G.R. No. L-23516




Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-23516 June 25, 1980 CANDIDO SAN LUIS, JESUS BENJIL, CARMELITA BENJIL, ROMEO SAN LUIS, JOSELITO SAN LUIS, ENCARNACION SAN LUIS and PURISIMA SAN LUIS, plaintiffs-appellants, vs. TOMASA SAN LUIS NEGRETE, assisted by her husband, RAMON NEGRETE, ROSARIO SAN LUIS, and her husband, IRENEO SUSON, defendants-appellees. FERNANDEZ, J.: This is a direct appeal to this Court from the decision of the Court of First Instance of Basilan City in Civil Case No. 315 entitled "Candido San Luis, et al. versus Tomasa San Luis Negrete, et al." the dispositive part of which reads: In view of all the foregoing, judgment is hereby rendered denying the action for rescission of the deed of absolute sale, Exhibit "F-1'. The defendants Rosario San Luis Suson and Ireneo Suson, are, however, ordered to pay to the heirs of Felipe San Luis the sum of P750.00, with legal rate of interest from the date of the filing of the complaint, until the same shall have been paid, with costs against them. The defendants Tomasa San Luis Negrete and Ramon Negrete are hereby absolved from the complaint. Their counterclaim is, however, dismissed. SO ORDERED Given this 31 st day of March, 1964, at Isabela, Basilan City. GERONIMO R. MARAVE Judge 1 On November 22, 1961, the plaintiffs filed a complaint in the Court of First Instance of Basilan City, docketed as Civil Case No. 315, seeking the annulment of a deed of sale executed by Felipe San Luis and some of his children in favor of Tomasa San Luis Negrete and Rosario San Luis Suson, both daughters of said Felipe San Luis, on the ground that the sale was simulated and was not supported by valid consideration and to set aside the order issued in Land Registration Case No. N-5 directing the Register of Deeds of Basilan City to cancel Original Certificate of Title No. 0-7 and to issue a new title to Tomasa San Luis Negrete and Rosario San Luis Suson embracing the land covered by plan Psu-145621.2 In her answer filed on September 22, 1962, the defendant Tomasa San Luis Negrete averred as special and affirmative defenses that Felipe San Luis sold the parcel of land containing 510 square meters covered by Plan Psu-145621 and by Original Certificate of Title No. 0-7 of the Registry of Deeds of Basilan City on May 9, 1956 to Tomasa San Luis, married to Ramon Negrete and Rosario San Luis, married to Ireneo Suson; that the Court of First Instance of Basilan City, by virtue of a motion dated July 6, 1960 filed by defendant Tomasa San Luis Negrete, issued an order dated July 15, 1960 ordering and authorizing the Register of Deeds of Basilan City to register the deed of sale dated May 9, 1956 and to cancel Original Certificate of Title No. 0-7 and to issue a new title to Tomasa San Luis Negrete and Rosario San Luis Suson over the said parcel of land; that the order of the trial court dated July 15, 1960 and the order dated July 29, 1960 are valid and within its jurisdiction; and that in the document of sale of May 9, 1956, the plaintiff, Candido San Luis, appears as one of the instrumental witnesses. 3 The trial court summarized the evidence of the parties as follows: Plaintiffs' evidence shows that spouses Felipe San Luis and Encarnacion Rodriguez had nine children already mentioned above. On August 8, 1955, plaintiff Candido San Luis as attorney of his father, Felipe San Luis, filed an application for registration of title of the land in question in the name of Felipe. Paragraph 1 of the application states that Felipe San Luis was the owner in fee simple of the land applied for. On May 9, 1956, during the pendency of said application for registration, Felipe San Luis and his children Ramon, Pilar, Amado and Antonio, all surnamed San Luis, executed a deed of absolute sale conveying the land to Rosario San Luis Suson and Tomasa San Luis Negrete (Exhibit "F-l"). In the meantime, on March 15, 1958, the Court issued a decree confirming the title of Felipe over the land and ordering the registration thereof. So, on August 6, 1958, the Register of Deeds issued Original Certificate of Title No. 0-7 in the name of Felipe San Luis. On January 3, 1960, Felipe San Luis died. On July 6, 1960, Tomasa and Rosario filed a motion praying this Court to cancel Original Certificate of Title No. 0-7 by virtue of the said deed of absolute sale of May 9, 1956, and to issue a new one in their names. On July 15, 1960, this Court ordered Original Certificate of Title No. 0-7 cancelled and the issuance of a new one in the name of Tomasa San Luis Negrete and