G.R. No. 118114 December 7, 1995TEODOROACAP, petitioner, vs.CORT O! APPEA"# $n% ED& DE "O# RE&E#, respon%ents.PAD'""A, J.:This is a petition for review on certiorari of the decision 1 of the Court of Appeals, 2nd Division,in CA-G.R. No. 31!!, which affir"ed the decision 2 of the Re#ional Trial Court of$i"a"a%lan, Ne#ros &ccidental holdin# that private respondent 'd% de los Re%es had ac(uiredownership of )ot No. 113* of the Cadastral +urve% of $ini#aran, Ne#ros &ccidental ,ased on adocu"ent entitled -Declaration of $eirship and .aiver of Ri#hts-, and orderin# thedispossession of petitioner as leasehold tenant of the land for failure to pa% rentals.The facts of the case are as follows/The title to )ot No. 113*of the Cadastral +urve%of $ini#aran, Ne#ros &ccidental wasevidenced ,% &CT No. R-121!0. The lot has an area of 13,!2* s(. "eters. The title was issuedandisre#isteredinthena"eof spouses+antia#o1as(ue2and)oren2a&ru"a.After ,othspousesdied,their onl% son 3eli4,erto inheritedthe lot.5n 10!6,3eli4,erto e4ecutedadul%notari2ed docu"ent entitled -Declaration of $eirship and Deed of A,solute +ale- in favor ofCos"e 7ido.The evidence ,efore the court a quo esta,lished that since 10*, petitioner Teodoro Acap had,een the tenant of a portion of the said land, coverin# an area of nine thousand five hundred80,6**9 "eters. .hen ownership was transferred in 10!6 ,% 3eli4,erto to Cos"e 7ido, Acapcontinued to ,e the re#istered tenant thereof and reli#iousl% paid his leasehold rentals to 7ido andthereafter, upon 7ido:s death, to his widow )aurenciana.The controvers% ,e#an when 7ido died intestate and on 2! Nove",er 10;1, his survivin# heirse4ecuted a notari2ed docu"ent deno"inated as -Declaration of $eirship and .aiver of Ri#hts of)ot No. 113* $ini#aran Cadastre,- wherein the% declared< to (uote its pertinent portions, that/. . . Cos"e 7ido died in the =unicipalit% of $ini#aran, Ne#ros &ccidental, he died intestate andwithout an% >nown de,ts and o,li#ations which the said parcel of land is 8sic9 held lia,le.That Cos"e7idowassurvived,%his?herle#iti"ateheirs, na"el%/ )A@R'NC5ANA 75D&,wife, ')A, 'R15N, ')='R, and ')'C$&R all surna"ed 75D&< childrenin# the provision of +ection 1, Rule !B of the Rules of Court, the a,ove-"entionedheirs do here,% declare unto CsicD ourselves the onl% heirs of the late Cos"e 7ido and that wehere,% adEudicate unto ourselves the a,ove-"entioned parcel of land in e(ual shares.Now,therefore, .e)A@R'NC5ANA 3, ')A,')='R, 'R15Nand')'C$&Rall surna"ed75D&, do hereby waive, quitclaim all our rights, interests and participation over the said parcelof land in favor of 'DA D' )&+ R'A'+, of le#al a#e, 8f9ilipino, "arried to 15RG5N5A D')&+R'A'+, andresident of $ini#aran, Ne#ros &ccidental, 7hilippines. . . . B 8'"phasissupplied9The docu"ent was si#ned ,% all of 7ido:s heirs. 7rivate respondent 'd% de los Re%es did not si#nsaid docu"ent.5twill ,enoted that atthe ti"e of Cos"e7ido:s death, titletothe propert% continued to,ere#istered in the na"e of the 1as(ue2 spouses. @pon o,tainin# the Declaration of $eirship with.aiverofRi#htsinhisfavor,privaterespondent 'd%delosRe%esfiledthesa"ewiththeRe#istr% of Deeds as part of a notice of an adverse claima#ainst the ori#inal certificate of title.Thereafter, privaterespondent sou#ht forpetitioner8Acap9topersonall%infor"hi"that he8'd%9 had ,eco"e the new owner of the land and that the lease rentals thereon should ,e paid tohi". 7rivate respondent further alle#ed that he and petitioner entered into an oral leasea#ree"ent wherein petitioner a#reed to pa% ten 81*9 cavans of pala% per annum as lease rental. 5n10;2, petitioner alle#edl% co"plied with said o,li#ation. 5n 10;3, however, petitioner refused topa% an% further lease rentals on the land, pro"ptin# private respondent to see> the assistance ofthethen=inistr%of A#rarianRefor"8=AR9 in$ini#aran, Ne#ros &ccidental. The=ARinvited petitioner to a conference scheduled on 13 &cto,er 10;3. 7etitioner did not attend theconference,utsent his wife instead tothe conference.Durin# the"eetin#,anofficer of the=inistr%infor"ed Acap:swifea,outprivaterespondent:sownershipofthesaidland,utshestatedthat sheandher hus,and8Teodoro9 didnot reco#ni2eprivaterespondent:s clai"ofownership over the land.&n2; April 10;;, afterthelapseoffour8B9%ears, privaterespondentfiledaco"plaint forrecover% of possession and da"a#es a#ainst petitioner, alle#in# in the "ain that as his leaseholdtenant, petitioner refused and failed to pa% the a#reed annual rental of ten 81*9 cavans of pala%despite repeated de"ands.Durin#thetrial ,eforethecourt aquo, petitioner reiteratedhisrefusal toreco#ni2eprivaterespondent:s ownership over the su,Eect land. $e averred that he continues to reco#ni2e Cos"e7ido as the owner of the said land, and havin# ,een a re#istered tenant therein since 10*, henever rene#ed on his rental o,li#ations. .hen 7ido died, he continued to pa% rentals to 7ido:swidow. .hen the latter left for a,road, she instructed hi" to sta% in the landholdin# and to pa%the accumulated rentals upon her de"and or return fro" a,road.7etitioner further clai"ed ,efore the trial court that he had no >nowled#e a,out an% transfer orsale ofthelot toprivaterespondentin 10;1andeventhefollowin#%earafter )aurenciana:sdeparture for a,road. $e denied havin# entered into a ver,al lease tenanc% contract with privaterespondent and that assu"in# that the said lot was indeed sold to private respondent without his>nowled#e, R.A. 3;BB, as a"ended, #rants hi" the ri#ht to redee" the sa"e at a reasona,leprice. 7etitioner also ,ewailed private respondent:s eEect"ent action as a violation of his ri#ht tosecurit% of tenure under 7.D. 2!.&n2* Au#ust 1001, thelowercourt renderedadecisioninfavorofprivaterespondent, thedispositive part of which reads/.$'R'3&R', pre"ises considered, the Court renders Eud#"ent in favor of the plaintiff, 'd% delos Re%es, and a#ainst the defendant, Teodoro Acap, orderin# the followin#, to wit/1. Declarin# forfeiture of defendant:s preferred ri#ht to issuance of a Certificate of )and Transferunder 7residential Decree No. 2! and his far"holdin#sewise passed on theirownership of )ot 113* to herein plaintiff 8private respondent9. As owner hereof, plaintiff has theri#ht to de"and pa%"ent of rental and the tenant is o,li#ated to pa% rentals due fro" the ti"ede"and is "ade. . . . 444 444 444Certainl%, the sale of the 7ido fa"il% of )ot 113* to herein plaintiff does not of itself e4tin#uishthe relationship. There was onl% a chan#e of the personalit% of the lessor in the person of hereinplaintiff 'd%delos Re%es who,ein#thepurchaser or transferee, assu"es theri#hts ando,li#ations of the for"er landowner to the tenant Teodoro Acap, herein defendant. !A##rieved, petitioner appealed to the Court of Appeals, i"putin# error to the lower court when itruled that private respondent ac(uired ownership of )ot No. 113* and that he, as tenant, shouldpa% rentals to private respondent and that failin# to pa% the sa"e fro" 10;3 to 10;!, his ri#ht toa certificate of land transfer under 7.D. 2! was dee"ed forfeited.The Court of Appeals ,rushed aside petitioner:s ar#u"ent that the Declaration of $eirship and.aiver of Ri#hts 8'4hi,it -D-9, the docu"ent relied upon ,% private respondent to prove hisownership to the lot, was e4cluded ,% the lower court in its order dated 2! Au#ust 100*. Theorderindeednotedthat thedocu"ent wasnot identified,%Cos"e7ido:sheirsandwasnotre#isteredwiththeRe#istr%ofDeedsofNe#ros&ccidental.Accordin#torespondent court,however,sincetheDeclarationof$eirshipand.aiverofRi#htsappearstohave,eendul%notari2ed, no further proof of its due e4ecution was necessar%. )i>e the trial court, respondentcourt was alsoconvincedthat the saiddocu"ent stands as primafacie proof of appellee:s8private respondent:s9 ownership of the land in dispute..ith respect to its non-re#istration, respondent court noted that petitioner had actual >nowled#eofthesu,Eectsale ofthelandindisputetoprivaterespondent ,ecauseasearl%as10;3, he8petitioner9 alread% >new of private respondent:s clai" over the said land ,ut which he thereafterdenied, andthat in10;2, he8petitioner9 actuall%paidrent toprivaterespondent. &therwisestated, respondent court considered this fact of rental pa%"ent in 10;2 as estoppel on petitioner:spart to thereafter refute private respondent:s clai" of ownership over the said land. @nder thesecircu"stances, respondent court ruled that indeed there was deli,erate refusal ,% petitioner topa% rent for a continued period of five %ears that "erited forfeiture of his otherwise preferredri#ht to the issuance of a certificate of land transfer.5n the present petition, petitioner i"pu#ns the decision of the Court of Appeals as not in accordwith the law and evidence when it rules that private respondent ac(uired ownership of )ot No.113* throu#h the afore"entioned Declaration of $eirship and .aiver of Ri#hts.$ence, the issues to ,e resolved presentl% are the followin#/1. .$'T$'R &R N&T T$' +@FG'CT D'C)ARAT5&N &3 $'5R+$57 AND .A51'R &3R5G$T+ 5+ AR'C&GN5H'D =&D' &3 ACI@5R5NG &.N'R+$57 FA 7R51AT'R'+7&ND'NT &1'R T$' )&T 5N I@'+T5&N.2. .$'T$'R &R N&T T$' +A5D D&C@='NT CAN F' C&N+5D'R'D A D''D &3 +A)'5N 3A1&R &3 7R51AT' R'+7&ND'NT &3 T$' )&T 5N I@'+T5&N.7etitioner ar#uesthat theRe#ional Trial Court, initsorder dated! Au#ust 100*, e4plicitl%e4cluded the docu"ent "ar>ed as '4hi,it -D- 8Declaration of $eirship, etc.9 as privaterespondent:sevidence,ecauseit wasnot re#isteredwiththeRe#istr%ofDeedsandwasnotidentified ,% an%one of the heirs of Cos"e 7ido. The Court of Appeals, however, held the sa"eto ,e ad"issi,le, it ,ein# a notari2ed docu"ent, hence, a prima facie proof of privaterespondents: ownership of the lot to which it refers.7etitionerpoints outthat the Declarationof$eirshipand .aiver of Ri#htsisnot one of thereco#ni2ed "odes of ac(uirin# ownership under Article !12 of the Civil Code. Neither can thesa"e ,e considered a deed of sale so as to transfer ownership of the land to private respondent,ecause no consideration is stated in the contract 8assu"in# it is a contract or deed of sale9.7rivate respondent defends the decision of respondent Court of Appeals as in accord with theevidence and the law. $e posits that while it "a% indeed ,e true that the trial court e4cluded his'4hi,it -D- which is the Declaration of $eirship and .aiver of Ri#hts as part of his evidence,the trial court declared hi" nonetheless owner of the su,Eect lot ,ased on other evidence adduceddurin# the trial, na"el%, the notice of adverse clai" 8'4hi,it -'-9 dul% re#istered ,% hi" with theRe#istr% of Deeds, which contains the (uestioned Declaration of $eirship and .aiver of Ri#htsas an inte#ral part thereof..e find the petition i"pressed with "erit.5n the first place, an asserted ri#ht or clai" to ownership or a real ri#ht over a thin# arisin# fro"a Euridical act, however Eustified, is not per se sufficient to #ive rise to ownership over the res.That ri#ht or title "ust ,e co"pleted ,% fulfillin# certain conditions i"posed ,% law. $ence,ownership and real ri#hts are ac(uired onl% pursuant to a le#al "ode or process. .hile title is theEuridical Eustification, "ode is the actual process of ac(uisition or transfer of ownership over athin# in (uestion. ;@nder Article !12 of the Civil Code, the "odes of ac(uirin# ownership are #enerall% classifiedinto two 829 classes, na"el%, the original mode 8i.e., throu#h occupation, ac(uisitive prescription,laworintellectual creation9andthederivativemode 8i.e., throu#hsuccession mortiscausa ortradition as a result of certain contracts, such as sale, ,arter, donation, assi#n"ent or "utuu"9.5n the case at ,ench, the trial court was o,viousl% confused as to the nature and effect of theDeclaration of $eirship and .aiver of Ri#hts, e(uatin# the sa"e with a contract 8deed9 of sale.The% are not the sa"e.5n a Contract of +ale, one of the contractin# parties o,li#ates hi"self to transfer the ownership ofand to deliver a deter"inate thin#, and the other part% to pa% a price certain in "one% or itse(uivalent. 