446 Phil. 133
CARPIO MORALES, J.:
Lot No. 98-A-1 with an area of 92 square m. for FELIX MOLINA;More than four years after petitioner executed the Deed of Sale conveying his share of the property to his sister Felisa or on June 13, 1988, upon the request of Felisa, he executed another Deed of Absolute Sale[6] in lieu of the first covering the same share in favor of Felisa’s son private respondent Margarito Flores and his wife private respondent Nerisa Herrera. The pertinent provisions of the second Deed are reproduced hereunder:
Lot No. 98-A-2 with an area of 92 square m. for PEDRO MOLINA;
Lot No. 98-A-3 with an area of 92 square m. for FELISA MOLINA;
Lot No. 98-A-4 with an area of 92 square m. for TOMAS MOLINA;
Lot No. 98-A-5 with an area of 43 square m. as the RIGHT OF WAY;[5]
TCT No. T-170585[7] in the name of respondent spouses covering petitioner’s share in the co-owned property was accordingly issued.x x x
That the Vendor is the absolute owner in fee simple of a ¼ portion of a parcel of land, situated in the Poblacion, Naic, Cavite, Philippines, known as and more specifically described as follows:x x x
That for and in consideration of the sum of EIGHT THOUSAND PESOS ONLY (P8,000.00) Philippine Currency, receipt of which in full is hereby acknowledged by theVendor from the Vendee, the Vendor hereby sells, transfers and conveys and by these presents have (sic) sold, transferred and conveyed unto the above named Vendee, her (sic) heirs and assigns the (1/4) square meters (sic) portion of the above described parcel of land, free from all kinds of liens and encumbrances whatsoever. (Underscoring supplied).x x x
Wherefore, this Court finds merit in plaintiff’s complaint and hereby orders:Upon recourse to the Court of Appeals, the trial court’s decision was reversed and the complaint of petitioner was dismissed, hence the present petition anchored on the following assigned errors:Plus costs of suit.
- The annulment of the contract, Absolute Deed of Sale dated June 13, 1988 among and between the plaintiff and the defendants which is null and void;
- The cancellation of TCT No. 170585 of the Register of Deeds of Cavite Province at Trece Martires City; and
- The defendants to pay plaintiff reasonable attorney’s fees of P5,000.00.
SO ORDERED.[9]
Petitioner contends that he signed the Deed of Absolute Sale through the misrepresentations of his sister Felisa who made him believe that what he was signing was only a receipt evidencing his indebtedness to her[11] which, by his own admission, he had incurred on several occasions; that Felisa took advantage of his lack of sufficient education and knowledge of English to defraud him into selling his property; and that parol evidence should be admitted to prove the real nature of the transaction which he claims was one of an equitable mortgage.
- RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT HOLDING THAT THE DEED OF SALE DO (sic) NOT EXPRESS THE TRUE INTENT AND AGREEMENT OF THE PARTIES;
- RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT FINDING THE TRANSACTION TO BE AN EQUITABLE MORTGAGE AND NOT A DEED OF SALE AND THEREFORE TRANSCENDS THE CORRECT APPLICATION OF ART. 1602 OF THE CIVIL CODE;
- RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT HOLDING THAT THE ALLEGED SALE WAS NOT A CONSUMATED (sic) CONTRACT OF SALE;
- RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT FINDING THAT THE PETITIONER WAS DEFRAUDED BY FELISA MOLINA IN SIGNING THE SIMULATED AND FICTITIOUS DEED OF SALE.[10]
Art. 1602. The contract shall be presumed to be an equitable mortgage, in any of the following cases:In issue then is whether the parties intended the Deed of Absolute Sale in favor of respondent to be an equitable mortgage.
(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.
In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee as rent or otherwise shall be considered as interest which shall be subject to usury laws (Emphasis supplied).
Art. 1604. The provisions of Article 1602 shall also apply to a contract purporting to be an absolute sale.
That the alleged loan was received in installments of P1,000.00 per month for ten months or a total of P10,000.00 in fact indicates that the transaction was not one of a loan but of sale on installment.
Q: In connection with that issue, do you remember how much you owed your sister?A: Yes, your Honor.Q: How much?A: Ten thousand (P10,000.00) pesos, your Honor.Q: Do you have any copy of that agreement of your loan?A: None, sir.Q: How did you receive that amount of money?A: Little by little, sir. Month by month (buwan buwan), sir.Q: And how long did you receive that amount of ten thousand (P10,000.00) pesos?A: Ten months. Every month, I was allowed to received (sic) P1,000.00.Q: You did not put up any collateral to your loan? Did you?A: None, your Honor. (Emphasis and underscoring supplied).[15]
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.That petitioner, prior to the execution of the impugned Deed, signed receipts identically denominated as “Kasunduan” under which he acknowledged receiving sums of money as payment for his property, which receipts were worded in the vernacular and could not have been mistaken or misunderstood for anything else other than as evidence of the sale of his property, seals the case against him. It confirms this Court’s earlier observation that the transaction indicated was one of sale on installment. Thus each of the receipts – Kasunduan[21] provides:
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.
Ako si PEDRO MOLINA, balo, may sapat na gulang, Pilipino, naninirahan sa Naik, Kabite, ay tumanggap ng halagang one thousand (P1,000) sa aking kapatid na si FELISA S. MOLINA bilang tanda na ipinagbibili ko sa kanya ang aking kaparte sa lupang minana naming sa aming mga magulang, nakilala bilang Lote Numero 98-A na may titulo Numero T-44010 na nasa Kalye ZAMORA NAIK, KABITE, x x xAdditionally, petitioner affixed his signature on the Deed after its contents were sufficiently explained to him in the vernacular, which was witnessed by two other persons of legal age and duly acknowledged before a notary public. Ironically, petitioner’s own witness, Nemecio Molina, who was likewise a witness to the execution of the Deed, belied his claim of having no knowledge of the contents of the subject instrument when he took the witness stand:
More. Another witness to the document, Atty. Edwina Mendoza, testified that prior to the execution of the Deed, the parties thereto approached her “to tell [her] that sometime in the future, they will have to execute a deed of conveyance because they are entering to (sic) this kind of transaction,”[23] adding that when petitioner was informed that he would actually be selling his property, the latter readily acceded.[24]
Q: Now, before the said document was signed by the parties, do you know what was done by the Notary Public, Mariano Villanueva?A: Yes, sir.Q: What was done by Notary Public Mariano Villanueva before the parties signed the document?A: He read the document to Pedro Molina.Q: In what vernacular did Atty. Villanueva use the reading of the document, Tagalog or English?A: In English, your Honor.Q: You mean to say that Notary Public Mariano Villanueva was reading the contents of the sale of the document which is in English?A: Yes, sir.Q: And that is all what (sic) Atty. Villanueva did before he required the parties to sign?A: He told her secretary to translate it in Tagalog.[22] (Underscoring supplied).