sales - june 22

7/18/2019 Sales - June 22

http://slidepdf.com/reader/full/sales-june-22 1/65

SECOND DIVISION

[G.R. No. 137290. July 31, 2000]

SAN MIGUEL PROPERTIES PHILIPPINES, INC., petitioner, vs. SPOUSESALRE!O HUANG "#$ GRACE HUANG, respondents.

! E C I S I O N

MEN!O%A, J .&

This is a petition for review of the decision, [1] dated April , 1!!", of the Co#rt of Appealswhich reversed the decision of the $e%ional Trial Co#rt, &ranch 1'(, )asi% Cit*

dis+issin% the co+plaint ro#%ht * respondents a%ainst petitioner for enforce+ent of acontract of sale-

The facts are not in disp#te-

)etitioner San .i%#el )roperties )hilippines, Inc- is a do+estic corporation en%a%ed inthe p#rchase and sale of real properties- )art of its inventor* are two parcels of landtotallin% 1, "( s/#are +eters at the corner of .eralco Aven#e and 0eneral CapinpinStreet, &arrio Orano, )asi% Cit*, which are covered * TCT Nos- )T2(!' and )T2(!3 of the $e%ister of Deeds of )asi% Cit*-

On 4er#ar* 21, 1!!5, the properties were offered for sale for )'2,156,666-66 in cash-The offer was +ade to Att*- 7elena .- Da#8 who was actin% for respondent spo#ses as#ndisclosed principals- In a letter [2] dated .arch 25, 1!!5, Att*- Da#8 si%nified her clientsinterest in p#rchasin% the properties for the a+o#nt for which the* were offered *petitioner, #nder the followin% ter+s9 the s#+ of )'66,666-66 wo#ld e %iven as earnest+one* and the alance wo#ld e paid in ei%ht e/#al +onthl* install+ents fro+ .a* toDece+er, 1!!5- 7owever, petitioner ref#sed the co#nteroffer-

On .arch 2!, 1!!5, Att*- Da#8 wrote another letter [(] proposin% the followin% ter+s forthe p#rchase of the properties, viz:

This is to e:press o#r interest to #* *o#raove+entioned propert* withan area of 1, "( s/- +eters- 4or this p#rpose, we are enclosin% herewiththe s#+ of )1,666,666-66 representin% earnestdeposit +one*, s#;ect tothe followin% conditions-

1- <e will e %iven the e:cl#sive option to p#rchase the propert* withinthe (6 da*s fro+ date of *o#r acceptance of this offer-

http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/137290.htm#_ftn1








7/18/2019 Sales - June 22


2- D#rin% said period, we will ne%otiate on the ter+s and conditions of thep#rchase= S.))I will sec#re the necessar* .ana%e+ent and &oardapprovals= and we initiate the doc#+entation if there is +#t#al a%ree+entetween #s-

(- In the event that we do not co+e to an a%ree+ent on this transaction,the said a+o#nt of )1,666,666-66 shall e ref#ndale to #s in f#ll #ponde+and- - - -

Isidro A- Sorecare*, petitioners vicepresident and operations +ana%er for corporatereal estate, indicated his confor+it* to the offer * affi:in% his si%nat#re to the letter andaccepted the >earnestdeposit> of )1 +illion- ?pon re/#est of respondent spo#ses,Sorecare* ordered the re+oval of the >4O$ SA@E> si%n fro+ the properties-

Att*- Da#8 and Sorecare* then co++enced ne%otiations- D#rin% their +eetin% on April, 1!!5, Sorecare* infor+ed Att*- Da#8 that petitioner was willin% to sell the s#;ect

properties on a !6da* ter+- Att*- Da#8 co#ntered with an offer of si: +onths withinwhich to pa*-

On April 15, 1!!5, the parties a%ain +et d#rin% which Sorecare* infor+ed Att*- Da#8that petitioner had not *et acted on her co#nteroffer- This pro+pted Att*- Da#8 topropose a fo#r+onth period of a+orti8ation-

On April 2', 1!!5, Att*- Da#8 ased for an e:tension of 5' da*s fro+ April 2!, 1!!5 toB#ne 1(, 1!!5 within which to e:ercise her option to p#rchase the propert*, addin% thatwithin that period, >[we] hope to finali8e [o#r] a%ree+ent on the +atter-> [5] 7er re/#estwas %ranted-

On B#l* ", 1!!5, petitioner, thro#%h its president and chief e:ec#tive officer, 4ederico0on8ales, wrote Att*- Da#8 infor+in% her that eca#se the parties failed to a%ree on theter+s and conditions of the sale despite the e:tension %ranted * petitioner, the latterwas ret#rnin% the a+o#nt of )1 +illion %iven as >earnestdeposit-> [']

On B#l* 26, 1!!5, respondent spo#ses, thro#%h co#nsel, wrote petitioner de+andin%the e:ec#tion within five da*s of a deed of sale coverin% the properties- $espondentsatte+pted to ret#rn the >earnestdeposit> #t petitioner ref#sed on the %ro#nd thatrespondents option to p#rchase had alread* e:pired-

On A#%#st 13, 1!!5, respondent spo#ses filed a co+plaint for specific perfor+ancea%ainst petitioner efore the $e%ional Trial Co#rt, &ranch 1((, )asi% Cit* where it wasdoceted as Civil Case No- 35336-

<ithin the period for filin% a responsive pleadin%, petitioner filed a +otion to dis+iss theco+plaint alle%in% that 1 the alle%ed >e:cl#sive option> of respondent spo#ses laceda consideration separate and distinct fro+ the p#rchase price and was th#s#nenforceale and 2 the co+plaint did not alle%e a ca#se of action eca#se there was





7/18/2019 Sales - June 22


no >+eetin% of the +inds> etween the parties and, therefore, no perfected contract ofsale- The +otion was opposed * respondents-

On Dece+er 12, 1!!5, the trial co#rt %ranted petitioners +otion and dis+issed theaction- $espondents filed a +otion for reconsideration, #t it was denied * the trial

co#rt- The* then appealed to the Co#rt of Appeals which, on April , 1!!", rendered adecision[3] reversin% the ;#d%+ent of the trial co#rt- The appellate co#rt held that all there/#isites of a perfected contract of sale had een co+plied with as the offer +ade on.arch 2!, 1!!5, in connection with which the earnest +one* in the a+o#nt of )1 +illionwas tendered * respondents, had alread* een accepted * petitioner- The co#rt cited

Art- 152 of the Civil Code which provides that >[w]henever earnest +one* is %iven in acontract of sale, it shall e considered as part of the price and as proof of the perfectionof the contract-> The fact the parties had not a%reed on the +ode of pa*+ent did notaffect the contract as s#ch is not an essential ele+ent for its validit*- In addition, theco#rt fo#nd that Sorecare* had a#thorit* to act in ehalf of petitioner for the sale of theproperties- ["]

)etitioner +oved for reconsideration of the trial co#rts decision, #t its +otion wasdenied- 7ence, this petition-

)etitioner contends that the Co#rt of Appeals erred in findin% that there was a perfectedcontract of sale etween the parties eca#se the .arch 2!, 1!!5 letter of respondents,which petitioner accepted, +erel* res#lted in an option contract, aleit it was#nenforceale for lac of a distinct consideration- )etitioner ar%#es that the asence ofa%ree+ent as to the +ode of pa*+ent was fatal to the perfection of the contract of sale-)etitioner also disp#tes the appellate co#rts r#lin% that Isidro A- Sorecare* hada#thorit* to sell the s#;ect real properties- []

$espondents were re/#ired to co++ent within ten 16 da*s fro+ notice- 7owever,despite 1( e:tensions totallin% 152 da*s which the Co#rt had %iven to the+,respondents failed to file their co++ent- The* were th#s considered to have waived thefilin% of a co++ent-

The petition is +eritorio#s-

In holdin% that there is a perfected contract of sale, the Co#rt of Appeals relied on thefollowin% findin%s9 1 earnest +one* was alle%edl* %iven * respondents and accepted* petitioner thro#%h its vicepresident and operations +ana%er, Isidro A- Sorecare*=

and 2 the doc#+entar* evidence in the records show that there was a perfectedcontract of sale-

<ith re%ard to the alle%ed pa*+ent and acceptance of earnest +one*, the Co#rt holdsthat respondents did not %ive the )1 +illion as >earnest +one*> as provided * Art-152 of the Civil Code- The* presented the a+o#nt +erel* as a deposit of what wo#ldevent#all* eco+e the earnest +one* or downpa*+ent sho#ld a contract of sale e+ade * the+- The a+o#nt was th#s %iven not as a part of the p#rchase price and as








7/18/2019 Sales - June 22


proof of the perfection of the contract of sale #t onl* as a %#arantee that respondentswo#ld not ac o#t of the sale- $espondents in fact descried the a+o#nt as an>earnestdeposit-> In Spouses Doromal, Sr. v. Court of Appeals,[!] it was held9

- - - <hile the )',666 +i%ht have indeed een paid to Carlos in Octoer,

1!3", there is nothin% to show that the sa+e was in the concept of theearnest +one* conte+plated in Art- 152 of the Civil Code, invoed *petitioner, as si%nif*in% perfection of the sale- Viewed in the acdrop ofthe fact#al +ilie# thereof e:tant in the record, <e are +ore inclined toelieve that the said ) ',666-66 were paid in the concept of earnest +one*as the ter+ was #nderstood #nder the Old Civil Code, that is, as a%#arantee that the #*er wo#ld not ac o#t, considerin% that it is notclear that there was alread* a definite a%ree+ent as to the price then andthat petitioners were decided to #* 3" onl* of the propert* sho#ldrespondent Bavellana ref#se to a%ree to part with her 1" share- [16]

In the present case, the )1 +illion >earnestdeposit> co#ld not have een %iven asearnest +one* as conte+plated in Art- 152 eca#se, at the ti+e when petitioneraccepted the ter+s of respondents offer of .arch 2!, 1!!5, their contract had not *eteen perfected- This is evident fro+ the followin% conditions attached * respondents totheir letter, to wit9 1 that the* e %iven the e:cl#sive option to p#rchase the propert*within (6 da*s fro+ acceptance of the offer= 2 that d#rin% the option period, the partieswo#ld ne%otiate the ter+s and conditions of the p#rchase= and ( petitioner wo#ldsec#re the necessar* approvals while respondents wo#ld handle the doc#+entation-

The first condition for an option period of (6 da*s s#fficientl* shows that a sale wasnever perfected- As petitioner correctl* points o#t, acceptance of this condition did not

%ive rise to a perfected sale #t +erel* to an option or an accepted #nilateral pro+iseon the part of respondents to #* the s#;ect properties within (6 da*s fro+ the date ofacceptance of the offer- S#ch option %ivin% respondents the e:cl#sive ri%ht to #* theproperties within the period a%reed #pon is separate and distinct fro+ the contract ofsale which the parties +a* enter-[11] All that respondents had was ;#st the option to #*the properties which privile%e was not, however, e:ercised * the+ eca#se there wasa fail#re to a%ree on the ter+s of pa*+ent- No contract of sale +a* th#s e enforced *respondents-

4#rther+ore, even the option sec#red * respondents fro+ petitioner was fatall*defective- ?nder the second para%raph of Art- 15"!, an accepted #nilateral pro+ise to#* or sell a deter+inate thin% for a price certain is indin% #pon the pro+isor onl* if thepro+ise is s#pported * a distinct consideration- Consideration in an option contract+a* e an*thin% of val#e, #nlie in sale where it +#st e the price certain in +one* orits e/#ivalent- There is no showin% here of an* consideration for the option- @acin% an*proof of s#ch consideration, the option is #nenforceale-

E/#all* co+pellin% as proof of the asence of a perfected sale is the second conditionthat, d#rin% the option period, the parties wo#ld ne%otiate the ter+s and conditions of







7/18/2019 Sales - June 22


the p#rchase- The sta%es of a contract of sale are as follows9 1 negotiation, coverin%the period fro+ the ti+e the prospective contractin% parties indicate interest in thecontract to the ti+e the contract is perfected= 2 perfection, which taes place #pon theconc#rrence of the essential ele+ents of the sale which are the +eetin% of the +inds ofthe parties as to the o;ect of the contract and #pon the price= and ( consummation,

which e%ins when the parties perfor+ their respective #ndertain%s #nder the contractof sale, c#l+inatin% in the e:tin%#ish+ent thereof- [12] In the present case, the partiesnever %ot past the ne%otiation sta%e- The alle%ed >ind#itale evidence> [1(] of a perfectedsale cited * the appellate co#rt was nothin% +ore than offers and co#nteroffers whichdid not a+o#nt to an* final arran%e+ent containin% the essential ele+ents of a contractof sale- <hile the parties alread* a%reed on the real properties which were the o;ectsof the sale and on the p#rchase price, the fact re+ains that the* failed to arrive at+#t#all* acceptale ter+s of pa*+ent, despite the 5'da* e:tension %iven * petitioner-

The appellate co#rt opined that the fail#re to a%ree on the ter+s of pa*+ent was no arto the perfection of the sale eca#se Art- 15"' onl* re/#ires a%ree+ent * the parties

as to the price of the o;ect- This is error- In Navarro v. Sugar Producers CooperativeMarketing Association, Inc.,[15] we laid down the r#le that the +anner of pa*+ent of thep#rchase price is an essential ele+ent efore a valid and indin% contract of sale cane:ist- Altho#%h the Civil Code does not e:pressl* state that the +inds of the parties+#st also +eet on the ter+s or +anner of pa*+ent of the price, the sa+e is needed,otherwise there is no sale- As held in o!ota S"a#, Inc. v. Court of Appeals,[1'] a%ree+ent on the +anner of pa*+ent %oes into the price s#ch that a disa%ree+enton the +anner of pa*+ent is tanta+o#nt to a fail#re to a%ree on the price- [13] In $elascov. Court of Appeals,[1"] the parties to a proposed sale had alread* a%reed on the o;ect ofsale and on the p#rchase price- &* the #*ers own ad+ission, however, the parties stillhad to a%ree on how and when the downpa*+ent and the install+ents were to e paid-

It was held9

- - - S#ch ein% the sit#ation, it can not, therefore, e said that a definiteand fir+ sales a%ree+ent etween the parties had een perfected overthe lot in /#estion- Indeed, this Co#rt has alread* r#led efore that adefinite a%ree+ent on the +anner of pa*+ent of the p#rchase price is anessential ele+ent in the for+ation of a indin% and enforceale contract of sale- The fact, therefore, that the petitioners delivered to the respondentthe s#+ of )16,666 as part of the downpa*+ent that the* had to pa*cannot e considered as s#fficient proof of the perfection of an* p#rchaseand sale a%ree+ent etween the parties herein #nder Art- 152 of the newCivil Code, as the petitioners the+selves ad+it that so+e essential +atter the ter+s of the pa*+ent still had to e +#t#all* covenanted-[1]

Th#s, it is not the %ivin% of earnest +one*, #t the proof of the conc#rrence of all theessential ele+ents of the contract of sale which estalishes the e:istence of a perfectedsale-

















7/18/2019 Sales - June 22


In the asence of a perfected contract of sale, it is i++aterial whether Isidro A-Sorecare* had the a#thorit* to enter into a contract of sale in ehalf of petitioner- Thisiss#e, therefore, needs no f#rther disc#ssion-

'HEREORE, the decision of the Co#rt of Appeals is $EVE$SED and respondents

co+plaint is DIS.ISSED-

SO OR!ERE!.

%uisum&ing, 'uena, and De (eon, )r., ))., conc#r-

'ellosillo, *C"airman+, )., on leave-

[1] Per Associate Justice Corona Ibay-Somera and concurred in by Justices Emeterio C. Cui and Salvador J. ValdezJr.[!] Anne" #$ Rollo %. &&.['] Anne" E$ Id . %. 1((.[)] Anne" *$ Id . %. 1(!.[+] Anne" I$ Rollo %. 1(,.[] Rollo %%. '-1.[,] Id. %%. )-(.[] Petition %%. 1!-1'$ Rollo %%. 1)-1+.[&] SC/A +,+ 01&,+[1(] Id. at +!. 0Em%2asis added[11] Carceler v. Court o3 A%%eals '(! SC/A ,1 01&&&$ Cavite #evelo%ment 4an5 and *ar East 4an5 and 6rust

Com%any v. Court o3 A%%eals 7./. 8o. 1'1,& *eb. 1 !(((.[1!] An9 :u Asuncion v. Court o3 A%%eals !' SC/A (! 01&&)[1'] 62e Court o3 A%%eals enumerated t2ese as 3ollo;s< 01 Annex = A= ;2ic2 contains %etitioners o33er to sell t2esub>ect %ro%erties$ 0! Annex = D= a letter dated ?arc2 !) 1&&) t2rou92 ;2ic2 res%ondent s%ouses t2rou92 Atty.

@elena ?. #auz si9ni3ied t2eir interest to buy t2e sub>ect %ro%erties$ and 0' Annex = E = anot2er letter 3romres%ondent s%ouses dated ?arc2 !& 1&&) t2rou92 ;2ic2 res%ondents a9ain e"%ressed t2eir interest to buy t2e

sub>ect %ro%erties sub>ect to certain conditions.[1)] 1 SC/A 111 01&1[1+] !)) SC/A '!( 01&&+[1] Id. %. '!.[1,] +1 SC/A )'& 01&,'[1] Id . %. )+'. 0Em%2asis added

http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/137290.htm#_ftnref1














































7/18/2019 Sales - June 22


SECOND DIVISION

[G.R. No. 126444. December 4, 1998]

ALFONSO QI!ADA, CRESEN"E QI!ADA, RE#NELDA QI!ADA,

DE$E"RIO QI!ADA, ELI"ERIA QI!ADA, ELALIO

QI!ADA, %&' (ARLI"O QI!ADA, petitioners, vs. COR" OF

A))EALS, REGALADO $ONDE!AR, RODLFO GOLORAN,

AL*ER"O ASIS, SEGNDINO RAS, ERNES"O GOLORAN, CELSO

A*ISO, FERNANDO *A"IS"A, AN"ONIO $ACASERO, %&'

NES"OR $AGINSA#, respondents.

D E C I S I O N

$AR"INE+, J .

Petitioners as 2eirs o3 t2e late 6rinidad ui>ada 3iled a com%laint a9ainst %rivate

res%ondents 3or Buietin9 o3 title recovery o3 %ossession and o;ners2i% o3 %arcels o3 land ;it2

claim 3or attorneys 3ees and dama9es. 62e suit ;as %remised on t2e 3ollo;in9 3acts 3ound by t2e

Court o3 A%%eals ;2ic2 is materially t2e same as t2at 3ound by t2e trial court<

=Plainti33s-a%%ellees 0 petitioners are t2e c2ildren o3 t2e late 6rinidad Corvera Vda. de

ui>ada. 6rinidad ;as one o3 t2e 2eirs o3 t2e late Pedro Corvera and in2erited 3romt2e latter t2e t;o-2ectare %arcel o3 land sub>ect o3 t2e case situated in t2e barrio o3

San A9ustin 6alaco9on A9usan del Sur. Dn A%ril + 1&+ 6rinidad ui>ada to9et2er

;it2 2er sisters eonila Corvera Vda. de SeBuea and Paz Corvera Cabiltes and brot2er

E%a%iadito Corvera e"ecuted a conditional deed o3 donation 0E"2. C o3 t2e t;o-

2ectare %arcel o3 land sub>ect o3 t2e case in 3avor o3 t2e ?unici%ality o3 6alaco9on

t2e condition bein9 t2at t2e %arcel o3 land s2all be used solely and e"clusively as %art

o3 t2e cam%us o3 t2e %ro%osed %rovincial 2i92 sc2ool in 6alaco9on. A%%arently

6rinidad remained in %ossession o3 t2e %arcel o3 land des%ite t2e donation. Dn July

!& 1&! 6rinidad sold one 01 2ectare o3 t2e sub>ect %arcel o3 land to de3endant-

a%%ellant /e9alado ?onde>ar 0E"2. 1. SubseBuently 6rinidad verbally sold t2eremainin9 one 01 2ectare to de3endant-a%%ellant 0respondent) /e9alado ?onde>ar

;it2out t2e bene3it o3 a ;ritten deed o3 sale and evidenced solely by recei%ts o3

%ayment. In 1&( t2e 2eirs o3 6rinidad ;2o at t2at time ;as already dead 3iled a

com%laint 3or 3orcible entry 0E"2. E a9ainst de3endant-a%%ellant 0respondent

/e9alado ?onde>ar ;2ic2 com%laint ;as 2o;ever dismissed 3or 3ailure to %rosecute

0E"2. *. In 1&, t2e %ro%osed %rovincial 2i92 sc2ool 2avin9 3ailed to materialize

7/18/2019 Sales - June 22


t2e San99unian9 4ayan o3 t2e munici%ality o3 6alaco9on enacted a resolution

revertin9 t2e t;o 0! 2ectares o3 land donated bac5 to t2e donors 0E"2. #. In t2e

meantime de3endant-a%%ellant 0respondent /e9alado ?onde>ar sold %ortions o3 t2e

land to de3endants-a%%ellants 0respondents *ernando 4autista 0E"2. + /odol3o

7oloran 0E"2. E3ren 7uden 0E"2. , and Ernesto 7oloran 0E"2. .

=Dn July + 1& %lainti33s-a%%ellees 0 petitioners 3iled t2is action a9ainst de3endants-

a%%ellants 0respondents. In t2e com%laint %lainti33s-a%%ellees 0 petitioners alle9ed

t2at t2eir deceased mot2er never sold conveyed trans3erred or dis%osed o3 t2e

%ro%erty in Buestion to any %erson or entity muc2 less to /e9alado ?onde>ar save t2e

donation made to t2e ?unici%ality o3 6alaco9on in 1&+$ t2at at t2e time o3 t2e

alle9ed sale to /e9alado ?onde>ar by 6rinidad ui>ada t2e land still belon9s to t2e

?unici%ality o3 6alaco9on 2ence t2e su%%osed sale is null and void.

=#e3endants-a%%ellants 0respondents on t2e ot2er 2and in t2eir ans;er claimed t2at

t2e land in dis%ute ;as sold to /e9alado ?onde>ar t2e one 01 2ectare on July !&1&! and t2e remainin9 one 01 2ectare on installment basis until 3ully %aid. As

a33irmative andFor s%ecial de3ense de3endants-a%%ellants 0respondents alle9ed t2at

%lainti33s action is barred by lac2es or 2as %rescribed.

=62e court a quo rendered >ud9ment in 3avor o3 %lainti33s-a%%ellees 0 petitioners< 3irstly because

6rinidad ui>ada 2ad no le9al title or ri92t to sell t2e land to de3endant ?onde>ar in 1&! 1&

1&, and 1& t2e same not bein9 2ers to dis%ose o3 because o;ners2i% belon9s to t2e

?unici%ality o3 6alaco9on 0#ecision %. )$ Rollo %. '& and secondly t2at t2e deed o3 salee"ecuted by 6rinidad ui>ada in 3avor o3 ?onde>ar did not carry ;it2 it t2e con3ormity and

acBuiescence o3 2er c2ildren more so t2at s2e ;as already ' years old at t2e time and a ;ido;0#ecision %. $ Rollo %. )1.=[1]

62e dis%ositive %ortion o3 t2e trial courts decision reads<

=G@E/E*D/E vie;ed 3rom t2e above %erce%tions t2e scale o3 >ustice 2avin9

tilted in 3avor o3 t2e %lainti33s >ud9ment is as it is 2ereby rendered<

1 orderin9 t2e #e3endants to return and vacate t2e t;o 0! 2ectares o3 land to Plainti33s asdescribed in 6a" #eclaration 8o. 1!(& in t2e name o3 6rinidad ui>ada$

! orderin9 any %erson actin9 in #e3endants be2al3 to vacate and restore t2e %eace3ul

%ossession o3 t2e land in Buestion to Plainti33s$

' orderin9 t2e cancellation o3 t2e #eed o3 Sale e"ecuted by t2e late 6rinidad ui>ada in 3avor o3 #e3endant /e9alado ?onde>ar as ;ell as t2e #eeds o3 SaleF/elinBuis2ments e"ecuted by

?onde>ar in 3avor o3 t2e ot2er #e3endants$

) orderin9 #e3endants to remove t2eir im%rovements constructed on t2e Buestioned lot$

+ orderin9 t2e #e3endants to %ay Plainti33s >ointly and severally t2e amount o3 P1((((.((re%resentin9 attorneys 3ees$

http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/126444.htm#_edn1


7/18/2019 Sales - June 22


orderin9 #e3endants to %ays t2e amount o3 P(((.(( as e"%enses o3 liti9ation$ and

, orderin9 #e3endants to %ay t2e sum o3 P'((((.(( re%resentin9 moral dama9es.

SD D/#E/E#.=[!]