0@ponthe other hand, a declarationof heirshipandwaiver of ri#hts operates as a pu,licinstru"ent whenfiledwiththeRe#istr%ofDeedswhere,%theintestateheirsadEudicateanddividetheestateleft ,%thedecedent a"on#the"selves as the%seefit. 5t is ineffect ane4traEudicial settle"ent ,etween the heirs under Rule !B of the Rules of Court. 1*$ence, there is a "ar>ed difference ,etween a sale of hereditar% ri#hts and a waiver of hereditar%ri#hts. The first presu"es the e4istence of a contract or deed of sale ,etween the parties. 11 Thesecond is, technicall% spea>in#, a "ode of e4tinction of ownership where there is an a,dicationor intentional relin(uish"ent of a >nown ri#ht with >nowled#e of its e4istence and intention torelin(uish it, in favor of other persons who are co-heirs in the succession. 12 7rivate respondent,,ein# then a stran#er to the succession of Cos"e 7ido, cannot conclusivel% clai" ownership overthe su,Eect lot on the sole ,asis of the waiver docu"ent which neither recites the ele"ents ofeither a sale, 13 or a donation, 1B or an% other derivative "ode of ac(uirin# ownership.Iuite surprisin#l%, ,oth the trial court and pu,lic respondent Court of Appeals concluded that a-sale- transpired ,etween Cos"e 7ido:s heirs and private respondent and that petitioner ac(uiredactual >nowled#e of said sale when he was su""oned ,% the =inistr% of A#rarian Refor" todiscuss private respondent:s clai" over the lot in (uestion. This conclusion has no ,asis ,oth infact and in law.&n record, '4hi,it -D-, which is the -Declaration of $eirship and .aiver of Ri#hts-was excluded ,%thetrial court initsorderdated 27August !!" ,ecausethedocu"ent wasneither re#istered with the Re#istr% of Deeds nor identified ,% the heirs of Cos"e 7ido. There isnoshowin#that privaterespondent hadthesa"edocu"ent attachedtoor"adepart oftherecord. .hat the trial court ad"itted was Anne4 -'-, a notice of adverse clai" filed with theRe#istr% of Deeds which contained the Declaration of $eirship with .aiver of ri#hts and wasannotated at the ,ac> of the &ri#inal Certificate of Title to the land in (uestion.A notice of adverse clai", ,% its nature, does not however prove private respondent:s ownershipover the tenanted lot. -A notice of adverse clai" is nothin# ,ut a notice of a clai" adverse to there#istered owner, the validit% of which is %et to ,e esta,lished in court at so"e future date, and isno ,etter than a notice of lis pendens which is a notice of a case alread% pendin# in court.- 165tisto,e notedthatwhile thee4istence of said adverseclai" wasdul% proven, there is noevidence whatsoever that a deed of sale was e4ecuted ,etween Cos"e 7ido:s heirs and privaterespondent transferrin#theri#htsof7ido:sheirstothelandinfavor of privaterespondent.7rivate respondent:s ri#ht or interest therefore in the tenanted lot re"ains an adverse clai" whichcannot ,%itself ,esufficient tocancel the&CTtothelandandtitlethesa"einprivaterespondent:s na"e.Conse(uentl%, while the transaction ,etween 7ido:s heirs and private respondent "a% ,e ,indin#on ,oth parties, the ri#ht of petitioner as a re#istered tenant to the land cannot ,e perfunctoril%forfeited on a "ere alle#ation of private respondent:s ownership without the correspondin# proofthereof.7etitioner had ,een a re#istered tenant in the su,Eect land since 10* and reli#iousl% paid leaserentalsthereon.5n his"ind,hecontinuedto ,e the re#isteredtenant ofCos"e7ido and hisfa"il% 8after 7ido:s death9, even if in 10;2, private respondent alle#edl% infor"ed petitioner thathe had ,eco"e the new owner of the land.@nder the circu"stances, petitioner "a% have, in #ood faith, assu"ed such state"ent of privaterespondent to ,e true and "a% have in fact delivered 1* cavans of pala% as annual rental for 10;2toprivate respondent. Fut in10;3, it is clear that petitioner had"is#ivin#s over privaterespondent:s clai"of ownership over the said land ,ecause in the &cto,er 10;3 =ARconference, his wife )aurenciana cate#oricall% denied all of private respondent:s alle#ations. 5nfact, petitioner even secured a certificate fro" the =AR dated 0 =a% 10;; to the effect that hecontinued to ,e the re#istered tenant of Cos"e 7ido and not of private respondent. The reason isthat private respondent never registered the Declaration of $eirship with .aiver of Ri#hts withthe Re#istr% of Deeds or with the =AR. 5nstead, he 8private respondent9 sou#ht to do indirectl%what could not ,e done directl%,i.e., file a notice of adverse claim on the said lot to establishownership thereover.5t stands toreason, therefore, toholdthat therewas no un#ustifiedor deliberaterefusal ,%petitioner to pa% the lease rentals or a"orti2ations to the landowner?a#ricultural lessor which, inthis case, private respondent failed to esta,lish in his favor ,% clear and convincin# evidence. 1Conse(uentl%, the sanction of forfeiture of his preferred ri#ht to ,e issued a Certificate of )andTransfer under 7.D. 2! and to the possession of his far" holdin#s should not ,e applied a#ainstpetitioners, since private respondent has not esta,lisheda causeof actionfor recover%ofpossession a#ainst petitioner..$'R'3&R', pre"ises considered, the Court here,% GRANT+ the petition and the decision ofthe Court of Appeals dated 1 =a% 100B which affir"ed the decision of the RTC of $i"a"a%lan,Ne#ros &ccidental dated2*Au#ust 1001is here,%+'TA+5D'. Theprivaterespondent:sco"plaint for recover% of possession and da"a#es a#ainst petitioner Acap is here,%D5+=5++'Dfor failure to properl%state a cause of action, without preEudice to privaterespondent ta>in# the proper le#al steps to esta,lish the le#al "ode ,% which he clai"s to haveac(uired ownership of the land in (uestion.+& &RD'R'D. (G.R. No. 1)8*4+. ,-./ 11, 0))112AR'ANO 3. 4E"ARDE $n% A4E"'NA D. 4E"ARDE, vs. CORT O! APPEA"#, DA4'D A. RA&2NDO $n% GEORGE RA&2NDO, D E C ' # ' O NPANGAN'5AN, J.6Asu,stantial ,reachof areciprocal o,li#ation, li>efailuretopa%thepriceinthe"annerprescri,ed ,%the contract, entitles the inEured part% to rescind the o,li#ation. Rescissiona,ro#ates the contract fro" its inception and re(uires a "utual restitution of ,enefits received.The CaseFeforeusisa7etitionforReviewonCertiorariC1D (uestionin#theDecisionC2D oftheCourt ofAppeals 8CA9 in CA-GR C1 No. 32001 dated &cto,er 0, 1002, as well as its ResolutionC3D datedDece",er 20, 1002 den%in# petitioners "otion for reconsideration.CBDThe dispositive portion of the assailed Decision reads/.$'R'3&R', the &rder dated =a% 16, 1001 is here,% ANN@))'D and +'T A+5D' and theDecisiondatedNove",er1B, 100*dis"issin#theCCDo"plaint isR'5N+TAT'D. The,ondsposted ,% plaintiffs-appellees and defendants-appellants are here,% R')'A+'D.C6DThe 3actsThe factual antecedents of the case, as found ,% the CA, are as follows/4 4 4. David Ra%"undo Cherein private respondentD is the a,solute and re#istered owner of aparcel of land, to#ether with the house and other i"prove"ents thereon, located at 101; Ja"ias+t., Das"arias 1illa#e, =a>ati and covered ,% TCT No. 1B21!!. Defendant Geor#e Ra%"undoCherein private respondentD is Davids father who ne#otiated with plaintiffs Avelina and =ariano1elarde Cherein petitionersD for the sale of said propert%, which was, however, under lease 8'4h., p. 232, Record of Civil Case No. 160629.&n Au#ust ;, 10;, a Deed of +ale with Assu"ption of =ort#a#e 8'4h. A< '4h. 1, pp. 11-12,Record9 was e4ecuted ,% defendant David Ra%"undo, as vendor, in favor of plaintiff Avelina1elarde, as vendee, with the followin# ter"s and conditions/4 4 4 4 4 4 4 4 4That for andinconsiderationof thea"ount of '5G$T$@NDR'DT$&@+AND7'+&+87;**,***.**9, 7hilippinecurrenc%, receipt of whichinfull ishere,%ac>nowled#ed,%the1'ND&Rfro"the1'ND'', tohisentireandco"pletesatisfaction, ,%thesepresentsthe1'ND&R here,% +'))+, C'D'+, TRAN+3'R+, C&N1'A+ANDD')51'R+, freel%andvoluntaril%, with full warrant% of a le#al and valid title as provided ,% law, unto the 1'ND'',her heirs, successors and assi#ns, the parcel of land "entioned and descri,ed a,ove, to#etherwith the house and other i"prove"ents thereon.That the aforesaid parcel of land, to#ether with the house and other i"prove"ents thereon, were"ort#a#ed,%the 1'ND&RtotheFANJ&3 T$'7$5)5775N'5+)AND+, =a>ati, =etro=anila, to secure the pa%"ent of a loan of &N' =5))5&N '5G$T $@NDR'D T$&@+AND7'+&+ 871,;**,***.**9, 7hilippine currenc%, as evidenced ,% a Real 'state =ort#a#e si#nedand e4ecuted ,% the 1'ND&R in favor of the said Fan> of the 7hilippine 5slands, onKKKKKK andwhich Real 'state =ort#a#e was ratified ,efore Notar% 7u,lic for =a>ati, KKKKKKK, as Doc. No.KKKK, 7a#e No. KKK, Foo> No. KKK, +eries of 10; of his Notarial Re#ister.That as part of the consideration of this sale, the 1'ND'' here,% assu"es to pa% the "ort#a#eo,li#ations on the propert% herein sold in the a"ount of &N' =5))5&N '5G$T $@NDR'DT$&@+AND 7'+&+ 871,;**,***.**9, 7hilippine currenc%, in favor of Fan> of the 7hilippine5slands, in the na"e of the 1'ND&R, and further a#rees to strictl% and faithfull% co"pl% with alltheter"sandconditionsappearin#intheReal 'state=ort#a#esi#nedande4ecuted,%the1'ND&R in favor of F75, includin# interests and other char#es for late pa%"ent levied ,% theFan>, as if the sa"e were ori#inall% si#ned and e4ecuted ,% the 1'ND''.5t is further a#reed and understood ,% the parties herein that the capital #ains ta4 anddocu"entar%sta"ps onthe sale shall ,e for the account of the 1'ND&R< whereas, there#istration fees and transfer ta4 thereon shall ,e for the account of the 1'ND''. 8'4h. A, pp.11-12, Record9.&n the sa"e date, and as part of the a,ove-docu"ent, plaintiff Avelina 1elarde, with the consentof her hus,and, =ariano, e4ecuted an @nderta>in# 8'4h. C, pp. 13-1B, Record9, the pertinentportions of which read, as follows/4 4 4 4 4 4 4 4 4.hereas, as per Deed of +ale with Assu"ption of =ort#a#e, 5 paid =r. David A. Ra%"undo thesu"of '5G$T$@NDR'DT$&@+AND7'+&+87;**,***.**9, 7hilippine currenc%, andassu"e the "ort#a#e o,li#ations on the propert% with the Fan> of the 7hilippine 5slands in thea"ount of &N' =5))5&N '5G$T $@NDR'D T$&@+AND 7'+&+ 871,;**,***.**9,7hilippinecurrenc%,inaccordancewiththeter"sandconditionsoftheDeedofReal 'state=ort#a#edatedKKKKKKKKK, si#nedande4ecuted,%=r.David A. Ra%"undowiththesaidFan>, ac>nowled#ed ,efore Notar% 7u,lic for =a>ati, KKKKK, as Doc. No. KKK, 7a#e No. KKK,Foo> No. KK, +eries of 10; of his Notarial Re#ister..