Illiteracy and Consent: A Crucial Lesson in Property Law

Spouses Eugenio De Vera and Rosalia Padilla v. Fausta Catungal, substituted by her heirs, G.R. No. 211687, February 10, 2021

Imagine an elderly woman, unable to read or write, being asked to place her thumbmark on a document that she believes is merely an acknowledgment of a debt. Unbeknownst to her, that document transfers ownership of her family’s land to another party. This scenario, unfortunately, is not uncommon and underscores the importance of ensuring that all parties to a contract fully understand its implications. In the case of Spouses Eugenio De Vera and Rosalia Padilla v. Fausta Catungal, the Supreme Court of the Philippines addressed the critical issue of vitiated consent in property transactions, particularly when one party is illiterate.

The central legal question in this case was whether Fausta Catungal’s consent to the Deed of Extrajudicial Settlement Among Heirs with Absolute Sale was vitiated by fraud, given her illiteracy and the lack of explanation regarding the document’s contents. The case highlights the need for transparency and fairness in transactions involving vulnerable parties.

Understanding the Legal Context

In the Philippines, the Civil Code governs contracts and property transactions. A fundamental principle is that consent must be freely given and fully understood by all parties involved. Article 1332 of the Civil Code is particularly relevant in cases involving illiterate individuals:

Article 1332. When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.

This provision aims to protect those who cannot read or understand the language of the contract from being exploited. The term “vitiated consent” refers to consent that is not freely given due to factors such as fraud, mistake, or undue influence, rendering the contract voidable.

Consider a scenario where a farmer, unable to read, is asked to sign a contract to sell his land. If the buyer does not explain the document’s contents and the farmer later discovers that he has sold his land for a fraction of its value, the contract could be challenged under Article 1332.

The Journey of the Case

Vicente Catungal owned two parcels of land in Pangasinan. After his death, his children, including Fausta and Genaro, inherited the properties. In 1994, Fausta and Genaro executed a Deed of Extrajudicial Settlement Among Heirs with Absolute Sale, transferring the land to Spouses Eugenio De Vera and Rosalia Padilla for P30,000. Fausta, being illiterate, affixed her thumbmark on the document.

Three years later, Fausta filed a complaint, alleging that the Spouses De Vera deceived her into believing the document was merely an acknowledgment of debt. She claimed she did not understand the document’s true nature due to her illiteracy and the absence of any explanation.

The Regional Trial Court (RTC) initially dismissed Fausta’s complaint, finding no evidence of fraud. However, the Court of Appeals (CA) reversed this decision, ruling that the presumption of fraud or mistake under Article 1332 was not overcome by the Spouses De Vera.

The Supreme Court upheld the CA’s decision, emphasizing the following points:

“When one of the contracting parties is unable to read or is otherwise illiterate, and fraud is alleged, a presumption that there is fraud or mistake in obtaining consent of that party arises.”

“To rebut the presumption, the other contracting party must show, by clear and convincing evidence, that the terms and contents of the contract were explained to the contracting party who is unable to read.”

The Court found that Fausta’s illiteracy was established through her testimony and that of her daughter, Lourdes, as well as admissions from the Spouses De Vera. The absence of evidence showing that the Deed’s contents were explained to Fausta led to the conclusion that her consent was vitiated by fraud.

Practical Implications and Key Lessons

This ruling underscores the importance of ensuring that all parties to a contract, especially those who are illiterate or vulnerable, fully understand the document’s implications. It serves as a reminder to property owners and buyers to exercise due diligence and transparency in transactions.

For businesses and individuals involved in property transactions, the case highlights the need for:

• Ensuring that all parties understand the contract, particularly when one party is illiterate or has limited literacy.
• Documenting the explanation of the contract’s terms, preferably with witnesses or legal counsel present.
• Seeking legal advice to ensure compliance with legal requirements and to protect the interests of all parties.

Key Lessons:

• Always verify that the other party understands the contract’s contents, especially if they are illiterate.
• Maintain records of any explanations given to parties regarding the contract’s terms.
• Be cautious of transactions that may exploit vulnerable individuals and seek legal recourse if necessary.

Frequently Asked Questions

What is vitiated consent?

Vitiated consent refers to consent that is not freely given due to factors like fraud, mistake, or undue influence, making a contract voidable.

How does Article 1332 protect illiterate individuals?

Article 1332 shifts the burden of proof to the party enforcing the contract to show that the terms were fully explained to the illiterate party when fraud or mistake is alleged.

What should I do if I suspect a contract was signed under vitiated consent?

Seek legal advice immediately. You may need to file a case to annul the contract and restore your rights.

Can notarized documents be challenged in court?

Yes, notarized documents can be challenged if there is evidence that the consent of one party was vitiated.

What steps can I take to ensure a fair property transaction?

Ensure all parties understand the contract, document explanations, and consider having legal counsel present during the transaction.

ASG Law specializes in property law and civil litigation. Contact us or email hello@asglawpartners.com to schedule a consultation.