G.R. No. 108169

Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 108169 August 25, 1999

SPOUSES VENANCIO DAVID and PATRICIA MIRANDA DAVID and FLORENCIA VENTURA VDA. DE BASCO, petitioners,
vs.
ALEJANDRO and GUADALUPE TIONGSON, respondents.

PARDO, J.:

Before the Court is a petition for review on certiorari of the decision of the Court of Appeals¹ modifying that of the trial court² in an action for specific performance with damages filed by petitioners against respondents.

The facts are as follows:

On February 23, 1989, three sets of plaintiffs, namely, spouses Feliciano and Macaria Ventura, spouses Venancio and Patricia David and Florencia Ventura Vda. de Basco, filed with the Regional Trial Court, San Fernando, Pampanga, a complaint for specific performance with damages, against private respondents spouses Alejandro and Guadalupe Tiongson, alleging that the latter sold to them lots located in Cabalantian, Bacolor, Pampanga, as follows:

(a) a parcel of residential land with an area of 300 square meters (sq. m.), more or less, for a total purchase price of P16,500.00, sold to spouses Feliciano and Macaria Ventura;

(b) a parcel of land consisting of 308 sq.m., more or less, which is a portion of Lot No. 1547-G-2-G covered by TCT No. 187751-R, for a total consideration of P15,000.00, sold to spouses Venancio and Patricia M. David;

(c) two parcels of land with a total area of 169 sq. m., 109 sq. m., which is a portion of Lot No. 1547-G-2-G and a 60 sq. m., which is part of a lot covered by TCT No. 200835-R, for a total consideration of P10,400.00, sold to Florencia Ventura Vda. de Basco.

The parties expressly agreed that as soon as the plaintiffs fully paid the purchase price on their respective lots, respondents would execute an individual deed of absolute sale and cause the issuance of the corresponding certificate of title in plaintiffs' favor.

Spouses Ventura immediately took possession of the lot, erected their house thereon and fenced the perimeters. As of October 28, 1985, the Venturas had fully paid the price of their lot, evidenced by a certification³ issued by Alejandro Tiongson. Sometime in November 1985, the Venturas demanded the execution of a deed of sale and the issuance of the corresponding certificate of title, but the latter refused to issue the same.

Spouses David claimed that, as agreed by the parties, the P15,000.00 purchase price would be paid as follows: P3,800.00, as downpayment and a monthly amortization of P365.00, starting on March 8, 1983, until fully paid. On October 31, 1985, the Davids had paid a total of P15,050.00, evidenced by the receipts issued by Alejandro Tiongson.⁴ On the first week of November 1985, the Davids demanded the execution of a deed of sale and the issuance of the corresponding certificate of title, but respondents refused. Unlike the Venturas, they were not able to take possession of the property.

Plaintiff Florencia Ventura Vda. de Basco averred that she bought two parcels of land, a 109 sq. m. lot and a 60 sq. m. lot, for P6,425.00 and P6,500.00, respectively. As of February 6, 1984, Florencia had paid P12,945.00 for the two lots, evidenced by receipts issued by Alejandro Tiongson.⁵ Sometime in March 1984, she demanded the execution of the deeds of sale and issuance of the corresponding certificates of title over the lots. However, respondents failed to comply with their obligation.

After no settlement was reached at the barangay level, on February 23, 1989, plaintiffs filed a complaint with the Regional Trial Court, San Fernando, Pampanga, for specific performance with damages. On April 18, 1989, upon motion of the plaintiffs, respondents Tiongsons were declared in default for failure to file their answer, despite the fifteen (15) days extension granted by the trial court.1âwphi1.nêt

On June 14, 1989, the trial court rendered a decision, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against the defendants:

1) Ordering the defendants to execute the deeds of absolute sale covering the lots respectively sold to plaintiffs and to cause the issuance of the title covering the aforesaid lots at their own expense;

2) Ordering the defendants to pay unto the plaintiffs P15,000.00 as moral damages.

