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Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 104819 July 20, 1998
CHONNEY LIM, petitioner,
vs.
COURT OF APPEALS, LEA CASTRO HELAN !"# $EITH LARENCE HELAN, respondents.

$APUNAN, J.:
efore us is a petition for revie! of the decision of the "ourt of #ppeals
1
affir$in% in toto the
decision of the Re%ional Trial "ourt, ranch V, a%uio "it&.
2
The bare facts of this case as aptl&
stated b& the "ourt of #ppeals in its decision are as follo!s'
On March (), *+,), a conditional deed of sale !as e-ecuted bet!een appellant .i$
and appellee .ea /helan. It !as stipulated that appellee /helan !ould bu& fro$ the
appellant a parcel of land !ith an area of *,000 s1uare $eters for the su$ of
P200,000.00 or 3.S. 450,000.00 in 3.S. 4*00 deno$ination. The propert&, ho!ever,
!as $ort%a%ed to the an6 of the Philippine Islands7 the loan !hich on $aturit& on
#u%ust *), *+,), !ould be P(2+,+20.,,.
.ea /helan then paid an earnest $one& of 3.S. 4+,000.00 consistin% of 3.S.
4,,000.00 in 4*00.00 bills and 3.S. 4*,000.00 in traveller8s chec6s of 4*00.007
thereafter, she occupied the pre$ises. Subse1uentl&, appellee /helan alle%edl&
%ave appellant .i$ 3.S. 4,,000.00, a ban6 draft in the su$ of P*)*,000.00 and later
a chec6 for P*9,,00.00 dra!n a%ainst P"I an6. #fter these pa&$ents, a deed of
absolute sale !as si%ned b& appellee /helan and appellant .i$ on :une (*, *+,),
appellant .i$ alle%edl& %ave /helan -ero-ed copies of title, realt& ta- receipts and
bills for li%ht and !ater.
On #u%ust (5, *+,), appellant .i$ sent /helan a tele%ra$ de$andin% her to vacate
the sub;ect propert&. /helan countered that she !as alread& the o!ner thereof. On
#u%ust (), *+,), a co$plaint for e;ect$ent !as filed a%ainst the, appellee.
Plaintiff<appellee "honne& .i$ clai$ed that he !as not paid the 3.S. 4,,000.00 due hi$7
that the ban6 draft for the su$ of P*)*,000.00 !as not honored7 and that the chec6 for
P*9,,00.00 bounced. Defendant<appellee .ea /helan, ho!ever, replied that she paid
the indebtedness of the appellant in the a$ount of P(*0,(+9.90 inclusive of interests and
penalt& char%es hence, the $ort%a%e of the propert& to the an6 of the Philippine Islands
!as alread& cancelled. "onse1uentl&, appellee stopped the pa&$ent of the ban6 draft
and chec6 in favor of the appellant. #ppellee, li6e!ise, clai$ed that she paid the capital
%ains ta- on the sale of the propert& to her in the a$ount of P*),++).00. =urther$ore,
appellee /helan alle%ed that the house !hich !as built on the land she bou%ht, had
been renovated at her e-pense for the a$ount of P*,0,000.00 to P(00.000.00. /hen, in
*+,2, the said house !as da$a%ed b& a t&phoon, it !as repaired and had cost appellee
P*9,000.00.
%
Since the ban6 draft in the a$ount of P*)*,000.00 !as dishonored and the P"I an6 chec6 for
P*9,,00.00 bounced, petitioner "honne& .i$ alle%ed that he !as not paid. He therefore instituted
an action for rescission of contract !hich !as doc6eted as "ivil "ase No. )(5<R.
On the other hand, .ea /helan filed an action for specific perfor$ance de$andin% fro$ "honne&
.i$ the deliver& of the title of said propert& !hich she has full& paid. This !as doc6eted as "ivil "ase
No. )+2<R.
