MATE V.

COURT OF APPEALS
4-9 May 21, 1998 GR No. 120724-25 Martinez, J.
Consideration; Art. 1471 Kathleen
Petitioners Respondents:
Fernando T. Mate The Honorable Court of Appeals and
Inocencio Tan
Doctrine: The filing of the criminal case (violations of BP 22) was a tacit admission by
petitioner that there was a consideration of the pacto de retro sale.
Facts:
1. On October 1986, Josefina Ray (“Josie”; cousin of petitioner’s wife) and Tan (private
respondent) went to the residence of petitioner at Tacloban.
2. Josie was soliciting help from petitioner because Tan was going to prosecute her and her family
for violation of B.P. 22 (Bouncing Checks Law) for issuing rubber checks that amounted to
P4.4million.
3. Josie requested petitioner to cede to Tan his 3 lots in Tacloban and that Josie will redeem these
lots with her own funds. At first, petitioner rejected but later on agreed.
4. He executed a fictitious deed of sale with right to repurchase subject to the following
conditions:
a. The amount to be stated in the document is P1,400,000 with interest thereon at 5% a
month
b. Properties will be repurchased within 6 months or on or before April 4, 1987.
c. Although it would appear in the document that petitioner is the vendor, it is Josie who
will provide the money for redemption
d. Titles to the properties will be delivered to private respondent but the sale will not be
registered in the Registry of Deeds and annotated on the titles.
5. As assurance to petitioner of the redemption, Josie issued 2 BPI checks both postdated
December 15, 1986. One was for P1.4M for the selling price and the other amounted to
P420,000 pertaining to interest for the 6 months.
6. On January 1987, petitioner deposited the checks but were dishonored for having been drawn
against a closed account.
7. He sent a telegram to Josie regarding the checks but she did not respond. He also went to
Manila but could not find her. He filed a criminal case for violation of BP22.
8. BP 22 Case: archived because Josie cannot be found as she went into hiding.
9. Civil Cases for Annulment of Contract with damages and Action for consolidation of ownership
of the properties subject of sale: filed with RTC Leyte and consolidated
10. RTC Ruling: Deed of Sale with Right of Repurchase is valid and binding. Period to redeem has
expired, ownership thereof is consolidated by operation of law
11. CA Ruling: Affirmed decision of the trial court.
 12. Petitioner’s contention in this appeal – that the contract is null and void for lack of
consideration because allegedly no money changed hands when he signed it and the checks
that were issued for redemption of the properties involved in the sale have been dishonored.

Issue/s: Ruling:
1. Whether or not the Deed of Sale with right to repurchase is valid 1. Yes

Ratio:

The contract has a consideration. Petitioner accommodated Josefina so she would not be
charged criminally by Tan. To ensure repurchase, petitioner got a check worth P1.4 million. By
allowing that titles be in possession of Tan for 6 months, petitioner got a check worth P420,000.

Even if the checks were dishonored, there is absolutely no basis for petitioner to file a
complaint against Tan and Josie to annul the pacto de retro sale on the ground of lack of
consideration, invoking his failure to encash the checks. His cause of action was to file criminal
actions against Josie under BP 22, which he did. The filing of the criminal cases was a tacit
admission that there was a consideration of the pacto de retro sale.

Petitioner knew that he was bound by deed of sale with right to repurchase as evidenced by
filing criminal cases against Josie when the checks bounced. Petitioner invokes the case of
Singson v. Isabela which states that “where one or two innocent persons must suffer, that
person who gave occasion for the damages to be caused must bear consequences” Petitioner
is NOT an innocent person. In fact, he gave occasion to damages caused by virtue of the
contract which he prepared and signed. As a lawyer who drafted the contract, he knew what
he was entering into. Also, he should have known that the transaction was also fraught with
risks since Josie and family had a checkered history of issuing worthless checks.