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August 16, 2014

Modina vs. CA

Facts:
  • This case involves parcels of land registered under the name of Ramon Chiang.
  • Chiang theorized that  the subject properties were sold to him by his wife, Merlinda Plana Chiang as evidenced by a Deed of Sale and were subsequently sold by Chiang to the petitioner Serafin Modina. (Dates of sale:August 3, 1979 and August 24, 1979, respectively.)
  • Modina brought a Complaint for Recovery of Possession with Damages against the private respondents before the RTC.
  • Upon learning the institution of the said case, Merlinda presented a Complaint-in-intervention, seeking the declaration of nullity of the Deed of Sale between her husband and MODINA on the ground that the titles of the parcels of land in dispute were never legally transferred to her husband. 
  • She contended that fraudulent acts were allegedly employed by her husband to obtain a Torrens Title in his favor.  However, she confirmed the validity of the lease contracts with the other private respondents.
  • MERLINDA also admitted that the said parcels of land were those ordered sold by the CFI of Iloilo in “Intestate Estate of Nelson Plana” where she was appointed as the administratix, being the widow of the deceased, her first husband.  An Authority to Sell was issued by the said Probate Court for the sale of the same properties.
  • RTC ruled in favor of the wife Merlinda declaring the two sales in August 1979 as void and inexistent. 
  • Upon appeal, the CA affirmed in toto the RTC ruling.



Issues: 
1. WON the sale of subject lots should be nullified. YES
2. WON petitioner Modina was a purchaser in good faith. NO

Held: 

1st issue: The sale of the subject lots should be nullified

Prohibition of sale between spouses
Art. 1490.  The husband and the wife cannot sell property to each other, except:
(1)  when a separation of property was agreed upon in the marriage settlements; or
(2)  when there has been a judicial separation of property under Art. 191.

The sale between Chiang spouses was null and void. The ownership of the lot did not transfer to Ramon Chiang. Hence, the sale to Modina was null and void.
The exception to the rule laid down in Art. 1490 of the New Civil Code not having existed with respect to the property relations of Ramon Chiang and Merlinda Plana Chiang, the sale by the latter in favor of the former of the properties in question is invalid for being prohibited by law.  Not being the owner of subject properties, Ramon Chiang could not have validly sold the same to plaintiff Serafin Modina.  The sale by Ramon Chiang in favor of Serafin Modina is, likewise, void and inexistent. Serafin Modina is, likewise, void and inexistent. 

A contract of sale without consideration is a void contract
Under Article 1409of the New Civil Code, enumerating void contracts, a contract without consideration is one such void contract.  One of the characteristics of a void or inexistent contract is that it produces no effect.  So also, inexistent contracts can be invoked by any person whenever juridical effects founded thereon are asserted against him.  A transferor can recover the object of such contract by accion reivindicatoria and any possessor may refuse to deliver it to the transferee, who cannot enforce the transfer.

Thus, Modina’s insistence that Merlinda cannot attack subject contract of sale as she was a guilty party thereto is equally unavailing. 

Merlinda can recover the property
Since one of the characteristics of a void or inexistent contract is that it does not produce any effect, MERLINDA can recover the property from petitioner who never acquired title thereover.

Records show that in the complaint-in-intervention of MERLINDA, she did not aver the same as a ground to nullify subject Deed of Sale.  In fact, she denied the existence of the Deed of Sale in favor of her husband.  In the said Complaint, her allegations referred to the want of consideration of such Deed of Sale.  She did not put up the defense under Article 1490, to nullify her sale to her husband CHIANG because such a defense would be inconsistent with her claim that the same sale was inexistent.

2nd issue: Modina was not a purchaser in good faith

There are circumstances which are indicia of bad faith on Mondina’s part
(1)  He asked his nephew, Placido Matta, to investigate the origin of the property and the latter learned that the same formed part of the properties of MERLINDA’s first husband; 
(2)  that the said sale was between the spouses; 
(3) that when the property was inspected, MODINA met all the lessees who informed that subject lands belong to MERLINDA and they had no knowledge that the same lots were sold to the husband.

It is a well-settled rule that a purchaser cannot close his eyes to facts which would put a reasonable man upon his guard to make the necessary inquiries, and then claim that he acted in good faith.  His mere refusal to believe that such defect exists, or his wilful closing of his eyes to the possibility of the existence of a defect in his vendor’s title, will not make him an innocent purchaser for value, if it afterwards develops that the title was in fact defective, and it appears that he had such notice of the defect as would have led to its discovery had he acted with that measure of precaution which may reasonably be required of a prudent man in a like situation.

REFERENCE:
G.R. No. 109355. October 29, 1999] SERAFIN MODINA, petitioner vs. COURT OF APPEALS AND ERNESTO HONTARCIEGO, PAUL FIGUEROA, TEODORO HIPALLA AND RAMON CHIANG, MERLINDA CHIANG, respondents.

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