Montecillo V Reynes
Montecillo V Reynes
Montecillo V Reynes
DECISION
CARPIO, J.:
The Case
On March 24, 1993, the Regional Trial Court of Cebu City, Branch
18, rendered a Decision[1 declaring the deed of sale of a parcel of
land in favor of petitioner null and void ab initio. The Court of
Appeals,[2 in its July 16, 1998 Decision[3 as well as its February 11,
1999 Order[4 denying petitioners Motion for Reconsideration,
affirmed the trial courts decision in toto. Before this Court now is a
Petition for Review on Certiorari[5 assailing the Court of Appeals
decision and order.
The Facts
That I, IGNACIA T. REYNES, of legal age, Filipino, widow, with residence and
postal address at Mabolo, Cebu City, Philippines, for and in consideration
of FORTY SEVEN THOUSAND (P47,000.00) PESOS, Philippine
Currency, to me in hand paid by RIDO MONTECILLO, of legal age,
Filipino, married, with residence and postal address at Mabolo, Cebu City,
Philippines, the receipt hereof is hereby acknowledged, have sold,
transferred, and conveyed, unto RIDO MONTECILLO, his heirs, executors,
administrators, and assigns, forever, a parcel of land together with the
improvements thereon, situated at Mabolo, Cebu City, Philippines, free from
all liens and encumbrances, and more particularly described as follows:
That for and in consideration of the total sum of FIFTY THOUSAND (P50,000)
PESOS, Philippine Currency, received in full and receipt whereof is herein
acknowledged from SPOUSES REDEMPTOR ABUCAY and ELISA ABUCAY, do
hereby in these presents, SELL, TRANSFER and CONVEY absolutely unto said
Spouses Redemptor Abucay and Elisa Abucay, their heirs, assigns and
successors-in-interest the whole parcel of land together with improvements
thereon and more particularly described as follows:
of which I am the absolute owner thereof free from all liens and
encumbrances and warrant the same against claim of third persons and
other deeds affecting said parcel of land other than that to the said spouses
and inconsistent hereto is declared without any effect.
Reynes and the Abucay Spouses alleged that on June 18, 1984 they
received information that the Register of Deeds of Cebu City issued
Certificate of Title No. 90805 in the name of Montecillo for the
Mabolo Lot.
The trial court rendered a decision on March 24, 1993 declaring the
Deed of Sale to Montecillo null and void. The trial court ordered the
cancellation of Montecillos Transfer Certificate of Title No. 90805
and the issuance of a new certificate of title in favor of the Abucay
Spouses. The trial court found that Montecillos Deed of Sale had no
cause or consideration because Montecillo never paid Reynes
the P47,000.00 purchase price, contrary to what is stated in the
Deed of Sale that Reynes received the purchase price. The trial
court ruled that Montecillos Deed of Sale produced no effect
whatsoever for want of consideration. The dispositive portion of the
trial courts decision reads as follows:
xxx
Not satisfied with the trial courts Decision, Montecillo appealed the
same to the Court of Appeals.
The Issues
1. Was there an agreement between Reynes and Montecillo that the stated
consideration of P47,000.00 in the Deed of Sale be paid to Cebu Ice and
Cold Storage to secure the release of the Transfer Certificate of Title?
2. If there was none, is the Deed of Sale void from the beginning or simply
rescissible?[15
The Ruling of the Court
Payment shall be made to the person in whose favor the obligation has been
constituted, or his successor in interest, or any person authorized to receive
it.
Thus, Montecillos payment to Cebu Ice Storage is not the payment that would
extinguish[16 Montecillos obligation to Reynes under the Deed of Sale.
It militates against common sense for Reynes to sell her Mabolo Lot
for P47,000.00 if this entire amount would only go to Cebu Ice
Storage, leaving not a single centavo to her for giving up ownership
of a valuable property. This incredible allegation of Montecillo
becomes even more absurd when one considers that Reynes did not
benefit, directly or indirectly, from the payment of the P47,000.00
to Cebu Ice Storage.
