Professional Documents
Culture Documents
Katipunan vs. Katipunan, Jr. G.R. No. 132415, January 30, 2002
Katipunan vs. Katipunan, Jr. G.R. No. 132415, January 30, 2002
equitably possible---this much is dictated by Art. 1398 provides that when the
defect of the contract consists in the incapacity of one of the parties, the
incapacitated person is not obliged to make any restitution, except when he has
been benefited by the things or price received by him.
Thus, since the Deed of
Absolute Sale between respondent and Balguma brothers is voidable and hereby
annulled, then the restitution of the property and its fruits to respondent is just and
proper.
DANDAN VS. ARFEL REALTY & MANAGEMENT CORP.
Facts: On 7 March 1992, Arfel Realty, represented by its president and general
manager Rafael Felix, sold to Dandan a parcel of land covered by Transfer
Certificate of Title No. T-10527 and designated as Lot 3 Block 16 situated in Barrio
Pamplona, Las Pias, Metro Manila for the price of P320,000.00. The sale is
evidenced by a Deed of Absolute Sale.
The lot was previously the subject of a Contract to Sell executed between Arfel
Realty and the spouses Emerita and Carlito Sauro (the Sauros). Under this contract,
the Sauros undertook to pay the purchase price of P690,000.00, with a 50% down
payment of P345,000.00 and the balance payable in sixty (60) equal installments of
P9,528.52 including interest of 22% per annum. While the Sauros claimed to have
fully paid for the subject lot in the total amount of P799,601.59 and demanded the
delivery of title, Arfel Realty asserted that the several checks drawn by the Sauros
to effect payment were either dishonored by the bank due to insufficiency of funds
or were drawn against a closed account. Thus, the Sauros allegedly still had an
unpaid balance of P299,614.23.
According to Arfel Realty, Dandan was made aware of its previous transaction with
the Sauros. On 10 April 1992, a Memorandum of Agreement (the Agreement) was
executed between Arfel Realty and Dandan with the consideration representing the
balance due to Arfel Realty from the previous sale to the Sauros. The Agreement,
bound Dandan to assume all liabilities arising from the Deed of Absolute Sale and
held Arfel Realty free from any suit or judgment by reason of said sale.
On 2 June 1992, the Sauros filed a complaint for specific performance against Arfel
Realty before the Housing and Land Use Regulatory Board (HLURB). Arfel Realty
filed its answer with a counterclaim for moral damages and attorneys fees. Arfel
Realty followed this on 23 September 1992 with a third-party complaint against
Dandan, praying indemnification from Dandan for whatever is adjudged against it in
favor of the Sauros.
Dandan filed his Position Paper, contending that the HLURB had no jurisdiction
over the third-party complaint as the case did not involve the sale of a house and
lot but rather a personal action for indemnification and payment of attorneys fees.
He also questioned the validity of the Agreement in that it was not supported by
any valuable consideration. He argued that he affixed his signature to the
Agreement unaware of its legal import and without any intention to be bound by it.
made discoveries of many frauds which Macleod had perpetrated against the
company during the period of his management, whereby the company had been
defrauded of many thousands of pesos.
Issue: Did the intimidation amounted to vitiation of consent?
Held: The courts will not set aside contracts merely because solicitation,
importunity, argument, persuasion, or appeal to affection was used to obtain the
consent of the other party. Influence obtained by persuasion or argument or by
appeal to affection is not prohibited either in law or morals and is not obnoxious
even in courts of equity
The plaintiff here claims the sum of P22,000, with legal interest from the month of
April 1921 on the sum of P10,000, and from April 1922 on the sum of P12,000, until
full payment of the amounts claimed.
The defendant admits that she purchased the two parcels of land referred to by the
plaintiff, by virtue of the deed of sale Exhibit A, but alleges in defense: (a) That the
plaintiff knowing that the second parcel of land he sold had an area of 60 hectares,
by misrepresentation lead the defendant to believe that said second parcel
contained 98 hectares, and thus made it appear in the deed of sale and induced the
vendee to bind herself to pay the price of P47,000 for the two parcels of land, which
he represented contained an area of no less than 200 hectares, to which price the
defendant would not have bound herself had she known that the real area of the
second parcel was 60 hectares, and, consequently, she is entitled to a reduction in
the price of the two parcels in proportion to the area lacking, that is, that the price
be reduced to P38,000; (b) that the defendant, in addition to the amounts
acknowledged by the plaintiff, had paid other sums amounting to P4,000; and (c)
that the defendant never refused to pay the justly reduced price, but the plaintiff
refused to receive the just amount of the debt.
Issue: Is fraud present in this case to vitiate consent?
Held:
1. REAL, PROPERTY; PURCHASE AND SALE; VENDORS ALLEGED FALSE
REPRESENTATIONS. When the purchaser proceeds to make investigations by
himself, and the vendor does nothing to prevent such investigation from being as
complete as the former might wish, the purchaser cannot later allege that the
vendor made false representations to him. (National Cash Register Co. v. Townsend,
137 N. C., 662; 70 L. R. A., 349; Williamson v. Holt, 147 N. C., 515.)
2. ID.; ID.; ID. One who contracts for the purchase of real estate in reliance on the
representations and statements of the vendor as to its character and value, but
after he has visited and examined it for himself, and has had the means and
opportunity of verifying such statements, cannot avoid the contract on the ground
that they were false or exaggerated. (Brown v. Smith, 109 Fed., 26.)
