ISABEL RUBIO ALCASID, ASSISTED BY HER HUSBAND DOMINGO A. ALCASID, PETITIONERS, VS. THE HONORABLE COURT OF APPEALS AND RUFINA L. LIM, RESPONDENTS.

This is a petition under Rule 45 of the Revised Rules of Court to
set aside the decision of the Court of Appeals in CA-G.R. SP No. 26108 entitled
“Rufina L. Lim v. Hon. Eustaquio Sto. Domingo, in his capacity as
Presiding Judge of the Regional Trial Court, Fourth Judicial Region, Branch 35,
Calamba, Laguna, and Isabel Rubio Alcasid, assisted by her husband Domingo A.
Alcasid.”

I

Petitioner is one of the co-owners of two parcels of land located
in Calamba, Laguna. Private respondent
offered to purchase from petitioner and her co-owners the above-mentioned
property. Petitioner was willing to
sell her share for P4,500,000.00 and only if all her co-owners would sell their
respective shares of the said land.

Petitioner engaged the services of Atty. Antonio A. Fernandez for
the purpose of negotiating the sale, without knowing that he was also
representing private respondent.

In March 1990, Atty. Fernandez confirmed to petitioner that all
her co-owners were already amenable to sell their shares for P1,500,000.00

On March 4, 1990, petitioner signed a Deed of Sale drafted by
Atty. Fernandez. Subsequently,
petitioner learned that the other co-owners did not agree to sell their shares
over the subject property.

On November 4, 1990, petitioner filed a complaint in the Regional
Trial Court, Branch 34, Calamba, Laguna, for annulment of the contract of sale
and damages with a prayer for temporary restraining order or writ of
preliminary injunction against private respondent.

Private respondent filed a motion to dismiss on the grounds that
the complaint stated no cause of action. The trial court denied the motion to dismiss.

On August 20, 1991, a motion to declare private respondent in
default was filed by petitioner. This
was granted by the trial court.

Private respondent appealed the said orders of the trial court to
the Court of Appeals, which reversed the decision of the trial court and held
that the complaint stated no cause of action.

Hence, this petition.

II

Petitioner alleges that her complaint for annulment of contract
is based upon fraud, mistake and undue influence which vitiated her
consent. According to her, were it not
for the misrepresentation of private respondent and Atty. Fernandez that her
co-owners had agreed to sell their share to private respondent, petitioner
would not have agreed to sell her share.

Private respondent, on the other hand, claims the complaint is in
the nature of a malpractice suit against Atty. Fernandez and not against her.

III

Petitioner contends that she was not aware that Atty. Fernandez
was also representing private respondent, but a letter dated March 4, 1990 sent by Atty. Fernandez to the
petitioner belied her allegation.

The letter is reproduced in full, as follows:

“March 4, 1990

TO:  Mrs. Isabel R. Alcasid &

               Mrs. Mila A. Marcos (daughter)

For and in behalf of my client, Miss Rufina L. Lim of Bucal,
Calamba, Laguna, I, Atty. Antonio A. Fernandez hereby confirm that the selling
price of One Million One Thousand Seven Hundred Fifty Pesos (P1,0001,750.00) is
NET Purchase price and full payment of Lot Nos. 44-10-A-4 & 199-New-A-4.

My client, Miss Rufina Lim, the vendee, hereby assumes the
full payment of BIR capital gain tax and transfer fee. Likewise, my said clients shall shoulder
Register of Deed’s registration and transfer fees, including all the
documentary & science stamps. Attorney’s fees and back taxes and other related fees shall be
exclusively paid by the vendee, Miss Lim.

In payment for the said purchase price, the full amount is
represented by PNB DEMAND DRAFT NO. ________ issued on March _____, 1990.

This arrangement is also true to other vendors, namely Ignacio
Rubio, Felix Rubio, Heirs of Eufrosina Laygo, Heirs of Luz Rubio & Heirs of
Amador Rubio.

ANTONIO A. FERNANDEZ

Counsel for Miss Rufina Lim“

(Rollo, p. 7; Underlining supplied)

On the matter of fraud, Article 1338 of the Civil Code of the
Philippines provides:

“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” (Art. 1338, Civil Code).

In order that fraud may vitiate consent and be a cause for
annulment of contract, the following must concur:

1.) It must have been employed by one contracting party upon the other
(Art. 1342 and 1344);

2.) It must have induced the other party to enter into the contract (Art.
1338);

3.) It must have been serious (Art. 1344);

4.) It must have
resulted in damage and injury to the party seeking annulment (Tolentino, IV
Commentaries on the Civil Code of the Philippines,
507 [1991 ed]).

As to the alleged mistake, Article 1331 of the Civil Code of the
Philippines provides:

“In order that mistake may invalidate consent, it should refer
to the substance of the thing which is the object of the contract, or to those
conditions which have principally moved one or both parties to enter into the
contract.”

To invalidate consent, the error must be real and not one that
could have been avoided by the party alleging it. The error must arise from facts unknown to him. He cannot allege an error which refers to a
fact known to him or which he should have known by ordinary diligent
examination of the facts. An error so
patent and obvious that nobody could have made it, or one which could have been
avoided by ordinary prudence, cannot be invoked by the one who made it in order
to annul his contract (Tolentino, supra at pp. 486-487).

Petitioner could have avoided the alleged mistake had she exerted
efforts to verify from her co-owners if they really consented to sell their
respective shares.

As to undue influence, Article 1337 of the Civil Code of the
Philippines provides:

“There is undue influence when a person takes improper
advantage of his power over the will of another, depriving the latter of a
reasonable freedom of choice. The
following circumstances shall be considered: the confidential, family, spiritual and other relations between the
parties, or the fact that the person alleged to have been unduly influenced was
suffering from mental weakness, or was ignorant or in financial distress.”

Undue influence, therefore, is any means employed upon a party
which, under the circumstances, he could not well resist and which controlled
his volition and induced him to give his consent to the contract, which
otherwise he would not have entered into. It must in some measure destroy the free agency of a party and interfere
with the exercise of that independent discretion which is necessary for
determining the advantages or disadvantages of a proposed contract (Tolentino, supra
at p. 501). If a competent person has
once assented to a contract freely and fairly, he is bound thereby.

The finding of the Court of Appeals that petitioner executed the contract
of her own free will and choice and not from duress is fully supported by the
evidence. Such finding should not be
disturbed (Martinez v. Hongkong & Shanghai Bank, 15 Phil. 252 [1910]).

Private respondent did not commit any wrongful act or omission
which violated the primary right of petitioner. Hence, petitioner did not have a cause of action (State
Investment House, Inc. v. Court of Appeals, 206 SCRA 348 [1992]).

WHEREFORE, the petition is DENIED. The decision of the Court of Appeals
appealed from is AFFIRMED.

SO ORDERED.

Cruz, (Chairman), Davide, Jr., Bellosillo, and Kapunan, JJ.,
concur.