LIMKETKAI SONS MILLING, INC.

, petitioner,
vs.
COURT OF APPEALS, BANK OF THE PHILIPPINE ISLANDS
and NATIONAL BOOK STORE, respondents.

MELO, J.:
The issue in the petition before us is whether or not there was a
perfected contract between petitioner Limketkai Sons Milling, Inc.
and respondent Bank of the Philippine Islands BPI! covering the
sale of a parcel of land, appro"imatel# $.$ hectares in area, and
located in Barrio Bagong Ilog, Pasig %it#, Metro Manila.
Branch &'& of the (egional Trial %ourt of the )ational %apital
*udicial (egion stationed in Pasig ruled that there was a
perfected contract of sale between petitioner and BPI. It stated
that there was mutual consent between the parties+ the sub,ect
matter is definite+ and the consideration was determined. It
concluded that all the elements of a consensual contract are
attendant. It ordered the cancellation of a sale effected b# BPI to
respondent )ational Book Store )BS! while the case was
pending and the nullification of a title issued in favor of said
respondent )BS.
-pon elevation of the case to the %ourt of .ppeals, it was held
that no contract of sale was perfected because there was no
concurrence of the three re/uisites enumerated in .rticle &$&0 of
the %ivil %ode. The decision of the trial court was reversed and
the complaint dismissed.
1ence, the instant petition.
Shorn of the interpretations given to the acts of those who
participated in the disputed sale, the findings of facts of the trial
court and the %ourt of .ppeals narrate basicall# the same events
and occurrences. The records show that on Ma# &2, &345,
Philippine (emnants %o., Inc. constituted BPI as its trustee to
manage, administer, and sell its real estate propert#. 6ne such
piece of propert# placed under trust was the disputed lot, a
$$,7'58s/uare meter lot at Barrio Bagong Ilog, Pasig, Metro
Manila covered b# Transfer %ertificate of Title )o. 23$&99.
6n *une 9$, &300, Pedro (evilla, *r., a licensed real estate broker
was given formal authorit# b# BPI to sell the lot for P&,777.77 per
s/uare meter. This arrangement was concurred in b# the owners
of the Philippine (emnants.
Broker (evilla contacted .lfonso Lim of petitioner compan# who
agreed to bu# the land. 6n *ul# 0, &300, petitioner:s officials and
(evilla were given permission b# (olando ;. .romin, BPI
.ssistant ;ice8President, to enter and view the propert# the# were
bu#ing.
6n *ul# 3, &300, (evilla formall# informed BPI that he had
procured a bu#er, herein petitioner. 6n *ul# &&, &300, petitioner:s
officials, .lfonso Lim and .lbino Limketkai, went to BPI to confirm
the sale. The# were entertained b# ;ice8President Merlin .lbano
and .sst. ;ice8President .romin. Petitioner asked that the price of
P&,777.77 per s/uare meter be reduced to P377.77 while .lbano
stated the price to be P&,&77.77. The parties finall# agreed that
the lot would be sold at P&,777.77 per s/uare meter to be paid in
cash. Since the authorit# to sell was on a first come, first served
and non8e"clusive basis, it ma# be mentioned at this ,uncture that
there is no dispute over petitioner:s being the first comer and the
bu#er to be first served.
)otwithstanding the final agreement to pa# P&,777.77 per s/uare
meter on a cash basis, .lfonso Lim asked if it was possible to pa#
on terms. The bank officials stated that there was no harm in
tr#ing to ask for pa#ment on terms because in previous
transactions, the same had been allowed. It was the
understanding, however, that should the term pa#ment be
disapproved, then the price shall be paid in cash.
It was .lbano who dictated the terms under which the installment
pa#ment ma# be approved, and acting thereon, .lfonso Lim, on
the same date, *ul# &&, &300, wrote BPI through Merlin .lbano
embod#ing the pa#ment initiall# of &7< and the remaining 37<
within a period of 37 da#s.
Two or three da#s later, petitioner learned that its offer to pa# on
terms had been fro=en. .lfonso Lim went to BPI on *ul# &0, &300
and tendered the full pa#ment of P$$,7'5,777.77 to .lbano. The
pa#ment was refused because .lbano stated that the authorit# to
sell that particular piece of propert# in Pasig had been withdrawn
from his unit. The same check was tendered to BPI ;ice8
President )elson Bona who also refused to receive pa#ment.