Dn a%%eal t2e Court o3 A%%eals reversed and set aside t2e >ud9ment a quo['] rulin9 t2at t2esale made by 6rinidad ui>ada to res%ondent ?onde>ar ;as valid as t2e) 3ormer retained an

inc2oate interest on t2e lots by virtue o3 t2e automatic reversion clause in t2e deed o3 donation.[)] 62erea3ter %etitioners 3iled a motion 3or reconsideration. G2en t2e CA denied t2eir motion[+] %etitioners instituted a %etition 3or revie; to t2is Court ar9uin9 %rinci%ally t2at t2e sale o3 t2e

sub>ect %ro%erty made by 6rinidad ui>ada to res%ondent ?onde>ar is void considerin9 t2at att2at time o;ners2i% ;as already trans3erred to t2e ?unici%ality o3 6alaco9on. Dn t2e contrary

%rivate res%ondents contend t2at t2e sale ;as valid t2at t2ey are buyers in 9ood 3ait2 and t2at

%etitioners case is barred by lac2es.[]

Ge a33irm t2e decision o3 t2e res%ondent court.

62e donation made on A%ril + 1&+ by 6rinidad ui>ada and 2er brot2er and sisters [,] ;assub>ect to t2e condition t2at t2e donated %ro%erty s2all be =used solely and e"clusively as a %art

o3 t2e cam%us o3 t2e %ro%osed Provincial @i92 Sc2ool in 6alaco9on.= [] 62e donation 3urt2er %rovides t2at s2ould =t2e %ro%osed Provincial @i92 Sc2ool be discontinued or i3 t2e same s2all

be o%ened but 3or some reason or anot2er t2e same may in t2e 3uture be closed= t2e donated

%ro%erty s2all automatically revert to t2e donor.[&] Suc2 condition not bein9 contrary to la;

morals 9ood customs %ublic order or %ublic %olicy ;as validly im%osed in t2e donation. [1(]

G2en t2e ?unici%alitys acce%tance o3 t2e donation ;as made 5no;n to t2e donor t2e

3ormer became t2e ne; o;ner o3 t2e donated %ro%erty -- donation bein9 a mode o3 acBuirin9 and

transmittin9 o;ners2i%[11] - not;it2standin9 t2e condition im%osed by t2e donee. 62e donation is

%er3ected once t2e acce%tance by t2e donee is made 5no;n to t2e donor.

[1!]

Accordin9lyo;ners2i% is immediately trans3erred to t2e latter and t2at o;ners2i% ;ill only revert to t2e

donor i3 t2e resolutory condition is not 3ul3illed.

In t2is case t2at resolutory condition is t2e construction o3 t2e sc2ool. It 2as been ruled t2at

;2en a %erson donates land to anot2er on t2e condition t2at t2e latter ;ould build u%on t2e land

a sc2ool t2e condition im%osed is not a condition %recedent or a sus%ensive condition but a

resolutory one.[1'] 62us at t2e time o3 t2e sales made in 1&! to;ards 1& t2e alle9ed seller 06rinidad could not 2ave sold t2e lots since s2e 2ad earlier trans3erred o;ners2i% t2ereo3 by

virtue o3 t2e deed o3 donation. So lon9 as t2e resolutory condition subsists and is ca%able o3

3ul3illment t2e donation remains e33ective and t2e donee continues to be t2e o;ner sub>ect onlyto t2e ri92ts o3 t2e donor or 2is successors-in-interest under t2e deed o3 donation. Since no

%eriod ;as im%osed by t2e donor on ;2en must t2e donee com%ly ;it2 t2e condition t2e latter remains t2e o;ner so lon9 as 2e 2as tried to com%ly ;it2 t2e condition ;it2in a reasonable %eriod. Suc2 %eriod 2o;ever became irrelevant 2erein ;2en t2e donee-?unici%ality mani3ested

t2rou92 a resolution t2at it cannot com%ly ;it2 t2e condition o3 buildin9 a sc2ool and t2e same

;as made 5no;n to t2e donor. Dnly t2en - ;2en t2e non-3ul3illment o3 t2e resolutory condition

;as brou92t to t2e donors 5no;led9e - t2at o;ners2i% o3 t2e donated %ro%erty reverted to t2edonor as %rovided in t2e automatic reversion clause o3 t2e deed o3 donation.



























7/18/2019 Sales - June 22


62e donor may 2ave an inc2oate interest in t2e donated %ro%erty durin9 t2e time t2at

o;ners2i% o3 t2e land 2as not reverted to 2er. Suc2 inc2oate interest may be t2e sub>ect o3

contracts includin9 a contract o3 sale. In t2is case 2o;ever ;2at t2e donor sold ;as t2e landitsel3 ;2ic2 s2e no lon9er o;ns. It ;ould 2ave been di33erent i3 t2e donor-seller sold 2er interests

over t2e %ro%erty under t2e deed o3 donation ;2ic2 is sub>ect to t2e %ossibility o3 reversion o3

o;ners2i% arisin9 3rom t2e non-3ul3illment o3 t2e resolutory condition.As to lac2es %etitioners action is not yet barred t2ereby. ac2es %resu%%oses 3ailure or

ne9lect 3or an unreasonable and une"%lained len9t2 o3 time to do t2at ;2ic2 by e"ercisin9 due

dili9ence could or s2ould 2ave been done earlier$ [1)] =it is ne9li9ence or omission to assert a ri92t

;it2in a reasonable time t2us 9ivin9 rise to a %resum%tion t2at t2e %arty entitled to assert iteit2er 2as abandoned or declined to assert it.=[1+] Its essential elements o3<

a Conduct on t2e %art o3 t2e de3endant or o3 one under ;2om 2e claims 9ivin9 rise to t2e

situation com%lained o3$

b #elay in assertin9 com%lainants ri92t a3ter 2e 2ad 5no;led9e o3 t2e de3endants conduct and

a3ter 2e 2as an o%%ortunity to sue$

c ac5 o3 5no;led9e or notice on t2e %art o3 t2e de3endant t2at t2e com%lainant ;ould assert

t2e ri92t on ;2ic2 2e bases 2is suit$ and

d In>ury or %re>udice to t2e de3endant in t2e event relie3 is accorded to t2e com%lainant.=[1]

are absent in t2is case. Petitioners cause o3 action to Buiet title commenced only ;2en t2e

%ro%erty reverted to t2e donor andFor 2is successors-in-interest in 1&,. Certainly ;2en t2e suit

;as initiated t2e 3ollo;in9 year it cannot be said t2at %etitioners 2ad sle%t on t2eir ri92ts 3or alon9 time. 62e 1&(s sales made by 6rinidad ui>ada cannot be t2e rec5onin9 %oint as to ;2en

%etitioners cause o3 action arose.62ey 2ad no interest over t2e %ro%erty at t2at time e"ce%t under

t2e deed o3 donation to ;2ic2 %rivate res%ondents ;ere not %rivy. ?oreover %etitioners 2ad %reviously 3iled an e>ectment suit a9ainst %rivate res%ondents only t2at it did not %ros%er on a

tec2nicality.

4e t2at at it may t2ere is one t2in9 ;2ic2 militates a9ainst t2e claim o3 %etitioners. Sale bein9 a consensual contract is %er3ected by mere consent ;2ic2 is mani3ested t2e moment t2ere

is a meetin9 o3 t2e minds [1,] as to t2e o33er and acce%tance t2ereo3 on t2ree 0' elements< sub>ect

matter %rice and terms o3 %ayment o3 t2e %rice. [1] o;ners2i% by t2e seller on t2e t2in9 sold at t2e

time o3 t2e %er3ection o3 t2e contract o3 sale is not an element 3or its %er3ection. G2at t2e la;reBuires is t2at t2e seller 2as t2e ri92t to trans3er o;ners2i% at t2e time t2e t2in9 sold is

delivered.[1&] Per3ection per se does not trans3er o;ners2i% ;2ic2 occurs u%on t2e actual or

constructive delivery o3 t2e t2in9 sold.[!(] A %er3ected contract o3 sale cannot be c2allen9ed on t2e9round o3 non-o;ners2i% on t2e %art o3 t2e seller at t2e time o3 its %er3ection$ 2ence t2e sale is

still valid.

62e consummation 2o;ever o3 t2e %er3ected contract is anot2er matter. It occurs u%on t2econstructive or actual delivery o3 t2e sub>ect matter to t2e buyer ;2en t2e seller or 2er

successors-in-interest subseBuently acBuires o;ners2i% t2ereo3. Suc2 circumstance 2a%%ened in

t2is case ;2en %etitioners -- ;2o are 6rinidad ui>adas 2eirs and successors-in-interest --

became t2e o;ners o3 t2e sub>ect %ro%erty u%on t2e reversion o3 t2e o;ners2i% o3 t2e land tot2em. ConseBuently o;ners2i% is trans3erred to res%ondent ?onde>ar ands t2ose ;2o claim t2eir

ri92t 3rom 2im. Article 1)') o3 t2e 8e; Civil Code su%%orts t2e rulin9 t2at t2e sellers =title



















7/18/2019 Sales - June 22


%asses by o%eration o3 la; to t2e buyer.=[!1] 62is rule a%%lies not only ;2en t2e sub>ect matter o3

t2e contract o3 sale is 9oods[!!] but also to ot2er 5inds o3 %ro%erty includin9 real %ro%erty.[!']

62ere is also no merit in %etitioners contention t2at since t2e lots ;ere o;ned by t2emunici%ality at t2e time o3 t2e sale t2ey ;ere outside t2e commerce o3 men under Article 1)(&

0) o3 t2e 8CC$[!)]t2us t2e contract involvin9 t2e same is ine"istent and void 3rom t2e

be9innin9. @o;ever no;2ere in Article 1)(& 0) is it %rovided t2at t2e %ro%erties o3 amunici%ality ;2et2er it be t2ose 3or %ublic use or its %atrimonial %ro%erty [!+] are outside t2e

commerce o3 men. 4esides t2e lots in t2is case ;ere conditionally o;ned by t2e

munici%ality. 6o rule t2at t2e donated %ro%erties are outside t2e commerce o3 men ;ould render

nu9atory t2e unc2allen9ed reasonableness and >ustness o3 t2e condition ;2ic2 t2e donor 2as t2eri92t to im%ose as o;ner t2ereo3. ?oreover t2e ob>ects re3erred to as outsides t2e commerce o3

man are t2ose ;2ic2 cannot be a%%ro%riated suc2 as t2e o%en seas and t2e 2eavenly bodies.

Git2 res%ect to t2e trial courts a;ard o3 attorneys 3ees liti9ation e"%enses and moraldama9es t2ere is neit2er 3actual nor le9al basis t2ereo3. Attorneys 3ees and e"%enses o3 liti9ation

cannot 3ollo;in9 t2e 9eneral rule in Article !!( o3 t2e 8e; Civil Code be recovered in t2is

case t2ere bein9 no sti%ulation to t2at e33ect and t2e case does not 3all under any o3 t2ee"ce%tions.[!] It cannot be said t2at %rivate res%ondents 2ad com%elled %etitioners to liti9ate ;it2

t2ird %ersons. 8eit2er can it be ruled t2at t2e 3ormer acted in 9ross and evident bad 3ait2 in

re3usin9 to satis3y t2e latters claims considerin9 t2at %rivate res%ondents ;ere under an 2onest

belie3 t2at t2ey 2ave a le9al ri92t over t2e %ro%erty by virtue o3 t2e deed o3 sale. ?oral dama9escannot li5e;ise be >usti3ied as none o3 t2e circumstances enumerated under Articles !!1& [!,] and

!!!([!] o3 t2e 8e; Civil Code concur in t2is case.

(-EREFORE by virtue o3 t2e 3ore9oin9 t2e assailed decision o3 t2e Court o3 A%%eals isA**I/?E#.

SO ORDERED.

Melo (Acting Chairman), uno, and Mendo!a, ""., concur.

[1] #ecision o3 Court o3 A%%eals in CA-7./. CV 8o. ))(1 %romul9ated on ?ay '1 1&& %%. !-+$ Rollo %%. )1-)).

[!] /e9ional 6rial Court 04ayu9an A9usan del Sur #ecision dated July 1 1&&' %enned by Jud9e Henaida Placer %.$ Anne" =A= o3 Petition$ Rollo, %. !1.

['] 62e decretal %ortion o3 t2e CAs decision states< =G@E/E*D/E %remises considered t2e decision a%%ealed

3rom is 2ereby /EVE/SE# and SE6 ASI#E and >ud9ment rendered declarin9 t2e de3endants-a%%ellants as t2e

ri92t3ul and la;3ul o;ners and %ossessors o3 t2e sub>ect land. 62ere is no %ronouncement as to costs.=

[)] CA #ecision %%. -,$ Rollo, %%. )+-).

[+] CA /esolution %romul9ated Au9ust ! 1&&$ Rollo, %. ++.

[] Comment o3 Private /es%ondents %%. ,-$ Rollo, %%. ,-.

[,] @er sisters ;ere eonila Corvera Vda. de SeBuea and Paz Corvera Cabiltes and t2e brot2er ;as E%a%iadito

Corvera.

[] /6C #ecision %. 1$ Rollo, %. 1.












http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/126444.htm#_ednref1
























7/18/2019 Sales - June 22


[&] CA #ecision %%. +-$ Rollo %%. ))-)+.

[1(] City o3 An9eles v. CA !1 SC/A &(.

[11] Article ,1! 8e; Civil Code %rovides< =D;ners2i% is acBuired by occu%ation and by intellectual creation.

=D;ners2i% and ot2er real ri92ts over %ro%erty are acquired and transmitted #$ la%, #$ donation, by testate and

intestate succession and in conseBuence o3 certain contracts by tradition.

=62ey may also be acBuired by means o3 %rescri%tion.= 0Italics su%%lied.

[1!] Article ,') 8e; Civil Code 08CC reads< =62e donation is %er3ected 3rom t2e moment t2e donor 5no;s o3 t2e

acce%tance by t2e donee.=

[1'] Central P2ili%%ine niversity v. CA !) SC/A +11.

[1)] /eyes v. CA !) SC/A '+$ /e%ublic v. Sandi9anbayan !++ SC/A )'$ PA Em%loyees Savin9s oanAssociation Inc. v. 8/C !( SC/A ,+.

[1+] Cat2olic 4is2o% o3 4alan9a v. CA !) SC/A 11$ C2avez v. 4onto-Perez !)! SC/A ,'$ /ivera v. CA !))

SC/A !1$ Cormero v. CA '1, P2il. ').

[1] Santia9o v. CA !, SC/A & 01&&,$ Cat2olic 4is2o% o3 4alan9a v. CA !) SC/A 11$ Claveria v. uin9co

!(, SC/A 01&&!$ Perez v. Dn9 C2o 11 SC/A ,'! 01&!$ :usin9co v. Dn9 @in9 ian )! SC/A +& 01&,1$I.E. ot2o Inc. v. Ice and Cold Stora9e Industries Inc. ' SC/A ,))$ 7o C2i 7un et. al. v. Co C2o et. al.& P2il.

!!.

[1,] Article 1),+ 8e; Civil Code 08CC. =62e contract o3 sale is %er3ected at t2e moment t2ere is a meetin9 o3 t2eminds u%on t2e t2in9 ;2ic2 is t2e ob>ect o3 t2e contract and u%on t2e %rice. " " ".=

[1] eabres v. CA 1) SC/A 1+ 01&$ See also 8avarro v. Su9ar Producers Cor%oration 1 SC/A 11(.

[1&] Article 1)+& 8CC - =62e t2in9 must be licit and t2e vendor must 2ave a ri92t to trans3er t2e o;ners2i% t2ereo3 at

t2e time it is delivered.=

[!(] Article ,1! 8CC. =" " ". D;ners2i% and ot2er real ri92ts over %ro%erty are acBuired and transmitted " " " inconsequence o& certain cont'racts, #$ tradition.=

[!1]

Article 1)') 8CC %rovides< =G2en a %erson ;2o is not t2e o;ner o3 a t2in9 sells or alienates and delivers itand later t2e seller or 9rantor acBuires title t2ereto suc2 title %asses by o%eration o3 la; to t2e buyer or 9rantee.=

[!!] Article 1+(+ o3 t2e 8CC %rovides< =Sub>ect to t2e %rovisions o3 t2is 6itle ;2ere 9oods are sold by a %erson ;2ois not t2e o;ner t2ereo3 and ;2o does not sell t2em under aut2ority or ;it2 t2e consent o3 t2e o;ner t2e buyer

acBuires no better title to t2e 9oods t2an t2e seller 2ad unless t2e o;ner o3 t2e 9oods is by 2is conduct %recluded

3rom denyin9 t2e sellers aut2ority to sell.

=" " " " " " " " ".= 0Em%2asis su%%lied.

Dt2er e"ce%tions to t2e 3ore9oin9 includes< 0a ;2en t2e contrary is %rovided in recordin9 la;s 0b sales madeunder statutory %o;er o3 sale or %ursuant to a valid order 3rom a court o3 com%etent >urisdiction and 0c sales made

in a merc2ants store in accordance ;it2 t2e Code o3 commerce and s%ecial la;s.

[!'] See Article 1)') 8CC supra.$ EstoBue v. Pa>imula 1'' P2il. ++$ !) SC/A +& 01&$ 4ucton v. 7abar ++

SC/A )&&.[!)] Article 1)(& 0) 8CC< =62e 3ollo;in9 contracts are ine"istent and void 3rom t2e be9innin9<

" " " " " " " " "

0) 62ose ;2ose ob>ect is outside t2e commerce o3 men$

" " " " " " " " ".=


































7/18/2019 Sales - June 22


[!+] Article )!' 8CC< =62e %ro%erties o3 %rovinces cities and munici%alities is divided into %ro%erty 3or %ublic use

and %atrimonial %ro%erty.=

Article )!) %rovides< =Pro%erty 3or %ublic use in t2e %rovinces cities and munici%alities consist o3 t2e %rovincial

roads city streets munici%al streets t2e sBuares 3ountains %ublic ;aters %romenades and %ublic ;or5s 3or %ublicservice %aid 3or by said %rovinces cities or munici%alities.

=All ot2er %ro%erty %ossessed by any o3 t2em is %atrimonial and s2all be 9overned by t2is Code ;it2out %re>udice tot2e %rovisions o3 s%ecial la;s.=

[!] In t2e absence o3 sti%ulation attorneys 3ees and e"%enses o3 liti9ation ot2er t2an >udicial costs cannot be

recovered e"ce%t<

" " " " " " " " "

0! ;2en t2e de3endants act or omission 2as com%elled t2e %lainti33 to liti9ate ;it2 t2ird %ersons or to incur

e"%enses to %rotect 2is interest.

" " " " " " " " "

0+ ;2ere t2e de3endant acted in 9ross and evident bad 3ait2 in re3usin9 to satis3y t2e %lainti33s %lainlyvalid >ust and demandable claim.

" " " " " " " " ".

[!,] ?oral dama9es may be recovered in t2e 3ollo;in9 and analo9ous cases<

01 a criminal o33ense resultin9 in %2ysical in>uries$

0! Buasi-delicts causin9 %2ysical in>uries$

0' seduction abduction ra%e or ot2er lascivious acts$

0) adultery or concubina9e$

0+ ille9al or arbitrary detention or arrests$

0 ille9al searc2$

0, libel slander or any ot2er 3orm o3 de3amation$

0 malicious %rosecution$

0& acts mentioned in Article '(&$

01( acts and actions re3erred to in Articles !1 ! !, ! !& '( '! ') and '+.

62e %arents o3 t2e 3emale seduced abducted ra%ed or abused re3erred to in 8o. ' o3 t2is Article may also recover

moral dama9es.

62e s%ouse ascendants descendants and brot2ers and sisters may brin9 t2e action mentioned in 8o. & o3 t2is

Article in t2e order named.

[!] Article !!!(. Gill3ul in>ury to %ro%erty may be a le9al 9round 3or a;ardin9 moral dama9es i3 t2e court s2ould

3ind t2at under t2e circumstances suc2 dama9es are >ustly due. 62e same rule a%%lies to breac2es o3 contracts;2ere t2e de3endant acted 3raudulently or in bad 3ait2.









7/18/2019 Sales - June 22


T7I$D DIVISION

[G.R. No. 137((2. Ju#) 1*, 2000]

RO+ERTO %. LAORTE%A, GON%ALO %. LAORTE%A, MICHAEL %.LAORTE%A, !ENNIS %. LAORTE%A, "#$ LEA %.LAORTE%A, petitioners, vs.ALON%O MACHUCA, respondent .

! E C I S I O N

GON%AGARE-ES, J .&

This )etition for $eview on Certiorari sees the reversal of the Decision of the Co#rt of Appeals[1] in CA 0-$- CV No- 5"5'" entitled >A@ONFO .AC7?CA vers#s $O&E$TO F-@A4O$TEFA, 0ONFA@O F- @A4O$TEFA, @EA F?@?ETA@A4O$TEFA .IC7AE@ F-@A4O$TEFA, and DENNIS F- @A4O$TEFA>-

The followin% facts as fo#nd * the Co#rt of Appeals are #ndisp#ted9

>The propert* involved consists of a ho#se and lot located at No- ""'"Sherwood Street, .arcelo 0reen Villa%e, )araa/#e, .etro .anila,covered * Transfer Certificate of Title TCT No- 2263'3 !51 of the$e%istered of Deeds of )araa/#e E:hiit >D>, )laintiff, record, pp- ((1((2- The s#;ect propert* is re%istered in the na+e of the late 4ranciscoG- @aforte8a, altho#%h it is con;#%al in nat#re E:hiit >>, Defendants,record pp- ((1(3-

On A#%#st 2, 1!, defendant @ea F#l#eta@aforte8a e:ec#ted a Special)ower of Attorne* in favor of defendants $oerto F- @aforte8a and0on8alo F- @aforte8a, Br-, appointin% oth as her Attorne*infacta#thori8in% the+ ;ointl* to sell the s#;ect propert* and si%n an* doc#+entfor the settle+ent of the estate of the late 4rancisco G- @aforte8a E:h->A>, )laintiff, record, pp- (2((2'-

@iewise on the sa+e da*, defendant .ichael F- @aforte8a e:ec#ted aSpecial )ower of Attorne* in favor of defendants $oerto F- @aforte8a and0on8alo @aforte8a, Br-, liewise, %rantin% the sa+e a#thorit* E:h- >&>,record, pp- (23(2- &oth a%enc* instr#+ents contained a provision thatin an* doc#+ent or paper to e:ercise a#thorit* %ranted, the si%nat#re ofoth attorne*sinfact +#st e affi:ed-

On Octoer 2", 1!, defendant Dennis F- @aforte8a e:ec#ted a Special)ower of Attorne* in favor of defendant $oerto F- @aforte8a for the

http://sc.judiciary.gov.ph/jurisprudence/2000/june2000/137552.html#_ftn1



7/18/2019 Sales - June 22


p#rpose of sellin% the s#;ect propert* E:h- >C>, )laintiff, record, pp- (2!((6- A *ear later, on Octoer (6, 1!!, Dennis F- @aforte8a e:ec#tedanother Special )ower of Attorne* in favor of defendants $oerto F-@aforte8a and 0on8alo @aforte8a, Br- na+in% oth attorne*sinfact for thep#rpose of sellin% the s#;ect propert* and si%nin% an* doc#+ent for the

settle+ent of the estate of the late 4rancisco G- @aforte8a- Thes#se/#ent a%enc* instr#+ent E:h- >2>, record, pp- ("1("( containedsi+ilar provisions that oth attorne*sinfact sho#ld si%n an* doc#+ent orpaper e:ec#ted in the e:ercise of their a#thorit*-

In the e:ercise of the aove a#thorit*, on Ban#ar* 26, 1!!, the heirs ofthe late 4rancisco G- @aforte8a represented * $oerto F- @aforte8a and0on8alo F- @aforte8a, Br- entered into a .e+orand#+ of A%ree+entContract to Sell with the plaintiff [2] over the s#;ect propert* for the s#+ ofSIH 7?ND$ED T7I$T T7O?SAND )ESOS )3(6,666-66 pa*ale asfollows9

a )(6,666-66 as earnest +one*, to e forfeited in favor of thedefendants if the sale is not effected d#e to the fa#lt of the plaintiff=

)366,666-66 #pon iss#ance of the new certificate of title in the na+e of the late 4rancisco G- @aforte8a and #pon e:ec#tion of an e:tra;#dicialsettle+ent of the decedents estate with sale in favor of the plaintiff )ar- 2,E:h- >E>, record, pp- (('((3-

Si%nificantl*, the fo#rth para%raph of the .e+orand#+ of A%ree+entContract to Sell dated Ban#ar* 26, 1!! E:h- >E>, s#pra- contained a

provision as follows9

:::- ?pon iss#ance * the proper Co#rt of the new title, the&?E$@ESSEE shall e notified in writin% and said &?E$@ESSEE shall have thirt* (6 da*s to prod#ce the alanceof )366,666-66 which shall e paid to the SE@@E$@ESSO$S #ponthe e:ec#tion of the E:tra;#dicial Settle+ent with sale-