Rosario San Luis Suson. On July 18 and 22, 1960, Atty. Candido San Luis filed motions for reconsideration of the order of this Court of July 15, 1960. On July 29, 1960, the Court denied the motion for reconsideration. On July 30, 1960, Atty. San Luis filed a petition for certiorari before the Court of Appeals praying to declare the orders of this Court of July 15 and 29, null and void. On September 30, 1961, the Court of Appeals denied the writ of certiorari and dismissed the petition on the ground that there were no questions of fact to be passed upon but merely questions of law which were not in aid of its appelate jurisdiction. This dismissal was, however, without prejudice to the filing of the proper action in Court. To supplement the above evidence, Atty. Candido San Luis took the witness stand and testified that on May 9, 1956, his father Felipe San Luis, sold the land in question to the defendants for P3,000.00. He was a witness to the transaction but did not draft the document himself. One time his father complained to him that he was not paid the consideration of the sale by the vendees. His brothers and sisters were, however, duly paid for their corresponding shares. He did not sell his share nor receive payment therefore. The vendees never took possession of the land for his father had always been in possession thereof and collected rentals from lessees. Rosario San Luis Suson, testifying for the plaintiffs' corroborated the testimony of Atty. San Luis. In addition, she testified that in the year 1956, she and Tomasa approached their brother, Atty. Candido San Luis, to prepare the deed of sale to be signed by their father, but Atty. San Luis advised them to ask their father's decision before preparing the deed of sale. Their father, however, decided to execute the deed of sale and the document was accordingly prepared. She and Tomasa, however, never paid the consideration of the sale to their father, for Tomasa kept on postponing the payment. Rosario further testified that it was her father who paid the taxes on the land and collected the rentals from lessees. After her father's death, she continued collecting the rentals on the land. On the other hand, Tomasa San Luis Negrete testified that on May 9, 1956, she and Rosario San Luis Suson purchased the land in question from their father. The deed of sale, Exhibit "F-l", was prepared by her brother, Atty. Candido San Luis himself who told her to bring it to Atty. Segundo Martinez for ratification as soon as the parties and witnesses had signed it. Their father told them to divide the P1,500.00 among their brothers and sisters and the rest to be paid to him (father). So, she and Rosario paid P1,500.00 to their father, while her brothers and sisters were paid P166.00 each, except Atty. Candido San Luis who waived receiving his share alleging that it was too small an amount and that he has more than enough for himself. This sale was subject to the condition that their father would continue collecting the rentals on the land during his lifetime. Tomasa paid taxes on the land as evidenced by Exhibits "4" to "9". During his lifetime, her father used to live with her and she knows he had no debt. As a matter of fact, he had a bank deposit as the amount received by him from her was deposited in the bank. After the fire of 1962, she constructed a house on the land valued at P8,000.00. Her sister Rosario testified in this case in favor of the plaintiffs because Atty. Candido San Luis promised to give her his share in the event the plaintiffs win in this case. Her sister Rosario is now occupying one-half of the land in question. Ramon San Luis corroborated the testimony of Tomasa. In addition, he testified that when he signed the document, Exhibit "F- l", he understood that he sold his share thereof and received P200.00 consideration for the same. All his brothers and sisters were also paid their shares. On one occasion when he visited his father in Isabela, he (father) informed him that Tomasa had already paid her part in the consideration of the sale. His father did not have any account with anyone when he died. As a matter of fact, he had deposit in the bank. Although the land Registration Court decreed Felipe San Luis as the sole owner in fee simple of the land, he considered his nine children as his co-owners thereof. This is so expressly stated in the deed of absolute sale (Exhibit "F-l"). He divided the proceeds of the sale by giving one-half thereof to this children and retained the other half for himself. His children were actually paid the purchase price for their respective shares, except Atty. Candido San Luis. The plaintiffs in this case are Atty. Candido San Luis and the nine children of deceased Remedios San Luis and Jose San Luis who did not sign the document of sale, Exhibit "F-1". The other heirs of Felipe San Luis who signed Exhibit "F-1" did not join the plaintiffs in this action for rescission. 