Bautista v. Lasam
REITERATIONFacts
The Antecedents: Gabriel Lasam (deceased) sold a parcel of land to Felix B. Bautista and Melquiades B. Bautista for P8,000. The land was stated to have an area of 2,130 hectares. The buyers alleged that they were to pay P2,000 in May 1930 and P6,000 in May 1932, plus 12% annual interest and 25% attorney's fees. The buyers claimed that only 1,445 hectares were registered in their name, and they sought a reduction in price for the remaining 671 hectares, which they alleged were not registered in their name and amounted to P5,576.01. Procedural History: The original seller, Gabriel Lasam, filed a complaint for the collection of the unpaid balance of the purchase price. The Court of First Instance of Cagayan ruled in favor of the seller, ordering the buyers to pay P7,257 plus interest and 10% attorney's fees. The buyers appealed to the Court of Appeals, raising issues regarding the land's area, the unregistered portion, the amount awarded, and attorney's fees. The Court of Appeals affirmed the decision of the Court of First Instance. The Petition: The buyers (Bautistas) filed a petition for certiorari with the Supreme Court, alleging that the Court of Appeals erred in interpreting Articles 1471, 1475, and 1478 of the Civil Code.
Issue(s)
Whether the petitioners are entitled to a reduction of the purchase price under Article 1471 of the Civil Code due to the area discrepancy. Whether the seller is liable for the warranty against eviction (saneamiento) regarding the 671 hectares that were not registered.
Ruling
The Supreme Court denied the petition, affirmed the decision of the Court of Appeals, and ordered the petitioners to pay the costs.
Ratio Decidendi
On Issue 1: The Court ruled that the sale was made for a lump sum (precio alzado) and not based on a price per unit of measure. Applying Article 1471 of the Civil Code, in such sales, there is no increase or decrease in the price regardless of whether the actual area is greater or less than stated, as long as the land delivered is that which is comprised within the boundaries (linderos) designated in the contract. The Court of Appeals found as a fact that the buyers took possession of the entire area within the boundaries and remain in possession thereof. Since the buyers are in possession of the actual physical land they intended to buy, the fact that the actual measurement was less than the estimate in the deed does not justify a price reduction. Furthermore, the buyers, being lawyers, drafted the contract themselves and were fully aware of the nature of the property and its boundaries. On Issue 2: The Court held that the claim for warranty against eviction (saneamiento) must fail because the legal requirements were not met. Under Article 1475, eviction occurs only when the buyer is deprived of the thing sold by a final judgment. In this case, the petitioners were never deprived of the 671 hectares; they remained in physical possession of the land even though they failed to obtain a Torrens title for it. Moreover, Articles 1481 and 1482 require that the seller be formally notified of the eviction suit at the instance of the buyer as a condition precedent to holding the seller liable for the warranty. Citing Jovellano v. Lualhati (47 Phil. 392), the Court emphasized that without this notification, the seller is not obligated to the warranty. Here, the seller was not even a party to the registration case nor was he notified of the adverse proceedings in a manner that would trigger his liability for saneamiento.
Main Doctrine
The seller is not liable for eviction if the buyer is not deprived of the property by a final judgment based on a prior right, and if the seller was not properly notified of the eviction suit. Furthermore, in a sale of real property for a lump sum ('precio alzado') with stated boundaries, the seller is obligated to deliver all that is included within those boundaries, even if it exceeds the stated area, but the buyer cannot claim a reduction in price if the excess is not substantial and the contract is not annulled.