JAIME L. YANEZA, PETITIONER, VS. THE HONORABLE COURT OF APPEALS, MANUEL A. DE JESUS AND WILHELMINA M. MANZANO, RESPONDENTS.

Yaneza versus De Jesus

The Case

This is a petition for certiorari and prohibition brought by Jaime Yaneza against the Court of Appeals, Manuel de Jesus, and Wilhelmina Manzano. Yaneza owns a parcel of land in Baras, Rizal, and the respondents own the adjacent lot, which has no access to the road except through a portion of his property. After the parties signed a deed of absolute sale over a strip of that property to serve as an access road, Yaneza unilaterally canceled the deed and sued to rescind the contract. The case matters because the Supreme Court uses it to teach two enduring lessons: that the period to appeal is jurisdictional and cannot be extended after it has lapsed, and that rescission under Article 1191 of the Civil Code presupposes a valid and subsisting obligation, so it cannot be granted where the original contract has already been superseded by a new one.

Procedural History

Yaneza filed a complaint for cancellation of contract with the Municipal Circuit Trial Court of Teresa-Baras. The trial court dismissed the complaint, granted the respondents' counterclaims, and ordered Yaneza to execute a new deed of absolute sale covering the access road, canceled his right of way, ordered him to remove the steel fence he had built, and awarded damages. Yaneza appealed to the Regional Trial Court of Morong, Rizal, Branch 78, which affirmed the trial court's decision but deleted the monetary award in favor of the respondents. The respondents moved for reconsideration, which was denied, and they then filed a petition for relief from judgment, the status of which the parties did not disclose.

Yaneza's counsel received a copy of the Regional Trial Court decision on February 6, 2001, and withdrew his appearance three days later. On February 22, 2001, through new counsel, Yaneza filed an urgent motion for extension of time to file a petition for review, asking for fifteen days from February 24, 2001, or until March 12, 2001. The Court of Appeals denied the motion as filed one day late and dismissed the appeal. Yaneza's motion for reconsideration and motion for leave to admit the petition for review were likewise denied. Yaneza then filed this petition for certiorari and prohibition before the Supreme Court.

Facts

Yaneza owned a 603-square-meter parcel of land, Lot 2730-A, in Baras, Rizal, which he purchased from Rudy Llagas in June 1990. The respondents, De Jesus and Manzano, owned the adjacent Lot 2732, which had no access to the nearest road except through a road they had constructed over a portion of Yaneza's lot. In September 1995, Yaneza wrote to the respondents objecting to the use of his property as an access road and offered to sell them the entire property. Two days later, he wrote again, offering instead a perpetual easement of right of way four meters wide.

Instead of an easement, the parties executed a Deed of Absolute Sale in October 1995 over a 175-square-meter portion of Lot 2730-A, to be used as an access road five meters wide, for a consideration of 20,000 pesos. The deed stated that the use of the portion sold shall be for the purpose of the right of way of the respondents' property, and that the vendor shall have the perpetual right to use the same as right of way for his own purposes. Almost a year later, in September 1996, Yaneza executed on his own a Deed of Cancellation. When the respondents refused to honor it, he filed a complaint for cancellation of contract in April 1997, alleging that the respondents had built a road eight meters wide instead of five, had not complied with the conditions of the deed and an attached Deed of Undertaking, and had dumped gravel, sand, and soil along the access road.

The respondents answered that they had bought the disputed 280-square-meter portion from Llagas as early as March 1994 and had built a road over it. To buy peace, they agreed to pay 20,000 pesos, but after discovering that the deed covered only 175 square meters, they renegotiated and paid an additional 40,000 pesos for the entire 280 square meters, as shown by an acknowledgment receipt. They claimed Yaneza never prepared the new deed of sale. They also alleged that after a misunderstanding with their caretaker, Yaneza built a fence along the access road, reducing it to a narrow passage. The trial court dismissed the complaint and ruled for the respondents, and the Regional Trial Court affirmed with the deletion of the damages award.