On Ban#ar* 26, 1!!, plaintiff paid the earnest +one* of T7I$TT7O?SAND )ESOS )(6,666-66, pl#s rentals for the s#;ect propert*E:h- >4>, )laintiff, record, p- ((!-

On Septe+er 1, 1!![(], defendant heirs, thro#%h their co#nsel wrote aletter E:h- 1, Defendants, record, p- ("6 to the plaintiff f#rnishin% thelatter a cop* of the reconstit#ted title to the s#;ect propert*, advisin% hi+that he had thirt* ( da*s to prod#ce the alance of SIH 7?ND$ED)ESOS sic )366,666-66 #nder the .e+orand#+ of A%ree+ent whichplaintiff received on the sa+e date-






7/18/2019 Sales - June 22


On Octoer 1, 1!!, plaintiff sent the defendant heirs a letter re/#estin%for an e:tension of the T7I$T (6 DAS deadline #p to Nove+er 1',1!! within which to prod#ce the alance of SIH 7?ND$ED T7O?SAND)ESOS )366,666-66 E:h- >0>, )laintiff, record, pp- (51(52-Defendant $oerto F- @aforte8a, assisted * his co#nsel Att*- $o+eo @-

0#tierre8, si%ned his confor+it* to the plaintiffs letter re/#est E:h- >01and >02>, )laintiff, record, p- (52- The e:tension, however, does notappear to have een approved * 0on8alo F- @aforte8a, the secondattorne*infact as his confor+it* does not appear to have een sec#red-

On Nove+er 1', 1!!, plaintiff infor+ed the defendant heirs, thro#%hdefendant $oerto F- @aforte8a, that he alread* had the alance of SIH7?ND$ED T7O?SAND )ESOS )366,666-66 covered * ?nitedCocon#t )lanters &an .ana%ers Chec No- 66615 dated Nove+er 1',1!! TSN, A#%#st 2', 1!!2, p- 11= E:hs- >7>, record, pp- (5((55= >.>,records p- ('6= and >N>, record, p- ('1- 7owever, the defendants, ref#sed

to accept the alance TSN, A#%#st 25, 1!!2, p- 15= E:hs- >.1>, )laintiff,record, p- ('6= and >N1>, )laintiff, record, p- ('1- Defendant $oerto F-@aforte8a had told hi+ that the s#;ect propert* was no lon%er for saleTSN, Octoer 26, 1!!2, p- 1!= E:h- >B>, record, p- (5"-

On Nove+er 26, 1!![5], defendants infor+ed the plaintiff that the* werecancelin% the .e+orand#+ of A%ree+ent Contract to Sell in view of theplaintiffs fail#re to co+pl* with his contract#al oli%ations E:h- >(>-

Thereafter, plaintiff reiterated his re/#est to tender pa*+ent of the alanceof SIH 7?ND$ED T7O?SAND )ESOS )366,666-66- Defendants,

however, insisted on the rescission of the .e+orand#+ of A%ree+ent-Thereafter, plaintiff filed the instant action for specific perfor+ance- Thelower co#rt rendered ;#d%+ent on B#l* 3, 1!!5 in favor of the plaintiff, thedispositive portion of which reads9

<7E$E4O$E, ;#d%+ent is here* rendered in favor of plaintiff Alon8o .ach#ca and a%ainst the defendant heirs of the late4rancisco G- @aforte8a, orderin% the said defendants-

a To accept the alance of )366,666-66 as f#ll pa*+ent of theconsideration for the p#rchase of the ho#se and lot located at No- ""'"

Sherwood Street, .arcelo 0reen Villa%e, )araa/#e, .etro .anila,covered * Transfer Certificate of Title No- 2263'3 !51 of the $e%istr*of Deeds of $i8al )araa/#e, &ranch=

To e:ec#te a re%istrale deed of asol#te sale over the s#;ectpropert* in favor of the plaintiff=



7/18/2019 Sales - June 22


c Bointl* and severall* to pa* the plaintiff the s#+ of )26,666-66 asattorne*s fees pl#s cost of s#it-

SO O$DE$ED- $ollo, pp- "5"'-> [']

)etitioners appealed to the Co#rt of Appeals, which affir+ed with +odification thedecision of the lower co#rt= the dispositive portion of the Decision reads9

><7E$E4O$E, the /#estioned decision of the lower co#rt is here* A44I$.ED with the .ODI4ICATION that defendant heirs @ea F#l#eta@aforte8a, .ichael F- @aforte8a, Dennis F- @aforte8a and $oerto F-@aforte8a incl#din% 0on8alo F- @aforte8a, Br- are here* ordered to pa*

;ointl* and severall* the s#+ of 4I4T T7O?SAND )ESOS )'6,666-66as +oral da+a%es-

SO O$DE$ED->[3]

.otion for $econsideration was denied #t the Decision was +odified so as to asolve0on8alo F- @aforte8a, Br- fro+ liailit* for the pa*+ent of +oral da+a%es- ["] 7ence thispetition wherein the petitioners raise the followin% iss#es9

I. 'HETHER THE TRIAL AN! APPELLATE COURTS CORRECTL-CONSTRUE! THE MEMORAN!UM O AGREEMENT AS IMPOSINGRECIPROCAL O+LIGATIONS.

II. 'HETHER THE COURTS A /UO CORRECTL- RULE! THATRESCISSION 'ILL NOT LIE IN THE INSTANT CASE.

III. 'HETHER THE RESPON!ENT IS UN!ER ESTOPPEL ROMRAISING THE ALLEGE! !EECT IN THE SPECIAL PO'ER OATTORNE- !ATE! 30 OCTO+ER 199 EECUTE! +- !ENNISLAORTE%A.

I. SUPPOSING E GRATIA ARGUMENTI THE MEMORAN!UM OAGREEMENT IMPOSES RECIPROCAL O+LIGATIONS, 'HETHERTHE PETITIONERS MA- +E COMPELLE! TO SELL THE SU+JECTPROPERT- 'HEN THE RESPON!ENT AILE! TO MAE A JU!ICIALCONSIGNATION O THE PURCHASE PRICE4

. 'HETHER THE PETITIONERS ARE IN +A! AITH SO TO AS MAETHEM LIA+LE OR MORAL !AMAGES4[]

The petitioners contend that the .e+orand#+ of A%ree+ent is +erel* a leasea%ree+ent with >option to p#rchase>- As it was +erel* an option, it onl* %ave therespondent a ri%ht to p#rchase the s#;ect propert* within a li+ited period witho#ti+posin% #pon the+ an* oli%ation to p#rchase it- Since the respondents tender of









7/18/2019 Sales - June 22


pa*+ent was +ade after the lapse of the option a%ree+ent, his tender did not %ive riseto the perfection of a contract of sale-

It is f#rther +aintained * the petitioners that the Co#rt of Appeals erred in r#lin% thatrescission of the contract was alread* o#t of the /#estion- $escission i+plies that a

contract of sale was perfected #nlie the .e+orand#+ of A%ree+ent in /#estion whichas previo#sl* stated is alle%edl* onl* an option contract-

)etitioner adds that at +ost, the .e+orand#+ of A%ree+ent Contract to Sell is a +erecontract to sell, as indicated in its title- The oli%ation of the petitioners to sell thepropert* to the respondent was conditioned #pon the iss#ance of a new certificate oftitle and the e:ec#tion of the e:tra;#dicial partition with sale and pa*+ent of the)366,666-66- This is wh* possession of the s#;ect propert* was not delivered to therespondent as the owner of the propert* #t onl* as the lessee thereof- And the fail#reof the respondent to pa* the p#rchase price in f#ll prevented the petitioners oli%ation toconve* title fro+ ac/#irin% oli%ator* force-

)etitioners also alle%e that ass#+in% for the sae of ar%#+ent that a contract of salewas indeed perfected, the Co#rt of Appeals still erred in holdin% that respondents fail#reto pa* the p#rchase price of )366,666-66 was onl* a >sli%ht or cas#al reach>-

The petitioners also clai+ that the Co#rt of Appeals erred in r#lin% that the* were notread* to co+pl* with their oli%ation to e:ec#te the e:tra;#dicial settle+ent- The )owerof Attorne* to e:ec#te a Deed of Sale +ade * Dennis F- @aforte8a was s#fficient andnecessaril* incl#ded the power to e:ec#te an e:tra;#dicial settle+ent- At an* rate, therespondent is estopped fro+ clai+in% that the petitioners were not read* to co+pl* withtheir oli%ation for he acnowled%ed the petitioners ailit* to do so when he re/#ested

for an e:tension of ti+e within which to pa* the p#rchase price- 7ad he tr#l* elievedthat the petitioners were not read*, he wo#ld not have needed to as for said e:tension-

4inall*, the petitioners alle%e that the respondents #ncorroorated testi+on* that thirdpersons offered a hi%her price for the propert* is hearsa* and sho#ld not e %iven an*evidentiar* wei%ht- Th#s, the order of the lower co#rt awardin% +oral da+a%es waswitho#t an* le%al asis-

The appeal is ereft of +erit-

A per#sal of the .e+orand#+ A%ree+ent shows that the transaction etween the

petitioners and the respondent was one of sale and lease- The ter+s of the a%ree+entread9

>1- 4or and in consideration of the s#+ of )ESOS9 SIH 7?ND$EDT7I$T T7O?SAND )3(6,666-66 pa*ale in a +anner herein elowindicated, SE@@E$@ESSO$ here* a%ree to sell #nto &?E$@ESSEEthe propert* descried in the first <7E$EAS of this A%ree+ent within si:3 +onths fro+ the e:ec#tion date hereof, or #pon iss#ance * the Co#rt

7/18/2019 Sales - June 22


of a new owners certificate of title and the e:ec#tion of e:tra;#dicialpartition with sale of the estate of 4rancisco @aforte8a, whichever isearlier=

2- The aove+entioned s#+ of )ESOS9 SIH 7?ND$ED T7I$T

T7O?SAND )3(6,666-66 shall e paid in the followin% +anner9

)(6,666-66 as earnest +one* and as consideration for this A%ree+ent, which a+o#nt shall e forfeited in favor of SE@@E$@ESSO$S if the sale is not effected eca#se of the fa#lt or optionof &?E$@ESSEE=

)366,666-66 #pon the iss#ance of the new certificate of title in thena+e of the late 4rancisco @aforte8a and #pon the e:ec#tion of anE:tra;#dicial Settle+ent of his estate with sale in favor of &?E$@ESSEE free fro+ lien or an* enc#+rances-

(- )arties reasonal* esti+ate that the iss#ance of a new title in place ofthe lost one, as well as the e:ec#tion of e:tra;#dicial settle+ent of estatewith sale to herein &?E$@ESSEE will e co+pleted within si: 3+onths fro+ the e:ec#tion of this A%ree+ent- It is therefore a%reed thatd#rin% the si: +onths period, &?E$@ESSEE will e leasin% the s#;ectpropert* for si: +onths period at the +onthl* rate of )ESOS9 T7$EET7O?SAND 4IVE 7?ND$ED )(,'66-66- )rovided however, that if theiss#ance of new title and the e:ec#tion of E:tra;#dicial )artition isco+pleted prior to the e:piration of the si: +onths period, &?E$@ESSEE shall onl* e liale for rentals for the correspondin% period

co++encin% fro+ his occ#panc* of the pre+ises to the e:ec#tion andco+pletion of the E:tra;#dicial Settle+ent of the estate, provided f#rtherthat if after the e:piration of si: 3 +onths, the lost title is not *et replacedand the e:tra ;#dicial partition is not e:ec#ted, &?E$@ESSEE shall nolon%er e re/#ired to pa* rentals and shall contin#e to occ#p*, and #sethe pre+ises #ntil s#;ect condition is co+plied * SE@@E$@ESSO$=

5- It is here* a%reed that within reasonale ti+e fro+ the e:ec#tion ofthis A%ree+ent and the pa*+ent * &?E$@ESSEE of the a+o#nt of)(6,666-66 as herein aove provided, SE@@E$@ESSO$S shalli++ediatel* file the correspondin% petition for the iss#ance of a new title in

lie# of the lost one in the proper Co#rts- ?pon iss#ance * the properCo#rts of the new title, the &?E$@ESSEE shall have thirt* (6 da*s toprod#ce the alance of )366,666-66 which shall e paid to the SE@@E$@ESSO$S #pon the e:ec#tion of the E:tra;#dicial Settle+ent with sale-> [!]

A contract of sale is a consens#al contract and is perfected at the +o+ent there is a+eetin% of the +inds #pon the thin% which is the o;ect of the contract and #pon theprice-[16] 4ro+ that +o+ent the parties +a* reciprocall* de+and perfor+ance s#;ect to





7/18/2019 Sales - June 22


the provisions of the law %overnin% the for+ of contracts- [11] The ele+ents of a validcontract of sale #nder Article 15' of the Civil Code are 1 consent or +eetin% of the+inds= 2 deter+inate s#;ect +atter and ( price certain in +one* or its e/#ivalent- [12]

In the case at ench, there was a perfected a%ree+ent etween the petitioners and the

respondent where* the petitioners oli%ated the+selves to transfer the ownership ofand deliver the ho#se and lot located at ""'" Sherwood St-, .arcelo 0reen Villa%e,)araa/#e and the respondent to pa* the price a+o#ntin% to si: h#ndred tho#sandpesos )366,666-66- All the ele+ents of a contract of sale were th#s present- 7owever,the alance of the p#rchase price was to e paid onl* #pon the iss#ance of the newcertificate of title in lie# of the one in the na+e of the late 4rancisco @aforte8a and #ponthe e:ec#tion of an e:tra;#dicial settle+ent of his estate- )rior to the iss#ance of the>reconstit#ted> title, the respondent was alread* placed in possession of the ho#se andlot as lessee thereof for si: +onths at a +onthl* rate of three tho#sand five h#ndredpesos )(,'66-66- It was stip#lated that sho#ld the iss#ance of the new title and thee:ec#tion of the e:tra;#dicial settle+ent e co+pleted prior to e:piration of the si:

+onth period, the respondent wo#ld e liale onl* for the rentals pertainin% to the periodco++encin% fro+ the date of the e:ec#tion of the a%ree+ent #p to the e:ec#tion of thee:tra;#dicial settle+ent- It was also e:pressl* stip#lated that if after the e:piration of thesi: +onth period, the lost title was not *et replaced and the e:tra;#dicial partition wasnot *et e:ec#ted, the respondent wo#ld no lon%er e re/#ired to pa* rentals and wo#ldcontin#e to occ#p* and #se the pre+ises #ntil the s#;ect condition was co+plied with* the petitioners-

The si:+onth period d#rin% which the respondent wo#ld e in possession of thepropert* as lessee, was clearl* not a period within which to e:ercise an option- Anoption is a contract %rantin% a privile%e to #* or sell within an a%reed ti+e and at a

deter+ined price- An option contract is a separate and distinct contract fro+ that whichthe parties +a* enter into #pon the cons#++ation of the option- [1(] An option +#st es#pported * consideration-[15] An option contract is %overned * the second para%raphof Article 15"! of the Civil Code [1'], which reads9

>Article 15"!- :::

An accepted #nilateral pro+ise to #* or to sell a deter+inate thin% for aprice certain is indin% #pon the pro+issor if the pro+ise is s#pported * aconsideration distinct fro+ the price->

In the present case, the si:+onth period +erel* dela*ed the de+andailit* of thecontract of sale and did not deter+ine its perfection for after the e:piration of the si:+onth period, there was an asol#te oli%ation on the part of the petitioners and therespondent to co+pl* with the ter+s of the sale- The parties +ade a >reasonaleesti+ate> that the reconstit#tion of the lost title of the ho#se and lot wo#ld taeappro:i+atel* si: +onths and th#s pres#+ed that after si: +onths, oth parties wo#lde ale to co+pl* with what was reciprocall* inc#+ent #pon the+- The fact that afterthe e:piration of the si:+onth period, the respondent wo#ld retain possession of the













7/18/2019 Sales - June 22


ho#se and lot witho#t need of pa*in% rentals for the #se therefor, clearl* indicated thatthe parties conte+plated that ownership over the propert* wo#ld alread* e transferred* that ti+e-

The iss#ance of the new certificate of title in the na+e of the late 4rancisco @aforte8a

and the e:ec#tion of an e:tra;#dicial settle+ent of his estate was not a condition whichdeter+ined the perfection of the contract of sale- )etitioners contention that since thecondition was not +et, the* no lon%er had an oli%ation to proceed with the sale of theho#se and lot is #nconvincin%- The petitioners fail to distin%#ish etween a conditioni+posed #pon the perfection of the contract and a condition i+posed on theperfor+ance of an oli%ation- 4ail#re to co+pl* with the first condition res#lts in thefail#re of a contract, while the fail#re to co+pl* with the second condition onl* %ives theother part* the option either to ref#se to proceed with the sale or to waive the condition-Th#s, Art- 1'5' of the Civil Code states9

>Art- 1'5'- <here the oli%ation of either part* to a contract of sale is

s#;ect to an* condition which is not perfor+ed, s#ch part* +a* ref#se toproceed with the contract or he +a* waive perfor+ance of the condition- If the other part* has pro+ised that the condition sho#ld happen or eperfor+ed, s#ch first +entioned part* +a* also treat the nonperfor+anceof the condition as a reach of warrant*-

<here the ownership in the thin%s has not passed, the #*er +a* treatthe f#lfill+ent * the seller of his oli%ation to deliver the sa+e asdescried and as warranted e:pressl* or * i+plication in the contract ofsale as a condition of the oli%ation of the #*er to perfor+ his pro+ise toaccept and pa* for the thin%-> [13]

In the case at ar, there was alread* a perfected contract- The condition was i+posedonl* on the perfor+ance of the oli%ations contained therein- Considerin% however thatthe title was event#all* >reconstit#ted> and that the petitioners ad+it their ailit* toe:ec#te the e:tra;#dicial settle+ent of their fathers estate, the respondent had a ri%ht tode+and f#lfill+ent of the petitioners oli%ation to deliver and transfer ownership of theho#se and lot-

<hat f#rther +ilitates a%ainst petitioners ar%#+ent that the* did not enter into a contractof sale is the fact that the respondent paid thirt* tho#sand pesos )(6,666-66 asearnest +one*- Earnest +one* is so+ethin% of val#e to show that the #*er was reall*

in earnest, and %iven to the seller to ind the ar%ain-

[1"] <henever earnest +one* is%iven in a contract of sale, it is considered as part of the p#rchase price and proof of the

perfection of the contract- [1]

<e do not s#scrie to the petitioners view that the .e+orand#+ A%ree+ent was acontract to sell- There is nothin% contained in the .e+orand#+ A%ree+ent fro+ which itcan reasonal* e ded#ced that the parties intended to enter into a contract to sell, i-e-one where* the prospective seller wo#ld e:plicitl* reserve the transfer of title to the







7/18/2019 Sales - June 22


prospective #*er, +eanin%, the prospective seller does not as *et a%ree or consent totransfer ownership of the propert* s#;ect of the contract to sell #ntil the f#ll pa*+ent ofthe price, s#ch pa*+ent ein% a positive s#spensive condition, the fail#re of which is notconsidered a reach, cas#al or serio#s, #t si+pl* an event which prevented theoli%ation fro+ ac/#irin% an* oli%ator* force-[1!]There is clearl* no e:press reservation

of title +ade * the petitioners over the propert*, or an* provision which wo#ld i+posenonpa*+ent of the price as a condition for the contracts enterin% into force- Altho#%hthe +e+orand#+ a%ree+ent was also deno+inated as a >Contract to Sell>, we holdthat the parties conte+plated a contract of sale- A deed of sale is asol#te in nat#realtho#%h deno+inated a conditional sale in the asence of a stip#lation reservin% title inthe petitioners #ntil f#ll pa*+ent of the p#rchase price- [26] In s#ch cases, ownership of thethin% sold passes to the vendee #pon act#al or constr#ctive deliver* thereof- [21] The +erefact that the oli%ation of the respondent to pa* the alance of the p#rchase price was+ade s#;ect to the condition that the petitioners first deliver the reconstit#ted title of theho#se and lot does not +ae the contract a contract to sell for s#ch condition is notinconsistent with a contract of sale-[22]

The ne:t iss#e to e addressed is whether the fail#re of the respondent to pa* thealance of the p#rchase price within the period allowed is fatal to his ri%ht to enforce thea%ree+ent-

<e r#le in the ne%ative-

Ad+ittedl*, the fail#re of the respondent to pa* the alance of the p#rchase price was areach of the contract and was a %ro#nd for rescission thereof- The e:tension of thirt*(6 da*s alle%edl* %ranted to the respondent * $oerto F- @aforte8a assisted * hisco#nsel Attorne* $o+eo 0#tierre8 was correctl* fo#nd * the Co#rt of Appeals to e

ineffective inas+#ch as the si%nat#re of 0on8alo F- @aforte8a did not appear thereon asre/#ired * the Special )owers of Attorne*-[2(] 7owever, the evidence reveals that afterthe e:piration of the si:+onth period provided for in the contract, the petitioners werenot read* to co+pl* with what was inc#+ent #pon the+, i-e- the deliver* of thereconstit#ted title of the ho#se and lot- It was onl* on Septe+er 1, 1!! or nearl*ei%ht +onths after the e:ec#tion of the .e+orand#+ of A%ree+ent when the petitionersinfor+ed the respondent that the* alread* had a cop* of the reconstit#ted title andde+anded the pa*+ent of the alance of the p#rchase price- The respondent co#ld nottherefore e considered in dela* for in reciprocal oli%ations, neither part* inc#rs indela* if the other part* does not co+pl* or is not read* to co+pl* in a proper +annerwith what was inc#+ent #pon hi+- [25]

Even ass#+in% for the sae of ar%#+ent that the petitioners were read* to co+pl* withtheir oli%ation, we find that rescission of the contract will still not prosper- Therescission of a sale of an i++ovale propert* is specificall* %overned * Article 1'!2 ofthe New Civil Code, which reads9

>In the sale of i++ovale propert*, even tho#%h it +a* have eenstip#lated that #pon fail#re to pa* the price at the ti+e a%reed #pon the














7/18/2019 Sales - June 22


rescission of the contract shall of ri%ht tae place, the vendee +a* pa*,even after the e:piration of the period, as lon% as no de+and forrescission of the contract has een +ade #pon hi+ either ;#diciall* or * anotarial act- After the de+and, the co#rt +a* not %rant hi+ a new ter+-> [2']

It is not disp#ted that the petitioners did not +ae a ;#dicial or notarial de+and forrescission- The Nove+er 26, 1!! letter of the petitioners infor+in% the respondent ofthe a#to+atic rescission of the a%ree+ent did not a+o#nt to a de+and for rescission,as it was not notari8ed- [23] It was also +ade five da*s after the respondents atte+pt to+ae the pa*+ent of the p#rchase price- This offer to pa* prior to the de+and forrescission is s#fficient to defeat the petitioners ri%ht #nder article 1'!2 of the Civil Code-[2"] &esides, the .e+orand#+ A%ree+ent etween the parties did not contain a cla#see:pressl* a#thori8in% the a#to+atic cancellation of the contract witho#t co#rtintervention in the event that the ter+s thereof were violated- A seller cannot #nilaterall*and e:tra;#diciall* rescind a contract of sale where there is no e:press stip#lationa#thori8in% hi+ to e:tra;#diciall* rescind- [2] Neither was there a ;#dicial de+and for the

rescission thereof- Th#s, when the respondent filed his co+plaint for specificperfor+ance, the a%ree+ent was still in force inas+#ch as the contract was not *etrescinded- At an* rate, considerin% that the si:+onth period was +erel* anappro:i+ation of the ti+e it wo#ld tae to reconstit#te the lost title and was not acondition i+posed on the perfection of the contract and considerin% f#rther that thedela* in pa*+ent was onl* thirt* da*s which was ca#sed * the respondents ;#stified#t +istaen elief that an e:tension to pa* was %ranted to hi+, we a%ree with theCo#rt of Appeals that the dela* of one +onth in pa*+ent was a +ere cas#al reach thatwo#ld not entitle the respondents to rescind the contract- $escission of a contract willnot e per+itted for a sli%ht or cas#al reach, #t onl* s#ch s#stantial andf#nda+ental reach as wo#ld defeat the ver* o;ect of the parties in +ain% the

a%ree+ent-

[2!]