$'R'A+, while "%applicationfor the assu"ptionof the "ort#a#e o,li#ations onthepropert%is not %et approved,%the "ort#a#ee Fan>, 5 havea#reedtopa%the "ort#a#eo,li#ations on the propert% with the Fan> in the na"e of =r. David A. Ra%"undo, in accordancewith the ter"s and conditions of the said Deed of Real 'state =ort#a#e, includin# all interestsand other char#es for late pa%"ent..$'R'A+, this underta>in#is ,ein#e4ecutedinfavor of =r. DavidA. Ra%"undo, forpurposesofattestin# andconfir"in#ourprivate understandin#concernin#thesaid"ort#a#eo,li#ations to ,e assu"ed.N&., T$'R'3&R', for and in consideration of the fore#oin# pre"ises, and the assu"ption ofthe "ort#a#e o,li#ations of &N' =5))5&N'5G$T $@NDR'D T$&@+AND7'+&+871,;**,***.**9, 7hilippine currenc%, with the Fan> of the 7hilippine islands, 5, =rs. Avelina D.1elarde, withtheconsent of"%hus,and, =arianoH. 1elarde, dohere,%,indando,li#ate"%self, "% heirs, successors and assi#ns, to strictl% and faithfull% co"pl% with the followin#ter"s and conditions/1. That until such ti"e as "% assu"ption of the "ort#a#e o,li#ations on the propert% purchasedis approved ,% the "ort#a#ee ,an>, the Fan> of the 7hilippine 5slands, 5 shall continue to pa% thesaid loan in accordance with the ter"s and conditions of the Deed of Real 'state =ort#a#e in thena"e of =r. David A. Ra%"undo, the ori#inal =ort#a#or.2. That, in the event 5 violate an% of the ter"s and conditions of the said Deed of Real 'state=ort#a#e, 5 here,% a#ree that "% downpa%"ent of 7;**,***.**, plus all pa%"ents "ade withthe Fan> of the 7hilippine 5slands on the "ort#a#e loan, shall ,e forfeited in favor of =r. DavidA. Ra%"undo, as and ,% wa% of li(uidated da"a#es, without necessit% of notice or an% Eudicialdeclaration to that effect, and =r. David A Ra%"undo shall resu"e total and co"plete ownershipand possession of the propert% sold ,% wa% of Deed of +ale with Assu"ption of =ort#a#e, andthe sa"e shall ,e dee"ed auto"aticall% cancelled and ,e of no further force or effect, in thesa"e "anner as if 8the9 sa"e had never ,een e4ecuted or entered into.3. That 5 a" e4ecutin# this @nderta>in# for purposes of ,indin# "%self, "% heirs, successors andassi#ns, to strictl% and faithfull% co"pl% with the ter"s and conditions of the "ort#a#eo,li#ations with the Fan> of the 7hilippine 5slands, and the covenants, stipulations andprovisions of this @nderta>in#.That, David A. Ra%"undo, the vendor of the propert% "entioned and identified a,ove, CdoesDhere,% confir" and a#ree to the underta>in#s of the 1endee pertinent to the assu"ption of the"ort#a#e o,li#ations ,% the 1endee with the Fan> of the 7hilippine 5slands. 8'4h. C, pp. 13-1B,Record9.This underta>in# was si#ned ,% Avelina and =ariano 1elarde and David Ra%"undo.5t appears that the ne#otiated ter"s for the pa%"ent of the ,alance of 71.; "illion was fro" theproceeds of a loan that plaintiffs were to secure fro" a ,an> with defendants help. Defendantshad a standin# approved credit line with the Fan> of the 7hilippine 5slands 8F759.The partiesa#reed to avail of this, su,Eect to F75s approval of an application for assu"ption of "ort#a#e ,%plaintiffs. 7endin#F75sapproval oCfDtheapplication, plaintiffsweretocontinuepa%in#the"onthl% interests of the loan secured ,% a real estate "ort#a#e.7ursuant to said a#ree"ents, plaintiffs paid F75 the "onthl% interest on the loan secured ,% theafore"entioned "ort#a#e for three 839 "onths as follows/ +epte",er 10, 10; at 72!,226.**etedas Civil Case No. 16062 at the Re#ional Trial Court of =a>ati, Franch 1B0. The case was triedand heard ,% then Gud#e Consuelo Anares-+antia#o 8now an associate Eustice of this Court9, whodis"issed the Co"plaint in a Decision dated Nove",er 1B, 100*.C!D Thereafter, petitioners filed a=otion for Reconsideration.C;D=eanwhile, thenGud#eAnares-+antia#owas pro"otedtotheCourt of Appeals andGud#e+alvador +. A. A,ad +antos was assi#ned to the sala she vacated. 5n an &rder dated =a% 16,1001,C0D Gud#eA,ad+antos #rantedpetitioners =otionfor Reconsiderationanddirectedtheparties to proceed with the sale. $e instructed petitioners to pa% the ,alance of 71.; "illion toprivaterespondents who, inturn, wereorderedtoe4ecuteadeedof a,solutesaleandtosurrender possession of the disputed propert% to petitioners.7rivate respondents appealed to the CA.Ruling of the Court of AppealsThe CA set aside the &rder of Gud#e A,ad +antos and reinstated then Gud#e Anares-+antia#osearlier Decision dis"issin# petitioners Co"plaint. @pholdin# the validit% of the rescission "ade,% private respondents, the CA e4plained its rulin# in this wise/5nthe Deedof +ale withAssu"ptionof =ort#a#e, it was stipulated that as part of theconsideration of this sale, the 1'ND'' 81elarde9 would assu"e to pa% the "ort#a#e o,li#ationon the su,Eect propert% in the a"ount of 71.; "illion in favor of F75 in the na"e of the 1endor8Ra%"undo9. +incethepriceto,epaid,%the1endee1elardeincludes thedownpa%"entof 7;**,***.** and the ,alance of 71.; "illion, and the ,alance of 71.; "illion cannot ,e paid incash, 1endee1elarde, aspart of theconsiderationof thesale, hadtoassu"ethe"ort#a#eo,li#ation on the su,Eect propert%. 5n other words, the assu"ption of the "ort#a#e o,li#ation ispart of the o,li#ation of 1elarde, as vendee, under the contract. 1elarde further a#reed to strictl%and faithfull% co"pl% with all the ter"s and conditions appearin# in the Real 'state =ort#a#esi#ned and e4ecuted ,% the 1'ND&R in favor of F75 4 4 4 as if the sa"e were ori#inall% si#nedand e4ecuted ,% the 1endee. 8p.2, thereof, p.12, Record9. This was reiterated ,% 1elarde in thedocu"ent entitled @nderta>in# wherein the latter a#reed to continue pa%in# said loan inaccordance with the ter"s and conditions of the Deed of Real 'state =ort#a#e in the na"e ofRa%"undo. =oreover, it was stipulated that in the event of violation ,% 1elarde of an% ter"s andconditions of saiddeedof real estate"ort#a#e, thedownpa%"ent of 7;**,***.**plus allpa%"ents "ade with F75 or the "ort#a#e loan would ,e forfeited and the CDDeed of C+Dale withCADssu"ption of C=Dort#a#e would there,% ,e cancelled auto"aticall% and of no force and effect8pars. 2 L 3, thereof, pp. 13-1B, Record9.3ro" these 2 docu"ents, it is therefore clear that part of the consideration of the sale was theassu"ption ,% 1elarde of the "ort#a#e o,li#ation of Ra%"undo in the a"ount of 71.;"illion. This would "ean that 1elarde had to "a>e pa%"ents to F75 under the CDDeed of CRDealC'Dstate C=Dort#a#e in the na"e of Ra%"undo. The application with F75 for the approval of theassu"ptionof "ort#a#e would"eanthat, incase of approval, pa%"ent of the "ort#a#eo,li#ation will now ,e in the na"e of 1elarde. And in the event said application is disapproved,1elarde had to pa% in full. This is alle#ed and ad"itted in 7ara#raph 6 of the Co"plaint. =ariano1elardeli>ewisead"ittedthisfact durin#thehearin#on+epte",er16, 100!8p. B!, t.s.n.,+epte",er 16, 10;!< see also pp. 1-2, t.s.n., &cto,er ;, 10;09. This ,ein# the case, the non-pa%"ent of the"ort#a#eo,li#ationwouldresult inaviolationof thecontract. And, upon1elardes failure to pa% the a#reed price, theCnD Ra%"undo "a% choose either of two 829 actions -819 de"and fulfill"ent of the contract, or 829 de"and its rescission 8Article 1101, Civil Code9.Thedisapproval,%F75 of theapplication for assu"ptionof"ort#a#ecannot,eusedasane4cusefor1elardesnon-pa%"ent ofthe,alanceofthepurchaseprice. As,orneout ,%theevidence, 1elarde had to pa% in full in case of F75s disapproval of the application for assu"ptionof "ort#a#e. .hat 1elarde should have done was to pa% the ,alance of 71.; "illion. 5nstead,1elarde sent Ra%"undo a letter dated Ganuar% !, 10;! 8'4h. J, B9 which was stron#l% #ivenwei#ht ,% the lower court in reversin# the decision rendered ,% then Gud#e Anares-+antia#o.5nsaid letter, 1elarde re#istered their willin#ness to pa% the ,alance in cash ,ut enu"erated 3 newconditions which, tothe "indof this Court, wouldconstitute a newunderta>in#or newa#ree"ent which is su,Eect to the consent or approval of Ra%"undo. These 3 conditions were nota"on# those previousl% a#reed upon ,% 1elarde and Ra%"undo. These are "ere offers or, at"ost, anatte"pt tonovate. Fut thena#ain, therecan,enonovation,ecausetherewasnoa#ree"ent of all the parties to the new contract 8Garcia, Gr. vs. Court of Appeals, 101 +CRAB039.5t was li>ewise a#reed that in case of violation of the "ort#a#e o,li#ation, the Deed of +ale withAssu"ption of =ort#a#e would ,e dee"ed auto"aticall% cancelled and of no further force andeffect, as if the sa"e had never ,een e4ecuted or entered into. .hile it is true that even if thecontract e4pressl% provided for auto"atic rescission upon failure to pa% the price, the vendee"a% still pa%, he "a% do so onl% for as lon# as no de"and for rescission of the contract has ,een"ade upon hi" either Eudiciall% or ,% a notarial act 8Article 1602, Civil Code9. 5n the case at ,ar,Ra%"undo sent 1elarde a notarial notice dated Ganuar% ;, 10;! of cancellation?rescission of thecontract due to the latters failure to co"pl% with their o,li#ation. The rescission was Eustified inview of 1elardes failure to pa% the price 8,alance9 which is su,stantial and funda"ental as todefeat the o,Eect of the parties in "a>in# the a#ree"ent. As adverted to a,ove, the a#ree"ent ofthe parties involved a reciprocal o,li#ationwherein the o,li#ation of one is a resolutor%condition of the o,li#ation of the other, the non-fulfill"ent of which entitles the other part% torescind the contract 8+on#cuan vs. 5AC, 101 +CRA 2;9. Thus, the non-pa%"ent of the "ort#a#eo,li#ation,%appellees 1elardewouldcreateari#ht tode"andpa%"ent or torescindthecontract, or to cri"inal prosecution 8'dca 7u,lishin# L Distri,ution Corporation vs. +antos, 1;B+CRA 1B9. @ponappelleesfailure, therefore, topa%the,alance, thecontract wasproperl%rescinded 8Rui2 vs. 5AC, 1;B +CRA !2*9. Conse(uentl%, appellees 1elarde havin# violated thecontract, the% have lost their ri#ht to its enforce"ent and hence, cannot avail of the action forspecific perfor"ance 81o%saw vs. 5nterphil 7ro"otions, 5nc., 1B; +CRA 369.C1*D$ence, this appeal.C11DThe Issues7etitioners, in their =e"orandu",C12D interpose the followin# assi#n"ent of errors/5.The Court of Appeals erred in holdin# that the non-pa%"ent of the "ort#a#e o,li#ation resultedin a ,reach of the contract.55.The Court of Appeals erred in holdin# that the rescission 8resolution9 of the contract ,% privaterespondents was Eustified.555.The Court of Appeals erred in holdin# that petitioners Ganuar% !, 10;! letter #ave three newconditions constitutin#"ereoffers or anatte"pt tonovatenecessitatin#anewa#ree"ent,etween the parties.The Courts RulingThe 7etition is partiall% "eritorious.First Issue:Breach of Contract7etitioners aver that their nonpa%"ent of private respondents "ort#a#e o,li#ationdidnotconstitute a ,reach of contract, considerin# that their re(uest to assu"e the o,li#ation had ,eendisapproved ,% the "ort#a#ee ,an>. Accordin#l%, pa%"ent of the "onthl% a"orti2ations ceasedto ,e their o,li#ation and, instead, it devolved upon private respondents a#ain.