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cralawThis is an
appeal by certiorari
to annul and set aside the Decision and Resolution of
the Court of Appeals (CA)
cralawThe facts appear as follows:
cralawRespondent Rufina Lim filed an
action to remove cloud on, or quiet title to, real property, with preliminary
injunction and issuance of [a hold-departure order] from the
cralawIn her amended complaint, respondent
averred inter alia that she bought
the hereditary shares (consisting of 10 lots) of Ignacio Rubio [and] the heirs
of Luz Baloloy, namely: Alejandrino, Bayani, and other co-heirs; that said
vendors executed a contract of sale dated April 10, 1990 in her favor; that
Ignacio Rubio and the heirs of Luz Baloloy received [a down payment] or earnest
money in the amount of
cralawAs to petitioner Corazon Escueta, in spite of her knowledge that the disputed lots have already been sold by Ignacio Rubio to respondent, it is alleged that a simulated deed of sale involving said lots was effected by Ignacio Rubio in her favor; and that the simulated deed of sale by Rubio to Escueta has raised doubts and clouds over respondents title.
cralawIn their separate amended answers, petitioners denied the material allegations of the complaint and alleged inter alia the following:
cralawFor the heirs of Luz Baloloy (Baloloys for brevity):
cralawRespondent has no cause of action, because the subject contract of sale has no more force and effect as far as the Baloloys are concerned, since they have withdrawn their offer to sell for the reason that respondent failed to pay the balance of the purchase price as orally promised on or before May 1, 1990.
cralawFor petitioners Ignacio Rubio (Rubio for brevity) and Corazon Escueta (Escueta for brevity):
cralawRespondent has no cause of action,
because Rubio has not entered into a contract of sale with her; that he has
appointed his daughter Patricia Llamas to be his attorney-in-fact and not in
favor of Virginia Rubio Laygo Lim (Lim for brevity) who was the one who
represented him in the sale of the disputed lots in favor of respondent; that
cralawThe Baloloys failed to appear at the
pre-trial.Upon motion of respondent,
the trial court declared the Baloloys in default.They then filed a motion to lift the order
declaring them in default, which was denied by the trial court in an order
cralawIN VIEW OF THE FOREGOING, judgment
is hereby rendered in favor of [respondent] and against [petitioners, heirs] of
Luz R. Balolo[y], namely: Alejandrino Baloloy and Bayani Baloloy.The [petitioners] Alejandrino Baloloy and
Bayani Baloloy are ordered to immediately execute an [Absolute] Deed of Sale
over their hereditary share in the properties covered by TCT No. 74392 and TCT
No. 74394, after payment to them by [respondent] the amount of
cralawWith costs against [petitioners] Alejandrino Baloloy and Bayani Baloloy.
cralawThe Baloloys filed a petition for relief
from judgment and order dated
cralawTrial on the merits ensued between respondent and Rubio and Escueta.After trial, the trial court rendered its assailed Decision, as follows:
IN VIEW OF THE FOREGOING, the complaint [and] amended complaint are dismissed
Corazon L. Escueta, Ignacio
E. Rubio[,] and the Register of Deeds.The counterclaim of [petitioners] [is] also dismissed.However, [petitioner] Ignacio E. Rubio is ordered to return to the [respondent], Rufina Lim[,] the amount of
cralawOn appeal, the CA affirmed the trial courts order and partial decision, but reversed the later decision. The dispositive portion of its assailed Decision reads:
cralawWHEREFORE, upon all the foregoing premises considered, this Court rules:
1. cralawthe appeal of the Baloloys from the Order denying the
Petition for Relief from Judgment and Orders dated
2. cralawthe Decision dismissing [respondents] complaint is REVERSED and SET ASIDE and a new one is entered.Accordingly,
a. cralawthe validity of the subject contract of sale in favor of [respondent] is upheld.
b. cralawRubio is directed to execute a Deed of Absolute Sale conditioned upon the payment of the balance of the purchase price by [respondent] within 30 days from the receipt of the entry of judgment of this Decision.
c. cralawthe contracts of sale between Rubio and Escueta involving Rubios share in the disputed properties is declared NULL and VOID.
d. cralawRubio and Escueta are ordered to pay jointly and
the amount of
3. cralawthe appeal of Rubio and Escueta on the denial of their counterclaim is DISMISSED.
cralawPetitioners Motion for Reconsideration of the CA Decision was denied.Hence, this petition.
cralawThe issues are:
THE HONORABLE COURT OF APPEALS ERRED IN DENYING THE PETITION FOR RELIEF FROM JUDGMENT FILED BY THE BALOLOYS.