)etitioners insistence that the respondent sho#ld have consi%nated the a+o#nt is notdeter+inative of whether respondents action for specific perfor+ance will lie- )etitionersthe+selves point o#t that the effect of consi%nation is to e:tin%#ish the oli%ation- Itreleases the detor fro+ responsiilit* therefor- [(6] The fail#re of the respondent toconsi%nate the )366,666-66 is not tanta+o#nt to a reach of the contract for * the factof tenderin% pa*+ent, he was willin% and ale to co+pl* with his oli%ation-

The Co#rt of Appeals correctl* fo#nd the petitioners %#ilt* of ad faith and awarded+oral da+a%es to the respondent- As fo#nd * the said Co#rt, the petitioners ref#sed toco+pl* with their oli%ation for the reason that the* were offered a hi%her price thereforand the respondent was even offered )166,666-66 * the petitioners law*er, Attorne*0#tierre8, to relin/#ish his ri%hts over the propert*- The award of +oral da+a%es is inaccordance with Article 11!1[(1] of the Civil Code p#rs#ant to Article 2226 which providesthat +oral da+a%es +a* e awarded in case of a reach of contract where thedefendant acted in ad faith- The a+o#nt awarded depends on the discretion of theco#rt ased on the circ#+stances of each case- [(2] ?nder the circ#+stances, the award



















7/18/2019 Sales - June 22


%iven * the Co#rt of Appeals a+o#ntin% to )'6,666-66 appears to #s to e fair andreasonale-

ACCOR!INGL-, the decision of the Co#rt of Appeals in CA 0-$- CV No- 5"5'" is A44I$.ED and the instant petition is here* DENIED-

No prono#nce+ent as to costs-

SO OR!ERE!.

Melo, *C"airman+, Pangani&an, and Purisima, ))., conc#r-

$itug, )., Aroad, On Official &#siness-

[1] 6;el3t2 #ivision com%osed o3 t2e ponente " . ?ariano ?. mali and t2e members< " . Consuelo :nares-Santia9o

0C2airman and " . /omeo J. Calle>o Sr. concurrin9.[!] Alonzo ?ac2uca res%ondent 2erein.['] S2ould be 1&&$ E"2ibit =1= /ecord %. ',(.[)] S2ould be 1&&$ E"2ibit ='=$ /ecord %. ',).[+] #ecision %%. 1-)$ Rollo %%. '&-)!.[] #ecision %%. 1)-1+$ Rollo %%. +!-+'.[,] /esolution %. ,$ Rollo %. +&.[] Petitioners ?emorandum %. ,-$ Rollo %%. 11&-1!(.[&] Rollo %%. !'-!+.[1(] City o3 Cebu vs. @eirs o3 Candido /ubi '( SC/A )( at %. )1, [1&&&].[11] Article 1),+ Civil Code.[1!] City o3 Cebu vs. @eirs o3 Candido /ubi supra.[1'] Co vs. Court o3 A%%eals 7. /. 8o. 11!''( Au9ust 1, 1&&& at %. ,.[1)] I#id .[1+] I#id .[1] im vs. Court o3 A%%eals !' SC/A +& at %. +, [1&&].[1,] 6o%acio vs. Court o3 A%%eals !11 SC/A !&1 at %. !&+ [1&&!].[1] Article 1)! Civil Code.[1&] City o3 Cebu vs. @eirs o3 Candido /ubi supra at %. )1&.[!(] 4abasa vs. Court o3 A%%eals !&( SC/A +'! at %. +)( [1&&].[!1] I#id .[!!] I#id .

[!'] 62e Po;ers o3 Attorney read<

=""" It is 2ereby understood t2at in si9nin9 any document or %a%er to e"ercise t2e aut2ority 2erein 9ranted t2e

si9nature o3 both attorneys must be a33i"ed to said document.= 0em%2asis su%%lied[!)] Article 11& Civil Code.[!+] Article 1+&! reBuirin9 demand by suit or notarial act in case t2e vendor ;ants to rescind does not a%%ly to a

contract to sell or %romise to sell ;2ere title remains ;it2 t2e vendor until 3ul3illment o3 a %ositive condition suc2 as

3ull %ayment o3 t2e %rice [/oBue vs. a%uz & SC/A ,)1 citin9 ?anuel vs. /odri9uez 1(& P2il.].[!] /ecord %. +.[!,] Dcam%o vs. Court o3 A%%eals !'' SC/A ++1 at %. +! [1&&)].[!] Co vs. Court o3 A%%eals supra at %. &.

http://sc.judiciary.gov.ph/jurisprudence/2000/june2000/137552.html#_ftnref1


































































7/18/2019 Sales - June 22


[!&] Dcam%o vs. Court o3 A%%eals supra.['(] Article 1!+ o3 t2e Civil Code reads< =I3 t2e creditor to ;2om tender o3 %ayment 2as been made re3uses ;it2out

>ust cause to acce%t it t2e debtor s2all be released 3rom res%onsibility by t2e consi9nation o3 t2e t2in9 or sum due.

"""=

['1] =62e %o;er to rescind obli9ations is im%lied in reci%rocal ones in case one o3 t2e obli9ors s2ould not com%ly

;it2 ;2at is incumbent u%on 2im.

62e in>ured %arty may c2oose bet;een 3ul3illment and rescission o3 t2e obli9ation ;it2 t2e %ayment o3 dama9es in

eit2er case. @e may also see5 rescission even a3ter 2e 2as c2osen 3ul3illment i3 t2e latter s2ould become im%ossible.

62e court s2all decree t2e rescission claimed unless t2ere be >ust cause aut2orizin9 t2e 3i"in9 o3 a %eriod. """=['!] im vs. Court o3 A%%eals upra at %. +1.









7/18/2019 Sales - June 22


SECOND DIVISION

[G.R. No. 133*3. A56l 1(, 200(]

PERPETUA !A. !E APE, petitioner, vs. THE HONORA+LE COURTO APPEALS "#$ GENOROSA CA'IT !A. !ELUMA-NO, respondents.

! E C I S I O N

CHICO8NA%ARIO, J.&

&efore ?s is a petition for review on certiorari of the Decision

[1]

of the Co#rt of Appeals in CA0-$- CV No- 5'3 entitled, 0enerosa Cawit de @#+a*no, acco+panied* her h#sand &ra#lio @#+a*no v- 4ort#nato Ape, incl#din% his wife )erpet#a de Ape-

The pertinent facts are as follows9

Cleopas Ape was the re%istered owner of a parcel of land partic#larl* nown as @otNo- 2(1! of the Escalante Cadastre of Ne%ros Occidental and covered * Ori%inalCertificate of Title OCT No- $) 1("! $)1'5 [(66]- [2] ?pon Cleopas Apes deathso+eti+e in 1!'6, the propert* passed on to his wife, .aria Ondo*, and their eleven11 children, na+el*9 4ort#nato, Cornelio, &ernalda, &ienvenido, Encarnacion, @oreta,@o#rdes, 4elicidad, Adela, Do+inador, and An%elina, all s#rna+ed Ape-

On 1' .arch 1!"(, 0enerosa Cawit de @#+a*no private respondent herein, ;oined * her h#sand, &ra#lio,[(] instit#ted a case for Specific )erfor+ance of a Deed of Sale with Da+a%es a%ainst 4ort#nato and his wife )erpet#a petitioner herein eforethe then Co#rt of 4irst Instance of Ne%ros Occidental- It was alle%ed in the co+plaintthat on 11 April 1!"1, private respondent and 4ort#nato entered into a contract of saleof land #nder which for a consideration of )',666-66, 4ort#nato a%reed to sell his sharein @ot No- 2(1! to private respondent- The a%ree+ent was contained in a receiptprepared * private respondents soninlaw, Andres 4lores, at her ehest- Said receiptwas attached to the co+plaint as Anne: A thereof and later +ared as E:hiit 0 for private respondent- The receipt states9

A%ril 11 1&,1

TO <7O. IT .A CONCE$N9

62is date received 3rom ?rs. 7enerosa Ca;it de umayno t2e sum o3 6@I/6:

PESDS D8: as Advance Payment o3 my s2are in and Purc2ased 3or *IVE

6@DSA8# PESDS D6 K!'1&.

http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/133638.htm#_ftn1






7/18/2019 Sales - June 22


0Si9ned

*D/68A6D APE

)(6-66 <ITNESS9

0Ille9ible [5]

As private respondent wanted to re%ister the clai+ed sale transaction, shes#pposedl* de+anded that 4ort#nato e:ec#te the correspondin% deed of sale and toreceive the alance of the consideration- 7owever, 4ort#nato #n;#stifial* ref#sed toheed her de+ands- )rivate respondent, therefore, pra*ed that 4ort#nato e ordered toe:ec#te and deliver to her a s#fficient and re%istrale deed of sale involvin% his oneeleventh 111 share or participation in @ot No- 2(1! of the Escalante Cadastre= to pa*)',666-66 in da+a%es= )'66-66 rei+#rse+ent for liti%ation e:penses as well asadditional )'66-66 for ever* appeal +ade= )2,666-66 for attorne*s fees= and to pa* thecosts-[']

4ort#nato and petitioner denied the +aterial alle%ations of the co+plaint andclai+ed that 4ort#nato never sold his share in @ot No- 2(1! to private respondent andthat his si%nat#re appearin% on the p#rported receipt was for%ed- &* wa* of co#nterclai+, the defendants elow +aintained havin% entered into a contract of leasewith respondent involvin% 4ort#natos portion of @ot No- 2(1!- This p#rported leasecontract co++enced in 1!36 and was s#pposed to last #ntil 1!3' with an option for another five ' *ears- The ann#al lease rental was )166-66 which private respondentand her h#sand alle%edl* paid on install+ent asis- 4ort#nato and petitioner alsoassailed private respondent and her h#sands contin#ed possession of the rest of @otNo- 2(1! alle%in% that in the event the* had ac/#ired the shares of 4ort#natos coowners * wa* of sale, he was invoin% his ri%ht to redee+ the sa+e- 4inall*, 4ort#nato

and petitioner pra*ed that the lease contract etween the+ and respondent e orderedann#lled= and that respondent e ordered to pa* the+ attorne*s fees= +oral da+a%es=and e:e+plar* da+a%es-[3]

In their repl*,["] the private respondent and her h#sand alle%ed that the* hadp#rchased fro+ 4ort#natos coowners, as evidenced * vario#s written instr#+ents,[] their respective portions of @ot No- 2(1!- &* virt#e of these sales, the* insisted that4ort#nato was no lon%er a coowner of @ot No- 2(1! th#s, his ri%ht of rede+ption nolon%er e:isted-

)rior to the resol#tion of this case at the trial co#rt level, 4ort#nato died and wass#stit#ted in this action * his children na+ed Salodada, Clarita, Narciso, $o+eo,

$odri%o, .arieta, 4ort#nato, Br-, and Salvador, all s#rna+ed Ape-[!]

D#rin% the trial, private respondent testified that she and her h#sand ac/#ired thevario#s portions of @ot No- 2(1! elon%in% to 4ort#natos coowners- Thereafter, her h#sand ca#sed the annotation of an adverse clai+ on the certificate of title of @ot No-2(1!-[16] The annotation states9















7/18/2019 Sales - June 22


Entry 8o. 1!'+'& Adverse claim 3iled by 4raulio umayno. 8otice o3 adverse claim

3iled by 4raulio umayno a33ectin9 t2e lot described in t2is title to t2e e"tent o3

,,+11.&' sBuare meters more or less t2e a99re9ate area o3 s2ares sold to 2im on t2e

basis o3 0alle9ed sales in 2is %ossession. #oc. 8o. 1+, Pa9e 8o. '' 4oo5 8o. LI

Series o3 1&, o3 Ale"ander Ca;it o3 Escalante 8e9. Dcc. #ate o3 instrument. June

!! 1&, at <'( a.m. 0S7# *E#E8CID//AH Act9. /e9ister o3 #eeds. [11]

In addition, private respondent clai+ed that after the ac/#isition of those shares,she and her h#sand had the whole @ot No- 2(1! s#rve*ed * a certain Oscar .ascadawho ca+e #p with a technical description of said piece of land- [12] Si%nificantl*, privaterespondent alle%ed that 4ort#nato was present when the s#rve* was cond#cted- [1(]

Also presented as evidence for private respondent were pict#res taen of so+eparts of @ot No- 2(1! p#rportedl* showin% the land elon%in% to 4ort#nato ein%o#nded * a row of anana plants there* separatin% it fro+ the rest of @ot No- 2(1!-[15]

As re%ards the circ#+stances s#rro#ndin% the sale of 4ort#natos portion of theland, private respondent testified that 4ort#nato went to her store at the ti+e when their lease contract was ao#t to e:pire- 7e alle%edl* de+anded the rental pa*+ent for hisland #t as she was no lon%er interested in renewin% their lease a%ree+ent, the*a%reed instead to enter into a contract of sale which 4ort#nato acceded to providedprivate respondent o#%ht his portion of @ot No- 2(1! for )',666-66- Thereafter, sheased her soninlaw 4lores to prepare the afore+entioned receipt- 4lores read thedoc#+ent to 4ort#nato and ased the latter whether he had an* o;ection thereto-4ort#nato then went on to affi: his si%nat#re on the receipt-

4or her part, petitioner insisted that the entire @ot No- 2(1! had not *et een

for+all* s#divided=[1']

that on 11 April 1!"1 she and her h#sand went to privaterespondents ho#se to collect past rentals for their land then leased * the for+er,however, the* +ana%ed to collect onl* thirt* pesos= [13] that private respondent +ade her petitioners h#sand si%n a receipt acnowled%in% the receipt of said a+o#nt of +one*=[1"] and that the contents of said receipt were never e:plained to the+- [1] She also statedin her testi+on* that her h#sand was an illiterate and onl* learned how to write hisna+e in order to e e+plo*ed in a s#%ar central- [1!] As for private respondents p#rchaseof the shares owned * 4ort#natos coowners, petitioner +aintained that neither shenor her h#sand received an* notice re%ardin% those sales transactions-[26] Thetesti+on* of petitioner was later on corroorated * her da#%hterinlaw, .arietta ApeDino-[21]

After d#e trial, the co#rt a /#o rendered a decision[22] dis+issin% oth the co+plaintand the co#nterclai+- The trial co#rt liewise ordered that deeds or doc#+entsrepresentin% the sales of the shares previo#sl* owned * 4ort#natos coowners ere%istered and annotated on the e:istin% certificate of title of @ot No- 2(1!- Accordin% tothe trial co#rt, private respondent failed to prove that she had act#all* paid the p#rchaseprice of )',666-66 to 4ort#nato and petitioner- Appl*in%, therefore, the provision of

Article 1('6 of the Civil Code,[2(] the trial co#rt concl#ded that private respondent did not




























7/18/2019 Sales - June 22


have the ri%ht to de+and the deliver* to her of the re%istrale deed of sale over 4ort#natos portion of the @ot No- 2(1!-

The trial co#rt also re;ected 4ort#nato and petitioners clai+ that the* had the ri%ht of rede+ption over the shares previo#sl* sold to private respondent and the lattersh#sand, reasonin% as follows9

#e3endants in t2eir counterclaim invo5e t2eir ri92t o3 le9al redem%tion under Article

1!' o3 t2e 8e; Civil Code in vie; o3 t2e alle9ed sale o3 t2e undivided %ortions o3

t2e lot in Buestion by t2eir co-2eirs and co-o;ners as claimed by t2e %lainti33s in t2eir

com%laint. 62ey 2ave been in3ormed by t2e %lainti33 about said sales u%on t2e 3ilin9 o3

t2e com%laint in t2e instant case as 3ar bac5 as ?arc2 1) 1&,'. #e3endant t2emselves

%resented as t2eir very o;n e"2ibits co%ies o3 t2e res%ective deeds o3 sale or

conveyance by t2eir said co-2eirs and co-o;ners in 3avor o3 t2e %lainti33s or t2eir

%redecessors-in-interest ;ay bac5 on January ! 1&&! ;2en t2ey 3ormally o33ered

t2eir e"2ibits in t2e instant case$ meanin9 t2ey t2emselves acBuired %ossession o3

said documentary e"2ibits even be3ore t2ey 3ormally o33ered t2em in evidence. nderArt. 1!' o3 t2e 8e; Civil Code de3endants 2ave only 6@I/6: 0'( #A:S counted

3rom t2eir actual 5no;led9e o3 t2e e"act terms and conditions o3 t2e deeds o3 sale or

conveyance o3 t2eir co-2eirs and co-o;ners s2are ;it2in ;2ic2 to e"ercise t2eir ri92t

o3 le9al redem%tion.[25]

<ithin the re%le+entar* period, oth parties filed their respective notices of appealefore the trial co#rt with petitioner and her children tain% e:ception to the findin% of the trial co#rt that the period within which the* co#ld invoe their ri%ht of rede+ption hadalread* lapsed-[2'] 4or her part, private respondent raised as errors the trial co#rts r#lin%

that there was no contract of sale etween herself and 4ort#nato and the dis+issal of their co+plaint for specific perfor+ance-[23]

The Co#rt of Appeals, in the decision now assailed efore #s, reversed and setaside the trial co#rts dis+issal of the private respondents co+plaint #t #pheld theportion of the co#rt a uos decision orderin% the dis+issal of petitioner and her childrens co#nterclai+- The dispositive portion of the appellate co#rts decision reads9

G@E/E*D/E t2e decision dated ?arc2 11 1&&) is 2ereby /EVE/SE# and SE6

ASI#E inso3ar as t2e dismissal o3 %lainti33s-a%%ellants com%laint is concerned and

anot2er one is entered orderin9 t2e de3endant-a%%ellant *ortunato A%e andFor 2is ;i3e

Per%etua de A%e and successors-in-interest to e"ecute in 3avor o3 %lainti33-a%%ellant7enerosa Ca;it de umayno a #eed o3 Absolute Sale involvin9 t2e one-elevent2

01F11 s2are or %artici%ation o3 *ortunato A%e in ot 8o. !'1& Escalante Cadastre

containin9 an area o3 1!+!,.1& sBuare meters more or less ;it2in 0'( days 3rom

3inality o3 t2is decision and in case o3 non-com%liance ;it2 t2is Drder t2at t2e Cler5

o3 Court o3 said court is ordered to e"ecute t2e deed on be2al3 o3 t2e vendor. 62e







7/18/2019 Sales - June 22


decision is A**I/?E# inso3ar as t2e dismissal o3 de3endants-a%%ellants counterclaim

is concerned.

Git2out %ronouncement as to costs. [2"]

The Co#rt of Appeals #pheld private respondents position that E:hiit 0 had all theear+ars of a valid contract of sale, th#s9

E"2ibit 7 is t2e best %roo3 t2at t2e P+(((.(( re%resentin9 t2e %urc2ase %rice o3 t2e

1F11t2 s2are o3 *ortunato A%e ;as not %aid by t2e vendee on A%ril 11 1&,1 andFor u%

to t2e %resent but t2at does not a33ect t2e bindin9 3orce and e33ect o3 t2e document.

62e vendee 2avin9 %aid t2e vendor an advance %ayment o3 t2e a9reed %urc2ase %rice

o3 t2e %ro%erty ;2at t2e vendor can e"act 3rom t2e vendee is 3ull %ayment u%on 2is

e"ecution o3 t2e 3inal deed o3 sale. As is s2o;n t2e vendee %recisely instituted t2is

action to com%el t2e vendor *ortunato A%e to e"ecute t2e 3inal document a3ter s2e

;as in3ormed t2at 2e ;ould e"ecute t2e same u%on arrival o3 2is dau92ter 4ala 3rom?indanao but a3ter;ards 3ailed to live u% to 2is contractual obli9ation 06S8 %%. 11-

1' June 1( 1&&!.

It is not ri92t 3or t2e trial court to e"%ect %lainti33-a%%ellant to %ay t2e balance o3 t2e

%urc2ase %rice be3ore t2e 3inal deed is e"ecuted or 3or 2er to de%osit t2e eBuivalent

amount in court in t2e 3orm o3 consi9nation. Consi9nation comes into 3ore in t2e case

o3 a creditor to ;2om tender o3 %ayment 2as been made and re3uses ;it2out >ust cause

to acce%t it 0Arts. 1!+ and 1!+! 8.C.C.$ uerino vs. Pelarca !& SC/A 1. As

vendee %lainti33-a%%ellant 7enerosa Ca;it de umayno does not 3all ;it2in t2e

%urvie; o3 a debtor.

Ge t2ere3ore 3ind and so 2old t2at t2e trial court s2ould 2ave 3ound t2at e"2ibit 7

bears all t2e earmar5s o3 a %rivate deed o3 sale ;2ic2 is valid bindin9 and en3orceable

bet;een t2e %arties and t2at as a conseBuence o3 t2e 3ailure and re3usal on t2e %art o3

t2e vendor *ortunato A%e to live u% to 2is contractual obli9ation 2e andFor 2is 2eirs

and successors-in-interest can be com%elled to e"ecute in 3avor o3 and to deliver to

t2e vendee %lainti33-a%%ellant 7enerosa Ca;it de umayno a re9isterable deed o3

absolute sale involvin9 2is one-elevent2 01F11t2 s2are or %artici%ation in ot 8o.

!'1& Escalante Cadastre containin9 an area o3 1!+!,.1& sBuare meters more or less

;it2in '( days 3rom 3inality o3 t2is decision and in case o3 non-com%liance ;it2insaid %eriod t2is Court a%%oints t2e Cler5 o3 Court o3 t2e trial court to e"ecute on

be2al3 o3 t2e vendor t2e said document.[2]

The Co#rt of Appeals, however, affir+ed the trial co#rts r#lin% on the iss#e of petitioner and her childrens ri%ht of rede+ption- It r#led that 4ort#natos receipt of theSecond Owners D#plicate of OCT $) 1("! $)1'5 [(66], containin% the adverseclai+ of private respondent and her h#sand, constit#ted a s#fficient co+pliance with





7/18/2019 Sales - June 22


the written notice re/#ire+ent of Article 132( of the Civil Code and the period of rede+ption #nder this provision had lon% lapsed-

A%%rieved * the decision of the appellate co#rt, petitioner is now efore #s raisin%,essentiall*, the followin% iss#es9 whether 4ort#nato was f#rnished with a written noticeof sale of the shares of his coowners as re/#ired * Article 132( of the Civil Code= and

whether the receipt si%ned * 4ort#nato proves the e:istence of a contract of saleetween hi+ and private respondent-

In her +e+orand#+, petitioner clai+ed that the Co#rt of Appeals erred in s#stainin%the co#rt a /#os prono#nce+ent that she co#ld no lon%er redee+ the portion of @ot No-2(1! alread* ac/#ired * private respondent for no written notice of said sales wasf#rnished the+- Accordin% to her, the Co#rt of Appeals #nd#l* e:panded the scope of the law * e/#atin% 4ort#natos receipt of Second Owners D#plicate of OCT $) 1("!$)1'5 [(66] with the written notice re/#ire+ent of Article 132(- In addition, shear%#ed that E:hiit 0 co#ld not possil* e a contract of sale of 4ort#natos share in @otNo- 2(1! as said doc#+ent does not contain a definite a%ree+ent on the +anner of

pa*+ent of the price-

[2!]

Even ass#+in% that E:hiit 0 is, indeed, a contract of saleetween private respondent and 4ort#nato, the latter did not have the oli%ation todeliver to private respondent a re%istrale deed of sale in view of private respondentsown fail#re to pa* the f#ll p#rchase price of 4ort#natos portion of @ot No- 2(1!-)etitioner is also of the view that, at +ost, E:hiit 0 +erel* contained a #nilateralpro+ise to sell which private respondent co#ld not enforce in the asence of aconsideration distinct fro+ the p#rchase price of the land- 4#rther, petitioner reiteratedher clai+ that d#e to the illiterac* of her h#sand, it was inc#+ent #pon privaterespondent to show that the contents of E:hiit 0 were f#ll* e:plained to hi+- 4inall*,petitioner pointed o#t that the Co#rt of Appeals erred when it too into consideration thesa+e e:hiit despite the fact that onl* its photocop* was presented efore the co#rt-

On the other hand, private respondent ar%#ed that the annotation on the secondowners certificate over @ot No- 2(1! constit#ted constr#ctive notice to the whole worldof private respondents clai+ over the +a;orit* of said parcel of land- $el*in% on o#r decision in the case of Ca&rera v. $illanueva,[(6] private respondent insisted that when4ort#nato received a cop* of the second owners certificate, he eca+e f#ll* aware of the contracts of sale entered into etween his coowners on one hand and privaterespondent and her deceased h#sand on the other-

)rivate respondent also averred that altho#%h @ot No- 2(1! was not act#all*partitioned in a s#rve* after the death of Cleopas Ape, the land was partitioned ina "antal-"antal +anner * the heirs- Each too and possessed specific portion or

pre+ises as hisher share in land, far+ed their respective portion or pre+ises, andi+proved the+, each heir li+itin% hisher i+prove+ent within the portion or pre+iseswhich were hisher respective share-[(1] Th#s, when private respondent and her h#sandp#rchased the other parts of @ot No- 2(1!, it was no lon%er #ndivided as petitioner clai+s-

The petition is partl* +eritorio#s-

Article 132( of the Civil Code provides9







7/18/2019 Sales - June 22


62e ri92t o3 le9al %re-em%tion or redem%tion s2all not be e"ercised e"ce%t ;it2in

t2irty days 3rom t2e notice in ;ritin9 by t2e %ros%ective vendor or by t2e vendor as

t2e case may be. 62e deed o3 sale s2all not be recorded in t2e /e9istry o3 Pro%erty

unless accom%anied by an a33idavit o3 t2e vendor t2at 2e 2as 9iven ;ritten notice

t2ereo3 to all %ossible redem%tioners.

