VILLAMIL VS VILLAROSA

G.R. No. 177187

April 7, 2009
The instant petition for review seeks the reversal of the Decision and Resolution of the Court of
Appeals[1] dated 12 September 2006 and 23 March 2007, which partially reversed and set aside the Decision of the
Regional Trial Court (RTC)[2]of Quezon City, Branch 88, in Civil Case No. Q-92-11997.
Spouses Juanito and Lydia Villamil (petitioners) represented by their son and attorney-in-fact, Winfred
Villamil, filed a complaint [3] for annulment of title, recovery of possession, reconveyance, damages, and injunction
against the Spouses Mateo and Purificacion Tolentino (Spouses Tolentino), Lazaro Villarosa (Villarosa) and the
Register of Deeds of Quezon City before the RTC of Quezon City. The complaint alleged that petitioners were the
registered owners of a parcel of land situated at Siska Subdivision, Tandang Sora, Quezon City, covered by Transfer
Certificate of Title (TCT) No. 223611[4]; that Juanito Villamil Jr. asked permission from his parents, petitioners herein,
to construct a residential house on the subject lot in April 1986; that in the first week of May 1987, petitioners visited
the lot and found that a residential house was being constructed by a certain Villarosa; that petitioners proceeded to the
Office of the Register of Deeds to verify their title; that they discovered a Deed of Sale [5] dated 16 July 1979 which
they purportedly executed in favor of Cipriano Paterno (Paterno) as the vendee; that they later found out that the TCT
in their names was cancelled and a new one, TCT No. 351553, was issued in the name of Paterno; that a Deed of
Assignment[6] was likewise executed by Paterno in favor of the Spouses Tolentino, and; that on the basis of said document,
TCT No. 351553 was cancelled and in its place TCT No. 351673[7] was issued in the name of the Spouses Tolentino.

Three months later, the Spouses Tolentino executed a Deed of Absolute Sale [8] in favor of Villarosa for the sum
of P276,000.00. TCT No. 354675 was issued in place of TCT No. 351673.[9]
Spouses Villamil asserted that the Deed of Sale in favor of Paterno is a falsified document because they did not
participate in its execution and notarization. They also assailed the Deed of Assignment in favor of the Spouses
Tolentino as having been falsified because the alleged assignor is a fictitious person. Finally, they averred that the Deed
of Sale between Spouses Tolentino and Villarosa is void considering that the former did not have any right to sell the
subject property.
In their Answer, the Spouses Tolentino alleged that Paterno had offered the property for sale and presented to
him TCT No. 351553 registered in his (Paternos) name.Since they did not have sufficient funds then, the Spouses
Tolentino negotiated with and obtained from Express Credit Financing a loan, the proceeds of which they used in
paying the agreed consideration. They paid Paterno P180,000.00, but upon the latters request, a deed of assignment
was issued, instead of a deed of sale, to avoid payment of capital gains tax. Express Credit Financing held their title as
security for the loan. The Spouses Tolentino thereafter decided to sell the property to Villarosa to pay their obligation to
Express Credit Financing.[10]
Villarosa, for his part, claimed in his Answer that he is a purchaser in good faith and for value, having
paid P276,000.00 as consideration for the purchase of the land and the payment having been received and
acknowledged by Mateo Tolentino.[11]

In their Reply, petitioners insisted that the deed of absolute sale executed by the Spouses Tolentino in favor of
Villarosa is legally defective, having been notarized by one Atty. Juanito Andrade, who was not a duly commissioned
notary public for the year 1987, as evidenced by a certification of the Clerk of Court of the RTC of Quezon City. [12]
To establish that the deed of sale between the Spouses Villamil and Paterno is spurious, the Spouses Villamil
proferred three points, namely: first, the residence certificate number of Juanito Villamil in the Deed of Sale was
510462 while in the income tax return he filed in 1979, his residence certificate was numbered 4868818;

[13]

second, the

tax account numbers in these two documents are not the same, in the Deed of Sale, it was 9007-586-9 whereas in the
income tax return he filed in 1979 it was J 4545-30821-A-1; [14] and third, the Spouses Villamil had paid the real estate
taxes over the subject land from 1976-1987.[15]
Petitioner also alleged that Paterno is a fictitious person. [16]
During the pre-trial, the parties agreed to limit the issues to the following:
1.

whether the Deed of Absolute Sale executed by Villamil in favor of Paterno is fake;

2.

Whether Paterno is a fictitious person;

3.

Whether the Spouses Tolentino are buyers in good faith;

Whether Villarosa, the present registered owner, is a buyer in good faith. [17]
On 12 June 2003, the trial court declared all the TCTs of Paterno, Spouses Tolentino and Villarosa null and

void and ordered the cancellation of the latters title and the issuance of a new one in the name of the Spouses
Villamil. The dispositive portion reads:
WHEREFORE, in view of the foregoing, the court finds merit on plaintiffs complaint and
hereby orders the following:
A.
B.
C.
D.
E.
F.
G.

The injunction against defendant Lazaro Cruz Villarosa, enjoining him from further acts of
possession, ownership and dominion over the property is made permanent.
Transfer Certificate of Titles Number 351553; in the name of Cipriano Paterno, 351673; in
the name of Spouses Mateo A. Tolentino and Purificacion Tolentino and 354675; in the name
of Lazaro Cruz Villarosa are declared null and void;
All of the existing improvements on the land shall be forfeited in favor of the plaintiffs;
The Register of Deeds of Quezon City is hereby ordered to cancel TCT No. 354675 in the
name of Lazaro Cruz Villarosa and issue a new one in the name of Spouses Juanito R. Villamil
and Lydia M. Villamil;
Defendant Lazaro Cruz Villarosa shall pay plaintiffs the rent of P1,000.00 per month to
commence February 1987 up to the present;
Defendants shall pay solidarily plaintiffs the amount of P30,000.00 as attorneys
fees, P50,000.00 as moral damages and P20,000.00 exemplary damages.
The counterclaims of the defendants are dismissed.
SO ORDERED.[18]

The trial court also found that the Deed of Absolute Sale executed by the Spouses Villamil in favor of Paterno
is fake; that Paterno is a fictitious person; and that Spouses Tolentino and Villarosa are both buyers in bad faith.

