GR 151035; (June, 2004) (Digest)
G.R. No. 151035 ; June 3, 2004
ANDREA MAYOR and VERGEL ROMULO, petitioners, vs. LOURDES MASANGKAY BELEN and LEONARDO BELEN, respondents.
FACTS
Respondent Lourdes Belen purchased a parcel of land from petitioner Andrea Mayor for P18,000.00, paying P11,445.00 and leaving a balance. Subsequently, on June 17, 1980, Lourdes executed a Kasulatan ng Bilihang Tuluyan (Deed of Absolute Sale) selling the property back to Mayor for P18,000.00. Two days later, Mayor executed a Kasulatan ng Sanglaan (Real Estate Mortgage) over the same property in favor of Lourdes to secure a P12,000.00 loan. Lourdes and Leonardo Belen later filed suits seeking the annulment of these contracts.
The respondents alleged that petitioners, through co-petitioner Vergel Romulo, employed fraud and undue influence. They claimed Romulo made Lourdes believe the original sale to her was void due to a discrepancy between the installment payments made and the cash term stated in the deed, and that she might lose her prior payments. She was induced to agree to a scheme presented as protective—the repurchase and mortgage—which was in fact a ruse to defraud her and reacquire the property.
ISSUE
Whether the execution of the Kasulatan ng Bilihang Tuluyan and Kasulatan ng Sanglaan was vitiated by fraud.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ rulings, finding the contracts void due to fraud. Under Article 1338 of the Civil Code, fraud exists when insidious words or machinations induce a party to enter a contract they otherwise would not have agreed to. The Court found the respondents’ version credible and supported by evidence. Lourdes, having already paid a substantial portion (70%) of the purchase price, had no logical reason to voluntarily sell the property back and then immediately loan money secured by the same property. This unnatural sequence indicated deception.
The petitioners’ defense was weak and inconsistent. Mayor’s claim that she needed the P18,000.00 from the repurchase to pay a debt was contradicted by her simultaneous act of borrowing P12,000.00 from Lourdes. Furthermore, the failure to present Romulo as a witness, the alleged mastermind, was taken against the petitioners given the circumstances. The factual findings of the trial court and the Court of Appeals, which found clear and convincing evidence of insidious machinations, are conclusive. The fraud was serious enough to have misled an ordinarily prudent person, thus vitiating Lourdes Belen’s consent and rendering the contracts voidable.