Archipelago Management and Marketing Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: The case involves a property dispute over a parcel of land titled in the name of Rosalina Santos-Morales. Rosalina, widowed, married Emeterio Morales, also a widower. Emeterio's son, Narciso Morales, is the president of petitioner Archipelago Management and Marketing Corporation. Emeterio allegedly took Rosalina's owner's duplicate certificate of title under the pretext of applying for its reconstitution after the Quezon City Hall fire. He then allegedly convinced Rosalina to sign documents, one of which turned out to be a Deed of Absolute Sale dated May 3, 1989, purportedly selling the property to petitioner for P1,200,000.00. A new title was issued to petitioner. Rosalina and Emeterio continued to reside in the property, and Rosalina entered into a lease contract for the buildings and continued paying realty taxes. Procedural History: Rosalina, through her daughter Lydia Trinidad, filed a Complaint for Annulment of Contract with Damages against petitioner, denying the sale and alleging fraud and deceit in obtaining her signature. She claimed she never received the consideration and that her signature was obtained by her husband and stepson. She also pointed to irregularities in the deed, such as an expired residence certificate and a notary public not commissioned for the term. Rosalina died during the proceedings, and her heirs were substituted as plaintiffs. The Regional Trial Court (RTC) dismissed the complaint. The Court of Appeals (CA) initially affirmed the RTC decision but, upon private respondents' Motion for Reconsideration, issued an Amended Decision reversing its prior ruling and annulling the Deed of Absolute Sale. The CA denied petitioner's subsequent Motion for Reconsideration. The Petition: Petitioner seeks to set aside the CA's Amended Decision and Resolution, arguing that the CA erred in reversing its original decision based on a motion for reconsideration that allegedly did not raise new and substantial issues.
Issue(s)
Whether the Court of Appeals committed a reversible error in reversing its original decision and the decision of the Regional Trial Court by annulling the Deed of Absolute Sale on a mere motion for reconsideration which did not raise new and substantial issues. Whether fraud vitiated the consent of Rosalina Santos-Morales when she affixed her signature on the questioned Deed of Absolute Sale. Whether the Court of Appeals committed reversible error in ruling that the signature of Rosalina was fraudulently obtained.
Ruling
The petition is denied for lack of merit. The assailed Amended Decision dated January 28, 1997, and Resolution dated April 23, 1997, of the Court of Appeals are affirmed.
Ratio Decidendi
On the propriety of the Motion for Reconsideration: The Court ruled that the Court of Appeals did not err in granting private respondents' Motion for Reconsideration. Rule 9 of the Revised Internal Rules of the Court of Appeals requires only that a motion for reconsideration state the material dates and the grounds relied upon, allowing the appellate tribunal to correct possible errors. In this case, the motion alleged newly discovered evidence, specifically the holographic will of Rosalina, which was not a mere rehash of previous arguments. More importantly, the reversal of the original decision was justified by the subsequent findings of fraud. On whether fraud vitiated the consent of Rosalina Santos-Morales: The Court affirmed the Court of Appeals' finding that fraud vitiated Rosalina's consent, thereby annulling the Deed of Absolute Sale. A contract requires the concurrence of consent, object, and cause, and consent may be vitiated by mistake, violence, intimidation, undue influence, or fraud (dolo causante). The Court found causal fraud demonstrated by several facts: (1) Emeterio Morales misrepresented his need for the owner's duplicate certificate of title, claiming it was for reconstitution when it was used for the sale; (2) Rosalina was tricked into believing she was signing documents for title reconstitution, not a deed of sale; (3) there was no apparent economic need for Rosalina to sell her property; (4) the Deed of Sale contained an expired residence certificate of Rosalina, while a new one had been issued and used for a subsequent lease contract, indicating Rosalina likely did not appear before the notary; (5) the notary public who notarized the deed was not commissioned for the term; (6) there was no substantial proof of payment of the P1,200,000.00 consideration, and Rosalina's bank records did not show any increase; (7) Rosalina continued to exercise acts of ownership, such as entering into a lease contract and paying realty taxes, even after the alleged sale; and (8) Rosalina immediately repudiated the deed upon learning of it and filed an affidavit of adverse claim and the complaint for annulment. The Court found petitioner's version of events, including the alleged cash payment, implausible. On whether the Court of Appeals committed reversible error in ruling that Rosalina's signature was fraudulently obtained: The Court found no reversible error. The circumstances overwhelmingly demonstrated causal fraud. Rosalina had no intention to sell her property and had no reason to do so. Her subsequent actions confirmed her lack of knowledge of the sale, and she considered herself the absolute owner. Petitioner, conversely, presented no evidence of ownership or challenge to Rosalina's dominion after the alleged sale. The Court reiterated that fraud, while not presumed, can be inferred from circumstantial evidence, and the series of acts committed by petitioner and Emeterio Morales pointed to a fraudulent scheme to obtain Rosalina's signature.
Main Doctrine
Fraud vitiates consent when a party is induced to enter into a contract through insidious words or machinations, without which consent would not have been given (dolo causante). Circumstantial evidence, including misrepresentation in obtaining the certificate of title, irregularities in notarization, subsequent acts of ownership by the original owner, and immediate disavowal of the deed, can establish such fraud.