These t!o >(? cases !ere consolidated and on :une *+, *+,+, the Re%ional Trial "ourt, ranch V,
a%uio "it& denied "honne& .i$8s action for rescission and %ranted .ea /helan8s pra&er for specific
perfor$ance. The dispositive portion of the decision reads as follo!s'
/H@R@=OR@, in "ivil "ase No. )+2<R, ;ud%$ent is hereb& rendered'
*. Directin% the Re%ister of Deeds of a%uio "it& to cancel, upon pa&$ent of the
prescribed fees therefor, Transfer "ertificate of Title No. T<5(9)* of his Re%istr& and
in lieu thereof issue a ne! one in the na$e of .ea "astro /helan, =ilipino, of le%al
a%e, $arried to Aeith .a!rence /helan, an #ustralian citiBen and a resident of *52
Aennon Road, a%uio "it&, and for this purpose, the ranch "ler6 of "ourt $a&
release to .ea "astro /helan, upon proper receipt, the o!ner8s cop& of T"T No. T<
5(9)*7
(. Orderin% "honne& . .i$ to pa& .ea "astro /helan the follo!in% a$ounts'
a. P9C,(+*.90 representin% the overpa&$ent $ade b&
.ea "astro /helan7
b. P*0,000.00 as $oral da$a%es7
c. PC,000.00 as e-e$plar& da$a%es7
d. P*C,000.00 as attorne&8s fees7 plus
e. the costs of suit.
5. Dis$issin% the co$plaint in "ivil "ase No. )+2<R insofar as defendant an6 of the
Philippine Islands is concerned7 and
). Dis$issin% li6e!ise the co$plaint of "honne& . .i$ a%ainst .ea "astro /helan and
Aeith .a!rence /helan doc6eted as "ivil "ase No. )(5<R
4
On appeal, the "ourt of #ppeals affir$ed the decision of the Re%ional Trial "ourt. The $otion for
reconsideration !as li6e!ise denied. Hence, this petition.
Petitioner $a6es the follo!in% assi%n$ent of errors'
#.
R@SPOND@NT "O3RT O= #PP@#.S @RR@D DR#V@.E, ON # V@RE #SI" #ND
IMPORT#NT F3@STION O= .#/, /H@N IT "R@DIT@D #S P#EM@NT ON TH@
P3R"H#S@ PRI"@ 3ND@R TH@ D@@D O= #SO.3T@ S#.@ R@SPOND@NT .@#
/H@.#N8S @.#T@D #ND #D =#ITH GP#EM@NTG O= P@TITION@R "HONN@E
.IM8S .O#N /ITH TH@ #NA O= TH@ PHI.IPPIN@ IS.#NDS >PI?, #ND O= TH@
"#PIT#. D#INS T#H, /ITHO3T HIS ANO/.@DD@ #ND "ONS@NT #ND
#D#INST HIS /I.., TH@R@E MIS3ND@RST#NDIND #ND MIS#PP.EIND
#RTI".@ *(52 O= TH@ "IVI. "OD@.
.
R@SPOND@NT "O3RT O= #PP@#.S @RR@D DR#V@.E, ON # V@RE #SI" #ND
IMPORT#NT F3@STION O= .#/, IN NOT HO.DIND TH#T TH@ DISHONOR O=
R@SPOND@NT .@# /H@.#N8S TR D@M#ND DR#=T =OR P*)*,000.00 #ND
P"I "H@"A =OR P*9,000.00 DID NOT H#V@ TH@ @==@"T O= P#EM@NT ON
TH@ P3R"H#S@ PRI"@ 3ND@R TH@ D@@D O= #SO.3T@ S#.@, TH@R@E
VIO.#TIND #RTI".@ *()+ O= TH@ "IVI. "OD@.
".