.n action for specific performance with damages was thereupon
filed on .ugust 9', &300 b# petitioner against BPI. In the course
of the trial, BPI informed the trial court that it had sold the propert#
under litigation to )BS on *ul# &2, &303. The complaint was thus
amended to include )BS.
6n *une &7, &33&, the trial court rendered ,udgment in the case
as follows>
?1@(@A6(@, ,udgment is hereb# rendered in favor of
plaintiff and against defendants Bank of the Philippine
Islands and )ational Book Store, Inc.> B
&. Ceclaring the Ceed of Sale of the propert# covered
b# T.%.T. )o. 23$&99 in the name of the Bank of the
Philippine Islands, situated in Barrio Bagong Ilog,
Pasig, Metro Manila, in favor of )ational Book Store,
Inc., null and void+
9. 6rdering the (egister of Ceeds of the Province of
(i=al to cancel the Transfer %ertificate of Title which
ma# have been issued in favor of )ational Book Store,
Inc. b# virtue of the aforementioned Ceed of Sale dated
*ul# &2, &303+
$. 6rdering defendant BPI, upon receipt b# it from
plaintiff of the sum of P$$,7'5,777.77, to e"ecute a
Ceed of Sale in favor of plaintiff of the aforementioned
propert# at the price of P&,777.77 per s/uare meter+ in
default thereof, the %lerk of this %ourt is directed to
e"ecute the said deed+
2. 6rdering the (egister of Ceeds of Pasig, upon
registration of the said deed, whether e"ecuted b#
defendant BPI or the %lerk of %ourt and pa#ment of the
corresponding fees and charges, to cancel said T.%.T.
)o. 23$&99 and to issue, in lieu thereof, another
transfer certificate of title in the name of plaintiff+
'. 6rdering defendants BPI and )ational Book Store,
Inc. to pa#, ,ointl# and severall#, to the plaintiff the sums
of P&7,777,777.77 as actual and conse/uential
damages and P&'7,777.77 as attorne#:s fees and
litigation e"penses, both with interest at &9< per
annum from date hereof+
5. 6n the cross8claim of defendant bank against
)ational Book Store, ordering the latter to indemnif# the
former of whatever amounts BPI shall have paid to the
plaintiff b# reason hereof+ and
4. Cismissing the counterclaims of the defendants
against the plaintiff and )ational Book Store:s cross8
claim against defendant bank.
%osts against defendants.
pp. 2282', Rollo.!
.s earlier intimated, upon the decision being appealed, the %ourt
of .ppeals Buena DPE, (asul, and Mabutas,JJ.!, on .ugust &9,
&332, reversed the trial court:s decision and dismissed petitioner:s
complaint for specific performance and damages.
The issues raised b# the parties revolve around the following four
/uestions>
&! ?as there a meeting of the minds between petitioner
Limketkai and respondent BPI as to the sub,ect matter of the
contract and the cause of the obligationF
9! ?ere the bank officials involved in the transaction authori=ed
b# BPI to enter into the /uestioned contractF
$! Is there competent and admissible evidence to support the
alleged meeting of the mindsF
2! ?as the sale of the disputed land to the )BS during the
pendenc# of trial effected in good faithF
There is no dispute in regard to the following> a! that BPI as
trustee of the propert# of Philippine (emnant %o. authori=ed a
licensed broker, Pedro (evilla, to sell the lot for P&,777.77 per
s/uare meter+ b! that Philippine (emnants confirmed the
authorit# to sell of (evilla and the price at which he ma# sell the
lot+ c! that petitioner and (evilla agreed on the former bu#ing the
propert#+ d! that BPI .ssistant ;ice8President (olando ;. .romin
allowed the broker and the bu#er to inspect the propert#+ and e!
that BPI was formall# informed about the broker having procured
a bu#er.
The controvers# revolves around the interpretation or the
significance of the happenings or events at this point.
Petitioner states that the contract to sell and to bu# was perfected
on *ul# &&, &300 when its top officials and broker (evilla finali=ed
the details with BPI ;ice8Presidents Merlin .lbano and (olando ;.
.romin at the BPI offices.
(espondents, however, contend that what transpired on this date
were part of continuing negotiations to bu# the land and not the
perfection of the sale. The arguments of respondents center on
two propositions B &! ;ice8Presidents .romin and .lbano had
no authorit# to bind BPI on this particular transaction and 9! the
subse/uent attempts of petitioner to pa# under terms instead of
full pa#ment in cash constitutes a counter8offer which negates the
e"istence of a perfected contract.