THE HONORABLE COURT OF APPEALS ERRED IN REINSTATING THE COMPLAINT AND IN AWARDING MORAL DAMAGES AND ATTORNEYS FEES IN FAVOR OF RESPONDENT RUFINA L. LIM CONSIDERING THAT:
E. RUBIO IS NOT BOUND BY THE CONTRACT OF
CONTRACT ENTERED INTO BETWEEN RUFINA LIM AND VIRGINIA LAYGO-LIM IS A CONTRACT
TO SELL AND NOT A CONTRACT OF
C. RUFINA LIM FAILED TO FAITHFULLY COMPLY WITH HER OBLIGATIONS UNDER THE CONTRACT TO SELL THEREBY WARRANTING THE CANCELLATION THEREOF.
L. ESCUETA ACTED IN UTMOST GOOD FAITH IN ENTERING INTO THE CONTRACT OF
THE CONTRACT OF
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING PETITIONERS COUNTERCLAIMS.
cralawBriefly, the issue is whether the contract of sale between petitioners and respondent is valid.
cralawPetitioners argue, as follows:
cralawFirst, the CA did not consider the circumstances surrounding petitioners failure to appear at the pre-trial and to file the petition for relief on time.
to the failure to appear at the pre-trial, there was fraud, accident and/or
excusable neglect, because petitioner Bayani was in the
cralawFurthermore, petitioner Alejandrino was not clothed with a power of attorney to appear on behalf of Bayani at the pre-trial conference.
cralawSecond, the sale by
with an assumed agent, respondent should ascertain not only the fact of agency,
but also the nature and extent of the formers authority.Besides,
cralawThe amount encashed by Rubio represented not the down payment, but the payment of respondents debt.His acceptance and encashment of the check was not a ratification of the contract of sale.
cralawThird, the contract between respondent
cralawFourth, Respondent failed to faithfully fulfill her part of the obligation.Thus, Rubio had the right to sell his
properties to Escueta who exercised due diligence in ascertaining ownership of
the properties sold to her.Besides, a
purchaser need not inquire beyond what appears in a
cralawThe petition lacks merit.The contract of sale between petitioners and respondent is valid.
cralawBayani Baloloy was represented by his attorney-in-fact, Alejandrino Baloloy.In the Baloloys answer to the original complaint and amended complaint, the allegations relating to the personal circumstances of the Baloloys are clearly admitted.
cralawAn admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof.Thefactual admission in the pleadings on record [dispenses] with the need x x x to present evidence to prove the admitted fact.It cannot, therefore,be controverted by theparty making such admission, and [is] conclusive as to them.All proofs submitted by them contrary thereto or inconsistent therewith should be ignored whether objection is interposed by a party or not.Besides, there is no showing that a palpable mistake has been committed in their admission or that no admission has been made by them.
cralawPre-trial is mandatory.The notices of pre-trial had been sent to both the Baloloys and their former counsel of record.Being served with notice, he is charged with the duty of notifying the party represented by him.He must see to it that his client receives such notice and attends the pre-trial.What the Baloloys and their former counsel have alleged instead in their Motion to Lift Order of As In Default dated December 11, 1991 is the belated receipt of Bayani Baloloys special power of attorney in favor of their former counsel, not that they have not received the notice or been informed of the scheduled pre-trial.Not having raisedthe ground of lack of a special power of attorneyin their motion, they are now deemed to have waived it.Certainly, they cannot raise it at this late stage of the proceedings.For lack of representation, Bayani Baloloywas properly declared in default.
cralawSection 3 of Rule 38 of the Rules of Court states:
cralawSEC. 3.Time for filing petition; contents and verification. A petition provided for in either of the preceding sections of this Rule must be verified, filed within sixty (60) days after the petitioner learns of the judgment, final order, or other proceeding to be set aside, and not more than six (6) months after such judgment or final order was entered, or such proceeding was taken; and must be accompanied with affidavits showing the fraud, accident, mistake, or excusable negligence relied upon, and the facts constituting the petitioners good and substantial cause of action or defense, as the case may be.
cralawThere is no reason for the Baloloys to ignore the effects of the above-cited rule.The 60-day period is reckoned from the time the party acquired knowledge of the order, judgment or proceedings and not from the date he actually read the same.As aptly put by the appellate court:
evidence on record as far as this issue is concerned shows that Atty. Arsenio Villalon, Jr., the former counsel of
record of the Baloloys received a copy of the partial decision dated
apparently in an attempt to cure the lapse of the aforesaid reglementary period
to file a petition for relief from judgment[,]
included in its petition the two Orders dated
cralawFurthermore, no fraud, accident, mistake, or excusable negligence exists in order that the petition for relief may be granted.There is no proof of extrinsic fraud that prevents a party from having a trial x x x or from presenting all of his case to the courtor anaccident x x x which ordinary prudence could not have guarded against, and by reason of which the party applying has probably been impaired in his rights.There is also no proof of either amistake x x x of laworan excusable negligence caused by failure to receive notice of x x x the trial x x x that it would not be necessary for him to take an active part in the case x x x by relying on another person to attend to the case for him, when such other person x x x was chargeable with that duty x x x, or by other circumstances not involving fault of the moving party.