Despite the plain lan%#a%e of the law, this Co#rt has, over the *ears, een tased tointerpret the written notice re/#ire+ent of the aove/#oted provision- In the case 'uttev. Manuel ! / Sons, Inc.,[(2] we declared that

In considerin9 ;2et2er or not t2e o33er to redeem ;as timely ;e t2in5 t2at t2e notice

9iven by t2e vendee 0buyer s2ould not be ta5en into account. 62e te"t o3 Article 1!'

clearly and e"%ressly %rescribes t2at t2e t2irty days 3or ma5in9 t2e redem%tion are to

be counted 3rom notice in ;ritin9 by t2e vendor. nder t2e old la; 0Civ. Code o3

1& Art. 1+!) it ;as immaterial ;2o 9ave t2e notice$ so lon9 as t2e redeemin9 co-

o;ner learned o3 t2e alienation in 3avor o3 t2e stran9er t2e redem%tion %eriod be9anto run. It is t2us a%%arent t2at t2e P2ili%%ine le9islature in Article 1!' deliberately

selected a %articular met2od o3 9ivin9 notice and t2at met2od must be deemed

e"clusive. 0'& Am. Jur. !',$ Payne vs. State 1! S.G. !0d +!. As ruled in Gam%ler

vs. ecom%te 1+( Atl. )+ 0a33d. in ,+ a; Ed. [.S.] !,+

;2y t2ese %rovisions ;ere inserted in t2e statute ;e are not in3ormed but ;e may

assume until t2e contrary is s2o;n t2at a state o3 3acts in res%ect t2ereto e"isted

;2ic2 ;arranted t2e le9islature in so le9islatin9.

62e reasons 3or reBuirin9 t2at t2e notice s2ould be 9iven by t2e seller and not by t2e buyer are easily divined. 62e seller o3 an undivided interest is in t2e best %osition to

5no; ;2o are 2is co-o;ners t2at under t2e la; must be noti3ied o3 t2e sale. Also t2e

notice by t2e seller removes all doubts as to 3act o3 t2e sale its %er3ection$ and its

validity t2e notice bein9 a rea33irmation t2ereo3 so t2at t2e %arty noti3ied need not

entertain doubt t2at t2e seller may still contest t2e alienation. 62is assurance ;ould

not e"ist i3 t2e notice s2ould be 9iven by t2e buyer.[((]

The interpretation was so+ehow +odified in the case of De Cone0ero, et al. v. Court of Appeals, et al.[(5] wherein it was pointed o#t that Article 132( does not prescrie a

partic#lar for+ of notice, nor an* distinctive +ethod for notif*in% the rede+ptioner th#s,as lon% as the rede+ptioner was notified in writin% of the sale and the partic#larsthereof, the rede+ption period starts to r#n- This view was reiterated in 1tcu&an v. "e2onora&le Court of Appeals, et al.,[('] Ca&rera v. $illanueva,[(3] 3arcia, et al. v.Calaliman, et al.,[("] Distrito, et al. v. "e 2onora&le Court of Appeals, et al., [(] and Mariano, et al. v. 2on. Court of Appeals, et al.[(!]

7owever, in the case of Salatandol v. 4etes,[56] wherein the plaintiffs were notf#rnished an* written notice of sale or a cop* thereof * the vendor, this Co#rt a%ain




















7/18/2019 Sales - June 22


referred to the principle en#nciated in the case of &#tte- As oserved * B#stice Vicente.endo8a, s#ch reversion is onl* so#nd, th#s9

Art. 1!' o3 t2e Civil Code is clear in reBuirin9 t2at t2e ;ritten noti3ication s2ould

come 3rom t2e vendor or %ros%ective vendor not 3rom any ot2er %erson. 62ere is

t2ere3ore no room 3or construction. Indeed t2e %rinci%al di33erence bet;een Art.1+!) o3 t2e 3ormer Civil Code and Art. 1!' o3 t2e %resent one is t2at t2e 3ormer did

not s%eci3y ;2o must 9ive t2e notice ;2ereas t2e %resent one e"%ressly says t2e

notice must be 9iven by t2e vendor. E33ect must be 9iven to t2is c2an9e in statutory

lan9ua9e. [51]

In this case, the records are ereft of an* indication that 4ort#nato was %iven an*written notice of prospective or cons#++ated sale of the portions of @ot No- 2(1! * thevendors or wo#lde vendors- The thirt* (6da* rede+ption period #nder the law,therefore, has not co++enced to r#n-

Despite this, however, we still r#le that petitioner co#ld no lon%er invoe her ri%ht toredee+ fro+ private respondent for the e:ercise of this ri%ht pres#pposes the e:istenceof a coownership at the ti+e the conve*ance is +ade * a coowner and when it isde+anded * the other coowner or coowners- [52] The re%i+e of coownership e:istswhen ownership of an #ndivided thin% or ri%ht elon%s to different persons- [5(] &* thenat#re of a coownership, a coowner cannot point to specific portion of the propert*owned in co++on as his own eca#se his share therein re+ains intan%ile- [55] As le%alrede+ption is intended to +ini+i8e coownership,[5'] once the propert* is s#divided anddistri#ted a+on% the coowners, the co++#nit* ceases to e:ist and there is no +orereason to s#stain an* ri%ht of le%al rede+ption-[53]

In this case, records reveal that altho#%h @ot No- 2(1! has not *et een for+all*s#divided, still, the partic#lar portions elon%in% to the heirs of Cleopas Ape hadalread* een ascertained and the* in fact too possession of their respective parts- Thiscan e ded#ced fro+ the testi+on* of petitioner herself, th#s9

G2en t2e %lainti33s leased t2e s2are o3 your 2usband ;ere t2ere any metes

and boundsM

A It ;as not 3ormally subdivided. Ge 2ave only a de3inite %ortion. 0hantal

hantal

62is hantalhantal o3 your 2usband ;as it also se%arate and distinct 3romt2e hantalhantal or t2e s2are o3 t2e brot2ers and sisters o3 your

2usbandM

A Gell t2is %ro%erty in Buestion is a common %ro%erty.















7/18/2019 Sales - June 22


6o t2e nort2 ;2ose s2are ;as t2at ;2ic2 is ad>acent to your 2usbands

assumed %artitionM

A I do not 5no; ;2at [does] t2is nort2 [mean].

CD/6

06o Gitness

6o t2e %lace 3rom ;2ere t2e sun rises ;2ose s2are ;as t2atM

A 62e s2ares o3 Cornelia oreta Encarnacion and Adela.

@o; could you determine t2eir o;n s2aresM

A 62ey ;ere residin9 in t2eir res%ective assumed %ortions.

@o; about determinin9 t2eir res%ective boundariesM

A It could be determined by sta5es and %artly a ro; o3 banana %lantations

%lanted by my son-in-la;.

G2o is t2is son-in-la; you mentionedM

A 8arciso A%e.

A66:. CAGI6

0Continuin9

:ou said t2at t2ere ;ere sta5es to determine t2e 2antal-2antal o3 your

2usband and t2e 2antal-2antal o3 t2e ot2er 2eirs did I 9et you ri92tM

A66:. 6A8

Admitted :our @onor.

A66:. CAGI6

?rs. A%e in 1&( Cleo%as A%e ;as already dead is t2at correctM

A Certainly since 2e died in 1&+(.

7/18/2019 Sales - June 22


4y t2e mani3estation o3 your counsel t2at t2e entire land 01' 2ectares o3

your 3at2er-in-la; Cleo%as A%e ;as leased to 7enerosa umayno is

t2is correctM

A 8o it is only t2e assumed %ortion o3 my 2usband [;2ic2] ;as leased to

7enerosa umayno.

*or clari3ication it ;as only t2e s2are o3 your 2usband [;2ic2] ;as leased

to 7enerosa Ca;it umaynoM

A :es.[5"]

A66:. CAGI6

?y Buestion< is t2at %ortion ;2ic2 you said ;as leased by your 2usband to

t2e umayno[s] and ;2ic2 ;as included to t2e lease by your mot2er-in-la; to t2e umayno[s] ;2en t2e umayno[s] returned your 2usband[s]

s2are ;as t2at t2e same %remises t2at your 2usband leased to t2e

umayno[s]M

A 62e same.

In re-%ossessin9 t2is %ortion o3 t2e land corres%ondin9 to t2e s2are o3 your

2usband did your 2usband demand t2at t2ey s2ould re-%ossess t2e land

3rom t2e umayno[s] or did t2e umayno[s] return t2em to your

2usband voluntarilyM

A 62ey >ust returned to us ;it2out %ayin9 t2e rentals.

CD/6

Gas t2e return t2e result o3 your 2usbands reBuest or >ust voluntarily t2ey

returned it to your 2usbandM

A 8o sir it ;as >ust returned voluntarily and t2ey abandoned t2e area but my

2usband continued 3armin9.[5]

Si+ilarl* tellin% of the partition is the stip#lation of the parties d#rin% the pretrialwherein it was ad+itted that @ot No- 2(1! had not een s#divided nevertheless,4ort#nato Ape had possessed a specific portion of the land ostensil* correspondin% tohis share-[5!]

4ro+ the fore%oin%, it is evident that the partition of @ot No- 2(1! had alread* eeneffected * the heirs of Cleopas Ape- Altho#%h the partition +i%ht have een infor+al is







7/18/2019 Sales - June 22


of no +o+ent for even an oral a%ree+ent of partition is valid and indin% #pon theparties-['6] @iewise, the fact that the respective shares of Cleopas Apes heirs are stille+raced in one and the sa+e certificate of title and have not een technicall*apportioned does not +ae said portions less deter+inale and identifiale fro+ oneanother nor does it, in an* wa*, di+inish the do+inion of their respective owners- ['1]

T#rnin% now to the second iss#e of the e:istence of a contract of sale, we r#le thatthe records of this case etra* the stance of private respondent that 4ort#nato Apeentered into s#ch an a%ree+ent with her-

A contract of sale is a consens#al contract, th#s, it is perfected * +ere consent of the parties- It is orn fro+ the +o+ent there is a +eetin% of +inds #pon the thin% whichis the o;ect of the sale and #pon the price- ['2] ?pon its perfection, the parties +a*reciprocall* de+and perfor+ance, that is, the vendee +a* co+pel the transfer of theownership and to deliver the o;ect of the sale while the vendor +a* de+and thevendee to pa* the thin% sold-['(] 4or there to e a perfected contract of sale, however,the followin% ele+ents +#st e present9 consent, o;ect, and price in +one* or its

e/#ivalent- In the case of (eonardo v. Court of Appeals, et al .,

['5]

we e:plained theele+ent of consent, to wit9

62e essence o3 consent is t2e a9reement o3 t2e %arties on t2e terms o3 t2e contract t2e

acce%tance by one o3 t2e o33er made by t2e ot2er. It is t2e concurrence o3 t2e minds o3

t2e %arties on t2e ob>ect and t2e cause ;2ic2 constitutes t2e contract. 62e area o3

a9reement must e"tend to all %oints t2at t2e %arties deem material or t2ere is no

consent at all.

6o be valid consent must meet t2e 3ollo;in9 reBuisites< 0a it s2ould be intelli9ent or

;it2 an e"act notion o3 t2e matter to ;2ic2 it re3ers$ 0b it s2ould be 3ree and 0c it

s2ould be s%ontaneous. Intelli9ence in consent is vitiated by error$ 3reedom by

violence intimidation or undue in3luence$ s%ontaneity by 3raud. ['']

In this ;#risdiction, the %eneral r#le is that he who alle%es fra#d or +istae in atransaction +#st s#stantiate his alle%ation as the pres#+ption is that a person taesordinar* care for his concerns and that private dealin%s have een entered into fairl*and re%#larl*-['3] The e:ception to this r#le is provided for #nder Article 1((2 of the CivilCode which provides that [w]hen one of the parties is #nale to read, or if the contract isin a lan%#a%e not #nderstood * hi+, and +istae or fra#d is alle%ed, the personenforcin% the contract +#st show that the ter+s thereof have een f#ll* e:plained to the

for+er-In this case, as private respondent is the one seein% to enforce the clai+ed

contract of sale, she ears the #rden of provin% that the ter+s of the a%ree+ent weref#ll* e:plained to 4ort#nato Ape who was an illiterate- This she failed to do- <hile sheclai+ed in her testi+on* that the contents of the receipt were +ade clear to 4ort#nato,s#ch alle%ation was de#ned * Andres 4lores hi+self when the latter too the witnessstand- Accordin% to 4lores9






http://sc.judiciary.gov.ph/jurisprudence/2004/sep2004/125485.htm














7/18/2019 Sales - June 22


A66:. 6A8

?r. Gitness t2at recei%t is in En9lis2 is it notM

A :es sir.

G2en you %re%ared t2at recei%t ;ere you a;are t2at *ortunato A%e doesnt

5no; 2o; to read and ;rite En9lis2M

A :es sir I 5no;.

?r. Gitness you said you ;ere %resent at t2e time o3 t2e si9nin9 o3 t2at

alle9ed recei%t o3 P'(.(( correctM

A :es sir.

G2ere in ;2at %lace ;as t2is recei%t si9nedM

A At t2e store.

At t2e time o3 t2e si9nin9 o3 t2is recei%t ;ere t2ere ot2er %erson[s] %resent

aside 3rom you your mot2er-in-la; and *ortunato A%eM

A In t2e store yes sir.

G2en you si9ned t2at document o3 course you acted as ;itness u%onreBuest o3 your mot2er-in-la;M

A 8o t2is %ortion I ;as t2e one ;2o %re%ared t2at document.

Git2out as5in9 o3 0sic your mot2er-in-la; you %re%ared t2at document or

it ;as your mot2er-in-la; ;2o reBuested you to %re%are t2at document

and acted as ;itnessM

A S2e reBuested me to %re%are but does not instructed 0sic me to act as

;itness. It ;as our o%inion t2at ;2enever I %re%ared t2e document I

si9ned it as a ;itness.

#id it not occur to you to as5 ot2er ;itness to act on t2e side o3 *ortunato

A%e ;2o did not 5no; 2o; to read and ;rite En9lis2M

A It occurred to me.

7/18/2019 Sales - June 22


4ut you did not bot2er to reBuest a %erson ;2o is not related to your

mot2er-in-la; considerin9 t2at *ortunato A%e did not 5no; 2o; to read

and ;rite En9lis2M

A 62e one ;2o re%resented *ortunato A%e doesnt 5no; also 2o; to read and

;rite En9lis2. Dne a maid.

:ou mentioned t2at t2ere [;as anot2er] %erson inside t2e store under your

%revious statement ;2en t2e document ;as si9ned t2ere [;as anot2er]

%erson in t2e store aside 3rom you your mot2er-in-la; and *ortunato

A%e is not trueM

A 62at is true t2ere is one %erson but t2at %erson doesnt 5no; 2o; to

read also.

D3 course ?r. Gitness since it occurred to you t2at t2ere ;as need 3orot2er ;itness to si9n t2at document 3or *ortunato A%e is it not a 3act t2at

t2e ?unici%al 4uildin9 is very near your 2ouseM

A uite 0near.

4ut you could readily %roceed to t2e ?unici%al 4uildin9 and reBuest one

;2o is 5no;led9eable in En9lis2 to act as ;itnessM

A I t2in5 t2ere is no need 3or t2at small recei%t. So I dont bot2er mysel3 to 9o.

:ou did not consider t2at recei%t very im%ortant because you said t2at small

recei%tM

A :es I 5no;.['"]

As can e %leaned fro+ 4loress testi+on*, while he was ver* +#ch aware of 4ort#natos inailit* to read and write in the En%lish lan%#a%e, he did not other to f#ll*e:plain to the latter the s#stance of the receipt E:hiit 0- 7e even dis+issed the ideaof asin% so+eod* else to assist 4ort#nato considerin% that a +easl* s#+ of thirt*pesos was involved- Evidentl*, it did not occ#r to 4lores that the doc#+ent he hi+self

prepared pertains to the transfer alto%ether of 4ort#natos propert* to his +otherinlaw-It is precisel* in sit#ations s#ch as this when the wisdo+ of Article 1((2 of the CivilCode readil* eco+es apparent which is to protect a part* to a contract disadvanta%ed* illiterac*, i%norance, +ental weaness or so+e other handicap- [']

In s#+, we hold that petitioner is no lon%er entitled to the ri%ht of rede+ption #nder Article 13(2 of the Civil Code as @ot No- 2(1! had lon% een partitioned a+on% its co





7/18/2019 Sales - June 22


owners- This Co#rt liewise ann#ls the contract of sale etween 4ort#nato and privaterespondent on the %ro#nd of vitiated consent-

'HEREORE, pre+ises considered, the decision dated 2' .arch 1!! of theCo#rt of Appeals is here* $EVE$SED and SET ASIDE and the decision dated 11.arch 1!!5 of the $e%ional Trial Co#rt, &ranch ', San Carlos Cit*, Ne%ros Occidental,

dis+issin% oth the co+plaint and the co#nterclai+, is here* $EINSTATED- No costs-

SO OR!ERE!.

Puno, *C"airman+, Austria-Martinez, Calle0o, Sr., and inga, ))., conc#r .

[1] )enned * Associate B#stice Arte+on D- @#na with Associate B#stices 0odardo A- Bacinto and $oerto A- &arrios, conc#rrin%= $ollo, pp- 2!5-

[2] $ecords, Vol- II, pp- 21(215-

[(] &ra#lio @#+a*no passed awa* on 15 Octoer 1! per Notice of Death of )laintiff &ra#lio @#+a*noand .otion for S#stit#tion dated 21 4er#ar* 1!! filed * co#nsel, Att*- Ale:ander B- Cawit=$ecords, Vol- I, pp- 2"2!-

[5] $ecords, Vol- I, p- '-

['] $ecords, Vol- I, p- (-

[3] $ecords, Vol- I, pp- 11-

["] Id -, p- 13-

[] E:hiits G, T, ?, <, H, , F, AA, CC, DD, EE, 44, 00, 77, II, BB, JJ, @@, TT, HH, , FF, AAA, &&&,CCC, and DDD for respondent-

[!]

$ecords, Vol- I, pp- 11126-[16] TSN, " .arch 1!!6, p- '1-

[11] 4ollo, p- 5"-

[12] Supra, note 16, p- '3= E:hiit D for respondent-

[1(] I&id.

[15] E:hiits NN, NN1, NN2, NN(, OO, OO1, OO2, OO(, )), ))1, ))2, and ))( for respondent-

[1'] TSN, 25 Octoer 1!!6, p- "-

[13] Id -, p- -

[1"] Id., p- 12-

[1] I&id.

[1!] Id., pp- 1(15-

[26] Id -, pp- 151'-

[21] TSN, 2" Nove+er 1!!1-

[22] $ecords, Vol- II, pp- (''(3!-

http://sc.judiciary.gov.ph/jurisprudence/2005/apr2005/133638.htm#_ftnref1






















































7/18/2019 Sales - June 22


[2(] Article 1('6 of the Civil Code reads9 In onero#s contracts the ca#se is #nderstood to e, for eachcontractin% part*, the prestation or pro+ise of a thin% or service * the other= in re+#nerator*ones, the service or enefit which is re+#nerated= and in contracts of p#re eneficence, the +erelieralit* of the enefactor-

[25] Supra, note 22, pp- (32(3(= e+phasis in the ori%inal-

[2']

I&id., p- ("6-[23] CA 4ollo, p- !(-

[2"] 4ollo, pp- 5"5-

[2] 4ollo, pp- 5'53-

[2!] 4ollo, p- 265= citin% @i+etai Sons .illin%, Inc- v- Co#rt of Appeals, 0-$- No- 11'6!, 2! .arch 1!!3,2'' SC$A 323-

[(6] 0-$- No- "6'3!, 6' April 1!, 136 SC$A 3"2-

[(1] 4ollo, p- 1'-

[(2] 0-$- No- @1'5!!, 2 4er#ar* 1!32, 5 SC$A '23-

[((] Id. at p- '((-

[(5] 0-$- No- @2112, 2! April 1!33, 13 SC$A ""'-

[('] 0-$- No- @5'135, 13 .arch 1!", 15 SC$A '6"-

[(3] Supra, note (6-

[("] 0-$- No- 23'', 1" April 1!!, 1"2 SC$A 261-

[(] 0-$- No- !'2'3, 2 .a* 1!!1, 1!" SC$A 363-

[(!] 0-$- No- 161'22, 2 .a* 1!!(, 222 SC$A "(3-

[56] 0-$- No- @(126, 2" B#ne 1!, 132 SC$A '3!-

[51] 4rancisco v- &oiser, 0-$- No- 1("3"", (1 .a* 2666, ((2 SC$A "!2, 66-

[52] ?* v- 7on- Co#rt of Appeals, 0-$- No- 16"5(!, 26 B#l* 1!!', 253 SC$A "11-

[5(] 4elices v- Cole%ado, 0-$- No- @2(("5, (6 Septe+er 1!"6, (' SC$A 1"(-

[55] Supra., note 56, p- '"(-

[5'] &asa, et al- v- 7on- Adres C- A%#ilar, et al-, 0-$- No- @(6!!5, (6 Septe+er 1!2, 11" SC$A 12-

[53] 7ernande8 v- 7on- )edro C- G#itain, et al-, 0-$- No- @55'", 2! Nove+er 1!, 13 SC$A !2,citin% Caro v- Co#rt of Appeals, 0-$- No- @53661, 2' .arch 1!2, 11( SC$A 16-

[5"] TSN, 25 Octoer 1!!6, pp- (6(5-

[5] TSN, 2' B#l* 1!!1, pp- 3"-

[5!] $ecords, Vol- II, p- 3-

['6] Caro v- Co#rt of Appeals, 0-$- No- @53661, 2' .arch 1!2, 11( SC$A 16, citin% 7ernande8 v- Andal,et al-, " )hil- 1!3 1!5"-

['1] Dela Cr#8 v- Cr#8, et al-, 0-$- No- @2""'!, 1" April 1!"6, (2 SC$A (6"-

['2] Jatip#nan v- Jatip#nan, Br-, 0-$- No- 1(251', (6 Ban#ar* 2662, ("' SC$A 266-

['(] Article 15' of the Civil Code-








http://sc.judiciary.gov.ph/jurisprudence/1996/mar1996/118509.htm














http://sc.judiciary.gov.ph/jurisprudence/2000/may2000/137677.html













http://sc.judiciary.gov.ph/jurisprudence/2002/jan2002/132415.htm





































7/18/2019 Sales - June 22


['5] 0-$- No- 12'5', 1( Septe+er 2665-

[''] Id., pp- 3"-

['3] Ca*a*a v- Inter+ediate Appellate Co#rt, 0-$- No- "'126, 2 April 1!!5, 2(2 SC$A 1-

['"] TSN, ( Octoer 1!!6, pp- 161(-

['] Supra, note '3, p- 3-











7/18/2019 Sales - June 22


Re/b0c o 3e )0&e5

S/reme Co/r3$%&0%

FIRS" DIVISION

/E:8A#D VIA8EVA 7./. 8D. 1+))&'

Petitioner

Present<

PA87A8I4A8 C . J .

(Chairperson)

:8A/ES-SA86IA7D

- versus - AS6/IA-?A/6I8EH

CAEJD S/. and

C@ICD-8AHA/ID JJ .

P@IIPPI8E 8A6ID8A 4A8N

0P84

/es%ondent. Promul9ated<

#ecember !(("- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - "

D E C I S I O N

AS"RIA$AR"INE+, J .

62e Petition 3or /evie; on Certiorari under /ule )+ be3ore t2is Court assails t2e

January !& !((! #ecision[1] and June !, !((! /esolution[!] o3 t2e Court o3

A%%eals 0CA in CA-7./. CV 8o. +!((['] ;2ic2 reversed and set aside t2e

Se%tember 1) 1&&+ #ecision[)] o3 t2e /e9ional 6rial Court 4ranc2 !! 7eneral

Santos City 0/6C in Civil Case 8o. )++'.

http://sc.judiciary.gov.ph/jurisprudence/2006/december2006/154493.htm#_ftn1








7/18/2019 Sales - June 22


As culled 3rom t2e records t2e 3acts are as 3ollo;s<

62e S%ecial Assets ?ana9ement #e%artment 0SA?# o3 t2e P2ili%%ine 8ational

4an5 0P84 issued an advertisement 3or t2e sale t2ru biddin9 o3 certain P84

%ro%erties inCalum%an9 7eneral Santos City includin9 ot 8o. 1, covered by

6C6 8o. 6-1+()! consistin9 o3 !!,( sBuare meters ;it2 an advertised 3loor

%rice o3 P1)(&(((.(( and ot 8o. 1& covered by 6C6 8o. 6-1+(' consistin9

o3 )11&( sBuare meters ;it2 an advertised 3loor %rice o3 P!!(((.((.[+] 4iddin9

;as sub>ect to t2e 3ollo;in9 conditions< 1 t2at cas2 bids be submitted not later

t2an A%ril !, 1&&$ ! t2at said bids be accom%anied by a 1(O de%osit in

mana9ers or cas2iers c2ec5$ and ' t2at all acce%table bids be sub>ect to a%%roval

by P84 aut2orities.

