Case Summary (G.R. No. L-64143)
Case Background
The petitioner, Premier Insurance & Surety Corporation, filed a petition to review an amended decision rendered by the Court of Appeals, now known as the Intermediate Appellate Court. The central issue involved the liability of Mauro M. Castro under an "Agreement and Statement of Warranties" associated with the sale of a parcel of land, specifically regarding the title's validity. The land in question, a 17,121 square meter lot covered by Transfer Certificate of Title No. 254170 in the name of Sarmiento, was sold to the petitioner at a price of P22.00 per square meter.
Sale Process and Title Verification
As part of the sale process, the petitioner’s board required verification of the property’s legal documents and physical boundaries. Respondent Castro facilitated the sale on behalf of Sarmiento. The petitioner engaged Honorato R. Sta. Maria, a geodetic engineer, to conduct due diligence on the property. Following a satisfactory initial report by the engineer, the deed of sale was executed, and a partial payment was made by issuing checks, pending further verification by the surveyor. Despite initial confidence in the title’s validity, issues arose regarding the ability of Sarmiento to encash the checks due to insufficient funds, leading to a stop payment order.
The Disputed Agreement
The petitioner claimed that under the executed "Agreement and Statement of Warranties," Castro agreed to be jointly and severally liable alongside Sarmiento concerning any issues that might arise from the sale. Upon execution of this agreement, the petitioner made the full payment for the property; however, subsequent transactions revealed that there were competing titles to the same lot, with the trial court later declaring Sarmiento's title null and void and affirming the Almendras' title as valid.
Court of Appeals Findings
The Court of Appeals found Castro not jointly liable with Sarmiento, contending that the agreement did not reflect the true intent of the parties and was more formal than substantial. The petitioner raised multiple assignments of error, arguing that the appellate court erroneously granted reformation of the agreement without the requisite legal basis and misconstrued the intentions behind the agreement.
Examination of Factual Issues
The Supreme Court, in examining the factual issues, affirmed the credibility of evidence presented by the respondent court. Notably, the court confirmed that the petitioner was aware of potential title issues and that the report by the engineer had stated the authenticity of Sarmiento's title, albeit with possible risks of overlapping claims. Castro’s defense posited that the Agreement was merely intended to facilitate the collection of payment by Sarmiento, and could not encompass warranties concerning the title because the property was already covered by a Torrens certificate indicating no disclosed encumbrances.
Legal Principles on Reformation and Intent
In addressing the issues of reformation and intent, the Court underscored that while parol evidence generally cannot alter a
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Case Information
- Court: First Division, Supreme Court of the Philippines
- G.R. No.: 64143
- Date: February 28, 1986
- Petitioner: Premier Insurance & Surety Corporation
- Respondents: Hon. Intermediate Appellate Court and Mauro M. Castro
Background of the Case
- The case revolves around a petition to review an amended decision of the Court of Appeals, now known as the Intermediate Appellate Court.
- The primary issue was the liability of private respondent Mauro Castro in connection with an agreement and statement of warranties executed during the sale of a parcel of land.
- The property in question is a 17,121 square meter lot in Ibayo, Paranaque, with Transfer Certificate of Title No. 254170 in the name of Benjamin R. Sarmiento.
Transaction Details
- The petitioner’s board of directors resolved to purchase the property at P22.00 per square meter, contingent upon verification of legal papers and survey plans.
- The petitioner appointed treasurer Mr. Manuel Chua to negotiate the sale and engaged geodetic engineer Honorato R. Sta. Maria for property verification.
- Respondent Castro represented Sarmiento in the sale, submitting a deed of absolute sale to the petitioner.
- The sale was registered, and a transfer certificate of title was issued in the name of the petitioner, with payment conditions stipulated.
The Agreement and Statement of Warranties
- Castro executed the "Agreement and Statement of Warranties," asserting:
- Sarmiento was the true owner of the property and that it was free from liens.
- Castro h