4 The trial court rendered judgment "denying, the action for rescission of the deed of absolute sale, Exhibit 'F-1'" because: The first question to be determined is whether the plaintiffs did not sell their shares of the land to the defendants. When the deed of absolute sale was executed on May 9, 1956, Remedios San Luis and Jose San Luis were already dead and their respective children were still minors. While said children of Jose and Remedios did not sign the deed of absolute sale, their respective surviving parents signed receipts Exhibits "2" and "3''. An examination of these receipts shows that their surviving parents did not only give their consent to the sale but actually sold the shares of their children by receiving the amount of P166.00 equivalent to the share of one child of Felipe San Luis from Tomasa and Rosario. One of those receipts was witnessed by Atty. San Luis. Article 320 of the New Civil Code, in force at the time of the sale, provides that the father, or in his absence, the mother is the legal administrator of the property pertaining to the child under parental authority. If the property is worth more than P2,000.00, the approval of the Court is necessary for a contract entered into by said parents in behalf of the minor, since the parent shall be considered the guardian of the child's property (Padilla, Comments on the Civil Code, Vol. 2, pages 542-543, 1951 Ed.) In other words, if the property is not more than P2,000.00, the approval of the Court is not necessary for the efficacy of such a contract. The value of the share of the children of Jose as well as that of Remedios is P166.00 only. The surviving parents therefore, of the children of Jose and Remedios may sell the property without the necessity of the previous approval of the Court and this sale may only be rescinded if the heirs suffered lession by at least one-fourth of what they ought to receive. With respect to the contention that Atty. San Luis did not sell his share to Tomasa and Rosario, it should be stated that he signed the deed of sale as an instrumental witness. He is the only attorney in the family. He knows that the other heirs were all paid their shares. He did not demand for the payment of his share. Under the circumstances, the Court will have to give credence to the testimony that Atty. San Luis gave his consent to the sale and that he waived receiving his share in favor of his sisters, Tomasa and Rosario. He is much better off in comparison with his sisters. It follows from the foregoing that Atty. San Luis and the minor children of Jose and Remedios had legally conveyed their respective shares to Tomasa and Rosario. 5 The trial court sustained the order of the registration court cancelling Original Certificate of Title No. 0-7 in the name of Felipe San Luis and directing the issuance of a new one in the names of Tomasa San Luis Negrete and Rosario San Luis Suson for the following reason: The second question to be determined is whether or not the failure of Tomasa and Rosario to file their case over the land during land registration proceedings bars them from claiming the land in view of the ruling of the Supreme Court in the case Moldero vs. Yandoc, G.R. No. L-14321, Oct. 20, 1961, to the effect that under the torrens system, claims and liens of whatever character existing against the land prior to the issuance of the certificate are cut off by such certificate if not noted thereon, and the certificate so issued binds the whole world. This case of Moldero vs. Yandoc is not, however, in point, because in this case, the action was instituted against a third person, an innocent purchaser, and the plaintiff did not have any cause of action in so far as the latter is concerned. In the case at bar, no innocent third person or purchaser had acquired the property. The decree is a mere confirmation and registration of the ownership of the land. Since the ownership thereof had already been sold by the lawful owners to Tomasa and Rosario, the sale may be enforced against the vendors. Article 1159 of the New Civil Code provides that obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Article 1167 of the same Code provides