[G.R. No. 109125. December 2, 1994.]

ANG YU ASUNCION, ARTHUR GO AND KEH TIONG,Petitioners, v. THE HON. COURT OF APPEALS and BUEN REALTY DEVELOPMENT CORPORATION,Respondents.

D E C I S I O N

VITUG,J.:

Assailed, in this petition for review, is the decision of the Court of Appeals, dated 04 December 1991, in CA-G.R. SP No. 26345 setting aside and declaring without force and effect the orders of execution of the trial court, dated 30 August 1991 and 27 September 1991, in Civil Case No. 87-41058.

The antecedents are recited in good detail by the appellate court thusly:jgc:chanrobles.com.ph

"On July 29, 1987 a Second Amended Complaint for Specific Performance was filed by Ann Yu Asuncion and Keh Tiong, Et Al., against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan before the Regional Trial Court, Branch 31, Manila in Civil Case No. 87-41058, alleging, among others, that plaintiffs are tenants or lessees of residential and commercial spaces owned by defendants described as Nos. 630-638 Ongpin Street, Binondo, Manila; that they have occupied said spaces since 1935 and have been religiously paying the rental and complying with all the conditions of the lease contract; that on several occasions before October 9, 1986, defendants informed plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same; that during the negotiations, Bobby Cu Unjieng offered a price of P6-million while plaintiffs made a counter offer of P5-million; that plaintiffs thereafter asked the defendants to put their offer in writing to which request defendants acceded; that in reply to defendants letter, plaintiffs wrote them on October 24, 1986 asking that they specify the terms and conditions of the offer to sell; that when plaintiffs did not receive any reply, they sent another letter dated January 28, 1987 with the same request; that since defendants failed to specify the terms and conditions of the offer to sell and because of information received that defendants were about to sell the property, plaintiffs were compelled to file the complaint to compel defendants to sell the property to them.

"Defendants filed their answer denying the material allegations of the complaint and interposing a special defense of lack of cause of action.

"After the issues were joined, defendants filed a motion for summary judgment which was granted by the lower court. The trial court found that defendants offer to sell was never accepted by the plaintiffs for the reason that the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contract of sale at all. Nonetheless, the lower court ruled that should the defendants subsequently offer their property for sale at a price of P11-million or below, plaintiffs will have the right of first refusal. Thus the dispositive portion of the decision states:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered in favor of the defendants and against the plaintiffs summarily dismissing the complaint subject to the aforementioned condition that if the defendants subsequently decide to offer their property for sale for a purchase price of Eleven Million Pesos or lower, then the plaintiffs has the option to purchase the property or of first refusal, otherwise, defendants need not offer the property to the plaintiffs if the purchase price is higher than Eleven Million Pesos.

"SO ORDERED.

"Aggrieved by the decision, plaintiffs appealed to this Court in CA-G.R. CV No. 21123. In a decision promulgated on September 21, 1990 (penned by Justice Segundino G. Chua and concurred in by Justices Vicente V. Mendoza and Fernando A. Santiago), this Court affirmed with modification the lower courts judgment, holding:jgc:chanrobles.com.ph

"In resume, there was no meeting of the minds between the parties concerning the sale of the property. Absent such requirement, the claim for specific performance will not lie. Appellants demand for actual, moral and exemplary damages will likewise fail as there exists no justifiable ground for its award. Summary judgment for defendants was properly granted. Courts may render summary judgment when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law (Garcia v. Court of Appeals, 176 SCRA 815). All requisites obtaining, the decision of the court a quo is legally justifiable.

WHEREFORE, finding the appeal unmeritorious, the judgment appealed from is hereby AFFIRMED, but subject to the following modification: The court a quo in the aforestated decision gave the plaintiffs-appellants the right of first refusal only if the property is sold for a purchase price of Eleven Million pesos or lower; however, considering the mercurial and uncertain forces in our market economy today. We find no reason not to grant the same right of first refusal to herein appellants in the event that the subject property is sold for a price in excess of Eleven Million pesos. No pronouncement as to costs.

SO ORDERED.

"The decision of this Court was brought to the Supreme Court by petition for review oncertiorari. The Supreme Court denied the appeal on May 6, 1991 for insufficiency in form and substances (Annex H, Petition).

"On November 15, 1990, while CA-G.R. CV No. 21123 was pending consideration by this Court, the Cu Unjieng spouses executed a Deed of Sale (Annex D, Petition) transferring the property in question to herein petitioner Buen Realty and Development Corporation, subject to the following terms and conditions:jgc:chanrobles.com.ph

"1. That for and in consideration of the sum of FIFTEEN MILLION PESOS (P15,000,000.00), receipt of which in full is hereby acknowledged, the VENDORS hereby sells, transfers and conveys for and in favor of the VENDEE, his heirs, executors, administrators or assigns, the above-described property with all the improvements found therein including all the rights and interest in the said property free from all liens and encumbrances of whatever nature, except the pending ejectment proceeding;

2. That the VENDEE shall pay the Documentary Stamp Tax, registration fees for the transfer of title in his favor and other expenses incidental to the sale of above-described property including capital gains tax and accrued real estate taxes.

"As a consequence of the sale, TCT No. 105254/T-881 in the name of the Cu Unjieng spouses was cancelled and, in lieu thereof, TCT No. 195816 was issued in the name of petitioner on December 3, 1990.

"On July 1, 1991, petitioner as the new owner of the subject property wrote a letter to the lessees demanding that the latter vacate the premises.

"On July 16, 1991, the lessees wrote a reply to petitioner stating that petitioner brought the property subject to the notice of lis pendens regarding Civil Case No. 87-41058 annotated on TCT No. 105254/T-881 in the name of the Cu Unjiengs.

"The lessees filed a Motion for Execution dated August 27, 1991 of the Decision in Civil Case No. 87-41058 as modified by the Court of Appeals in CA-G.R. CV No. 21123.

"On August 30, 1991, respondent Judge issued an order (Annex A, Petition) quoted as follows:jgc:chanrobles.com.ph

"Presented before the Court is a Motion for Execution filed by plaintiff represented by Atty. Antonio Albano. Both defendants Bobby Cu Unjieng and Rose Cu Unjieng represented by Atty. Vicente Sison and Atty. Anacleto Magno respectively were duly notified in todays consideration of the motion as evidenced by the rubber stamp and signatures upon the copy of the Motion for Execution.

The gist of the motion is that the Decision of the Court dated September 21, 1990 as modified by the Court of Appeals in its decision in CA G.R. CV-21123, and elevated to the Supreme Court upon the petition for review and that the same was denied by the highest tribunal in its resolution dated May 6, 1991 in G.R. No. L-97276, had now become final and executory. As a consequence, there was an Entry of Judgment by the Supreme Court as of June 6, 1991, stating that the aforesaid modified decision had already become final and executory.

It is the observation of the Court that this property in dispute was the subject of the Notice of Lis Pendens and that the modified decision of this Court promulgated by the Court of Appeals which had become final to the effect that should the defendants decide to offer the property for sale for a price of P11 Million or lower, and considering the mercurial and uncertain forces in our market economy today, the same right of first refusal to herein plaintiffs/appellants in the event that the subject property is sold for a price in excess of Eleven Million pesos or more.

WHEREFORE, defendants are hereby ordered to execute the necessary Deed of Sale of the property in litigation in favor of plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15 Million pesos in recognition of plaintiffs right of first refusal and that a new Transfer Certificate of Title be issued in favor of the buyer.

All previous transactions involving the same property notwithstanding the issuance of another title to Buen Realty Corporation, is hereby set aside as having been executed in bad faith.

SO ORDERED.

"On September 22, 1991 respondent Judge issue another order, the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, let there be Writ of Execution issue in the above-entitled case directing the Deputy Sheriff Ramon Enriquez of this Court to implement said Writ of Execution ordering the defendants among others to comply with the aforesaid Order of this Court within a period of one (1) week from receipt of this Order and for defendants to execute the necessary Deed of Sale of the property in litigation in favor of the plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15,000,000.00 and ordering the Register of Deeds of the City of Manila, to cancel and set aside the title already issued in favor of Buen Realty Corporation which was previously executed between the latter and defendants and to register the new title in favor of the aforesaid plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go.

SO ORDERED.

"On the same day, September 27, 1991 the corresponding writ of execution (Annex C, Petition) was issued." 1

On 04 December 1991, the appellate court, on appeal to it by private respondent, set aside and declared without force and effect the above questioned orders of the court a quo.

In this petition for review oncertiorari, petitioners contend that Buen Realty can be held bound by the writ of execution by virtue of the notice of lis pendens, carried over on TCT No. 195816 issued in the name of Buen Realty, at the time of the latters purchase of the property on 15 November 1991 from the Cu Unjiengs.chanrobles.com : virtual law library

We affirm the decision of the appellate court.

A not too recent development in real estate transactions is the adoption of such arrangements as the right of first refusal, a purchase option and a contract to sell. For ready reference, we might point out some fundamental precepts that may find some relevance to this discussion.

An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code). The obligation is constituted upon the concurrence of the essential elements thereof, viz: (a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations (law, contracts, quasi-contracts, delicts and quasi-delicts); (b) the object which is the prestation or conduct; required to be observed (to give, to do or not to do); and (c) the subject-persons who, viewed from the demandability of the obligation, are the active (obligee) and the passive (obligor) subjects.

