Conculada v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioners Brigida Conculada, Paciano Garcia, Jr., et al. are involved in a dispute over Lot 4, one of two parcels of land co-owned by the Garcia heirs. Private respondents, spouses Kimtoy Jamaani-Wee and Tian Su Wee, were tenants occupying portions of these lots and were informed of their preferential right to buy the portions they occupied. Procedural History: Private respondents filed a complaint for annulment of sale, cancellation of deed of donation, specific performance, and damages against petitioners, alleging violation of their right of first refusal over Lot 4. The Regional Trial Court (RTC) initially dismissed the complaint. The Court of Appeals (CA) reversed the RTC's dismissal and remanded the case for further proceedings. This Court denied petitioners' petition for certiorari. After trial, the RTC rendered a decision declaring the deed of extrajudicial settlement, deed of sale to Conculada, and deed of donation void, and ordered the execution of a deed of conveyance in favor of private respondents, along with damages. The CA affirmed the RTC decision. The Petition: Petitioners seek review of the CA decision, questioning the fate of the P455,000 paid by Brigida Conculada, the legal basis for voiding the sale and donation, the implementation of the order to execute a deed of conveyance, and who has a better right to Lot 4.
Issue(s)
Whether the P455,000 paid by petitioner Brigida Conculada to the Garcia heirs for Lot 4 was accounted for and to whom it should be paid. Whether the decision declaring the deed of extrajudicial settlement, deed of sale to Conculada, and deed of donation void is tenable. Whether the decision ordering petitioners Garcia, Jr. and Borja to execute a deed of conveyance in favor of private respondents and collect the consigned purchase price can be legally implemented. Between petitioners spouses Brigida and Lee Kang and their children, and respondents spouses Kimtoy Jamaani-Wee and Tian Su Wee, who has a better right to Lot 4, and who suffered damages.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, upholding the preferential right of private respondents to purchase Lot 4. The Court recognized petitioner Brigida Conculada's right to restitution of the P455,000 purchase price, ordering that the amount consigned by private respondents be used for this purpose once the deed of conveyance is executed in favor of private respondents. The orders for cancellation of title and payment of damages were maintained.
Ratio Decidendi
On the P455,000 paid by petitioner Brigida Conculada: The Court clarified that while the sale to Conculada was declared null and void for violating the right of first refusal, it was a rescissible contract. Conformably with Article 1385 of the Civil Code, the purchase price must be restored to the buyer. Therefore, petitioner Conculada is entitled to restitution of the P455,000 she paid. To facilitate this, the amount consigned by private respondents with the RTC can be utilized for restitution once the deed of conveyance is executed in favor of private respondents. On the annulment of the Deed of Extrajudicial Settlement, Deed of Sale, and Deed of Donation: The Court found the annulment tenable. The decision of the Court of Appeals upholding the right of first refusal of private respondents had already become final and executory, establishing res judicata. The sale to Conculada was a violation of this right, making it rescissible. The Extrajudicial Settlement of Estate, to the extent that it affected private respondents' right to Lot 4, was deemed inoperative and thus null and void, as it should not stand in the way of their preferential right. On the implementation of the deed of conveyance and collection of purchase price: The Court affirmed the order for petitioners Garcia, Jr. and Borja to execute a deed of conveyance in favor of private respondents. The purchase price of P455,000, which private respondents had consigned with the RTC, was ordered to be collected by the sellers (Garcia, Jr. and Borja or their representatives) and then used for the restitution of the P455,000 paid by petitioner Conculada. This ensures that the private respondents fulfill their obligation while Conculada receives back her payment. On who has a better right to Lot 4 and damages: The Court reiterated that the private respondents' right to buy Lot 4 had become final and executory through res judicata. The petitioners' insistence on waiver due to inaction was found untenable, as the delay was considered reasonable given the amount involved and the need for caution. The appellate court's findings, affirmed by this Court, bind the parties. Consequently, the private respondents have the better right to Lot 4, and the award of damages, attorney's fees, and litigation expenses to them was maintained.
Main Doctrine
A contract of sale entered into in violation of a right of first refusal is rescissible, entitling the buyer to restitution of the purchase price once the sale is set aside.