FIRST DIVISION
[ G.R. No. 246382. July 14, 2021 ]
SPOUSES BRENDA VALENZUELA AND ANACLETO[1] VALENZUELA, PETITIONER, VS. JOSELITO, MARGARITO, JR., AND WILLIAM ALL SURNAMED CAPALA; MARIA LILY CAPALA FLORES, MARGARITA CABANA OLIVER AND SUSAN CAPALA MENDOZA, RESPONDENTS.
CONCURRING AND DISSENTING OPINION
CAGUIOA, J.:
I concur in the result. The Contract to Buy is valid and respondents are bound to execute a Final Deed of Sale and to deliver Transfer Certificate of Title (TCT) No. 34880 upon receipt of the unpaid amount of the purchase price.1 I dissent, however, as regards (1) the discussion on the superseded judicial admission and (2) the characterization of the Contract to Buy as a contract to sell.
A judicial admission does not lose effect simply because a party amends his or her complaint
The ponencia holds:
Preliminarily, the Court will discuss the effect of the stipulation made by the parties during the pre-trial, specifically the admission as to the existence of the execution of the Contract to Buy between Teodorica and Brenda Valenzuela. In the original complaint filed by respondents Capala, they claim that Spouses Valenzuela should now turn over the subject property to them considering the death of Teodorica which extinguished the alleged Contract to Buy, terminating whatever rights and obligations created between the contracting parties. In the amended complaint, respondents Capala changed their principal cause of action to nullity of the Contract to Buy on the basis of forgery, asserting that Teodorica's signature therein was forged. The contract being a nullity, Spouses Valenzuela should now turn over the possession to respondents Capala.
It should be noted that the pre-trial was conducted prior to the amendment of the complaint. When the motion for leave to amend complaint was granted by the RTC, no other pre-trial was conducted. The Court disagrees with the CA that the admission as [to] the existence and due execution of the Contract to Buy stands. When respondents Capala changed their cause of action in their amended complaint to forgery, said admission no longer applies in their favor considering that it contradicts their claim as to the due execution and genuineness of the contract. Thus, said admission was vacated upon the [amendment] of the complaint.2
I disagree. The facts indicate that respondents filed an action for recovery of possession and ownership, claiming that the subject property was owned by their mother, Teodorica Capala (Teodorica), but that the same was in the possession of petitioners who had no right over the same.3 On the other hand, petitioners claimed that the subject property was sold to them by Teodorica by virtue of a Contract to Buy dated December 1, 1978. As such, it was incumbent upon her heirs to deliver the TCT and to execute a Final Deed of Sale in their favor.4 During pre-trial, respondents admitted the following stipulation:
4. The existence of the execution of the Contract to Buy between the late Teodorica Capala and the defendant Brenda Valenzuela executed on December 1, 1978 as notarized by Notary Public Bruno Villamor.5
Later, respondents sought: (1) to amend their complaint to emphasize that their principal cause of action was to declare the Contract to Buy null and void and (2) to correct their pre-trial admission.6
Confusingly, the RTC granted the motion to amend but denied the motion to correct the pre-trial admission because "[j]udicial admissions especially during pre-trial can no longer be undone except through evidence to be presented during trial that such admission was made through palpable mistake."7 Despite this judicial admission, the RTC eventually declared the Contract to Buy as null and void.
Reversing the RTC, the CA held that the Contract to Buy was valid. On the judicial admission, the CA held:
Nothing in the records would show that [respondents'] former counsel, Atty. Benjamin Tugonon, who they blame for the purported improvident admission, unintentionally agreed to the subject stipulation. Further negating the alluded mistake is the circumstance that the supposed erroneous admission is not at variance, but is rather consistent, with [respondents'] theory expressed in their Complaint, Reply and Pre-Trial Brief that said Contract does exist but has been concealed from them, and that it has been extinguished by Teodorica's death, thereby conceding the prior existence and due execution thereof.8
Based on the foregoing, I agree with the CA that the judicial admission stands. Section 4, Rule 129 of the Rules of Court expressly states that "[a]n admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made."9
Absent any showing that an admission was made through "palpable mistake" or that "no admission was made", there would be no basis to disregard the same. Rather, I find that the RTC erred in allowing respondents to amend their complaint and change their theory to belatedly claim that the contract was forged, without noticing the apparent inconsistency between respondents' judicial admission and their new cause of action. This is especially true considering that the RTC itself noted that "[j]udicial admissions especially during pre-trial can no longer be undone except through evidence to be presented during trial that such admission was made through palpable mistake."10 Indeed, giving weight to respondents' judicial admission is consistent with and in fact confirms the CA's finding that the Contract to Buy was validly executed.
