G.R. No. 167874, 15 January 2010
Napala offered to purchase the land of Spouses Tongson for P3,000,000. The petitioners find the offer acceptable executed with Napala a Memorandum of Agreement. Upon signing of the Deed of Absolute Sale Napala paid P200,000 in cash to petitioners and issued a postdated PNB check for the payment of the remaining amount. However, the check bounces because of insufficient fund, despite the petitioners repeated demand that it be paid in full or return the land, Napala failed to do both now the petitioners filed an action against Napala.
Whether or not the contract of sale can be annulled based on the fraud employed by Napala.
A valid contract requires the concurrence of the following essential elements: (1) consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; (2) determinate subject matter; and (3) price certain in money or its equivalent.
In the case, there is no dispute as regards the presence of the two requisites for a valid sales contract, namely, (1) a determinate subject matter and (2) a price certain in money. The problem now lie with the existence of the remaining element, which is consent of the contracting parties, specifically, the consent of the Spouses Tongson to sell the property to Napala.
The Supreme Court found no causal fraud in this case to justify the annulment of the contract of sale between the parties. It is clear from the records that the Spouses Tongson agreed to sell their property to Napala who offered to pay ₱3,000,000 as purchase price therefor. Contrary to the Spouses Tongson’s belief that the fraud employed by Napala was “already operational at the time of the perfection of the contract of sale,” the misrepresentation by Napala that the postdated PNB check would bounce on its maturity hardly equates to dolo causante. Napala’s assurance that the check he issued was fully funded was not the principal inducement for the Spouses Tongson to sign the Deed of Absolute Sale. Even before Napala issued the check, the parties had already consented and agreed to the sale transaction. The Spouses Tongson were never tricked into selling their property to Napala. On the contrary, they willingly accepted Napala’s offer to purchase the property at ₱3,000,000. In short, there was a meeting of the minds as to the object of the sale as well as the consideration therefor.
Instances where there is an existence of causal fraud include: (1) when the seller, who had no intention to part with her property, was “tricked into believing”; (2) when the signature of the authorized corporate officer was forged; or (3) when the seller was seriously ill, and died a week after signing the deed of sale raising doubts on whether the seller could have read, or fully understood, the contents of the documents he signed or of the consequences of his act. Suffice it to state that nothing analogous to these badges of causal fraud exists in this case.
However, while no causal fraud attended the execution of the sales contract, the fraud surfaced when Napala issued the worthless check to the Spouses Tongson, which is definitely not during the negotiation and perfection stages of the sale. Rather, the fraud existed in the consummation stage of the sale when the parties are in the process of performing their respective obligations under the perfected contract of sale.
* Case digest by Aileen B.Buenafe, LLB-1, Andres Bonifacio Law School, SY 2017-2018