that if a person obliged to do something fails to do so, the same shall be executed at his cost. As deeply embodied at the very foundation of all the provisions of the Code touching the nature and effect of all contractual obligations is the maxim that the will of the contracting parties is the law of their contract — a maxim which amplified in the elementary propositions that "contracts are perfected by mere consent", that the contracting parties may make any agreement and establish any clauses and conditions which they may deem advisable, provided they are not contrary to law, morals, good customs, public order or public policy; that "the validity or compliance of contracts cannot be left to the will of one of the contracting parties"; and that "contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for validity are present." It is elemental that the law requires parties to do what they have agreed to do. If a party charges himself with an obligation possible to be performed, he must abide by it unless performance is rendered impossible by the act of God, the law, or the other party. (Francisco, Annotated Civil Code, Vol. IV, pages 21-22). Public policy demands that a person should not be allowed to use a torrens title to enrich himself at the expense of another. 6 The plaintiffs-appellants assigned the following errors: I Holding that the registration of the property in favor of Felipe San Luis, ceases to be a conjugal property, hence he only allowed his children to participate in the proceeds of the Sale: (a) Denying the share of Candido San Luis; (b) Denying the rights of the minor children; II In holding that the receipts signed by the surviving parents of the minors are sufficient transfer of participation of ownership in real property; III In not holding that the registration of property in favor of Felipe San Luis on March 15, 1968, almost two years after the alleged Deed of Sale of May 9, 1956, binds the land and quiets title thereto; IV In failing to hold that there was no consummated contract of Sale on the ground of lack of consideration and no actual delivery and possession by the vendees; V For holding that this action for the dissolution of contract of Sale based on lack of consideration has prescribed in four years. 7 The facts, as stated in the brief of the plaintiffs-appellants, are: A parcel of land containing Five Hundred and Ten (510) square meters, more or less, situated at the commercial section of Isabela, Basilan City, acquired and owned by the spouses Felipe San Luis and Encarnacion Rodriquez during their matrimonial regime under possessory information title and described in Psu-145621. That on August 8, 1955, long after the death of his wife, Felipe San Luis filed an application for the registration of the title over the land in question. However, the surviving spouse, Felipe San Luis, during the pendency of his application for the registration of the conjugal property herein mentioned together with some of his children, namely, Antonio, Pilar, Ramon and Amado, all surnamed San Luis, executed a deed of Absolute Sale on May 9, 1956, conveying said property to Rosario San Luis-Suson and Tomasa San Luis-Negrete. (Exh. "F-1"). Candido San Luis and the minor children of his other younger sister and brother Remedios San Luis-Benjil and Jose San Luis, all deceased and all are children of Felipe San Luis and Encarnacion Rodriguez did not execute any deed of Sale. The minor children are the other plaintiffs herein, namely, Jesus and Carmelita, surnamed Benjil and Romeo, Joselito, Encarnacion and Purisima, all surnamed San Luis. In the meantime, on March 15, 1958, the Land Registration Court issued a decree confirming the title of Felipe San Luis over the land and ordering the registration thereof. Wherefore, the Register of Deeds issued Original Certificate of Title No. 0-7 in the name of Felipe San Luis on August 6, 1958. Two years and three months after the alleged deed of sale. (Records do not show that there was any motion presented to preserve the rights of the vendees during the registration proceedings). During all these years and until his death on January 3, 1960, Felipe San Luis was in full exercise of his ownership and possession of his property, collecting all the rentals of houses constructed therein in the amount of One Hundred to One Hundred Twenty Pesos monthly and in the payment of land taxes. No delivery of possession or any color of ownership was ever transferred to the alleged vendees, Tomasa Negrete and Rosario Suson. After the death of Felipe San