On 12 September 2006, the Court of Appeals reversed the trial court and declared void the title of the
Spouses Tolentino and Paterno but upheld the validity of the title of Villarosa. The dispositive portion of the appellate
courts decision reads, thus:
WHEREFORE, the appeal is GRANTED and the trial courts June 12, 2003 Decision is
REVERSED and SET ASIDE with respect to appellant. In lieu thereof, another is entered as follows:
(a) ordering the dissolution of the injunction issued by the trial court; (b) declaring Transfer Certificate
of Title No. 354675 in the name of appellant valid; (c) affirming appellants ownership of the subject
parcel as well as all existing improvements thereon; and (d) absolving appellant of liability for all
monetary awards adjudicated by the trial court. [19]
The appellate court ruled that while the Spouses Tolentinos acquisition of the subject land does not appear to be
above board,[20] the circumstances surrounding Villarosas acquisition, on the other hand, indicate that he is a purchaser
for value and in good faith.[21]
On 23 March 2007, the appellate court denied petitioners motion for reconsideration. Hence, this petition.
It should be noted that Paterno was not made a defendant in the complaint before the trial court and that the
decision of the Court of Appeals insofar as it nullified the title in the name of the Spouses Tolentino was not appealed to
this Court. Thus, the petition before this Court centers on the validity of Villarosas title only. The resolution of this issue
devolves on whether Villarosa is a purchaser in good faith.
The Spouses Villamil maintains that Villarosa is not a purchaser in good faith considering that he has
knowledge of the circumstances that should have forewarned him to make further inquiry beyond the face of the title. [22]
Villarosa counters that he is a purchaser in good faith because before buying the property, he went to the
Register of Deeds of Quezon City to verify the authenticity of Spouses Tolentinos title, as well as to the Express Credit
Financing Corporation to check whether Spouses Tolentino had indeed mortgaged the subject property. Having been
assured of the authenticity and genuineness of its title, he proceeded to purchase the property. [23]
The determination of whether Villarosa is a purchaser in good faith is a factual issue which is generally outside
the province of this Court to determine in a petition for review. Indeed, this Court is not a trier of facts, and the factual
findings of the Court of Appeals are binding and conclusive upon this Court.[24] However, the rule has its recognized
exceptions,[25] one of which obtains in this case, i.e., there is a conflict between the findings of fact of the Court of
Appeals and those of the trial court.
In the case at bar, the courts below arrived at the same findings concerning the circumstances related to the
transfer of titles in favor of Paterno and the Spouses Tolentino and on that basis declared both their titles spurious. But
they differ with respect to the title of Villarosa. The trial court held that Villarosa knew of the circumstances of Spouses
Tolentinos acquisition of the subject property, thus making him (Villarosa) a purchaser in bad faith. To the contrary, the
Court of Appeals, upon review of the records, found that Villarosa is a purchaser in good faith.
The burden of proving the status of a purchaser in good faith lies upon one who asserts that status. [26]

An innocent purchaser for value is one who buys the property of another without notice that some other person
has a right to or interest in that same property, and who pays a full and fair price at the time of the purchase or before
receiving any notice of another persons claim. [27]
The honesty of intention that constitutes good faith implies freedom from knowledge of circumstances that
ought to put a prudent person on inquiry. Good faith consists in the belief of the possessors that the persons from whom
they received the thing are its rightful owners who could convey their title. Good faith, while always presumed in the
absence of proof to the contrary, requires this well-founded belief.[28]
Indeed, we found that Villarosa had successfully discharged this burden. In the instant case, there were no
traces of bad faith on Villarosas part in acquiring the subject property by purchase. Villarosa merely responded to a
newspaper advertisement for the sale of a parcel of land with an unfinished structure located in Tierra Pura, Tandang
Sora, Quezon City.[29] He contacted the number specified in the advertisement and was able to talk to a certain lady
named Annabelle[30] who introduced him to the owner, Mateo Tolentino. [31] When he visited the site, he inquired from
Mateo Tolentino about the unfinished structure and was informed that the latter allegedly ran out of money and
eventually lost interest in pursuing the construction because of his old age. [32] Villarosa was then given a copy of the
title.[33] He went to the Register of Deeds and was able to verify the authenticity of the title. [34] He also found out that the
property was mortgaged under the name of Mario Villamor, who turned out to be the employer of Tolentino.Upon
reaching an agreement on the price of P276,000.00, Villarosa redeemed the title from Express Financing Company.
[35]

Thereafter, the property was released from mortgage and a deed of sale was executed. [36] Villarosa then secured the

transfer of title in his name.[37]

Well-settled is the rule that every person dealing with a registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the
condition of the property. Where there is nothing in the certificate of title to indicate any cloud or vice in the ownership
of the property, or any encumbrance thereon, the purchaser is not required to explore further than what the Torrens Title upon
its face indicates in quest for any hidden defects or inchoate right that may subsequently defeat his right thereto. [38]

This principle does not apply when the party has actual knowledge of facts and circumstances that would impel
a reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in
his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property
in litigation. One who falls within the exception can neither be denominated an innocent purchaser for value nor a
purchaser in good faith.[39]
Petitioner enumerates the instances that should have put Villarosa on guard with respect to the title of the
Spouses Tolentino.
First, petitioner points out that Villarosa should have inquired about the unfinished structure by verifying if
there was a building permit. If he did ask, Villarosa would have found out that it was not the Spouses Tolentino who
owned the structure, petitioner adds.

In finding bad faith on Villarosa, the trial court relied mainly on the alleged testimony of Mateo Tolentino that
he told Villarosa at the time he offered the property for sale to him that the lot and the unfinished structure belonged to
Spouses Villamil.[40] However, as observed by the appellate court to which the Court agrees, all that the transcript of the
stenographic notes of the hearing concerned state is that Mateo Tolentino told Villarosa that the unfinished structure
belonged to the previous owner without mention of the Spouses Villamil. [41]
In any event, even if Mateo Tolentino had particularly referred to or mentioned the Spouses Villamil, that would
not have mattered at all. Specifically, the information alone and without more would not be enough to make Villarosa
investigate further.
Second, petitioner notes that while the title of the Spouses Tolentino was issued only on 6 November 1986 they
offered the property for sale barely two months later.According to petitioner, this should have prompted Villarosa to
make further inquiries.
Third, petitioner harps that the property was mortgaged to Express Financing to secure a loan in the amount
of P225,000.00 which was satisfied out of the proceeds of the sale to Villarosa, leaving the Spouses Tolentino a
measly P21,000.00 from the transaction. The circumstance was no cause for Villarosa to be alarmed nor to arouse his
suspicion that there was a defect in the title of the Spouses Tolentino. There was nothing unlawful or irregular with the
fact that the property offered for sale or sold was mortgaged.Besides, the records are bereft of any
indication that Villarosa had knowledge of the details of the mortgage transaction. Also, there is no question about the
adequacy of the price provided in the deed of sale in favor of Villarosa.
Petitioner also avers that since Paternos transfer to Spouses Tolentino is spurious, the Spouses Tolentino could
not also transfer any right to Villarosa on account of the principle that no one can transfer a greater right to another than
he himself has.
We do not agree.
A forged or fraudulent document may become the root of a valid title if the property has already been
transferred from the name of the owner to that of the forger.[42] This doctrine serves to emphasize that a person who
deals with registered property in good faith will acquire good title from a forger and be absolutely protected by a
Torrens title.[43]
Having made the necessary inquiries and having found the title to be authentic, Villarosa need not go beyond
the certificate of title. When dealing with land that is registered and titled, as in this case, buyers are not required by the
law to inquire further than what the Torrens certificate of title indicates on its face. [44] He examined the transferors title,
which was then under the name of Spouses Tolentino. He did not have to scrutinize each and every title and previous
owners of the property preceding Tolentino.
In sum, Villarosa was able to establish good faith when he bought the subject property. Therefore, TCT No.
354675 issued in his name is declared valid.
WHEREFORE, the Decision of the Court of Appeals dated 12 September 2006 is AFFIRMED. Costs against petitioners.

