G.R. No. 157493 (February 5, 2007)
Topics: contract of sale; sale of co-owned property
Summary:
Petitioners are brothers and sisters co-owning a land. One of the petitioners entered into a contract to sell, which the others later signed.
Doctrines:
The rule that one who signs a contract is presumed to know its contents has been applied even to contracts of illiterate persons on the ground that if such persons are unable to read, they are negligent if they fail to have the contract read to them. If a person cannot read the instrument, it is as much his duty to procure some reliable persons to read and explain it to him, before he signs it, as it would be to read it before he signed it if he were able to do and his failure to obtain a reading and explanation of it is such gross negligence as will estop from avoiding it on the ground that he was ignorant of its contents.
Facts:
Petitioners together with Adolfo Oesmer and Jesus Oesmer, are brothers and sisters, and the co-owners of undivided shares of two parcels of agricultural and tenanted land which were acquired by right of succession.
Respondent Paraiso Development Corporation is known to be engaged in the real estate business.
This case originated when Ernesto Oesmer, one of the co-owners of the subject land, met with the President of respondent corporation for the purpose of brokering the sale of petitioners’ properties to respondent corporation. Pursuant to the said meeting, a Contract to Sell was drafted whereby petitioners Ernesto and Enriqueta subsequently signed the aforesaid Contract to Sell. A check in the amount of P100,000.00, payable to Ernesto, was given as option money. Sometime thereafter, Rizalino, Leonora, Bibiano, Jr., and Librado also signed the said Contract to Sell. However, two of the brothers, Adolfo and Jesus, did not sign the document.
Later on, petitioners informed the respondent, through a letter, of their intention to rescind the Contract to Sell and to return the amount of P100,000.00 given by respondent as option money. Respondent did not respond to the aforesaid letter. Afterwards, herein petitioners, together with Adolfo and Jesus, filed a Complaint for Declaration of Nullity or for Annulment of Option Agreement or Contract to Sell with Damages before the RTC.
The trial court held that the assailed Contract to Sell is valid and binding only to the undivided proportionate share of Ernesto who signed the document and received the check. Ernesto was ordered to execute the Contract of Absolute Sale concerning his 1/8 share over the subject two parcels of land in favor of respondent.
On appeal, the Court of Appeals modified the decision of RTC whereby it declared that the Contract to Sell is valid and binding with respect to the undivided proportionate share of the six signatories of the document.
Issue: Whether not the contract to sell binds the co-owners of Ernesto.
Ruling:
YES. The contract to sell was valid and binding. In contrast to the contention of the five co-owners who affixed their signatures in the contract to sell that their signatures do not confer authority to Ernesto as an agent to sell their shares, the Court held that they were selling the same directly and in their own right. Hence, written authority is no longer necessary since they were selling their shares in their own capacity as owners.
In addition, the petitioners, being owners of their respective undivided shares in the subject properties, can dispose of their shares even without the consent of all the co-heirs. Article 493 of the Civil Code provides that, “Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.” Consequently, even without the consent of the two co-heirs, Adolfo and Jesus, the Contract to Sell was valid and binding with respect to the 6/8 proportionate shares of the petitioners.