Mate v. CA

Facts:

On October 6, 1986, Josefina “Josie” Rey and private respondent Tan went to the residence of petitioner in Tacloban City. Josie solicited his help to stave her off her prosecution by respondent for violation of B. P. 22. Josie asked petitioner to cede to respondent his 3 lots. Josie explained to him that he was in no danger of losing his property as they will be redeemed by her own funds. After a long discussion, petitioner agreed to execute a fictitious deed of sale with right to repurchase after 6 months. Josie gave petitioner 2 post-dated checks to be used in redeeming the property. However, the checks were both dishonoured. Realizing that he was swindled, he sent a telegram to Josie, and looked for her in Manila, but she was nowhere to be found. Petitioner filed a criminal case against Josie for violation of B. P. 22, but the case was archived since Josie could not be located. Petitioner filed a case for annulment of contract with damages against Josie and respondent. Josie was declared in default and the case proceeded against respondent. Both the trial court and the Court of Appeals upheld the validity of the sale.

Issue:

Whether the sale was null and void for want of consideration

Held:

It is plain that consideration existed at the time of the execution of the deed of sale with right of repurchase. It is not only appellant's kindness to Josefina, being his cousin, but also his receipt of P420,000.00 from her which impelled him to execute such contract. Furthermore, while petitioner did not receive the P1.4 Million purchase prices from respondent Tan, he had in his possession a postdated check of Josie Rey in an equivalent amount precisely to repurchase the two lots on or before the sixth month. Unfortunately, the two checks issued by Josie Rey were worthless. Both were dishonored upon presentment by petitioner with the drawee banks. However, there is absolutely no basis for petitioner to file a complaint against private respondent Tan and Josie Rey to annul the pacto de retro sale on the ground of lack of consideration, invoking his failure to encash the two checks. Petitioner's cause of action was to file criminal actions against Josie Rey under B.P. 22, which he did. The filing of the criminal cases was a tacit admission by petitioner that there was a consideration of the pacto de retro sale.