NARANJA VS COURT OF APPEALS

586 SCRA 31

This petition seeks a review of the Court of Appeals (CA) Decision [1] dated September 13, 2002 and
Resolution[2] dated September 24, 2003 which upheld the contract of sale executed by petitioners predecessor, Roque
Naranja, during his lifetime, over two real properties.
Roque Naranja was the registered owner of a parcel of land, denominated as Lot No. 4 in ConsolidationSubdivision Plan (LRC) Pcs-886, Bacolod Cadastre, with an area of 136 square meters and covered by Transfer
Certificate of Title (TCT) No. T-18764. Roque was also a co-owner of an adjacent lot, Lot No. 2, of the same
subdivision plan, which he co-owned with his brothers, Gabino and Placido Naranja. When Placido died, his one-third
share was inherited by his children, Nenita, Nazareto, Nilda, Naida and Neolanda, all surnamed Naranja, herein
petitioners. Lot No. 2 is covered by TCT No. T-18762 in the names of Roque, Gabino and the said children of Placido.
TCT No. T-18762 remained even after Gabino died. The other petitioners Serafin Naranja, Raul Naranja, and Amelia
Naranja-Rubinos are the children of Gabino. [3]
The two lots were being leased by Esso Standard Eastern, Inc. for 30 years from 1962-1992. For his properties,
Roque was being paid P200.00 per month by the company.[4]
In 1976, Roque, who was single and had no children, lived with his half sister, Lucilia P. Belardo (Belardo), in
Pontevedra, Negros Occidental. At that time, a catheter was attached to Roques body to help him urinate. But the
catheter was subsequently removed when Roque was already able to urinate normally. Other than this and the influenza
prior to his death, Roque had been physically sound.[5]
Roque had no other source of income except for the P200.00 monthly rental of his two properties. To show his
gratitude to Belardo, Roque sold Lot No. 4 and his one-third share in Lot No. 2 to Belardo on August 21, 1981, through
a Deed of Sale of Real Property which was duly notarized by Atty. Eugenio Sanicas. The Deed of Sale reads:
I, ROQUE NARANJA, of legal age, single, Filipino and a resident of Bacolod City, do hereby declare that I
am the registered owner of Lot No. 4 of the Cadastral Survey of the City of Bacolod, consisting of 136 square
meters, more or less, covered by Transfer Certificate of Title No. T-18764 and a co-owner of Lot No. 2,
situated at the City of Bacolod, consisting of 151 square meters, more or less, covered by Transfer Certificate
of Title No. T-18762 and my share in the aforesaid Lot No. 2 is one-third share.
That for and in consideration of the sum of TEN THOUSAND PESOS (P10,000.00), Philippine Currency, and
other valuable consideration, receipt of which in full I hereby acknowledge to my entire satisfaction, by these
presents, I hereby transfer and convey by way of absolute sale the above-mentioned Lot No. 4 consisting of
136 square meters covered by Transfer Certificate of Title No. T-18764 and my one-third share in Lot No. 2,
covered by Transfer Certificate of Title No. T-18762, in favor of my sister LUCILIA P. BELARDO, of legal
age, Filipino citizen, married to Alfonso D. Belardo, and a resident of Pontevedra, Negros Occidental, her
heirs, successors and assigns.
IN WITNESS WHEREOF, I have hereunto set my hand this 21 st day of August, 1981
at Bacolod City, Philippines.
(SGD.)
ROQUE NARANJA[6]
Roques copies of TCT No. T-18764 and TCT No. T-18762 were entrusted to Atty. Sanicas for
registration of the deed of sale and transfer of the titles to Belardo. But the deed of sale could not be registered
because Belardo did not have the money to pay for the registration fees. [7]

Belardos only source of income was her store and coffee shop. Sometimes, her children would give her money
to help with the household expenses, including the expenses incurred for Roques support. At times, she would also
borrow money from Margarita Dema-ala, a neighbor.[8] When the amount of her loan reached P15,000.00, Dema-ala
required a security. On November 19, 1983, Roque executed a deed of sale in favor of Dema-ala, covering his two
properties in consideration of the P15,000.00 outstanding loan and an additional P15,000.00, for a total of P30,000.00.
Dema-ala explained that she wanted Roque to execute the deed of sale himself since the properties were still in his
name. Belardo merely acted as a witness. The titles to the properties were given to Dema-ala for safekeeping. [9]
Three days later, or on December 2, 1983, Roque died of influenza. The proceeds of the loan were used for his
treatment while the rest was spent for his burial. [10]
In 1985, Belardo fully paid the loan secured by the second deed of sale. Dema-ala returned the certificates of
title to Belardo, who, in turn, gave them back to Atty. Sanicas. [11]
Unknown to Belardo, petitioners, the children of Placido and Gabino Naranja, executed an Extrajudicial
Settlement Among Heirs[12] on October 11, 1985, adjudicating among themselves Lot No. 4. On February 19, 1986,
petitioner Amelia Naranja-Rubinos, accompanied by Belardo, borrowed the two TCTs, together with the lease
agreement with Esso Standard Eastern, Inc., from Atty. Sanicas on account of the loan being proposed by Belardo to
her. Thereafter, petitioners had the Extrajudicial Settlement Among Heirs notarized on February 25, 1986. With Roques
copy of TCT No. T-18764 in their possession, they succeeded in having it cancelled and a new certificate of title, TCT
No. T-140184, issued in their names.[13]
In 1987, Belardo decided to register the Deed of Sale dated August 21, 1981. With no title in hand, she was
compelled to file a petition with the RTC to direct the Register of Deeds to annotate the deed of sale even without a
copy of the TCTs. In an Order dated June 18, 1987, the RTC granted the petition. But she only succeeded in registering
the deed of sale in TCT No. T-18762 because TCT No. T-18764 had already been cancelled. [14]
On December 11, 1989, Atty. Sanicas prepared a certificate of authorization, giving Belardos daughter,
Jennelyn P. Vargas, the authority to collect the payments from Esso Standard Eastern, Inc. But it appeared from the
companys Advice of Fixed Payment that payment of the lease rental had already been transferred from Belardo to
Amelia Naranja-Rubinos because of the Extrajudicial Settlement Among Heirs.
On June 23, 1992, Belardo,[15] through her daughter and attorney-in-fact, Rebecca Cordero, instituted a suit for
reconveyance with damages. The complaint prayed that judgment be rendered declaring Belardo as the sole legal owner
of Lot No. 4, declaring null and void the Extrajudicial Settlement Among Heirs, and TCT No. T-140184, and ordering
petitioners to reconvey to her the subject property and to pay damages. The case was docketed as Civil Case No. 7144.
Subsequently, petitioners also filed a case against respondent for annulment of sale and quieting of title with damages,
praying, among others, that judgment be rendered nullifying the Deed of Sale, and ordering the Register of Deeds of Bacolod City
to cancel the annotation of the Deed of Sale on TCT No. T-18762. This case was docketed as Civil Case No. 7214.

On March 5, 1997, the RTC rendered a Decision in the consolidated cases in favor of petitioners. The trial
court noted that the Deed of Sale was defective in form since it did not contain a technical description of the subject

properties but merely indicated that they were Lot No. 4, covered by TCT No. T-18764 consisting of 136 square
meters, and one-third portion of Lot No. 2 covered by TCT No. T-18762. The trial court held that, being defective in
form, the Deed of Sale did not vest title in private respondent. Full and absolute ownership did not pass to private
respondent because she failed to register the Deed of Sale. She was not a purchaser in good faith since she acted as a
witness to the second sale of the property knowing that she had already purchased the property from Roque. Whatever
rights private respondent had over the properties could not be superior to the rights of petitioners, who are now the
registered owners of the parcels of land. The RTC disposed, thus:
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered:
1.
2.

Dismissing Civil Case No. 7144.

