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BRIGIDA CONCULADA v. CA

FACTS:

The petitioner, Paciano Garcia, Jr., and Henrietta Borja, co-owned two parcels of land in Sulu, Philippines. These lands were leased to 28 tenants, including the respondents, Kimtoy Jamaani-Wee and Tian Su Wee. Without authorization from the other Garcia heirs, Garcia, Jr. and his lawyer, Ulka Ulama, announced the sale of the lots to the tenants, including Wee. Wee expressed interest in purchasing the lot where his store was built and requested proof of Garcia, Jr.'s authority. Wee was advised to submit a deposit. Ulama later informed Wee that Garcia, Jr. was authorized to sign the deed of sale and reminded Wee about the deposit. Wee's lawyer requested Ulama to prepare the contract for Lot 4, and Wee submitted a check as an initial deposit. However, Garcia, Jr., Ulama, and Borja sold Lot 4 to petitioner Brigida Conculada, who later donated the lot to her children. Wee refused the refund of his deposit and instead offered to reimburse Borja the amount paid by Conculada. Wee filed a complaint for annulment and cancellation of the sale of Lot 4, as well as the cancellation of the deed of donation executed by Conculada. The trial court dismissed the complaint, but the Court of Appeals reversed and remanded the case back to the trial court. The trial court then declared the sale and donation of Lot 4 null and void. The Court of Appeals affirmed this decision. Petitioners raised questions regarding the payment made by Conculada and the validity of the trial court's decision.

ISSUES:

  1. What happened to the P455,000.00 paid by petitioner Brigida Conculada to the heirs of Dr. & Mrs. Garcia Sr.?

  2. Is the decision of the court a quo declaring the deeds of extrajudicial settlement of estate, deed of sale, and deed of donation null and void without legal basis?

  3. How can the portion of the decision ordering defendants to execute a deed of conveyance and collect the purchase price be implemented?

  4. Who has a better right to the disputed property and who has suffered damages?

  5. Whether petitioner Conculada is entitled to the restitution of the P455,000 purchase price.

RULING:

  1. The issue of what happened to the P455,000.00 paid by petitioner Brigida Conculada to the heirs of Dr. & Mrs. Garcia Sr. was not mentioned in the decisions of the lower courts. The Supreme Court did not provide an answer to this question.

  2. The decision of the court a quo declaring the deeds of extrajudicial settlement of estate, deed of sale, and deed of donation null and void was upheld by the Court of Appeals. The Supreme Court affirmed the ruling of the Court of Appeals, stating that it had become final and executory. The appellate court's decision was based on factual findings supported by substantial evidence.

  3. The Supreme Court did not provide an answer to how the portion of the decision ordering defendants to execute a deed of conveyance and collect the purchase price can be implemented.

  4. The main issue is who has the better right to the disputed property. The Supreme Court upheld the right of the private respondents to buy the disputed property, stating that the ruling of the Court of Appeals, affirming their right of first refusal, had become final and executory. The Court applied the doctrine of res judicata and held that the judgment upholding the right of the respondents effectively forecloses any further inquiry on the matter. The issue of damages was not further discussed.

  5. Petitioner Conculada is entitled to the restitution of the P455,000 purchase price. The sale to Conculada must be set aside as it violated the right of first refusal of private respondent spouses. The prevailing doctrine is that a contract of sale entered into in violation of a right of first refusal of another person is rescissible. According to Article 1385 of the Civil Code, in rescission, the purchase price must be restored to the buyer. The amount of P455,000, which was consigned by private respondents with the RTC for the purchase of Lot No. 4, could be utilized for the restitution.

PRINCIPLES:

  • The doctrine of res judicata applies when a right or fact has been judicially tried and determined by a court of competent jurisdiction, or an opportunity for such trial has been given, and the judgment of the court remains unreversed. It is conclusive upon the parties and those in privity with them.

  • A review of factual questions is not within the function of the Supreme Court, unless the appellate court's findings are palpably unsupported by the evidence on record or the judgment is based on misapprehension of facts.

  • A contract of sale entered into in violation of a right of first refusal of another person is rescissible. (Guzman, Bocaling and Co., Inc. vs. Bonnevie, 206 SCRA 668, 675)

  • Rescission is a remedy granted by law to the contracting parties and even to third persons, to secure reparations for damages caused to them by a contract, even if this should be valid, by means of the restoration of things to their condition at the moment prior to the celebration of said contract. (Tolentino)