$owever, petitioners did not "erel% stop pa%in# the "ort#a#e o,li#ations< the% also failed to pa%the ,alance of the purchase price. As ad"itted ,% ,oth parties, their a#ree"ent "andated thatpetitioners should pa% the purchase price ,alance of 71.; "illion to private respondents in casethe re(uest to assu"e the "ort#a#e would ,e disapproved. Thus, on Dece",er 16, 10;, whenpetitioners received notice of the ,an>s disapproval of their application to assu"e respondents"ort#a#e, the% should have paid the ,alance of the 71.; "illion loan.5nstead of doin# so, petitioners sent a letter to private respondents offerin# to "a>e such pa%"entonl%uponthefulfill"ent ofcertainconditionsnot ori#inall%a#reeduponinthecontract ofsale. +uch conditional offer to pa% cannot ta>e the place of actual pa%"ent as would dischar#ethe o,li#ation of a ,u%er under a contract of sale.5nacontract of sale, theseller o,li#ates itself totransfer theownershipof anddeliver adeter"inatethin#, andthe,u%ertopa%therefor apricecertainin"one%oritse(uivalent.C13D 7rivate respondents had alread% perfor"ed their o,li#ation throu#h the e4ecution of the Deedof +ale, which effectivel% transferred ownership of the propert% to petitioner throu#hconstructive deliver%. 7rior ph%sical deliver%or possessionis not le#all%re(uired, andthee4ecution of the Deed of +ale is dee"ed e(uivalent to deliver%.C1BD7etitioners, on the other hand, did not perfor" their correlative o,li#ation of pa%in# the contractprice in the "anner a#reed upon. .orse, the% wanted private respondents to perfor" o,li#ations,e%ondthosestipulatedinthecontract ,eforefulfillin#theirowno,li#ationtopa%thefullpurchase price.Second IssueValidity of the Rescission7etitionersli>ewiseclai"that therescissionofthecontract ,%privaterespondentswasnotEustified, inas"uchas thefor"er hadsi#nifiedtheir willin#ness topa%the,alanceof thepurchase price onl% a little over a "onth fro" the ti"e the% were notified of the disapproval oftheir application for assu"ption of "ort#a#e. 7etitioners also aver that the ,reach of the contractwas not su,stantial as would warrant a rescission. The% cite several casesC16D in which this Courtdeclared that rescission of a contract would not ,e per"itted for a sli#ht or casual ,reach. 3inall%,the% ar#ue that the% have su,stantiall% perfor"ed their o,li#ation in #ood faith, considerin# thatthe%have alread%"ade the initial pa%"ent of 7;**,***andthree 839 "onthl%"ort#a#epa%"ents.As pointed out earlier, the ,reach co""itted ,% petitioners was not so "uch their nonpa%"ent ofthe"ort#a#eo,li#ations, as their nonperfor"anceof their reciprocal o,li#ationtopa%thepurchase price under the contract of sale. 7rivate respondents ri#ht to rescind the contract finds,asis in Article 1101 of the Civil Code, which e4plicitl% provides as follows/Art. 1101. -- The power to rescind o,li#ations is i"plied in reciprocal ones, in case one of theo,li#ors should not co"pl% with what is incu",ent upon hi".The inEured part% "a% choose ,etween fulfill"ent and the rescission of the o,li#ation, with thepa%"ent of da"a#es ineither case. $e"a%alsosee>rescissionevenafter hehas chosenfulfill"ent, if the latter should ,eco"e i"possi,le.Theri#ht of rescissionofapart%toano,li#ationunderArticle1101of theCivil Codeispredicated on a ,reach of faith ,% the other part% who violates the reciprocit% ,etween the".C1D The,reachconte"platedinthesaidprovisionistheo,li#orsfailuretoco"pl%withane4istin#o,li#ation.C1!D .hentheo,li#or cannot co"pl%withwhat isincu",ent uponit, theo,li#ee "a% see> rescission and, in the a,sence of an% Eust cause for the court to deter"ine theperiod of co"pliance, the court shall decree the rescission.C1;D5nthepresent case, privaterespondentsvalidl%e4ercisedtheirri#ht torescindthecontract,,ecause of the failure of petitioners to co"pl% with their o,li#ation to pa% the ,alance of thepurchase price. 5ndu,ita,l%, the latter violated the ver% essence of reciprocit% in the contract ofsale, a violation that conse(uentl% #ave rise to private respondents ri#ht to rescind the sa"e inaccordance with law.True, petitioners e4pressed their willin#ness to pa% the ,alance of the purchase price one "onthafter it ,eca"e due< however, this was not e(uivalent to actual pa%"ent as would constitute afaithful co"pliance of their reciprocal o,li#ation. =oreover, the offer to pa% was conditioned onthe perfor"ance ,% private respondents of additional ,urdens that had not ,een a#reed upon inthe ori#inal contract. Thus, it cannot ,e said that the ,reach co""itted ,% petitioners was "erel%sli#ht or casual as would preclude the e4ercise of the ri#ht to rescind.=isplaced is petitioners reliance on the casesC10D the% cited ,ecause the factual circu"stances inthose cases are not analo#ous to those in the present one. 5n Song $o there was, on the part of the,u%er, onl% a dela% of twent% 82*9 da%s to pa% for the #oods delivered. =oreover, the ,u%ersoffer to pa% was unconditional and was accepted ,% the seller. 5n %epeda, the ,reach involved a"ereone-wee>dela%inpa%in#the,alanceof 71,***, whichwasactuall%paid. 5n &an, thealle#ed ,reach was private respondents dela% of onl% a few da%s, which was for the purpose ofclearin# the title to the propert%< there was no reference whatsoever to the nonpa%"ent of thecontract price.5n the instant case, the ,reach co""itted did not "erel% consist of a sli#ht dela% in pa%"ent oranirre#ularit%< such,reachwouldnot nor"all%defeat the intentionof the parties tothecontract. $ere, petitioners not onl% failed to pa% the 71.; "illion ,alance, ,ut the% also i"poseduponprivaterespondents newo,li#ationsaspreconditionstotheperfor"anceof their owno,li#ation. 5n effect, the (ualified offer to pa% was a repudiation of an e4istin# o,li#ation, whichwas le#all% due and de"anda,le under the contract of sale. $ence, private respondents were leftwith the le#al option of see>in# rescission to protect their own interest.Mutual RestitutionRequired in RescissionAs discussed earlier, the ,reach co""itted ,% petitioners was the nonperfor"ance of a reciprocalo,li#ation, not a violation of the ter"s and conditions of the "ort#a#e contract. Therefore, theauto"atic rescissionandforfeiture of pa%"ent clauses stipulatedinthe contract does notappl%. 5nstead, Civil Code provisions shall #overn and re#ulate the resolution of this controvers%.Considerin# that the rescission of the contract is ,ased on Article 1101 of the Civil Code, "utualrestitution is re(uired to ,rin# ,ac> the parties to their ori#inal situation prior to the inception ofthe contract. Accordin#l%, the initial pa%"ent of 7;**,***andthe correspondin#"ort#a#epa%"ents in the a"ounts of 72!,226, 723,*** and 723,026 8totalin# 7;!B,16*.**9 advanced ,%petitioners should ,e returned ,% private respondents, lest the latter unEustl% enrich the"selves atthe e4pense of the for"er.Rescission creates the o,li#ation to return the o,Eect of the contract. 5t can ,e carried out onl%when the one who de"ands rescission can return whatever he "a% ,e o,li#ed to restore.C2*D Torescind is to declare a contract void at its inception and to put an end to it as thou#h it neverwas. 5t is not "erel% to ter"inate it and release the parties fro" further o,li#ations to each other,,ut to a,ro#ate it fro" the ,e#innin# and restore the parties to their relative positions as if nocontract has ,een "ade.C21DThird IssueAttempt to Novate5n view of the fore#oin# discussion, the Court finds it no lon#er necessar% to discuss the thirdissue raised ,% petitioners. +uffice it to sa% that the three conditions appearin# on the Ganuar% !,10;! letter of petitioners to private respondents were not part of the ori#inal contract.F% thatti"e, it was alread% incu",ent upon the for"er to pa% the ,alance of the sale price.The% had nori#ht to de"and preconditions to the fulfill"ent of their o,li#ation, which had ,eco"e due..$'R'3&R', the assailed Decision is here,% A$$'()*D with the )+D'$',A&'+- thatprivate respondents are ordered to return to petitioners the a"ount of 7;!B,16*, which the latterpaid as a conse(uence of the rescinded contract, with le#al interest thereon fro" Ganuar% ;, 10;!,the date of rescission. No pronounce"ent as to costs.+& &RD'R'D.!ebr-$r/ 1, 1915G.R.No.99*5& TE7 $n% CO.,vs.5A#'"'O GON3A"E#, TRENT, J.6The ,asis of this action is a written contract, '4hi,it A, the pertinent para#raphs of which follow/1. That =r.FasilioGon2ale2here,%ac>nowled#esreceipt ofthesu"of73,***7hilippinecurrenc% fro" =essrs. Au Te> and Co., and that in consideration of said su" ,e o,li#ates hi"selfto deliver to the said Au Te> and Co., ** piculs of su#ar of the first and second #rade, accordin#to the result of the polari2ation, within the period of three "onths, ,e#innin# on the 1st da% ofGanuar%, 1012, and endin# on the 31st da% of =arch of the sa"e %ear, 1012.2. That the said =r. Fasilio Gon2ales o,li#ates hi"self to deliver to the said =essrs. Au Te> andCo., of this cit% the said ** piculs of su#ar at an% place within the said "unicipalit% of +antaRosa which the said =essrs. Au Te> and Co., or a representative of the sa"e "a% desi#nate.3. That in case the said =r. Fasilio Gon2ales does not deliver to =essrs. Au Te> and Co. the **piculs of su#ar within the period of three "onths, referred to in the second para#raph of thisdocu"ent, this contract will ,e rescindedandthe said=r. FasilioGon2ales will then,eo,li#ated to return to =essrs. Au Te> and Co. the 73,*** received and also the su" of 71,2** ,%wa% of inde"nit% for loss and da"a#es.7laintiff proved that no su#ar had ,een delivered to it under this contract nor had it ,een a,le torecover the 73,***. 7laintiff pra%ed for Eud#"ent for the 73,*** and, in addition,for 71,2**under para#raph B, supra. Gud#"ent was rendered for 73,*** onl%, and fro" this Eud#"ent ,othparties appealed.The points raised ,% the defendant will ,e considered first. $e alle#es that the court erred inrefusin#toper"it parolevidenceshowin#that thepartiesintendedthatthesu#arwasto,esecured fro" the crop which the defendant raised on his plantation, and that he was una,le tofulfill the contract ,% reason of the al"ost total failure of his crop. This case appears to ,e one towhich the rule which e4cludes parol evidence to add to or var% the ter"s of a written contract isdecidedl% applica,le. There is not the sli#htest inti"ation in the contract that the su#ar was to ,eraised,%thedefendant. 7arties arepresu"edtohavereducedtowritin#all theessentialconditions of their contract. .hile parol evidence is ad"issi,le in a variet% of wa%s to e4plainthe "eanin# of written contracts, it cannot serve the purpose of incorporatin# into the contractadditional conte"poraneous conditions which are not "entioned at all in the writin#, unless therehas ,een fraud or "ista>e. 5n an earl% case this court declined to allow parol evidence showin#that a part% to a written contract was to ,eco"e a partner in a fir" instead of a creditor of thefir". 87astor vs. Gaspar, 2 7hil. Rep., 602.9 A#ain, in 'veland vs. 