The alleged lack of authorit# of the bank officials acting in behalf
of BPI is not sustained b# the record.
.t the start of the transactions, broker (evilla b# himself alread#
had full authorit# to sell the disputed lot. @"hibit B dated *une 9$,
&300 states, Gthis will serve as #our authorit# to sell on an as is,
where is basis the propert# located at Pasig Blvd., Bagong
Ilog . . . .G ?e agree with (evilla:s testimon# that the authorit#
given to him was to sell and not merel# to look for a buyer, as
contended b# respondents.
(evilla testified that at the time he perfected the agreement to sell
the litigated propert#, he was acting for and in behalf of the BPI as
if he were the Bank itself. This notwithstanding and to firm up the
sale of the land, (evilla saw it fit to bring BPI officials into the
transaction. If BPI could give the authorit# to sell to a licensed
broker, we see no reason to doubt the authorit# to sell of the two
BPI ;ice8Presidents whose precise ,ob in the Bank was to
manage and administer real estate propert#.
(espondent BPI alleges that sales of trust propert# need the
approval of a Trust %ommittee made up of top bank officials. It
appears from the record that this trust committee meets rather
infre/uentl# and it does not have to pass on regular transactions.
(olando .romin was BPI .ssistant ;ice8President and Trust
6fficer. 1e directl# supervised the BPI (eal Propert#
Management -nit. 1e had been in the (eal @state Civision since
&30' and was the head supervising officer of real estate matters.
.romin had been with the BPI Trust Cepartment since &350 and
had been involved in the handling of properties of beneficial
owners since &34' tsn., Cecember $, &337, p. '!.
@"hibit &7 of BPI, the Aebruar# &', &303 letter from Senior ;ice8
President @dmundo Barcelon, while purporting to inform .romin
of his poor performance, is an admission of BPI that .romin was
in charge of Torrens titles, lease contracts, problems of tenants,
insurance policies, installment receivables, management fees,
/uitclaims, and other matters involving real estate transactions.
1is immediate superior, ;ice8President Merlin .lbano had been
with the (eal @state Civision for onl# one week but he was
present and ,oined in the discussions with petitioner.
There is nothing to show that .lfonso Lim and .lbino Limketkai
knew .romin before the incident. (evilla brought the brothers
directl# to .romin upon entering the BPI premises. .romin acted
in a perfectl# natural manner on the transaction before him with
not the slightest indication that he was acting ultra vires. This
shows that BPI held .romin out to the public as the officer
routinel# handling real estate transactions and, as Trust 6fficer,
entering into contracts to sell trust properties.
(espondents state and the record shows that the authorit# to bu#
and sell this particular trust propert# was later withdrawn from
Trust 6fficer .romin and his entire unit. If .romin did not have an#
authorit# to act as alleged, there was no need to withdraw
authorit# which he never possessed.
Petitioner points to Areola vs. Court of Appeals 9$5 S%(. 52$
D&332E! which cited Prudential Bank vs. Court of Appeals 99
S%(. $'7 D&33$E!, which in turn relied upon McIntosh vs. Dakota
Trust Co. '9 )C 4'9, 972 )? 0&0, 27 .L( &79&!, to wit>
.ccordingl# a banking corporation is liable to innocent
third persons where the representation is made in the
course of its business b# an agent acting within the
general scope of his authorit# even though, in the
particular case, the agent is secretl# abusing his
authorit# and attempting to perpetrate a fraud upon his
principal or some other person for his own ultimate
benefit.
at pp. 5'985'$.!
In the present case, the position and title of .romin alone, not to
mention the testimon# and documentar# evidence about his work,
leave no doubt that he had full authorit# to act for BPI in the
/uestioned transaction. There is no allegation of fraud, nor is
there the least indication that .romin was acting for his own
ultimate benefit. BPI later dismissed .romin because it appeared
that a top official of the bank was personall# interested in the sale
of the Pasig propert# and did not like .romin:s testimon#. .romin
was charged with poor performance but his dismissal was onl#
sometime after he testified in court. More than two long #ears
after the disputed transaction, he was still .ssistant ;ice8
President of BPI.
