 1458–1477, 1592)
- Rules of Court (Rules 18, 38, 45, 129)
Facts
Respondent Lim filed for removal of cloud on title and quieting of title over ten lots, alleging she purchased hereditary shares from petitioner Rubio and the Baloloy heirs under April 10, 1990 contract of sale. She paid a total down payment of ₱552,169.86 but petitioners allegedly refused to deliver individual certificates of title or accept the remaining balance. Rubio purportedly executed a simulated sale in favor of Escueta, creating competing adverse claims.
Procedural History
- Baloloy heirs were declared in default for failure to appear at pre-trial; ex parte evidence led to RTC partial decision (July 23, 1993) ordering them to execute deeds or have the Clerk of Court do so, plus damages and cancellation of adverse claims.
- Baloloys’ petition for relief from judgment (filed July 1994) was denied (September 16, 1994); their appeal to the CA was dismissed.
- RTC on merits dismissed Lim’s complaint against Rubio, Escueta, and the Register of Deeds but ordered Rubio to refund ₱102,169.80 with interest.
- CA affirmed the partial decision but reversed the final RTC decision: it upheld Lim’s contract, directed Rubio to execute an absolute deed on payment of the balance, voided Rubio’s sale to Escueta, and awarded Lim moral damages (₱20,000) and attorney’s fees (₱20,000).
- Petitioners’ motion for reconsideration was denied, leading to this Supreme Court appeal.
Issues
I. Whether the CA erred in denying the Baloloys’ petition for relief from judgment.
II. Whether Rubio is bound by the sale to Lim, whether the contract is a sale or a mere contract to sell, and whether Lim failed her obligations.
III. Validity of the sale between Rubio and Escueta.
IV. Whether the CA erred in dismissing petitioners’ counterclaims.
Supreme Court Ruling
The petition is denied. The Court affirms the CA Decision and Resolution.
Legal Analysis
Pre-trial Default and Relief from Judgment
- Pleadings admissions by Baloloy heirs were conclusive under Rules of Court, Rule 129, Sec. 4.
- Notice of pre-trial to counsel was sufficient; no extrinsic fraud, accident, mistake, or excusable neglect justified relief under Rule 38, Sec. 3.
- The 60-day reglementary period for petitioning relief began upon receipt of the partial decision; petition filed after 90 days.
Agency and Ratification
- Under Civil Code, Art. 1892, a duly appointed agent may name a substitute; Patricia Llamas validly sub-delegated to Virginia Lim.
- Lim’s purchase contract, even if beyond authority, was ratified by Rubio’s encashment of the down-payment check, creating implied agency power (Arts. 1317, 1319).
- Baloloy heirs accepted benefits, invoking estoppel against subsequent repudiation.
Nature of the Contract
- The April 10, 1990 instrument met elements of a sale (Art. 1458): mutual consent, determinate subject matter, certain price.
- No stipulation retained ownership pending full payment; delivery was effected constructively by contract execution and actually by possession and use.
- Earnest money constituted part of the price (Art. 1482) and perfected the contract (Art. 1475).
Torrens Registration and Competing Sales
- Article 1544 protects the first buyer of registered land; respondent’s titl
Case Syllabus (G.R. No. 137162)
Facts
- Rufina Lim bought hereditary shares (10 lots) from Ignacio E. Rubio and the heirs of Luz R. Baloloy (Alejandrino, Bayani, and co-heirs) under a contract of sale dated April 10, 1990.
- Vendors received down payments: ₱102,169.86 from Rubio’s share and ₱450,000 from the Baloloys, with the balance to be paid upon presentation of individual certificates of title.
- Rubio and the Baloloys allegedly refused to deliver their Torrens titles free from liens; Rubio also declined a further ₱100,000 down payment.
- Despite knowledge of respondent’s purchase, Corazon Escueta acquired a simulated deed of sale from Rubio, clouding respondent’s title.
Procedural History
- Trial Court: Baloloys failed to appear at pre-trial and were declared in default; ex parte evidence led to a partial decision (July 23, 1993) ordering the Baloloys to execute deeds of sale or have the clerk do so, plus damages and cancellation of adverse claims.
- Baloloys’ petitions for relief from judgment (July 1994) were denied (September 16, 1994). They appealed to the Court of Appeals.
- Trial on the merits: The trial court dismissed Lim’s complaint against Rubio, Escueta, and the Register of Deeds, but ordered Rubio to return ₱102,169.80 with 6% interest (Decision dated July 23, 1993, and final decision thereafter).
- Court of Appeals (Oct. 26, 1998; Jan. 11, 1999): Affirmed denial of Baloloys’ relief petition; reversed dismissal of respondent’s complaint; upheld validity of Lim’s contract; directed Rubio to execute deed of sale; declared Rubio–Escueta sale void; awarded Lim moral damages (₱20,000) and attorney’s fees (₱20,000).
Issues Presented
- Whether the Court of Appeals erred in denying the Baloloys’ petition for relief from judgment.
- Whether the appellate court erred in reinstating Lim’s complaint and awarding moral damages and attorney’s fees.
- Whether the sale contract between Rubio and Escueta is valid.
- Whether the Court of Appeals erred in dismissing petitioners’ counterclaims.
Petitioners’ Arguments
- The Baloloys were improperly declared in default due to lack of notice, fraud, accident, or excusable neglect; Bayani was abroad and unserved.
- Rubio never contracted with Lim; the Special Power of Attorney was in favor of Patricia Llamas, no