G.R. No. 44169; July 16, 1937
GUILLERMO PUATO Y CONSTANTINO, plaintiff-appellee, vs. FILOMENA MENDOZA and VALENTIN DAVID, defendants-appellants.

FACTS

Guillermo Puato sold a 370-hectare land to Filomena Mendoza and Valentin David for P39,000. The buyers paid P1,500 upon execution of the deed of sale, with the balance of P37,500 secured by a mortgage on the same property, payable in installments. The defendants paid only P12,700 of the mortgage debt. Puato filed an action for foreclosure. The defendants claimed the sale and mortgage contracts were void for lack of cause or consideration, and sought rescission based on alleged deceit, arguing Puato misrepresented the land as “good” when they later found it to be of poor quality. They also filed a counterclaim for improvements made.

ISSUE

1. Whether the deeds of sale and mortgage are null and void for lack of cause or consideration.
2. Whether the contracts should be rescinded on the ground of deceit.

RULING

1. No. The contracts are valid. The cause or consideration in the sale is the stipulated price of P39,000, and in the mortgage, the unpaid balance of P37,500. The sale was perfected upon mutual consent and partially executed with the payment and transfer of title, making it absolute and irrevocable. Non-payment of the full price does not negate the existence of a cause.
2. No. Rescission is not warranted. The plaintiff’s representation that the land was “good” did not constitute the serious deceit required under Article 1270 of the Civil Code for annulment. The land was found to be second-class, which cannot be considered poor. The defendants, as purchasers, had the duty to inspect the land before buying it, especially since the plaintiff himself had never seen it. The judgment of the lower court ordering the defendants to pay the unpaid balance of P24,800 with interest and authorizing foreclosure upon non-payment was affirmed.

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