cralawArticle 1892 of the Civil Code provides:
cralawArt. 1892. The agent may appoint a substitute if the principal has not prohibited him from doing so; but he shall be responsible for the acts of the substitute:
cralaw(1) When he was not given the power to appoint one x x x.
cralawApplying the above-quoted provision to the special power of attorney executed by Ignacio Rubio in favor of his daughter Patricia Llamas, it is clear that she is not prohibited from appointing a substitute.By authorizing Virginia Lim to sell the subject properties, Patricia merely acted within the limits of the authority given by her father, butshe will have to be responsible for the acts of the sub-agent, among which is precisely the sale of the subject properties in favor of respondent.
cralawEven assuming that Virginia Lim has no authority to sell the subject properties, the contract she executed in favor of respondent is not void, but simply unenforceable, under the second paragraph of Article 1317 of the Civil Code which reads:
cralawArt. 1317. x x x
A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party.
cralawIgnacio Rubio merely denies the contract of sale.He claims, without substantiation, that what he received was a loan, not the down payment for the sale of the subject properties.His acceptance and encashment of the check, however, constitute ratification of the contract of sale andproduce the effects of an express power of agency.[H]is action necessarily implies that he waived his right of action to avoid the contract, and, consequently, it also implies the tacit, if not express, confirmation of the said sale effected by Virginia Lim in favor of respondent.
cralawSimilarly, the Baloloys have ratified the contract of sale when they accepted and enjoyed its benefits.The doctrine of estoppel applicable to petitioners here is not only that which prohibits a party from assuming inconsistent positions, based on the principle of election, but that which precludes him from repudiating an obligation voluntarily assumed after having accepted benefits therefrom. To countenance such repudiation would be contrary to equity, and would put a premium on fraud or misrepresentation.
cralawIndeed, Virginia Lim and respondent haveentered into a contract of sale.Not only has the title to the subject properties passed to the latter upon delivery of the thing sold, but there is also no stipulation in the contract that states the ownership is to be reserved in or retained by the vendor until full payment of the price.
1544 of the Civil Code, a second
buyer of the property who may have had actual or constructive knowledge
of such defect in the sellers title, or at least was
charged with the obligation to discover such
defect, cannot be a registrant in good faith. Such second
buyer cannot defeat the first buyers
case a title is issued to the second buyer, the first buyer may seek
reconveyance of the property subject of the sale.Even the argument that a purchaser need not inquire beyond
what appears in a
cralawNothing in the contract prevents the obligation of the vendor to convey title from becoming effective or gives the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period.Petitioners themselves have failed to deliver their individual certificates of title, for which reason it is obvious that respondent cannot be expected to pay the stipulated taxes, fees, and expenses.
cralaw[A]ll the elements of a valid contract of saleunder Article 1458 of the Civil Code are present, such as: (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent.Ignacio Rubio, the Baloloys, and their co-heirs sold their hereditary shares for a price certain to which respondent agreed to buy and pay for the subject properties.The offer and the acceptance are concurrent, since the minds of the contracting parties meet in the terms of the agreement.
cralawIn fact, earnest money has been given by respondent.[I]t shall be considered as part of the price and as proof of the perfection of the contract.It constitutes an advance payment to be deducted from the total price.
cralawArticle 1477 of the same Code also states that [t]he ownership of the thing sold shall be transferred to the vendee upon actual or constructive delivery thereof.In the present case, there is actual delivery as manifested by acts simultaneous with and subsequent to the contract of sale when respondent not only took possession of the subject properties but also allowed their use as parking terminal for jeepneys and buses.Moreover, the execution itself of the contract of sale is constructive delivery.
cralawConsequently, Ignacio Rubio could no longer sell the subject properties to Corazon Escueta, after having sold them to respondent.[I]n a contract of sale, the vendor loses ownership over the property and cannot recover it until and unless the contract is resolved or rescinded x x x.The records do not show that Ignacio Rubio asked for a rescission of the contract.What he adduced was a belated revocation of the special power of attorney he executed in favor of Patricia Llamas.In the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the time agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the contract has been made upon him either judicially or by a notarial act.
cralawWHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 48282, dated
ADOLFO S. AZCUNA
REYNATO S. PUNO
ANGELINA SANDOVAL-GUTIERREZRENATO C. CORONA
Associate JusticeAssociate Justice
CANCIO C. GARCIA
cralawPursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
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