Heirs of Enrique Zambales vs. Court of Appeals & Nin Bay Mining Corp.
120 SCRA 897
February 1983
FACTS:
The spouses Enrique Zambales and Joaquina Zambales (the Zambaleses), who are illiterate, were the homestead patentees of a parcel of land in the Municipality of Del Pilar, Roxas, Palawan, pursuant to Homestead Patent No. V-59502 dated September 6, 1955. They claimed in November 1956 that respondent Nin Bay Mining Corporation (Corporation) had removed silica sand from their land and destroyed the plants and other improvements thereon, to which said Corporation denied to have done so. On October 29, 1959, the Zambaleses, duly assisted by their counsel, Atty. Perfecto de los Reyes, and the Corporation, entered into a Compromise Agreement which state, among others, that the Zambaleses are giving the Corporation full power and authority to sell, transfer and convey on September 10, 1960 or at any time thereafter the whole or any part of herein subject property.
On September 10, 1960, the Corporation sold the disputed property to Joaquin B. Preysler for the sum of P8,923.70 fixed in the Compromise Agreement. On December 6, 1969, or ten (10) years after the Trial Court's Decision based on the Compromise Agreement, and nine (9) years after the sale to Preysler, the Zambaleses filed a civil action in the CFI of Palawan for "Annulment of a Deed of Sale with Recovery of Possession and Ownership with Damages”, alleging that Atty. de los Reyes and the Corporation induced them through fraud, deceit and manipulation to sign the Compromise Agreement.
The trial court declared null and void the deed of sale executed between Preysler and the Corporation, but the Court of Appeals reversed the said decision after finding that the alleged fraud or misrepresentation in the execution of the Compromise Agreement had not been substantiated by evidence.
ISSUE:
Are the compromise agreement and the subsequent deed of sale valid and legal?
COURT RULING:
The Supreme Court sustained the finding of the appellate court that fraud and misrepresentation did not vitiate petitioners' consent to the Agreement because the latter were not as ignorant as they themselves tried to show. The Zambaleses were political leaders who speak in the platform during political rallies, and the lawyers they have hired belong to well-established law firms in Manila, which show that although they were illiterate, they are still well-informed.
However, while the Compromise Agreement was held to be in violation of the Public Land Act, which prohibits alienation and encumbrance of a homestead lot within five years from the issuance of the patent. Although the issue was not raised in the Courts below, the Supreme Court has the authority to review matters even if they are not assigned as errors in the appeal, if it is found that their consideration is necessary in arriving at a just decision of the case. The bilateral promise to sell between the Zambaleses and the Corporation, and the subsequent deed of sale between Preysler and the latter were declared null and void.
