Petitioners Respondents: First Division
Petitioners Respondents: First Division
Petitioners Respondents: First Division
DECISION
DEL CASTILLO, J : p
This Petition for Review on Certiorari 1 seeks to set aside the June 25,
2013 Decision 2 and January 29, 2014 Resolution 3 of the Court of Appeals
(CA) in CA-G.R. CV. No. 96345 which, respectively, granted herein
respondents' appeal and reversed the June 1, 2010 Decision 4 of the
Regional Trial Court of San Mateo, Rizal, Branch 75 (RTC) in Civil Case No.
1380-98 SM, and denied petitioners' motion for reconsideration thereto. HTcADC
Factual Antecedents
After trial, the RTC rendered its Decision dated June 1, 2010,
pronouncing as follows:
From the foregoing, the main issue is whether or not the
extrajudicial settlement is null and void on grounds of fraud, deceit,
misrepresentation or mistake.
xxx xxx xxx
Besides, while the Extra-Judicial Settlement was executed and
signed on July 13, 1986 8 x x x, and alleged fraud was discovered on
May 12, 1986 when subdivision survey was conducted x x x and
defendants started to build their houses x x x this petition was filed
only on August 14, 1998 or more than 10 years from date of
execution or date of discovery of alleged fraud. Under Art. 1144 Civil
Code, actionable documents prescribes [sic] in 10 years. However, if
a property is allegedly acquired thru fraud or mistake, the person
obtaining it is, by force of law, considered an implied trustee for the
benefit of the person deprived of it, in which case the action based
thereon is 10 years from date of registration of the extra-judicial
settlement or issuance of new certificate of title (Art. 1456 Civil Code
x x x). Hence, this petition is not barred by prescription. As the period
is not too long nor short, laches has not yet set in.
Moreover, fraud, as basis of the Complaint, is not delineated
therein with particularity. Under Sec. 5 Rule 8, fraud must be alleged
specifically, not generally. Nonetheless, apart from such allegations,
no clear and convincing evidence was presented by plaintiffs. For
one, while plaintiff Concepcion Cruz-Enriquez is admittedly only grade
3 and could hardly understand English as what is written in the extra-
judicial settlement which was not even allegedly fully explained to
her, it appears that she can absolutely read and write, and
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understand English albeit not fully. And as she is deeply interested in
her inheritance share, she is aware of the import and consequences
of what she executed and signed. For the past 10 years, there is no
way she could feign ignorance of the alleged fraud and make passive
reactions or complaint thereof. Being adversely interested in the
property, her apprehensions were purely in the state of her mind, if
not unilateral and afterthought.
Secondly, just like any other contracts, parties in an extra-
judicial settlement are given wide latitude to stipulate terms and
conditions they feel fair and convenient beneficial to one and
prejudicial to the other. By tradition and good customs, equality is
relaxed if only to buy peace, or out of compassion or courtesy. So
long as not contrary to strict provisions of the law, the supremacy of
contracts shall be respected. aScITE
Q: That is why you signed the document even though you did
not understand the same?
A: Yes, sir.
Court:
Did you not ask your younger sister Amparo to read this
document considering it was in English? I will reform the
question.
Q: But you don't know how to read English?
A: No, your Honor.
Q: When you saw that the document was in English, did you
not ask your younger sister to read the document before
you affixed your signature?
A: No, your Honor.
Q: Why did you not ask Amparo to read the document to you
considering that it was in English and you don't understand
English?
A: Parti-partihan daw po at nagtiwala ako, your Honor.
Appellant Concepcion invoked Articles 24 and 1332 of the
Civil Code of the Philippines, which provide:
ART. 24. In all contractual, property or other
relations, when one of the parties is at a disadvantage on
account of his moral dependence, ignorance, indigence,
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mental weakness, tender age or other handicap, the
courts must be vigilant for his protection.
ART. 1332. When one of the parties is unable to
read, or if the contract is in a language not understood by
him, and mistake or fraud is alleged, the person enforcing
the contract must show that the terms thereof have been
fully explained to the former. x x x
Article 1332 was a provision taken from [A]merican law,
necessitated by the fact that there continues to be a fair number of
people in this country without the benefit of a good education or
documents have been written in English or Spanish. The provision
was intended to protect a party to a contract disadvantaged by
illiteracy, ignorance, mental weakness or some other handicap. It
contemplates a situation wherein a contract is entered into but the
consent of one of the contracting parties is vitiated by mistake or
fraud committed by the other.