'astern =inin# Co. 81B 7hil.Rep., 6*09 a contract of e"plo%"ent provided that the plaintiff should receive fro"thedefendant a stipulated salar% and e4penses. The defendant sou#ht to interpose as a defense torecover% that the pa%"ent of the salar% was contin#ent upon the plaintiff:s e"plo%"entredoundin# to the ,enefit of the defendant co"pan%. The contract contained no such conditionand the court declined to receive parol evidence thereof.5n the case at ,ar, it is sou#ht to show that the su#ar was to ,e o,tained e4clusivel% fro" the cropraised ,% the defendant. There is no clause in the written contract which even re"otel% su##estssuchacondition. Thedefendant undertoo>todeliveraspecified(uantit%ofsu#arwithinaspecified ti"e. The contract placed no restriction upon the defendant in the "atter of o,tainin#the su#ar. $e was e(uall% at li,ert% to purchase it on the "ar>et or raise it hi"self. 5t "a% ,e truethat defendant owned a plantation and e4pected to raise the su#ar hi"self, ,ut he did not li"it hiso,li#ation to his own crop of su#ar. &ur conclusion is that the condition which the defendantsee>s to add to the contract ,% parol evidence cannot ,e considered. The ri#hts of the parties"ust ,e deter"ined ,% the writin# itself.The second contention of the defendant arises fro" the first. $e assu"es that the contract wasli"itedtothesu#arhe"i#ht raiseuponhisownplantation< that thecontract representedaperfectedsale< andthat ,%failure of his crophe was relievedfro"co"pl%in#withhisunderta>in# ,% loss of the thin# due. 8Arts. 1B62, 1*0, and 11;2, Civil Code.9 This ar#u"ent isfault%inassu"in#that therewasaperfectedsale.Article1B6*definesaperfectedsaleasfollows/The sale shall be perfected ,etween vendor and vendee and shall ,e ,indin# on ,oth of the", ifthe% have a#reed upon the thin# which is the o,Eect of the contract and upon the price, evenwhen neither has ,een delivered.Article 1B62 reads/ -The inEur% to or the profit of the thin# sold shall,after the contract has beenperfected, ,e #overned ,% the provisions of articles 1*0 and 11;2.-This court has consistentl% held that there is a perfected sale with re#ard to the -thin#- wheneverthe article of sale has ,een ph%sicall% se#re#ated fro" all other articles Thus, a particular to,accofactor% with its contents was held sold under a contract which did not provide for either deliver%of the price or of the thin# until a future ti"e. =cCullou#h vs. Aenlle and Co. 83 7hil. Rep., 2069.Iuitesi"ilar was therecent caseof /arrettovs. Santa)arina 827hil. Rep., 2**9 wherespecifiedsharesof stoc>inato,accofactor%wereheldsold,%acontract whichdeferreddeliver% of ,oth the price and the stoc> until the latter had ,een appraised ,% an inventor% of theentire assets of the co"pan%. 5n /orromeo vs. $ranco 86 7hil. Rep., B09 a sale of a specific housewasheldperfected,etweenthevendor andvendee, althou#hthedeliver%of thepricewaswithhelduntil thenecessar%docu"ents of ownershipwereprepared,%thevendee. 5n &an0eonco vs. 1o 'nqui 8; 7hil. Rep., 6319 the plaintiff had delivered a (uantit% of he"p into thewarehouseof the defendant. Thedefendant drewa,ill of e4chan#e inthe su"of 7;**,representin# thepricewhich had ,eena#reeduponforthe he"pthusdelivered.7rior tothepresentation of the ,ill for pa%"ent, the he"pwas destro%ed. .hereupon, the defendantsuspended pa%"ent of the ,ill. 5t was held that the he"p havin# ,een alread% delivered, the titlehad passed and the loss was the vendee:s. 5t is our purpose to distin#uish the case at ,ar fro" allthese cases.5n the case at ,ar the underta>in# of the defendant was to sell to the plaintiff ** piculs of su#arof the first and second classes. .as this an a#ree"ent upon the -thin#- which was the o,Eect ofthe contract within the "eanin# of article 1B6*, supraM +u#ar is one of the staple co""odities ofthis countr%. 3or the purpose of sale its ,ul> is wei#hed, the custo"ar% unit of wei#ht ,ein#deno"inateda-picul.- Therewas nodeliver%under thecontract. Now, if calledupontodesi#nate the article sold, it is clear that the defendant could onl% sa% that it was -su#ar.- $ecouldonl%usethis #enericna"efor thethin#sold. Therewas no-appropriation- of an%particular lot of su#ar. Neither part% could point to an% specific (uantit% of su#ar and sa%/ -Thisis the article which was the su,Eect of our contract.- $ow different is this fro" the contractsdiscussedinthecasesreferredtoa,oveN5nthe=cCullou#hcase, forinstance, theto,accofactor% which the parties dealt with was specificall% pointed out and distin#uished fro" all otherto,acco factories. +o, in the Farretto case, the particular shares of stoc> which the parties desiredto transfer were capa,le of desi#nation. 5n the Tan )eonco case, where a (uantit% of he"p wasthesu,Eect ofthecontract, it wasshownthat that (uantit%had,eendepositedinaspecificwarehouse, and thus set apart and distin#uished fro" all other he"p.A nu",er of cases have ,een decided in the +tate of )ouisiana, where the civil law prevails,which confir" our position. 7erhaps the latest is .itt +hoe Co. vs. +ee#ars and Co. 8122 )a.,1B6< B! +ou., BBB9. 5n this case a contract was entered into ,% a travelin# sales"an for a (uantit%of shoes, the sales havin# ,een "ade ,% sa"ple. The court said of this contract/Fut it is wholl%i""aterial, for the purpose of the "ain(uestion, whether =itchell wasauthori2ed to "a>e a definite contract of sale or not, since the onl% contract that he was in aposition to "a>e was an a#ree"ent to sell or an e4ecutor% contract of sale. $e sa%s that plaintiffsends out 3!6 sa"ples of shoes, and as he was offerin# to sell ,% sa"ple shoes, part of which hadnot ,een "anufactured and the rest of which were incorporated in plaintiff:s stoc> in )%nch,ur#,1a., it was i"possi,le that he and +ee#ars and Co. should at that ti"e have a#reed upon thespecific o,Eects, the title to which was to pass, and hence there could have ,een no sale. $e and+ee#arsandCo. "i#ht havea#reed, anddid8ineffect 9a#ree, that theidentificationoftheo,Eects and their appropriation to the contract necessar% to "a>e a sale should thereafter ,e "ade,% the plaintiff, actin# for itself and for +ee#ars and Co., and the le#end printed in red in> onplaintiff:s,illheads8-&urresponsi,ilit%ceaseswhenweta>etransportationCo:s. receipt O5n#ood order:- indicates plaintiff:s idea of the "o"ent at which such identification andappropriation would ,eco"e effective. The (uestion presented was carefull% considered in thecase of +tate vs. +hields, et al. 811* )a., 6B!, 3B +ou., !39 8in which it was a,solutel% necessar%that it should ,e decided9, and it was there held that in receivin# an order for a (uantit% of #oods,of a >ind and at a price a#reed on, to ,e supplied fro" a #eneral stoc>, warehoused at anotherplace, the a#ent receivin# the order "erel% enters into an e4ecutor% contract for the sale of the#oods, which does not divest or transfer the title of an% deter"inate o,Eect, and which ,eco"eseffective for that purpose onl% when specific #oods are thereafter appropriated to the contractesplace onl% when the #oods as ordered are delivered to the pu,lic carriers at the place fro" whichthe% are to ,e shipped, consi#ned to the person ,% who" the order is #iven, at which ti"e andplace, therefore, the sale is perfected and the title passes.This case and +tate vs. +hields, referred to in the a,ove (uotation are a"pl% illustrative of thepositionta>en,%the)ouisianacourtonthe(uestion,eforeus. Futwecannotrefrainfro"referrin# to the case of )arue and 7revost vs. Ru#el%, Flair and Co. 81* )a. Ann., 2B29 which issu""ari2ed ,% the court itself in the +hields case as follows/. . . 5t appears that the defendants had "ade a contract for the sale, ,% wei#ht, of a lot of cotton,had received P3,*** on account of the price, and had #iven an order for its deliver%, which had,een presented to the purchaser, and reco#ni2ed ,% the press in which the cotton was stored, ,utthat the cotton had ,een destro%ed ,% fire ,efore it was wei#hed. 5t was held that it was still atthe ris> of the seller, and that the ,u%er was entitled to recover the P3,*** paid on account of theprice..e conclude that the contract in the case at ,ar was "erel% an e4ecutor% a#ree"ent< a pro"ise ofsale and not a sale. At there was no perfected sale, it is clear that articles 1B62, 1*0, and 11;2are not applica,le. The defendant havin# defaulted in his en#a#e"ent, the plaintiff is entitled torecover the 73,*** which it advanced to the defendant, and this portion of the Eud#"ent appealedfro" "ust therefore ,e affir"ed.The plaintiff has appealed fro" the Eud#"ent of the trial court on the #round that it is entitled torecover the additional su" of 71,2** under para#raph B of the contract. The court ,elow heldthat this para#raphwas si"pl%ali"itationuponthe a"ount of da"a#es whichcould,erecovered and not li(uidated da"a#es as conte"plated ,% the law. -5t also appears,- said thelower court, -that in an% event the defendant was prevented fro" fulfillin# the contract ,% thedeliver% of the su#ar ,% condition over which he had no control, ,ut these conditions were notsufficient to a,solve hi" fro" the o,li#ation of returnin# the "one% which he received.-The a,ove (uoted portion of the trial court:s opinion appears to ,e ,ased upon the propositionthat the su#ar which was to ,e delivered ,% the defendant was that which he e4pected to o,tainfro" his own hacienda and, as the dr% weather destro%ed his #rowin# cane, he could not co"pl%with his part of the contract. As we have indicated, this view is erroneous, as, under the contract,the defendant was not li"ited to his #rowth crop in order to "a>e the deliver%. $e a#reed todeliver the su#ar and nothin# is said in the contract a,out where he was to #et it..e thin> is a clear case of li(uidated da"a#es. The contract plainl% states that if the defendantfails to deliver the ** piculs of su#ar within the ti"e a#reed on, the contract will ,e rescindedand he will ,e o,li#ed to return the 73,*** and pa% the su" of 71,2** ,% wa% of inde"nit% forloss and da"a#es. There cannot ,e the sli#htest dou,t a,out the "eanin# of this lan#ua#e or theintentionoftheparties. Thereisnoroo"foreitherinterpretationorconstruction. @ndertheprovisions of article 1266 of the Civil Code contractin# parties are free to e4ecute the contractsthat the% "a% consider suita,le, provided the% are not in contravention of law, "orals, or pu,licorder. 5n our opinion there is nothin# in the contract under consideration which is opposed to an%of these principles.3or the fore#oin# reasons the Eud#"ent appealed fro" is "odified ,% allowin# the recover% of71,2**underpara#raphBofthecontract.Asthus"odified, theEud#"ent appealedfro"isaffir"ed, without costs in this instance.(G.R. No. 1055*1. !ebr-$r/ 10, 19971,O4AN "AND, vs. CORT O! APPEA"# $n% EGEN'O 8E#ADA, 'NC., 9ER2O#'#'2A, ,R. J.6This is a petition for review on certiorari to reverse and set aside the decision of the Court ofAppeals in C.A.-G.R. C1 No. B!616.7etitioner Govan )and, 5nc. is a corporation en#a#ed in the real estate ,usiness. 