G.R. No. 196444, 15 February 2017

FACTS:

Arcaina is the owner of a parcel of land. Her attorney-in-fact, Banta, entered into a contract with Ingram for the sale of the property. Banta represented that the property has an area of more or less 6,200 square meters (sq.m.) per the tax declaration covering it. The contract price was ₱1,860,000.00, with Ingram making installment payments for the property. Ingram still had an obligation to pay the remaining balance in the amount of ₱145,000.00.

Subsequently, Ingram caused the property to be surveyed and discovered that the lot has an area of 12,000 sq. m. Upon learning of the actual area of the property, Banta allegedly insisted that the difference of 5,800 sq. m. remains unsold. This was opposed by Ingram who claims that she owns the whole lot by virtue of the sale; he then instituted the recovery case. The Municipal Circuit Trial Court (MCTC) dismissed the complaint and declared that, for Ingram to be awarded the excess 5,800 sq. m. portion of the property, she should have presented evidence that she paid for the surplus area consistent with Article 1540 of the Civil Code.

The Regional Trial Court (RTC) reversed and set aside the Order of the MCTC. The RTC found that neither of the parties presented competent evidence to prove the property’s actual area. Hence, the RTC concluded that the area of the lot as shown by the boundaries indicated in the deeds of sale is only 6,200 sq. m. more or less. In addition, the RTC held that Article 1542, which covers sale of real estate in lump sum, applies in this case. Having apparently sold the entire lot for a lump sum, Arcaina, as the vendor, is obligated to deliver all the land included in the boundaries of the property, regardless of whether the real area should be greater or smaller than what is recited in the deeds of sale.

The Court of Appeals (CA) agreed with the RTC that the sale was made for a lump sum and not on a per-square-meter basis. The CA explained that in case of conflict between the area and the boundaries of a land subject of the sale, the vendor is obliged to deliver to the vendee everything within the boundaries. This is in consonance with Article 1542 of the Civil Code. Petitioners now assail the CA’ s declaration that the sale of the property was made for a lump sum.

Petitioners insist that they sold the property on a per-square-meter basis, at the rate of ₱300.00 per sq. m. Since the sale was on a per-square-meter basis, petitioners argue that it is Article 1539, and not Article 1542 of the Civil Code, which governs.

ISSUES:

1. Is the sale in this case a sale for a lump sum?
2. If this is a sale for a lump sum, should the excess area then be awarded to Respondents?

RULING:

Yes. In Del Prado v. Spouses Caballero, we were confronted with facts analogous to the present petition. Pending the issuance of the Original Certificate of Title (OCT) in their name, Spouses Caballero sold a parcel of land to Del Prado. The contract of sale stated both the property’s boundaries and estimated area of more or less 4,000 sq. m. Later, when the OCT was issued, the technical description of the property appeared to be 14,457 sq. m., more or less. Del Prado alleged that Spouses Caballero were bound to deliver all that was included in the boundaries of the land since the sale was made for a lump sum. Although, we agreed with Del Prado that the sale partakes of the nature of a lump sum contract, we did not apply Article 1542. In holding that Del Prado is entitled only to the area stated in the contract of sale, we explained:

The Court, however, clarified that the rule laid down in Article 1542 is not hard and fast and admits of an exception. It held:

“A caveat is in order, however. The use of “more or less” or similar words in designating quantity covers only a reasonable excess or deficiency. A vendee of land sold in gross or with the description “more or less” with reference to its area does not thereby ipso facto take all risk of quantity in the land.

In a contract of sale of land in a mass, the specific boundaries stated in the contract must control over any other statement, with respect to the area contained within its boundaries.

Black’s Law Dictionary defines the phrase “more or less” to mean:

“About; substantially; or approximately; implying that both parties assume the risk of any ordinary discrepancy. The words are intended to cover slight or unimportant inaccuracies in quantity, Carter v. Finch, 186 Ark. 954, 57 S.W.2d 408; and are ordinarily to be interpreted as taking care of unsubstantial differences or differences of small importance compared to the whole number of items transferred.”

In a lump sum contract, a vendor is generally obligated to deliver all the land covered within the boundaries, regardless of whether the real area should be greater or smaller than that recited in the deed. However, in case there is conflict between the area actually covered by the boundaries and the estimated area stated in the contract of sale, he/she shall do so only when the excess or deficiency between the former and the latter is reasonable. Applying Del Prado to the case before us, we find that the difference of 5,800 sq. m. is too substantial to be considered reasonable.

Further, at the time of the sale, Ingram and petitioners did not have knowledge of the actual area of the land within the boundaries of the property. It is undisputed that before the survey, the parties relied on the tax declaration covering the lot, which merely stated that it measures more or less 6,200 sq. m. Thus, when petitioners offered the property for sale and when Ingram accepted the offer, the object of their consent or meeting of the minds is only a 6,200 sq. m. property.

*Case digest by Jan Robert M. Corre, JD-4, Andres Bonifacio Law School, SY 2019-2020