Teran v. Villanueva
REITERATIONFacts
The Antecedents: The parties executed a deed of sale for a parcel of land described as containing 34 hectares, 52 ares, and 43 centares for P4,000. The defendants inherited this land, and its area was reflected in a tax declaration provided to the plaintiff. An agent of the defendants accompanied the plaintiff to inspect the land, pointing out some boundaries. The plaintiff, without further investigation into the exact area, agreed to the purchase and paid the sum, taking possession. Procedural History: The plaintiff filed an action for rescission of the contract with damages, alleging that the land contained only about ten hectares, not the stated 34 hectares. The trial court found no evidence of bad faith on the part of the defendants. The Petition: The plaintiff sought to rescind the contract due to the alleged deficiency in the land's area.
Issue(s)
Whether the sale of the land was for a lump sum (cuerpo cierto) or at a rate per unit of measure. Whether the significant deficiency in area (from 34 hectares to 10 hectares) entitles the vendee to rescission of the contract.
Ruling
The Supreme Court reversed the judgment of the lower court, holding that the contract of sale is valid and binding. The defendants were absolved from the complaint without special pronouncement of costs.
Ratio Decidendi
On Issue 1: The Court held that the transaction was clearly a sale of real estate for a lump sum and not at so much per unit of measure, as provided for in Article 1471 of the Civil Code. It noted that the deed of sale (Exhibit A) described the land by its area and boundaries for a single, total price of P4,000, without any indication that the price was calculated per hectare. Applying the commentaries of Manresa and Scaevola, the Court explained that in a lump sum sale, the cause of the contract is the thing sold (the 'cuerpo cierto') irrespective of its exact area or quantity. The Court emphasized that if the plaintiff had intended to purchase the land based on a specific unit price, such a stipulation should have been included in the written agreement. Consequently, the Civil Code presumes the purchaser had a determined piece of land in mind and accepted the transaction regardless of the exactness of the stated area. On Issue 2: The Court ruled that the vendee was not entitled to rescission because he failed to prove that the vendor failed to deliver any portion of the land included within the boundaries stated in the contract. Under Article 1471, the only ground for rescission or price reduction in a lump sum sale is the vendor's inability to deliver all that is comprised within the stipulated boundaries. Although the area was found to be only 10 hectares instead of 34, the plaintiff did not establish that any land within the boundaries mentioned in the deed remained undelivered. Furthermore, following the doctrine in Songco v. Sellner and Azarraga v. Gay, the Court held that a buyer who has the opportunity to inspect and verify the property's characteristics but fails to do so acts at his own peril. The Court concluded that misrepresentations regarding area do not vitiate the transaction when a correct description of boundaries is provided and the purchaser is not prevented from making a full investigation.
Main Doctrine
In a sale of real estate for a lump sum with area and boundaries given, the rule is that there shall be no increase or decrease in price even if the area is found to be more or less than that stated in the contract, provided the vendor delivers all that is included within the boundaries. However, if the vendor cannot deliver all that is included within the boundaries, the vendee has the option to reduce the price or rescind the contract. The presumption is that the purchaser ascertained the area and quality before the contract, and reliance on seller's statements without independent investigation is at the buyer's peril.