G.R. No. 196182, 1 September 2014

FACTS:

The petitioner is a corporation engaged in building condominium units. The petitioner started its construction at Pasay City. However, in their advertisement it provides that it is situated in Makati City. The respondent in belief that the condo unit was in Makati City agreed to buy a unit by paying reservation fee, downpayment and monthly installments. In their Contract to Sell it indicated therein that the condo unit was in Pasay City.

More than two years after the execution of the contract, respondent demanding the return of her payment on the ground that the unit was built in Pasay not in Makati.

ISSUE:

Whether petitioner was guilty of fraud and if so, whether such fraud is sufficient ground to nullify its contract with respondent.

RULING:

First, the fraud must be dolo causante or it must be fraud in obtaining the consent of the party. This is referred to as causal fraud. The deceit must be serious. The fraud is serious when it is sufficient to impress, or to lead an ordinarily prudent person into error; that which cannot deceive a prudent person cannot be a ground for nullity. The circumstances of each case should be considered, taking into account the personal conditions of the victim. Second, the fraud must be proven by clear and convincing evidence and not merely by preponderance thereof.

In the present case, the Supreme Court finds that petitioner is guilty of false representation of a fact. This is evidenced by its printed advertisements indicating that its subject condominium project is located in Makati City when, in fact, it is in Pasay City. However, insofar as the present case is concerned, the Court agrees with the Housing and Land Use Arbiter, the HLURB Board of Commissioners, and the Office of the President, that the misrepresentation made by petitioner in its advertisements does not constitute causal fraud which would have been a valid basis in annulling the Contract to Sell between petitioner and respondent.

“Being a notarized document, it had in its favor the presumption of regularity, and to overcome the same, there must be evidence that is clear, convincing and more than merely preponderant; otherwise, the document should be upheld. Mandap failed to overcome this presumption.

* Case digest by Lea Caipang, LLB-1, Andres Bonifacio Law School, SY 2017-2018