Bar Q and A #27

a) The sale of the land to Juan is not valid, being contrary to law. Therefore, no transfer of ownership of the land was effected from the delinquent taxpayer to him. The original certificates of title obtained by Maria thru a free patent grant from the Bureau of Lands (under Chapter VII, CA 141) is valid but in view of her delinquency, the said title is subject to the right of the City Government to sell the land at public auction. The issuance of the OCT did not exempt the land from the tax sales. Section 44 of P.D. No. 1529 provides that every registered owner receiving a Certificate of Title shall hold the same free from all encumbrances, subject to certain exemptions.

b) Juan may recover because he was not a party to the violation of the law.

c) No, the sale did not divest Maria of her title precisely because the sale is void. It is as good as if no sale ever took place.

In tax sales, the owner is divested of his land initially upon award and issuance of a Certificate of Sale, and finally after the lapse of the 1 year period from date of registration, to redeem, upon execution by the treasurer of an instrument sufficient in form and effects to convey the property. Maria remained owner of the land until another tax sale is to be performed in favor of a qualified buyer.

The sale of the land by A to B 3 years after issuance of the homestead patent, being in violation of Section 118 of the Public Land Act, is void from its inception. The action filed by the heirs of B to declare the nullity or inexistence of the contract and to recover the land should be given due course.

B’s defense of prescription is untenable because an action which seeks to declare the nullity or inexistence of a contract does not prescribe. (Article 1410; Banga v. Soler, 2 SCRA 755)

On the other hand, B’s defense of pari delicto is equally untenable. While as a rule, parties who are in pari delicto have no recourse against each other on the principle that a transgressor cannot profit from his own wrongdoing, such rule does not apply to violations of Section 118 of the Public Land Act because of the underlying public policy in the said Act “to conserve the land which a homesteader has acquired by gratuitous grant from the government for himself and his family”. In keeping with this policy, it has been held that one who purchases a homestead within the five-year prohibitory period can only recover the price which he has paid by filing a claim against the estate of the deceased seller. (Labrador vs. Delos Santos 66 Phil. 579) under the principle that no one shall enrich himself at the expense of another. Applying the pari delicto rule to violations of Section 118 of the Public Land Act, the Court of Appeals has ruled that “the homesteader suffers the loss of the fruits realized by the vendee who in turn forfeits the improvement that he has introduced into the land”. (Obot vs. Sandadlillas, 62 OG, April 25, 1966)

a. The contract of sale is voidable, because Lana is a minor, and is thus incapable of giving consent to a contract.

b. The contract of sale is void, because its object, the Philippine sea, is outside the commerce of men.

Alternative answer: (b) the contract of sale is void under Article 1306 of the Civil Code because it is against public policy.

Another alternative answer: (b) The contract of sale is void as it is prohibited by a treaty, which is considered binding law in the Philippines.

[Note: Under Article 137 of the UNCLOS, the Philippine Sea is governed by the following mandates: xxx (b) No State or natural or juridical person shall appropriate any part thereof. xxx].

c. The contract unenforceable, because both parties, being minors, are incapable of givingconsent.

d. The contract is valid and may not be annulled by either party due to the ratification by the parents of Barri and Garri, if done while both were still minors. Ratification extinguishes the action to annul a voidable contract, or an unenforceable contract, as in this case were both parties were minors and may be done by the parents, as guardians of the minor children. [Article 1407, NCC]

e. The contract is rescissible because it is in fraud of creditors. [Article 1381, NCC]

Civil obligation is a juridical necessity to give, to do and not to do. It gives the creditor the legal right   to   compel   by   an   action   in   court   the performance of such obligation.

A natural obligation is based on equity and natural law. There is no legal right to compel performance thereof but if the debtor voluntarily pays it, he cannot recover what was paid.

a. Renren's action to recover possession of the land will prosper. In 1965, after buying the land from Robyn, he submitted the Deed of Sale to the Registry of Deeds for registration together with the owner's duplicate copy of the title, and paid the corresponding registration fees. Under Sec.
56 of PD No. 1529, the Deed of Sale to Renren is considered registered from the time the sale was entered in the Day Book (now called the Primary Entry Book). For all legal intents and purposes, Renren is considered the registered owner of the land. After all, it was not his fault that the Registry of Deeds could not issue the corresponding transfer certificate of title. Mikaelo's defense of prescription cannot be sustained. A Torrens title is imprescriptible. No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. (Sec. 47, P.D. No. 1529) The right to recover possession of registered land likewise does not prescribe because possession is just a necessary incident of ownership.

b. Mikaelo's defense of laches, however, appears to be more sustainable. Renren bought the land and had the sale registered way back in 1965. From the facts, it appears that it was only in 1998 or after an inexplicable delay of 33 years that he took the first step asserting his right to the land.