The records show that the letter of instruction dated *une &2,
&300 from the owner of Philippine (emnants %o. regarding the
sale of the firm:s propert# was addressed to .romin. The
P&,777.77 figure on the first page of broker (evilla:s authorit# to
sell was changed to P&,&77.77 b# .romin. The price was later
brought down again to P&,777.77, also b# .romin. The permission
given to petitioner to view the lot was signed b# .romin and
honored b# the BPI guards. The letter dated *ul# 3, &300 from
broker (evilla informing BPI that he had a bu#er was addressed
to .romin. The conference on *ul# &&, &300 when the contract
was perfected was with .romin and ;ice8President .lbano.
.lbano and .romin were the ones who assured petitioner
Limketkai:s officers that term pa#ment was possible. It was
.romin who called up Miguel Bicharra of Philippine (emnants to
state that the BPI re,ected pa#ment on terms and it was to .romin
that Philippine (emnants gave the go signal to proceed with the
cash sale. @ver#thing in the record points to the full authorit# of
.romin to bind the bank, e"cept for the self8serving memoranda
or letters later produced b# BPI that .romin was an inefficient and
undesirable officer and who, in fact, was dismissed after he
testified in this case. But, of course, .romin:s alleged inefficienc#
is not proof that he was not full# clothed with authorit# to bind BPI.
(espondents: second contention is that there was no perfected
contract because petitioner:s re/uest to pa# on terms constituted
a counter8offer and that negotiations were still in progress at that
point.
.sst. ;ice8President .romin was subpoenaed as a hostile witness
for petitioner during trial. .mong his statements is one to the
effect that B
. . . Mr. Lim offered to bu# the propert# at P377.77 per
s/uare meter while Mr. .lbano counter8offered to sell
the propert# at P&,&77.77 per s/uare meter but after
the usual haggling, e finally a!reed to sell the propert#
at the price of P&,777.77 per s/uare meter . . .
tsn, &98$837, p. &4+ @mphasis supplied.!
.sked if there was a meeting of the minds between the bu#er and
the bank in respect to the price of P&,777.77 per s/uare meter,
.romin answered>
Hes, sir, as far as m# evaluation there was a meeting of
the minds as far as the price is concerned, sir.
ibid, p. &4.!
The re/uirements in the pa#ment of the purchase price on terms
instead of cash were suggested b# BPI ;ice8President .lbano.
Since the authorit# given to broker (evilla specified cash
pa#ment, the possibilit# of pa#ing on terms was referred to the
Trust %ommittee but with the mutual agreement that Gif the
proposed pa#ment on terms will not be approved b# our Trust
%ommittee, Limketkai should pa# in cash . . . the amount was no
longer sub,ect to the approval or disapproval of the %ommittee, it
is onl# on the terms.G ibid, p. &3!. This is incontrovertibl#
established in the following testimon# of .romin>
.. .fter #ou were able to agree on the price
of P&,777.77Is/. m., since the letter or
authorit# sa#s the pa#ment must be in cash
basis, what transpired later onF
B. After e have a!reed on the price, the Lim
brothers in/uired on how to go about
submitting the covering proposal if the# will
be allowed to pa# on terms. The# re/uested
us to give them a guide on how to prepare
the corresponding letter of proposal. I recall
that, upon the re/uest of Mr. .lbino
Limketkai, we dictated a guide on how to
word a written firm offer that was to be
submitted b# Mr. Lim to the bank setting out
the terms of pa#ment but ith the mutual
a!reement that if his proposed payment on
terms ill not be approved by our trust
committee" #imketkai should pay the price in
cash.
J .nd did bu#er Limketkai agree to pa# in
cash in case the offer of terms will be cash
disapproved!.
. $es" sir.
J .t the start, did the# show their willingness
to pa# in cashF
. $es" sir.
J Hou said that the agreement on terms was
to be submitted to the trust committee for
approval, are you tellin! the Court that hat
as to be approved by the trust committee
as the provision on the payment on termsF
. $es" sir.
J %o the amount as no lon!er sub&ect to
the approval or disapproval of the committee"
it is only on the termsF
. $es" sir.
tsn, Cec. $, &337, pp. &08&3+ @mphasis supplied.!
The record shows that if pa#ment was in cash, either broker
(evilla or .romin had full authorit#. But because petitioner took
advantage of the suggestion of ;ice8President .lbano, the matter
was sent to higher officials. Immediatel# upon learning that
pa#ment on terms was fro=en andIor denied, Limketkai e"ercised
his right within the period given to him and tendered pa#ment in
full. The BPI re,ected the pa#ment.