Civil Case No. 7214.
a)
Declaring the Deed of Sale dated August 21, 1981, executed by Roque
Naranja, covering his one-third (1/3) share of Lot 2 of the consolidation-subdivision plan
(LRC) Pcs-886, being a portion of the consolidation of Lots 240-A, 240-B, 240-C and 240-D,
described on plan, Psd-33443 (LRC) GLRO Cad. Rec. No. 55 in favor of Lucilia Belardo, and
entered as Doc. No. 80, Page 17, Book No. XXXVI, Series of 1981 of Notary Public Eugenio
Sanicas of Bacolod City, as null and void and of no force and effect;
b)
Ordering the Register of Deeds of Bacolod City to cancel Entry No.
148123 annotate at the back of Transfer Certificate of Title No. T-18762;
c)
Ordering Lucilia Belardo or her successors-in-interest to pay plaintiffs
the sum of P20,000.00 as attorneys fees, the amount of P500.00 as appearance fees.
Counterclaims in both Civil Cases Nos. 7144 and 7214 are hereby DISMISSED.
SO ORDERED.[16]
On September 13, 2002, the CA reversed the RTC Decision. The CA held that the unregisterability of a deed of
sale will not undermine its validity and efficacy in transferring ownership of the properties to private respondent. The
CA noted that the records were devoid of any proof evidencing the alleged vitiation of Roques consent to the sale;
hence, there is no reason to invalidate the sale. Registration is only necessary to bind third parties, which petitioners,
being the heirs of Roque Naranja, are not. The trial court erred in applying Article 1544 of the Civil Code to the case at
bar since petitioners are not purchasers of the said properties. Hence, it is not significant that private respondent failed
to register the deed of sale before the extrajudicial settlement among the heirs. The dispositive portion of the CA
Decision reads:
WHEREFORE, the decision dated March 5, 1997 in Civil Cases Nos. 7144 and 7214 is hereby
REVERSED and SET ASIDE. In lieu thereof, judgment is hereby rendered as follows:
1. Civil Case No. 7214 is hereby ordered DISMISSED for lack of cause of action.
2. In Civil Case No. 7144, the extrajudicial settlement executed by the heirs of Roque Naranja adjudicating
among themselves Lot No. 4 of the consolidation-subdivision plan (LRC) Pcs 886 of the Bacolod Cadastre is
hereby declared null and void for want of factual and legal basis. The certificate of title issued to the heirs of
Roque Naranja (Transfer Certificate of [T]i[t]le No. T-140184) as a consequence of the void extra-judicial
settlement is hereby ordered cancelled and the previous title to Lot No. 4, Transfer Certificate of Title No. T18764, is hereby ordered reinstated. Lucilia Belardo is hereby declared the sole and legal owner of said Lot
No. 4, and one-third of Lot No. 2 of the same consolidation-subdivision plan, Bacolod Cadastre, by virtue of
the deed of sale thereof in her favor dated August 21, 1981.
SO ORDERED.[17]

The CA denied petitioners motion for reconsideration on September 24, 2003. [18] Petitioners filed this petition
for review, raising the following issues:
1. WHETHER OR NOT THE HONORABLE RESPONDENT COURT OF APPEALS IS CORRECT IN
IGNORING THE POINT RAISED BY [PETITIONERS] THAT THE DEED OF SALE WHICH
DOES NOT COMPL[Y] WITH THE PROVISIONS OF ACT NO. 496 IS [NOT] VALID.
2. WHETHER OR NOT THE ALLEGED DEED OF SALE [OF REAL PROPERTIES] IS VALID
CONSIDERING THAT THE CONSENT OF THE LATE ROQUE NARANJA HAD BEEN
VITIATED; x x x THERE [IS] NO CONCLUSIVE SHOWING THAT THERE WAS
CONSIDERATION AND THERE [ARE] SERIOUS IRREGULARITIES IN THE
NOTARIZATION OF THE SAID DOCUMENTS.[19]

In her Comment, private respondent questioned the Verification and Certification of Non-Forum Shopping
attached to the Petition for Review, which was signed by a certain Ernesto Villadelgado without a special power of
attorney. In their reply, petitioners remedied the defect by attaching a Special Power of Attorney signed by them.
Pursuant to its policy to encourage full adjudication of the merits of an appeal, the Court had previously
excused the late submission of a special power of attorney to sign a certification against forum-shopping. [20] But even if
we excuse this defect, the petition nonetheless fails on the merits.
The Court does not agree with petitioners contention that a deed of sale must contain a technical description of
the subject property in order to be valid. Petitioners anchor their theory on Section 127 of Act No. 496, [21] which
provides a sample form of a deed of sale that includes, in particular, a technical description of the subject property.
To be valid, a contract of sale need not contain a technical description of the subject property. Contracts of sale
of real property have no prescribed form for their validity; they follow the general rule on contracts that they may be
entered into in whatever form, provided all the essential requisites for their validity are present. [22] The requisites of a
valid contract of sale under Article 1458 of the Civil Code are: (1) consent or meeting of the minds; (2) determinate
subject matter; and (3) price certain in money or its equivalent.
The failure of the parties to specify with absolute clarity the object of a contract by including its technical
description is of no moment. What is important is that there is, in fact, an object that is determinate or at least
determinable, as subject of the contract of sale. The form of a deed of sale provided in Section 127 of Act No. 496 is
only a suggested form. It is not a mandatory form that must be strictly followed by the parties to a contract.
In the instant case, the deed of sale clearly identifies the subject properties by indicating their respective lot numbers,
lot areas, and the certificate of title covering them. Resort can always be made to the technical description as stated in
the certificates of title covering the two properties.
On the alleged nullity of the deed of sale, we hold that petitioners failed to submit sufficient proof to show that Roque
executed the deed of sale under the undue influence of Belardo or that the deed of sale was simulated or without consideration.

A notarized document carries the evidentiary weight conferred upon it with respect to its due execution, and
documents acknowledged before a notary public have in their favor the presumption of regularity. It must be sustained
in full force and effect so long as he who impugns it does not present strong, complete, and conclusive proof of its
falsity or nullity on account of some flaws or defects provided by law.[23]

Petitioners allege that Belardo unduly influenced Roque, who was already physically weak and senile at that
time, into executing the deed of sale. Belardo allegedly took advantage of the fact that Roque was living in her house
and was dependent on her for support.
There is undue influence when a person takes improper advantage of his power over the will of another,
depriving the latter of a reasonable freedom of choice. [24] One who alleges any defect, or the lack of consent to a
contract by reason of fraud or undue influence, must establish by full, clear and convincing evidence, such specific acts
that vitiated the partys consent; otherwise, the latters presumed consent to the contract prevails. [25] For undue
influence to be present, the influence exerted must have so overpowered or subjugated the mind of a contracting party
as to destroy his free agency, making him express the will of another rather than his own. [26]
Petitioners adduced no proof that Roque had lost control of his mental faculties at the time of the sale. Undue
influence is not to be inferred from age, sickness, or debility of body, if sufficient intelligence remains. [27] The evidence
presented pertained more to Roques physical condition rather than his mental condition. On the contrary, Atty. Sanicas,
the notary public, attested that Roque was very healthy and mentally sound and sharp at the time of the execution of the
deed of sale. Atty. Sanicas said that Roque also told him that he was a Law graduate. [28]
Neither was the contract simulated. The late registration of the Deed of Sale and Roques execution of the
second deed of sale in favor of Dema-ala did not mean that the contract was simulated. We are convinced with the
explanation given by respondents witnesses that the deed of sale was not immediately registered because Belardo did
not have the money to pay for the fees. This explanation is, in fact, plausible considering that Belardo could barely
support herself and her brother, Roque. As for the second deed of sale, Dema-ala, herself, attested before the trial court
that she let Roque sign the second deed of sale because the title to the properties were still in his name.
Finally, petitioners argue that the Deed of Sale was not supported by a consideration since no receipt was
shown, and it is incredulous that Roque, who was already weak, would travel to Bacolod City just to be able to execute
the Deed of Sale.
The Deed of Sale which states receipt of which in full I hereby acknowledge to my entire satisfaction is an
acknowledgment receipt in itself. Moreover, the presumption that a contract has sufficient consideration cannot be
overthrown by a mere assertion that it has no consideration. [29]
Heirs are bound by contracts entered into by their predecessors-in-interest. [30] As heirs of Roque, petitioners are
bound by the contract of sale that Roque executed in favor of Belardo. Having been sold already to Belardo, the two
properties no longer formed part of Roques estate which petitioners could have inherited. The deed of extrajudicial
settlement that petitioners executed over Lot No. 4 is, therefore, void, since the property subject thereof did not become part
of Roques estate.

WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated
September 13, 2002 and Resolution dated September 24, 2003 are AFFIRMED.
SO ORDERED.

CANTEMPRATE VS RS REALTY DEVT. CORP.

587 SCRA 492

May 8, 2009

This is a petition for review on certiorari[1] under Rule 45 of the 1997 Rules of Civil Procedure assailing the decision[2] and
resolution[3] of the Court of Appeals in CA-G.R. SP No. 81859. The Court of Appeals decision affirmed the decision [4] of the Office
of the President, which adopted the decision [5] of the Housing Land Use and Regulatory Board (HLURB) dismissing petitioners
complaint for lack of jurisdiction, while the resolution denied petitioners motion for reconsideration.

The following factual antecedents are matters of record.

Herein petitioners Vicenta Cantemprate, Zenaida Delfin, Elvira Millan, Fevito G. Obidos, Macario Yap,
Carmen Yap, Lilia Camacho, Lilia Mejia, Emilia Dimas, Estrella Eugenio, Milagros L. Cruz, Leonardo Ecat, Nora
Masangkay, Jesus Ayson, Nilo Samia, Carmencita Morales and Lorna Ramirez were among those who filed before the
HLURB a complaint[6] for the delivery of certificates of title against respondents CRS Realty Development Corporation
(CRS Realty), Crisanta Salvador and Cesar Casal.[7]
The complaint alleged that respondent Casal was the owner of a parcel of land situated in General Mariano
Alvarez, Cavite known as the CRS Farm Estate while respondent Salvador was the president of respondent CRS
Realty, the developer of CRS Farm Estate. Petitioners averred that they had bought on an installment basis subdivision
lots from respondent CRS Realty and had paid in full the agreed purchase prices; but notwithstanding the full payment
and despite demands, respondents failed and refused to deliver the corresponding certificates of title to petitioners. The
complaint prayed that respondents be ordered to deliver the certificates of title corresponding to the lots petitioners had
purchased and paid in full and to pay petitioners damages. [8]
An amended complaint[9] was subsequently filed impleading other respondents, among them, the Heirs of
Vitaliano and Enrique Laudiza, who were the predecessors-in-interest of respondent Casal, herein respondents Bennie
Cuason and Caleb Ang, to whom respondent Casal purportedly transferred the subdivision lots and one Leticia Ligon.
The amended complaint alleged that by virtue of the deed of absolute sale executed between respondent Casal and
respondents Ang and Cuason, Transfer Certificate of Title (TCT) No. 669732 covering the subdivided property was
issued in the names of respondents Ang and Cuason as registered owners thereof. [10]
The amended complaint prayed for additional reliefs, namely: (1) that petitioners be declared the lawful
owners of the subdivision lots; (2) that the deed of absolute sale executed between respondent Casal and respondents
Cuason and Ang and TCT No. 669732 be nullified; and (3) that respondents Cuason and Ang be ordered to reconvey
the subdivision lots to petitioners.[11]
In his answer,[12] respondent Casal averred that despite his willingness to deliver them, petitioners refused to
accept the certificates of title with notice of lis pendenscovering the subdivision lots. The notice of lis
pendens pertained to Civil Case No. BCV-90-14, entitled Heirs of Vitaliano and Enrique Laudiza, represented by their
Attorney-In-Fact Rosa Medina, Plaintiffs, v. Cesar E. Casal, CRS Realty and Development Corporation and the
Register of Deeds of Cavite, Defendants, which was pending before the Regional Trial Court (RTC), Branch 19,
Bacoor, Cavite. Leticia Ligon was said to have intervened in the said civil case. [13]

By way of special and affirmative defenses, respondent Casal further averred that the obligation to deliver the
certificate of titles without encumbrance fell on respondent CRS Realty on the following grounds: (1) as stipulated in
the subdivision development agreement between respondents Casal and CRS Realty executed on 06 September 1988,
the certificates of title of the subdivision lots would be transferred to the developer or buyers thereof only upon full
payment of the purchase price of each lot; (2) the contracts to sell were executed between petitioners and respondent
CRS Realty; and (3) the monthly amortizations were paid to respondent CRS Realty and not to respondent Casal. [14]
Respondent Casal also alleged that he subsequently entered into a purchase agreement over the unsold portions
of the subdivision with respondents Ang, Cuason and one Florinda Estrada who assumed the obligation to reimburse
the amortizations already paid by petitioners. [15]
In her answer, respondent Salvador alleged that the failure by respondent Casal to comply with his obligation
under the first agreement to deliver to CRS or the buyers the certificates of title was caused by the annotation of the
notice of lis pendens on the certificate of title covering the subdivision property. Respondent Salvador further averred
that the prior agreements dated 6 September 1988 and 08 August 1989 between respondents Casal and CRS Realty
were superseded by an agreement dated 30 August 1996between respondents Casal and Salvador. In the subsequent
agreement, respondent Casal purportedly assumed full responsibility for the claims of the subdivision lot buyers while
respondent Salvador sold her share in CRS Realty and relinquished her participation in the business.
Respondents Ang and Cuason claimed in their answer with counterclaim [16] that respondent Casal remained the
registered owner of the subdivided lots when they were transferred to them and that the failure by petitioners to
annotate their claims on the title indicated that they were unfounded. Respondent CRS Realty and the Heirs of Laudiza
were declared in default for failure to file their respective answers. [17]
On 18 December 1998, HLURB Arbiter Ma. Perpetua Y. Aquino rendered a decision [18] primarily ruling that the
regular courts and not the HLURB had jurisdiction over petitioners complaint, thus, the complaint for quieting of title could
not be given due course. The Heirs of Laudiza and Ligon were dropped as parties on the ground of lack of cause of action.
However, she found respondents CRS Realty, Casal and Salvador liable on their obligation to deliver the certificates of title
of the subdivision lots to petitioners who had paid in full the purchase price of the properties. She also found as fraudulent
and consequently nullified the subsequent transfer of a portion of the subdivision to respondents Ang and Cuason.

The dispositive portion of the decision reads:

WHEREFORE, in view of the foregoing, judgement [sic] is hereby rendered as follows:
1) For respondents CRS Realty and Development Corp., Crisanta Salvador, and Cesar Casal to, jointly and severally:

a) cause the delivery or to deliver the individual titles, within thirty (30) days from the finality of the decision,
to the following complainants who have fully paid the purchase price of their lots, and to whom Deeds of Sale
were issued, to wit:
1. Vicenta Cantemprate = Lots 1 to 8 Block 2 Lots 5 & 6 Block 13
2. Leonardo/Felicidad Ecat = Lots 21, 23 & 25 Block 11