5ts 7resident andChair"an of the Foard of Directors is one Goseph +%.7rivate respondent 'u#enio Iuesada is the owner of the I Fuildin# located on an ;*1 s(. ". lotat the corner of =a%hali#ue +treet and Ri2al Avenue, +ta. Cru2, =anila. The propert% is covered,% TCT No. !!!0 of the Re#istr% of Deeds of =anila.7etitioner learned fro" co-petitioner Consolacion 7. =endo2a that private respondent was sellin#theaforesaid=a%hali#uepropert%. Thus, petitioner throu#hGoseph+%"adeawrittenoffer,dated Gul% 2!, 10;! for 71*.26 "illion. This first offer was not accepted ,% Conrado Iuesada,the General =ana#er of private respondent. Goseph +% sent a second written offer dated Gul% 31,10;0forthesa"eprice,ut inclusiveofanunderta>in#topa%thedocu"entar%sta"pta4,transfer ta4, re#istration fees and notarial char#es. Chec> No. 2B!*B;, dated Gul% 31, 10;0, forone"illionpesosdrawna#ainst the7hilippineCo""ercial and5ndustrial Fan>87C5F9wasenclosed therewith as earnest "one%. This second offer, with earnest "one%, was a#ain reEected,% Conrado Iuesada. @ndaunted, Goseph +%, on Au#ust 1*, 10;0, sent a third written offer fortwelve "illion pesos with a si"ilar chec> for one "illion pesos as earnest "one%. Annotated onthis thirdletter-offer was thephrase-Receivedori#inal, 0-B-;0- ,esidewhichappears thesi#nature of Conrado Iuesada.&n the ,asis of this annotation which petitioner insists is the proof that there alread% e4ists avalid, perfected a#ree"ent to sell the =a%hali#ue propert%, petitioner filed with the trial court, aco"plaint for specific perfor"ance and collection of su" of "one% with da"a#es. $owever, thetrial court held that/-44 4the,usinessencounters ,etween Goseph+%andConrado Iuesadahadnot passedthene#otiation sta#e relatin# to the intended sale ,% the defendant corporation of the propert% in(uestion. 4 4 4 As the court finds, there is nothin# in the record to point that a contract was everperfected. 5n fact, there is nothin# in writin# which is indispensa,l% necessar% in order that theperfected contract could ,e enforced under the +tatute of 3rauds.-C1D+incethetrial court dis"issedpetitioner:s co"plaint for lac>of causeof action, petitionerappealedC2D to respondent Court of Appeals ,efore which it assi#ned the followin# errors/-1. TheCourt aquo failedtoappreciatethat therewasalread%aperfectedcontract of sale,etween Govan )and, 5nc. and the private respondentDed as '4hi,it D-2 would si#nif% the acceptanceof the offer. Neither does it si#nif%, as +% had testified that the chec> was dul% received on saiddate. 5f this were true +%, who appears to ,e an intelli#ent ,usiness"an could have easil% as>edConrado Iuesadato indicateon '4hi,it D the alle#ed factof acceptanceof saidchec>. And,etter still, +% could have as>ed Iuesada the acceptance in writin# separate of the written offer ifindeed there was an a#ree"ent as to the price of the proposed sale of the propert% in (uestion.-C6DClearl%then, apunctilious e4a"inationof thereceipt reveals that thesa"ecanneither ,ere#arded as a contract of sale nor a pro"ise to sell. +uch an annotation ,% Conrado Iuesadaa"ounts to neither a written nor an i"plied acceptance of the offer of Goseph +%. 5t is "erel% a"e"orandu" of the receipt ,% the for"er of the latter:s offer. The re(uisites of a valid contractof sale are lac>in# in said receipt and therefore the -sale- is neither valid nor enforcea,le.Althou#h there was a series of co""unications throu#h letter-offers and reEections as evidentfro" the facts of this case, still it is undenia,le that no written a#ree"ent was reached ,etweenpetitioner andprivate respondent withre#ardtothe sale of the realt%. $ence, the alle#edtransactionisunenforcea,leasthere(uire"entsunder the+tatuteof 3raudshavenot ,eenco"pliedwith. @nderthesaidprovision, ana#ree"entforthesaleofrealpropert%orofaninterest therein, to ,e enforcea,le, "ust ,e in writin# and su,scri,ed ,% the part% char#ed or ,%an a#ent thereof7etitioner alsoasseveratesthat thefailureof ConradoIuesadatoreturnthechec>for one"illion pesos, translates to i"plied acceptance of its third letter-offer. 5t, however, does not re,utthefindin#of thetrial court that privaterespondent wasreturnin#thechec>,ut petitionerrefusedtoaccept the sa"e andthat whenConradoIuesada su,se(uentl%sent it ,ac>topetitioner throu#h re#istered "ail, the latter failed to clai" its "ail fro" the post office.3inall%,wefittin#l%appl%heretheoft-repeateddoctrinethatthefactualfindin#softhetrialcourt, especiall% as re#ards the credi,ilit% of witnesses, are conclusive upon this court, unless thecase falls under the Eurisprudentiall% esta,lished e4ceptions. Fut this is a case that tenders noe4ceptional circu"stance< rather, we find the o,servations of the trial court to ,e le#all% soundand valid/-4 4 4 Goseph +%:s testi"on% is not i"pressive ,ecause of several inconsistencies herein pointedout. &n the "atter of earnest "one%, the sa"e appears to ,e the idea solel% of the CpetitionerD,assu"in# that he had intended to ,ind the CpetitionerD corporation. 5n the written second offer 4 44 he had stated that the chec> of 71= had ,een enclosed 8attached9 therewith. The sa"e chec> 44 4 was a#ain "entioned to ,e enclosed 8attached9 in the third written offer under date Au#ust1*, 10;0 4 4 4. +% testified in his direct e4a"ination that he had personall% #iven this chec> toConrado Iuesada. Fut on cross e4a"ination, he reversed hi"self ,% sa%in# that the chec> was#iven thru his Cco-petitionerD =endo2a. '4a"inin# the third written offer, it appears that when itwas first t%pewritten, this 711= was noted to have ,een corrected, and that as per his testi"on%,+% had increased it to 712=. This is the reason accordin# to +% wh% there was a superi"positionof the nu",er :12: over the nu",er :11: to "ean 712= as the revised consideration for the sale ofthe propert% in (uestion.-CDRespondent court thus concluded that/-4 4 4 CsinceD the "atter of evaluation of the credi,ilit% of witnessCesD is addressed to the trialcourtandunlessclearl%contrar%totherecords,efore@s,thefindin#softhesaidcourtareentitled to #reat respondent on appeal, 4 4 4 it was Goseph +%:s idea to offer the earnest "one%,and the evidence to show that Goseph +% accepted the sa"e, is wantin#. 4 4 4-C!Dand accordin#l% affir"ed the trial court Eud#"ent appealed fro".As shown elucidated a,ove, we a#ree with the findin#s and conclusions of the trial court and therespondent court. Neither has petitioner positedan%newissues inthe instant petitionthatwarrant the further e4ercise ,% this court of its review powers..$'R'3&R', pre"ises considered, this petition is D'N5'D.Costs a#ainst petitioner.+& &RD'R'D.(G.R. No. 1*0415. ,$n-$r/ *), 0))012'GE"7AT'PNAN, 'NOCENC'O 4A"DE3, EDGARDO 5A"G2A $n%"EOPO"DO 5A"G2A, ,R., vs. 5RA"'O 7AT'PNAN, ,R.#ANDO4A":GT'ERRE3, J.6Fefore us is a petition for review on certiorariC1D assailin# the DecisionC2D of the Court of AppealsdatedGul% 31,100! inCA-GRC1 No.B602;, FraulioJatipunan,Gr.vs.=i#uelJatipunan,5nocencio 1alde2, Att%. )eopoldo Fal#u"a, +r., 'd#ardo Fal#u"a and )eopoldo Fal#u"a, Gr.which set aside the Decision of the Re#ional Trial Court 8RTC9 of =anila, Franch 2;, in CivilCase No. ;!-30;01 for annul"ent of a Deed of A,solute +ale.The antecedents are/Respondent FraulioJatipunan, Gr. istheowner of a2*3s(uare"eter lot andafive-doorapart"entconstructedthereonlocatedat3;6-3=atien2a+t.,+an=i#uel, =anila.Thelotisre#isteredinhis na"e under TCTNo. 1*0103C3D of theRe#istr%of Deeds of =anila. Theapart"ent units are occupied ,% lessees.&n Dece",er 20, 10;6, respondent, assisted ,% his ,rother, petitioner =i#uel Jatipunan, enteredinto a Deed of A,solute +aleCBD with ,rothers 'd#ardo Fal#u"a and )eopoldo Fal#u"a, Gr. 8co-petitioners9, represented,%their father Att%. )eopoldoFal#u"a, +r., involvin#thesu,Eectpropert% for a consideration of 71;!,***.**. Conse(uentl%, respondents title to the propert% wascancelled and in lieu thereof, TCT No. 1;30BC6D was re#istered and issued in the na"es of theFal#u"a,rothers. 5nGanuar%,10;,Att%.Fal#u"a, thenstill alive, startedcollectin#rentalsfro" the lessees of the apart"ents.&n=arch1*, 10;!, respondent filedwiththeRTCof=anila, Franch21,CD aco"plaint forannul"ent of the Deed of A,solute +ale, doc>eted as Civil Case No. ;!-30;01.C!D $e averred thathis ,rother =i#uel, Att%. Fal#u"a and 5nocencio 1alde2 8defendants therein, now petitioners9convinced hi" to wor> a,road. The% even ,rou#ht hi" to the NF5 and other #overn"ent officesfor the purpose of securin# clearances and other docu"ents which later turned out to ,e falsified.Throu#hinsidious words and"achinations, the%"adehi"si#nadocu"ent purportedl%acontract of e"plo%"ent, which docu"ent turned out to ,e a Deed of A,solute +ale. F% virtue ofthe said sale, ,rothers 'd#ardo and )eopoldo, Gr. 8co-defendants9, were a,le to re#ister the title tothe propert% in their na"es. Respondent further alle#ed that he did not receive the considerationstated in the contract. $e was shoc>ed when his sister A#ueda Jatipunan-+avellano told hi" thatthe Fal#u"a ,rothers sent a letter to the lessees of the apart"ent infor"in# the" that the% are thenew owners.3inall%,he clai"edthatthe defendants,nowpetitioners,withevident,ad faith,conspired with one another in ta>in# advanta#e of his i#norance, he ,ein# onl% a third #rader.5n their answer, petitioners denied the alle#ations in the co"plaint, alle#in# that respondent wasawareof thecontents of theDeedof A,solute+aleandthat hereceivedtheconsiderationinvolvednewthatthe Fal#u"a,rothershave ,eencollectin#the rentals sinceDece",er, 10;6 ,ut that he has not o,Eected or confronted the"< and that he filed the co"plaint,ecause his sister, A#ueda +avellano, ur#ed hi" to do so.C;DTwice respondent "oved to dis"iss his co"plaint 8which were #ranted9 on the #rounds that hewasactuall%insti#ated,%his sister tofilethesa"e< andthat theparties havereachedana"ica,le settle"ent after Att%. Fal#u"a, +r. paid hi" 72,6**.** as full satisfaction of his clai".5n #rantin# his "otions for reconsideration, the trial court was convinced that respondent did notsi#nthe"otions todis"iss voluntaril% ,ecauseof hispoor co"prehension,as shown,% the"edical report of Dr. Annette Revilla, a Resident 7s%chiatrist at the 7hilippine General $ospital.Fesides,the trialcourtnotedthat respondent was not assisted,% counsel in si#nin# the said"otions, thus it is possi,le that he did not understand the conse(uences of his action.C0D'ventuall% the trial court set the case for pre-trial. The court li>ewise #ranted respondents "otionto appoint A#ueda +avellano as his #uardian ad litem.C1*DAfter hearin#, the trial court dis"issed the co"plaint, holdin# that respondent failed to prove hiscauses of action since he ad"itted that/ 819 he o,tained loans fro" the Fal#u"as< 829 he si#nedthe Deed of A,solute +ale< and 839 he ac>nowled#ed sellin# the propert% and that he stoppedcollectin# the rentals.@ponappeal ,%respondent, theCourt of Appeals, onGul%31, 100!, renderedtheassailedDecision, the dispositive portion of which reads/.$'R'3&R', the Eud#"ent appealed fro" is here,% R'1'R+'D and +'T A+5D', and a newone entered annullin# the Deed of +ale. Conse(uentl%, TCT No. 1;30B is here,% declared nulland void and of no force and effect. The Re#ister of Deeds of =anila is directed to cancel thesa"e and restore TCT No. 1*0103 in the na"e of Fraulio Jatipunan.