A contract should not be considered as one "to sell" simply because the seller is obliged to execute a Final Deed upon full payment of the price
I likewise disagree with the conclusion that the parties entered into a contract to sell11 and not a contract of sale — simply because the Contract to Buy required the execution of a deed of absolute sale upon payment of the price, viz.:
That the Party for the First Part desires to sell said parcel of land aforementioned to the Party for the Second Part for a valuable sum of Thirty[-]Five Thousand Pesos (P35,000.00), Philippine Currency, and a token money or partial amount of which has been acknowledged in this document the sum of Ten Thousand Pesos (P10,000.00), has been paid by the Party [f]or the Second Part;
That the Party for the Second Part is to buy the land belonging to the Party for the First Part and hereby paid the sum of Ten Thousand Pesos (P10,000.00) to the Party for the First Part, as token money or earnest money acknowledged to have been received in full by the Party for the First Part;
That the remaining balance of P25,000.00, shall be paid by the Party for the Second Part to the Party for the First Part, as soon as the Transfer Certificate of Title shall be delivered by the Party for the First Part to the Party for the Second Part, and when this is complied [with,] a Final Deed of Sale of this lot shall be executed by the Party for the First Part to the Party for the Second Part.12 (Emphasis supplied)
I am aware that there are cases that hold that "[w]here the vendor promises to execute a deed of absolute sale upon the completion by the vendee of the payment of the price, the contract is only a contract to sell"13 and that "[t]he need to execute a deed of absolute sale upon completion of payment of the price generally indicates that it is a contract to sell, as it implies the reservation of title in the vendor until the vendee has completed the payment of the price."14
I submit, however, that this ruling is inaccurate and must be read in light of the law and jurisprudence regarding the nature of sales. In Spouses Beltran v. Spouses Cangayda,15 the Court held:
A contract of sale is consensual in nature, and is perfected upon the concurrence of its essential requisites, thus:
The essential requisites of a contract under Article 1318 of the New Civil Code are: (1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which is established. Thus, contracts, other than real contracts are perfected by mere consent which is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Once perfected, they bind other contracting parties and the obligations arising therefrom have the force of law between the parties and should be complied with in good faith. The parties are bound not only to the fulfillment of what has been expressly stipulated but also to the consequences which, according to their nature, may be in keeping with good faith, usage and law.1âшphi1
Being a consensual contract, sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. A perfected contract of sale imposes reciprocal obligations on the parties whereby the vendor obligates himself to transfer the ownership of and to deliver a determinate thing to the buyer who, in turn, is obligated to pay a price certain in money or its equivalent. Failure of either party to comply with his [or her] obligation entitles the other to rescission as the power to rescind is implied in reciprocal obligations. x x x16 (Emphasis supplied)
Evidently, a contract of sale is perfected by mere consent. The execution of a deed is only necessary for (1) enforceability under Article 140317 of the Civil Code, (2) convenience under Article 135818 of the same law, and (3) eventual registration with the Land Registration Authority under Presidential Decree No. 1529.19
Hence, the mere fact that an agreement requires the seller to physically execute a Final Deed of Sale and to deliver the TCT upon payment of the price does not necessarily mean that a perfected sale should be characterized as a contract to sell, particularly in cases where constructive or actual delivery of the property in question indicates otherwise. Under Article 149820 of the Civil Code, the execution of a sale in a public instrument constitutes constructive delivery and is an aspect of contract performance, not perfection.21 In San Lorenzo Development Corp. v. Court of Appeals,22 the Court explained:
Sale, being a consensual contract, is perfected by mere consent and from that moment, the parties may reciprocally demand performance. The essential elements of a contract of sale, to wit: (1) consent or meeting of the minds, that is, to transfer ownership in exchange for the price; (2) object certain which is the subject matter of the contract; (3) cause of the obligation which is established.
The perfection of a contract of sale should not, however, be confused with its consummation. In relation to the acquisition and transfer of ownership, it should be noted that sale is not a mode, but merely a title. A mode is the legal means by which dominion or ownership is created, transferred or destroyed, but title is only the legal basis by which to affect dominion or ownership. Under Article 712 of the Civil Code, "ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition." Contracts only constitute titles or rights to the transfer or acquisition of ownership, while delivery or tradition is the mode of accomplishing the same. Therefore, sale by itself does not transfer or affect ownership; the most that sale does is to create the obligation to transfer ownership. It is tradition or delivery, as a consequence of sale, that actually transfers ownership.
Explicitly, the law provides that the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him [or her] in any of the ways specified in Article 1497 to 1501. The word "delivered" should not be taken restrictively to mean transfer of actual physical possession of the property. The law recognizes two principal modes of delivery, to wit: (1) actual delivery; and (2) legal or constructive delivery.
Actual delivery consists in placing the thing sold in the control and possession of the vendee. Legal or constructive delivery, on the other hand, may be had through any of the following ways: the execution of a public instrument evidencing the sale; symbolical tradition such as the delivery of the keys of the place where the movable sold is being kept; traditio longa manu or by mere consent or agreement if the movable sold cannot yet be transferred to the possession of the buyer at the time of the sale; traditio brevi manu if the buyer already had possession of the object even before the sale; and traditio constitutum possessorium, where the seller remains in possession of the property in a different capacity.23 (Emphasis supplied; italics in the original)
In view of the foregoing principles, I disagree with the doctrine that an undertaking to execute a final deed upon full payment of the price necessarily means that the parties entered into a contract to sell and that no contract of sale yet exists.
