GR 127767; (January, 2002) (Digest)
G.R. No. 127767 ; January 30, 2002
NILO R. JUMALON, petitioner, vs. COURT OF APPEALS, HON. RUBEN D. TORRES, in his capacity as Executive Secretary, HOUSING AND LAND USE REGULATORY BOARD, and MA. ASUNCION DE LEON, respondents.
FACTS
On July 16, 1991, Ma. Asuncion De Leon purchased a house and lot from Nilo Jumalon under a Conditional Sales Agreement, later formalized by a Deed of Absolute Sale. De Leon paid a portion of the P500,000 price in cash and obtained a loan using the property as collateral. She later discovered the property was built directly beneath high-tension wires within a 30-meter right-of-way of the Manila Electric Company (MERALCO). An inquiry revealed MERALCO’s certification that construction in the area was prohibited as the 115,000-volt lines were hazardous to life and property. Further, Jumalon’s subdivision project was not registered with the HLURB, and he had no license to sell or development permit.
De Leon filed a complaint before the HLURB seeking rescission of the sale, alleging fraud and misrepresentation by Jumalon regarding the property’s safety, encumbrances, and his legal authority to sell. The HLURB Arbiter ruled in her favor, ordering rescission, refund of payments, and damages. This decision was affirmed by the HLURB Board of Commissioners and the Office of the President, which deleted the moral damages award. The Court of Appeals subsequently affirmed the decision.
ISSUE
The primary issues are whether the Court of Appeals erred in affirming the rescission of the contract and whether De Leon’s action to annul the sale had already prescribed.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court held that the factual findings of the lower tribunals, supported by substantial evidence, are conclusive. It found that Jumalon committed fraud in the sale. The property was rendered unsafe and uninhabitable due to its location directly beneath hazardous high-tension wires, a fact Jumalon misrepresented. This constituted a vitiation of consent under the Civil Code, warranting annulment. On the issue of prescription, the Court ruled the action was filed within the prescriptive period. De Leon filed the complaint with the HLURB on March 16, 1993, approximately one year and eight months after the July 1991 sale, well within the four-year period for actions based on fraud under Article 1391 of the Civil Code. Thus, the rescission was valid and timely.