UY KIAO ENG vs. NIXON LEE G.R.No. 176831 January 15, 2010 Nachura, J.:

Facts: Respondent Nixon Lee filed a petition for mandamus with damages against his mother Uy Kiao Eng, herein petitioner, before the RTC of Manila to compel petitioner to produce the holographic will of his father so that probate proceedings for the allowance thereof could be instituted. Respondent had already requested his mother to settle and liquidate the patriarch’s estate and to deliver to the legal heirs their respective inheritance, but petitioner refused to do so without any justifiable reason. Petitioner denied that she was in custody of the original holographic will and that she knew of its whereabouts. The RTC heard the case. After the presentation and formal offer of respondent’s evidence, petitioner demurred, contending that her son failed to prove that she had in her custody the original holographic will. The RTC, at first, denied the demurrer to evidence. However, it granted the same on petitioner’s motion for reconsideration. Respondent’s motion for reconsideration of this latter order was denied. Hence, the petition was dismissed. Aggrieved, respondent sought review from the appellate court. The CA initially denied the appeal for lack of merit. Respondent moved for reconsideration. The appellate court granted the motion, set aside its earlier ruling, issued the writ, and ordered the production of the will and the payment of attorney’s fees. It ruled this time that respondent was able to show by testimonial evidence that his mother had in her possession the holographic will. Dissatisfied with this turn of events, petitioner filed a motion for reconsideration. The appellate court denied this motion. Left with no other recourse, petitioner brought the matter before this Court, contending in the main that the petition for mandamus is not the proper remedy and that the testimonial evidence used by the appellate court as basis for its ruling is inadmissible.

Issue: Whether or not mandamus is the proper remedy of the respondent.

Held: The Court cannot sustain the CA’s issuance of the writ.

Mandamus is a command issuing from a court of law of competent jurisdiction, in the name of the state or the sovereign, directed to some inferior court, tribunal, or board, or to some corporation or person requiring the performance of a particular duty therein specified, which duty results from the official station of the party to whom the writ is directed or from operation of law. This definition recognizes the public character of the remedy, and clearly excludes the idea that it may be resorted to for the purpose of enforcing the performance of duties in which the public has no interest. The writ is a proper recourse for citizens who seek to enforce a public right and to compel the performance of a public duty, most especially when the public right involved is mandated by the Constitution. As the quoted provision instructs, mandamus will lie if the tribunal, corporation, board, officer, or person unlawfully neglects the performance of an act which the law enjoins as a duty resulting from an office, trust or station.

The writ of mandamus, however, will not issue to compel an official to do anything which is not his duty to do or which it is his duty not to do, or to give to the applicant anything to which he is not entitled by law. Nor will mandamus issue to enforce a right which is in substantial dispute or as to which a substantial doubt exists, although objection raising a mere technical question will be disregarded if the right is clear and the case is meritorious. As a rule, mandamus will not lie in the absence of any of the following grounds: [a] that the court, officer, board, or person against whom the action is taken unlawfully neglected the performance of an act which the law specifically enjoins as a duty resulting from office, trust, or station; or [b] that such court, officer, board, or person has unlawfully excluded petitioner/relator from the use and enjoyment of a right or office to which he is entitled. On the part of the relator, it is essential to the issuance of a writ of mandamus that he should have a clear legal right to the thing demanded and it must be the imperative duty of respondent to perform the act required.

Recognized further in this jurisdiction is the principle that mandamus cannot be used to enforce contractual obligations. Generally, mandamus will not lie to enforce purely private contract rights, and will not lie against an individual unless some obligation in the nature of a public or quasi-public duty is imposed. The writ is not appropriate to enforce a private right against an individual.] The writ of mandamus lies to enforce the execution of an act, when, otherwise, justice would be obstructed; and, regularly, issues only in cases relating to the public and to the government; hence, it is called a prerogative writ. To preserve its prerogative character, mandamus is not used for the redress of private wrongs, but only in matters relating to the public.

Moreover, an important principle followed in the issuance of the writ is that there should be no plain, speedy and adequate remedy in the ordinary course of law other than the remedy of mandamus being invoked. In other words, mandamus can be issued only in cases where the usual modes of procedure and forms of remedy are powerless to afford relief. Although classified as a legal remedy, mandamus is equitable in its nature and its issuance is generally controlled by equitable principles. Indeed, the grant of the writ of mandamus lies in the sound discretion of the court.