In its %omment and Memorandum, respondent )BS cites An! $u
Asuncion vs. Court of Appeals 9$0 S%(. 579 D&332E! to bolster
its case. %ontrar#wise, it would seem that the legal principles
found in said case strengthen and support petitioner:s submission
that the contract was perfected upon the meeting of the minds of
the parties.
The negotiation or preparation stage started with the authorit#
given b# Philippine (emnants to BPI to sell the lot, followed b# a!
the authorit# given b# BPI and confirmed b# Philippine (emnants
to broker (evilla to sell the propert#, b! the offer to sell to
Limketkai, c! the inspection of the propert# and finall# d! the
negotiations with .romin and .lbano at the BPI offices.
The perfection of the contract took place when .romin and
.lbano, acting for BPI, agreed to sell and .lfonso Lim with .lbino
Limketkai, acting for petitioner Limketkai, agreed to bu# the
disputed lot at P&,777.77 per s/uare meter. .side from this there
was the earlier agreement between petitioner and the authori=ed
broker. There was a concurrence of offer and acceptance, on the
ob,ect, and on the cause thereof.
The phases that a contract goes through ma# be summari=ed as
follows>
a. preparation, conception or generation, which is the
period of negotiation and bargaining, ending at the
moment of agreement of the parties+
b. perfection or birth of the contract, which is the
moment when the parties come to agree on the terms
of the contract+ and
c. consummation or death, which is the fulfillment or
performance of the terms agreed upon in the contract
To#ota Shaw, Inc. vs. %ourt of .ppeals, K.(. )o.
&&55'7, Ma# 9$, &33'!.
But in more graphic prose, we turn to An! $u Asuncion" per
*ustice ;itug>
. . . . contract undergoes various stages that include its
negotiation or preparation, its perfection and, finall#, its
consummation. 'e!otiation covers the period from the
time the prospective contracting parties indicate interest
in the contract to the time the contract is concluded
perfected!. Theperfection of the contract takes place
upon the concurrence of the essential elements thereof.
. contract which is consensual as to perfection is so
established upon a mere meeting of minds, i.e., the
concurrence of offer and acceptance, on the ob,ect and
on the cause thereof. . contract which re/uires, in
addition to the above, the deliver# of the ob,ect of the
agreement, as in a pledge orcommodatum, is
commonl# referred to as a real contract. In
a solemn contract, compliance with certain formalities
prescribed b# law, such as in a donation of real
propert#, is essential in order to make the act valid, the
prescribed form being thereb# an essential element
thereof. The stage of consummation begins when the
parties perform their respective undertakings under the
contract culminating in the e"tinguishment thereof.
-ntil the contract is perfected, it cannot, as an
independent source of obligation, serve as a binding
,uridical relation. In sales, particularl#, to which the topic
for discussion about the case at bench belongs, the
contract is perfected when a person, called the seller,
obligates himself, for a price certain, to deliver and to
transfer ownership of a thing or right to another, called
the bu#er, over which the latter agrees.
9$0 S%(. 579+ 5&& D&332E.!
In (illonco Realty Company vs. Bormaheco 5' S%(. $'9
D&34'E!, bearing factual antecendents similar to this case, the
%ourt, through *ustice ./uino later to be %hief *ustice!, /uoting
authorities, upheld the perfection of the contract of sale thusl#>
The contract of sale is perfected at the moment there is
a meeting of minds upon the thing which is the ob,ect of
the contract and upon the price. Arom that moment, the
parties ma# reciprocall# demand performance, sub,ect
to the provisions of the law governing the form of
contracts. .rt. &24', Ibid.!
""" """ """
%onsent is manifested b# the meeting of the offer and
the acceptance upon the thing and the cause which are
to constitute the contract. The offer must be certain and
the acceptance absolute. . /ualified acceptance
constitutes a counter8offer .rt. &$&3, %ivil %ode!. G.n
acceptance ma# be e"press or implied.G .rt. &$97,
%ivil %ode!.
""" """ """
It is true that an acceptance may contain a re)uest for
certain chan!es in the terms of the offer and yet be a
bindin! acceptance. G%o lon! as it is clear that the
meanin! of the acceptance is positively and
une)uivocally to accept the offer" hether such re)uest
is !ranted or not" a contract is formed.G Stuart vs.
Aranklin Life Ins. %o., &7' Aed. 9nd 35', citing Sec. 43,
?illiston on %ontracts!.
""" """ """
. . . the vendor:s change in a phrase of the offer to
purchase, which change does not essentiall# change
the terms of the offer, does not amount to a re,ection of
the offer and the tender or a counter8offer. Stuart vs.
