Case Summary (G.R. No. 139982)
Factual Background
Eligio Herrera, Sr., owner of two contiguous lots in Cainta, sold the first (500 sq m, TD 01-00495) to petitioner for ₱1,000,000 (installments paid November 1990–August 1991), and the second (451 sq m, TD 01-00497) for ₱750,000 on March 12, 1991. Respondent, one of Eligio’s children, claimed (a) prior 1973 sale of TD 01-00497 in his favor, (b) co-ownership in TD 01-00495 as heir of his mother, and (c) that Eligio was incapacitated by senile dementia at time of sale. After failed price-increase negotiations, respondent filed for annulment of sale.
RTC and CA Rulings
The RTC (Nov. 14, 1994) declared both deeds of sale null and void, ordered restitution of properties to respondent and refund of ₱1,750,000 to petitioner, and denied petitioner’s counterclaim. The CA (Aug. 30, 1999) affirmed in toto, sustaining nullity for lack of consent capacity and alleged defects in title transfer.
Issues on Review
The petition for certiorari presented three main grounds:
- Misapplication of the distinction between void and voidable contracts and failure to consider ratification by respondent.
- Erroneous factual and jurisprudential findings on senile dementia.
- Violation of due process in declaring consideration grossly inadequate.
Void Versus Voidable Contracts
Under Civil Code Art. 1409, a void contract lacks one essential requisite or is prohibited by law and cannot be ratified. By contrast, Art. 1390 identifies voidable contracts (e.g., lack of capacity per Art. 1327) that remain binding unless annulled by timely court action and can be ratified, expressly or implicitly, by acceptance of benefits.
Supreme Court’s Legal Analysis
- Capacity and Contractual Effect
• Findings of mental incapacity (senile dementia) render the sales voidable, not void ab initio.
• A demented person’s consent is vitiated (Art. 1327), making the contract annullable (Art. 1390), but valid until annulled. - Ratification by Acceptance of Benefits
• Respondent negotiated price increases while accepting installment payments, evidenced by delay in filing suit and failure to tender back payments.
• Implied ratificat
Case Syllabus (G.R. No. 139982)
Procedural History
- Petition for review on certiorari filed in the Supreme Court from the Court of Appeals decision dated August 30, 1999 in CA-G.R. CV No. 47869
- Court of Appeals affirmed in toto the Regional Trial Court of Antipolo City, Branch 73, decision in Civil Case No. 92-2267
- RTC had declared the deeds of sale null and void and ordered the return of properties and purchase price, and denied petitioner’s counterclaim
Facts
- Eligio Herrera, Sr. owned two parcels of land in Barangay San Andres, Cainta, Rizal (500 sq. m. – TD 01-00495; 451 sq. m. – TD 01-00497)
- On January 3, 1991, petitioner bought the first parcel (TD 01-00495) for P 1,000,000, paid by installments from November 30, 1990 to August 10, 1991
- On March 12, 1991, petitioner bought the second parcel (TD 01-00497) for P 750,000
- Respondent claimed prior sale of the second parcel in his favor in 1973 and co-ownership of the first parcel by heirs of Eligio’s deceased wife
- Respondent alleged that Eligio, Sr. was afflicted with senile dementia at the time of sale and hence incapacitated to consent
- Petitioner pleaded estoppel and ratification, arguing acceptance of installments constituted implied ratification
Issue
- Whether the contracts of sale are void ab initio or merely voidable and thus subject to ratification by acceptance of benefits
Trial Court Decision
- Deeds of sale covering TD Nos. 01-00495 and 01-00497 declared null and void
- Petitioner ordered to return the lots with improvements; respondent to refund P 1,750,000 purchase price
- Costs of suit imposed on petitioner; petitioner’s counterclaim denied