Case Summary (G.R. No. 174118)
Key Dates
September 25, 1992 – Contract to Sell and to Buy executed between the Church and Pante
June 28, 1994 – Sale by the Church to the spouses Rubi covering a larger lot that included the 32-sqm strip
July 30, 1999 – RTC decision annulling sale to Pante and upholding sale to Rubi
May 18, 2006 – Court of Appeals decision reversing the RTC in favor of Pante
April 11, 2012 – Supreme Court decision under review
Applicable Law
1987 Philippine Constitution
Civil Code of the Philippines (Articles 1318–1319 on consent; Article 1331 on mistake; Article 1390 on voidable contracts; Articles 1497–1498 on delivery; Article 1544 on double sales)
Factual Background
The Church owned and sold to Pante a narrow strip of land under a “Contract to Sell and to Buy” fixing a P11,200 purchase price, P1,120 down payment, and a three-year payment period. Unbeknownst to the Church, that strip formed part of a larger lot occupied by the Rubi spouses. After Pante paid in full by consignment in 1995, the Church had already sold the entire lot, including the strip, to the Rubis, who erected a fence blocking Pante’s access.
RTC Ruling on Fraud, Voidability, and Double Sale
The Regional Trial Court found that Pante had misrepresented himself as an actual occupant in bad faith to satisfy the Church’s alleged policy of selling only to residents. Invoking Article 1390 of the Civil Code, the RTC annulled the contract with Pante and upheld the sale to the Rubis. It further held that Pante’s delayed full payment precluded estoppel against the subsequent sale, rendering the Rubis rightful owners.
Court of Appeals on Contract Character and Priority of Possession
The Court of Appeals characterized the transaction as an absolute sale rather than a contract to sell, noting the absence of an ownership reservation and the existence of a repurchase right. It recognized Pante’s consignment as fulfillment of the condition precedent. Applying Article 1544 on double sales, the CA held that, since neither sale was registered, Pante’s prior good-faith possession (use as a passageway since 1963) conferred ownership over the Rubis’ later claim.
Issue of Vitiated Consent and Misrepresentation
The Supreme Court examined whether Pante’s representation of occupancy vitiated the Church’s consent. It emphasized that for mistake or fraud under Articles 1318–1331 to void consent, the error must concern the substance of the thing or a qualification that was the principal cause of the contract. The Court found no credible evidence that actual residency was a strict sale condition, given:
- The lot’s impractical size for habitation,
- A sketch plan labeling the parcel as “Right of Way” under Pante’s name, and
- Clerical awareness and approval of the transaction despite knowledge of the lot’s use as passage.
Accordingly, there was no deliberate misrepresentation by Pante and no vitiation of consent.
Contract Validity and Impact of Delay in Payment
Upon affirming the contract as an absolute sale, the Court held that owners
...continue readingCase Syllabus (G.R. No. 174118)
Procedural History
- The Roman Catholic Church (“Church”) filed a petition for review on certiorari under Rule 45 to set aside the Court of Appeals’ (CA) May 18, 2006 decision and August 11, 2006 resolution in CA-G.R.-CV No. 65069.
- The CA had reversed the Regional Trial Court’s (RTC) July 30, 1999 decision in Civil Case No. 94-3286, Branch 24, RTC of Naga City.
- At the RTC level, Regino Pante sought annulment of the Church’s sale to spouses Rubi over the 32-sqm lot, while the Church counterclaimed to annul its contract with Pante for alleged fraud.
Facts
- The Church owned a 32-square-meter strip of land (2×16 m) in Barangay Dinaga, Canaman, Camarines Sur.
- September 25, 1992: Contract to Sell and to Buy executed between Church and Pante; purchase price ₱11,200 with down payment ₱1,120, balance due by September 25, 1995.
- June 28, 1994: Church sold a 215-sqm lot—including the 32-sqm strip previously sold to Pante—to spouses Nestor and Fidela Rubi, who erected a concrete fence blocking Pante’s access.
- Pante filed an action to annul the sale to the Rubis insofar as it included his strip; Church counterclaimed to annul the sale to Pante for alleged misrepresentation of occupancy.
- Stipulated facts at pre-trial: lot dimensions; sale dates to Pante and to Rubis; Pante’s representation that he was an occupant.
- July 30, 1999 RTC decision: Annulled Church–Pante contract for vitiated consent (fraudulent misrepresentation), upheld sale to Rubis; held Pante’s delayed payment fatal to his title.
- May 18, 2006 CA decision: Reversed RTC; characterized contract as absolute sale, recognized Pante’s valid payment and ownership, applied double-sale rule (Art. 1544) in his favor.
Issues
- Whether the Ch