In the instant case, the Court, without unnecessarily ascertaining whether the obligation involved here—the production of the original holographic will—is in the nature of a public or a private duty, rules that the remedy of mandamus cannot be availed of by respondent Lee because there lies another plain, speedy and adequate remedy in the ordinary course of law. Let it be noted that respondent has a photocopy of the will and that he seeks the production of the original for purposes of probate. The Rules of Court, however, does not prevent him from instituting probate proceedings for the allowance of the will whether the same is in his possession or not.

There being a plain, speedy and adequate remedy in the ordinary course of law for the production of the subject will, the remedy of mandamus cannot be availed of. Suffice it to state that respondent Lee lacks a cause of action in his petition. Thus, the Court grants the demurrer.

PEOPLE vs. JOSELITO NOQUE G.R.No. 175319 January 15, 2010 Del Castillo, J.:

Facts: Accused Joselito Noque was caught in a buy-bust operation conducted by SPO4 Norberto Murillo on January 30, 2001. Two Informations were filed before the RTC of Manila docketed as Criminal Case Nos. 01-189458 and 01-189459 charging of the crimes of illegal sale and illegal possession of a regulated drug. The trial court convicted the accused on both charges. The trial court held that while the Informations alleged methamphetamine hydrochloride as the drug seized from the appellant, the drug actually confiscated which was ephedrine, which by means of chemical reaction could change into methamphetamine. Thus, the trial court ruled that the appellant can be convicted of the offenses charged, which are included in the crimes proved. The CA affirmed the trial court’s decision. The CA held that the designations and allegations in the informations are for the crimes of illegal sale and illegal possession of regulated drugs. Hence, the accused appealed the case before the Supreme Court.

Issue: Whether or not appellant’s right to be informed of the nature and cause of the accusation was not violated.

Held: The appeal is bereft of merit.

As correctly observed by CA, the offenses designated in the Informations are for violations of Sections 15 and 16 of RA 6425, which define and penalize the crimes of illegal sale and possession of regulated drugs. The allegations in the Informations for the unauthorized sale and possession of “shabu” or methamphetamine hydrochloride are immediately followed by the qualifying phrase “which is a regulated drug”. Thus, it is clear that the designations and allegations in the Informations are for the crimes of illegal sale and illegal possession of regulated drugs. Ephedrine has been classified as a regulated drug by the Dangerous Drugs Board in Board Resolution No. 2, Series of 1988.

The CA correctly ruled that Sections 4 and 5, Rule 120 of the Rules of Court, can be applied by analogy in convicting the appellant of the offenses charged, which are included in the crimes proved. Under these provisions, an offense charged is necessarily included in the offense proved when the essential ingredients of the former constitute or form part of those constituting the latter. At any rate, a minor variance between the information and the evidence does not alter the nature of the offense, nor does it determine or qualify the crime or penalty, so that even if a discrepancy exists, this cannot be pleaded as a ground for acquittal. In other words, his right to be informed of the charges against him has not been violated because where an accused is charged with a specific crime, he is duly informed not only of such specific crime but also of lesser crimes or offenses included therein.

PEOPLE vs. EDGARDO ESTRADA G.R. No. 178318 January 15, 2010 Del Castillo, J.:

Facts: On November 19, 1997, two similarly-worded Informations were filed against appellant Edgardo Estrada charging him with two counts of Rape committed against his niece, 12-year old minor and is living in the house of his parents. On August 16, 2002, the trial court found the accused guilty of qualified rape on two counts and sentenced him to suffer the supreme penalty of death. The CA affirmed the decision of the trial court with modification finding the appellant guilty of simple rape. The Court of Appeals opined that mere allegation in the Information that the appellant was the victim’s uncle would not suffice to satisfy the special qualifying circumstance of relationship. It must be categorically stated that appellant is a relative within the 3rd civil degree by consanguinity or affinity. Hence this appeal.

Issue: Whether or not the accused should be convicted of qualified rape or simple rape.

Held: Applying the guiding principles that “a) an accusation for rape is easy to make, difficult to prove and even more difficult to disprove; b) in view of the intrinsic nature of the crime, the testimony of the complainant must be scrutinized with utmost caution; and c) the evidence of the prosecution must stand on its own merits and cannot draw strength from the weakness of the evidence for the defense”, we affirm the Decision of the Court of Appeals finding herein appellant guilty of two counts of simple rape.