Among the sources of an obligation is a contract (Art. 1157, Civil Code), which is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service (Art. 1305, Civil Code). 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 the essential elements thereof. 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 thereof. A contract which requires, in addition to the above, the delivery of the object of the agreement, as in a pledge or commodatum, is commonly referred to as a real contract. In a solemn contract, compliance with certain formalities prescribed by law, such as in a donation of real property, is essential in order to make the act valid, the prescribed form being thereby an essential element thereof. The stage of consummation begins when the parties perform their respective undertakings under the contract culminating in the extinguishment thereof.chanrobles virtual lawlibrary

Until the contract is perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation. In sales, particularly, to which the topic for discussion about the case at bench belongs, the contract is perfected when a person, called the seller, obligates himself, for a price certain, to deliver and to transfer ownership of a thing or right to another, called the buyer, over which the latter agrees. Article 1458 of the Civil Code provides:jgc:chanrobles.com.ph

"Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.

"A contract of sale may be absolute or conditional.

When the sale is not absolute but conditional, such as in a "Contract to Sell" where invariably the ownership of the thing sold is retained until the fulfillment of a positive suspensive condition (normally, the full payment of the purchase price), the breach of the condition will prevent the obligation to convey title from acquiring an obligatory force. 2 In Dignos v. Court of Appeals (158 SCRA 375), we have said that, although denominated a "Deed of Conditional Sale," a sale is still absolute where the contract is devoid of any proviso that title is reserved or the right to unilaterally rescind is stipulated, e.g., until or unless the price is paid. Ownership will then be transferred to the buyer upon actual or constructive delivery (e.g., by the execution of a public document) of the property sold. Where the condition is imposed upon the perfection of the contract itself, the failure of the condition would prevent such perfection. 3 If the condition is imposed on the obligation of a party which is not fulfilled, the other party may either waive the condition or refuse to proceed with the sale (Art. 1545, Civil Code). 4

An unconditional mutual promise to buy and sell, as long as the object is made determinate and the price is fixed, can be obligatory on the parties, and compliance therewith may accordingly be exacted. 5

An accepted unilateral promise which specifies the thing to be sold and the price to be paid, when coupled with a valuable consideration distinct and separate from the price, is what may properly be termed a perfected contract of option. This contract is legally binding, and in sales, it conforms with the second paragraph of Article 1479 of the Civil Code, viz:jgc:chanrobles.com.ph

"ART. 1479. . . . .

"An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price. (1451a) 6

Observe, however, that the option is not the contract of sale itself. 7 The optionee has the right, but not the obligation, to buy. Once the option is exercised timely, i.e., the offer is accepted before a breach of the option, a bilateral promise to sell and to buy ensues and both parties are then reciprocally bound to comply with their respective undertakings. 8

Let us elucidate a little. A negotiation is formally initiated by an offer. An imperfect promise (policitacion) is merely an offer. Public advertisements or solicitations and the like are ordinarily construed as mere invitations to make offers or only as proposals. These relations, until a contract is perfected, are not considered binding commitments. Thus, at any time prior to the perfection of the contract, either negotiating party may stop the negotiation. The offer, at this stage, may be withdrawn; the withdrawal is effective immediately after its manifestation, such as by its mailing and not necessarily when the offeree learns of the withdrawal (Laudico v. Arias, 43 Phil. 270). Where a period is given to the offeree within which to accept the offer, the following rules generally govern:chanrob1es virtual 1aw library

(1) If the period is not itself founded upon or supported by a consideration, the offeror is still free and has the right to withdrawal the offer before its acceptance, or, if an acceptance has been made, before the offerors coming to know of such fact, by communicating that withdrawal to the offeree (see Art. 1324, Civil Code; see also Atkins, Kroll & Co. v. Cua, 102 Phil. 948, holding that this rule is applicable to a unilateral promise to sell under Art. 1479, modifying the previous decision in South Western Sugar v. Atlantic Gulf, 97 Phil. 249; see also Art. 1319, Civil Code; Rural Bank of Paraaque, Inc., v. Remolado, 135 SCRA 409; Sanchez v. Rigos, 45 SCRA 368). The right to withdraw, however, must not be exercised whimsically or arbitrarily; otherwise, it could give rise to a damage claim under Article 19 of the Civil Code which ordains that "every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith."chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

(2) If the period has a separate consideration, a contract of "option" is deemed perfected, and it would be a breach of that contract to withdraw the offer during the agreed period. The option, however, is an independent contract by itself, and it is to be distinguished from the projected main agreement (subject matter of the option) which is obviously yet to be concluded. If, in fact, the optioner-offeror withdraws the offer before its acceptance (exercise of the option) by the optionee-offeree, the latter may not sue for specific performance on the proposed contract ("object" of the option) since it has failed to reach its own stage of perfection. The optioner-offeror, however, renders himself liable for damages for breach of the option. In these cases, care should be taken of the real nature of the consideration given, for if, in fact, it has been intended to be part of the consideration for the main contract with a right of withdrawal on the part of the optionee, the main contract could be deemed perfected; a similar instance would be an "earnest money" in a contract of sale that can evidence its perfection (Art. 1482, Civil Code).

In the law on sales, the so-called "right of first refusal" is an innovative juridical relation. Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code. Neither can the right of first refusal, understood in its normal concept, per se be brought within the purview of an option under the second paragraph of Article 1479, aforequoted, or possibly of an offer under Article 1319 9 of the same Code. An option or an offer would require, among other things, 10 a clear certainty on both the object and the cause or consideration of the envisioned contract. In a right of first refusal, while the object might be made determinate, the exercise of the right, however, would be dependent not only on the grantors eventual intention to enter into a binding juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior thereto, it can at best be so described as merely belonging to a class of preparatory juridical relations governed not by contracts (since the essential elements to establish the vinculum juris would still be indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered provisions of the Civil Code on human conduct.cralawnad

Even on the premise that such right of first refusal has been decreed under a final judgment, like here, its breach cannot justify correspondingly an issuance of a writ of execution under a judgment that merely recognizes its existence, nor would it sanction an action for specific performance without thereby negating the indispensable element of consensuality in the perfection of contracts. 11 It is not to say, however, that the right of first refusal would be inconsequential for, such as already intimated above, an unjustified disregard thereof, given, for instance, the circumstances expressed in Article 19 12 of the Civil Code, can warrant a recovery for damages.

The final judgment in Civil Case No. 87-41058, it must be stressed, has merely accorded a "right of first refusal" in favor of petitioners. The consequence of such a declaration entails no more than what has heretofore been said. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of private respondents to honor the right of first refusal, the remedy is not a writ of execution on the judgment, since there is none to execute, but an action for damages in a proper forum for the purpose.

Furthermore, whether private respondent Buen Realty Development Corporation, the alleged purchaser of the property, has acted in good faith or bad faith and whether or not it should, in any case, be considered bound to respect the registration of the lis pendens in Civil Case No. 87-41058 are matters that must be independently addressed in appropriate proceedings. Buen Realty, not having been impleaded in Civil Case No. 87-41058, cannot be held subject to the writ of execution issued by respondent Judge, let alone ousted from the ownership and possession of the property, without first being duly afforded its day in court.

We are also unable to agree with petitioners that the Court of Appeals has erred in holding that the writ of execution varies the terms of the judgment in Civil Case No. 87-41058, later affirmed in CA-G.R. CV-21123. The Court of Appeals, in this regard, has observed:chanrobles virtual lawlibrary

"Finally, the questioned writ of execution is in variance with the decision of the trial court as modified by this Court. As already stated, there was nothing in said decision 13 that decreed the execution of a deed of sale between the Cu Unjiengs and respondent lessees, or the fixing of the price of the sale, or the cancellation of title in the name of petitioner (Limpin v. IAC, 147 SCRA 516; Pamantasan ng Lungsod ng Maynila v. IAC, 143 SCRA 311; De Guzman v. CA, 137 SCRA 730; Pastor v. CA, 122 SCRA 885)."cralaw virtua1aw library

It is likewise quite obvious to us that the decision in Civil Case No. 87-41058 could not have decreed at the time the execution of any deed of sale between the Cu Unjiengs and petitioners.

WHEREFORE, we UPHOLD the Court of Appeals in ultimately setting aside the questioned Orders, dated 30 August 1991 and 27 September 1991, of the court a quo. Costs against petitioners.

SO ORDERED.

THIRD DIVISIONG.R. No. 205879, April 23, 2014SKUNAC CORPORATION AND ALFONSO F. ENRIQUEZ,Petitioners,v.ROBERTO S. SYLIANTENG AND CAESAR S. SYLIANTENG,Respondents.D E C I S I O NPERALTA,J.:This treats of the petition for review oncertiorariassailing the Decision1and Resolution2of the Court of Appeals (CA), dated August 10, 2012 and February 18, 2013, respectively, in CAG.R. CV No. 92022.