Defendants are likewise ordered to pay the costs of suit.⁶

Respondents Tiongsons appealed the decision to the Court of Appeals. They claimed that their failure to file an answer in due time amounted to excusable negligence.⁷ They contended that the plaintiffs had not fully paid the agreed price of P120 per sq. m. They argued that the Venturas were still in arrears for P30,000.00, the Davids for P21,000.00 and Florencia for P9,880.00. Hence, the deeds of sale and certificates of title were not issued.

On October 19, 1992, the Court of Appeals⁸ modified the trial court's decision. Although it blamed respondents for their failure to file an answer in due time, it held that there was no perfected contracts of sale entered into by the Davids and Florencia Vda. de Basco with respondents. However, the Court of Appeals upheld the sale involving the Venturas and ordered respondents to execute a deed of sale and cause the issuance of the corresponding certificate of title in Venturas' favor.

With respect to spouses David, the Court of Appeals said that there was no agreement as to the price, as well as the manner and time of payment of the installments. It held that Patricia David's testimony regarding the price, P15,000.00, payable in monthly installments of P365.00, contradicted a receipt stating: ". . . the balance to be paid on installment to be agreed upon later on."⁹ The appellate court referred to another receipt¹⁰ wherein only P300.00 was paid but with the following statement — "Subject to further discussion later on." It stated that there was no agreement as to the price, since it was subject to further discussion by the parties. It held that the P115.00 overpayment¹¹ illustrate the lack of an agreed price. The receipts failed to state the total purchase price or prove that full payment was made. Thus, there was no meeting of minds regarding the price. Consequently, there was no perfected contract of sale.

In ruling against the Davids, the Court of Appeals applied the doctrine in Yuvienco v. Dacuycuy¹² that in sale of real property on installments, the statute of frauds read together with the requirements of Article 1475, must be understood and applied in the sense that the payment on installments must be in the requisite form of a note or memorandum. In other words, there must be a note or memorandum evidencing the agreement to pay on installment, otherwise, the contract is unenforceable under the statute of frauds. In the instant case, the agreement to pay in installment was not reduced in writing.

As regards Florencia Ventura Vda. de Basco, the Court of Appeals ruled that there was no meeting of the minds with regard to both object and consideration of the contract. It held that the 109 sq. m. lot could not be specifically determined or identified by the parties.

As to the sixty (60) sq. m. lot, the Court of Appeals held that the object was not determinate nor determinable. Assuming arguendo that the lot was determinate or determinable, the Court of Appeals held that there was no purchase price agreed upon. The receipts indicated a price of P70.00 per sq. m., or a total of P4,200.00. However, Florencia paid P6,500.00 for the lot. The discrepancy between Florencia's claim of full payment and the last receipt¹³ stating that only a partial payment was made, bolstered the finding that there was no agreed price.

The Court of Appeals, however, upheld the contract of sale with respect to the spouses Ventura. It held that the Venturas had fully paid for the lot, evidenced by the certification issued by Alejandro Tiongson. There was also actual delivery when the Venturas took possession, erected their house thereon and fenced the perimeters.

The Court of Appeals decreed as follows:

PREMISES CONSIDERED, the appealed decision is hereby MODIFIED. The contracts of sale not having been perfected between plaintiff-appellee spouses Venancio and Patricia M. David, and plaintiff-appellee Florencia Ventura Vda. de Basco (vendees) and defendant-appellants Alejandro and Guadalupe D. Tiongson (vendors), hence, inefficacious, the former's action for specific performance must fail, but defendants-appellants must return to plaintiffs-appellees spouses Venancio and Patricia David the amount of fifteen thousand one hundred fifteen pesos (P15,115.00) and to plaintiff-appellee Florencia Ventura Vda. de Basco, the amount of twelve thousand nine hundred twenty five pesos (P12,925.00) with legal interest from the time of the filing of the complaint until the return of the said amounts.

