TL;DR

In lump sum sales of real estate in the Philippines, the Supreme Court clarified that while boundaries generally prevail over stated area, this rule is not absolute. If the discrepancy between the stated area and the actual area within the boundaries is too substantial, the buyer is not automatically entitled to the excess land without additional payment. This case emphasizes that the phrase “more or less” in property descriptions covers only reasonable discrepancies, protecting sellers from being compelled to deliver significantly larger properties than originally intended in lump sum agreements. Buyers should not assume automatic ownership of unexpectedly large areas in lump sum purchases when the difference is considerable.

When ‘More or Less’ Means Just That: The Case of the Unexpectedly Large Lot

This case, Arcaina v. Ingram, revolves around a real estate transaction gone awry due to a significant discrepancy in land area. Dasmariñas Arcaina and Magnani Banta (petitioners) sold a property in Albay to Noemi Ingram (respondent). The deeds of sale described the land (Lot No. 3230) as approximately 6,200 square meters, bounded by specific lots and a seashore, for a lump sum price of P1,860,000. However, a subsequent survey revealed the property to be closer to 12,000 square meters – almost double the stated area. This discrepancy sparked a legal battle: did Ingram purchase the entire 12,000 sq.m. within the described boundaries, or only the approximately 6,200 sq.m. as indicated in the deeds? The core legal question is whether Article 1542 of the Civil Code, governing lump sum sales of real estate, mandates the delivery of the entire area within the boundaries regardless of a substantial area discrepancy.

The Municipal Circuit Trial Court (MCTC) initially sided with the sellers, Arcaina and Banta, dismissing Ingram’s claim for the entire property. The MCTC emphasized that Ingram was aware of the 6,200 sq.m. area from the tax declaration and failed to prove payment for the surplus. However, the Regional Trial Court (RTC) reversed this, ruling in favor of Ingram. The RTC applied Article 1542, stating that in lump sum sales, boundaries prevail, obligating Arcaina to deliver the entire Lot 3230. The Court of Appeals (CA) affirmed the RTC’s decision, highlighting that the sale was for a lump sum and that the “substantial” excess area should have been apparent to the vendor. The CA cited jurisprudence emphasizing the primacy of boundaries in lump sum sales. The Supreme Court, however, disagreed with both the RTC and CA.

Justice Jardeleza, writing for the Supreme Court, clarified the application of Article 1542 in light of substantial area discrepancies. The Court acknowledged that Article 1542 generally dictates that in lump sum sales where boundaries and area are specified, the vendor must deliver everything within the boundaries, even if it exceeds the stated area. This is particularly true when the area is qualified with “more or less.” However, the Supreme Court emphasized that this rule is not absolute. Citing Del Prado v. Spouses Caballero, the Court reiterated that the phrase “more or less” only covers “reasonable excess or deficiency.” A vendee does not automatically assume all quantity risks, especially when the discrepancy is significant. The Court stated:

The Court, however, clarified that the rule laid down in Article 1542 is not hard and fast and admits of an exception. It held:

“A caveat is in order, however. The use of ‘more or less’ or similar words in designating quantity covers only a reasonable excess or deficiency. A vendee of land sold in gross or with the description ‘more or less’ with reference to its area does not thereby ipso facto take all risk of quantity in the land.

Applying this exception, the Supreme Court found that the 5,800 sq.m. difference (almost doubling the stated 6,200 sq.m.) was “too substantial to be considered a slight difference in quantity” and not a “reasonable excess.” The Court reasoned that compelling the vendor to deliver almost twice the agreed area without additional compensation would be unfair and beyond the contemplation of Article 1542. The Court underscored that the parties’ initial agreement, based on the tax declaration, was for a property of approximately 6,200 sq.m. The deeds of sale merely formalized this agreement. Therefore, the meeting of minds was limited to the 6,200 sq.m. portion. The Supreme Court reinstated the MCTC’s decision, albeit with modifications regarding interest, effectively limiting Ingram’s ownership to the originally contemplated 6,200 sq.m. and obligating her to pay the remaining balance of the purchase price.

This decision highlights the importance of due diligence in real estate transactions, especially concerning land area. While boundaries are crucial in defining property, substantial discrepancies between stated and actual areas in lump sum sales can lead to legal disputes. The phrase “more or less” offers some flexibility, but it does not cover excessively large deviations. Both buyers and sellers must be aware that in lump sum contracts, a significantly larger actual area than stated might not automatically transfer to the buyer without renegotiation or additional payment. This case serves as a reminder that “more or less” has reasonable limits and that courts will consider the fairness and intent of the parties when discrepancies are considerable.

FAQs

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Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Arcaina v. Ingram, G.R. No. 196444, February 15, 2017