G.R. No. 139982-WPS Office

G.R. No. 139982.
November 21, 2002
JULIAN FRANCISCO (Substituted by his Heirs, namely: CARLOS ALTEA FRANCISCO; the heirs of late
ARCADIO FRANCISCO, namely: CONCHITA SALANGSANG-FRANCISCO (surviving spouse), and his children
namely: TEODULO S. FRANCISCO, EMILIANO S. FRANCISCO, MARIA THERESA S. FRANCISCO,
PAULINA S. FRANCISCO, THOMAS S. FRANCISCO; PEDRO ALTEA FRANCISCO; CARINA FRANCISCO-
ALCANTARA; EFREN ALTEA FRANCISCO; DOMINGA LEA FRANCISCO-REGONDON; BENEDICTO ALTEA
FRANCISCO and ANTONIO ALTEA FRANCISCO), petitioner,
vs.
PASTOR HERRERArespondent.
QUISUMBING, J.:
FACTS
Eligio Herrera, Sr., the father of respondent, was the owner of two parcels of land, one consisting of 500
sq. m. and another consisting of 451 sq. m., covered by Tax Declaration (TD) Nos. 01-00495 and 01-
00497, respectively. Both were located at Barangay San Andres, Cainta, Rizal.
On January 3, 1991, petitioner bought from said landowner the first parcel, covered by TD No. 01-00495,
for the price of P1,000,000, paid in installments from November 30, 1990 to August 10, 1991.
On March 12, 1991, petitioner bought the second parcel covered by TD No. 01-00497, for P750,000.
Contending that the contract price for the two parcels of land was grossly inadequate, the children of
Eligio, Sr., namely, Josefina Cavestany, Eligio Herrera, Jr., and respondent Pastor Herrera, tried to
negotiate with petitioner to increase the purchase price. When petitioner refused, herein respondent
then filed a complaint for annulment of sale, with the RTC of Antipolo City, docketed as Civil Case No.
92-2267. In his complaint, respondent claimed ownership over the second parcel, which is the lot
covered by TD No. 01-00497, allegedly by virtue of a sale in his favor since 1973. He likewise claimed
that the first parcel, the lot covered by TD No. 01-00495, was subject to the co-ownership of the
surviving heirs of Francisca A. Herrera, the wife of Eligio, Sr., considering that she died intestate on April
2, 1990, before the alleged sale to petitioner. Finally, respondent also alleged that the sale of the two
lots was null and void on the ground that at the time of sale, Eligio, Sr. was already incapacitated to give
consent to a contract because he was already afflicted with senile dementia, characterized by
deteriorating mental and physical condition including loss of memory.
In his answer, petitioner as defendant below alleged that respondent was estopped from assailing the
sale of the lots. Petitioner contended that respondent had effectively ratified both contracts of sales, by
receiving the consideration offered in each transaction.
On November 14, 1994, the Regional Trial Court handed down its decision, the dispositive portion of
which reads:
ISSUE
Are the assailed contracts of sale void or merely voidable and hence capable of being ratified?
HELD
Petitioner contends that the Court of Appeals erred when it ignored the basic distinction between void
and voidable contracts. He argues that the contracts of sale in the instant case, following Article 1390 of
the Civil Code are merely voidable and not void ab initio. Hence, said contracts can be ratified. Petitioner
argues that while it is true that a demented person cannot give consent to a contract pursuant to Article
1327, nonetheless the dementia affecting one of the parties will not make the contract void per se but
merely voidable. Hence, when respondent accepted the purchase price on behalf of his father who was
allegedly suffering from senile dementia, respondent effectively ratified the contracts. The ratified
contracts then become valid and enforceable as between the parties.
Coming now to the pivotal issue in this controversy. A void or inexistent contract is one which has no
force and effect from the very beginning. Hence, it is as if it has never been entered into and cannot be
validated either by the passage of time or by ratification. There are two types of void contracts: (1) those
where one of the essential requisites of a valid contract as provided for by Article 1318 of the Civil Code
is totally wanting; and (2) those declared to be so under Article 1409 of the Civil Code. By contrast, a
voidable or annullable contract is one in which the essential requisites for validity under Article 1318 are
present, but vitiated by want of capacity, error, violence, intimidation, undue influence, or deceit.
An annullable contract may be rendered perfectly valid by ratification, which can be express or implied.
Implied ratification may take the form of accepting and retaining the benefits of a contract. This is what
happened in this case. Respondents contention that he merely received payments on behalf of his
father merely to avoid their misuse and that he did not intend to concur with the contracts is
unconvincing. If he was not agreeable with the contracts, he could have prevented petitioner from
delivering the payments, or if this was impossible, he could have immediately instituted the action for
reconveyance and have the payments consigned with the court. None of these happened. As found by
the trial court and the Court of Appeals, upon learning of the sale, respondent negotiated for the
increase of the purchase price while receiving the installment payments. It was only when respondent
failed to convince petitioner to increase the price that the former instituted the complaint for
reconveyance of the properties. Clearly, respondent was agreeable to the contracts, only he wanted to
get more. Further, there is no showing that respondent returned the payments or made an offer to do
so. This bolsters the view that indeed there was ratification. One cannot negotiate for an increase in the
price in one breath and in the same breath contend that the contract of sale is void.
Nor can we find for respondents argument that the contracts were void as Eligio, Sr., could not sell the
lots in question as one of the properties had already been sold to him, while the other was the subject
of a co-ownership among the heirs of the deceased wife of Eligio, Sr. Note that it was found by both the
trial court and the Court of Appeals that Eligio, Sr., was the declared owner of said lots. This finding is
conclusive on us. As declared owner of said parcels of land, it follows that Eligio, Sr., had the right to
transfer the ownership thereof under the principle of jus disponendi.
In sum, the appellate court erred in sustaining the judgment of the trial court that the deeds of sale of
the two lots in question were null and void

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G.R. No. 139982.

November 21, 2002

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