As to plaintiff-appellee spouses Feliciano and Macaria Ventura, the decision of the court a quo is AFFIRMED. We hereby order: (a) Plaintiff-appellee spouses Feliciano and Macaria Ventura to have the lot purchased by them segregated by a licensed surveyor from the rest of the Lot 8 described in TCT No. 200835-R and to have the corresponding subdivision plan, duly approved by the Land Registration Authority, submitted to the court of origin for approval; (b) the defendants-appellants Alejandro and Guadalupe D. Tiongson to be divested of their title to the lot purchased under Rule 39, Section 10, Rules of Court; and (c) the Register of Deeds of Pampanga to cancel TCT No. 200835-R and issue, in lieu thereof, one title to the names of Feliciano and Macaria Ventura for the lot they purchased another title in the names of Alejandro and Guadalupe D. Tiongson.

In the light of the above, moral damages in the amount of three thousand pesos (P3,000.00) to be paid to plaintiffs-appellees Feliciano and Macaria Ventura by defendant-appellant spouses Tiongson is considered fair and reasonable. Without costs.¹⁴

On November 6, 1992, Venancio and Patricia M. David and Florencia Ventura Vda. de Basco filed a motion for reconsideration of the foregoing decision. On December 11, 1992, the Court of Appeals denied the motion.¹⁵

Hence, this petition for review.

We shall discuss the sales transactions between petitioners and respondents in seriatim.

As to the Spouses Venancio and Patricia David

Petitioners Davids contend that there was an implied agreement on the price and manner of installment payments. The receipts issued by respondents and Patricia David's testimony clearly indicate the agreement.

We disagree with the finding of the Court of Appeals that there was no agreement as to the price of the lots. The Court of Appeals relied heavily on the receipts issued by Alejandro Tiongson. However, Patricia David testified that there was an agreement to purchase the lot for P15,000.00, payable as follows: P3,800.00 as down payment, with P385.00 monthly installments thereafter.¹⁶ The respondents failed to rebut such declaration, as the default order rendered them without personality to adduce evidence in their behalf.

However, in the brief filed with the appellate court, the Tiongsons alleged that the agreed price was P120.00 per sq. m. Hence, they are now estopped to deny the existence of an agreed price. The question to be determined should not be whether there was an agreed price, but what that agreed price was, whether for a total of P15,000.00, as claimed by the Davids or P120.00 per sq. m., as alleged by respondents. The sellers could not render invalid a perfected contract of sale by merely contradicting the buyers' allegation regarding the price, and subsequently raising the lack of agreement as to the price.

It is a fact that for three consecutive years, the Davids had religiously paid P385.00 as monthly installments, until it amounted to P15,050.00, including the downpayment. As to the first installment receipt, wherein only P300.00 was paid and a notation was written, to wit — "Subject to further discussion later on," Patricia David explained that what was subject to further discussion was not the total purchase price, but only the P65.00 underpayment.

The Court of Appeals held that the P115.00 overpayment confirmed the lack of agreement as to the price. However, the receipts showed that Davids paid only P15,050.00. It perplexes this Court how the appellate court came up with the P15,115.00 figure. At any rate, an overpayment of P50.00, as in this case, does not negate the existence of an agreed purchase price. Instead, this entitles the buyer to claim reimbursement of any overpayment made.

Furthermore, the Court of Appeals erred in applying the statute of frauds. The rule presupposes the existence of a perfected contract and requires only that a note or memorandum be executed in order to compel judicial enforcement thereof.¹⁷

At any rate, we rule that there was a perfected contract. However, the statute of frauds is inapplicable. The rule is settled that the statute of frauds applies only to executory and not to completed, executed, or partially executed contracts.¹⁸ In the case of spouses David, the payments made rendered the sales contract beyond the ambit of the statute of frauds.

The Court of Appeals erred in concluding that there was no perfected contract of sale. However, in view of the stipulation of the parties that the deed of sale and corresponding certificate of title would be issued after full payment, then, they had entered into a contract to sell and not a contract of sale.¹⁹

As to Florencia Ventura Vda. de Basco

Petitioner Florencia Ventura Vda. de Basco contends that the receipts described the two (2) lots that she bought. The receipts also indicated the price of each lot, to wit, P6,425.00 for the 109 sq. m. lot, and P6,500.00 for the 60 sq. m. lot.

