GR 122611; (March, 2001) (Digest)
G.R. No. 122611 ; March 8, 2001
NAPOLEON H. GONZALES, petitioner, vs. HONORABLE COURT OF APPEALS AND SPOUSES GABRIEL AND LUZVIMINDA CABALLERO, respondents.
FACTS
Spouses Gabriel and Luzviminda Caballero, owners of two adjoining lots in Cubao (Lot 1, vacant; Lot 2, with their residence), obtained a loan secured by a mortgage on both lots. To pay the matured loan, they advertised for sale only Lot 1. Petitioner Napoleon Gonzales, introduced by a broker, offered to buy the property. The spouses agreed to sell Lot 1 for P470,000.00, with Gonzales paying the bank P375,000.00 to discharge the mortgage. Gonzales prepared a Deed of Absolute Sale covering only Lot 1, which the spouses signed.
Gonzales later demanded the execution of a deed and transfer of title for both lots, claiming the sale included their residential lot (Lot 2). The spouses refused, insisting the sale was for Lot 1 only. Gonzales filed a complaint for specific performance to compel the transfer of both titles.
ISSUE
Whether the contract of sale between the parties involved both Lots 1 and 2, or only Lot 1.
RULING
The Supreme Court ruled that the sale involved only Lot 1. In determining the parties’ intention, the Court examines the contemporaneous and subsequent acts surrounding the contract’s execution. The advertisement offered only Lot 1. The loan to be paid was P375,000.00, which exactly matched the amount Gonzales paid the bank. The Deed of Absolute Sale prepared by Gonzales himself expressly referred only to Lot 1. The Court found it implausible that the spouses would sell both lots, including their residence, for P470,000.00 when the advertised price for Lot 1 alone was approximately P576,150.00. The claim of an undervalued price for tax purposes was more consistent with a sale of only one lot. The testimony regarding a second deed was explained by the spouses as pertaining to a document with an undervalued price for tax purposes, not a sale of a second lot. The Court found no reversible error in the lower courts’ factual findings and affirmed the dismissal of the petition.