+& &RD'R'D.5n reversin# the RTC Decision, the Court of Appeals ruled/@pon close scrutin% of all the evidence on record, plaintiff-appellants contention finds support inthe certification dated Au#ust B, 10;! issued ,% Dr. Ana =arie Revilla, a ps%chiatrist at the @7-7G$, who was presented as an e4pert witness. $er findin#s e4plained the reason wh% plaintiff-appellant showed a lot of inconsistencies when he was put on the stand. 5t supports the fact thatplaintiff-appellant is slow in co"prehension and has a ver% low 5I. Fased on such findin#s, thetrial court wasfaultedforitswron#assess"ent ofappellants"ental condition. 5t ar,itraril%disre#arded the testi"on% of a s>illed witness and "ade an unsupported findin# contrar% to here4pert opinion.Ad"ittedl%, e4pert witnesses whenpresentedtothecourt "ust ,econstruedtohave,eenpresentednottoswa%thecourt infavorofan%oftheparties, ,ut toassist thecourt inthedeter"inationof theissue,eforeit 4*spirituvs. ,ourt of Appeals, 2B2+CRA329. '4pertopinions are not ordinaril%conclusive. The%are #enerall%re#ardedas purel%advisor%incharacter< the court "a% place whatever wei#ht the% choose upon such testi"on% and "a% reEectit if the% find it inconsistent with the facts in the case or otherwise unreasona,le 8Fasic 'vidence,% Ricardo G. 3rancisco, pp. 2*29.The trial court whose decision is now under review refused to ad"it the e4perts testi"on% andprefer to ,ase its decision on its findin#s that contrar% to the alle#ation of the appellant, he isnonethelesscapa,leofrespondin#tothe(uestionse4poundedtohi"whileonthestand. 5nshort,thecourt was swa%ed,%its owno,servationofappellants de"eanor on thestand.&fcourse, theruleistoaccord"uchwei#httothei"pressionsofthetrialEud#e, whohadtheopportunit% to o,serve the witnesses directl% and to test their credi,ilit% ,% their de"eanor on thestand 45eople vs. *rro#o, 220 +CRA B09. +uch i"pression however, is not per se the ,asis of aconclusion, for it needs confor"it% with the findin#s of facts relevant to the case..e find it indispensa,le to #ive credit to the findin#s of Dr. Ana =arie Revilla, whose testi"on%re"ains unsha>en and uni"peached. The tests she "ade are revealin# and unre,utted and has a,earin# on facts of the case.5t is a proven fact that Fraulio reached onl% Grade 555 due to his ver% low 5I< that he is illiteratee passport, etc., nor of =i#uels own plans to #o a,road. 5t is then "ost pro,a,le that it was=i#uel who wanted to #o a,road and needed the "one% for it.5nviewof thefore#oin#, it isapparent that thecontract enteredinto,%FraulioandAtt%.Fal#u"a is voida,le, pursuant to the provisions of Article 130* of the Civil Code, to wit/Art. 130*. The followin# contracts are voida,le or annulla,le, even thou#h there "a% have ,eenno da"a#e to the contractin# parties/819 Those where one of the parties is incapa,le of #ivin# consent to a contracted, "isunderstood or "isapplied so"e fact orcircu"stance of wei#ht and su,stance, which, if considered, could "ateriall% affect the result ofthe case.C12D Also, whenthefactualfindin#sof the trial court contradict those oftheappellatecourt, this Court isconstrainedto"a>eafactual reviewof therecordsand"a>eits ownassess"ent of the case.C13D The instant case falls within the said e4ception.A contract of sale is ,orn fro" the "o"ent there is a "eetin# of "inds upon the thin# which isthe o,Eect of the contract and upon the price.C1BD This "eetin# of the "inds spea>s of the intent oftheparties inenterin#intothecontract respectin#thesu,Eect "atter andtheconsiderationthereof.C16D Thus, the ele"ents of a contract of sale are consent, o,Eect, and price in "one% or itse(uivalent.C1D @nder Article133*of theCivil Code, consent "a%,evitiated,%an%of thefollowin#/ 8a9 "ista>e, 829 violence, 839 inti"idation, 8B9 undue influence, and 869 fraud.C1!D Thepresence of an% of these vices renders the contract voida,le.$ere, as ,orne ,% the facts on hand, respondent si#ned the deed without the re"otest idea ofwhat it was, thus/ATTA. +AR=5'NT&/I After =i#uel received that "one% which a"ount %ou do not re"e",er how "uch, do %oure"e",er havin# si#ned a docu"ent purported to ,e sale of propert% that which %ou ownedMA Aes, 5 si#ned so"ethin# ,ecause the% forced "e to si#n.C&@RT 8To the witness9I Do %ou >now how to affi4 %our si#natureMA Aes, Aour $onor.I Aou si#n %our na"e here. 8witness is #iven a piece of paper ,% the court wherein he was "adeto si#n his na"e9ATTA. +AR=5'NT&/I Aou said that %ou re"e",er %ou have si#ned a docu"ent. Did %ou co"e to >now what >ind ofdocu"ent was that which %ou si#ned at that ti"eMA 5 do not >now.I .here did %ou si#n that docu"entMA 5 si#ned that docu"ent in the house of +encio.I .here is this house of +encioMA 5t is Eust ,ehind our house at +an =i#uel.I No,od% infor"ed %ou what docu"ent %ou were si#nin#MA No,od% infor"ed "e what docu"ent 5 was si#nin#.I .ho as>ed %ou to si#n that docu"entMA =% ,rother =i#uel and +encio as>ed "e to si#n that docu"ent.I Aou never ,othered to as> %our ,rother =i#uel wh% %ou were si#nin# that docu"entMA Accordin# to the", if 5 will not si#n, so"ethin# will happen.I .ho particularl% told %ou that if %ou will not si#n that docu"ent so"ethin# will happenMA Att%. Fal#u"a. 8witness pointin# to Att%. Fal#u"a9I Aouwant totell thecourt thatAtt%.Fal#u"aat that ti"e%ousi#nedthat docu"ent waspresentMA Aes, sir, he was there.I .hat if an% did Att%. Fal#u"a do when %ou were as>ed to si#n that docu"entMA $e was as>in# "e also to si#n.C&@RT 8To the witness9I .ere %ou threatened with a #un or an% instru"entMA No, Aour $onor.I $ow were %ou threatenedMA 5 was shoved aside ,% +encio and =i#uel and 5 was surprised wh% the% "ade "e si#n.I Did %ou fall down when %ou were shovedMA 5 was "ade to "ove to the side.I And ,ecause of that %ou si#ned that docu"ent that %ou were ,ein# forced to si#nMA Aes, sir.I .hat >ind of paper did %ou si#nMA A coupon ,ond paper.I .as there so"ethin# writtenMA There was so"ethin# written on it, ,ut 5 do not >now.I .as it t%pewrittenMA There was so"ethin# t%pewritten when it was shown to "e ,ut 5 do not >now what it was.C1;D 8@nderscorin# supplied9The circu"stances surroundin# the e4ecution of the contract "anifest a vitiated consent on thepart of respondent. @ndue influence was e4erted upon hi" ,% his ,rother =i#uel and 5nocencio1alde28petitioners9and Att%.Fal#u"a. 5twashis,rother=i#uelwhone#otiatedwith Att%.Fal#u"a. $owever, the% did not e4plain to hi" the nature and contents of the docu"ent. .orse,the% deprivedhi"of a reasona,lefreedo"of choice.5t,earsstressin#that he reachedonl%#rade three. Thus, it was i"possi,le for hi" to understand the contents of the contract written in'n#lish and e",ellished in le#al Ear#on. 'ven the trial court,in reinstatin# the case which itearlier dis"issed, too> co#ni2ance of the "edical findin# of Dr. Revilla 8presented ,%respondents counsel as e4pert witness9 who testified durin# the hearin# of respondents "otionfor reconsideration of the first order dis"issin# the co"plaint. Accordin# to her, ,ased on thetests she conducted, she found that respondent has a ver% low 5I and a "ind of a si4-%ear oldchild.C10D 5n fact, the trial court had to clarif% certain "atters ,ecause Fraulio was either confused,for#etful or couldnot co"prehend.C2*D Thus, his lac>of education, coupledwithhis "entalaffliction, placedhi"not onl%at ahopelessl%disadvanta#eousposition vis--vis petitionerstoenter into a contract, ,ut virtuall% rendered hi" incapa,le of #ivin# rational consent. To ,e sure,his i#norance and wea>ness "ade hi" "ost vulnera,le to the deceitful caEolin# and inti"idationof petitioners. The trial court o,viousl% erred when it disre#arded Dr. Revillas testi"on% withoutan% reason at all. 5t "ust ,e e"phasi2ed that petitioners did not re,ut her testi"on%.'ven the consideration, if an%, was not shown to ,e actuall% paid to respondent. '4tant fro" therecords is the fact that =i#uel profited fro" the entire transaction and #ave onl% s"all a"ountsof "one% to respondent, thus/I Do %ou >now how "uch "one% was #iven to =i#uel and fro" who" did that "one% co"efro"MA 5 do not >now how "uch, ,ut the "one% ca"e fro" Att%. Fal#u"a.I Aou do not >now how "uch a"ount was #iven ,% Att%. Fal#u"a and for what considerationwas the "one% #iven %ou are not aware of thatMA 5 a" not aware ,ecause 5 was not there, 5 do not >now an%thin#.I Aou want to tell the court that despite that it is %ou ,ein# the owner of this propert% it was=i#uel who ne#otiated the as>in# of "one% fro" Att%. Fal#u"aMA Aes, it is li>e that.I .ere %ou consulted ,% %our ,rother =i#uel when he as>ed "one% fro" Att%. Fal#u"aMA No, sir, in the ,e#innin# he >ept it a secret then later on he told us.I Aou want to tell this court that it was onl% when %our ,rother =i#uel #ave 8%ou9 "one% that hetold %ou that we have now the "one% fro" Att%. Fal#u"aMA No, sir, 5 did not even >now where that "one% ca"e fro". $e was a,out to leave for a,roadwhen he told "e that he received "one% fro" Att%. Fal#u"a.I Did %ou receive an% a"ount fro" =i#uel ever% ti"e he was #iven ,% Att%. Fal#u"aM Aoureceived also "one% fro" =i#uel ever% ti"e he was #iven ,% Att%. Fal#u"aMA Aes, he would #ive "e s"all deno"inations, ,ar%a.I .hen%ousaid-,ar%a, would%ou,ea,letotell thecourt how"uchthis,ar%a%ouarereferrin# to isMA =a% ,e twent% pesos, "a% ,e ten pesos, ,ut the% are all loose chan#e.I Tell us how "an% ti"es did =i#uel receive "one% fro" Att%. Fal#u"a as "uch as %ou canrecallMA 5donot >now,ecauseever%ti"e"%,rother=i#uel and Att%.Fal#u"awouldtransact,usiness, 5 was not present.4 4 4I Fefore or after the si#nin# of this piece of paper were %ou #iven an% ,i# a"ount of "one% ,%%our ,rother =i#uel or Att%. Fal#u"a or +encioMA After si#nin# that docu"ent, Att%. Fal#u"a #ave "e several loose chan#e ,ar%a, no paper,ills. A Eust handful of coins.C21D 8@nderscorin# supplied9.e are convinced that respondent was tellin# the truth that he did not receive the purchase price.$is testi"on% on this point was not controverted ,% =i#uel. =oreover, Att%. Fal#u"a ad"ittedthat it was=i#uel whoreceivedthe"one%fro"hi".C22D .hat =i#uel #averespondent was"erel% loose chan#e or ,ar%a-,ar%a, #rossl% disproportionate to the value of his propert%. .ea#ree with the conclusion of the Court of Appeals that it is then "ost pro,a,le that it was =i#uelwho wanted to #o a,road and needed the "one% for it.5n the case of Archipelago )anagement and )ar6eting ,orp. vs. ,ourt of Appeals,C23D penned ,%Gustice Arte"io1.7an#ani,an, this Court sustainedthe decisionof the Court of Appealsannullin# the deed of sale su,Eect thereof. 5n that case, Rosalina 8the owner9 was convinced ,%her second hus,and to si#n several docu"ents, purportedl% an application for the reconstitutionof her ,urned certificate of title. $owever, said docu"ents turned out to ,e a Deed of A,solute+ale where it was stipulated that she sold her propert% for 7 1,2**,***.