Art. 1338 – Fraud.
Petitioners – Consuelo
Reyes, Mario Francisco & Marila Berceño
Respondents – CA, Jose Ortañez & Angel Aseoche.
Facts:
·
The
subject of this controversy is a 4-unit apartment building located at Sampaloc,
Manila, owned by Jose Ortañez.
·
Ortañez
leased separately the units to the three petitioners and Angel Aseoche.
·
In
1980, Ortañez offered to sell the building to the said lessees for P150,000.00
and gave them 30 days within which to reply. But only Reyes and Aseoche indicated
their interest in purchasing the units they were respectively occupying. The
other two petitioners did not respond.
·
Reyes
did not pursue her intention to purchase her unit. Aseoche negotiated with
Ortañez, and was offered the option to buy the entire building.
·
Thereafter,
Aseoche notified the petitioners in writing that he was now the owner of the
whole building. Later, he told them to vacate their respective units within 90
days because the premises would be occupied by his son, brother and sister.
·
The
petitioners filed a complaint against Aseoche and Ortañez for Annulment of
Title/ Sale with Damages, later amended to include a prayer for Specific
Performance.
·
The
trial court rendered its decision on their favor, but was reversed by the CA.
·
The
petitioners asserted that the sale between Aseoche and Ortañez was tainted with
fraud and bad faith, which called for nullification.
Issue:
WoN the fraud that vitiates a contract
invoked by the peitioners be the “fraud” contemplated by Art. 1338 of the Civil
Code.
Held:
No, the
Court holds that the fraud or bad faith as a ground for nullifying the contract
between Ortañez and Aseoche is NOT the fraud contemplated by the said provision because
they are strangers to the contracting parties. Hence, the petitioners are not entitled
to such invocation.
Under Art.
1338, There is fraud when, through insidious words or machinations of one of
the contracting parties, the other is induced to enter into a contract which
without them he would not have agreed to.
In the
case at bar, there was no evidence that Aseoche resorted to insidious words or
machinations to induce Ortañez to enter into a contract with him, which
constituted fraud. Moreover, the petitioners failed to establish that they
authorized Aseoche to represent them in their negotiation. It is clear,
however, that the petitioners decided to challenge the sale between the private
respondents only because and after they were asked to vacate the subject
property although they had not earlier manifested or pursued any interest in
buying it when it was formally offered for sale to them.
Thus, the petition is DENIED.
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