Thus, in case one of the parties to a contract is unable to read
and fraud is alleged, the person enforcing the contract must show
that the terms thereof have been fully explained to the former. Where
a party is unable to read, and he expressly pleads in his reply that he
signed the voucher in question 'without knowing its contents which
have not been explained to him,' this plea is tantamount to one of
mistake or fraud in the execution of the voucher or receipt in question
and the burden is shifted to the other party to show that the former
fully understood the contents of the document; and if he fails to prove
this, the presumption of mistake (if not fraud) stands unrebutted and
controlling.
Here, at the time appellant Concepcion signed the document in
question, she was with appellee Amparo. Appellant could not possibly
have read the contents of the extra-judicial settlement and could not
have consented to a contract whose terms she never knew nor
understood. It cannot be presumed that appellant Concepcion knew
the contents of the extra-judicial settlement. Article 1332 of the Civil
Code is applicable in these circumstances.
Although under Art. 1332 there exists a presumption of mistake
or error accorded by law to those who have not had the benefit of a
good education, one who alleges any defect or the lack of a valid
consent to a contract must establish the same by full, clear and
convincing evidence, not merely by preponderance of evidence.
Hence, even as the burden of proof shifts to the defendants x x x to
rebut the presumption of mistake , the plaintiff x x x who allege(s)
such mistake (or fraud) must show that his personal circumstances
warrant the application of Art. 1332.
In this case, the presumption of mistake or error on the part of
appellant Concepcion was not sufficiently rebutted by appellees.
Appellees failed to offer any evidence to prove that the extrajudicial
settlement of estate was explained in a language known to the
appellant Concepcion, i.e., in Pilipino. Clearly, appellant Concepcion,
who only finished Grade 3, was not in a position to give her free,
voluntary and spontaneous consent without having the document,
which was in English, explained to her in the Pilipino. She stated in
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open court that she did not understand English. Her testimony as
quoted above is instructive.
Due to her limited educational attainment, appellant
Concepcion could not understand the document in English. She
wanted to seek assistance. However, due to the misrepresentation,
deception and undue pressure of her sister appellee Amparo,
petitioner signed the document. Appellant Concepcion was assured
that she would receive her legitimate share in the estate of their late
parents.
Later on, appellant Concepcion found out that appellee Antonia
received two (2) lots compared to her siblings, including appellant
Concepcion, who respectively received one (1) lot each. This was a
substantial mistake clearly prejudicial to the substantive interests of
appellant Concepcion in her parent's estate. There is no doubt that,
given her lack of education, appellant Concepcion is protected by Art.
1332 of the Civil Code. There is reason to believe that, had the
provisions of the extrajudicial agreement been explained to her in the
Pilipino language, she would not have consented to the significant
and unreasonable diminution of her rights.
Atty. Edgardo C. Tagle, the officer who notarized the
extrajudicial settlement did not state that he explained the contents
to all the parties concerned. The records or the subject document for
that matter, do not reflect that he explained the contents of the
document to appellant Concepcion nor to the other parties in a
language or dialect known to all of them. Significantly, the appellants
even denied their presence during the notarization of the document.
Therefore, the presumption of mistake under Article 1332 is
controlling, having remained unrebutted by appellees. The evidence
proving that the document was not fully explained to appellant
Concepcion in a language known to her, given her low educational
attainment, remained uncontradicted by appellees x x x the consent
of petitioner was invalidated by a substantial mistake or error,
rendering the agreement voidable. The deed of extrajudicial
settlement between appellants and appellees should therefore he
annulled and set aside on the ground of mistake.
In Rural Bank of Caloocan, Inc. v. Court of Appeals, the Supreme
Court ruled that a contract may be annulled on the ground of vitiated
consent, even if the act complained of is committed by a third party
without the connivance or complicity of one of the contracting parties.
It found that a substantial mistake arose from the employment of
fraud or misrepresentation. The plaintiff in that case was a 70-year
old unschooled and unlettered woman who signed an unauthorized
loan obtained by a third party on her behalf. The Court annulled the
contract due to a substantial mistake which invalidated her consent.
ATICcS
Issues
Our Ruling
Footnotes
1. Rollo , pp. 6-24.
6. Id. at 28.
7. Id. at 31-38.
17. CIVIL CODE, Article 1015. Accretion is a right by virtue of which, when two or
more persons are called to the same inheritance, devise or legacy, the part
assigned to the one who renounces or cannot receive his share, or who died
before the testator, is added or incorporated to that of his co-heirs, co-
devisees, or co-legatees.
Article 1018. In legal succession the share of the person who repudiates the
inheritance shall always accrue to his co-heirs.
Article 1019. The heirs to whom the portion goes by the right of accretion
take it in the same proportion that they inherit.
Article 1020. The heirs to whom the inheritance accrues shall succeed to all
the rights and obligations which the heir who renounced or could not receive
it would have had.
21. G.R. No. 187942, September 7, 2016, 802 SCRA 319, 331-332.