The rape incidents were committed in July 1997 hence the law applicable is Article 335 of the Revised Penal Code as amended by Republic Act No. 7659. In the instant case, it was clearly established by the prosecution that on two occasions in July 1997, the victim was sexually abused by appellant through force and intimidation, against her will and without her consent. The qualifying circumstance of minority of the victim was likewise proven by the presentation of the latter’s Birth Certificate.

However, as regards the allegation in the Information that appellant is an uncle of the victim, we agree with the Court of Appeals that the same did not sufficiently satisfy the requirements of Art. 335 of the Revised Penal Code, i.e., it must be succinctly stated that appellant is a relative within the 3rd civil degree by consanguinity or affinity. It is immaterial that appellant admitted that the victim is his niece. In the same manner, it is irrelevant that “AAA” testified that appellant is her uncle.

In view of the foregoing, the Court of Appeals was correct in finding appellant guilty only of two counts of simple rape and in sentencing him to suffer the penalty of reclusion perpetua for each count, and in ordering him to pay P50,000.00 as civil indemnity, P50,000.00 as moral damages and P30,000.00 as exemplary damages for each count of rape.

WELFREDO CENEZE vs. FELICIANA RAMOS G.R. No. 172287 January 15, 2010 Nachura, J.:

Facts: Petitioner Welfredo Ceneze filed an action for declaration as bona fide tenant-lessee of two parcels of agricultural land owned by respondent Feliciana Ramos located in Lelemaan, Manaoag, Pangasinan. Petitioner alleged that in 1981, Julian Ceneze Sr., petitioner’s father, transferred his tenurial rights over the landholding to him with the consent and approval of respondent and that, since then, petitioner had been in actual and peaceful possession of the landholding until April 12, 1991, when respondent forcibly entered and cultivated the land for the purpose of dispossessing the petitioner of his right as tenant.

Respondent denied that a tenancy relationship existed between her and petitioner, asserting that she had never instituted petitioner as a tenant in any of her landholdings. She averred that petitioner had never been in possession of the landholding, but admitted that it was Julian, Sr. who was the tenant of the landholding. After Julian Sr., his wife and his son Julian Jr. migrated to the U.S.A. she reported on April 8, 1991, to the Municipal Agrarian Reform Officer (MARO) of Manaoag, Pangasinan, the abandonment of the landholding by Julian, Sr., his wife and his son, Julian, Jr.

On December 19, 1997, the Provincial Adjudicator rendered a decision in favor of petitioner for it find the petitioner a bona fide tenant-lessee of the landholding. The Department of Agrarian Reform Adjudication Board (DARAB) affirmed the decision.

Respondent elevated the case to the CA through a petition for review. On December 29, 2005, the CA resolved the petition in favor of respondent landowner and dismissed petitioner’s complaint. Likewise, petitioner’s motion for reconsideration was denied for lack of merit. Hence, this petition for review was filed.

Issue: Whether or not petitioner had tenancy relationship with respondent.

Held: The petition is not meritorious.

In resolving this petition, the Court is guided by the principle that tenancy is not purely a factual relationship dependent on what the alleged tenant does upon the land; it is also a legal relationship. A tenancy relationship cannot be presumed. There must be evidence to prove the presence of all its indispensable elements, to wit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvest. The absence of one element does not make an occupant of a parcel of land, its cultivator or planter, a de jure tenant.

The certification or findings of the Secretary of Agrarian Reform (or of an authorized representative) concerning the presence or the absence of a tenancy relationship between the contending parties are merely preliminary or provisional in character; hence, such certification does not bind the judiciary.

From our own assessment of the evidence at hand, we find that petitioner failed to establish the existence of a tenancy relationship between him and respondent. To prove a tenancy relationship, the requisite quantum of evidence is substantial evidence, or such relevant evidence as a From our own assessment of the evidence at hand, we find that petitioner failed to establish the existence of a tenancy relationship between him and respondent. To prove a tenancy relationship, the requisite quantum of evidence is substantial evidence, or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. The Certification of the BARC Chairman and the affidavits of Julian, Sr. and of the tenants of the adjacent landholdings certainly do not suffice. By themselves, they do not show that the elements of consent of the landowner and of sharing of harvests are present.

In any case, the fact alone of working on a landholding does not give rise to a presumption of the existence of agricultural tenancy. Substantial evidence requires more than a mere scintilla of evidence in order that the fact of sharing can be established; there must be concrete evidence on record adequate enough to prove the element of sharing. To prove sharing of harvests, a receipt or any other evidence must be presented, because self-serving statements are inadequate. In this case, petitioner failed to present a receipt for respondent’s share in the harvest, or any other solid evidence proving that there was a sharing of harvest.