It was not even an action to recover ownership but only possession of the land. By ordinary standards, 33 years of neglect or inaction is too long and may be considered unreasonable. As often held by the Supreme Court, the principle of imprescriptibility sometimes has to yield to the equitable principle of laches which can convert even a registered land owner's claim into a stale demand. Mikaelo's claim of laches, however, is weak insofar as the element of equity is concerned, there being no showing in the facts how he entered into the ownership and possession of the land.

a. No, the defense will not prosper. The problem did not give facts from which laches may be inferred. Mere delay in filing an action, standing alone, does not constitute laches. (Agra v. PNB, G.R. No. 133317, June 29, 1999)

b. The four basic elements of laches are:

1. Conduct on the part of the defendant or of one under whom he claims, giving rise to the situation of which complainant seeks a remedy;

2. Delay in asserting the complainant’s rights, the complainant having had knowledge or notice of the defendant’s conduct and having been afforded an opportunity to institute suit;

3. Lack of knowledge on the part of the defendant that the complainant would assert the right on which he bases his suit; and

4. Injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred.

A. LACHES means failure or neglect, for an unreasonable and unexplained length of time, to do what, by exercising due diligence, could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time (De Vera v. CA, G.R. No. 97761, April 14, 1999).

B. While Art. 1413 of the Spanish Civil Code did not require the consent of the wife for the validity of the sale, an alienation by the husband in fraud of the wife is void as held in Uy Coque v. Navas (G.R. No. L-20392, November 20, 1923). Assuming that the alienation in 1948 was in fraud of Winda and, therefore, makes the sale to Verde void, the action to set aside the sale, nonetheless, is already barred by prescription and laches. More than 52 years have already elapsed from her discovery of the sale in 1950.

A. Bert’s action for specific performance will prosper because there was a binding agreement of sale, not just an option contract. The sale was perfected upon acceptance by Simeon of 10% of the agreed price. This amount is in really earnest money which, under Art. 1482, “shall be considered as part of the price and as proof of the perfection of the contract”. (Topacio v. CA, G.R. No. 102606, July 3, 1992; Villongco Realty v. Bormaheco, G.R. No. L- 26872, July 25,1975)

B. Simeon cannot justify his refusal to proceed with the sale by the fact that the deal is financially disadvantageous to him. Having made a bad bargain is not a legal ground for pulling out a binding contract of sale, in the absence of some actionable wrong by the other party (Vales v. Villa, G.R. No. 10028, December 16, 1916) and no such wrong has been committed by Bert.

1) The suit will prosper. The sale was void because Linda did not give her written consent to the sale. In Jade-Manalo v. Camaisa, 374 SCRA 498 (2002), the Supreme Court has ruled that the sale of conjugal property is void if both spouses have not given their written consent to it and even if the spouse who did not sign the Deed of Sale participated in the negotiation of the contract. In Abalos v. Macatangay, 439 SCRA 649 (2004), the Supreme Court even held that for the sale to be valid, the signatures of the spouses to signify their written consent must be on the same document. In this case, Linda, although she was the one who negotiated the sale, did not give her written consent to the sale. Hence, the sale is void. However, Linda will not be entitled to damages because Ray is not in any way in bad faith.

2) Yes, Ray has a cause of action against Linda and Biong for the return of the 2 million pesos he paid for the property. He may recover damages from the spouses, if it can be proven that they were in bad faith in backing out from the contract, as this is an act contrary to morals and good customs under Articles 19 and 21 of the Civil Code.

No, Alice and Bernadette did not enter into a contract of sale over the lot covered by TCT No. 12345. In a contract of sale, the ownership passes to the vendee upon delivery of the thing sold. Here, the title passes only upon full payment of the purchase price, which is a hallmark of a contract to sell, and not of a contract of sale. Hence, Alice and Bernadette did not enter into a contract of sale.