As regards the 109 sq. m. lot, Florencia presented the following receipts as evidence of full payment:

Received from Mrs. Florencia Ventura-Basco of Cabalantian, Bacolor Pampanga, the sum of FIVE HUNDRED PESOS (P500.00), Philippine Currency, as additional partial payment on the parcel of land located at Cabalantian, Bacolor Pampanga, being the portion of Lot 1547-G-2-G of Psd-03-004803.

It is understood that this lot is the portion formerly earmarked for Mrs. Rosita Ventura-Muslan wherein she already paid the sum of P1,500.00; hence, by agreement of Mrs. Basco and Mrs. Muslan, who are sisters, the sum of P1,500.00 are applied herein as additional payment for and in behalf of Mrs. Basco, thereby making the total payments made by Mrs. Basco to said lot in the sum of P2,000.00, as of this date.

San Fernando, Pampanga, June 4, 1983.

(signed)

C O N F O R M E:

ALEJANDRO C. TIONGSON
(signed)

FLORENCIA VENTURA-BASCO
(signed)

ROSITA VENTURA-MUSLAN²⁰

Received from Mrs. Florencia Ventura-Basco of Cabalantian, Bacolor Pampanga, the sum of FOUR THOUSAND FOUR HUNDRED TWENTY FIVE PESOS (P4,425.00), Philippine Currency, representing the last and full payment on the purchase price of Lot 1547-G-2-G-2, Plan Psd-03-05957, located at Cabalantian, Bacolor Pampanga, with an area of 109 square meters, more or less, as regards the sum of P3,625 and the sum of P800.00 applied for the payment of the segregation survey of said lot.

Title over this lot shall be issued upon the survey and segregation of the additional portion which Mrs. Florencia V. Basco is also buying to be taken from Lot 1547-G-2-G-I, wherein the said portion of said Lot 1547-G-2-G-2 shall be consolidated into one lot only at the expense of the buyer.

San Fernando, Pampanga, September 1, 1983.

C O N F O R M E: FOR ALEJANDRO TIONGSON

Seller

(signed)
FLORENCIA VENTURA-BASCO

By: (signed)
PORFIRIO C. PINEDA
Buyer²¹

According to the Court of Appeals, the object is neither determinate nor determinable. It held that the receipts described two different lots, one described as Psd-03-004803, while the other as Psd-03-05957. It stated that the discrepancy showed there was no meeting of the minds as regards the object of the contract.

We disagree. We find that the 109 sq. m. lot was adequately described in the receipt, or at least, can be easily determinable. The receipt issued on June 4, 1983 stated that the lot being purchased by Florencia was the one earlier earmarked for her sister, Rosita Muslan. Thus, the subject lot is determinable. Any mistake in the designation of the lot does not vitiate the consent of the parties or affect the validity and binding effect of the contract of sale.²² The receipt issued on September 1, 1983 clearly described the lot area as 109 sq. m. It also showed that Florencia had fully paid the purchase price.

With respect to the sixty (60) sq. m. lot, Florencia presented the following receipts to prove full payment:

Received from Mrs. Florencia Basco of Cabalantian, Bacolor, Pampanga, the sum of THREE THOUSAND PESOS (P3,000.00), Philippine Currency, as partial and down payment on the purchase price of the additional portion adjacent to Lot 1547-G-2-G. The price on this portion shall be computed at P70.00 per square meter, and said portion shall be determined later as to its area, but in no case shall it be extended farther than the gate opening at Juan Cunanan's lot and the acacia tree on the north.

San Fernando, Pampanga, November 8, 1983.

(signed)

ALEJANDRO TIONGSON
Seller

x x x x x x x x x

Received from Mrs. Florencia Basco of Cabalantian, Bacolor, Pampanga, the sum of ONE THOUSAND PESOS (P1,000.00), Philippine Currency, as partial and down payment on a portion of Lot 1547-G-2-I, which is a portion of Lot 6 of the provisional plan with marking of Lot 35 on the sketch plan. The price shall be computed at P70.00 per square meter. The final area shall be determined in the final survey to be conducted.