..
That as concern[ed] complainant LEONARDO/FELICIDAD ECAT, whose total lost area is deficient by 278
square meters from the 2,587 square meters provided for in the Contract to Sell and that covered by the Deed

of Sale which is 2,309 square meters, for respondents to deliver the deficiency by the execution of the Deed of
Sale on the said portion and the delivery of the titles on their three (3) lots.
b) submit to the Register of Deeds of Trece Martires City, Cavite a certified true copy of the approved
subdivision plan of CRS Farm Estate, as well as photocopies of the technical description of complainants
individual lots, blue prints and tracing cloth: In the event that said respondents cannot surrender said
documents, complainants are hereby ordered to secure said documents and be the ones to submit them to the
Register of Deeds;
c) to refund to complainants the expenses theyve incurred in registering their individual Deeds of Sale with the
Register of Deeds of Trece Martires City, Cavite;
d) pay each of the complainants the sum of P10,000.00[,] as actual damages; the sum of P15,000.00[,] as moral
damages; and the sum of P20,000.00[,] as exemplary damages;
e) pay complainants the sum of P30,000.00 as and by way of attorneys fees;
f) pay to the Board the sum of P20,000.00 as administrative fine for violation of section 25 of P.D. No. 957 in
relation to sections 38 and 39 of the same decree.
2.) The sale of the subject property in whole to respondents Caleb Ang and Bennie Cuason is hereby declared
annulled and of no effect especially that which pertains to the portion of the subdivision which have already
been previously sold by the respondent CRS Realty to herein complainants, prior to the sale made by
respondent Cesar Casal to Caleb Ang and Bennie Cuason. As a consequence thereof, respondents Ang and
Cuason are hereby ordered to surrender to the Register of Deeds of Trece Martires City, Cavite, the owners
duplicate copy of TCT No. 669732 in order for the said Register of Deeds to issue the corresponding
certificates of title to all complainants named herein;
3.) The Register of Deeds of Trece Martires City, Cavite is hereby ordered to cancel TCT No. 669732 and
reinstate TCT No. T-2500 in the name of Cesar Casal, from which the individual titles of herein complainants
would be issued, with all the annotations of encumbrances inscribed at the back of TCT No. 669732 carried
over to the said reinstated title.
All other claims and counterclaims are hereby dismissed.
SO ORDERED.[19]
From the decision of the HLURB Arbiter, respondents Casal, Cuason and Ang, as well as Leticia Ligon, filed separate
petitions for review before the Board of Commissioners (Board).
On 22 November 1999, the Board rendered a decision, [20] affirming the HLURB Arbiters ruling that the HLURB had
no jurisdiction over an action for the quieting of title, the nullification of a certificate of title or the reconveyance of a
property. Notably, the Board referred to an earlier case, HLURB Case No. REM-A-0546, involving respondent Casal and the
Heirs of Laudiza, where the Board deferred the issuance of a license to sell in favor of CRS Farm Estate until the issue of
ownership thereof would be resolved in Civil Case No. BCV-90-14 pending before the RTC of Bacoor, Cavite.

Furthermore, the Board ruled that to allow petitioners to proceed with the purchases of the subdivision lots
would be preempting the proceedings before the RTC of Bacoor, Cavite and compounding the prejudice caused to
petitioners. Thus, the Board dismissed the complaint for quieting of title but ordered the refund of the amounts paid by
petitioners and other buyers to CRS Realty, to wit:
WHEREFORE, premises considered, judgment is hereby rendered, MODIFYING the Decision
dated December 18, 1998 by the Office below, to wit:
1. The complaint for quieting of title against Cesar Casal, Bennie Cuason, Caleb Ang, Heirs of Vitaliano
and Enrique Laudiza, and Leticia Ligon is DISMISSED for lack of jurisdiction.

2. Ordering CRS Realty and/or any of the Officers to refund to complainants for all payments made plus
12% from the time the contract to sell is executed until fully paid.
3. All other claims and counterclaims are hereby DISMISSED.
4. Directing CRS to pay P10,000.00 as administrative fine for each and every sale without license.
Let case be referred to the Legal Services Group (LSG) for possible criminal prosecution against the Officers of CRS
Realty and Casal.
SO ORDERED.[21]
Ligon, respondent Casal and herein petitioners filed separate motions for reconsideration. On 28 November
2000, the Board issued a resolution,[22] modifying its Decision dated 22 November 2009 by imposing the payment of
damages in favor of petitioners, thus:
WHEREFORE, based on the foregoing:
1. The decision of this Board dated November 22, 1999 is hereby MODIFIED to read as follows:
WHEREFORE, premises considered, judgment is hereby rendered, MODIFYING the Decision
dated December 18, 1998 by the Office below, thus:
1.
The complaint for quieting of title against Cesar Casal, Bennie Cuason, Caleb Ang, Heirs of Vitaliano
and Enrique Laudiza and Leticia Ligon is DISMISSED for lack of jurisdiction;
2.
CRS Realty and/or any of the officers jointly and severally is/are ordered to refund to complainants,
at the complainants option, all payments made for the purchase of the lots plus 12% interest from the time
the contract to sell is executed until fully paid and cost of improvement, if any;
3.
CRS Realty and/or any of its officers jointly and severally is/are ordered [to] pay each of the
complainants the sum of P30,000.00 as and by way [of] moral damages, P30,000.00 as and by way of
exemplary damages, and P20,000.00 as attorneys fees;
4.
CRS Realty and/or any of its officers is/are hereby ordered to pay this Board P10,000.00 as
administrative fine for each and every sale executed without license
5.

All other claims and counterclaims are hereby DISMISSED.

Let the case be referred to the Legal Services Group (LSG) for possible criminal prosecution against the
officers of CRS Realty and Casal.
2. Complainants Motion for Reconsideration, save in so far as we have above given due course, is hereby
DISMISSED.
3. Likewise respondents Motion for Reconsideration are hereby DISMISSED for lack of merit.
4. Respondent Bennie Cuasons Motion to Cancel Lis Pendens is hereby DENIED, the same being premature.
Let the records be elevated to the Office of the President in view of the appeal earlier filed by complainants.
SO ORDERED.[23]
Upon appeal, the Office of the President (OP) on 03 December 2003 affirmed in toto both the decision and
resolution of the Board.[24] Aggrieved, petitioners elevated the matter to the Court of Appeals via a Rule 43 petition for review.

Before the Court of Appeals, petitioners argued that the OP erred in rendering a decision which adopted by
mere reference the decision of the HLURB and that the HLURB erred in ruling that it had no jurisdiction over
petitioners complaint, in not nullifying the deed of absolute sale executed between respondent Casal and respondents
Cuason and Ang and in ordering the refund of the amounts paid by petitioners for the subdivision lots. [25]

On 21 June 2005, the Court of Appeals rendered the assailed decision, [26] affirming the OP Decision dated 03
December 2003. On 03 February 2006, the appellate court denied petitioners motion for reconsideration for lack of merit. [27]