To recap, petitioner is not a de jure tenant entitled to security of tenure. There being no tenancy relationship between the parties, the DARAB did not have jurisdiction over the case. We, therefore, sustain the ruling of the CA, dismissing petitioner’s complaint.

CELESTINO BALUS vs. SATURNINO BALUS G.R.No. 168970 January 15, 2010 Peralta, J.:

Facts: Herein petitioner and respondents are the children of the spouses Rufo and Sebastiana Balus. On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as a security for a loan he obtained from the Rural Bank of Maigo, Lanao del Norte. Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was sold to the bank as the sloe bidder at a public auction held for that purpose. The property was not redeemed within the period allowed by law. More than two years after the auction, or on January 25, 1984, the sheriff executed a Definite Deed of Sale in favor of the Bank. Thereafter, a new title was issued in the name of the Bank.

On October 10, 1989, herein petitioner and respondents executed an Extrajudicial Settlement of Estate adjudicating to each of them a specific one-third portion of the subject property consisting of 10,246 square meters. The Extrajudicial Settlement also contained provisions wherein the parties admitted knowledge of the fact that their father mortgaged the subject property to the Bank and that they intended to redeem the same at the soonest possible time.

Three years after the execution of the Extrajudicial Settlement, herein respondents bought the subject property from the Bank. On October 12, 1992, a Deed of Sale of Registered Land was executed by the Bank in favor of respondents. Subsequently, a TCT was issued in the name of respondents. Meanwhile, petitioner continued possession of the subject lot.

On June 27, 1995, respondents filed a Complaint for Recovery of Possession and Damages against petitioner, contending that they had already informed petitioner of the fact that they were the new owners of the disputed property, but the petitioner still refused to surrender possession of the same to them.

The RTC held that the right of petitioner to purchase from the respondents his share in the disputed property was recognized by the provisions of the Extrajudicial Settlement of Estate, which the parties had executed before the respondents bought the subject lot from the Bank.

Aggrieved by the Decision of the RTC, herein respondents filed an appeal with the CA. The CA ruled that when petitioner and respondents did not redeem the subject property within the redemption period and allowed the consolidation of ownership and the issuance of a new title in the name of the Bank, their co-ownership was extinguished. Hence, the instant petition for review on certiorari under Rule 45.

Issue: Whether or not co-ownership by him and respondents over the subject property persisted even after the lot was purchased by the Bank and title thereto transferred to its name, and even after it was eventually bought back by the respondents from the Bank.

Held: The court is not persuaded.

At the outset, it bears to emphasize that there is no dispute with respect to the fact that the subject property was exclusively owned by petitioner and respondents' father, Rufo, at the time that it was mortgaged in 1979. This was stipulated by the parties during the hearing conducted by the trial court on October 28, 1996. Evidence shows that a Definite Deed of Sale was issued in favor of the Bank on January 25, 1984, after the period of redemption expired. There is neither any dispute that a new title was issued in the Bank's name before Rufo died on July 6, 1984. Hence, there is no question that the Bank acquired exclusive ownership of the contested lot during the lifetime of Rufo.

The rights to a person's succession are transmitted from the moment of his death. In addition, the inheritance of a person consists of the property and transmissible rights and obligations existing at the time of his death, as well as those which have accrued thereto since the opening of the succession. In the present case, since Rufo lost ownership of the subject property during his lifetime, it only follows that at the time of his death, the disputed parcel of land no longer formed part of his estate to which his heirs may lay claim. Stated differently, petitioner and respondents never inherited the subject lot from their father.

Furthermore, petitioner's contention that he and his siblings intended to continue their supposed co-ownership of the subject property contradicts the provisions of the subject Extrajudicial Settlement where they clearly manifested their intention of having the subject property divided or partitioned by assigning to each of the petitioner and respondents a specific 1/3 portion of the same. Partition calls for the segregation and conveyance of a determinate portion of the property owned in common. It seeks a severance of the individual interests of each co-owner, vesting in each of them a sole estate in a specific property and giving each one a right to enjoy his estate without supervision or interference from the other. In other words, the purpose of partition is to put an end to co-ownership, an objective which negates petitioner's claims in the present case.