In a June ! 1&&( letter [] to t2e ?ana9er P84-7eneral Santos 4ranc2

/eynaldo Villanueva 0Villanueva o33ered to %urc2ase ot 8os. 1, and 1&3or P',,(((.((. @e also mani3ested t2at 2e ;as de%ositin9 P)(((((.(( to s2o;

2is 9ood 3ait2 but ;it2 t2e understandin9 t2at said amount may be treated as %art o3

t2e %ayment o3 t2e %urc2ase %rice only ;2en 2is o33er is acce%ted by P84. At t2e

bottom o3 said letter t2ere a%%ears an unsi9ned mar9inal note statin9

t2at P)(((((.(( ;as de%osited into Villanuevas account 0Savin9s Account 8o.

)'1! ;it2 P84-7eneral Santos 4ranc2. [,]

P84-7eneral Santos 4ranc2 3or;arded t2e June ! 1&&( letter o3 Villanueva to

/amon 7uevara 07uevara Vice President SA?#.[] Dn July 1&&( 7uevara

in3ormed Villanueva t2at only ot 8o. 1& is available and t2at t2e as5in9

%rice t2ere3or is P!''((.((.[&] 7uevara 3urt2er ;rote<

I3 our Buoted %rice is acce%table to you %lease submit a revised o33er to

%urc2ase. Sale shall be subject to our Board of Directors approval and to other

terms and conditions imposed by the Bank on sale of acquired

assets. [1(] 0Em%2asis ours

Instead o3 submittin9 a revised o33er Villanueva merely inserted at t2e

bottom o3 7uevaras letter a July 11 1&&( mar9inal note ;2ic2 reads<

C D 8 * D / ? E<















7/18/2019 Sales - June 22


P/ICE D* P!''((.(( 0downpayment of !"","""."" and the balance payable in

two #$% years at quarterly amorti&ations. [11]

Villanueva %aid P!(((((.(( to P84 ;2ic2 issued D./. 8o. 1&&, to

ac5no;led9e recei%t o3 t2e %artial %ayment de%osit on o33er to %urc2ase. [1!] Dn t2edorsal %ortion o3 D33icial /ecei%t 8o. 1&&, Villanueva si9ned a ty%e;ritten note

statin9<

62is is a de%osit made to s2o; t2e sincerity o3 my %urc2ase o33er ;it2 t2e

understandin9 t2at it s2all be returned ;it2out interest i3 my o33er is not 3avorablyconsidered or be 3or3eited i3 my o33er is a%%roved but I 3ailFre3use to %us2 t2rou92

t2e %urc2ase.[1']

Also on July !) 1&&( P'((((.(( ;as debited 3rom Villanuevas Savin9s

Account 8o. )'1! and credited to SA?#.[1)]

Dn Dctober 11 1&&( 2o;ever 7uevara ;rote Villanueva t2at u%on orders

o3 t2e P84 4oard o3 #irectors to conduct anot2er a%%raisal and %ublic biddin9 o3

ot 8o. 1&SA?# is de3errin9 ne9otiations ;it2 2im over said %ro%erty and

returnin9 2is de%osit o3 P+((((.((.[1+] ndaunted Villanueva attem%ted to

deliver %ostdated c2ec5s coverin9 t2e balance o3 t2e %urc2ase %rice but P84

re3used t2e same.

@ence Villanueva 3iled ;it2 t2e /6C a Com%laint[1] 3or s%eci3ic

%er3ormance and dama9es a9ainst P84. In its Se%tember 1) 1&&+ #ecision t2e

/6C 9ranted t2e Com%laint t2us<

G@E/E*D/E >ud9ment is rendered in 3avor o3 t2e %lainti33 and a9ainst t2e

de3endant directin9 it to do t2e 3ollo;in9<

1. 6o e"ecute a deed o3 sale in 3avor o3 t2e %lainti33 over ot 1& com%risin9

)11&( sBuare meters situated at Calum%an9 7eneral Santos City covered by

6C6 8o. 6-1+(' a3ter %ayment o3 t2e balance in cas2 in t2e amounto3 P!'(''((.(($

!. 6o %ay t2e %lainti33 P1((((((.(( as moral dama9es$ P+(((((.(( asattorneys 3ees %lus liti9ation e"%enses and costs o3 t2e suit.

SD D/#E/E#.[1,]















7/18/2019 Sales - June 22


62e /6C anc2ored its >ud9ment on t2e 3indin9 t2at t2ere e"isted a %er3ected

contract o3 sale bet;een P84 and Villanueva. It 3ound<

62e 3ollo;in9 3acts are eit2er admitted or undis%uted<

" " "

62e de3endant t2rou92 Vice-President 7uevara ne9otiated ;it2 t2e %lainti33 inconnection ;it2 t2e o33er o3 t2e %lainti33 to buy ots 1, 1&. 62e o33er o3

%lainti33 to buy 2o;ever ;as acce%ted by t2e de3endant only inso3ar as ot 1& is

concerned as e"em%li3ied by its letter dated July 1&&( ;2ere t2e %lainti33

si9ni3ied 2is concurrence a3ter con3errin9 ;it2 t2e de3endants vice-%resident. 62econ3ormity o3 t2e %lainti33 ;as ty%e;ritten by t2e de3endants o;n %eo%le ;2ere

t2e %lainti33 acce%ted t2e %rice o3 P!''((.((. 62e de3endant also issued a

recei%t to t2e %lainti33 on t2e same day ;2en t2e %lainti33 %aid t2e amount

o3 P!(((((.(( to com%lete t2e do;n%ayment o3 P(((((.(( 0E"2ibit * E"2ibit I. Git2 t2is develo%ment t2e %lainti33 ;as also 9iven t2e 9o si9nal by t2e

de3endant to im%rove ot 1& because it ;as already in e33ect sold to 2im and because o3 t2at t2e de3endant 3enced t2e lot and com%leted 2is t;o 2ouses on t2e

%ro%erty.[1]

62e /6C also %ointed out t2at Villanuevas P+((((.(( do;n%ayment ;as

actually in t2e nature o3 earnest money acce%tance o3 ;2ic2 by P84 si9ni3ied t2at

t2ere ;as already a sale.[1&] 62e /6C 3urt2er cited contem%oraneous acts o3 P84

%ur%ortedly indicatin9 t2at as early as July !+ 1&&( it considered ot 1& already

sold as s2o;n by 7uevaras July !+ 1&&( letter 0E"2. @[!(]

to anot2er interested buyer.

P84 a%%ealed to t2e CA ;2ic2 reversed and set aside t2e Se%tember 1) 1&&+ /6C

#ecision t2us<G@E/E*D/E t2e a%%ealed decision is /EVE/SE# and SE6 ASI#E and

anot2er rendered #IS?ISSI87 t2e com%laint.

SD D/#E/E#.[!1]

Accordin9 to t2e CA t2ere ;as no %er3ected contract o3 sale becauset2e July 1&&( letter o3 7uevara constituted a Buali3ied acce%tance o3 t2e June !

1&&( o33er o3 Villanueva and to ;2ic2 Villanueva re%lied on July 11 1&&( ;it2 a

modi3ied o33er. 62e CA 2eld<

In t2e case at benc2 consent in res%ect to t2e %rice and manner o3 its %ayment is

lac5in9. 62e record s2o;s t2at a%%ellant t2ru 7uevaras July 1&&( letter madea Buali3ied acce%tance o3a%%ellees letter-o33er dated June ! 1&&( by im%osin9 an









7/18/2019 Sales - June 22


as5in9 %rice o3 P!''((.(( in cas2 3or ot 1&. 62e letter dated July 1&&(

constituted a counter-o33er 0Art. 1'1& Civil Code to ;2ic2 a%%ellee made a ne;

%ro%osal i.e. to %ay t2e amount o3 P!''((.(( in sta99ered amounts t2atis P(((((.(( as do;n%ayment and t2e balance ;it2in t;o years in Buarterly

amortizations.

A Buali3ied acce%tance or one t2at involves a ne; %ro%osal constitutes a counter-

o33er and a re>ection o3 t2e ori9inal o33er 0Art. 1'1& id.. ConseBuently ;2en

somet2in9 is desired ;2ic2 is not e"actly ;2at is %ro%osed in t2e o33er suc2acce%tance is not su33icient to 9enerate consent because any modi3ication or

variation 3rom t2e terms o3 t2e o33er annuls t2e o33er 06olentino Commentaries

and Juris%rudence on t2e Civil Code o3 t2e P2ili%%ines t2 ed. 1&& %. )+( cited

in A4S-C48 4roadcastin9 Cor%oration v. Court o3 A%%eals et al. '(1 SC/A+,!.

A%%ellees ne; %ro%osal ;2ic2 constitutes a counter-o33er ;as not acce%ted by

a%%ellant its board 2avin9 decided to 2ave ot 1& rea%%raised and sold t2ru %ublic biddin9.

?oreover it ;as clearly stated in 7uevaras July 1&&( letter t2at t2e sale s2all

be sub>ect to our 4oard o3 #irectors a%%roval and to ot2er terms and conditions

im%osed by t2e 4an5 on sale o3 acBuired assets.[!!]

Villanuevas ?otion 3or /econsideration[!'] ;as denied by t2e CA in its /esolution

o3 June !, !((!.

Petitioner Villanueva no; assails be3ore t2is Court t2e January !& !((! #ecision

and June !, !((! /esolution o3 t2e CA. @e assi9ns 3ive issues ;2ic2 may be

condensed into t;o< 3irst ;2et2er a %er3ected contract o3 sale e"ists bet;een

%etitioner and res%ondent P84$ and second ;2et2er t2e conduct and actuation o3

res%ondent constitutes bad 3ait2 as to entitle %etitioner to moral and e"em%lary

dama9es and attorneys 3ees.

62e Court sustains t2e CA on bot2 issues.






7/18/2019 Sales - June 22


Contracts o3 sale are %er3ected by mutual consent ;2ereby t2e seller obli9ates

2imsel3 3or a %rice certain to deliver and trans3er o;ners2i% o3 a s%eci3ied t2in9 or

ri92t to t2e buyer over ;2ic2 t2e latter a9rees.[!)] ?utual consent bein9 a state o3

mind its e"istence may only be in3erred 3rom t2e con3luence o3 t;o acts o3 t2e

%arties< an o33er certain as to t2e ob>ect o3 t2e contract and its consideration and an

acce%tance o3 t2e o33er ;2ic2 is absolute in t2at it re3ers to t2e e"act ob>ect and

consideration embodied in said o33er.[!+]G2ile it is im%ossible to e"%ect t2e

acce%tance to echo every nuance o3 t2e o33er it is im%erative t2at it assents to t2ose

%oints in t2e o33er ;2ic2 under t2e o%erative 3acts o3 eac2 contract are not only

material but motivatin9 as ;ell. Anyt2in9 s2ort o3 t2at level o3 mutuality %roduces

not a contract but a mere counter-o33er a;aitin9 acce%tance.[!] ?ore %articularly

on t2e matter o3 t2e consideration o3 t2e contract t2e o33er and its acce%tance must

be unanimous bot2 on t2e rate o3 t2e %ayment and on its term. An acce%tance o3 an

o33er ;2ic2 a9rees to t2e rate but varies t2e term is ine33ective. [!,]

6o determine ;2et2er t2ere ;as mutual consent bet;een t2e %arties 2erein it is

necessary to retrace eac2 o33er and acce%tance t2ey made.

/es%ondent be9an ;it2 an invitation to bid issued in A%ril 1&& coverin9

several o3 its acBuired assets in Calum%an9 7eneral Santos City includin9 ot 8o.

1& 3or ;2ic2 t2e 3loor %rice ;as P!!(((.((. 62e o33er ;as sub>ect to t2e

condition t2at sealed bids accom%anied by a 1(O de%osit in mana9ers or cas2iers

c2ec5 be submitted not later t2an 1( ocloc5 in t2e mornin9 o3 A%ril !, 1&&.

Dn June ! 1&&( %etitioner made an o33er to buy ot 8o. 1, and ot 8o.

1& 3or an a99re9ate %rice o3 P',,(((.((. It is noted t2at t2is o33er e"actly

corres%onded to t2e A%ril 1&& invitation to bid issued by res%ondent in t2at t2e

%ro%osed a99re9ate %urc2ase %rice 3or ot 8os. 1, and 1& matc2ed t2e advertised

3loor %rices 3or t2e same %ro%erties. @o;ever it cannot be said t2at t2e June !

1&&( letter o3 %etitioner ;as an e33ective acce%tance o3 t2e A%ril 1&& invitation to

bid 3or by its e"%ress terms said invitation la%sed on A%ril !, 1&&.[!] ?ore t2an

t2at t2e A%ril 1&& invitation ;as sub>ect to t2e condition t2at all sealed bids

submitted and acce%ted be a%%roved by res%ondents 2i92er aut2orities.

62us t2e June ! 1&&( letter o3 %etitioner ;as an o33er to buy inde%endent

o3 t2e A%ril 1&& invitation to bid. It ;as a de3inite o33er as it identi3ied ;it2

certainty t2e %ro%erties sou92t to be %urc2ased and 3i"ed t2e contract %rice.

@o;ever res%ondent re%lied to t2e June ! 1&&( o33er ;it2 a July

1&&( letter t2at only ot 8o. 1& is available and t2at t2e %rice t2ere3or is












7/18/2019 Sales - June 22


no; P!''((.((. As t2e CA %ointed out t2is re%ly ;as certainly not an

acce%tance o3 t2e June ! 1&&( o33er but a mere counter-o33er. It deviated 3rom t2e

ori9inal o33er on t2ree material %oints< 3irst t2e ob>ect o3 t2e %ro%osed sale is no;

only ot 8o. 1& rat2er t2an ot 8os. 1, and 1&$ second t2e area o3 t2e %ro%erty to

be sold is still )11&( sB. m but an ,&,-sB. m %ortion is no; %art o3 a %ublic road$

and t2ird t2e consideration is P!''(( 3or one lot rat2er t2an P',,(((.(( 3or

t;o lots. ?ore im%ortant t2is July 1&&( counter-o33er im%osed t;o conditions<

one t2at %etitioner submit a revised o33er to %urc2ase based on t2e Buoted %rice$

and t;o t2at t2e sale o3 t2e %ro%erty be a%%roved by t2e 4oard o3 #irectors and

sub>ected to ot2er terms and conditions im%osed by t2e 4an5 on t2e sale o3

acBuired assets.

In re%ly to t2e July 1&&( counter-o33er %etitioner si9ned 2is July 11

1&&( con3ormity to t2e Buoted %rice o3 P!''((.(( but inserted t2e term

do;n%ayment o3 P(((((.(( and t2e balance %ayable in t;o years at Buarterlyamortization. 62e CA vie;ed t2is July 11 1&&( con3ormity not as an acce%tance o3

t2e July 1&&( counter-o33er but a 3urt2er counter-o33er 3or ;2ile %etitioner

acce%ted t2e P!''((.(( %rice 3or ot 8o. 1& 2e Buali3ied 2is acce%tance by

%ro%osin9 a t;o-year %ayment term.

Petitioner does not directly im%u9n suc2 reasonin9 o3 t2e CA. @e merely

Buestions it 3or ta5in9 u% t2e issue o3 ;2et2er 2is July 11 1&&( con3ormity

modi3ied t2e July 1&&( counter-o33er as t2is ;as alle9edly never raised durin9

t2e trial nor on a%%eal.

[!&]

Suc2 ar9ument is not ;ell ta5en. *rom be9innin9 to end res%ondent denied

t2at a contract o3 sale ;it2 %etitioner ;as ever %er3ected. ['(] Its de3ense ;as broad

enou92 to encom%ass every issue relatin9 to t2e concurrence o3 t2e elements o3

contract s%eci3ically on ;2et2er it consented to t2e ob>ect o3 t2e sale and its

consideration. 62ere ;as not2in9 to %revent t2e CA 3rom inBuirin9 into t2e o33ers

and counter-o33ers o3 t2e %arties to determine ;2et2er t2ere ;as indeed a %er3ected

contract bet;een t2em.

?oreover t2ere is merit in t2e rulin9 o3 t2e CA t2at t2e July 111&&( mar9inal note ;as a 3urt2er counter-o33er ;2ic2 did not lead to t2e %er3ection

o3 a contract o3 sale bet;een t2e %arties. Petitioners o;n June ! 1&&( o33er

Buoted t2e %rice o3 P',,(((.(( 3or t;o lots but ;as silent on t2e term o3

%ayment. /es%ondents July 1&&( counter-o33er Buoted t2e %rice

o3 P!'''((.(( and ;as also silent on t2e term o3 %ayment. % to t2at %oint t2e

term or sc2edule o3 %ayment ;as not on t2e ne9otiation table. 62us;2en





7/18/2019 Sales - June 22


%etitioner suddenly introduced a term o3 %ayment in 2is July 11 1&&( counter-

o33er 2e inter>ected into t2e ne9otiations a ne; substantial matter on ;2ic2 t2e

%arties 2ad no %rior discussion and over ;2ic2 t2ey must yet a9ree.['1] Petitioners July 11 1&&( counter-o33er t2ere3ore did not us2er t2e %arties

beyond t2e ne9otiation sta9e o3 contract ma5in9 to;ards its %er3ection. @e made a

counter-o33er t2at reBuired acce%tance by res%ondent.

As it ;ere res%ondent t2rou92 its 4oard o3 #irectors did not acce%t t2is

last counter-o33er. As stated in its Dctober 11 1&&( letter to %etitioner res%ondent

ordered t2e rea%%raisal o3 t2e %ro%erty in clear re%udiation not only o3 t2e

%ro%osed %rice but also t2e term o3 %ayment t2ereo3.

Petitioner insists 2o;ever t2at t2e Dctober 11 1&&( re%udiation ;as

belated as res%ondent 2ad already a9reed to 2is July 11 1&&( counter-o33er ;2en it

acce%ted 2isdo;n%ayment or earnest money o3 P+((((.((.['!] @e cites Article1)! o3 t2e Civil Code ;2ere it says t2at acce%tance o3 do;n%ayment or earnest

money %resu%%oses t2e %er3ection o3 a contract.

8ot so. Acce%tance o3 %etitioners %ayments did not amount to an im%lied

acce%tance o3 2is last counter-o33er.

6o be9in ;it2 P84-7eneral Santos 4ranc2 ;2ic2 acce%ted

%etitioners P'((((.(( %ayment and P84-SA?# ;2ic2 acce%ted

2is P!(((((.(( %ayment 2ad no aut2ority to bind res%ondent to a contract o3 sale

;it2 %etitioner.[''] Petitioner is ;ell a;are o3 t2is. 6o recall %etitioner sent 2is June

! 1&&( o33er to P84-7eneral Santos 4ranc2. Said branc2 did not act on 2is o33er

e"ce%t to endorse it to 7uevarra. 62erea3ter %etitioner transacted directly

;it2 7uevarra. Petitioner t2en cannot %retend t2at P84-7eneral Santos 4ranc2

2ad aut2ority to acce%t 2is July 11 1&&( counter-o33er by merely acce%tin9

2is P'((((.(( %ayment.

8eit2er did SA?# 2ave aut2ority to bind P84. In its A%ril 1&& invitation

to bid as ;ell as its July 1&&( counter-o33er SA?# ;as al;ays care3ul to

em%2asize t2at ;2atever o33er is made and entertained ;ill be sub>ect to t2ea%%roval o3 res%ondents 2i92er aut2orities. 62is is a reasonable disclaimer

considerin9 t2e cor%orate nature o3 res%ondent. [')]

?oreover %etitioners %ayment o3 P!(((((.(( ;as ;it2 t2e clear understandin9

t2at 2is July 11 1&&( counter-o33er ;as still sub>ect to a%%roval by

res%ondent. 62is is borne out by res%ondents E"2ibits !-a and !-b ;2ic2

%etitioner never controverted ;2ere it a%%ears on t2e dorsal %ortion o3 D./.










7/18/2019 Sales - June 22


8o. 1&&, t2at %etitioner acceded t2at t2e amount 2e %aid ;as a mere " " " de%osit

made to s2o; t2e sincerity o3 [2is] %urc2ase o33er ;it2 t2e understandin9 t2at it

s2all be returned ;it2out interest i3 [2is] o33er is not 3avorably considered " " ".['+] 62is ;as a clear ac5no;led9ment on 2is %art t2at t2ere ;as yet no %er3ected

contract ;it2 res%ondent and t2at even ;it2 t2e %ayments 2e 2ad advanced 2is

July 11 1&&( counter-o33er ;as still sub>ect to consideration by res%ondent.

8ot only t2at in t2e same E"2. !-a as ;ell as in 2is June ! 1&&( o33er %etitioner

re3erred to 2is %ayments as mere de%osits. Even D./. 8o. 1&&, re3ers to

%etitioners %ayment as mere de%osit. It is only in t2e debit notice issued by P84-

7eneral Santos 4ranc2 ;2ere %etitioners %ayment is re3erred to as do;n%ayment.

4ut t2en as ;e said P84-7eneral Santos 4ranc2 2as no aut2ority to bind

res%ondent by its inter%retation o3 t2e nature o3 t2e %ayment made by %etitioner.

In sum t2e amounts %aid by %etitioner ;ere not in t2e nature o3 do;n%ayment or earnest money but ;ere mere de%osits or %roo3 o3 2is interest in t2e %urc2ase o3

ot 8o. 1&. Acce%tance o3 said amounts by res%ondent does not %resu%%ose

%er3ection o3 any contract.[']

It must be noted t2at %etitioner 2as e"%ressly admitted t2at 2e 2ad ;it2dra;n t2e

entire amount o3 P+((((.(( de%osit 3rom P84-7eneral Santos 4ranc2.[',]

Git2 t2e 3ore9oin9 disBuisition t2e Court 3ore9oes resolution o3 t2e second issue

as it is evident t2at res%ondent acted ;ell ;it2in its ri92ts ;2en it re>ected t2e last

counter-o33er o3 %etitioner.

In 3ine %etitioners %etition lac5s merit.

G@E/E*D/E t2e %etition is DENIED. 62e #ecision dated January !& !((! and

/esolution dated June !, !((! o3 t2e Court o3 A%%eals are AFFIR$ED.

8o costs.

SD D/#E/E#.

$A. ALICIA AS"RIA$AR"INE+ Associate "ustice

GE CD8C/<

AR"E$IO V. )ANGANI*AN







7/18/2019 Sales - June 22


Chie& "ustice

Chairperson

CONSELO #NARESSAN"IAGO RO$EO !. CALLE!O, SR.

Associate "ustice Associate "ustice

$INI"A V. C-ICONA+ARIO

Associate "ustice

CER"IFICA"ION

Pursuant to Section 1' Article VIII o3 t2e Constitution it is 2ereby certi3ied t2at

t2e conclusions in t2e above #ecision ;ere reac2ed in consultation be3ore t2e case

;as assi9ned to t2e ;riter o3 t2e o%inion o3 t2e Courts #ivision.

AR"E$IO V. )ANGANI*AN

Chie& "ustice

[1] Penned by Associate Justice Ed9ardo P. Cruz and concurred in by Associate

Justices @ilarion . ABuino and Amelita 7. 6olentino.[!] CA rollo %. 1'!.['] Entitled Re$naldo *illanueva, lainti&&Appellee v. hilippine +ational an-, De&endantAppellant .[)] /ecords %. 1+1.[+] E"2ibit 4 Plainti33s *older o3 E"2ibits %. !.[] E"2ibit C id. at '.[,] E"2ibit C-1 id.[] E"2ibit # id. at +.[&]

E"2ibit * id. at ,.[1(] Id.[11] E"2ibit *-1 id.[1!] E"2ibit E id. at .[1'] E"2ibit !-a and !-b id. 0dorsal %ortion.[1)] E"2ibit 7 id. at .[1+] E"2ibit J id. at 1!.[1] /ecords %. 1.[1,] Id. at 1+,-1+.[1] Id. at 1++.

http://sc.judiciary.gov.ph/jurisprudence/2006/december2006/154493.htm#_ftnref1





































7/18/2019 Sales - June 22


[1&] Id. at 1+.[!(] Plainti33s *older o3 E"2ibits %. &.[!1] CA rollo %. 1(+.[!!] Id. at 1(!-1('.[!'] Id. at 11!.[!)] las v. Angelesutalla 7./. 8o. 1+++&). Se%tember !, !(() )'& SC/A !,' !&!.[!+] anco /ilipino avings and Mortgage an- v. Court o& Appeals 7./. 8o. 1)'& July !((+ )' SC/A )

,,$ an 0oren!o Development Corporation v. Court o& Appeals 7./. 8o. 1!)!)! January !1 !((+ ))&SC/A && 111.