Luis, specifically on July 6, 1960, exactly two years and three (3) months and twenty one (21) days after the issuance of the decree in favor of the former, Tomasa Negrete without the knowledge and consent of Rosario Suson filed a motion before the lower Court to cancel the Original Certificate of Title No. 0-7 and to issue a new one in their names, pursuant to the alleged Deed of Sale of May 9, 1960. Subsequently, the lower Court on July 15, 1960 ordered the cancellation of the Original Certificate of Title No. 0-7 and the issuance of a new one in the names of Tomasa San Luis-Negrete and Rosario San Luis-Suson. That when Candido San Luis, one of the heirs got wind of the irregular and anomalous order of the Court, he immediately on July 18 and 22, 1960, filed motions for reconsideration of this Order. The Court, however, on July 29, 1960, denied the motion for reconsideration. Consequently, he instituted a petition for certiorari to the Court of Appeals, Manila, which should however be in the Supreme Court of the Philippines. The petition was denied without prejudice to its filing in the proper Court on the ground that the 'determination of whether or not the Court below abused its discretion in issuing the order complained of, is a question of law that is not in aid of its appellate jurisdiction.' Hence this action. 8 The appellees made the following counter statement of facts: The relation of facts in the brief for the Appellants is substantially correct. The Spouses Felipe San Luis and Encarnacion Rodriguez had nine children, namely (1) Antonio, (2) Candido, (3) Pilar, (4) Ramon, (5) Remedios, (deceased) survived by her children, Jesus Benjil and Carmelita Benjil, (6) Jose, (deceased) survived by her children, Romeo, Joselito, Encarnacion and Purisima, (7) Tomasa, (8) Rosario, and (9) Amado, all surnamed San Luis. Felipe San Luis was the owner of the land in question for paragraph one (1) of the verified application for registration states that Felipe San Luis was the owner in fee simple of the land applied for (Exh. "19"). The land referred to in the May 9, 1956 deed of absolute sale is the land registered in Decree No. N-64331 (Exh. "G") and now covered by Original Certificate of Title No. 0-7 of the Register of Deeds of Basilan City (Exh. "18") and Plan Psu-145621, in the name of Felipe San Luis alone. Since the time the land in question was sold to them Appellee Tomasa San Luis Negrete has been exercising acts of ownership over the same. She has been paying the taxes on the land in question (Exhs. "4", "5", "6", "7", "8", and "9"), and has been in possession and occupation of the same. She had constructed a house on the lot, valued at eight thousand pesos (P8,000.00) Philippine Currency, (Faustino, t. s.n., p. 52). The Motion of July 6, 1960 was filed with the consent and concurrence of Rosario San Luis Suson. The present case for annulment of the May 9, 1956 deed of sale was filed five and one half (5 1/2) years after the execution of the same. None of the plaintiff Minors appeared in Court during the trial of the case at bar. Their parents too did not appear for them. None came to Court to assert their alleged rights, except Appellant Candido San Luis. There was no Order issued by the Honorable Trial Court appointing Atty. Candido San Luis guardian-ad-litem for said Minors. 9 It is thus seen that there is no dispute as to the principal facts. The pertinent portion of the deed of absolute sale in question reads: This agreement made and entered into by and between Felipe San Luis, a widower and his other children, namely: AMADO SAN LUIS, ANTONIO SAN LUIS, PILAR SAN LUIS and RAMON SAN LUIS, the first two Felipe and Amado San Luis are residents with postal address at Isabela, Basilan City and the last three of Zamboanga City, all of legal age, married and hereafter known as the First Party and TOMASA SAN LUIS NEGRETE and ROSARIO SAN LUIS SUSON, married to Ramon Negrete and Ireneo Suson respectively, also of legal age, Filipino residents with Postal address at Isabela, Basilan City and hereafter known as the SECOND PARTY. WITNESSETH That whereas, the First Party and the Second party are Father and children who are the co-owners of an urban Lot (PSU 145621 Town Site) situated in Isabela, Basilan City, particularly bounded and described as follows: North — bounded by property of Rufino Dias (Psu-124552); South — " " " " Dionisio Tan (Psu 124553); East — Public Land (Mangrove); West — Municipal Road. Containing a superficial area of 510 Sq. more or less with approved plan No. PSU-145621, by