SPS. JESUS AND EMER FAJARDO vs. ANITA R. FLORES G.R. No. 167891 January 15, 2010 Nachura, J.:

Facts: Leopoldo delos Reyes owned a parcel of land located in Barangay Sumandig in Hacienda Buenavista, San Ildefonso, Bulacan. In 1963, he allowed petitioner Jesus Fajardo to cultivate said land. The net harvests were divided equally between the two until 1975 when the relationship was converted to leasehold tenancy. From the time petitioner cultivated the land, he was allowed by Leopoldo delos Reyes to erect a house for his family on the stony part of the land, which is the subject of controversy.

On January 26, 1988, Leopoldo delos Reyes died. His daughter and sole heir, herein respondent Anita Flores, inherited the property. On June 28, 1991, Anita Flores and Jesus Fajardo executed an agreement, denominated as “KASUNDUAN NG PAGHAHATI NG LUPA AT PAGTATALAGA NG DAAN UKOL SA MAGKABILANG PANIG followed by another agreement, “KASUNDUAN SA HATIAN SA LUPA,” executed on July 10, 1991, wherein the parties agreed to deduct from Lot No. 2351 an area of 10,923 sq m, allotting the same to petitioner. Apparently, there was a conflict of claims in the interpretation of the Kasunduan between Anita Flores and Jesus Fajardo, which was referred to the DAR, Provincial Agrarian Reform Office, Baliuag, Bulacan. The case was referred to the Department of Agrarian Reform Adjudication Board (DARAB), Malolos, Bulacan.

On December 22, 2000, a complaint for ejectment was filed by herein respondent Anita Flores, assisted by her husband Bienvenido Flores, against petitioners with the Municipal Trial Court (MTC), San Ildefonso, Bulacan.

Petitioners filed a Motion to Dismiss, alleging that Lot No. 2351, was agricultural land; that they had been continuously, uninterruptedly, and personally cultivating the same since 1960 up to the present; that the MTC had no jurisdiction over the case, considering that the dispute between the parties, regarding the Kasunduan, was referred to the DARAB; and that the assumption by the DARAB of jurisdiction over the controversy involving the lot in question therefore precluded the MTC from exercising jurisdiction over the case.

Resolving the Motion to Dismiss, the MTC ruled that, while at first glance, the court did not have jurisdiction over the case, considering that it was admitted that petitioner was allowed to cultivate the land, a closer look at the Kasunduan, however, revealed that what was divided was only the portion being tilled. By contrast, the subject matter of the complaint was the stony portion where petitioners’ house was erected. Thus, the court ruled that it had jurisdiction over the subject matter. On April 25, 2001, the MTC rendered judgment in favor of respondent.

On appeal, the Regional Trial Court (RTC), Branch 16, Third Judicial Region, Malolos, Bulacan, affirmed the MTC Decision in toto upon a finding that no reversible error was committed by the court a quo in its Decision dated August 29, 2002. On motion for reconsideration, however, the RTC issued an Order on December 10, 2002, reversing its decision dated August 29, 2002. The RTC found that the issue involved appeared to be an agrarian dispute, which fell within the contemplation of Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, and thus ordered the dismissal of the case for lack of jurisdiction.

A petition for review was then filed by respondents with the CA to annul the Order of the RTC dated December 10, 2002. On October 28, 2004, the CA rendered the assailed decision, which reinstated the MTC decision. It disagreed with the findings of the RTC and ruled that the part of Lot No. 2351 where petitioners’ house stood was stony and residential in nature, one that may not be made to fall within the ambit of the operation of Philippine agrarian laws, owing to its non-agriculture character. The subsequent motion for reconsideration was denied; hence, this petition.

Issue: Whether it is MTC or the DARAB which has jurisdiction over the case.

Held: We agree with the RTC when it clearly pointed out in its Order dated December 10, 2002 that the resolution of this case hinges on the correct interpretation of the contracts executed by the parties. The issue of who has a better right of possession over the subject land cannot be determined without resolving first the matter as to whom the subject property was allotted. Thus, this is not simply a case for unlawful detainer, but one that is incapable of pecuniary estimation, definitely beyond the competence of the MTC.

An agrarian dispute refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship, or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers’ associations or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowner to farmworkers, tenants, and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee. It relates to any controversy relating to, inter alia, tenancy over lands devoted to agriculture.