LAURETA TRINIDAD VS. IAC
Facts: The house looked beautiful in summer but not when the waters came. Then it
was flooded five feet deep and leas than prepossessing, let alone livable.
Disenchanted, the buyer sued the seller for the annulment of the sale and damages,
alleging fraud.
The house was Bungalow No. 17, situated at Commonwealth Village in Quezon City,
and belonged to the late Vicente J. Francisco. Sometime in early 1969, Laureta
Trinidad, the petitioner herein, approached him and offered to buy the property.
Francisco was willing to sell. Trinidad inspected the house and lot and examined a
vicinity map which indicated drainage canals along the property. The purchase price
was P70,000.00 with a down payment of P17,500.00. The balance was to be paid in
five equal annual installments not later than July 1 of each year at 12% interest per
annum.
On March 29, 1969, Trinidad paid Francisco P5,000.00 as earnest money and
entered into the possession of the house. However, as she relates it, she
subsequently heard from her new neighbors that two buyers had previously vacated
the property because it was subject to flooding. She says she talked to Francisco
about this matter and that he told her everything had been fixed and the house
would never be flooded again. Thus assured, she gave him P12,500.00 to complete
the down payment. They signed the Contract of Conditional Sale on August 8, 1969.
1
Trinidad paid the installment for 1970 and 1971 on time but asked Francisco for an
extension of 60 days to pay the installment due on July 1, 1972. However, she says
she eventually decided not to continue paying the amortizations because the house
was flooded again on July 18, 21, and 30, 1972, the waters rising to as high as five
feet on July 21. Upon her return from the United States on October 11, 1972, she
wrote the City Engineer's office of Quezon City and requested an inspection of the
subject premises to determine the cause of the flooding. The finding of City
Engineer Pantaleon P. Tabora was that "the lot is low and is a narrowed portion of
the creek."
On January 10, 1973, the petitioner filed her complaint against Francisco alleging
that she was induced to enter into the contract of sale because of his
misrepresentations. She asked that the agreement be annulled and her payments
refunded to her, together with the actual expenses she had incurred for the
"annexes and decorations" she had made on the house. She also demanded the
actual cost of the losses she had suffered as a result of the floods, moral and
exemplary damages in the sum of P200,000.00, and P10,000.00 attomey's
fees.
Issues: Whether or not there is misrepresentation of facts
Held: Fraud is never lightly inferred; it is good faith that is. Under the Rules of Court,
it is presumed that "a person is innocent of crime or wrong" 7 and that "private
transactions have been fair and regular." 8 While disputable, these presumptions
can be overcome only by clear and preponderant evidence.
Our finding is that the fraud alleged by the petitioner has not been satisfactorily
established to call for the annulment of the contract. This finding is based on the
following considerations.
First, it was the petitioner who admittedly approached the private respondent, who
never advertised the property nor offered it for sale to her.
Second, the petitioner had full opportunity to inspect the premises, including the
drainage canals indicated in the vicinity map that was furnished her, before she
entered into the contract of conditional sale.
Third, it is assumed that she made her appraisal of the property not with the
untrained eye of the ordinary prospective buyer but with the experience and even
expertise of the licensed real estate broker that she was. 9 If she minimized the
presence of the drainage canals, she has only her own negligence to blame.
Fourth, seeing that the lot was depressed and there was a drainage lot abutting it,
she cannot say she was not forewarned of the possibility that the place might be
flooded. Notwithstanding the obvious condition of the property, she still decided to
buy it.
Fifth, there is no evidence except her own testimony that two previous owners of
the property had vacated it because of the floods and that Francisco assured her
that the house would not be flooded again. The supposed previous owners were not
presented as witnesses and neither were the neighbors. Francisco himself denied
having made the alleged assurance.
Sixth, the petitioner paid the 1970 and 1971 amortizations even if, according to her
Complaint, "since 1969 said lot had been under floods of about one (1) foot deep,"
10 and despite the floods of September and November 1970.
Seventh, it is also curious that notwithstanding the said floods, the petitioner still
"made annexes and decorations on the house," 11 all of a permanent nature, for
which she now claims reimbursement from the private respondent.
What we see here is a bad bargain, not an illegal transaction vitiated by fraud. While
we may commiserate with the petitioner for a purchase that has proved unwise, we
can only echo what Mr. Justice Moreland observed in Vales v. Villa, 16 thus:
. . . Courts cannot follow one every step of his life and extricate him from bad
bargains, protect him from unwise investments, relieve him from one-sided
contracts, or annul the effects of foolish acts. Courts cannot constitute themselves
guardians of persons who are not legally incompetent. Courts operate not because
one person has been defeated or overcome by another, but because he has been
defeated or overcome illegally. Men may do foolish things, make ridiculous
contracts, use miserable judgment, and lose money by them indeed, all they
have in the world; but not for that alone can the law intervene and restore. There
must be, in addition, a violation of law, the commission of what the law knows as an
actionable wrong, before the courts are authorized to lay hold of the situation and
remedy it.
WHEREFORE, the appealed decision is AFFIRMED as above modified, with no
pronouncement as to costs. It is so ordered.