Calilap-Asmeron vs. CA and DBP, Art. 1332

Alexis Glynn Eliza C.
Martinez - 184033
LINA CALILAP-ASMERON, PETITIONER, VS. DEVELOPMENT BANK OF THE

PHILIPPINES, PABLO CRUZ, TRINIDAD CABANTOG, ENI S.P. ATIENZA AND
EMERENCIANA CABANTOG, RESPONDENTS.
G.R. No. 157330; November 23, 2011
When one of the parties is unable to read
FACTS:
On March 17, 1975, the petitioner and her brother Celedonio Calilap constituted a real estate
mortgage over two parcels of land in Bulacan to secure the performance of their loan obligation with
respondent Development Bank of the Philippines (DBP). When the petitioners failed to settle their
principal obligation, DBP foreclosed the mortgage. The mortgaged parcels of land were then sold to DBP
as the highest bidder. The one-year redemption period expired on September 1, 1981.
According to the petitioner, DBP accorded her a preferential right to repurchase the property TCT
No. 164117. In August 1982, the petitioner negotiated with DBP to buy back the property covered by
TCT No. 164117 by offering P15,000 but was rejected. Instead, DBP required her to pay the full purchase
price of P55,000 within 10 days. She returned to DBP with the amount, only to be told that DBP would
not sell back only one lot. Believing that the lot will be released after paying two amortizations for the
other lot (TCT No. 160929), however, she signed the deed of conditional sale covering both lots for the
total consideration of P157,000.00. She continued paying the amortizations until she had paid P40,000.00
in all, at which point she sought the release of the lot under TCT No. 164117. DBP still denied her
request, warning that it would rescind the contract should her remaining amortizations be still not paid.
On August 7, 1985, DBP rescinded the deed of conditional sale over her objections. Subsequently, DBP
sold the lot covered by TCT No. 164117 to respondent Pablo Cruz via a deed of absolute sale. The
petitioner consequently filed a complaint for the rescission of the sale to Cruz on January 30, 1987.
Notwithstanding their knowledge of her pending suit against Cruz, respondents Emerenciana Cabantog
and Eni S.P. Atienza still bought the property from Cruz. Hence, Cabantog and Atienza were impleaded
as additional defendants by amendment.
DBP insisted that the petitioner's real intention had been to repurchase the two lots on installment
basis. She manifested her real intention to that effect in writing through her letter dated September 14,
1981. On November 16, 1981, Lina Calilap-Asmeron requested DBP to put the bidding of the properties
on hold. A year later, she sent a letter dated August 31, 1982 to reiterate her intention to repurchase the
two properties and to offer to deposit P55,500.00 as initial payment. The petitioner subsequently made the
downpayment on September 10, 1992 which the respondent bank DBP formally accepted the offer
through its letter dated September 14, 1982, stating therein the terms and conditions. Said terms and
conditions bound her to pay the first amortization of P7,304.15, three months from the execution of the
deed, and the remaining amortizations to be due and payable every three months thereafter. The petitioner
paid her first quarterly amortization on time but then she incurred delays with her subsequent
installments. She made her last payment amounting to P4,500.00 on March 12, 1985, leaving five
quarterly amortizations unpaid. The following year, the petitioner sent a handwritten letter requesting
DBP to put on hold any plans of selling the subject property. She stated that she will be paying the whole
amount of her obligations through a private financier under DBP’s Incentive Plan. In reply to this request
made by the petitioner, DBP demanded the payment of the petitioner's remaining obligation of
P121,013.75 in cash, otherwise, it would be constrained to sell the property. In a telegram sent on March
5, 1986, the petitioner stated her willingness to pay 10% of her outstanding obligations. On March 12,
1986, DBP demanded the immediate remittance of the promised amount via telegram. When she did not
pay the six quarterly amortizations, DBP rescinded the deed of conditional sale and applied for a writ of
possession on November 17, 1986 in the RTC (Branch 17) in Malolos, Bulacan. Its application for the
writ of possession was granted on November 18, 1986.
ISSUE:
The pertinent issues in this matter are as follows:

● Whether or not Art. 1332 of the Civil Code applies to the petitioner Calilap-Asmeron?
● Whether or not there was a valid rescission of the deed of conditional sale carried out by the
respondent bank DBP?
RULING:
1. Regarding the first issue, Art. 1332 of the Civil Code does not apply to petitioner
Calilap-Asmeron. The petitioner sought for the court to consider that she had not given her full
consent to the deed of conditional sale on account of her lack of legal and technical knowledge.
The petitioner sought to have the aforementioned provision of the law to be applied to her. Article
1332 of the Civil Code which provides that 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.
The petitioner did not specify which of the stipulations of the deed of conditional sale she had
difficulty or deficiency in understanding. Her generalized averment of having been misled should,
therefore, be brushed aside as nothing but a last attempt to salvage a hopeless position. The
stipulations of the deed of conditional sale were simply worded and plain enough for even one
with a slight knowledge of English to easily understand. Moreover, the petitioner was not
illiterate as she had appeared to the trial court to be educated and had personally composed her
correspondence to DPB. Nor was the petitioners ignorance of the true nature of the deed of
conditional sale probably true. By her own admission, she had asked the bank officer why she had
been made to sign a deed of conditional sale instead of an absolute sale, which in itself reflected
her full discernment of the matters subject of her dealings with DBP.
2. Regarding the second issue, DBP validly exercised its right to rescind the deed of conditional sale
upon the petitioners default. The Court, which is not a trier of facts, adopts the findings of the
RTC and the CA, and sustains the exercise by DBP of its right to rescind following the petitioners
failure to pay her six monthly amortizations, and after her being given due notice of the notarial
rescission. As a consequence of the valid rescission, DBP had the legal right to thereafter sell the
property to a person other than the petitioner, like Cruz. In turn, Cruz could validly sell the
property to Cabantog and Trinidad, which he did.
DISPOSITIVE:
ACCORDINGLY, the petition for review is DENIED for lack of merit, and the decision of the Court of
Appeals promulgated on June 21, 2002 is AFFIRMED.
Costs of suit shall be paid by the petitioner.
SO ORDERED.

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Alexis Glynn Eliza C.

LINA CALILAP-ASMERON, PETITIONER, VS. DEVELOPMENT BANK OF THE

The pertinent issues in this matter are as follows:

Costs of suit shall be paid by the petitioner.

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