Undeniably, the instant case involves a controversy regarding tenurial arrangements. The contention that the Kasunduans, which allegedly terminated the tenancy relationship between the parties and, therefore, removed the case from the ambit of R.A. No. 6657, is untenable. There still exists an agrarian dispute because the controversy involves the home lot of petitioners, an incident arising from the landlord-tenant relationship.

Furthermore, the records disclose that the dispute between the parties, regarding the interpretation of the Kasunduan, was, in fact, raised and referred to the DAR, which in turn referred the case to the DARAB. In view of the foregoing, we reiterate Hilario v. Prudente, that:

The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction has initially been lodged with an administrative body of special competence. For agrarian reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in the Department of Agrarian Reform Adjudication Board (DARAB).

SPS. CARMEN and JOSE TONGSON vs. EMERGENCY PAWNSHOP BULA, INC. G.R. No. 167874 January 15, 2010 Carpio J.:

Facts: In may 1992, Napala offered to purchase from the spouses Tongson their 364-square meter parcel of land, situated in Davao City for P3,000,000.00. The spouses found the offer acceptable and executed with Napala a Memorandum of Agreement on May 8, 1992. Upong signing the Deed of Absolute Sale, Napala paid the spouses P200,000.00 in cash and issued a post-dated check in the amount of P2,800,000.00 representing the remaining balance of the purchase price of the subject property. When presented for payment, the PNB check was dishonored for insufficient funds. Despite the spouses Tongson’s repeated demands to either pay the full value of the check or to return the land, Napala failed to do either. The spouses filed with the RTC of Davao City a Complaint for Annulment of Contract and Damages with a Prayer for the Issuance of a Temporary Restraining Order and a Writ of Preliminary Injunction.

The trial court found that the purchase price of the subject property has not been fully paid and that Napala’s assurance to the Spouses Tongson that the PNB check would not bounce constituted fraud that induced the Spouses Tongson to enter into the sale. Without such assurance, the Spouses Tongson would not have agreed to the contract of sale. Accordingly, there was fraud within the ambit of Article 1338 of the Civil Code, justifying the annulment of the contract of sale, the award of damages and attorney’s fees, and payment of costs. Respondent appealed to the Court of Appeals.

The Court of Appeals agreed with the trial court’s finding that Napala employed fraud when he misrepresented to the Spouses Tongson that the PNB check in the amount of P2,800,000 would be properly funded at its maturity. However, the Court of Appeals found that the issuance and delivery of the PNB check and fraudulent representation made by Napala could not be considered as the determining cause for the sale of the subject parcel of land. Hence, such fraud could not be made the basis for annulling the contract of sale. Nevertheless, the fraud employed by Napala is a proper and valid basis for the entitlement of the Spouses Tongson to the balance of the purchase price in the amount of P2,800,000 plus interest at the legal rate of 6% per annum computed from the date of filing of the complaint on 11 February 1993.

The Spouses Tongson filed a partial motion for reconsideration which was denied by the Court of Appeals in its Resolution dated 10 March 2005. Hence, this petition for review before the SC.

Issue: Whether or not the contract of sale can be annulled based on the fraud employed by Napala.

Held: The petition has merit.

A contract is a meeting of the minds between two persons, whereby one is bound to give something or to render some service to the other. 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.

Under Article 1338 of the Civil Code, there is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to. In order that fraud may vitiate consent, it must be the causal (dolo causante), not merely the incidental (dolo incidente), inducement to the making of the contract. Additionally, the fraud must be serious.

We find 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 364-square meter Davao property to Napala who offered to pay P3,000,000 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 not 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 P3,000,000. In short, there was a meeting of the minds as to the object of the sale as well as the consideration therefor.

Some of the instances where this Court found the existence of causal fraud include: (1) when the seller, who had no intention to part with her property, was “tricked into believing” that what she signed were papers pertinent to her application for the reconstitution of her burned certificate of title, not a deed of sale; (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.

While they did not file an action for the rescission of the sales contract, the Spouses Tongson specifically prayed in their complaint for the annulment of the sales contract, for the immediate execution of a deed of reconveyance, and for the return of the subject property to them. The Spouses Tongson likewise prayed “for such other reliefs which may be deemed just and equitable in the premises.” In view of such prayer, and considering respondents’ substantial breach of their obligation under the sales contract, the rescission of the sales contract is but proper and justified. Accordingly, respondents must reconvey the subject property to the Spouses Tongson, who in turn shall refund the initial payment of P200,000 less the costs of suit.