R@SPOND@NT "O3RT O= #PP@#.S @RR@D DR#V@.E, ON # V@RE #SI" #ND
IMPORT#NT F3@STION O= .#/, IN "ON".3DIND TH#T TH@R@ /#S
P#EM@NT E R@SPOND@NT .@# /H@.#N O= TH@ S3M O= 4,,000.00 IN "#SH,
@V@N IN TH@ #S@N"@ O= # R@"@IPT TH@R@=OR #S R@F3IR@D E TH@
D@@D O= #SO.3T@ S#.@ /HI"H PROVID@S TH#T P@TITION@R "HONN@E
.IM SH#.. GISS3@ H@R # R@"@IPT O= TH@ "ONSID@R#TION O= TH@ S#.@ O=
TH@ S#.@ O= TH@ #OV@ D@S"RI@D PROP@RTEG, TH@R@E VIO.#TIND TH@
.@D#. PRIN"IP.@ TH#T TH@ "ONTR#"T IS TH@ .#/ @T/@@N TH@ P#RTI@S.
D.
R@SPOND@NT "O3RT O= #PP@#.S @RR@D DR#V@.E, ON # V@RE #SI" #ND
IMPORT#NT F3@STION O= .#/, IN MIS3ND@RST#NDIND #ND MIS#PP.EIND
TH@ PRIN"IP.@ TH#T TH@ =INDINDS O= TRI#., "O3RTS #R@ #""ORD@D
DR@#T /@IDHT IN VI@/ O= TH@IR OPPORT3NITE TO OS@RV@ TH@
"OND3"T #ND D@M@#NOR O= /ITN@SS@S, #ND IN ITS DROSS
MIS#PPR@H@NSION O= TH@ R@"ORD, "ONSID@RIND TH#T IN TH@ "#S@ #T
#R TH@ TRI#. "O3RT DID NOT #S@ ITS =INDINDS ON TH@ P@RSON#.
"R@DII.ITE O= R@SPOND@NT /H@.#N8S /ITN@SS@S 3T ON
"ON".3SIONS IT D@RIV@D =ROM DO"3M@NT#RE @VID@N"@, /HI"H #R@
TH@R@=OR@ "ON".3SIONS O= .#/ #S TO /HI"H #PP@..#T@ "O3RTS #R@
NOT #T # DIS#DV#NT#D@.
@.
R@SPOND@NT "O3RT O= #PP@#.S @RR@D DR#V@.E, ON # V@RE #SI" #ND
IMPORT#NT PRIN"IP.@ O= .#/, IN OV@R.OOAIND OR DISR@D#RDIND #
.@DION O= 3NDISP3T@D OR #DMITT@D =#"TS O= VIT#. #ND "R3"I#.
IMPORT IN TH@ "#S@ #T #R /HI"H /O3.D D@=INIT@.E "H#ND@ TH@
R@S3.T #ND M#ND#T@ # :3DDM@NT IN =#VOR O= P@TITION@R "HONN@E
.IM, S3"H #S @H#"T #""O3NTIND #ND PR@"IS@ #RITHM@TI" /ORAIND IN
=#VOR O= P@TITION@R "HONN@E .IM, TH@R@E "OMMITTIND /HO.@S#.@
#ND DROSS MIS#PPR@H@NSION O= TH@ R@"ORD TH#T IS @V@N
T#NT#MO3NT TO DR#V@ #3S@ O= DIS"R@TION IN TH@ P@R=ORM#N"@ O=
ITS #PP@..#T@ =3N"TION.
=.
R@SPOND@NT "O3RT O= #PP@#.S TH@R@=OR@ @RR@D DR#V@.E, ON V@RE
#SI" #ND IMPORT#NT F3@STION #ND PRIN"IP.@S O= .#/, IN #==IRMIND #ND
NOT R@V@RSIND TH@ D@"ISION #ND :3DDM@NT O= TH@ TRI#. "O3RT.
