Verceluz v. Edaño
REITERATIONFacts
The Antecedents: Plaintiffs sought to annul a deed of sale for a parcel of land, or to rescind it and compel the defendants to return the land and its fruits. The defendants claimed they purchased the land on October 11, 1914, had been in peaceful possession since, and that the plaintiffs had acknowledged the sale. The plaintiffs alleged fraud in the sale. Procedural History: The lower court rendered a decision decreeing the rescission of the sale and ordering the defendants to return the land and account for its fruits. The defendants appealed this decision. The Appeal: The defendants appealed, assigning errors related to the lower court's findings on the non-payment of the purchase price, the credibility of witnesses, the failure of certain individuals to testify, the decree of rescission, the finding of bad faith in possession, and the denial of a new trial. The appellees (plaintiffs) insisted the sale was void due to fraud, a claim the appellants argued could not be raised as they did not appeal the lower court's finding that the sale was valid.
Issue(s)
Whether the purchase price of the land was sufficiently paid by the defendants. Whether the sale should be rescinded due to non-payment of the purchase price. Whether the defendants are liable for the fruits of the land from the filing of the complaint.
Ruling
The Supreme Court affirmed the decision of the lower court, holding that the defendants failed to sufficiently prove the payment of the purchase price. Consequently, the rescission of the sale was upheld, and the defendants were ordered to return the land with its fruits, with the accounting retroacting to the date of the filing of the complaint.
Ratio Decidendi
On Issue 1: The Court found that the defendants failed to sufficiently prove the payment of the P3,000 purchase price. While the deed of sale acknowledged payment, the defendants admitted it was not paid on the date of execution (October 11, 1914) but claimed it was paid on March 19, 1915. However, against the testimony of the plaintiffs, corroborated by their witnesses, the defendants' claim of subsequent payment was not sufficiently substantiated. The Court noted that it was incumbent upon the defendants to prove this payment, and the evidence presented did not meet this burden. The fact that the lower court held the sale valid did not negate the plaintiffs' testimony regarding non-receipt of payment, as the rule of falsus in uno, falsus in omnibus is not invariable. On Issue 2: As a consequence of the failure to prove payment, the Court upheld the rescission of the sale. The defendants, as purchasers, violated their obligation to pay the purchase price. Under Articles 1506 and 1124 of the Civil Code, the vendors (plaintiffs) have the right to demand either payment of the price or rescission of the contract. Since payment was not sufficiently proven, rescission was the appropriate remedy. On Issue 3: The Court affirmed the order for the defendants to render an account of the fruits received from the land. As a consequence of the rescission, the defendants are bound to return the land with its fruits, as per Article 1295 of the Civil Code. This return must retroact to the date the action was instituted, meaning they must account for all fruits received from the filing of the complaint.
Main Doctrine
The Supreme Court reiterated that in a contract of sale, if the purchase price is not paid, the vendor has the right to demand either the payment of the price or the rescission of the contract, as provided for by Articles 1506 and 1124 of the Civil Code. Furthermore, the Court affirmed that upon rescission, the vendee is bound to return the property with its fruits, a consequence that retroacts to the date the action was instituted, in accordance with Article 1295 of the Civil Code.