The factual and procedural antecedents of the case, as narrated by the CA, are as follows:chanRoblesvirtualLawlibraryThe civil cases before the [Regional Trial Court of Pasig City] involved two (2) parcels of land identified as Lot 1, with an area of 1,250 square meters (Civil Case No. 63987) and Lot 2, with an area of 990 square meters (Civil Case No. 63988), both found in Block 2 of the Pujalte Subdivision situated along Wilson Street, Greenhills, San Juan City which are portions of a parcel of land previously registered in the name of Luis A. Pujalte on October 29, 1945 and covered by Transfer Certificate of Title (TCT) No. (78865) (2668) 93165 (Mother Title) of the Register of Deeds for the City of Manila.

Plaintiffsappellants Roberto S. Sylianteng and Caesar S. Sylianteng (appellants) base their claim of ownership over the subject lots a Deed of Absolute Sale executed in their favor by their mother, Emerenciana Sylianteng (Emerenciana), on June 27, 1983. Appellants further allege that Emerenciana acquired the lots from the late Luis Pujalte [Luis] through a Deed of Sale dated June 20, 1958 as reflected in Entry No. P.E. 4023, annotated on the covering TCT, by virtue of which she was issued TCT No. 42369. Then, when she sold the lots to appellants, TCT No. 39488, covering the same, was issued in their names.

[Herein petitioners] Skunac Corporation (Skunac) and Alfonso F. Enriquez (Enriquez), on the other hand, claim that a certain Romeo Pujalte who was declared by the RTC of Pasig City, Branch 151 in Special Proceedings No. 3366 as the sole heir of Luis Pujalte, caused the reconstitution of the Mother Title resulting to its cancellation and the issuance of TCT No. 5760R in his favor. Romeo Pujalte then allegedly sold the lots to Skunac and Enriquez in 1992. Thus, from TCT No. 5760R, TCT No. 5888R, for Lot 1 was issued in the name of Skunac, while TCT No. 5889R for Lot 2 was issued in the name of Enriquez.

[Respondents] contend that they have a better right to the lots in question because the transactions conveying the same to them preceded those claimed by [petitioners] as source of the latters titles. [Respondents] further assert that [petitioners] could not be considered as innocent purchasers in good faith and for value because they had prior notice of the previous transactions as stated in the memorandum of encumbrances annotated on the titles covering the subject lots. [Petitioners], for their part, maintain that [respondents] acquired the lots under questionable circumstances it appearing that there was no copy of the Deed of Sale, between Emerenciana and Luis Pujalte, on file with the Office of the Register of Deeds.3

On November 16, 2007, the Regional Trial Court of Pasig (RTC) rendered judgment in favor of herein petitioners. The dispositive portion of the RTC Decision reads as follows:chanRoblesvirtualLawlibraryWHEREFORE, premises considered, judgment is hereby rendered in favor of the defendants and against the plaintiffs:1. Declaring as null and void TCT No. 42369 in the name of Emerciana (sic) Sylianteng and TCT No. 39488 in the name of plaintiffs herein and ordering the cancellation thereof;

2. Declaring the herein defendants as buyers in good faith and for value; and

3. Declaring TCT No. 5888R in the name of SKUNAC Corporation and TCT No. 5889R in the name of Alfonso Enriquez as valid.

The complaintinintervention is ordered dismissed.

With costs against the plaintiffs.SO ORDERED.4

Herein respondents then filed an appeal with the CA.

On August 10, 2012, the CA promulgated its assailed Decision, disposing as follows:chanRoblesvirtualLawlibraryWHEREFORE, in light of all the foregoing, the appeal isGRANTED. The decision dated November 16, 2007 of Branch 160, Regional Trial Court of Pasig City in Civil Case No. 63987 is herebyREVERSED and SET ASIDE.

Judgment is hereby rendered in favor of plaintiffsappellants Roberto S. Sylianteng and Caesar S. Sylianteng and against defendantsappellees Skunac Corporation and Alfonso F. Enriquez, and intervenorappellee Romeo N. Pujalte:1. Declaring as null and void Transfer Certificate of Title No. 5760R in the name of Romeo N. Pujalte, Transfer Certificate of Title No. 5888R in the name of Skunac Corporation, and Transfer Certificate of Title No. 5889R in the name of Alfonso F. Enriquez;

2. Upholding the validity of Transfer Certificate of Title No. 42369 in the name of Emerenciana Sylianteng, and Transfer Certificate of Title No. 39488 in the names of Roberto S. Sylianteng and Caesar S. Sylianteng; and

3. Ordering defendantsappellees Skunac Corporation and Alfonso F. Enriquez, and intervenorappellee Romeo N. Pujalte, jointly and severally, to pay plaintiffsappellants Roberto S. Sylianteng and Caesar S. Sylianteng:a. Moral damages in the amount of P500,000.00,b. Exemplary damages in the amount of P500,000.00,c. Attorneys fees in the amount of P250,000.00, andd. The costs of suit.SO ORDERED.5

Petitioners filed a Motion for Reconsideration, but the CA denied it in its Resolution dated February 18, 2013.

Hence, the instant petition with the following assignment of errors:chanRoblesvirtualLawlibraryI. THE HONORABLE COURT OF APPEALS ERRED IN APPLYING IN THE CASE THE PROVISION OF THE CIVIL CODE ON DOUBLE SALE OF A REGISTERED LAND.

II. THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING THAT RESPONDENTS FAILED TO PROVE THE EXISTENCE OF SALE BETWEEN LUIS PUJALTE AND THEIR PREDECESSORININTEREST, EMERENCIANA SYLIANTENG.

III. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING NULL AND VOID TCT NO. 42369 PURPORTED TO HAVE BEEN ISSUED TO EMERENCIANA SYLIANTENG BY THE REGISTER OF DEEDS OF QUEZON CITY.

IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING THAT PETITIONERS ARE THE LAWFUL OWNERS OF THE SUBJECT LOTS SINCE THEY HAVE VALIDLY ACQUIRED THE SAME FROM ROMEO PUJALTE, THE SOLE HEIR OF LUIS PUJALTE.

V. THE HONORABLE COURT OF APPEALS ERRED IN AWARDING MORAL AND EXEMPLARY DAMAGES AS WELL AS ATTORNEY'S FEES AND COST OF SUIT TO RESPONDENTS CONSIDERING THAT PETITIONERS WERE NOT IN BAD FAITH IN PURCHASING THE SUBJECT LOTS.6

The petition lacks merit.

At the outset, the Court observes that the main issues raised in the instant petition are essentially questions of fact. It is settled that, as a rule, in petitions for review oncertiorariunder Rule 45 of the Rules of Court, only questions of law may be put in issue.7Questions of fact cannot be entertained. There are, however, recognized exceptions to this rule, to wit:chanRoblesvirtualLawlibrary(a) When the findings are grounded entirely on speculation, surmises, or conjectures;(b) When the inference made is manifestly mistaken, absurd, or impossible;(c) When there is grave abuse of discretion;(d) When the judgment is based on a misapprehension of facts;(e) When the findings of facts are conflicting;(f) When in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee;(g)When the CAs findings are contrary to those by the trial court;(h) When the findings are conclusions without citation of specific evidence on which they are based;(i) When the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent;(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or(k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.8

In the instant case, the findings of the CA and the RTC are conflicting. It, thus, behooves this Court to entertain the questions of fact raised by petitioners and review the records of this case to resolve these conflicting findings. Thus, this Court held in the case ofManongsong v. Estimo9that:chanRoblesvirtualLawlibraryWe review the factual and legal issues of this case in light of the general rules of evidence and the burden of proof in civil cases, as explained by this Court inJison v. Court of Appeals:x x x Simply put, he who alleges the affirmative of the issue has the burden of proof, and upon the plaintiff in a civil case, the burden of proof never parts. However, in the course of trial in a civil case, once plaintiff makes out aprima faciecase in his favor, the duty or the burden of evidence shifts to defendant to controvert plaintiffsprima faciecase, otherwise, a verdict must be returned in favor of plaintiff. Moreover, in civil cases, the party having the burden of proof must produce a preponderance of evidence thereon, with plaintiff having to rely on the strength of his own evidence and not upon the weakness of the defendants. The concept of preponderance of evidence refers to evidence which is of greater weight, or more convincing, that which is offered in opposition to it; at bottom, it means probability of truth.10

Coming to the merits of the case, the abovementioned assignment of errors boils down to two basic questions: (1) whether or not respondents' predecessorininterest, Emerenciana, validly acquired the subject lots from Luis, and (2) whether or not respondents, in turn, validly acquired the same lots from Emerenciana.

The Court rules in the affirmative, but takes exception to the CAs and RTCs application of Article 1544 of the Civil Code.

Reliance by the trial and appellate courts on Article 1544 of the Civil Code is misplaced. The requisites that must concur for Article 1544 to apply are:chanRoblesvirtualLawlibrary(a) The two (or more sales) transactions must constitute valid sales;(b) The two (or more) sales transactions must pertain to exactly the same subject matter;(c) The two (or more) buyers at odds over the rightful ownership of the subject matter must each represent conflicting interests; and(d) The two (or more) buyers at odds over the rightful ownership of the subject mattermust each have bought from the very same seller.11

Obviously, said provision has no application in cases where the sales involved were initiated not by just one but two vendors.12In the present case, the subject lots were sold to petitioners and respondents by two different vendors Emerenciana and Romeo Pujalte (Romeo). Hence, Article 1544 of the Civil Code is not applicable.