In fact, while I note that the parties in the instant case used the terms "to buy" and "to sell" (i.e., terms often associated with contracts to sell), the totality of the following contemporaneous and subsequent acts evince their intention to enter into a contract of sale:24 (1) upon the execution of the Contract to Buy, Teodorica delivered actual possession of the subject property to petitioners;25 (2) petitioners took possession of the property, constructed a building for their battery business, and began residing on the property;26 (3) Teodorica did not take any steps to recover the property from petitioners from the time of the sale until her death;27 (4) petitioners possessed the property from 1979 until the present;28 (5) Teodorica's heirs did not take any steps to recover the property for over 20 years (from the sale executed in 1978 until the filing of the complaint in 1999);29 and, (6) the Contract to Buy itself recognized the receipt of earnest money, which may be considered as proof of the perfection of a contract of sale.30
In view of the foregoing, I agree with petitioners that a perfected contract of sale exists and that respondents are bound to execute a Final Deed of Sale and to deliver Transfer Certificate of Title No. 34880 upon receipt of the unpaid amount of the purchase price.31 Further, considering that the instant case has been pending for over 20 years, I find it proper to require the parties to comply with their respective obligations within 30 days from finality of this decision.
Footnotes
1 Ponencia, p. 17.
2 Id. at 10-11.
3 Id. at 2.
4 Id. at 3-4.
5 Id. at 4.
6 See id. at 4-5
7 Rollo, p. 28.
8 Id. at 110.
9 Emphasis supplied.
10 Supra note 7.
11 See ponencia, p. 17.
12 Rollo, p. 80.
13 Nabus v. Spouses Pacson, 620 Phil. 344, 363, citing Ver Reyes v. Salvador, Sr., G.R. Nos. 139047 & 139365, September 11, 2008, 564 SCRA 456, 479-480.
14 Ponencia, p. 17. Citations omitted.
15 838 Phil. 935 (2018).
16 Id. at 945-946. Citations omitted.
17 ART. 1403. The following contracts are unenforceable, unless they are ratified:
(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases, an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year from the making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of another;
(c) An agreement made in consideration of marriage, other than a mutual promise to marry;
(d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum;
(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein;
(f) A representation as to the credit of a third person.
(3) Those where both parties are incapable of giving consent to a contract.
18 ART. 1358. The following must appear in a public document:
(1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest are governed by Articles 1403, No. 2, and 1405;
(2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains;
(3) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person;
(4) The cession of actions or rights proceeding from an act appearing in a public document.
All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales of goods, chattels or things in action are governed by Articles 1403, No. 2 and 1405.
19 AMENDING AND CODIFYING THE LAWS RELATIVE TO REGISTRATION OF PROPERTY AND FOR OTHER PURPOSES, otherwise known as the "PROPERTY REGISTRATION DECREE," June 11, 1978. Section 112 states:
SEC. 112. Forms in conveyancing. – The Commissioner of Land Registration shall prepare convenient blank forms as may be necessary to help facilitate the proceedings in land registration and shall take charge of the printing of land title forms.
Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary instruments, whether affecting registered or unregistered land, executed in accordance with law in the form of public instruments shall be registrable: Provided, that, every such instrument shall be signed by the person or persons executing the same in the presence of at least two witnesses who shall likewise sign thereon, and shall be acknowledged to be the free act and deed of the person or persons executing the same before a notary public or other public officer authorized by law to take acknowledgment. Where the instrument so acknowledged consists of two or more pages including the page whereon acknowledgment is written, each page of the copy which is to be registered in the office of the Register of Deeds, or if registration is not contemplated, each page of the copy to be kept by the notary public, except the page where the signatures already appear at the foot of the instrument, shall be signed on the left margin thereof by the person or persons executing the instrument and their witnesses, and all the pages sealed with the notarial seal, and this fact as well as the number of pages shall be stated in the acknowledgment. Where the instrument acknowledged relates to a sale, transfer, mortgage or encumbrance of two or more parcels of land, the number thereof shall likewise be set forth in said acknowledgment.
20 ART. 1498. When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.
With regard to movable property, its delivery may also be made by the delivery of the keys of the place or depository where it is stored or kept.
21 Far East Bank and Trust Co. v. Phil. Deposit Insurance Corp., 764 Phil. 488 (2015) explains:
It is well-established that a contract undergoes various stages that include its negotiation or preparation, its perfection, and finally, its consummation.
Negotiation covers the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is concluded (perfected). The perfection of the contract takes place upon the concurrence of its essential elements. A contract which is consensual as to perfection is so established upon a mere meeting of minds, i.e., the concurrence of offer and acceptance, on the object and on the cause or consideration. The consummation stage begins when the parties perform their respective undertakings under the contract, culminating in its extinguishment. (Emphasis and italics in the original) Id. at 503. Citations omitted.
22 490 Phil. 7 (2005).
23 Id. at 20-22. Citations omitted.
24 CIVIL CODE, Art. 1371 provides:
ART. 1371. In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered.
25 See ponencia, p. 13.
26 Id.
27 Id.
28 Id.
29 Rollo, p. 37.
30 CIVIL CODE, Art. 1482 provides:
ART. 1482. Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract.
31 Ponencia, p. 17.
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