The trial court found that Reynes had nothing to do with Jayags
mortgage debt with Cebu Ice Storage. The trial court made the
following findings of fact:
x x x. Plaintiff Ignacia Reynes was not a party to nor privy of the obligation
in favor of the Cebu Ice and Cold Storage Corporation, the obligation being
exclusively of Bienvenido Jayag and wife who mortgaged their residential
house constructed on the land subject matter of the complaint. The payment
by the defendant to release the residential house from the mortgage is a
matter between him and Jayag and cannot by implication or deception be
made to appear as an encumbrance upon the land.[17
Montecillo argues that his Deed of Sale has all the requisites of a
valid contract. Montecillo points out that he agreed to purchase, and
Reynes agreed to sell, the Mabolo Lot at the price of P47,000.00.
Thus, the three requisites for a valid contract concur: consent,
object certain and consideration. Montecillo asserts there is no lack
of consideration that would prevent the existence of a valid
contract. Rather, there is only non-payment of the consideration
within the period agreed upon for payment.
From the allegations in the pleadings of both parties and the oral and
documentary evidence adduced during the trial, the court is convinced that
the Deed of Sale (Exhibits 1 and 1-A) executed by plaintiff Ignacia Reynes
acknowledged before Notary Public Ponciano Alvinio is devoid of any
consideration. Plaintiff Ignacia Reynes through the representation of Baudillo
Baladjay had executed a Deed of Sale in favor of defendant on the promise
that the consideration should be paid within one (1) month from the
execution of the Deed of Sale. However, after the lapse of said period,
defendant failed to pay even a single centavo of the consideration. The
answer of the defendant did not allege clearly why no consideration was paid
by him except for the allegation that he had a balance of only P10,000.00. It
turned out during the pre-trial that what the defendant considered as the
consideration was the amount which he paid for the obligation of Bienvenido
Jayag with the Cebu Ice and Cold Storage Corporation over which plaintiff
Ignacia Reynes did not have a part except that the subject of the mortgage
was constructed on the parcel of land in question. Plaintiff Ignacia Reynes
was not a party to nor privy of the obligation in favor of the Cebu Ice and
Cold Storage Corporation, the obligation being exclusively of Bienvenido
Jayag and wife who mortgaged their residential house constructed on the
land subject matter of the complaint. The payment by the defendant to
release the residential house from the mortgage is a matter between him
and Jayag and cannot by implication or deception be made to appear as an
encumbrance upon the land. [23
Factual findings of the trial court are binding on us, especially if the
Court of Appeals affirms such findings.[24 We do not disturb such
findings unless the evidence on record clearly does not support such
findings or such findings are based on a patent misunderstanding of
facts,[25 which is not the case here. Thus, we find no reason to
deviate from the findings of both the trial and appellate courts that
no valid consideration supported Montecillos Deed of Sale.
Where the deed of sale states that the purchase price has been paid
but in fact has never been paid, the deed of sale is null and void ab
initio for lack of consideration. This has been the well-settled rule as
early as Ocejo Perez & Co. v. Flores,[27 a 1920 case. As
subsequently explained in Mapalo v. Mapalo[28
In our view, therefore, the ruling of this Court in Ocejo Perez & Co. vs.
Flores, 40 Phil. 921, is squarely applicable herein. In that case we ruled that
a contract of purchase and sale is null and void and produces no effect
whatsoever where the same is without cause or consideration in that the
purchase price which appears thereon as paid has in fact never been paid by
the purchaser to the vendor.
A contract of sale is void and produces no effect whatsoever where the price,
which appears thereon as paid, has in fact never been paid by the purchaser
to the vendor (Ocejo, Perez & Co. vs. Flores and Bas, 40 Phil. 921; Mapalo
vs. Mapalo, L-21489, May 19, 1966, 64 O.G. 331, 17 SCRA 114, 122). Such
a sale is non-existent (Borromeo vs. Borromeo, 98 Phil. 432) or cannot be
considered consummated (Cruzado vs. Bustos and Escaler, 34 Phil. 17;
Garanciang vs. Garanciang, L-22351, May 21, 1969, 28 SCRA 229).
SO ORDERED.