Nonetheless, the Court agrees with the findings and conclusion of the CA that Emerencianas acquisition of the subject lots from Luis and her subsequent sale of the same to respondents are valid and lawful. Petitioners dispute such finding. To prove their contention, they assail the authenticity and due execution of the deed of sale between Luis and Emerenciana.

Petitioners contend that respondents' presentation of the duplicate/carbon original of the Deed of Sale13dated June 20, 1958 is in violation of the best evidence rule under Section 3, Rule 130 of the Rules of Court.14The Court does not agree.

The best evidence rule is inapplicable to the present case. The said rule applies only when the content of such document is the subject of the inquiry.15Where the issue is only as to whether such document was actually executed, or exists, or on the circumstances relevant to or surrounding its execution, the best evidence rule does not apply and testimonial evidence is admissible.16Any other substitutionary evidence is likewise admissible without need to account for the original.17In the instant case, what is being questioned is the authenticity and due execution of the subject deed of sale. There is no real issue as to its contents.

In any case, going to the matter of authenticity and due execution of the assailed document, petitioners do not dispute that the copy of the deed of sale that respondents submitted as part of their evidence is a duplicate of the original deed of sale dated June 20, 1958. It is settled that a signed carbon copy or duplicate of a document executed at the same time as the original is known as a duplicate original and maybe introduced in evidence without accounting for the nonproduction of the original.18

Moreover, Section 4 (b), Rule 130 of the Rules of Court provides that [w]hen a document is in two or more copies executed at or about the same time, with identical contents, all such copies are equally regarded as originals.

In addition, evidence of the authenticity and due execution of the subject deed is the fact that it was notarized. The notarization of a private document converts it into a public document.19Moreover, a notarized instrument is admissible in evidence without further proof of its due execution, is conclusive as to the truthfulness of its contents, and has in its favor the presumption of regularity.20This presumption is affirmed if it is beyond dispute that the notarization was regular.21 To assail the authenticity and due execution of a notarized document, the evidence must be clear, convincing and more than merely preponderant.22

In the present case, petitioners failed to present convincing evidence to prove that the notarization of the subject deed was irregular as to strip it of its public character. On the contrary, a certified copy of page 26 of the notarial register of the notary public who notarized the subject deed of sale, which was issued by the Records Management and Archives Office of Manila, shows that the sale of the subject lots by Luis to Emerenciana was indeed regularly notarized.23

Petitioners further argue that the deed of sale between Emerenciana and Luis was not registered with the Register of Deeds of Quezon City. The Court, however, agrees with the CA that the said deed was, in fact, registered as evidenced by official receipts24issued to this effect. Petitioners, again, did not present any evidence to assail the authenticity of these documents.

Petitioners also question the authenticity of the subject deed of sale (Exhibit B1C) by arguing that only one copy of such deed was prepared as only one document number was assigned by the notary to the said deed. Petitioners claim that this is contrary to the claim of respondents that the said deed of sale was prepared, executed and notarized in several copies. The Court is not persuaded.

It is true that Section 246, Article V, Title IV, Chapter II of the Revised Administrative Code provides that [t]he notary shall give to each instrument executed, sworn to, or acknowledged before him a number corresponding to the one in his register, and shall also state on the instrument the page or pages of his register on which the same is recorded. In this regard, the Court agrees with respondents' contention that the instrument being referred to in the abovequoted provision is the deed or contract which is notarized. It does not pertain to the number of copies of such deed or contract. Hence, one number is assigned to a deed or contract regardless of the number of copies prepared and notarized. Each and every copy of such contract is given the same document number. It is, thus, wrong for petitioners to argue that only one copy of the June 20, 1958 deed of sale was prepared and notarized, because only one document number appears on the notarial book of the notary public who notarized the said deed. On the contrary, evidence shows that at least two copies of the subject deed of sale was prepared and notarized one was submitted for registration with the Register of Deeds of Quezon City and the other was retained by Emerenciana, which is the copy presented in evidence by respondents.

As to petitioners' contention that the copy of the deed of sale presented by respondents in evidence is of dubious origin because it does not bear the stamp RECEIVED by the Register of Deeds of Quezon City, suffice it to state that the Court finds no cogent reason to disagree with respondents' contention that the duplicate original of the subject deed of sale which they presented as evidence in court could not have been received by the Register of Deeds of Quezon City because only the original copy, and not the duplicate original, was submitted to the Register of Deeds for registration.

Petitioners also question the authenticity of and the entries appearing on the copy of the title covering the subject properties in the name of Luis. However, the Court finds no cogent reason to doubt the authenticity of the document as well as the entries appearing therein, considering that the parties (herein petitioners and respondents) stipulated25that the machine copy of TCT No. 78865 in the name of Luis, marked as Exhibit DDD for respondents, is a faithful reproduction of the original copy of the said title, including the memorandum of encumbrances annotated therein. Included in the memorandum of encumbrances is Entry No. P.E. 4023, which states, thus:chanRoblesvirtualLawlibraryThis certificate of title is hereby cancelled (sic) partially with respect to Lots 1 and 2, Blk. 2 by virtue of a Deed of Sale ratified on June 20, 1958 before Armenio P. Engracia of Notary for the City of Manila and Transfer Certificate of Title No. 42369 is issued in the name of Vendee, Emerenciana A.S. de Sylianteng, filing the aforesaid Deed under TNo. 42369.26

The same entry appears in Exhibit 11 for petitioners.27

P.E. No. 4023 has been entered on TCT No. 78865 by the then Acting Register of Deeds of San Juan. Petitioners assail the regularity of such entry. However, one of the disputable presumptions provided under Section 3 (m), Rule 131 of the Rules of Court is that official duty has been regularly performed. Under the said Rule, this presumption shall be considered satisfactory unless contradicted and overcome by other evidence. In the present case, petitioners failed to present sufficient evidence to contradict the presumption of regularity in the performance of the duties of then Acting Register of Deeds of San Juan.

Petitioners, nonetheless, insist that they have valid title over the subject properties. They trace their respective titles from that of Romeo. Romeo, in turn, derives his supposed ownership of and title over the subject lots from his claim that he is the sole heir of the estate of his alleged predecessorininterest, Luis. Evidence, however, shows that Romeo never became the owner of the subject properties for two reasons.

First, as shown above, the disputed lots were already sold by Luis during his lifetime. Thus, these parcels of land no longer formed part of his estate when he died. As a consequence, Romeos sale of the disputed lots to petitioners was not affirmed by the estate court, because the subject parcels of land were not among those included in the said estate at the time that Romeo was appointed as the administrator thereof. As shown in its October 11, 1993 Order,28the RTC of Pasig, acting as an estate court, denied Romeos motion for approval of the sale of the subject lots, because these properties were already sold to respondents per report submitted by the Register of Deeds of San Juan.

In fact, as early as July 14, 1960, prior to Romeos appointment as administrator of the estate of Luis, Paz L. Vda. de Pujalte (Paz), the mother of Luis, who was then appointed administratrix of the estate of the latter, in her Inventory and Appraisal29 which was submitted to the estate court, already excluded the subject properties among those which comprise the estate of Luis. Subsequently, in the Project of Partition30of the residual estate of Luis, dated March 22, 1963, Paz again did not include the disputed lots as part of such residual estate. Hence, Romeos sale of the subject lots to petitioners is invalid as it is settled that any unauthorized disposition of property under administration is null and void and title does not pass to the purchasers.31

Second, even granting that the subject lots formed part of the estate of Luis, it was subsequently proven in a separate case that Romeo is not his heir. In a criminal case for use of falsified documents filed against Romeo, it was proven that his claim of heirship is spurious. In the said criminal case, his birth certificate and the marriage certificate of his supposed parents, which he presented before the estate court, to prove his claim that he is the sole heir of Luis, were found by the criminal court to be falsified.32 In this regard, it bears to note the disquisition of the CA as to the legitimacy of Romeos claim, and its subsequent effect on petitioners' rights to the disputed properties, to wit:chanRoblesvirtualLawlibraryAppellees' [herein petitioners'] predicament is further compounded by Romeo Pujaltes conviction on November 18, 2005 of the offense of Use of Falsified Documents, for falsifying the documents that enabled him to deceive the estate court and have himself named as Luis Pujaltes sole heir. He did not appeal his conviction and, instead, applied for probation. It goes without saying that the documents purportedly conveying the lots in question to appellees and which are founded on Romeo Pujaltes alleged rights over the estate of the late Luis Pujalte do not deserve any consideration at all. x x x33

Indeed, not being an heir of Luis, Romeo never acquired any right whatsoever over the subject lots, even if he was able to subsequently obtain a title in his name. It is a wellsettled principle that no one can give what one does not have,nemo dat quod non habet.34One can sell only what one owns or is authorized to sell, and the buyer can acquire no more right than what the seller can transfer legally.35 Since Romeo has no right to the subject lots, petitioners, who simply stepped into the shoes of Romeo, in turn, acquired no rights to the same.

In addition, and as correctly pointed out by the CA, petitioners' position is neither helped by the fact that, in the present case, Romeo filed a Verified ComplaintinIntervention36with the RTC, denying that he sold the subject lots to petitioners and claiming that the same properties still form part of the estate of Luis.

