Rural vs CA

Rural Bank of Sta Maria Pangasinan vs CA Gr no. 110672 1999 Facts  A Deed of Absolute Sale with Assumption of Mortgage was executed between Manuel Behis as vendor/assignor and Rayandayan and Arceño as vendees/assignees for the sum of !"#$###%##% &n the same same day$ day$ Rayand Rayandaya ayan n and Arceñ Arceño o togeth together er with with Manuel Manuel Behis Behis execut executed ed anothe another  r   Agreement embodying the real consideration of the sale of the land in the sum of !$'##$###%##% (hereafter$ Rayandayan and Arceño negotiated with the principal stoc)holder of the ban)$ *ngr% *dilberto +atividad in Manila$ for the assumption of the indebtedness of Manuel Behis and the subse,uent release of the mortgage on the property by the ban)% Rayandayan and Arceño did not show to the ban) the Agreement with Manuel Behis providing for  the real consideration of !$'##$###%## for the sale of the property to the former% Subse,uently$ the ban) consented to the substitution of plaintiffs as mortgage debtors in place of Manuel Behis in a Memorandum of Agreement between private respondents and the ban) with restructured and liberali-ed terms for the payment of the mortgage debt% .nstead of the ban) foreclosing immediately for nonpayment of the delin,uent account$ petitioner  ban) agreed to receive only a partial payment of 0'1$###%## by installment on specified dates%  After payment thereof$ the ban) agreed to release the mortgage of Manuel Behis2 to give its consent consent to the transfer transfer of title to the private private respondents respondents22 and to the payment payment of the balance of  !##$###%## under new terms with a new mortgage to be executed by the private respondents over the same land% 3owe 3oweve verr$ peti petiti tion oner er ban) ban) did did not not comp comply ly with with the the M&A M&A with with resp respon onde dent nts s beca becaus use e of a supervening event namely the protest made by 4ristina Behis$ wife of Manual Behis$ alleging that she did not consent consent to the negotiat negotiation ion made as regard regards s the Deed of absolu absolute te sale sale with with  Assumption of Mortgage by her husband with the respondents and that her signature was forged by respondents% (he petitioner ban) then told respondents to settle the matter with Mrs% Behis%  At that point$ petitioner petitioner ban) cancelled its M&A M&A with with respondents because5 first$ first$ the latter failed failed to settle the protest of Mrs% Behis2 and$ secondly$ the terms of the Memorandum of Agreement have not been fully complied with as the payments were not made on time on the dates fixed therein2 and third$ their consent to the Memorandum of Agreement Agreement was secured by the plaintiffs thru fraud as the Ban) was not shown the Agreement containing the real consideration of !$'##%###%## of  the sale of the land of Manuel Behis to plaintiffs% (hereafter$ the the petitioner ban) returned the initial payment of 0'1$###%## to respondents% .n the mean time$ petitioner entered into an agreement with 3alsema Ban) that the latter would assume the mortgage of Manuel Behis in consideration of "!0$67"%'"% (hereafter$ respondents respondents brought the matter before the R(4 which ruled that the M&A is valid% (he case was elevated to the 4A on certiorari% (he respondent 4ourt affirmed the validity of the M&A dismissing the claim of the respondent that their consent to the agreement made with respon responden dents ts to assume assume the mortga mortgage ge of Manuel Manuel Behis$ Behis$ and awardi awarding ng the respon responden dents ts for  damages% 3ence this present appeal% !ssu"s5 !ssu"s5 8hethe 8hetherr or not respon responden dents ts are guilty guilty of fraud fraud 9whic 9which h would would ma)e ma)e the contra contract ct betwee between n respondents and petitioner viod: when it did not show or it concealed from the petitioner the

 Agreement 9between respondents and Manuel Behis: the consideration of !%'$ and rather what was only shown was the first agreement with regard to the Deed of Sale with Assumption of  Mortgage; #"l$ +o% (his brings us to the first issue raised by petitioner ban) that the Memorandum of Agreement is voidable on the ground that its consent to enter said agreement was vitiated by fraud because private respondents withheld from petitioner ban) the material information that the real consideration for the sale with assumption of mortgage of the property by Manuel Behis to Rayandayan and Arceño is !$'##$###%##$ and not !"#$###%## as represented to petitioner  ban)% According to petitioner ban)$ had it )nown of the real consideration for the sale$ i%e% !%' million$ it would not have consented into entering the Memorandum of Agreement with Rayandayan and Arceño as it was put in the dar) as to the real capacity and f inancial standing of  private respondents to assume the mortgage from Manuel Behis% etitioner ban) pointed out that it would not have assented to the agreement$ as it could not expect the private respondents to pay the ban) the approximately 1'1$###%## mortgage debt when private respondents have to pay at the same time !$'##$###%## to Manuel Behis on the sale of the land% (he )ind of fraud that will vitiate a contract refers to those insidious words or machinations resorted to by one of the contracting parties to induce the other to enter into a contract which without them he would not have agreed to% 01 Simply stated$ the fraud must be the determining cause of the contract$ or must have caused the consent to be given% .t is believed that the non disclosure to the ban) of the purchase price of the sale of the land between private respondents and Manuel Behis cannot be the of the 4ivil 4ode% 0' ?rom the sole reason submitted by the petitioner ban) that it was )ept in the dar) as to the financial capacity of private respondents$ we cannot see how the omission or concealment of the real purchase price could have induced the ban) into giving its consent to the agreement2 or that the ban) would not have otherwise given its consent had it )nown of the real purchase price% (he deceit which voids the contract exists where the party who obtains the consent does so by means of concealing or omitting to state material facts$ with intent to deceive$ by reason of which omission or concealment the other party was induced to give a consent which he would not otherwise have given 9(olentino$ 4ommentaries and @urisprudence on the 4ivil 4ode$ ol% .$ p% '>#:% .n this case$ the consideration for the sale with assumption of  mortgage was not the inducement to defendant ban) to give a consent which it would not otherwise have given% 4onse,uently$ not all the elements of fraud vitiating consent for purposes of annulling a contract concur$ to wit5 9a: .t was employed by a contracting party upon the other2 9b: .t induced the other  party to enter into the contract2 9c: .t was serious2 and2 9d: .t resulted in damages and inury to the party see)ing annulment% 0> etitioner ban) has not sufficiently shown that it was induced to enter  into the agreement by the nondisclosure of the purchase price$ and that the same resulted in damages to the ban)% .ndeed$ the general rule is that whosoever alleges fraud or mista)e in any transaction must substantiate his allegation$ since it is presumed that a person ta)es ordinary care for his concerns and that private transactions have been fair and regular% etitioner ban)Cs allegation of fraud and deceit have not been established sufficiently and competently to rebut the presumption of regularity and due execution of the agreement%