Case Summary (G.R. No. 195163)
Facts and Procedural Posture
The two parcels, one hectare and 3.0880 hectares respectively, were mortgaged to DBP by Victorino and Francisco Nool. Plaintiffs obtained a loan secured by these lands; failure to pay led to foreclosure and titles transferring to DBP. Within the redemption period, defendants Anacleto Nool redeemed the properties from DBP and obtained new titles. An alleged agreement was made where defendants purchased the parcels from petitioner Conchita Nool for P100,000, with P30,000 paid and P14,000 balance due, accompanied by an understanding that plaintiffs could repurchase the land later. Plaintiffs filed suit to enforce their right to repurchase; lower courts dismissed the complaint and ordered plaintiffs to return the P30,000 plus interest and pay rent for the land.
Issues Presented
- Whether the private documents evidencing sale (Exhibit C) and repurchase (Exhibit D) constitute valid and enforceable contracts.
- Whether plaintiffs’ possession and use of the land entitle them to demand the return of the property or prevent defendants from denying the sale agreement under the doctrine of estoppel.
- Whether ordering the return of P30,000.00 with interest and payment of rent to defendants is proper.
Validity and Enforceability of the Contracts of Sale and Repurchase
The Court held that the contracts were void ab initio because the sellers (petitioners) had no ownership or right to convey title to the land at the time of sale. Under the 1987 Philippine Constitution and the Civil Code, one cannot sell what one does not own nor repurchase what was not validly sold. The land had already legally changed ownership to DBP following the foreclosure and redemption period had expired. Subsequent sale by petitioners to defendants was thus inoperative and falls within Article 1409(5) of the Civil Code concerning contracts contemplating impossible services.
Regarding the contract of repurchase, the Court clarified that it is inherently dependent on the validity of the original sale contract and hence also void. Should it be considered a separate unilateral promise to sell, it still fails for want of consideration distinct from the price, thereby rendering it unenforceable pursuant to Article 1479 of the Civil Code. Jurisprudence establishes that a right to repurchase must be reserved in the original sale contract, not granted post-sale by a separate agreement.
Acquisition of Title by Respondent Anacleto Nool
The respondents lawfully acquired the disputed properties from DBP following foreclosure and redemption expiration. The Court underscored that the repurchase right allegedly reserved by petitioners is extinguished by the lawful acquisition of title by Anacleto Nool from DBP. The statutory right under Section 119 of the Public Land Act allowing repurchase by heirs within five years is considered fulfilled as the property remained within the family through Anacleto’s purchase. The alleged trust relation between siblings was not proven, and the sale from DBP was not in trust but an ordinary sale.
Non-Applicability of Estoppel Against the Respondents
The Court rejected petitioners’ argument that respondents are estopped from denying the sale or repurchase agreements due to prior possession and cultivation by petitioners. A contract void from the beginning cannot be validated by estoppel or ratification. Furthermore, the respondents acted in good faith and promptly asserted the nullity of the invalid contracts. Article 1410 of the Civil Code allows the defense of inexistence of contract to be raised at any time.
Return of Payments and Payment of Rents
Since the contract of sale
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Background and Procedural History
- The case involves a dispute over two parcels of land situated in San Manuel, Isabela, covered by Transfer Certificates of Title Nos. T-74950 and T-100945.
- Petitioners, spouses Conchita Nool and Gaudencio Almojera, claimed ownership by purchase from other siblings, Victorino and Francisco Nool.
- The parcels were mortgaged to the Development Bank of the Philippines (DBP) to secure a loan which the petitioners failed to pay, resulting in foreclosure and DBP acquiring ownership after redemption period lapsed.
- Defendants, Anacleto Nool (Conchita’s younger brother) and Emilia Nebre, purchased the foreclosed properties from DBP and secured new titles.
- Petitioners alleged an agreement with defendants to sell the land for P100,000, with P30,000 paid and awaiting the balance of P14,000, allowing them to repurchase and regain possession.
- Petitioners sought enforcement of this contract and return of land; defendants denied ownership rights and challenged the validity of the agreements.
- Trial court dismissed the complaint for lack of cause of action, ruling Exhibits C and D as non-binding option to sell and void for lack of consideration.
- Court of Appeals affirmed the trial court decision; petitioners filed petition for review on certiorari to the Supreme Court.
Issues Presented
- Whether Exhibits C ("Resibo ti Katulagan") and D ("Kasuratan") constitute a valid and enforceable contract of sale and repurchase.
- Whether the possession and cultivation of the land by petitioners imposed any binding obligation on defendants.
- Whether petitioners have the right to recover the land upon payment of the balance or to repurchase it.
- Whether petitioners are estopped from denying the invalidity of the contracts.
- Whether petitioners should be ordered to return the P30,000 payment with interest and pay rents on the land.
Facts Summary
- Two parcels of land with respective sizes of 1 hectare and 3.0880 hectares formerly owned by Victorino and Francisco Nool.
- Petitioners secured a loan from DBP using the land as mortgage; upon default, land was foreclosed and title transferred to DBP.
- Anacleto Nool bought the parcels from DBP through a deed of conditional sale dated April 1, 1985, receiving new titles in 1988.
- Petitioners and defendants executed two private documents on November 30, 1984: Exhibit C (recording sale and partial payment) and Exhibit D (an alleged agreement allowing repurchase by petitioners).
- Defendants paid P30,000 but did not complete balance payment of P14,000.
- Petitioners demanded return of land citing right of repurchase; defendants refused, leading to litigation.
Court's Ruling on Validity of Sale and Repurchase Contracts
- The Court ruled both Exhibits C and D void and inexistent from inception because the sellers (petitioners) did not have title to sell the land at the time of the alleged sale.
- The contractual principle relies on ownership or valid authorization to sell property under Articles 1459 and 1505 of the Civil Code.
- A sale of immova