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ROMAN CATHOLIC CHURCH v. REGINO PANTE

FACTS:

The Roman Catholic Church (Church), represented by the Archbishop of Caceres, owned a 32-square meter lot located in Barangay Dinaga, Canaman, Camarines Sur. On September 25, 1992, the Church entered into a contract to sell the lot to respondent Regino Pante. The purchase price was fixed at P11,200.00, with the initial down payment of P1,120.00 and the remaining balance payable in three years.

On June 28, 1994, the Church sold a 215-square meter lot to the spouses Nestor and Fidela Rubi (spouses Rubi), which included the lot previously sold to Pante. The spouses Rubi blocked Pante's access to the lot, leading him to file a case to annul the sale between the Church and the spouses Rubi, insofar as it included the lot previously sold to him.

The Church alleged that Pante had fraudulent intentions when he misrepresented himself as an actual occupant of the lot, as the Church only sold its lots to actual occupants. Pante admitted knowing that the spouses Rubi had been occupying the lot. On July 30, 1999, the Regional Trial Court (RTC) ruled in favor of the Church and annulled the contract between the Church and Pante. The RTC also upheld the sale in favor of the spouses Rubi due to Pante's delay in payment and their prior occupation of the lot.

Pante appealed the decision to the Court of Appeals (CA), which reversed the RTC's ruling. The CA considered the contract between Pante and the Church as a contract of sale, and ruled that Pante fulfilled the conditions of the contract. The CA applied the rules on double sales in the Civil Code and upheld the effectiveness of the sale in favor of Pante. The Church filed a petition for review on certiorari to contest the CA's ruling, arguing that the contract should be annulled due to Pante's misrepresentation.

ISSUES:

  1. Whether there was misrepresentation that vitiated the seller's consent and invalidated the contract between the Church and Pante.

  2. Whether the actual occupancy or residency of the buyer was a necessary qualification for the Church to sell its land.

  3. Whether the contract between the Church and Pante is valid and existing.

  4. Who, between Pante and the spouses Rubi, was first in possession of the property in good faith.

RULING:

  1. The Court ruled that there was no misrepresentation that vitiated the Church's consent and invalidated the contract. The actual occupancy or residency of the buyer was not a necessary qualification required by the Church in selling its land. The surrounding circumstances and evidence presented indicate that the Church was aware that Pante was using the disputed lot as a passageway. The Church either ignored or waived the requirement of actual occupancy or residency, and there was no evidence to suggest that Pante deliberately misled the Church.

  2. The Court held that the actual occupancy or residency of the buyer was not a necessary qualification for the Church to sell its land. The policy requiring actual occupancy or residency was not consistently applied, as demonstrated by the sale of the disputed lot to Pante despite him not being an actual occupant. The size and purpose of the lot, as well as the conduct of the parties, also support the conclusion that actual occupancy or residency was not a requirement.

  3. The contract between the Church and Pante is valid and existing. In the absence of any vitiation of consent, the contract stands. Any delay in payment by Pante does not nullify the contract.

  4. Pante was the first in possession of the property in good faith. He had been using the lot as a passageway with the Church's permission even before purchasing it in 1992. The construction of a concrete fence by the spouses Rubi over the lot was considered an assertion of possession made in bad faith.

PRINCIPLES:

  • Consent is an essential requisite of contracts, and to be valid, the parties must have a free, voluntary, and reasonable understanding of their obligations.

  • Mistake as to the identity or qualifications of one of the parties will vitiate consent only when such identity or qualifications have been the principal cause of the contract.

  • The actual occupancy or residency of a buyer may not be a necessary qualification for the sale of land, and its requirement must be consistently applied.

  • Voidable contracts are binding unless annulled by a proper court action.

  • The delay in payment does not nullify a contract of sale.

  • Ownership of a property in a double sale goes to the person who first takes possession of it in good faith.

  • Possession in Article 1544 of the Civil Code refers to both actual physical delivery and constructive delivery.

  • Actual delivery occurs when the thing sold is placed under the control and possession of the vendee.

  • Constructive delivery occurs when the sale is made through a public instrument.