529 Phil. 43
GARCIA, J.:
WHEREFORE, by preponderance of evidence, judgment is hereby rendered declaring the contract of sale of the fishpond property entered into by and between Sps. Francisco Magno and Antusa de Mesa Magno and Continent Japan Co. Inc. represented by Alenita Ishida annulled. Defendants are ordered to return to plaintiff the amount of Four Million Five Hundred Thousand (P4,500,000.00) Pesos plus interest at the rate of 12% per annum from August 1, 1987 until fully paid. The titles over the property subject of the sale having been registered back to the name of defendants/vendors, the plaintiff is under no obligation to restore anything to the defendant.Therefrom, the respondents went on appeal to the CA in CA-G.R. CV No. 441550. As stated at the threshold hereof, the appellate court, in its Decision[6] dated October 15, 1996, reversed that of the RTC and dismissed the petitioners' complaint, to wit:
Further, defendant is hereby ordered to pay plaintiff the following:SO ORDERED.
- The amount of One Hundred Thousand (P100,000.00) or actual and moral damages;
- The amount of Fifty (P50,000.00) Thousand Pesos as attorney's fees, and
- Costs of suit.
WHEREFORE, premises considered, the appeal is GRANTED. The decision appealed from is hereby REVERSED and SET ASIDE and new judgment is hereby rendered DISMISSING the complaint.Their motion for reconsideration having been denied by the CA in its equally challenged Resolution[7] of October 28, 1998, petitioners are now with this Court via the present recourse, arguing that the CA acted with patent grave abuse of discretion -
Counter-claim is likewise DISMISSED.
Costs against plaintiff-appellees.
SO ORDERED.
I
Clear it is from the above that petitioners never asked for the annulment of the contract of sale with mortgage. For sure, the reliefs prayed for are even inconsistent with what the trial court decreed, i.e., annulment of the parties' basic contract. The Court, as did the CA before it, is thus at a loss to understand why the trial court, instead of focusing itself to the reliefs sought by the petitioners, proceeded to annul the basic contract itself, a course of action which, to stress, is even inconsistent with the very existence of the contract from whence the reliefs asked merely sprung. As aptly pointed out by the CA in the decision under review:
- to effect the transfer of the titles over the property to Continent Japan Co., Inc. and to deliver the same;
- to pay actual damages in the amount of One Million Five Hundred (P1,500,000.00) Pesos which was sustained by plaintiffs due to the failure by defendants to immediately effect the transfer and delivery of the titles over the land, causing the former's financial partners to withdraw their financial commitments;
- to restore of the piggery property or in the alternative, the reduction of the consideration in the amount of Three Hundred Fifty Thousand (P350,000.00) Pesos;
- to compensate the plaintiffs in the amount of One Hundred Thousand (P100,000.00) Pesos for the fruits harvested from the property as well as the fixtures removed from the property bought;
- to compensate the plaintiffs in the amount of One Million (P1,000,000.00) Pesos for the difference in the actual number of prawns harvested from the fishpond;
- to compensate Elenita Ishida the amount of Two Hundred Fifty Thousand (P250,000.00) Pesos as and by was of moral damages;
- to pay exemplary damages in the amount of Two Hundred Fifty Thousand (P250,000.00) Pesos;
- to pay attorney's fees in the amount of Two Hundred Fifty Thousand (P250,000.00) Pesos; and
- to pay the costs of suit.
A careful perusal of the complaint will show as clearly appearing in the discussion of the facts of the case that nowhere in its prayer nor in the body of the complaint did [petitioners] ask for the annulment of the contract of sale with the [respondents]. Evidence is wanting for such a relief to be granted. (Words in brackets supplied).Evidently, in veering away from what the complaint prayed for, the trial court was of the view that there was no meeting of the minds of the parties vis a vis their Deed of Sale with Mortgage. In the words of the trial court, "[E]vident is the existence of the documents executed prior to, at the time or subsequent to the alleged transaction and agreement to sell and to buy the subject property."
It is error for the court a quo to hold that there was no meeting of the minds between the parties. It must be borne in mind that the principal object of the contract of sale with mortgage are the three adjoining parcels of land, and that the confusion as to the exclusion of the piggery as well as the fruits harvested does not warrant the annulment of the contract. They are merely incidental to the contract.This brings us to petitioners' second submission that the CA committed grave abuse of discretion in failing to rule that their complaint was not rendered moot and academic by the foreclosure proceedings and the resulting consolidation of titles over the mortgaged assets in the names of the respondents. Put differently but with the same sense, it is petitioners' contention that despite the foreclosure proceedings and the consolidation of titles in respondents' name, the viability of their complaint was never affected.
To warrant a declaration of nullity of the contract, the doubts or obscurities must be cast upon the principal object of the contract (which in this case are three parcels of land) in such a way that the true intention of the parties cannot be known . Par. 2, Art. 1378 of the Civil Code provides:xxx xxx xxxIf the doubts are cast upon the principal object of the contract in such a way that it cannot be known what may have been the intention or will of the parties, the contract shall be null and void.If the doubt refers to the incidental circumstances of an onerous contract, the doubt shall be settled in favor of the greatest reciprocity. For this purpose, par. 1 of the abovecited articles provides:When it is absolutely impossible to settle doubts by the rules established in the preceding articles, and the doubts refer to incidental circumstances of a gratuitous contract, the least transmission of rights and interests shall prevail. If the contract is onerous, the doubt shall be settled in favor of the greatest reciprocity of interest.Such a confusion merely led to the failure of the parties to express in the contract the true intention of their agreement, the proper remedy of which is reformation of the contact under Chapter 4, Title 2, Book IV (Obligations and Contracts) of the Civil Code.
xxx To ask for the annulment or rescission of the transaction between the parties at this time will be iniquitous considering that [petitioners] had a hand in the delay in the transfer of the titles to the properties in the name of the [petitioner] Continent Japan Co. Besides, as [respondent] correctly pointed out, no evidence was adduced during the proceedings before the trial court tending to prove that [petitioners] are entitled to the annulment of the contract between them as a relief.[9]With the view we take of this case, we find it unnecessary to address petitioners' third lament.