This portion shall be across the road opposite the portion of same lot purchased by Macaria Ventura.

San Fernando, Pampanga, November 8, 1983.

(signed)

ALEJANDRO TIONGSON
Seller

x x x x x x x x x

Received from Mrs. Florencia Basco of Cabalantian, Bacolor, Pampanga, the sum of TWO THOUSAND FIVE HUNDRED PESOS (P2,500.00), to be applied as partial payment on the purchase price of Lots 8-A (60 square meters), computed at P70.00 and Lot 6-U (338 square meters), computed at P70.00 per square meter.

San Fernando, Pampanga, February 6, 1984.

(signed)

ALEJANDRO TIONGSON
Seller²³

Regarding this lot, we find that there was also a perfected contract of sale. In fact, in the last receipt the parties agreed on the specific lot area. This suffices to identify the specific lot involved. It was unnecessary for the parties to enter into another agreement to determine the exact property bought. What remained to be done was the actual segregation of the 60 square meters.

Furthermore, the parties agreed on the price. The receipts clearly indicate the price as P70.00 per sq. m., hence the total price should be P4,200.00. However, Florencia paid P6,500.00 for the lot. Hence, there was even an overpayment of P2,300.00.

WHEREFORE, we REVERSE and SET ASIDE the decision of the Court of Appeals in CA — G.R. CV No. 24667. In lieu thereof, we render judgment ordering the respondents Tiongsons to execute deeds of absolute sale covering the following lots respectively sold to petitioners, and cause the issuance of the corresponding certificates of title, to wit:

1. 300 sq. m. lot sold to spouses Venancio and Patricia David;

2. 109 sq. m. lot sold to Florencia Ventura Vda. de Basco.

With respect to the 60 sq. m. lot sold to Florencia Ventura Vda. de Basco, respondent Tiongson is ordered to cause the segregation of the lot, and thereafter, to execute a deed of absolute sale to Florencia Ventura Vda. de Basco and cause the issuance of a certificate of title thereto.

We delete the award for moral damages, for lack of basis.1âwphi1.nêt

No costs.

SO ORDERED.

Davide, Jr., C.J., Puno, Kapunan and Ynares-Santiago, JJ., concur.

Footnotes

¹ CA-G.R. CV. No. 24667, promulgated on October 19, 1992, Justice Ricardo P. Galvez, ponente, Justices Arturo B. Buena and Asaali S. Isnani, concurring. Rollo, pp. 52-62.

² Dated June 14, 1989, penned by Judge Patrocinio R. Corpuz. Rollo, pp. 32-37.

³ Original Records, p. 8.

⁴ Original Records, pp. 81-104.

⁵ Original Records, pp. 105-108.

⁶ Rollo, pp. 32-37.

⁷ Defendants contended that the illness and subsequent death of defendant Alejandro Tiongson prevented them from filing an answer in due time.

⁸ Rollo, pp. 52-62.

⁹ Rollo, p. 65.

¹⁰ Rollo, p. 65.

¹¹ This should only be P50.00 based on the receipts presented.

¹² 104 SCRA 668 [1981].

¹³ Dated February 6, 1984, Rollo, p. 77.

¹⁴ Rollo, pp. 61-62.

¹⁵ Rollo, p. 64.

¹⁶ TSN, May 22, 1989, p. 14.

¹⁷ Villanueva v. Court of Appeals, 267 SCRA 89 [1997].

¹⁸ Diwa v. Donato, 234 SCRA 608 [1994].

¹⁹ Heirs of Pedro Escanlar v. Court of Appeals, 281 SCRA 176 [1997].

²⁰ Original Record, Exhibit G, p. 105.

²¹ Original Record, Exhibit H, p. 106.

²² Cf. Atilano v. Atilano, 28 SCRA 231 [1969].

²³ Original Record, Exhibits I, J, K, pp. 107-108.

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