Salame v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioners are the heirs of Vicenta Acevedo, who, along with private respondents (spouses Atila Balgos and Teodorica Asis), were co-owners of an agricultural land. Vicenta executed a "Contract of Sale of Undivided Share by Installment with Right of Repurchase" on her share for P5,300.00, with a right to repurchase within eight years, extendible by two years. Subsequently, Vicenta executed a "Deed of Absolute Sale" for her share for P9,000.00. Later, the respondent spouses executed a "Promise to Sell" their 1/2 portion to Vicenta within 1973-1974. Vicenta died in 1968. In December 1974, petitioners attempted to repurchase the property for P9,000.00, but the respondents refused, claiming absolute ownership. Procedural History: Petitioners filed a complaint for "Reconveyance and Damages" against the private respondents. The Regional Trial Court (RTC) dismissed both the complaint and the counterclaim for lack of merit. The Court of Appeals (CA) affirmed the RTC's decision in toto. The Petition: Petitioners seek review of the CA's decision, contending that the three transactions were a single transaction constituting an equitable mortgage, citing Article 1604 in relation to Article 1602 of the Civil Code, and that the "Promise to Sell" was a valid extension of the right to repurchase.
Issue(s)
Whether the three transactions between Vicenta Acevedo and the spouses Balgos constitute a single transaction presumed to be an equitable mortgage under Article 1602 of the Civil Code. Whether the "Promise to Sell" (Exhibit "C") is a valid and enforceable unilateral promise to sell under Article 1479 of the Civil Code.
Ruling
The petition is denied, and the decision of the Court of Appeals is affirmed in toto.
Ratio Decidendi
On the issue of equitable mortgage: The Court found the petitioners' contention unmeritorious. It held that the three documents (Exhibits "A," "B," and "C") were separate and independent transactions, despite referring to the same property. Notarial documents enjoy a presumption of regularity, and to contradict them, evidence that is clear, convincing, and more than merely preponderant is required. The records did not show even a preponderance of evidence to support the claim that the transactions constituted a single equitable mortgage. The Court emphasized that a notarial document is evidence of the facts expressed therein, and no evidence was presented to prove the parties' intention to enter into an equitable mortgage agreement beyond the documents themselves. Furthermore, the Parol Evidence Rule dictates that written agreements are presumed to contain all terms, and no evidence of other terms can be admitted unless specific exceptions apply, none of which were met here. On the enforceability of the "Promise to Sell" (Exhibit "C"): The Court ruled that Exhibit "C" was a unilateral promise to sell governed by Article 1479 of the Civil Code. This article requires that for a unilateral promise to be binding, it must be supported by a consideration distinct from the price. The record showed that Exhibit "C" was unilaterally executed by the private respondents without Vicenta's participation. Crucially, it did not indicate a selling price nor did it show that the promise was supported by a separate consideration. The Court reiterated the principle that the promisee bears the burden of proving the existence of such distinct consideration. As Exhibit "C" failed to meet these requirements, petitioners could not enforce the promise to sell.
Main Doctrine
A unilateral promise to sell, to be binding, must be supported by a consideration distinct from the price, and the burden of proving such consideration rests upon the promisee. Furthermore, notarial documents are presumed to be regular and require clear and convincing evidence to contradict their terms.