&
The issues raised b& petitioner are $erel& factual. Ti$e and a%ain, !e have al!a&s stated that it is
not !ithin the province of this "ourt to revie! the findin%s of facts especiall& !hen the trial court and
appellate court have no cause for disa%ree$ent. #bsent an& !hi$sical or capricious e-ercise of
;ud%$ent, and unless the lac6 of an& basis for the conclusions $ade b& the lo!er court be a$pl&
de$onstrated, the Supre$e "ourt !ill not disturb their findin%s.
'
/hile this rule is not infle-ible, the
"ourt finds no sufficient reason to depart fro$ such rule. The basic issue in the case at bar is
!hether or not "honne& .i$ has been full& paid for the propert& in 1uestion.
There is no dispute that a "onditional Deed of Sale !as e-ecuted bet!een "honne& .i$ and .ea
/helan coverin% the for$er8s propert& alon% Aennon Road., a%uio "it&. The consideration a%reed
upon !as P200,000.00 or 450,000.00. #n earnest $one& of 4*),000.00 !as then paid.
Subse1uentl&, .ea /helan paid "honne& .i$ an additional 4,,000.00 in cash. She also %ave hi$ a
ban6 draft in the su$ of P*)*,000.00 and a chec6 for P*9,,00.00 dra!n a%ainst P"I an6 as full
pa&$ent for the propert&.
3nfortunatel&, ho!ever, the ban6 draft and the P"I an6 chec6 !ere dishonored upon present$ent.
"honne& .i$ $oreover avers that he !as not paid 4,,000.00 as evidenced b& a pro$issor& note
!ritten on the left $ar%in of a cop& of the deed of sale in his possession. Thus, petitioner pra&ed for
the rescission of the contract.
On the other hand, .ea /helan clai$s that she has %iven "honne& .i$ the a$ount of 4,,000.00 in
cash7 the ban6 draft of P*)*,000.00 and the chec6 of P*9,,00.00. # deed of absolute sale !as
e-ecuted on :une (*, *+,), evidencin% the full pa&$ent for the house. She ho!ever discovered that
"honne& .i$ failed to pa& the $ort%a%e loan over the propert& to the PI in the a$ount of
P(*0,(+9.90 inclusive of interest and penalt& char%es and the capital %ains ta- to the IR in the
a$ount of P*),++).00 as pro$ised in the deed of sale so she paid the$ albeit !ithout the
6no!led%e of "honne& .i$. She also incurred e-penses for the renovation and repair of the house
!hen it !as destro&ed b& a t&phoon, all a$ountin% to about P(*9,000.00. Since she has in fact
overpaid "honne& .i$, .ea /helan de$anded fro$ hi$ the deliver& of the title over said propert&.
The trial court %ave credence to the version of .eah /helan that she indeed has paid "honne& .i$
the full a$ount for the propert&. The court ratiocinates'
The "ourt holds that .@# $ade the pa&$ents she clai$ed on the balance of the
purchase price of die disputed propert& for !hich reason "HONN@E si%ned the
correspondin% Deed of #bsolute Sale >@-hibit GMG or G)G?, albeit for the !atered do!n
consideration of onl& P500,000.00 !hich !as intended to allo! hi$ to $ini$iBe his
liabilit& for capital %ains ta-. ein% a business$an of lon% standin%, "HONN@E
!ould surel& not have si%ned the Deed of #bsolute Safe if he had not been priorl&
full& paid. /hat is $ore, in the Deed of #bsolute Sale, "HONN@E un1ualifiedl&
bound hi$self to deliver to .@# before the end of :ul& *+,) the follo!in%'
*. Transfer "ertificate of Title >T"T No. T<5(9)*? !ith the $ort%a%e
thereon dul& cancelled7
(. Real @state Receipts paid up to date7
5. Receipt of pa&$ent of "apital Dains Ta- and the clearance thereto7
). To issue her a receipt of the consideration of the sale of the above<
described propert&. >@-hibit GMG or G)G?