Issues

• Whether or not the Court of Appeals committed grave abuse of discretion in denying the motion for extension of time to file a petition for review, it having been filed after the lapse of the reglementary period.
• Whether or not the decision of the Regional Trial Court was rendered and written as required by the Constitution and the Rules of Court.
• Whether or not the petitioner has a cause of action for cancellation of the contract.
• Whether or not the petitioner may be compelled to execute a deed of conveyance against his will, in violation of his constitutional right against deprivation of property without due process and the civil law against unjust enrichment.

Applicable Provisions

Article 1191 of the Civil Code provides:

Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 of the Mortgage Law.

This is the provision on which Yaneza based his cause of action for cancellation, and the Court uses it to explain why rescission requires a subsisting obligation and a substantial breach.

Article 1357 of the Civil Code provides:

Article 1357. If the law requires a document or other special form, as in the acts and contracts enumerated in the following article, the contracting parties may compel each other to observe that form, once the contract has been perfected. This right may be exercised simultaneously with the action upon the contract.

This is the provision that authorizes the compulsion on Yaneza to execute the deed of sale reflecting the new agreement over the 280-square-meter area.

Ruling

On the first issue, the Court held that the Court of Appeals did not commit grave abuse of discretion. A motion for extension of time to file a petition must be filed before the expiration of the period set by law; otherwise, there is no longer any period to extend, and the judgment sought to be appealed has become final and executory. Once final, the appellate court has no jurisdiction to modify or reverse it. The Court stressed that the perfection of an appeal in the manner and within the period prescribed by law is mandatory and jurisdictional, and that failure to perfect an appeal is not a mere technicality because it deprives the appellate court of jurisdiction. Anyone seeking exemption from the reglementary period bears the burden of proving an exceptionally meritorious instance, and none obtained here.

On the merits, the Court held that the complaint was correctly dismissed. Yaneza's cause of action was based on breach of contract under Article 1191, but the construction of a road wider than the stipulated area was not a breach, because the contract contained no promise that the respondents would occupy only that area. Neither could the respondents be faulted for not facilitating the transfer of title, since they never signed the Deed of Undertaking and Yaneza failed to authenticate it. The Court added that rescission is not permitted for a slight or casual breach, but only for a substantial and fundamental breach that defeats the object of the parties, and the alleged breach was not of that level.

Most importantly, the Court held that rescission presupposes a valid and subsisting obligation. The original deed of sale had already been superseded or novated by a new oral contract covering the entire 280-square-meter area, as shown by Yaneza's admission that he received the 20,000 pesos and by the acknowledgment receipt for the additional 40,000 pesos. The new contract was valid despite not being in writing, because the Statute of Frauds affects only enforceability, not validity, and applies only to executory contracts, not to those partially or totally consummated. Having established the new contract, the Court held that Yaneza may be compelled to execute the corresponding deed of sale under Article 1357.

Doctrine

A motion for extension of time to file a petition for review must be filed before the expiration of the reglementary period; once the period lapses, the judgment becomes final and executory, and the appellate court loses jurisdiction. The perfection of an appeal within the period prescribed by law is mandatory and jurisdictional, and failure to perfect it is not a mere technicality.

Rescission under Article 1191 of the Civil Code requires a valid and subsisting obligation and a substantial and fundamental breach, not a slight or casual one. Where the original contract has been superseded or novated by a new agreement, an action to rescind the original contract is an exercise in futility.

A contract of sale need not be in writing to be valid; the Statute of Frauds affects only enforceability and applies only to executory contracts, not to those partially or totally consummated. Under Article 1357, once a contract has been perfected, the parties may compel each other to observe the required form.

Disposition

The Supreme Court dismissed the petition and affirmed the resolutions of the Court of Appeals, leaving Yaneza bound to execute the new deed of sale in favor of the respondents.

Remember This

The single line worth memorizing is that a motion for extension of time filed after the period has lapsed is a nullity, because there is no longer any period to extend, and rescission cannot lie where the contract sought to be rescinded no longer exists. Examiners like to use this case on the jurisdictional nature of the appeal period and on the requisites of rescission under Article 1191, including the rule that only a substantial breach justifies rescission.