Stretching petitioners' contention a bit further, granting that both petitioners and respondents bought the disputed lots in good faith by simply relying on the certificates of the sellers, and subsequently, acquiring titles in their own names, respondents' title shall still prevail. It is a settled rule that when two certificates of title are issued to different persons covering the same land in whole or in part, the earlier in date must prevail, and, in case of successive registrations where more than one certificate is issued over the land, the person holding a prior certificate is entitled to the land as against a person who relies on a subsequent certificate.37 The titles of respondents, having emanated from an older title, should thus be upheld.

Anent petitioners' bad faith, this Court finds no persuasive reason to depart from the findings of the CA that petitioners had prior knowledge of the estate proceedings involving the subject lots and that they have notice of the defect in the title of Romeo.

It is true that a person dealing with registered land need not go beyond the title. However, it is equally true that such person is charged with notice of the burdens and claims which are annotated on the title.38In the instant case, The Torrens Certificate of Title (TCT No. 5760R) in the name of Romeo, which was the title relied upon by petitioners, also contained Entry No. P.E. 4023, quoted above, which essentially informs petitioners that the lots which they were about to buy and which they in fact bought, were already sold to Emerenciana.39This entry should have alerted petitioners and should have prodded them to conduct further investigation. Simple prudence would have impelled them as honest persons to make deeper inquiries to clear the suspiciousness haunting Romeos title. On the contrary, rather than taking caution in dealing with Romeo, petitioners, instead, subsequently executed deeds of sale40over the same properties but all of which were, nonetheless, disallowed by the estate court in its Order41dated October 11, 1993 on the ground that the said lots were already sold, this time, by Emerenciana to respondents. In this regard, petitioners acted in bad faith.

Thus, as correctly held by the CA, respondents are entitled to moral damages. Moral damages are treated as compensation to alleviate physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury resulting from a wrong.42In the instant case, respondents satisfactorily established their claim for moral damages. They endured suffering brought about by Romeos bad faith in using falsified documents to enable himself to acquire title to and sell the subject lots to petitioners to the prejudice of respondents. Respondents also suffered by reason of petitioners' stubborn insistence in buying the said properties despite their knowledge of the defect in the title of Romeo.43Though moral damages are not capable of pecuniary estimation, the amount should be proportional to and in approximation of the suffering inflicted.44Respondents sought the award of P1,000,000.00 as moral damages from each of the petitioners, but the Court agrees with the CA that the total amount of P500,000.00 is sufficient for both respondents.

As to exemplary damages, these are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages.45They are imposed not to enrich one party or impoverish another, but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions.46While respondents were again seeking the amount of P1,000,000.00 as exemplary damages from each of the petitioners, the CA correctly reduced it to a total of P500,000.00.

Respondents are also entitled to attorneys fees, as awarded by the CA, on the strength of the provisions of Article 2208 of the Civil Code which provides, among others, that such fees may be recovered when exemplary damages are awarded, when the defendants act or omission has compelled the plaintiff to litigate with third persons, or in any other case where the court deems it just and equitable that attorneys fees and expenses of litigation should be recovered.

WHEREFORE, the petition isDENIED. The Decision and Resolution of the Court of Appeals, dated August 10, 2012 and February 18, 2013, respectively, in CAG.R. CV No. 92022, areAFFIRMED.

SO ORDERED.

SECOND DIVISIONG.R. No. 179205, July 30, 2014HEIRS OR REYNALDO DELA ROSA, NAMELY: TEOFISTA DELA ROSA, JOSEPHINE SANTIAGO AND JOSEPH DELA ROSA,Petitioners,v.MARIO A. BATONGBACAL, IRENEO BATONGBACAL, JOCELYN BATONGBACAL, NESTOR BATONGBACAL AND LOURDES BATONGBACAL,Respondents.D E C I S I O NPEREZ,J.:This is a Petition for Review onCertiorari1pursuant to Rule 45 of the Revised Rules of Court, assailing the 7 December 2006 Decision2and 8 August 2007 Resolution3of the Fourth Division of the Court of Appeals in CA-G.R. CV No. 64172. In its assailed Resolution, the appellate couti modified its earlier ruling and proceeded to direct petitioners to execute the requisite Deed of Sale over the subject property.The Facts

The subject prope1iy consists of a 3,750 square meter-portion of the 15,001 square meters parcel of land situated inBarrioSaog, Marilao, Bulacan denominated as Lot No. 1, and registered under Transfer Certificate of Title (TCT) No. T-1 074494under the names of Reynaldo Del a Rosa (Reynaldo), Eduardo Dela Rosa (Eduardo), Araceli Del a Rosa (Araceli) and Zenaida Dela Rosa (Zenaida).

Sometime in 1984, Reynaldo offered to sell the subject property to Guillermo Batongbacal (Guillermo) and Mario Batongbacal (Mario) for F50.00 per square meter or for a total of Fl87,500.00. Pursuant to the agreement, Reynaldo received an advance payment of F31 ,500.00 leaving a balance of F156,000.00. As shown in the document denominated asResiboand signed by Reynaldo on 18 February 1987, the parties agreed that the amount ofF20,000.00 as part of the advance payment shall be paid upon the delivery of the Special Power-of-Attorney (SPA), which would authorize Reynaldo to alienate the subject property on behalf of his co-owners and siblings namely, Eduardo, Araceli and Zenaida. The balance thereon shall be paid in F10,000.00 monthly installments until the purchase price is fully settled, to wit:chanRoblesvirtualLawlibraryRESIBO

Tinaggap ko ngayong araw na ito kayEngr. Guillermo A. Batongbacal, ng Poblacion II, Marilao, Bulacan,ang halagang sampung libong piso(P10,000.00)salaping Pilipino, hilang bahaging hayad sa bahagi ng lupang may sukat na3,750 sq.m.na aking kabahagi sa isang(1)lagay na lupang nasasaog,Marilao, Bulakan,sinasaklaw ngT.C.T. No. T-1 07449,ngBulakan,na ipinagkasundo kong ipagbili sa naulit naEngr. Guillermo A. Batongbacalsa halagang Limampung Piso(P50.00)salaping Filipino, bawat isang(1)metrong parisukat. Ang paunang hayad na aking tinanggap ukol sa lupang nabanggit sa itaas ayP21 ,500.00,nuong Abril14-18, 1984.Ang halagang dapat pa niyang bayaran sa akin ayP 156,000.00,na ang halagang dalawampung libong piso(P20,000.00)ay bahayaran niya sa akin sa araw na nagpower-ofattorneyninaZenaida dela Rosa,atEnrique Magsalocay aking nahigay sa nasahingEngr. Guillermo A. Batongbacal;na ang nalalahing hahaging bayad ay kanyang habayaran sa akin ng Sampung libong piso(P10,000.00)salaping Pilipino, bawat buwan hanggang sa matapusan ang pagbabayad ng kabuuang halaga na Isang Daang at Walumpu't Pitong libo Limang Daang Piso(P187,500.00).Ang bahaging aking ipinagbibili ay ang Lote No. 1, may sukat na3,750 sq.m.na makikita sa nakalakip na sketch plan na aking ding nilagdaan sa ikaliliwanag ng kasulutang ito.5chanrobleslaw

Subsequent to the execution of the said agreement, Mario and Guillermo, on their own instance, initiated a survey to segregate the area of 3,750 square meters from the whole area covered by TCT No. T-107449, delineating the boundaries of the subdivided parts. As a result, they came up with a subdivision plan specifically designating the subject property signed by a Geodetic Engineer.6Mario and Guillermo thereafter made several demands from Reynaldo to deliver the SPA as agreed upon, but such demands all went unheeded.

Consequently, Guillermo and Mario initiated an action for Specific Performance or Rescission and Damages before the Regional Trial Court (RTC) of Malolos, Bulacan, seeking to enforce their Contract to Sell dated 18 February 1987. In their Complaint docketed as Civil Case No. 215-M-90,7Mario and Guillermo asserted that they have a better right over the subject property and alleged that the subsequent sale thereof effected by Reynaldo to third persons is void as it was done in bad faith. It was prayed in the Complaint that Reynaldo be directed to deliver the SPA and, in case of its impossibility, to return the amount of P31,500.00 with legal interest and with damages in either case.

To protect their rights on the subject property, Mario and Guillermo, after initiating Civil Case No. 215-M-90, filed a Notice ofLis Pendensregistering their claim on the certificate of title covering the entire property.

In refuting the allegations of Mario and Guillermo in their Complaint. Reynaldo in his Answer8countered that the purported Contract to Sell is void, because he never gave his consent thereto. Reynaldo insisted that he was made to understand that the contract between him and the Batongbacals was merely an equitable mortgage whereby it was agreed that the latter will loan to him the amount of P31,500.00 payable once he receives his share in the proceeds of the sale of the land registered under TCT No. T-1 07449.

Following the pre-trial conference without the parties reaching an amicable settlement, trial on the merits ensued.9Both parties proceeded to present, in open court, documentary and testimonial evidence to substantiate their claims.

For failure of Mario and Guillermo as plaintiffs therein to adduce sufficient evidence to support their complaint, the RTC, in a Decision10dated 24 March 1999, dismissed Civil Case No. 215-M-90 and ordered Reynaldo to return to the former the sum of P28,000.00 with 12% annual interest. Reynaldo failed to convince the courta quothat the contract he entered into with Mario was an equitable mortgage. It was held by the trial court, however, that the supposed Contract to Sell denominated asResibois unenforceable under Article 1403 of the New Civil Code because Reynaldo cannot bind his co-owners into such contract without an SPA authorizing him to do so. As such, Reynaldo cannot be compelled to deliver the subject property but he was nonetheless ordered by the court to return the amount he received as part of the contract price since no one should be allowed to unjustly enrich himself at the expense of another. The RTC disposed in this wise:chanRoblesvirtualLawlibraryWHEREFORE, premises considered[,] the instant complaint is hereby DISMISSED.

