1. CIVIL LAW; CONTRACTS; SALE; RESCISSION BASED ON HIDDEN DEFECTS. — Petitioner two lots which he claimed he had been led to believe were contiguous, but, as he later discovered, were in fact separated by a strip of public land. HELD: This was no a hidden defect within the meaning of Art. 1561, Civil Code no attempt having been made to conceal the existence of the dividing strip from petitioner, who had the means and opportunity of discovering the same shortly after his offer to purchase the property was accepted and before he made the initial payment therefor. One "Who contracts for the purchase of real estate in reliance on the representations and statements of the vendor as to its character and value, but after he has visited and examined it for himself, and has had the means and opportunity of verifying such statements, cannot avoid the contract on the ground that they were false or exaggerated." (Azarraga v. Gay, 52 Phil. 599, 603-644, citing Brown v. Smith 109 Fed. 26)

2. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF THE COURT OF APPEALS BINDING ON APPEAL. — It is obvious that for petitioner’s appeal to have any chance of success at all, it is indispensable for the findings of fact of the Court of Appeals to be modified. For as those findings stand, his awareness of the existence of the strip of public land dividing the two lots subject of his agreement to purchase cannot but be necessarily concluded, as also, his partial compliance and avowed willingness to continue to comply with his contractual undertakings even after acquiring knowledge thereof. This Court cannot however modify on appeal the Appellate Court’s factual findings. It is axiomatic that the appellate jurisdiction of this Court is limited to reviewing errors of law, it being bound by the conclusions of fact of the Court of Appeals. There are, to be sure, exceptions to this principle, but none is disclosed in the instant case. In any event, those factual conclusions are justified by the evidence.

The application of the familiar doctrine of conclusiveness of the factual findings of the Court of Appeals, made upon its own assessment of the evidence, 1 is all that is needful to dispose of the case at bar.

Lilian Hamby, the private respondent’s predecessor in interest, was the owner of two (2) lots in Baguio City, inclusiveness of a house thereon standing. Sometime in February, 1996, Rene Knecht, the petitioner, offered through intermediaries to buy this property for US $47,500.00 payable on terms: US $17,500.00 as down payment, and the balance of US $30,000.00, in equal quarterly installments of US $3,750.00 over a period of two (2) years. Knecht proposed at the same time the assumption by him of Hamby’s lease on a beach property in Bauang, La Union. 2 Hamby accepted Knetch’s offer to buy her Baguio property. So on April 20, 1966, Knecht paid Hamby US $4,750.00 as earnest money, after having taken possession of the property a month earlier. 3

Knecht was given photostatic copies of Hamby’s two (2) titles to the lots on April 28, 1966. 4 He thereafter remitted to Hamby US $3,625.00 in September, 1966 and another US $3,625.00 in October, 1966, in partial completion of the stipulated down payment of US $17,500.00. 5

Knecht subsequently refused to make any further payments, however, and ignored Hambly’s demands therefor, made thru an attorney-in-fact. Hamby then demanded in writing that Knetch vacate the premises, offering at the same time to return the money thus far paid by him, US $12,000.00, minus the reasonable value of his use and occupation of the premises, set at P1,000.00 per month. This was followed by a notarial demand for rescission. These, Knecht also disregarded. 6

Hamby thereupon filed suit in the Court of First Instance of Baguio and Benguet for the rescission of her agreement for the sale to Knecht of the Baguio property. 7 In this action, Knecht sought to justify his refusal to continue complying with his contractual commitments by (1) his discovery of what he considered to be a hidden defect in the subject of the projected sale, i.e., that the two Baguio lots were not contiguous, as he had been made to believe, but were actually separated from each other by a strip of public land cutting across the land and passing right under the house thereon standing — the existence of which in his view conferred on him the right to "elect between withdrawing from the contract and demanding a proportionate reduction of the price with damages in either case;