the Director of Lands. That Whereas, the Parties hereto have agreed upon the Sale by the First Party to the Second Party all whatever rights and interests that they have or might have on the property above mentioned. NOW, THEREFORE, for and in consideration of the sum of Three Thousand Pesos (P3,000), the receipt of which is hereby acknowledged, the above named vendors have granted, sold and conveyed and by these presents do hereby grant, sell and convey unto the above named Vendees, their heirs, successors and assigns, all the rights and interests that they have or might have on the property described. IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals at Zamboanga City, Philippines, this 9th day of May, 1956 and in Basilan City, this _____ day of ________ 1956. (SGD.) FELIPE SAN LUIS (SGD.) PILAR SAN LUIS (SGD.) AMADO SAN LUIS (SGD.) ANTONIO SAN LUIS (SGD.) RAMON SAN LUIS SIGNED IN THE PRESENCE OF: (SGD.) CANDIDO SAN LUIS (SGD.) EGILIO SAN LUIS 10 It is significant to note that the said deed of sale specifically states that "the First Party and the Second Party are Father and children who are the co-owners of an urban Lot (PSU 145621-Town Site) situated in Isabela, Basilan City, ..." and that the parties had agreed upon "the sale by the First Party to the Second Party an whatever rights and interests that they have or might have on the property above mentioned." The vendors did not sell the entire land in question to the vendees. The vendors only sold whatever rights and interest that they had or might have had on the property in question. It is clear from the foregoing that the property in question was not the exclusive property of Felipe San Luis but was the conjugal property of said Felipe San Luis and his wife, Encarnacion Rodriguez. Hence, Felipe San Luis and some of his children could not have conveyed the share of the plaintiffs-appellants in the sale. The plaintiff, Candido San Luis, cannot be considered under estoppel in having signed as a witness in the deed of sale in as much as the vendors did not convey the entire property to the vendees but only their shares and interests in the land in question. Felipe San Luis conveyed his share consisting of one-half (½) of the entire land and one-tenth (1/10) of the other half as his inheritance from Encarnacion Rodriguez, his deceased wife. The four children, Amado, Antonio, Pilar and Ramon, all surnamed San Luis, conveyed their shares in the land consisting of four-tenths (4/10) thereof. The deed of sale in question is valid. There is no indication that it is simulated. The disputable presumption that the private transaction has been fair and regular 11 has not been rebutted. The evidence is that the vendors received the amount stated therein as consideration. Moreover, the disputable presumption that there was sufficient consideration for the contract 12 was not overcome. The registration court erred in ordering the cancellation of Original Certificate of Title No. 0-7 and in directing the issuance of a new one in the names of the vendees alone. The Original Certificate of Title No. 0-7 should be cancelled and the transfer certificate of title to be issued should be in the name of the vendees to the extent of the rights and interests of the vendors consisting of one-half and five- tenths of one-half of said land and in the names of the plaintiffs who did not convey their share in interest in the land in question consisting of three tenths (3/10) of one-half thereof. WHEREFORE, the decision appealed from is hereby set aside and judgment is rendered cancelling the transfer certificate of title in the names of the vendees and ordering the issuance of a new certificate of title in the names of the vendees and the plaintiffs in the proportion of seventeen-twentieth (17/20) to the former and one-twentieth (1/20) to Candido San Luis, one-twentieth (1/20) to the children of Remedios San Luis Benjil and one-twentieth (1/20) to the children of Jose San Luis, without pronouncement as to costs. SO ORDERED. Makasiar, Guerrero, De Castro and Melencio-Herrera, JJ., concur. Teehankee, J., (Chairman), took no part. Footnotes 1 Record on appeal p. 66. 2 Ibid., pp. 2-9. 3 Ibid., pp. 27-30. 4 Record on Appeal pp. 53-57. 5 Record on Appeal, pp. 57-59. 6 Record on Appeal pp. 59-61. 7 Brief for Plaintiffs-Appellants, first and second pages. 8 Idem., pp. 5-9. 9 Brief for the Appellees, pp. 1-3. 10 Annex "F", Record on Appeal pp. 23-25. 11 Par. (p) Sec. 5, Rule 131, Revised Rules of Court. 12 Par. (r), Ibid. The Lawphil Project - Arellano Law Foundation