[!] %edish Match, et al. v. Court o& Appeals 7./. 8o. 1!1!( Dctober !( !(() ))1 SC/A 1 1&.[!,] Marnelego v. anco /ilipino avings and Mortgage an- 7./. 8o. 11+!) January !, !(( )( SC/A '&&

)(.[!] *illegas v. Court o& Appeals 7./. 8o. 111)&+ Au9ust 1 !((.[!&] Rollo %%. !,-!.['(] /ecords %%. !' and '.['1] Marnelego v. anco /ilipino avings and Mortgage an- su%ra note !,. ['!] Rollo %%. !-'(.[''] /irme v. u-al Enterprises and Development Corporation 7./. 8o. 1)( Dctober !' !((' )1) SC/A 1&(

!(,.[')] Development an- o& the hilippines v. 1ng 7./. 8os. 1))1 and 1)),&, June 1+ !((+ )( SC/A 1,(

1'$ pouses /irme v. u-al su%ra note ''.['+] See note 1'.['] an Miguel roperties hilippines, Inc. v. pouses uang '&1 P2il. ' ) 0!((( citin9 +avarro v. ugar

roducers Cooperative Mar-eting Association Inc. 111 P2il. !( 01&1$ 2o$ota ha%, Inc. v. Court o&

Appeals '1) P2il. !(1 !1) 01&&+$ *elasco v. Court o& Appeals, 1+1-A P2il. 01&,'.

[',] 6S8 Dctober 1 1&&, %. !,.







































7/18/2019 Sales - June 22


G.R. No. 12*03 July 12, 200*

ANTONIO R. CORTES # :; <"5"<=y "; A$>#;=6"=o6 o? =:) );="=) o? Cl"6o S. Co6=);@, petitioner,vs-HON. COURT O APPEALS "#$ ILLA ESPERAN%A !EELOPMENT CORPORATION, respondents-

D E C I S I O N

-NARES8SANTIAGO, J .&

The instant petition for review sees the reversal of the B#ne 1(, 1!!3 Decision1 of the Co#rt of Appeals in CA0-$- CV No- 5"'3,settin% aside the B#ne 25, 1!!( Decision2 of the $e%ional Trial Co#rt of .aati, &ranch 1(, which rescinded the contract of saleentered into * petitioner Antonio Cortes Cortes and private respondent Villa Esperan8a Develop+ent Corporation Corporation-

The antecedents show that for the p#rchase price of )(,"66,666-66, the Corporation as #*er, and Cortes as seller, entered into acontract of sale over the lots covered * Transfer Certificate of Title TCT No- (111(A, TCT No- (1!1(A and TCT No- (261(A,located at &aclaran, )araKa/#e, .etro .anila- On vario#s dates in 1!(, the Corporation advanced to Cortes the total s#+ of)1,21(,666-66- So+eti+e in Septe+er 1!(, the parties e:ec#ted a deed of asol#te sale containin% the followin% ter+s9(

1- ?pon e:ec#tion of this instr#+ent, the Vendee shall pa* #nto the Vendor s#+ of T<O .I@@ION AND T<O 7?ND$ED

T7O?SAND )2,266,666-66 )ESOS, )hilippine C#rrenc*, less all advances paid * the Vendee to the Vendor inconnection with the sale=

2- The alance of ONE .I@@ION AND 4IVE 7?ND$ED T7O?SAND [)1,'66,666-66] )ESOS, )hil- C#rrenc* shall epa*ale within ONE 1 EA$ fro+ date of e:ec#tion of this instr#+ent, pa*+ent of which shall e sec#red * anirrevocale stand* letter of credit to e iss#ed * an* rep#tale local anin% instit#tion acceptale to the Vendor-

: : : :

5- All e:pense for the re%istration of this doc#+ent with the $e%ister of Deeds concerned, incl#din% the transfer ta:, shalle divided e/#all* etween the Vendor and the Vendee- )a*+ent of the capital %ains shall e e:cl#sivel* for the acco#ntof the Vendor= 'L co++ission of .arcosa Sanche8 to e ded#cted #pon si%nin% of sale-5

Said Deed was retained * Cortes for notari8ation-

On Ban#ar* 15, 1!', the Corporation filed the instant case' for specific perfor+ance seein% to co+pel Cortes to deliver the TCTsand the ori%inal cop* of the Deed of Asol#te Sale- Accordin% to the Corporation, despite its readiness and ailit* to pa* thep#rchase price, Cortes ref#sed deliver* of the so#%ht doc#+ents- It th#s pra*ed for the award of da+a%es, attorne*Ms fees andliti%ation e:penses arisin% fro+ CortesM ref#sal to deliver the sa+e doc#+ents-

In his Answer with co#nterclai+,3 Cortes clai+ed that the ownerMs d#plicate cop* of the three TCTs were s#rrendered to theCorporation and it is the latter which ref#sed to pa* in f#ll the a%reed down pa*+ent- 7e added that portion of the s#;ect propert* isocc#pied * his lessee who a%reed to vacate the pre+ises #pon pa*+ent of dist#rance fee- 7owever, d#e to the CorporationMsfail#re to pa* in f#ll the s#+ of )2,266,666-66, he in t#rn failed to f#ll* pa* the dist#rance fee of the lessee who now ref#sed to pa*+onthl* rentals- 7e th#s pra*ed that the Corporation e ordered to pa* the o#tstandin% alance pl#s interest and in the alternative,to cancel the sale and forfeit the )1,21(,666-66 partial down pa*+ent, with da+a%es in either case-

On B#ne 25, 1!!(, the trial co#rt rendered a decision rescindin% the sale and directed Cortes to ret#rn to the Corporation thea+o#nt of )1,21(,666-66, pl#s interest- It r#led that p#rs#ant to the contract of the parties, the Corporation sho#ld have f#ll* paidthe a+o#nt of )2,266,666-66 #pon the e:ec#tion of the contract- It stressed that s#ch is the law etween the parties eca#se the

Corporation failed to present evidence that there was another a%ree+ent that +odified the ter+s of pa*+ent as stated in thecontract- And, havin% failed to pa* in f#ll the a+o#nt of )2,266,666-66 despite CortesM deliver* of the Deed of Asol#te Sale and theTCTs, rescission of the contract is proper-

In its +otion for reconsideration, the Corporation contended that the trial co#rt failed to consider their a%ree+ent that it wo#ld pa*the alance of the down pa*+ent when Cortes delivers the TCTs- The +otion was, however, denied * the trial co#rt holdin% thatthe rescission sho#ld stand eca#se the Corporation did not act on the offer of CortesM co#nsel to deliver the TCTs #pon pa*+ent ofthe alance of the down pa*+ent- Th#s9

The Co#rt finds no +erit in the [CorporationMs] .otion for $econsideration- As stated in the decision so#%ht to ereconsidered, [CortesM] co#nsel at the pretrial of this case, proposed that if [the Corporation] co+pletes the down

http://www.lawphil.net/judjuris/juri2006/jul2006/gr_126083_2006.html#fnt1













7/18/2019 Sales - June 22


pa*+ent a%reed #pon and +ae arran%e+ent for the pa*+ent of the alances of the p#rchase price, [Cortes] wo#ld si%nthe Deed of Sale and t#rn over the certificate of title to the [Corporation]- [The Corporation] did nothin% to co+pl* with its#ndertain% #nder the a%ree+ent etween the parties-

<7E$E4O$E, in view of the fore%oin% considerations, the .otion for $econsideration is here* DENIED-

SO O$DE$ED-"

On appeal, the Co#rt of Appeals reversed the decision of the trial co#rt and directed Cortes to e:ec#te a Deed of Asol#te Saleconve*in% the properties and to deliver the sa+e to the Corporation to%ether with the TCTs, si+#ltaneo#s with the CorporationMspa*+ent of the alance of the p#rchase price of )2,5",666-66- It fo#nd that the parties a%reed that the Corporation will f#ll* pa*the alance of the down pa*+ent #pon CortesM deliver* of the three TCTs to the Corporation- The records show that no s#chdeliver* was +ade, hence, the Corporation was not re+iss in the perfor+ance of its oli%ation and therefore ;#stified in not pa*in%the alance- The decretal portion thereof, provides9

<7E$E4O$E, pre+ises considered, [the CorporationMs] appeal is 0$ANTED- The decision appealed fro+ is here*$EVE$SED and SET ASIDE and a new ;#d%+ent rendered orderin% [Cortes] to e:ec#te a deed of asol#te saleconve*in% to [the Corporation] the parcels of land s#;ect of and descried in the deed of asol#te sale, E:hiit D-Si+#ltaneo#sl* with the e:ec#tion of the deed of asol#te sale and the deliver* of the correspondin% ownerMs d#plicatecopies of TCT Nos- (111(A, (1!(1A and (261(A of the $e%istr* of Deeds for the )rovince of $i8al, .etro .anila,District IV, [the Corporation] shall pa* [Cortes] the alance of the p#rchase price of )2,5",666-66- As a%reed #pon inpara%raph 5 of the Deed of Asol#te Sale, E:hiit D, #nder ter+s and conditions, >All e:penses for the re%istration of thisdoc#+ent the deed of sale with the $e%ister of Deeds concerned, incl#din% the transfer ta:, shall e divided e/#all*

etween [Cortes and the Corporation]- )a*+ent of the capital %ains shall e e:cl#sivel* for the acco#nt of the Vendor= 'Lco++ission of .arcosa Sanche8 to e ded#cted #pon si%nin% of sale-> There is no prono#nce+ent as to costs-

SO O$DE$ED-

Cortes filed the instant petition pra*in% that the decision of the trial co#rt rescindin% the sale e reinstated-

There is no do#t that the contract of sale in /#estion %ave rise to a reciprocal oli%ation of the parties- $eciprocal oli%ations arethose which arise fro+ the sa+e ca#se, and which each part* is a detor and a creditor of the other, s#ch that the oli%ation of oneis dependent #pon the oli%ation of the other- The* are to e perfor+ed si+#ltaneo#sl*, so that the perfor+ance of one isconditioned #pon the si+#ltaneo#s f#lfill+ent of the other -!

Article 11!1 of the Civil Code, states9

A$T- 11!1- The power to rescind oli%ations is i+plied in reciprocal ones, in case one of the oli%ors sho#ld not co+pl*with what is inc#+ent #pon hi+-

: : : :

As to when said fail#re or dela* in perfor+ance arise, Article 113! of the sa+e Code provides that

A$T- 113!

: : : :

In reciprocal oli%ations, neither part* inc#rs in dela* if the other does not co+pl* or is not read* to co+pl* in a proper+anner with what is inc#+ent #pon hi+- 6o> =:) >o>)#= o#) o? =:) 5"6=); ?ul?ll; :; olB"=o#, $)l"y y =:)o=:)6 )B#;- E+phasis s#pplied

The iss#e therefore is whether there is dela* in the perfor+ance of the partiesM oli%ation that wo#ld ;#stif* the rescission of thecontract of sale- To resolve this iss#e, we +#st first deter+ine the tr#e a%ree+ent of the parties-

The settled r#le is that the decisive factor in eval#atin% an a%ree+ent is the intention of the parties, as shown not necessaril* * theter+inolo%* #sed in the contract #t * their cond#ct, words, actions and deeds prior to, d#rin% and i++ediatel* after e:ec#tin% thea%ree+ent- As s#ch, therefore, doc#+entar* and parol evidence +a* e s#+itted and ad+itted to prove s#ch intention-16

In the case at ar, the stip#lation in the Deed of Asol#te Sale was that the Corporation shall pa* in f#ll the )2,266,666-66 downpa*+ent #pon e:ec#tion of the contract- 7owever, as correctl* noted * the Co#rt of Appeals, the transcript of steno%raphic notes











7/18/2019 Sales - June 22


reveal CortesM ad+ission that he a%reed that the CorporationMs f#ll pa*+ent of the s#+ of )2,266,666-66 wo#ld depend #pon hisdeliver* of the TCTs of the three lots- In fact, his +ain defense in the Answer is that, he perfor+ed what is inc#+ent #pon hi+ *deliverin% to the Corporation the TCTs and the caron d#plicate of the Deed of Asol#te Sale, #t the latter ref#sed to pa* in f#ll thedown pa*+ent-11 )ertinent portion of the transcript, reads9

[G] Now, wh* did *o# deliver these three titles to the plaintiff despite the fact that it has not een paid in f#ll the a%reeddown pa*+ent

A <ell, the roer told +e that the down pa*+ent will e %iven if I s#rrender the titles-

G Do *o# +ean to sa* that the plaintiff a%reed to pa* in f#ll the down pa*+ent of )2,266,666-66 provided *o# s#rrenderor entr#st to the plaintiff the titles

A es, sir-12

<hat f#rther confir+ed the a%ree+ent to deliver the TCTs is the testi+on* of Cortes that the title of the lots will e transferred in thena+e of the Corporation #pon f#ll pa*+ent of the )2,266,666-66 down pa*+ent- Th#s

ATT- ANTA$AN

G Of co#rse, *o# have it transferred in the na+e of the plaintiff, the title

A ?pon f#ll pa*+ent-

: : : :

ATT- SA$TE

G <hen *o# said #pon f#ll pa*+ent, are *o# referrin% to the a%reed down pa*+ent of )2,266,666-66

A es, sir-1(

&* a%reein% to transfer title #pon f#ll pa*+ent of )2,266,666-66, CortesM i+pliedl* a%reed to deliver the TCTs to the Corporation inorder to effect said transfer- 7ence, the phrase >e:ec#tion of this instr#+ent> 15 as appearin% in the Deed of Asol#te Sale, andwhich event wo#ld %ive rise to the CorporationMs oli%ation to pa* in f#ll the a+o#nt of )2,266,666-66, can not e constr#ed as

referrin% solel* to the si%nin% of the deed- The +eanin% of >e:ec#tion> in the instant case is not li+ited to the si%nin% of a contract#t incl#des as well the perfor+ance or i+ple+entation or acco+plish+ent of the partiesM a%ree+ent-1' <ith the transfer of titles asthe correspondin% reciprocal oli%ation of pa*+ent, CortesM oli%ation is not onl* to affi: his si%nat#re in the Deed, #t to set into+otion the process that wo#ld facilitate the transfer of title of the lots, i.e-, to have the Deed notari8ed and to s#rrender the ori%inalcop* thereof to the Corporation to%ether with the TCTs-

7avin% estalished the tr#e a%ree+ent of the parties, the Co#rt +#st now deter+ine whether Cortes delivered the TCTs and theori%inal Deed to the Corporation- The Co#rt of Appeals fo#nd that Cortes never s#rrendered said doc#+ents to the Corporation-Cortes testified that he delivered the sa+e to .ann* Sanche8, the son of the roer, and that .ann* told hi+ that her +other,.arcosa Sanche8, delivered the sa+e to the Corporation-

G Do *o# have an* proof to show that *o# have indeed s#rrendered these titles to the plaintiff

A es, sir-

G I a+ showin% to *o# a receipt dated Octoer 2!, 1!(, what relation has this receipt with that receipt that *o# have+entioned

A That is the receipt of the real estate roer when she received the titles-

G On top of the printed na+e is .ann* Sanche8, there is a si%nat#re, do *o# now who is that .ann* Sanche8

A That is the son of the roer-















7/18/2019 Sales - June 22


: : : :

G .a* we now the f#ll na+e of the real estate roer

A .arcosa Sanche8

: : : :

G Do *o# now if the roer or .arcosa Sanche8 indeed delivered the titles to the plaintiff

A That is what [s]he told +e- She %ave the+ to the plaintiff-

: : : :-13

ATT- ANTA$AN

G Are *o# reall* s#re that the title is in the hands of the plaintiff

: : : :

G It is in the hands of the roer #t there is no showin% that it is in the hands of the plaintiff

A es, sir-

CO?$T

G 7ow do *o# now that it was delivered to the plaintiff * the son of the roer

A The roer told +e that she delivered the title to the plaintiff-

ATT- ANTA$AN

G Did she not show *o# an* receipt that she delivered to [.r-] Dra%on1" the title witho#t an* receipt

A I have not seen an* receipt-

G So, therefore, *o# are not s#re whether the title has een delivered to the plaintiff or not- It is onl* #pon the alle%ation of the roer

A es, sir-1

7owever, .arcosa Sanche8Ms #nre#tted testi+on* is that, she did not receive the TCTs- She also denied nowled%e of deliver*thereof to her son, .ann*, th#s9

G The defendant, Antonio Cortes testified d#rin% the hearin% on .arch 11, 1!3 that he alle%edl* %ave *o# the title to thepropert* in /#estion, is it tr#e

A I did not receive the title-

G 7e liewise said that the title was delivered to *o#r son, do *o# now ao#t that

A I do not now an*thin% ao#t that-1!

<hat f#rther stren%thened the findin%s of the Co#rt of Appeals that Cortes did not s#rrender the s#;ect doc#+ents was the offer ofCortesM co#nsel at the pretrial to deliver the TCTs and the Deed of Asol#te Sale if the Corporation will pa* the alance of the downpa*+ent- Indeed, if the said doc#+ents were alread* in the hands of the Corporation, there was no need for CortesM co#nsel to+ae s#ch offer-











7/18/2019 Sales - June 22


Since Cortes did not perfor+ his oli%ation to have the Deed notari8ed and to s#rrender the sa+e to%ether with the TCTs, the trialco#rt erred in concl#din% that he perfor+ed his part in the contract of sale and that it is the Corporation alone that was re+iss in theperfor+ance of its oli%ation- Act#all*, oth parties were in dela*- Considerin% that their oli%ation was reciprocal, perfor+ancethereof +#st e si+#ltaneo#s- The +#t#al inaction of Cortes and the Corporation therefore %ave rise to a compensation morae ordefa#lt on the part of oth parties eca#se neither has co+pleted their part in their reciprocal oli%ation-26 Cortes is *et to deliver theori%inal cop* of the notari8ed Deed and the TCTs, while the Corporation is *et to pa* in f#ll the a%reed down pa*+ent of)2,266,666-66- This +#t#al dela* of the parties cancels o#t the effects of defa#lt,21 s#ch that it is as if no one is %#ilt* of dela*-22

<e find no +erit in CortesM contention that the fail#re of the Corporation to act on the proposed settle+ent at the pretrial +#st econstr#ed a%ainst the latter- Cortes ar%#ed that with his co#nselMs offer to s#rrender the ori%inal Deed and the TCTs, the Corporationsho#ld have consi%ned the alance of the down pa*+ent- This ar%#+ent wo#ld have een correct if Cortes act#all* s#rrendered theDeed and the TCTs to the Corporation- <ith s#ch deliver*, the Corporation wo#ld have een placed in defa#lt if it chose not to pa*in f#ll the re/#ired down pa*+ent- ?nder Article 113! of the Civil Code, fro+ the +o+ent one of the parties f#lfills his oli%ation,dela* * the other e%ins- Since Cortes did not perfor+ his part, the provision of the contract re/#irin% the Corporation to pa* in f#llthe down pa*+ent never ac/#ired oli%ator* force- .oreover, the Corporation co#ld not e fa#lted for not a#to+aticall* heedin% tothe offer of Cortes- 4or one, its co+plaint has a pra*er for da+a%es which it +a* not want to waive * a%reein% to the offer ofCortesM co#nsel- 4or another, the previo#s representation of Cortes that the TCTs were alread* delivered to the Corporation when nos#ch deliver* was in fact +ade, is eno#%h reason for the Corporation to e +ore ca#tio#s in dealin% with hi+-

The Co#rt of Appeals therefore correctl* ordered the parties to perfor+ their respective oli%ation in the contract of sale, i.e., forCortes to, a+on% others, deliver the necessar* doc#+ents to the Corporation and for the latter to pa* in f#ll, not onl* the downpa*+ent, #t the entire p#rchase price- And since the Corporation did not /#estion the Co#rt of AppealMs decision and even pra*edfor its affir+ance, its pa*+ent sho#ld ri%htf#ll* consist not onl* of the a+o#nt of )!",666-66, representin% the alance of the)2,266,666-66 down pa*+ent, #t the total a+o#nt of )2,5",666-66, the re+ainin% alance in the )(,"66,666-66 p#rchase price-

'HEREORE, the petition is !ENIE! and the B#ne 1(, 1!!3 Decision of the Co#rt of Appeals in CA0-$- CV No- 5"'3,is AIRME!-

SO OR!ERE!-

Pangani&an, C.)., Austria-Martinez, Calle0o, Sr., C"ico-Nazario, ).)., conc#r-

oo=#o=);

1 )enned * Associate B#stice Ed#ardo 0- .ontene%ro and conc#rred in * Associate B#stices E+eterio C- C#i and BoseC- De @a $a+a= rollo, pp- (('1-

2 )enned * B#d%e 4ernando )- A%da+a%= rollo, pp- 333-

( Co+plaint, records, pp- 12-

5 E:hiit >D,> records, p- 16-

' $ecords, pp- 15-

3 Id - at ('(!-

"

Id - at 162-

Id - at '6'1- )etitioner filed a +otion for reconsideration #t was denied on A#%#st (6, 1!!3= rollo, p- '(-

! Asuncion v. 1vangelista, ("' )hil- (2, ('3 1!!!, citin% Tolentino, Art#ro, Co++entaries and B#rispr#dence on theCivil Code of the )hil-, Vol- IV, 1!' edition, p- 1"'-

16 Agas v. Sa&ico, 0-$- No- 1'355", April 23, 266', 5'" SC$A 23(, 2"'-

11 $ollo, p- 32-







http://www.lawphil.net/judjuris/juri2006/jul2006/gr_126083_2006.html#rnt1




















http://www.lawphil.net/judjuris/juri2005/apr2005/gr_156447_2005.html



















7/18/2019 Sales - June 22


12 TSN, .arch 11, 1!3, records, p- (25-

1( Id - at ("(-

15 >1- ?pon ))<u=o# o? =:; #;=6u>)#=, the Vendee shall pa* #nto the Vendor s#+ of T<O .I@@ION AND T<O7?ND$ED T7O?SAND )2,266,666-66 )ESOS, )hilippine C#rrenc*, less all advances paid * the Vendee to theVendor in connection with the sale= E+phasis s#pplied

1' 1astern Assurance / Suret! Corporation v. Intermediate Appellate Court , 0-$- No- 3!5'6, Nove+er 22, 1!, 1"!SC$A '31, '3"-

13 TSN, .arch 11, 1!, records, (21(25-

1" .r- $enato Dra%on is the )resident of respondent Corporation and the si%nator* to the Deed of Sale- See records, p-11-

1 TSN, .arch 11, 1!, records, pp- (3"(3!-

1! TSN, Octoer 2", 1!!, records, pp- (!(!6-

26 )aras, Civil Code, &oo IV, 4o#rteenth edition, p- 12(-

21 Vit#%, Co+pendi#+ of Civil @aw and B#rispr#dence, 1!!( edition, p- 52-

22 )aras, s#pra-


































7/18/2019 Sales - June 22


G.R. No. 170D79 )6u"6y 1, 200

AN!RE T. ALMOCERA, petitioner,vs-JOHNN- ONG, respondent-

! E C I S I O N

CHICO8NA%ARIO, J .&

&efore ?s is a )etition for $eview on Certiorari #nder $#le 5' of the 1!!" $#les of Civil )roced#re which sees to set aside theDecision1 of the Co#rt of Appeals dated 1 B#l* 266' in CA0-$- CV No- "'316 affir+in% in toto the Decision2 of &ranch 11 of the$e%ional Trial Co#rt $TC of Ce# Cit* in Civil Case No- CE&2(3" and its $esol#tion( dated 13 Nove+er 266' den*in%petitionerPs +otion for reconsideration- The $TC decision fo#nd petitioner Andre T- Al+ocera, Chair+an and Chief E:ec#tive Officerof 4irst &#ilder .#lti)#rpose Cooperative 4&.C, solidaril* liale with 4.&C for da+a%es-

Stripped of nonessentials, the respective versions of the parties have een s#++ari8ed * the Co#rt of Appeals as follows9

