FERNANDO T. MATE
THE HONORABLE COURT OF APPEALS and INOCENCIO TAN
G.R. No. 120724-25; May 21, 1998
Josie Rey with Inocencio Tan went to the residence of Fernando Mate and solicited assistance to stave off her and her family’s prosecution for violation of B.P. 22 with the amount of 4,432,067.00. Josie even requested Fernando Mate to cede three lots that he owns to Inocencio in order to placate him. Fernando refused to accept the proposal of Josie and even contended that he owes Inocencio nothing to convey to him his properties and his lots were not for sale. However, Josie persisted and informed Fernando that she will redeem those lots through her own money. After a long discussion, they have agreed and even executed a fictitious deed of sale with right to repurchase. For assurance that Josie will redeem the lots, she issued two postdated checks to Fernando. After such act, the Deed of Sale with Right to repurchase was notarized and was given to Inocencio together with the titles of the properties. The transaction was not registered to the Registry of Deeds. Fernando deposited the checks to his account few days after the date in the checks but both of them were dishonored due to a closed account. From then on, Josie could no longer be found.
LOWER COURT’S RULING: The Regional Trial Court, during the trial the RTC court asked private respondent to file an action for consolidation of ownership of the properties subject of the sale and pursuant thereto he filed Civil Case No. 7587 that was consolidated with the case he filed earlier which were later decided jointly by the trial court in favor of private respondent.
APPELLATE COURT’S RULING: The Deed of Sale with Right of Repurchase executed October 6, 1986 valid and binding between plaintiff and defendant (as vendor and vendee-a-retro respectively); that as the period to redeem has expired, ownership thereof was consolidated by operation of law, and the Register of Deeds is hereby ordered to REGISTER this decision consolidating the defendant’s ownership over the properties covered by Transfer Certificate of Title No. T-90-71, covering Lot 8; Original Certificate of Title No. N-311 covering Lot 5370, all of the Tacloban Cadastre, and issuing to defendant Inocencio Tan his titles after cancellation of the titles presently registered in plaintiff Fernando T. Mate’s name and that of his wife. The plaintiff Fernando Mate is further ordered to pay defendant the sum of ONE HUNDRED FORTY THOUSAND (P140,000.00) PESOS, for and as attorney’s fees.
Whether the Deed of Sale with Right to repurchase is valid.
The Supreme Court affirmed the decision of the Court of Appeals. The Court stated that as admitted by petitioner, by virtue of the sale with pacto de retro, Josie Rey gave him, as vendor-a-retro, a postdated check in the amount of P1.4 Million, which represented the repurchase price of the two (2) lots. Aside from the P1.4 Million check, Josie gave another postdated check to petitioner in the amount of P420,000.00, ostensibly as interest for six (6) months but which apparently was his fee for having executed the pacto de retro document. Josie thus assumed the responsibility of paying the repurchase price on behalf of petitioner to private respondent. Unfortunately, the two checks issued by Josie Rey were worthless. Both were dishonored upon presentment by petitioner with the drawee banks. However, there is absolutely no basis for petitioner to file a complaint against private respondent Tan and Josie Rey to annul the pacto de retro sale on the ground of lack of consideration, invoking his failure to encash the two checks. Petitioner’s cause of action was to file criminal actions against Josie Rey under B.P. 22, which he did. The filing of the criminal cases was a tacit admission by petitioner that there was a consideration of the pacto de retro sale. Further, Petitioner then postulates that “it is not only illegal but immoral to require him to repurchase his own properties with his own money when he did not derive any benefit from the transaction.” Thus, he invokes the case of Singson vs. Isabela Sawmill, 88 SCRA 633, 643, where the Court said that “where one or two innocent persons must suffer, that person who gave occasion for the damages to be caused must bear consequences.” Petitioner’s reliance on this doctrine is misplaced. He is not an innocent person. As a matter of fact, he gave occasion for the damage caused by virtue of the deed of sale with right to repurchase which he prepared and signed. Thus, there is the equitable maxim that between two innocent parties, the one who made it possible for the wrong to be done should be the one to bear the resulting loss.