#%ain, "HONN@E !ould not have assu$ed such an underta6in% unless he has alread&
been full& paid7 in fact, each of the thin%s he i$posed upon hi$self to do presupposes full
pa&$ent of the a%reed purchase price.
(
In $aintainin% that he !as not paid the a$ount of 4,,000 in cash, petitioner alle%ed that there !as
no receipt issued as proof of pa&$ent. He even presented a pro$issor& note to the effect, alle%edl&
!ritten b& .ea /helan on the left $ar%in of his cop& of the deed of sale !hich reads'
I, .@# "#STRO /H@.#N PROMIS@D TO P#E TH@ V@NDOR, MR. "HONN@E .IM
TH@ S3M O= S@V@N THO3S#ND THR@@ H3NDR@D T@N 49,5*0.00 DO..#RS
>#.. IN 4*00,00 3.S. DR@@N MON@E? ON OR @=OR@ TH@ @ND O= :3.E *+,),
THRO3DH ME .#/E@R #TTE. :OS@ S. P#DO.IN#, #S P#RT O= ME =3..
P#EM@NT =OR TH@ HO3S@ I .OT O= MR. .IM >R@='
IN=ORM#TIONJ#DR@@M@NT "ONTR#"T D#T@D :3N@ (*, *+,)? =#I.3R@ ON
ME P#RT TO "OMP.E /ITH S3"H PROMIS@, IS S3==I"I@NT DRO3ND TO
T@RMIN#T@ O3R D@@D O= #SO.3T@ S#.@ D#T@D :3N@ (0, *+,). I
TH@R@=OR@ #==IH ME SIDN#T3R@ #D#IN ON TH@ S@"OND P#D@ O= THIS
D@@D O= #SO.3T@ S#.@, TH#T TH@ #=OR@M@NTION@D PROMIS@D I
#RR#ND@M@NT #R@ TR3@ I "ORR@"T, TO TH@ @ST O= ME ANO/.@DD@.
SDD. .@# "#STRO /H@.#N
>/ITH ME =3.. "ONS@NT?
SDD. I..@DI.@
:3N@ (*, *+,) #D3IO
8
This "ourt can not, in an& !a&, accept "honne& .i$8s assertion. It behooves us to thin6 !h& a
docu$ent of so $uch i$portance, such as a pro$issor& note should ;ust be !ritten on the $ar%in of
the deed of sale. "onsiderin% the i$portant transaction entered into b& the parties and the
substantial a$ount involved, it is hi%hl& i$probable for .ea /helan to have $erel& !ritten a
pro$issor& note in the $ar%in of the deed of sale !hen this could be convenientl& !ritten on a
separate sheet of paper a she indeed had $ade such an underta6in%. Moreover, a close perusal of
the note reveals that .ea /helan8s na$e bet!een the !ords GIG and Gpro$isedG is hand!ritten and
the rest of the note t&pe!ritten and verbose enou%h to fit into .ea /helan8s si%nature on the second
pa%e. Her si%natures !hich appeared on the left $ar%in of the t!o<pa%ed deed of sale !ere $erel&
intended to authenticate the docu$ent !hich had alterations in the date and for no other purpose.
There is basis to conclude that not onl& is the docu$ent hi%hl& suspect but "honne& .i$8s character
and credibilit&, as !ell.
#s to !h& no receipt !as issued for the 4,,000.00, the trial court has this e-planation'
True it is that no receipt !as issued for the pa&$ent of the 3S 4,,000.00. .@#, ho!ever,
has satisfactoril& e-plained that it is for the reason that the pa&$ent !as in cash and that
the Deed of #bsolute Sale is alread& ac6no!led%e$ent >sic? enou%h of full pa&$ent
havin% been $ade b& her. Indeed, a si$ilar $ode of conduct had earlier been follo!ed b&
the parties !hen .@# paid for the stipulated earnest $one& or do!n pa&$ent of
3S4*),000.00. Onl& the first pa&$ent of 3D4+,000.00 >sic?, !as receipted for >@-hibit G@G
or G(G?. /hen .@# paid the re$ainin% 3S 4C,000.00, "HONN@E did not an&$ore issue
an& receipt as the "onditional Deed of Sale >@-hibit G=G or G5G? !hich the parties e-ecuted
si$ultaneousl& !ith the pa&$ent alread& served as the receipt.
