Case Digest: Hernandez vs. Hernandez

G.R. No. 158576:March 9, 2011.

CORNELIA M. HERNANDEZ, SUBSTITUTED BY LOURDES H. CASTILLO, Petitioner, v. CECILIO F. HERNANDEZ, Respondent.

PEREZ, J.:


FACTS:

On 11 November 1993, the owners of the Hernandez property, which includes petitioner Cornelia Hernandez, executed a letter indicating: (1) respondent Cecilio Hernandez as the representative of the owners of the land; and (2) the compensation he gets in doing such job. Such property was subject of an expropriation case for a DPWH project. During the course of the expropriation proceedings, an Order was issued by the RTC, Cecilio was appointed as one of the commissioners in the expropriation case. On 18 October 1996, Cornelia, and her other co-owners who were also signatories of the 11 November 1993 letter, executed an irrevocable Special Power of Attorney (SPA) appointing Cecilio Hernandez as their "true and lawful attorney" with respect to the expropriation of the subject property. There was no mention of the compensation scheme for Cecilio, the attorney-in-fact.

The just compensation for the condemned properties was fixed subsequently, with Cornelias share amounting to P7,321,500.00the amount apro-indivisoowner is to receive. At this point, Cecilios SPA was revoked by Cornelia. On 7 February 2000, however, Cornelia received from Cecilio a check amounting to P1,123,000.00. The check was accompanied by a Receipt and Quitclaimdocument in favor of Cecilio.In essence it states that: (1) the amount received will be the share of Cornelia in the just compensation paid by the government in the expropriated property; (2) in consideration of the payment, it will release and forever discharge Cecilio from any action, damages, claims or demands; and (3) Cornelia will not institute any action and will not pursue her complaint or opposition to the release to Cecilio or his heirs or assigns.

In a Letterdated 22 June 2000after she learned of her true share in the expropriation proceedingsCornelia demanded the accounting of the proceeds.The letter was left unanswered.She then decided to have the courts settle the issue.A Complaint for the Annulment of Quitclaim and Recovery of Sum of Money and Damages was filed before the RTC. Cecilio was declared in default, but this was reversed by the CA.

ISSUE: Whether or not the CA erred in holding the validity of the receipt and quitclaim document

HELD:

The petition is granted.

CIVIL LAW: Voidable contracts.

A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable. In determining whether consent is vitiated by any of the circumstances mentioned, courts are given a wide latitude in weighing the facts or circumstances in a given case and in deciding in their favor what they believe to have actually occurred,considering the age, physical infirmity, intelligence, relationship, and the conduct of the parties at the time of the making of the contract and subsequent thereto. Here, the service contract of 11 November 1993 (appointing Cecilio as representative), as well as the quitclaim and receipt, are voidablethe first due to mistake, the second due to fraud.

First, the service contract gave Cecilio compensation based on "1998 skyrocketing" prices that essentially will give Cecilio 83.07% of the just compensation due Cornelia as the co-owner of the land. No evidence on record would show that Cornelia agreed, by way of the 11 November 1993 letter, to give Cecilio 83.07% of the proceeds of the sale of her land. Second, quitclaims are also contracts and can be voided if there was fraud or intimidation that leads to lack of consent.The facts show that a simple accounting of the proceeds of the just compensation will be enough to satisfy the curiosity of Cornelia.However, Cecilio did not disclose the truth and instead of coming up with the request of his aunt, he made a contract intended to bar Cornelia from recovering any further sum of money from the sale of her property.

Moreover, when Cecilio accepted the position as commissioner, he created a barrier that prevented his performance of his duties under the SPA. Cecilio could not have been a hearing officer and a defendant at the same time.Indeed, Cecilio foisted fraud on both the Court and the Hernandezes when, after his appointment as commissioner, he accepted the appointment by the Hernandezes to "represent" and "sue for" them.

The decision of the CA is REVERSED and SET ASIDE.

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