However, [Reynaldo is] hereby ordered to return to [Mario and Guillermo of the sum of 28,000.00 plus 12% interest per annum from the date of this decision until fully paid.11chanrobleslaw

On appeal, the Court of Appeals, in its Decision12dated 7 December 2006, brushed aside the claim of equitable mortgage and held that the sale effected by Reynaldo of his undivided share in the property is valid and enforceable. According to the appellate court, no SPA is necessary for Reynaldo's disposition of his undivided share as it is limited to the portion that may be allotted to him upon the termination of the co-ownership. The Batongbacals could have validly demanded from Reynaldo to deliver the subject property pursuant to the Contract to Sell but such option is no longer feasible because the entire property has already been sold to third persons to whom a new title was issued. The appellate court thus proceeded to rescind the contract and ordered Reynaldo to return the amount he received as consideration thereby restoring the parties to their situation before entering into the agreement. The decretal portion of the decision reads:chanRoblesvirtualLawlibrary

In the course of the trial, Guillermo died and he was substituted by his heirs as party to the case.WHEREFORE, the decision dated March 24, 1999 is AFFIRMED with modification that appellee is ordered to return to appellants the amount of P31,500.00 plus 12% interest per annum from the date of decision of the trial court until full payment thereof.

In addition, the appellee is ordered:1. To pay appellants P50,000.00 as compensatory damages; P50,000.00 as moral damages; and P30,000.00 as exemplary damages.2. To pay attorney's fees and litigation expenses of P50,000.00; and3. Double costs.13

In seeking modification of the appellate court's decision, Mario and Guillermo pointed out that the title of the subject property has not yet been transferred to third persons, and thus, Reynaldo can still be compelled to execute a deed of conveyance over his undivided share of the entire property.

In a Resolution14dated 8 August 2007, the Court of Appeals granted the Motion for Reconsideration of Mario and Guillermo and directed Reynaldo to convey the subject property to them,viz:chanRoblesvirtualLawlibraryWHEREFORE, [Reynaldo's] Motion for Reconsideration is DENIED for lack of merit.

Upon the other hand, [Mario and Guillermo] Motion for Reconsideration is GRANTED. Accordingly, the decision dated December 7, 2006 is PARTIALLY RECONSIDERED ordering defendant-appellee Reynaldo dela Rosa or his successor-in-interest to execute the requisite Deed of Sale over his 1/4 undivided share in the subject property covered by TCT T-107449 and to accept the consideration of P156,000.00 within thirty (30) days from the finality of the decision.

In case of failure of [Reynaldo] to execute the deed of sale, the Branch Clerk of Court of RTC Br. 16 of Malolos, Bulacan is directed to execute the same and receive the Pl56,000.00 balance on the purchase price on behalf of Reynaldo dela Rosa.15chanrobleslaw

On 9 September 2007, the appellate court was notified of the death of Reynaldo, and his heirs sought to be substituted as party in this case.16cralawlawlibrary

Petitioners Heirs of Reynaldo are now before this Court via this instant Petition for Review onCertioraripraying that the Court of Appeals Decision and Resolution be reversed on the ground that it was rendered not in accordance with the applicable law and jurisprudence.Issues

I.

WHETHER OR NOT THERE IS A CONTRACT OF SALE BETWEEN REYNALDO DELA ROSA AND GUILLERMO BATONGBACAL;II.

ASSUMING THAT THERE IS A CONTRACT OF SALE, WHETHER OR NOT GUILLERMO BATONGBACAL COMPLIED WITH HIS OBLIGATION [UNDER THE CONTRACT];III.

WHETHER OR NOT RESPONDENTS ARE GUILTY OF LACHES;IV.

WHETHER OR NOT MARIO BATONGBACAL IS A PARTY TO THE TRANSACTION BETWEEN REYNALDO DELA ROSA AND GUILLERMO BATONGBACAL;V.

WHETHER OR NOT RESPONDENT[S] ARE ENTITLED TO AN AWARD OF DAMAGES;VI.

ASSUMING ARGUENDO THAT RESPONDENTS ARE ENTITLED TO AWARD OF DAMAGES. WHETHER OR NOT TI IE COURT OF APPEALS. A WARD OF DAMAGES WAS EXCESSIVE.17chanrobleslaw

The various contentions revolve on the sole issue of whether the contract entered into by parties was a Contract to Sell or an equitable mortgage. The Court will not delve into questions which arc factual m nature, consistent with the rule that this Court is not a trier of facts.The Court's Ruling

In assailing the Court of Appeals' Decision and Resolution, petitioners are unflinching in their stand that the disputed contract purporting to be an absolute deed of sale was an equitable mortgage with the subject property as security for a loan obligation. To prove their point, petitioners asserted that the consideration in the amount of P187,500.00 for a property consisting of 15,001 square meters is grossly inadequate because the land valuation inBarrioSaog, Marilao, Bulacan, at the time the transaction was entered into by the parties in 1984, was already P80.00 to P110.00 per square meter. The gross inadequacy of the price, the Heirs of Reynaldo argued, is telling of the intention of the parties to mortgage and not to sell the property with the end view of affording the mortgagor an easy opportunity to redeem the property should his means permit him to do so.

An equitable mortgage is defined as one although lacking in some formality, or form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, and contains nothing impossible or contrary to law. For the presumption of an equitable mortgage to arise, two requisites must concur: (1) that the parties entered into a contract denominated as a sale; and (2) the intention was to secure an existing debt by way of mortgage. Consequently, the non-payment of the debt when due gives the mortgagee the right to foreclose the mortgage, sell the property and apply the proceeds of the sale for the satisfaction of the loan obligation.18While there is no single test to determine whether the deed of absolute sale on its face is really a simple loan accommodation secured by a mortgage, the Civil Code, however, enumerates several instances when a contract is presumed to be an equitable mortgage, to wit:chanRoblesvirtualLawlibraryArticle 1602. The contract shall be presumed to be an equitable mortgage, in any of the following cases:chanRoblesvirtualLawlibrary(1)When the price of a sale with right to repurchase is unusually inadequate;

(2)When the vendor remains in possession as lessee or otherwise;

(3)When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed;

(4)When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold;

(6)In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee as rent or otherwise shall be considered as interest which shall be subject to the usury laws.

A perusal of the contract denominated asResiboreveals the utter frailty of petitioners' position because nothing therein suggests, even remotely, that the subject property was given to secure a monetary obligation. The terms of the contract set forth in no uncertain terms that the instrument was executed with the intention of transferring the ownership or the subject property to the buyer in exchange for the price. Nowhere in the deed is it indicated that the transfer was merely intended to secure a debt obligation. On the contrary, the document clearly indicates the intent of Reynaldo to sell his share in the property. The primary consideration in determining the true nature of a contract is the intention of the parties.19If the words of a contract appear to contravene the evident intention of the parties, the latter shall prevail.20Such intention is determined not only from the express terms of their agreement, but also from the contemporaneous and subsequent acts of the parties.21That the parties intended some other acts or contracts apart from the express terms of the agreement, was not proven by Reynaldo during the trial or by his heirs herein.22Beyond their bare and uncorroborated asseverations that the contract failed to express the true intention of the parties, the record is bereft of any evidence indicative that there was an equitable mortgage.

Neither could the allegation of gross inadequacy of the price carry the day for the petitioners. It must be underscored at this point that the subject of the Contract to Sell was limited only to 1/4pro-indivisoshare of Reynaldo consisting an area of 3,750 square meter and not the entire 15,001-square meter parcel of land. As a co-owner of the subject property, Reynaldo's right to sell, assign or mortgage his ideal share in the property held in common is sanctioned by law. The applicable law is Article 493 of the New Civil Code, which spells out the rights of co-owners over a co-owned property, to wit:chanRoblesvirtualLawlibraryArt. 493. Each co-owner shall have the full ownership of his part and or the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights arc involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him m the division upon the termination of the co-ownership.

Pursuant to this law, a co-owner has the right to alienate hisproindivisoshare in the co-owned property even without the consent of his co-owners.23This right is absolute and in accordance with the well-settled doctrine that a co-owner has a full ownership of hispro-indivisoshare and has the right to alienate, assign or mortgage it, and substitute another person for its enjoyment.24 In other words, the law does not prohibit a co-owner from selling, alienating, mortgaging his ideal share in the property held m common.25cralawlawlibrary

InVaglidad v. Vaglidad, Jr.,a case nearly on all fours to the present petition, the Court upheld the right of the co-owner to alienate hisproindivisoshare in the co-owned property as part of his right of dominion. It was even pointed out that since the previous sale is valid, the subsequent conveyance effected by the co-owner is null and void pursuant to the principle that "no one can give what he does not have,"nemo dat quod non habet, thus:chanRoblesvirtualLawlibraryLORETO sold the subject property to GABINO, JR. on May 12, 1986 as a co-owner. LORETO had a right, even before the partition of the property on January 19, 1987, to transfer in whole or in part his undivided interest in the lot even without the consent of his co-heirs. This right is absolute in accordance with the well-settled doctrine that a co-owner has full ownership of hispro-indivisoshare and has the right to alienate, assign or mortgage it, and substitute another person for its enjoyment. Thus, what GABINO, JR. obtained by virtue of the sale on May 12, 1986 were the same rights as the vendor LORETO had as co-owner, in an ideal share equivalent to the consideration given under their transaction.