9
#nent the ban6 draft and the chec6 !hich !ere dishonored upon present$ent, "honne& .i$ asserts
that since this did not effect pa&$ent, he !as therefore entitled to a rescission of the contract. /hile
such assertion $a& be true, the attendant circu$stances of the case, ho!ever, do not !arrant such
action. It is borne out b& the records that the draft and the chec6 !ere properl& funded at the ti$e of
present$ent.
10
The dishonor of the docu$ents !as neither the fault of "honne& .i$ nor .ea
/helan. On this point, the trial court correctl& elucidates'
/ith respect to the ban6 draft for P*)*,000.00, the sa$e !as dul& funded as
indubitabl& sho!n b& the correspondin% debit slip >@-hibit G,G? issued b& the Traders
Ro&al an6 >TR?. That it !as not encashed !hen "HONN@E presented it for
pa&$ent at the TR, a%uio "asino ranch, !as, as e-plained In TR8s letter to
"HONN@E, dated #u%ust *2, *+,) >@-hibit G@@G?, due to a $ana%e$ent rulin%
cancellin% the authorit& of the TR, a%uio "asino ranch, to encash such a draft so
the .@#8s dau%hter !as advised to %et bac6 the draft to be replaced !ith another
dra!n pa&able at a TR ranch nearest a%uio "it&. In the sa$e letter, "HONN@E
!as further advised that .@# !as in %ood faith and that he $a& present the draft for
pa&$ent at the TR, roadcast "it& ranch. 3nfortunatel&, .@#8s dau%hter did not
%et bac6 the draft fro$ "HONN@E to be replaced !ith another nor did "HONN@E
present it for pa&$ent at TR8s roadcast "it& ranch. ut the fact re$ains that the
ban6 draft had al!a&s been bac6ed up !ith sufficient funds. #ccordin%l&, the fault, if
an&, should be laid at the TR8s doorstep for allo!in% the draft to be dra!n pa&able
at its a%uio "asino ranch !hen the latter had no $ore authorit& for the purpose.
#s to the chec6 for P*9,,00.00, dated :une (*, *+,) > @-hibit GFG or G2G?, .@# issued it
a%ainst her current account deposit of P(0,000.00 !ith the Philippine "o$$ercial
International an6 >P"I? !hich she opened on :une (*, *+,) >@-hibits G*(G, G*5G and
G*5<#G?. The deposit !as reduced to P*+,000.00 as of :une (( >@-hibit G*5<G? but still
sufficient to cover the chec6. Ho!ever, the chec6 !as dishonored because "HONN@E
presented it for pa&$ent on :une (9 and before that, or on :une (C, he had pre$aturel&
encashed .@#8s other chec6, dated :ul& (C, *+,), for P(,000.00 >@-hibit G=G?, thereb&
further reducin% her deposit !as alread& short of P,00.00 to ans!er for her chec6 of
P*9,,00.00. De$onstrabl&, the fault !as not .@#8s but the dra!ee ban68s and
"HONN@E8s as evidence b& "HONN@E8s encash$ent of .@#8s chec6 for P(,000.00
before its due date on :ul& (C, *+,). In fact, the dra!ee ban6 had openl& ad$itted its
oversi%ht >@-hibit G*)G?.
11
Nonetheless, the pa&$ent of the $ort%a%e loan and the capital %ains ta- over the propert& !as
enou%h to cover for the pa&$ent of said propert&. "honne& .i$ asserts that this !as done in bad
faith, $erel& an afterthou%ht !hen the ban6 draft and the chec6 !ere dishonored. It is ho!ever for
this reason !h& .ea /helan eventuall& caused the Gstop pa&$entG of the chec6s because she found
out that "honne& .i$ failed to fulfill his obli%ations as provided in the deed of sale. She had paid
$ore than enou%h of !hat !as re1uired fro$ her for the propert&.