**, a consideration whichshe did not receive. The Court ruled that Rosalina, who was (uite old at that ti"e she si#ned thedeed, was tric>ed ,% her own hus,and, who e"plo%ed fraud and deceit, into ,elievin# that whatshe was si#nin# was her application for reconstitution of title.A contract where one of the parties is incapa,le of #ivin# consent or where consent is vitiated ,%"ista>e, fraud, or inti"idation is not void ab initio ,ut onl% voida,le and is ,indin# upon theparties unless annulled ,% proper Court action. The effect of annul"ent is to restore the parties tothe status quo ante insofar as le#all% and e(uita,l% possi,le-- this "uch is dictated ,% Article130; of the Civil Code. As an e4ception however to the principle of "utual restitution, Article1300 provides that when the defect of the contract consists in the incapacit% of one of the parties,the incapacitatedpersonis not o,li#edto"a>ean%restitution, e4cept whenhehas ,een,enefited ,% the thin#s or price received ,% hi". Thus, since the Deed of A,solute +ale ,etweenrespondent and the Fal#u"a ,rothers is voida,le and here,% annulled, then the restitution of thepropert% and its fruits to respondent is Eust and proper. 7etitioners should turn over to respondentall the a"ounts the% received startin# Ganuar%, 10; up to the ti"e the propert% shall have ,eenreturned to the latter. Durin# the pre-trial and as shown ,% the 7re-Trial &rder, the contendin#partiesstipulatedthat theFal#u"a,rothersreceivedfro"thelessees"onthl%rentalsinthefollowin# a"ounts/7'R5&D A=&@NT &3 R'NTA)+Ganuar%, 10; toDece",er, 10;! 7 B;1.** per "onthGanuar%, 10;; toDece",er, 10;; 72,1**.** per "onthGanuar%, 10;0 topresent 73,*26.** per "onthArticle2BoftheCivil CodeenEoinscourtsto,evi#ilant fortheprotectionofapart%toacontract who is placed at a disadvanta#e on account of his i#norance, "ental wea>ness or otherhandicap, li>e respondent herein. .e #ive su,stance to this "andate..$'R'3&R', the petition is D'N5'D. The assailed Decision of the Court of Appeals datedGul% 3, 100! in CA-GR C1 No. B602; is A335R='D with =&D535CAT5&N in the sense thatpetitioners 'd#ardo Fal#u"a and )eopoldo Fal#u"a, Gr., are ordered to turn over to respondentFraulio Jatipunan, Gr. the rentals the% received for the five-door apart"ent correspondin# to theperiod fro" Ganuar%, 10;up totheti"ethepropert%shallhave,eenreturned to hi",withinterest at the le#al rate. Costs a#ainst petitioners.+& &RD'R'D.(G.R. No. 100544. ,$n-$r/ 08, 0))*1REG'NA P. D'3ON, A2PARO D. 5ARTO"O2E, !'DE"'NA D. 5A"3A, E#TER A5ADD'3ON $n% ,O#EP9 ANT9ON& D'3ON, RA&2ND A. D'3ON, GERARD A. D'3ON$n% ,O#E A. D'3ON, ,R., vs. CORT O! APPEA"# $n% O4ER"AND E;PRE## "'NE#, 'NC.&NARE#:#ANT'AGO, J.6&n Ganuar% 2;, 1000, this Court rendered Eud#"ent in these consolidated cases as follows/.$'R'3&R', inviewof thefore#oin#, ,othpetitions are GRANT'D. Thedecisiondated=arch 20, 100B and the resolution dated &cto,er 10, 1006 in CA-G.R. C1 Nos. 26163-6B, aswell as the decision dated Dece",er 11, 1006 and the resolution dated April 23, 100! in CA-G.R. +7 No. 33113 of the Court of Appeals are here,% R'1'R+'D and +'T A+5D'.)et therecordsof this case,ere"andedtothetrial court for i""ediatee4ecutionof theEud#"ent dated Nove",er 22, 10;2 in Civil Case No. 1555-20166 of the then Cit% Court 8now=etropolitan Trial Court9 of Iue2on Cit%, Franch 555 as affir"ed in the decision dated +epte",er2, 10;B of the then 5nter"ediate Appellate Court 8now Court of Appeals9 and in the resolutiondated Gune 10, 10;6 of this Court.$owever, petitioners are ordered to R'3@ND to private respondent the a"ount of 73**,***.**which the% received throu#h Alice A. Di2on on Gune 2*, 10!6.+& &RD'R'D.7rivate respondent filed a =otion for Reconsideration, +econd =otion for Reconsideration, and=otion to +uspend 7rocedural Rules in the $i#her 5nterest of +u,stantial Gustice, all of whichhave ,een denied ,% this Court. This notwithstandin#, the cases were set for oral ar#u"ent on=arch 21, 2**1, on the followin# issues/1. .$'T$'R T$'R' AR' C5RC@=+TANC'+ T$AT .&@)D G@+T53A +@+7'N+5&N &3T$' R@)'+ &3 C&@RTin#s. Adoptin# thesesa"e e4hi,its as their own, then defendants 8now petitioners9 accordin#l% offered and "ar>edthe"as'4hi,its1throu#h1*, li>ewiseinclusiveof their correspondin#su,"ar>in#s.@pon"otion of the parties, the trial court #ave the" thirt% 83*9 da%s within which to si"ultaneousl%su,"it their respective"e"oranda, andanadditional 16da%swithinwhichtosu,"it theircorrespondin# co""ent or repl% thereto, after which, the case would ,e dee"ed su,"itted forresolution.&n April 1B, 10;;, the case was su,"itted for resolution ,efore Gud#e Re%naldo Roura, who wasthen te"poraril% detailed to preside over Franch ;2 of the RTC of Iue2on Cit%. &n=arch 1,10;0, Eud#"ent was handeddown,%Gud#e Roura fro"his re#ular ,enchat =aca,e,e,7a"pan#a for the Iue2on Cit% ,ranch, disposin# as follows/.$'R'3&R', Eud#"ent forspecificperfor"anceishere,%renderedorderin#defendant toe4ecute in favor of plaintiffs a deed of a,solute sale coverin# that parcel of land e",raced in andcovered ,% Transfer Certificate of Title No. 32!B*3 8now TCT No. 3316;29 of the Re#istr% ofDeeds for Iue2on Cit%, to#ether with all the i"prove"ents e4istin# thereon free fro" all liensand encu",rances, and once acco"plished, to i""ediatel% deliver the said docu"ent of sale toplaintiffs and upon receipt thereof, the plaintiffs are ordered to pa% defendants the whole ,alanceof thepurchaseprice a"ountin#to71,10*,***.**incash. Transfer Certificateof TitleNo.3316;2 of the Re#istr% of Deeds for Iue2on Cit% in the na"e of intervenor is here,% canceledanddeclaredto,ewithoutforceandeffect. Defendantsandintervenorandall otherpersonsclai"in# under the" are here,% ordered to vacate the su,Eect propert% and deliver possessionthereof to plaintiffs. 7laintiffs clai" for da"a#es and attorne%s fees, as well as the counterclai"sof defendants and intervenors are here,% dis"issed.No pronounce"ent as to costs.+o &rdered.=aca,e,e, 7a"pan#a for Iue2on Cit%, =arch 1, 10;0.8(ollo, p. 1*9A "otionforreconsiderationwasfiled,%petitioners,eforethenewpresidin#Eud#eoftheIue2on Cit% RTC ,ut the sa"e was denied ,% Gud#e 'strella T. 'strada, thusl%/The pra%er contained in the instant "otion, i.e., to annul the decision and to render anew decision,% the undersi#ned 7residin# Gud#e should ,e denied for the followin# reasons/ 819 The instantcase ,eca"e su,"ittedfor decisionas of April 1B, 10;;whentheparties ter"inatedthepresentation of their respective docu"entar% evidence and when the 7residin# Gud#e at that ti"ewas Gud#e Re%naldo Roura. The fact that the% were allowed to file "e"oranda at so"e futuredate did not chan#e the fact that the hearin# of the case was ter"inated ,efore Gud#e Roura andthereforethesa"eshould,esu,"ittedtohi"for decision< 829 .henthedefendants andintervenor did not o,Eect to the authorit% of Gud#e Re%naldo Roura to decide the case prior to therendition of the decision, when the% "et for the first ti"e ,efore the undersi#ned 7residin# Gud#eat the hearin# of a pendin# incident in Civil Case No. I-B1B6 on Nove",er 11, 10;;, the%weredee"edtohaveac(uiescedtheretoandthe%arenowestoppedfro"(uestionin#saidauthorit%of Gud#eRouraafter the%receivedthedecisionin(uestionwhichhappens to,eadverse to the"< 839 .hile it is true that Gud#e Re%naldo Roura was "erel% a Gud#e-on-detail atthis Franch of the Court, he was in all respects the 7residin# Gud#e with full authorit% to act onan% pendin# incident su,"itted ,efore this Court durin# his incu",enc%. .hen he returned tohis &fficial +tation at =aca,e,e, 7a"pan#a, he did not lose his authorit% to decide or resolvecases su,"itted to hi" for decision or resolution ,ecause he continued as Gud#e of the Re#ionalTrial Court and is of co-e(ual ran> with the undersi#ned 7residin# Gud#e. The standin# rule andsupported,%EurisprudenceisthataGud#eto who" a caseissu,"itted for decisionhastheauthorit% to decide the case notwithstandin# his transfer to another ,ranch or re#ion of the sa"ecourt 8+ec. 0, Rule 136, Rule of Court9.Co"in# now to the twin pra%er for reconsideration of the Decision dated =arch 1, 10;0 renderedin the instant case, resolution of which now pertains to the undersi#ned 7residin# Gud#e, after a"eticulous e4a"ination of the docu"entar% evidence presented ,% the parties, she is convincedthat theDecisionof =arch1, 10;0issupported,%evidenceand, therefore, shouldnot ,edistur,ed.5N 15'. &3 T$' 3&R'G&5NG, the =otion for Reconsideration and?or to Annul Decision andRender AnewDecision,%the 5ncu",ent 7residin#Gud#edated =arch2*, 10;0 is here,%D'N5'D.+& &RD'R'D.Iue2on Cit%, 7hilippines, Gul% 12, 10;0.8(ollo, pp. 1*;-1*097etitionersthereuponinterposedanappeal, ,uton Dece",er1, 1001, theCourt of Appeals8Fuena, Gon2a#a-Re%es, A,ad-+antos 879, GG.9 rendered its decision full% a#reein# with the trialcourt.$ence, the instant petition which was filed on =arch 6, 1002. The last pleadin#, privaterespondents Repl% =e"orandu", was filed on +epte",er 16, 1003. The case was, however, re-raffled to undersi#ned ponente onl% on Au#ust 2;, 100, due to the voluntar% inhi,ition of theGustice to who" the case was last assi#ned..hile we dee" it necessar% to introduce certain refine"ents in the dis(uisition of respondentcourt in the affir"ance of the trial courts decision, we definitel% find the instant petition ,ereft of"erit.The heart of the controvers% which is the ulti"ate >e% in the resolution of the other issues in thecase at ,ar is the precise deter"ination of the le#al si#nificance of the docu"ent entitled Receiptof Down 7a%"ent which was offered in evidence ,% ,oth parties. There is no dispute as to thefact that the said docu"ent e",odied the ,indin# contract ,etween Ra"ona 7atricia Alcara2 onthe one hand, and the heirs of Constancio 7. Coronel on the other, pertainin# to a particular houseandlot covered,%TCTNo. 1102!, as definedinArticle13*6of theCivil Codeof the7hilippines which reads as follows/Art. 13*6. A contract is a "eetin# of "inds ,etween two persons where,% one ,inds hi"self,with respect to the other, to #ive so"ethin# or to render so"e service..hile, it is the position of private respondents that the Receipt of Down 7a%"ent e",odied aperfected contract of sale, which perforce, the% see> to enforce ,% "eans of an action for specificperfor"ance, petitioners ontheir part insist that what the docu"ent si#nifiedwas a "eree4ecutor% contract to sell, su,Eect to certain suspensive conditions, and ,ecause of the a,sence ofRa"ona 7. Alcara2, who left for the @nited +tates of A"erica, said contract could not possi,l%ripen into a contract of a,solute sale.7lainl%, such variancein thecontendin#partiescontention is ,rou#ht a,out ,% thewa%eachinterprets theter"s and?or conditions set forthinsaidprivateinstru"ent. .ithal, ,asedonwhatever relevant and ad"issi,le evidence "a% ,e availa,le on record, this Court, as were thecourts ,elow, is now called upon to adEud#e what the real intent of the parties was at the ti"e thesaid docu"ent was e4ecuted.The Civil Code defines a contract of sale, thus/Art. 1B6;. F% the contract of sale one of the contractin# parties o,li#ates hi"self to transfer theownership of and to deliver a deter"inate thin#, and the other to pa% therefor a price ce