Hence, the instant petition, essentially praying for judgment ordering the cancellation of the deed of absolute
sale entered between respondent Casal, on the one hand, and respondents Ang and Cuason, on the other, the delivery of
the certificates of title of the subdivision lots, and the payment of damages to petitioners.
Petitioners have raised the following issues: (1) whether or not the absence of a license to sell has rendered the
sales void; (2) whether or not the subsequent sale to respondent Cuason and Ang constitutes double sale; (3) whether or
not the HLURB has jurisdiction over petitioners complaint; and (4) whether a minute decision conforms to the
requirement of Section 14, Article VIII of the Constitution. [28]
We shall resolve the issues in seriatim.
Petitioners assail the Court of Appeals ruling that the lack of the requisite license to sell on the part of
respondent CRS Realty rendered the sales void; hence, neither party could compel performance of each others
contractual obligations.
The only requisite for a contract of sale or contract to sell to exist in law is the meeting of minds upon the thing
which is the object of the contract and the price, including the manner the price is to be paid by the vendee. Under
Article 1458 of the New Civil Code, in a contract of sale, whether absolute or conditional, one of the contracting
parties obliges himself to transfer the ownership of and deliver a determinate thing, and the other to pay therefor a price
certain in money or its equivalent.[29]
In the instant case, the failure by respondent CRS Realty to obtain a license to sell the subdivision lots does not
render the sales void on that ground alone especially that the parties have impliedly admitted that there was already a
meeting of the minds as to the subject of the sale and price of the contract. The absence of the license to sell only
subjects respondent CRS Realty and its officers civilly and criminally liable for the said violation under Presidential
Decree (P.D.) No. 957[30] and related rules and regulations. The absence of the license to sell does not affect the validity
of the already perfected contract of sale between petitioners and respondent CRS Realty.
In Co Chien v. Sta. Lucia Realty and Development, Inc.,[31] the Court ruled that the requisite registration and
license to sell under P.D. No. 957 do not affect the validity of the contract between a subdivision seller and buyer. The
Court explained, thus:
A review of the relevant provisions of P.D. [No.] 957 reveals that while the law penalizes the
selling subdivision lots and condominium units without prior issuance of a Certificate of Registration
and License to sell by the HLURB, it does not provide that the absence thereof will automatically
render a contract, otherwise validly entered, void. Xxx
As found by the Court of Appeals, in the case at bar, the requirements of Sections 4 and 5 of
P.D. [No.] 957 do not go into the validity of the contract, such that the absence thereof would
automatically render the contract null and void. It is rather more of an administrative convenience in
order to allow a more effective regulation of the industry. x x x [32]

The second and third issues are interrelated as they pertain to whether the HLURB has jurisdiction over
petitioners complaint for the delivery of certificates of titles and for quieting of title.
Petitioners are partly correct in asserting that under Section 1 of P.D. No. 1344, [33] an action for specific
performance to compel respondents to comply with their obligations under the various contracts for the purchase of
lots located in the subdivision owned, developed and/or sold by respondents CRS Realty, Casal and Salvador is within
the province of the HLURB.
The HLURB has exclusive jurisdiction over the complaint for specific performance to compel respondents
CRS Realty, Casal and Salvador as subdivision owners and developers to deliver to petitioners the certificates of title
after full payment of the subdivision lots. On this score, the Court affirms the findings of HLURB Arbiter Aquino with
respect to the obligation of respondents Casal, Salvador and CRS Realty to deliver the certificates of title of the
subdivision to petitioners pursuant to their respective contracts to sell.
Indeed, under Section 25 of P.D. No. 957, among the obligations of a subdivision owner or developer is the
delivery of the subdivision lot to the buyer by causing the transfer of the corresponding certificate of title over the
subject lot.[34] The provision states:
Sec. 25. Issuance of Title.The owner or developer shall deliver the title of the lot or unit to the buyer upon full
payment of the lot or unit. No fee, except those required for the registration of the deed of sale in the Registry
of Deeds, shall be collected for the issuance of such title. In the event a mortgage over the lot or unit is
outstanding at the time of the issuance of the title to the buyer, the owner or developer shall redeem the
mortgage or the corresponding portion thereof within six months from such issuance in order that the title over
any fully paid lot or unit may be secured and delivered to the buyer in accordance herewith.
In the instant case, the contract to sell itself expressly obliges the vendor to cause the issuance of the
corresponding certificate of title upon full payment of the purchase price, to wit:
3. Title to said parcel of land shall remain in the name of the VENDOR until complete payment of the agreed price
by the VENDEE and all obligations herein stipulated, at which time the VENDOR agrees to cause the issuance of a
certificate of title in the Land Registration Act and the restrictions as may be provided in this Contract. [35]

From the foregoing it is clear that upon full payment, the seller is duty-bound to deliver the title of the unit to
the buyer. Thus, for instance, even with a valid mortgage over the lot, the seller is still bound to redeem said mortgage
without any cost to the buyer apart from the balance of the purchase price and registration fees. [36]
There is no question that respondents Casal, Salvador and CRS Realty breached their obligations to petitioners
under the contracts to sell. It is settled that a breach of contract is a cause of action either for specific performance or
rescission of contracts.[37] Respondents Casal, Salvador and CRS Realty have the obligation to deliver the
corresponding clean certificates of title of the subdivision lots, the purchase price of which have been paid in full by
petitioners. That the subject subdivision property is involved in a pending litigation between respondent Casal and
persons not parties to the instant case must not prejudice petitioners.
Respondents obligation to deliver the corresponding certificates of title is simultaneous and reciprocal. Upon
the full payment of the purchase price of the subdivision lots, respondents obligation to deliver the certificates of title

becomes extant. Respondents must cause the delivery of the certificates of title to petitioners free of any encumbrance.
But since the lots are involved in litigation and there is a notice of lis pendens at the back of the titles involved,
respondents have to be given a reasonable period of time to work on the adverse claims and deliver clean titles to
petitioners. The Court believes that six (6) months is a reasonable period for the purpose.
Should respondents fail to deliver such clean titles at the end of the period, they ought to pay petitioners actual
or compensatory damages. Article 1191 of the Civil Code sanctions the right to rescind the obligation in the event that
specific performance becomes impossible, to wit:
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the
payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if
the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with Articles 1385 and 1388 and the Mortgage Law.[38]
Rescission creates the obligation to return the object of the contract. It can be carried out only when the one
who demands rescission can return whatever he may be obliged to restore. Rescission abrogates the contract from its
inception and requires a mutual restitution of the benefits received. [39] Thus, respondents Casal, Salvador and CRS
Realty must return the benefits received from the contract to sell if they cannot comply with their obligation to deliver
the corresponding certificates of title to petitioners.
Under Article 2199 of the Civil Code, actual or compensatory damages are those awarded in satisfaction of, or
in recompense for, loss or injury sustained. They proceed from a sense of natural justice and are designed to repair the
wrong that has been done, to compensate for the injury inflicted and not to impose a penalty. [40] Also, under Article
2200, indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which
the obligee failed to obtain. Thus, there are two kinds of actual or compensatory damages: one is the loss of what a person
already possesses, and the other is the failure to receive as a benefit that which would have pertained to him. [41]

In the event that respondents Casal, Salvador and CRS Realty cannot deliver clean certificates of title to
petitioners, the latter must be reimbursed not only of the purchase price of the subdivision lots sold to them but also of
the incremental value arising from the appreciation of the lots. Thus, petitioners are entitled to actual damages
equivalent to the current market value of the subdivision lots.
In Solid Homes, Inc. v. Spouses Tan,[42] the Court ordered instead the payment of the current market value of
the subdivision lot after it was established that the subdivision owner could no longer comply with its obligation to
develop the subdivision property in accordance with the approved plans and advertisements.
On this score, in its Decision dated 28 November 2000 which was affirmed by the OP and the Court of
Appeals, the Board found respondent CRS Realty and its officers solidarily liable to refund the complainants or herein
petitioners the installments paid by them including interest, to pay them moral and exemplary damages and attorneys

fees and to pay the corresponding fine to the Board. The decision, however, failed to name the responsible officers of
respondent CRS Realty who should be solidarily liable petitioners.
The 18 December 1998 Decision of the HLURB Arbiter is quite instructive on this matter, thus:
Obviously, respondents CRS Realty Development Corporation, Crisanta R. Salvador and Cesar E. Casal,
avoided responsibility and liability for their failure to comply with their contractual and statutory obligation to
deliver the titles to the individual lots of complainants, by passing the buck to each other. The Board[,]
however, is not oblivious to the various schemes willfully employed by developers and owners of subdivision
projects to subtly subvert the law, and evade their obligations to lot buyers, as it finds the justifications
advanced by respondents CRS Realty Development Corp., Crisanta R. Salvador, and Cesar E. Casal grossly
untenable. The failure in the implementation of the agreement dated 06 September 1998 entered into by
respondent CRS, Salvador and Casal involving the subject property should not operate and work to prejudice
complainants, who are lot buyers in good faith and who have complied with their obligations by paying in full
the price of their respective lots in accordance with the terms and conditions of their contract to sell.
Respondent Casal is not without recourse against respondents CRS Realty or Salvador for the violation of their
agreement and as such, the same reason could not be made and utilized as a convenient excuse to evade their
obligation and responsibility to deliver titles to complainants.
Under the so called doctrine of estoppel, where one of two innocent persons, as respondents CRS Development
Corp./Crisanta R. Salvador and Cesar E. Casal claimed themselves to be, must suffer, he whose acts
occasioned the loss must bear it. In the herein case, it is respondents CRS Realty Development Corp./Crisanta
Salvador and Cesar E. Casal who must bear the loss. x x x[43]