. . . .@# discovered that, contrar& to "HONN@E8s representation, he had not &et
redee$ed the disputed propert& fro$ the $ort%a%e indebtedness for !hich it had
been %iven as securit& to the an6 of the Philippine Island >PI? !hich indebtedness
had alread& %one up to P(*0,(+9.90, inclusive of interest and penalt& char%es
>@-hibit G((G?. To protect her interest in the propert&, she paid the $ort%a%e
indebtedness, and at the sa$e ti$e, stopped the pa&$ent of her ban6 draft and
chec6 since !hat she paid to the PI !as ver& $uch $ore than their a%%re%ate
a$ount of P*C,,,00.00.
.@# further$ore found out that "HONN@E did not also pa& for the capital %ains ta-
on their transaction in the total a$ount of P*),+)).00 >@-hibits G5+G and G)0G?7 she
also paid for it.
The recourse ta6en b& .@# is sanctioned b& la! and ;urisprudence and "HONN@E can
be bound thereb& althou%h he had no prior 6no!led%e thereof considerin% that the
pa&$ents $ade !ere clearl& to his benefit as he !as thus spared of bein% burdened !ith
interests and penalt& char%es >Rehabilitation =inance "orporation vs. "ourt of #ppeals,
+) Phil. +,)?.
12
#rt. *(52 of the "ivil "ode is applicable in the case at bar !hich provides in part'
--- --- ---
/hoever pa&s for another $a& de$and fro$ the debtor !hat he has paid, e-cept
that if he paid !ithout the 6no!led%e or a%ainst the !ill of the debtor, he can recover
onl& insofar as the pa&$ent has been beneficial to the debtor.
Pursuant to the above provision, the respondent "ourt, thus, ruled that'
The pa&$ent of the loan and capital %ains ta- undoubtedl& relieved the appellant fro$
such obli%ations. The benefit had even been $utual, both appellant and appellee had
obtained advanta%es on their sides K the appellant fro$ his loan and appellee bein%
secured of the possession.
1%
/e find no error !ith the rulin% that petitioner .i$ is not entitled to rescission of the contract. It
cannot be denied that "honne& .i$ is also not !ithout fault in this case. It !as "honne& .i$8s
obli%ation to see to it that the propert& !as free fro$ all encu$brances and ta- liabilities,
14
a$on%
others, !hich he obviousl& failed to do. The respondent court8s rulin% in considerin% the pa&$ent of
the $ort%a%e loan and the capital %ains ta- b& .ea /helan as her full pa&$ent for the propert& is but
a fair disposition !hich this "ourt does not see an& co%ent reason to reverse.
/H@R@=OR@, the decision of the "ourt of #ppeals is hereb& #==IRM@D.
SO ORD@R@D.
Narvasa, C.J., Romero and Purisima, JJ., concur.
) Foo*"o*+,
* Penned b& :ustice :usto P. Torres, :r. !ith :ustice Ricardo :. =rancisco and :ustice
"onsueloEnares<Santia%o, concurrin%.
( Penned b& :ud%e >no! #ssociate :ustice of the "ourt of #ppeals? Salvador ValdeB,
:r.
5 Rollo, pp. (*)<(*C.
) Id., at (*5<(*).
C Id., at (0<(*.
2 Tanedo v. "#, (C( S"R# ,0 >*++2?.
9 Rollo., p. **9.
, Id., at (9(<(95.
+ Id., at **9.
*0 Records, pp. (2C I (29, "ivil "ase No. )+2<R.
** Rollo., pp. **,<**+.
*( Id., at **+.
*5 Id., at (*,.
*) Id., at **C.

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