LORETO sold some 1,604 square meters of Lot No. 1253 to GABINO, JR. Consequently, when LORETO purportedly sold to WILFREDO on December 7, 1989 the same portion of the lot, he was no longer the owner of Lot No. 1253-B. Based on the principle that "no one can give what he does not have," LORETO could not have validly sold to WILFREDO on December 7, 1989 what he no longer had.As correctly pointed out by the appellate court, the sale made by LORETO in favor of WILFREDO is void as LORETO did not have the right to transfer the ownership of the subject property at the time of sale.26(Emphasis supplied).

In the same breadth, a co-owner cannot be compelled by the court to give their consent to the sale of his share in a co-owned property. InArambula v. Nolasco, the Court intimated:chanRoblesvirtualLawlibraryThe ultimate authorities in civil law, recognized as such by the Court, agree that co-owners such as respondents have over their part, the right of full and absolute ownership. Such right is the same as that or individual owners which is not diminished by the fact that the entire property is co-owned with others. That part which ideally belongs to them, or their mental portion, may be disposed of as they please, independent of the decision of their co-owners. So we rule in this case. The respondents cannot be ordered to sell their portion of the co-owned properties. In the language ofRodriguez v. Court of First Instance of Rizal, "each party is the sole judgeof what is good for him."27(Underscoring ours).

Thus, even if the impression of the Court of Appeals were true,i.e.,that the entire propc1iy has been sold to thirds persons, such sale could not have affected the right of Mario and Guillermo to recover the property from Reynaldo. In view of the nature of co-ownership, the Court of Appeals correctly ruled that the terms in the Contract to Sell, which limited the subject to Reynaldo's ideal share in the property held in common is perfectly valid and binding. In fact, no authority from the other co-owners is necessary for such disposition to be valid as he is afforded by the law fullownership of his part and of the fruits and benefits pertaining thereto. A condition set forth in a sale contract requiring a co-owner to secure an authority from his co-owners for the alienation of his share, as seemingly indicated in this case, should be considered mere surplusage and docs not, in any way, affect the validity or the enforceability of the contract. Nor should such a condition indicate an intention to sell the whole because the contrary intention has been clearly written:chanRoblesvirtualLawlibraryx x xAng bahaging aking ipinagbibili ay ang !.ole No. 1, may sukat na 3,750 sq.m. na makikita sa nakalakip na sketch plan na aking ding nilagdaan sa ikaliliwanag ng kasulatang ito.28chanrobleslaw

Indeed, the intention clearly written, settles the issue regarding the purchase price. A contract of sale is a consensual contract, which becomes valid and binding upon the meeting of minds of the parties on the price and the object of the sale.29The mere inadequacy of the price docs not affect its validity when both parties arc in a position to form an independent judgment concerning the transaction, unless fraud, mistake or undue influence indicative of a defect in consent is present.30A contract may consequently be annulled on the ground of vitiated consent and not due to the inadequacy of the price.31In the case at bar, however, no evidence to prove fraud, mistake or undue influence indicative of vitiated consent is attendant.

As the parties invoking equitable mortgage, the Heirs of Reynaldo did not even come close to proving that the parties intended to charge the property as security for a debt, leaving us with no other choice but to uphold the stipulations in the contract. Basic is the rule that if the terms of the contract are clear and leave no doubt upon the intention of the parties, the literal meaning of its stipulations shall control,32we find that the Court of Appeals cannot be faulted for ruling, in modification of its original judgment, that the sale effected by Reynaldo of his undivided share in the property is valid and enforceable.

WHEREFORE, premises considered, the petition isDENIED. The assailed Decision and Resolution of the Court of Appeals are herebyAFFIRMED.

SO ORDERED.cralawred

Carpio, (Chairperson), Brion, Del Castil, Perez,andPerlas-Bernabe, JJ.,concur.

SECOND DIVISIONG.R. No. 166790, November 19, 2014JUAN P. CABRERA,Petitioner,v.HENRY YSAAC,Respondent.D E C I S I O NLEONEN,J.:Unless all the co-owners have agreed to partition their property, none of them may sell adefinite portionof the land. The co-owner may only sell his or herproportionate interestin the co-ownership. A contract of sale which purports to sell a specific or definite portion of unpartitioned land is null and void ab initio.

In this petition for review on certiorari,1Juan P. Cabrera assails the Court of Appeals' decision dated June 19, 20032and resolution dated January 3, 2005.3 These decisions ruled that a specific performance to execute a deed of sale over a parcel of land is not available as a relief for Juan Cabrera.

It appears that the heirs of Luis and Matilde Ysaac co-owned a 5,517-square-meter parcel of land located in Sabang, Naga City, covered by Original Certificate of Title (OCT) No. 506.4One of the co-owners is respondent, Henry Ysaac.

Henry Ysaac leased out portions of the property to several lessees. Juan Cabrera, one of the lessees, leased a 95-square-meter portion of the land beginning in 1986.5chanRoblesvirtualLawlibrary

On May 6, 1990, Henry Ysaac needed money and offered to sell the 95-square-meter piece of land to Juan Cabrera.6He told Henry Ysaac that the land was too small for his needs because there was no parking space for his vehicle.7chanRoblesvirtualLawlibrary

In order to address Juan Cabrera's concerns, Henry Ysaac expanded his offer to include the two adjoining lands that Henry Ysaac was then leasing to the Borbe family and the Espiritu family. Those three parcels of land have a combined area of 439-square-meters. However, Henry Ysaac warned Juan Cabrera that the sale for those two parcels could only proceed if the two families agree to it.

Juan Cabrera accepted the new offer. Henry Ysaac and Juan Cabrera settled on the price of P250.00 per square meter, but Juan Cabrera stated that he could only pay in full after his retirement on June 15, 1992.8Henry Ysaac agreed but demanded for an initial payment of P1,500.00, which Juan Cabrera paid.9chanRoblesvirtualLawlibrary

According to Juan Cabrera, Henry Ysaac informed him that the Borbe family and the Espiritu family were no longer interested in purchasing the properties they were leasing. Since Mamerta Espiritu of the Espiritu family initially considered purchasing the property and had made an initial deposit for it, Juan Cabrera agreed to reimburse this earlier payment. On June 9, 1990, Juan Cabrera paid the amount of P6,100.00.10Henry Ysaac issued a receipt for this amount. P3,100.00 of the'amount paid was reimbursed to Mamerta Espiritu and, in turn, she gave Juan Cabrera the receipts issued to her by Henry Ysaac.11chanRoblesvirtualLawlibrary

On June 15, 1992, Juan Cabrera tried to pay the balance of the purchase price to Henry Ysaac. However, at that time, Henry Ysaac was in the United States. The only person in Henry Ysaac's residence was his wife. The wife refused to accept Juan Cabrera's payment.12chanRoblesvirtualLawlibrary

Sometime in September 1993, Juan Cabrera alleged that Henry Ysaac approached him, requesting to reduce the area of the land subject of their transaction. Part of the 439-square-meter land was going to be made into a barangay walkway, and another part was being occupied by a family that was difficult to eject.13Juan Cabrera agreed to the proposal. The land was surveyed again. According to Juan Cabrera, Henry Ysaac agreed to shoulder the costs of the resurvey, which Juan Cabrera advanced in the amount of P3,000.00.

The resurvey shows that the area now covered by the transaction was 321 square meters.14Juan Cabrera intended to show the sketch plan and pay the amount due for the payment of the lot. However, on that day, Henry Ysaac was in Manila. Once more, Henry Ysaac's wife refused to receive the payment because of lack of authority from her husband.15chanRoblesvirtualLawlibrary

On September 21, 1994, Henry Ysaac's counsel, Atty. Luis Ruben General, wrote a letter addressed to Atty. Leoncio Clemente, Juan Cabrera's counsel.16Atty. General informed Atty. Clemente that his client is formally rescinding the contract of sale because Juan Cabrera failed to pay the balance of the purchase price of the land between May 1990 and May 1992. The letter also stated that Juan Cabrera's initial payment of P1,500.00 and the subsequent payment of P6,100.00 were going to be applied as payment for overdue rent of the parcel of land Juan Cabrera was leasing from Henry Ysaac.17The letter also denied the allegation of Juan Cabrera that Henry Ysaac agreed to shoulder the costs of the resurveying of the property.18chanRoblesvirtualLawlibrary

Juan Cabrera, together with his uncle, Delfin Cabrera, went to Henry Ysaac's house on September 16, 1995 to settle the matter.19 Henry Ysaac told Juan Cabrera that he could no longer sell the property because the new administrator of the property was his brother, Franklin Ysaac.20chanRoblesvirtualLawlibrary

