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ESTATE OF PEDRO C. GONZALES v. HEIRS OF MARCOS PEREZ

FACTS:

The instant case involves a petition for review on certiorari seeking to nullify the decision of the Court of Appeals (CA) and its resolution. The former Municipality of Marikina owns a parcel of land which was subdivided into three lots. The Municipal Council authorized the sale of Lots A and C through public bidding. Pedro Gonzales emerged as the highest bidder and the bid was accepted by the Municipal Council. A deed of sale was executed in favor of Pedro, but it was not acted upon by the Provincial Governor.

Pedro later sold a portion of Lot C to Marcos Perez. Pedro and Marcos both died. The Municipality of Marikina executed a deed of absolute transfer of real property in favor of the Estate of Pedro Gonzales, and new titles were issued after the subdivision of Lot C by the petitioners. The respondents then demanded the reconveyance of the subject property, but the petitioners refused. As a result, the respondents filed an action for annulment and/or rescission of the transfer and for reconveyance with damages.

The RTC dismissed the complaint, but the CA reversed the decision and ordered the reconveyance of the property. The petitioners filed a motion for reconsideration, which was denied. Hence, the present petition. The petitioners argue that the Deed of Sale between Pedro and Marcos is void for not meeting the solemnity requirements of the law. They also contend that Pedro could not have legally sold the property to Marcos because at that time he had not yet acquired ownership of the subject lot.

The Court disagrees and explains that the approval of the provincial governor is part of the system of supervision over municipal governments but does not prohibit them from entering into contracts regarding municipal properties.

ISSUES:

  1. Whether the absence of approval by the Provincial Governor renders a contract entered into by a municipality null and void.

  2. Whether the contract of sale between Pedro and the Municipality of Marikina should be considered voidable.

  3. Whether Pedro acquired ownership of the subject property upon delivery.

  4. Whether the Deed of Sale between Pedro and Marcos is valid and enforceable despite not being a public document.

RULING:

  1. The absence of approval by the Provincial Governor does not per se make the contracts null and void. The approval is part of the system of supervision exercised by the provincial government over the municipal governments.

  2. The contract of sale between Pedro and the Municipality of Marikina should be considered voidable, pending approval or disapproval by the Provincial Governor.

  3. Pedro acquired ownership of the subject property upon delivery, which occurred immediately after his bid was accepted by the Municipal Government of Marikina.

  4. The Deed of Sale between Pedro and Marcos is valid and enforceable despite not being a public document.

PRINCIPLES:

  • Contracts entered into by a municipality that fall under the provisions of Section 2196 of the Revised Administrative Code are considered voidable until approved or disapproved by the Provincial Governor.

  • The absence of approval by the Provincial Governor does not render a contract null and void.

  • Ownership of a sold property is acquired by the vendee upon delivery to him.

  • The issuance of a transfer certificate of title and the execution of a deed of transfer are merely confirmatory acts of ownership already acquired.

  • Consideration is always presumed in the absence of receipts or any proof of consideration.

  • Bare allegations, unsubstantiated by evidence, are not equivalent to proof.

  • The Court is not a trier of facts and only questions of law are the proper subject of a petition for review on certiorari.

  • The form required by Article 1358 of the Civil Code for acts and contracts to appear in a public document is not essential to the validity or enforceability of the transaction, but merely for convenience.

  • Even a verbal contract of sale of real estate produces legal effects between the parties.

  • The failure to observe the proper form prescribed by Article 1358 does not render acts or contracts enumerated therein invalid.

  • Article 1358 does not require the accomplishment of acts or contracts in a public instrument in order to validate them, but only to insure their efficacy.