In denying any liability, respondent Salvador argues that even before the filing of the case before the HLURB, the
agreements between her and respondent Casal involving the development and sale of the subdivision lots were superseded by an
agreement dated 30 August 1996, whereby respondent Casal purportedly assumed full responsibility over the claims of the
subdivision lot buyers while respondent Salvador sold her share in CRS Realty and relinquished her participation in the business .

The subsequent agreement which purportedly rescinded the subdivision development agreement between
respondents Casal and Salvador could not affect third persons like herein petitioners because of the basic civil law
principle of relativity of contracts which provides that contracts can only bind the parties who entered into it, and it
cannot favor or prejudice a third person, even if he is aware of such contract and has acted with knowledge thereof.
[44]

The fact remains that the contracts to sell involving the subdivision lots were entered into by and between

petitioners, as vendees, and respondent Salvador, on behalf of respondent CRS Realty as vendor. As one of the
responsible officers of respondent CRS Realty, respondent Salvador is also liable to petitioners for the failure of CRS
Realty to perform its obligations under the said contracts and P.D. No. 957, notwithstanding that
respondent Salvador had subsequently divested herself of her interest in the CRS Realty.
One of the purposes of P.D. No. 957 is to discourage and prevent unscrupulous owners, developers, agents and
sellers from reneging on their obligations and representations to the detriment of innocent purchasers. [45] The Court
cannot countenance a patent violation on the part of the said respondents that will cause great prejudice to petitioners.
The Court must be vigilant and should punish, to the fullest extent of the law, those who prey upon the desperate with
empty promises of better lives, only to feed on their aspirations. [46]

As

regards

petitioners

prayer

to

declare

them

the

absolute

owners

of the subdivision lots, the HLURB correctly ruled that it had no jurisdiction over the same. Petitioners amended
complaint[47] included a cause of action for reconveyance of the subdivision lots to petitioners and/or the quieting of
petitioners title thereto and impleaded a different set of defendants, namely, the Heirs of Laudiza and respondents Ang
and Cuason, who allegedly bought the subdivision lots previously sold to petitioners.
In Spouses Suntay v. Gocolay,[48] the Court held that the HLURB has no jurisdiction over the issue of
ownership, possession or interest in the condominium unit subject of the dispute therein because under Section 19 of
Batas Pambansa (B.P.) Blg. 129,[49] the Regional Trial Courts shall exercise exclusive original jurisdiction in all civil
actions which involve the title to, or possession of, real property, or any interest therein.
In view of the aforequoted delineation of jurisdiction between the HLURB and the RTCs, the HLURB has no
jurisdiction to declare petitioners as absolute owners of the subdivision lots as against the Heirs of Laudiza who filed
an action for reconveyance against respondent Casal, which is still pending before the RTC.
However, nothing prevents the HLURB from adjudicating on the issue of whether the alleged subsequent sale
of the subdivision lots to respondents Ang and Cuason constituted a double sale because the issue is intimately related
to petitioners complaint to compel respondents CRS Realty, Casal and Salvador to perform their obligation under the
contracts to sell. Considering that the alleged subsequent sale to respondents Ang and Cuason apparently would
constitute a breach of respondents obligation to issue the certificate of title to petitioners, if not an unsound business
practice punishable under Section 1 of P.D. No. 1344, [50] the HLURB cannot shirk from its mandate to enforce the laws
for the protection of subdivision buyers.
In Union Bank of the Philippines v. Housing and Land Use Regulatory Board,[51] the Court upheld HLURBs jurisdiction
over a condominium unit buyers complaint to annul the certificate of title over the unit issued to the highest bidder in the
foreclosure of the mortgage constituted on the unit by the condominium developer without the consent of the buyer.

The remand of the instant case to the HLURB is in order so that the HLURB may determine if the alleged
subsequent sale to respondents Ang and Cuason of those lots initially sold to petitioners constituted a double sale and
was tainted with fraud as opposed to the respondents claim that only the unsold portions of the subdivision property
were sold to them.
One final note. Contrary to petitioners contention, the decision of the OP does not violate the mandate of
Section 14, Article VIII of the Constitution, which provides that No decision shall be rendered by any court without
expressing therein clearly and distinctly the facts and the law on which it is based.
The OP decision ruled that the findings of fact and conclusions of law of the office a quo are amply supported
by substantial evidence and that it is bound by said findings of facts and conclusions of law and hereby adopt(s) the
assailed resolution by reference.

The Court finds these legal bases in conformity with the requirements of the Constitution. The Court has
sanctioned the use of memorandum decisions, a species of succinctly written decisions by appellate courts in
accordance with the provisions of Section 40, B.P. Blg. 129 on the grounds of expediency, practicality, convenience and
docket status of our courts. The Court has declared that memorandum decisions comply with the constitutional mandate. [52]

As already discussed, the Court affirms the ruling of the HLURB Arbiter insofar as it ordered respondents
Casal, Salvador and CRS Realty, jointly and severally, to cause the delivery of clean certificates of title to petitioners at
no cost to the latter. Said respondents have six months from the finality of this decision to comply with this directive,
failing which they shall pay petitioners actual damages equivalent to the current market value of the subdivision lots
sold to them, as determined by the HLURB.
However, the Court finds in order and accordingly affirms the Boards award of moral and exemplary damages
and attorneys fees in favor of each petitioner, as well as the imposition of administrative fine, against respondents
Casal, Salvador and CRS Realty.

WHEREFORE, the instant petition for review on certiorari is PARTLY GRANTED. The decision and
resolution of the Court of Appeals in CA-G.R. SP No. 81859, which upheld the decisions of the Office of the President
and the Housing and Land Use Regulatory Board, are AFFIRMED in all respects except for the
following MODIFICATIONS, to wit:
(1) Respondents CRS Realty, Cesar E. Casal and Crisanta R. Salvador are ORDERED to secure and deliver to
each of petitioners the corresponding certificates of titles, free of any encumbrance, in this names for the lots they
respectively purchased and fully paid for, within six (6) months from the finality of this Decision and, in case of
default, jointly and severally to pay petitioners the prevailing or current fair market value of the lots as determined by
the Housing and Land Use Regulatory Board; and
(2) Without prejudice to the implementation of the other reliefs granted in this Decision, including the reliefs
awarded by the HLURB which are affirmed in this Decision, this case is REMANDED to the HLURB for the purpose
of determining (a) the prevailing or current fair market value of the lots and (b) the validity of the subsequent sale of
the lots to respondents Bennie Cuason and Caleb Ang by ascertaining whether or not the sale was attended with fraud
and executed in bad faith. No costs.
SO ORDERED.