Due to Juan Cabrera's inability to enforce the contract of sale between him and Henry Ysaac, he decided to file a civil case for specific performance on September 20, 1995.21Juan Cabrera prayed for the execution of a formal deed of sale and for the transfer of the title of the property in his name.22He tendered the sum of P69,650.00 to the clerk of court as payment of the remaining balance of the original sale price.23On September 22, 1995, a notice oflis pendenswas annotated on OCT No. 560.24chanRoblesvirtualLawlibrary

In his answer with counterclaim,25Henry Ysaac prayed for the dismissal of Juan Cabrera's complaint.26He also prayed for compensation in the form of moral damages, attorney's fees, and incidental litigation expenses.27chanRoblesvirtualLawlibrary

Before the Regional Trial Court decided the case, the heirs of Luis and Matilde Ysaac, under the administration of Franklin Ysaac, sold their property to the local government of Naga City on February 12, 1997.28 The property was turned into a project for the urban poor of the city.29chanRoblesvirtualLawlibrary

During the trial, Corazon Borbe Combe of the Borbe family testified that contrary to what Juan Cabrera claimed, her family never agreed to sell the land they were formerly leasing from Henry Ysaac in favor of Juan Cabrera.30The Borbe family bought the property from Naga City's urban poor program after the sale between the Ysaacs and the local government of Naga City.31chanRoblesvirtualLawlibrary

On September 22, 1999, the Regional Trial Court of Naga City ruled that the contract of sale between Juan Cabrera and Henry Ysaac was duly rescinded when the former failed to pay the balance of the purchase price in the period agreed upon.32The Regional Trial Court found that there was an agreement between Juan Cabrera and Henry Ysaac as to the sale of land and the corresponding unit price.33 However, aside from the receipts turned over by Mamerta Espiritu of the Espiritu family to Juan Cabrera, there was no "evidence that the other adjoining lot occupants agreed to sell their respective landholdings" to Juan Cabrera.34The Regional Trial Court also doubted that Juan Cabrera was willing and able to pay Henry Ysaac on June 15, 1992. According to the trial court:chanroblesvirtuallawlibrary[A]fter the said refusal of Henry Ysaac's wife, plaintiff [Juan Cabrera] did not bother to write to the defendant [Henry Ysaac] or to any of the co-owners his intention to pay for the land or he could have consigned the amount in court at the same time notifying [Henry Ysaac] of the consignation in accordance with Article 1256 of the Civil Code. Furthermore, in September, 1993 [Juan Cabrera] was able to meet [Henry Ysaac] when the latter allegedly talked to him about the reduction of the area he was going to buy. There is no showing that [Juan Cabrera] again tendered his payment to Henry Ysaac. Instead, he allegedly made his offer after he had the land resurveyed but defendant was then in Manila. There is no evidence as to what date this offer was made. . .

. . . [T]he court does not see any serious demand made for performance of the contract on the part of [Juan Cabrera] in 1992 when he allegedly promised to pay the balance of the purchase price. Neither could he demand for the sale of the adjoining lots because. the occupants thereof did not manifest their consent thereto. At the most, he could have demanded the sale of the lot which he was occupying. If his payment was refused in 1995, he cannot demand for damages because the rescission of the contract was relayed to him in writing in Exhibit "4".35

The Regional Trial Court dismissed Juan Cabrera's complaint and Henry Ysaac's counterclaim.36Juan Cabrera appealed the Regional Trial Court's decision.37chanRoblesvirtualLawlibrary

The Court of Appeals agreed with the Regional Trial Court that there was a perfected contract of sale between Juan Cabrera and Henry Ysaac.38According to the Court of Appeals, even if the subject of the sale is part of Henry Ysaac's undivided property, a co-owner may sell a definite portion of the property.39chanRoblesvirtualLawlibrary

The Court of Appeals also ruled that the contract of sale between Juan Cabrera and Henry Ysaac was not validly rescinded.40For the rescission to be valid under Article 1592 of the Civil Code, it should have been done through a judicial or notarial act and not merely through a letter.41chanRoblesvirtualLawlibrary

However, due to the sale of the entire property of the Ysaac family in favor of the local government of Naga City, the Court of Appeals ruled that the verbal contract between Juan Cabrera and Henry Ysaac cannot be subject to the remedy of specific performance.42The local government of Naga City was an innocent purchaser for value, and following the rules on double sales, it had a preferential right since the sale, it entered into was in a public instrument, while the one with Juan Cabrera was only made orally.43The only recourse the Court of Appeals could do is to order Henry Ysaac to return the initial payment of the purchase price of P10,600.00 (P1,500.00 and P6,100.00 as evidenced by the receipts issued by Henry Ysaac to Juan Cabrera, and P3,000.00 for the surveying expenses) as payment of actual damages. The Court of Appeals likewise awarded attorney's fees and litigation costs. To wit:chanroblesvirtuallawlibraryWHEREFORE, premises considered, the assailed decision of the lower court is hereby SET ASIDE and a new one is entered as follows:ChanRoblesVirtualawlibrary1. Declaring that there is no valid rescission of the contract of sale of the subject lot between plaintiff-appellant [Juan P. Cabrera] and defendant-appellee [Henry Ysaac]; however, specific performance is not an available relief to plaintiff because of the supervening sale of the property to the City of Naga, an innocent purchaser and for value;

2. Ordering [Henry Ysaac] to pay [Juan P. Cabrera] actual damages in the amount of P10,600.00, with legal interest of 12% per annum from September 20, 1995 until paid;

3. Ordering [Henry Ysaac] to pay [Juan P. Cabrera], the amount of thirty thousand pesos (P30,000.00) by way of attorney's fees and litigation expenses.

Henry Ysaac filed his motion for reconsideration dated July 14, 2003 of the decision of the Court of Appeals.44On the other hand, Juan Cabrera immediately filed a petition for review on certiorari with this court.45In the resolution dated October 15, 2003, this court denied the petition "for being premature since respondent's motion for reconsideration of the questioned decision of the Court of Appeals is still pending resolution."46chanRoblesvirtualLawlibrary

In the resolution dated January 3, 2005, the Court of Appeals denied Henry Ysaac's motion for reconsideration. On February 24, 2005, Juan Cabrera filed another petition with this court, questioning the propriety of the Court of Appeals' decision and resolution.

This court initially noted that the petition was filed out of time. The stamp on the petition states that it was received by this court on March 24, 2005,47while the reglementary period to file the petition expired on February 28, 2005. Thus, the petition was dismissed in this court's resolution dated April 27, 2005.48Petitioner filed a motion for reconsideration.49 However, the same was denied with finality in this court's resolution dated August 17, 2005.50chanRoblesvirtualLawlibrary

In a letter addressed to the Chief Justice, petitioner argued that it would be unfair to him if a clerical error would deprive his petition from being judged on the merits. Petitioner emphasized that the registry receipts show that he filed the petition on February 24, 2005, not March 24, 2005, as noted by this court in his pleading.51This court treated the letter as a second motion for reconsideration. In the resolution dated March 31, 2006, this court found merit in petitioner's letter.52The petition was reinstated, and respondent was ordered to file his comment.53Respondent filed his comment on September 18, 2006.54This court required petitioner to file a reply,55which petitioner complied with on January 15, 2007.56chanRoblesvirtualLawlibrary

The issues raised by petitioner and respondent are summarized as follows:1. Whether this court could take cognizance of issues not raised by petitioner but by respondent in his comment to the petition for review;2. Whether there was a valid contract of sale between petitioner and respondent;3. Whether the contract of sale still subsisted;a. Whether the contract was terminated through rescission;b. Whether the contract was no longer enforceable due to the supervening sale of the property to the local government of Naga City;

4. Whether petitioner is entitled to the execution of a deed of sale in his favor; and5. Whether petitioner is entitled to actual damages, attorney's fees, and costs of litigation.

The petition should be denied.cralawredI

This court can resolve issuesraised by both parties

Petitioner stated that the errors in this case are: (1) "the [Court of Appeals] erred in holding that the relief of specific performance is not available to [petitioner] supposedly because of the supervening sale of [the] property to the City Government of Naga";57and (2) "consequently, the [Court of Appeals] erred in not ordering the execution of the necessary deed of sale in favor of [petitioner]."58Petitioner argues that this court should limit its adjudication to these two errors.59chanRoblesvirtualLawlibrary

On the other hand, respondent raised issues on the validity of the contract of sale in favor of petitioner, and the propriety of the award of actual damages with interest, attorney's fees, and litigation expenses.60chanRoblesvirtualLawlibrary

For petitioner, if respondent wanted to raise issues regarding the Court of Appeals' decision, respondent should have interposed a separate appeal.61chanRoblesvirtualLawlibrary

Petitioner's position is erroneous. This court can resolve issues and assignments of error argued by petitioner and respondent.

This court "is clothed with ample authority to review matters,even if they are not assigned as errors in their appeal,if it finds that their consideration is necessary to arrive at a just decision of the case."62We can consider errors not raised by the parties, more so if these errors were raised by respondent.

Respondent raised different issues compared with those raised by petitioner. However, the assignment of error of respondent was still responsive to the main argument of petitioner. Petitioner's argument works on the premise that there was a valid contract. By attacking the validity of the contract, respondent was merely responding to the premise of petitioner's main argument. The issue is relevant to the final disposition of this case; hence, it should be considered by this court in arriving at a decision.cralawredII

There was no valid contract