)laintiff Bohnn* On% tried to ac/#ire fro+ the defendants a >townho+e> descried as ?nit No- 5 of Atri#+ Townho+es inCe# Cit*- As reflected in a Contract to Sell, the sellin% price of the #nit was )(,566,666-66 pesos, for a lot area of ei%ht*

ei%ht s/#are +eters with a threestore* #ildin%- O#t of the p#rchase price, plaintiff was ale to pa* the a+o#ntof )1,636,666-66- )rior to the f#ll pa*+ent of this a+o#nt, plaintiff clai+s that defendants Andre Al+ocera and 4irst&#ilders fra#d#lentl* concealed the fact that efore and at the ti+e of the perfection of the aforesaid contract to sell, thepropert* was alread* +ort%a%ed to and enc#+ered with the @and &an of the )hilippines @&)- In addition, theconstr#ction of the ho#se has lon% een dela*ed and re+ains #nfinished- On .arch 1(, 1!!!, @ot 5a covered * TCTNo- 151, coverin% the #nit was advertised in a local taloid for p#lic a#ction for foreclos#re of +ort%a%e- It is theassertion of the plaintiff that had it not for the fra#d#lent conceal+ent of the +ort%a%e and enc#+rance * defendants,he wo#ld have not entered into the contract to sell-

On the other hand, defendants assert that on .arch 26, 1!!', 4irst &#ilders .#ltip#rpose Coop- Inc-, orrowed +one* inthe a+o#nt of )'66,666-66 fro+ To++* On%, plaintiffPs rother- This a+o#nt was #sed to finance the doc#+entationre/#ire+ents of the @&) for the f#ndin% of the Atri#+ Town 7o+es- This loan will e applied in pa*+ent of one 1 townho#se #nit which To++* On% +a* event#all* p#rchase fro+ the pro;ect- <hen the pro;ect was #nder wa*, To++* On%wanted to #* another townho#se for his rother, Bohnn* On%, plaintiff herein, which then, the a+o#nt of )1'6,666-66was %iven as additional partial pa*+ent- 7owever, the partic#lar #nit was not *et identified- It was onl* on Ban#ar* 16,1!!" that To++* On% identified ?nit No- 5 plaintiffPs chosen #nit and a%ain tendered )('6,666-66 as his third partial

pa*+ent- <hen the contract to sell for ?nit 5 was ein% drafted, To++* On% re/#ested that another contract to sellcoverin% ?nit ' e +ade so as to %ive Bohnn* On% another option to choose whichever #nit he +i%ht decide to have-<hen the constr#ction was alread* in f#ll last, defendants were infor+ed * To++* On% that their final choice was ?nit'- It was onl* #pon nowin% that the defendants will e sellin% ?nit 5 to so+e other persons for )5+illion that plaintiffchan%ed his choice fro+ ?nit ' to ?nit 5-5

In tr*in% to recover the a+o#nt he paid as down pa*+ent for the townho#se #nit, respondent Bohnn* On% filed a co+plaint forDa+a%es efore the $TC of Ce# Cit*, doceted as Civil Case No- CE&2(3", a%ainst defendants Andre T- Al+ocera and 4&.Calle%in% that defendants were %#ilt* of fra#d#lent conceal+ent and reach of contract when the* sold to hi+ a townho#se #nitwitho#t div#l%in% that the sa+e, at the ti+e of the perfection of their contract, was alread* +ort%a%ed with the @and &an of the)hilippines @&), with the latter ca#sin% the foreclos#re of the +ort%a%e and the event#al sale of the townho#se #nit to a thirdperson-

In their Answer, defendants denied liailit* clai+in% that the foreclos#re of the +ort%a%e on the townho#se #nit was ca#sed * thefail#re of co+plainant Bohnn* On% to pa* the alance of the price of said townho#se #nit-

After the pretrial conference was ter+inated, trial on the +erits ens#ed- $espondent and his rother, Tho+as - On%, too thewitness stand- 4or defendants, petitioner testified-

In a Decision dated 26 .a* 2662, the $TC disposed of the case in this +anner9

<7E$E4O$E, in view of all the fore%oin% pre+ises, ;#d%+ent is here* rendered in this case in favor of the plaintiff anda%ainst the defendants9

a Orderin% the defendants to solidaril* pa* to the plaintiff the s#+ of )1,636,666-66, to%ether with a le%al interestthereon at 3L per ann#+ fro+ April 21, 1!!! #ntil its f#ll pa*+ent efore finalit* of the ;#d%+ent- Thereafter, if the a+o#nt

http://www.lawphil.net/judjuris/juri2008/feb2008/gr_170479_2008.html#fnt1









7/18/2019 Sales - June 22


ad;#d%ed re+ains #npaid, the interest rate shall e 12L per ann#+ co+p#ted fro+ the ti+e when the ;#d%+ent eco+esfinal and e:ec#tor* #ntil f#ll* satisfied=

Orderin% the defendants to solidaril* pa* to the plaintiff the s#+ of )166,666-66 as +oral da+a%es, the s#+of )'6,666-66 as attorne*Ps fee and the s#+ of )1',31!-6 as e:penses of liti%ation= and

c Orderin% the defendants to pa* the cost of this s#it-'

The trial co#rt r#led a%ainst defendants for not actin% in %ood faith and for not co+pl*in% with their oli%ations #nder their contractwith respondent- In the Contract to Sell3 involvin% ?nit 5 of the Atri#+ Townho+es, defendants a%reed to sell said townho#se torespondent for )(,566,666-66- The down pa*+ent was)1,666,666-66, while the alance of )2,566,666-66 was to e paid in f#ll#pon co+pletion, deliver* and acceptance of the townho#se- ?nder the contract which was si%ned on 16 Ban#ar* 1!!", defendantsa%reed to co+plete and conve* to respondent the #nit within si: +onths fro+ the si%nin% thereof-

The trial co#rt fo#nd that respondent was ale to +ae a down pa*+ent or partial pa*+ent of )1,636,666-66 and that thedefendants failed to co+plete the constr#ction of, as well as deliver to respondent, the townho#se within si: +onths fro+ the si%nin%of the contract- .oreover, respondent was not infor+ed * the defendants at the ti+e of the perfection of their contract that thes#;ect townho#se was alread* +ort%a%ed to @&)- The +ort%a%e was foreclosed * the @&) and the townho#se was event#all*sold at p#lic a#ction- It said that defendants were %#ilt* of fra#d in their dealin% with respondent eca#se the +ort%a%e was notdisclosed to respondent when the contract was perfected- There was also nonco+pliance with their oli%ations #nder the contractwhen the* failed to co+plete and deliver the townho#se #nit at the a%reed ti+e- On the part of respondent, the trial co#rt declaredhe was ;#stified in s#spendin% f#rther pa*+ents to the defendants and was entitled to the ret#rn of the down pa*+ent-

A%%rieved, defendants appealed the decision to the Co#rt of Appeals assi%nin% the followin% as errors9

1- T7E @O<E$ CO?$T E$$ED IN 7O@DIN0 T7AT )@AINTI44 7AS A VA@ID CA?SE O4 ACTION 4O$ DA.A0ES A0AINST DE4ENDANTS-

2- T7E @O<E$ CO?$T E$$ED IN 7O@DIN0 T7AT DE4ENDANT AND$E T- [email protected]$A IS SO@IDA$I@ @IA&@E<IT7 T7E COO)E$ATIVE 4O$ T7E DA.A0ES TO T7E )@AINTI44-"

The Co#rt of Appeals r#led that the defendants inc#rred dela* when the* failed to deliver the townho#se #nit to the respondentwithin si: +onths fro+ the si%nin% of the contract to sell- It a%reed with the findin% of the trial co#rt that the nonpa*+ent of thealance of )2-5. * respondent to defendants was proper in li%ht of s#ch dela* and the fact that the propert* s#;ect of the casewas foreclosed and a#ctioned- It added that the trial co#rt did not err in %ivin% credence to respondentPs assertion that had he nowneforehand that the #nit was #sed as collateral with the @&), he wo#ld not have proceeded in #*in% the townho#se- @ie the trialco#rt, the Co#rt of Appeals %ave no wei%ht to defendantsP ar%#+ent that had respondent paid the alance of the p#rchase price of

the townho#se, the +ort%a%e co#ld have een released- It e:plained9

<e cannot find fa#lt with the choice of plaintiff not to f#rther dole o#t +one* for a propert* that in all events, wo#ld nevere his- .oreover, defendants co#ld, if the* were reall* desiro#s of satisf*in% their oli%ation, de+anded that plaintiff pa*the o#tstandin% alance ased on their contract- This the* had not done- <e can fairl* s#r+ise that defendants co#ld notco+pl* with their oli%ation the+selves, eca#se as testified to * .r- Al+ocera, the* alread* si%nified to @&) that the*cannot pa* their o#tstandin% loan oli%ations res#ltin% to the foreclos#re of the townho#se-

.oreover, as to the iss#e of petitionerPs solidar* liailit*, it said that this iss#e was elatedl* raised and cannot e treated for the firstti+e on appeal-

On 1 B#l* 266', the Co#rt of Appeals denied the appeal and affir+ed in toto the decision of the trial co#rt- The dispositive portion of the decision reads9

IN LIGHT O ALL THE OREGOING, this appeal is !ENIE!. The assailed decision of the $e%ional Trial Co#rt, &ranch

11, Ce# Cit* in Civil Case No- CE&2(3" is AIRME! in toto-!

In a $esol#tion dated 13 Nove+er 266', the Co#rt of Appeals denied defendantsP +otion for reconsideration-

)etitioner is now efore #s pleadin% his case via a )etition for $eview on Certiorari #nder $#le 5' of the 1!!" $#les of Civil)roced#re- The petition raises the followin% iss#es9

I- T7E 7ONO$A&@E CO?$T O4 A))EA@S 0$AVE@ E$$ED IN 7O@DIN0 T7AT DE4ENDANT 7AS INC?$$EDDE@A-















7/18/2019 Sales - June 22


II- T7E 7ONO$A&@E CO?$T O4 A))EA@S 0$AVE@ E$$ED IN S?STAININ0 $ES)ONDENTPS $E4?SA@ TO )AT7E &A@ANCE O4 T7E )?$C7ASE )$ICE-

III- T7E 7ONO$A&@E CO?$T O4 A))EA@S 0$AVE@ E$$ED IN 7O@DIN0 T7AT DE4ENDANT AND$E T- [email protected]$A IS SO@IDA$I@ @IA&@E <IT7 T7E DE4ENDANT COO)E$ATIVE 4O$ DA.A0ES TO )@AINTI44-16

It cannot e disp#ted that the contract entered into * the parties was a contract to sell- The contract was deno+inated as s#ch and

it contained the provision that the #nit shall e conve*ed * wa* of an Asol#te Deed of Sale, to%ether with the attendant doc#+entsof Ownership the Transfer Certificate of Title and Certificate of Occ#panc* and that the alance of the contract price shall epaid #pon the co+pletion and deliver* of the #nit, as well as the acceptance thereof * respondent- All these clearl* indicate thatownership of the townho#se has not passed to respondent-

In Serrano v. Caguiat , 11 we e:plained9

A contract to sell is ain to a conditional sale where the efficac* or oli%ator* force of the vendorPs oli%ation to transfertitle is s#ordinated to the happenin% of a f#t#re and #ncertain event, so that if the s#spensive condition does not taeplace, the parties wo#ld stand as if the conditional oli%ation had never e:isted- The s#spensive condition is co++onl*f#ll pa*+ent of the p#rchase price-

The differences etween a contract to sell and a contract of sale are wellsettled in ;#rispr#dence- As earl* as 1!'1,in Sing 5ee v. Santos [5" O-0- 3("2 1!'1], we held that9

>: : : [a] distinction +#st e +ade etween a contract of sale in which title passes to the #*er #pon deliver* ofthe thin% sold and a contract to sell : : : where * a%ree+ent the ownership is reserved in the seller and is notto pass #ntil the f#ll pa*+ent of the p#rchase price is +ade- In the first case, nonpa*+ent of the price is ane%ative resol#tor* condition= in the second case, f#ll pa*+ent is a positive s#spensive condition- &ein%contraries, their effect in law cannot e identical- In the first case, the vendor has lost and cannot recover theownership of the land sold #ntil and #nless the contract of sale is itself resolved and set aside- In the secondcase, however, the title re+ains in the vendor if the vendee does not co+pl* with the condition precedent of+ain% pa*+ent at the ti+e specified in the contract->

In other words, in a contract to sell, ownership is retained * the seller and is not to pass to the #*er #ntil f#llpa*+ent of the price-

The Contract to Sell entered into * the parties contains the followin% pertinent provisions9

5- TE$.S O4 )A.ENT9

5a- ONE .I@@ION )ESOS )1,666,666-66 is here* acnowled%ed as Downpa*+ent for the aove+entioned Contract)rice-

5- The &alance, in the a+o#nt of T<O .I@@ION 4O?$ 7?ND$ED )ESOS )2,566,666-66 shall e paid thr# financin%Instit#tion facilitated * the SE@@E$, preferal* @andan of the )hilippines @&)-

?pon co+pletion, deliver* and acceptance of the &?E$ of the Townho#se ?nit, the &?E$ shall have paid the Contract)rice in f#ll to the SE@@E$-

: : : :

3- CO.)@ETION DATES O4 T7E TO<N7O?SE ?NIT9

The #nit shall e co+pleted and conve*ed * wa* of an Asol#te Deed of Sale to%ether with the attendant doc#+ents ofOwnership in the na+e of the &?E$ the Transfer Certificate of Title and Certificate of Occ#panc* within a period of si:3 +onths fro+ the si%nin% of Contract to Sell-12

4ro+ the fore%oin% provisions, it is clear that petitioner and 4&.C had the oli%ation to co+plete the townho#se #nit within si:+onths fro+ the si%nin% of the contract- ?pon co+pliance therewith, the oli%ation of respondent to pa* the alanceof )2,566,666-66 arises- ?pon pa*+ent thereof, the townho#se shall e delivered and conve*ed to respondent #pon the e:ec#tionof the Asol#te Deed of Sale and other relevant doc#+ents-










7/18/2019 Sales - June 22


The evidence add#ced shows that petitioner and 4&.C failed to f#lfill their oli%ation to co+plete and deliver the townho#sewithin the si:+onth period- <ith petitioner and 4&.CPs nonf#lfill+ent of their oli%ation, respondent ref#sed to pa* the alance ofthe contract price- $espondent does not as that ownership of the townho#se e transferred to hi+, #t +erel* ass that thea+o#nt or down pa*+ent he had +ade e ret#rned to hi+-

Article 113! of the Civil Code reads9

Art- 113!- Those oli%ed to deliver or to do so+ethin% inc#r in dela* fro+ the ti+e the oli%ee ;#diciall* or e:tra;#diciall*de+ands fro+ the+ the f#lfill+ent of their oli%ation-

7owever, the de+and * the creditor shall not e necessar* in order that dela* +a* e:ist9

1 <hen the oli%ation or the law e:pressl* so declares= or

2 <hen fro+ the nat#re and the circ#+stances of the oli%ation it appears that the desi%nation of the ti+e when thethin% is to e delivered or the service is to e rendered was a controllin% +otive for the estalish+ent of the contract= or

( <hen de+and wo#ld e #seless, as when the oli%or has rendered it e*ond his power to perfor+-

In reciprocal oli%ations, neither part* inc#rs in dela* if the other does not co+pl* or is not read* to co+pl* in a proper+anner with what is inc#+ent #pon hi+- 4ro+ the +o+ent one of the parties f#lfills his oli%ation, dela* * the other

e%ins-

The contract s#;ect of this case contains reciprocal oli%ations which were to e f#lfilled * the parties, i-e-, to co+plete and deliver the townho#se within si: +onths fro+ the e:ec#tion of the contract to sell on the part of petitioner and 4&.C, and to pa* thealance of the contract price #pon co+pletion and deliver* of the townho#se on the part of the respondent-

In the case at ar, the oli%ation of petitioner and 4&.C which is to co+plete and deliver the townho#se #nit within the prescriedperiod, is deter+inative of the respondentPs oli%ation to pa* the alance of the contract price- <ith their fail#re to f#lfill theiroli%ation as stip#lated in the contract, the* inc#rred dela* and are liale for da+a%es-1( The* cannot insist that respondent co+pl*with his oli%ation- <here one of the parties to a contract did not perfor+ the #ndertain% to which he was o#nd * the ter+s of thea%ree+ent to perfor+, he is not entitled to insist #pon the perfor+ance of the other part*-15

On the first assi%ned error, petitioner insists there was no dela* when the townho#se #nit was not co+pleted within si: +onths fro+the si%nin% of the contract inas+#ch as the +ere lapse of the stip#lated si: 3 +onth period is not * itself eno#%h to constit#tedela* on his part and that of 4&.C, since the law re/#ires that there +#st either e ;#dicial or e:tra;#dicial de+and to f#lfill an

oli%ation so that the oli%or +a* e declared in defa#lt- 7e ar%#es there was no evidence introd#ced showin% that a prior de+andwas +ade * respondent efore the ori%inal action was instit#ted in the trial co#rt-

<e do not a%ree-

De+and is not necessar* in the instant case- De+and * the respondent wo#ld e #seless eca#se the i+possiilit* of co+pl*in%with their petitioner and 4&.C oli%ation was d#e to their fa#lt- If onl* the* paid their loans with the @&), the +ort%a%e on thes#;ect townho#se wo#ld not have een foreclosed and thereafter sold to a third person-

Anent the second assi%ned error, petitioner ar%#es that if there was an* dela*, the sa+e was inc#rred * respondent eca#se heref#sed to pa* the alance of the contract price-

<e find his ar%#+ent specio#s-

As aovedisc#ssed, the oli%ation of respondent to pa* the alance of the contract price was conditioned on petitioner and 4&.CPsperfor+ance of their oli%ation- Considerin% that the latter did not co+pl* with their oli%ation to co+plete and deliver the townho#se#nit within the period a%reed #pon, respondent co#ld not have inc#rred dela*- 4or fail#re of one part* to ass#+e and perfor+ theoli%ation i+posed on hi+, the other part* does not inc#r dela*-1'

?nder the circ#+stances otainin% in this case, we find that respondent is ;#stified in ref#sin% to pa* the alance of the contractprice- 7e was never in possession of the townho#se #nit and he can no lon%er e its owner since ownership thereof has eentransferred to a third person who was not a part* to the proceedin%s elow- It wo#ld si+pl* e the hei%ht of ine/#it* if we are tore/#ire respondent to pa* the alance of the contract price- To allow this wo#ld res#lt in the #n;#st enrich+ent of petitioner and4&.C- The f#nda+ental doctrine of #n;#st enrich+ent is the transfer of val#e witho#t ;#st ca#se or consideration- The ele+ents ofthis doctrine which are present in this case are9 enrich+ent on the part of the defendant= i+poverish+ent on the part of the plaintiff=and lac of ca#se- The +ain o;ective is to prevent one to enrich hi+self at the e:pense of another- It is co++onl* accepted that









7/18/2019 Sales - June 22


this doctrine si+pl* +eans a person shall not e allowed to profit or enrich hi+self ine/#ital* at anotherMs e:pense-137ence, toallow petitioner and 4&.C eep the down pa*+ent +ade * respondent a+o#ntin% to )1,636,666-66 wo#ld res#lt in their #n;#stenrich+ent at the e:pense of the respondent- Th#s, said a+o#nt sho#ld e ret#rned-

<hat is worse is the fact that petitioner and 4&.C intentionall* failed to infor+ respondent that the s#;ect townho#se which he was%oin% to p#rchase was alread* +ort%a%ed to @&) at the ti+e of the perfection of their contract- This delierate withholdin% *petitioner and 4&.C of the +ort%a%e constit#tes fra#d and ad faith- The trial co#rt had this sa*9

In the li%ht of the fore%oin% environ+ental circ#+stances and +ilie#, therefore, it appears that the defendants are %#ilt* offra#d in dealin% with the plaintiff- The* perfor+ed vol#ntar* and willf#l acts which prevent the nor+al reali8ation of theprestation, nowin% the effects which nat#rall* and necessaril* arise fro+ s#ch acts- Their acts i+port a dishonestp#rpose or so+e +oral oli/#it* and conscio#s doin% of a wron%- The said acts certainl* %tive rise to liailit* for da+a%es .anresa "2= &orrell.acia 232"= ( Ca+#s (5= OP@ear* v- .acondra* Q Co+pan*, 5'5 )hil- 12= 7eredia v- Salinas,16 )hil- 1'"- Article 11"6 of the New Civil Code of the )hilippines provides e:pressl* that >those who in the perfor+anceof their oli%ations are %#ilt* of fra#d and those who in an* +anner contravene the tenor thereof are liale for da+a%es-1"

On the last assi%ned error, petitioner contends that he sho#ld not e held solidaril* liale with defendant 4&.C, eca#se the latter isa separate and distinct entit* which is the seller of the s#;ect townho#se- 7e clai+s that he, as Chair+an and Chief E:ec#tiveOfficer of 4&.C, cannot e held liale eca#se his representin% 4&.C in its dealin%s is a corporate act for which onl* 4&.C sho#lde held liale-

This iss#e of piercin% the veil of corporate fiction was never raised efore the trial co#rt- The sa+e was raised for the first ti+eefore the Co#rt of Appeals which r#led that it was too late in the da* to raise the sa+e- The Co#rt of Appeals declared9

In the case elow, the pleadin%s and the evidence of the defendants are one and the sa+e and never had it +ade toappear that Al+ocera is a person distinct and separate fro+ the other defendant- In fine, we cannot treat this error for thefirst ti+e on appeal- <e cannot in %ood conscience, let the defendant Al+ocera raise the iss#e of piercin% the veil ofcorporate fiction ;#st eca#se of the adverse decision a%ainst hi+- : : :-1

To allow petitioner to p#rs#e s#ch a defense wo#ld #nder+ine asic considerations of d#e process- )oints of law, theories, iss#esand ar%#+ents not ro#%ht to the attention of the trial co#rt will not e and o#%ht not to e considered * a reviewin% co#rt, as thesecannot e raised for the first ti+e on appeal- It wo#ld e #nfair to the adverse part* who wo#ld have no opport#nit* to present f#rther evidence +aterial to the new theor* not ventilated efore the trial co#rt-1!

As to the award of da+a%es %ranted * the trial co#rt, and affir+ed * the Co#rt of Appeals, we find the sa+e to e proper andreasonale #nder the circ#+stances-

'HEREORE, the petition is !ENIE!. The Decision of the Co#rt of Appeals dated 1 B#l* 266' in CA0-$- CV No- "'316is AIRME!. Costs a%ainst the petitioner-

SO OR!ERE!.

MINITA . CHICO8NA%ARIO Associate B#stice

<E CONC?$9

CONSUELO -NARES8SANTIAGO Associate B#stice

Chairperson










7/18/2019 Sales - June 22


MA. ALICIA AUSTRIA8MARTINE% Associate B#stice

ANTONIO E!UAR!O +. NACHURA Associate B#stice

RU+EN T. RE-ES Associate B#stice

ATTESTATION

I attest that the concl#sions in the aove Decision were reached in cons#ltation efore the case was assi%ned to the writer of theopinion of the Co#rtPs Division-

CONSUELO -NARES8SANTIAGO Associate B#stice

Chairperson, Third Division

CERTIICATION

)#rs#ant to Section 1(, Article VIII of the Constit#tion, and the Division ChairpersonPs Attestation, it is here* certified that theconcl#sions in the aove Decision were reached in cons#ltation efore the case was assi%ned to the writer of the opinion of theCo#rtPs Division-

RE-NATO S. PUNOChief B#stice

oo=#o=);

1 Associate B#stice )a+pio A- Aarintos with Associate B#stices .ercedes 0o8oDadole and $a+on .- &ato, Br-,conc#rrin%= rollo, pp- 2'(2=

2 )enned * 7on- Isaias )- Dicdican-

( Id- at (((5-

5 4ollo, pp- 232"-

' Id- at 5"-

3 E:hiit A-

" 4ollo, pp- 1'13-

Id- at (6-

! Id- at (2-

http://www.lawphil.net/judjuris/juri2008/feb2008/gr_170479_2008.html#rnt1



























7/18/2019 Sales - June 22


16 Id- at 13-

11 0-$- No- 1(!1"(, 2 4er#ar* 266", '1" SC$A '", 353'-

12 4ollo, p- 22!-

1( (ea6o v. Court of Appeals, 526 )hil- (3, 5 2661-

15 Agustin v. Court of Appeals, 0-$- No- 5"'1, 3 B#ne 1!!6, 13 SC$A ("', ((-

1' Agustin v. Court of Appeals, id-, citin% A&a!a v. Standard-$acuum 7il Co., 161 )hil- 1232 1!'"-

13 P.C. )avier / Sons, Inc. v. Court of Appeals, 0-$- No- 12!''2, 2! B#ne 266', 532 SC$A (3, 5"-

1" 4ollo, p- 55-

1 Id- at (1-

1! $aldez v. C"ina 'anking Corporation, 0-$- No- 1''66!, 12 April 266', 5'' SC$A 3", 3!3-





http://www.lawphil.net/judjuris/juri2007/feb2007/gr_139173_2007.html








http://www.lawphil.net/judjuris/juri1990/jun1990/gr_84751_1990.html




























sales - june 22

Documents