Aranklin Life Ins. %o., supra.!
at pp. $598$5$+ $5'8$55.!
In the case at bench, the allegation of )BS that there was no
concurrence of the offer and acceptance upon the cause of the
contract is belied b# the testimon# of the ver# BPI official with
whom the contract was perfected. .romin and .lbano concluded
the sale for BPI. The fact that the deed of sale still had to be
signed and notari=ed does not mean that no contract had alread#
been perfected. . sale of land is valid regardless of the form it
ma# have been entered into %laudel vs. %ourt of .ppeals, &33
S%(. &&$, &&3 D&33&E!. The re/uisite form under .rticle &2'0 of
the %ivil %ode is merel# for greater efficac# or convenience and
the failure to compl# therewith does not affect the validit# and
binding effect of the act between the parties (itu!, %ompendium
of %ivil Law and *urisprudence, &33$ (evised @dition, p. ''9!. If
the law re/uires a document or other special form, as in the sale
of real propert#, the contracting parties ma# compel each other to
observe that form, once the contract has been perfected. Their
right ma# be e"ercised simultaneousl# with action upon the
contract .rticle &$'3, Civil Code!.
(egarding the admissibilit# and competence of the evidence
adduced b# petitioner, respondent %ourt of .ppeals ruled that
because the sale involved real propert#, the statute of frauds is
applicable.
In an# event, petitioner cites Abrenica vs. *onda $2 Phil. 4$3
D&3&5E! wherein it was held that contracts infringing the Statute of
Arauds are ratified when the defense fails to ob,ect, or asks
/uestions on cross8e"amination. The succinct words of *ustice
.raullo still ring in ,udicial cadence>
.s no timel# ob,ection or protest was made to the
admission of the testimon# of the plaintiff with respect
to the contract+ and as the motion to strike out said
evidence came too late+ and, furthermore, as the
defendants themselves, b# the cross8/uestions put b#
their counsel to the witnesses in respect to said
contract, tacitl# waived their right to have it stricken out,
that evidence, therefore, cannot be considered either
inadmissible or illegal, and court, far from having erred
in taking it into consideration and basing his ,udgment
thereon, notwithstanding the fact that it was ordered to
be stricken out during the trial, merel# corrected the
error he committed in ordering it to be so stricken out
and complied with the rules of procedure hereinbefore
cited.
at p. 420.!
In the instant case, counsel for respondents cross8e"amined
petitioner:s witnesses at length on the contract itself, the purchase
price, the tender of cash pa#ment, the authorit# of .romin and
(evilla, and other details of the litigated contract. -nder
the Abrenica rule reiterated in a number of cases, among them
Talosig vs. ;da. de )ieba 2$ S%(. 249 D&349E!, even assuming
that parol evidence was initiall# inadmissible, the same became
competent and admissible because of the cross8e"amination,
which elicited evidence proving the evidence of a perfected
contract. The cross8e"amination on the contract is deemed a
waiver of the defense of the Statute of Arauds (itu!,
%ompendium of %ivil Law and *urisprudence, &33$ (evised
@dition, supra, p. '5$!.
The reason for the rule is that as pointed out in Abrenica Gif the
answers of those witnesses were stricken out, the cross+
e,amination could have no ob&ect hatsoever" and if the
)uestions ere put to the itnesses and ansered by them" they
could only be taken into account by connectin! them ith the
ansers !iven by those itnesses on direct e,aminationG pp.
4248420!.
Moreover, under .rticle &27$ of the %ivil %ode, an e"ception to
the unenforceabilit# of contracts pursuant to the Statute of Arauds
is the e"istence of a written note or memorandum evidencing the
contract. The memorandum ma# be found in several writings, not
necessaril# in one document. The memorandum or memoranda
isIare written evidence that such a contract was entered into.
?e cite the findings of the trial court on this matter>
In accordance with the provisions of .rt. &27$ of the
%ivil %ode, the e"istence of a written contract of the
sale is not necessar# so long as the agreement to sell
real propert# is evidenced b# a written note or
memorandum, embod#ing the essentials of the contract
and signed b# the part# charged or his agent. Thus, it
has been held>
The Statute of Arauds, embodied in .rticle
&27$ of the %ivil %ode of the
Philippines,does not re)uire that the contract
itself be ritten. The plain test of Article -./0"
Para!raph 123 is clear that a ritten note or
memorandum" embodyin! the essentials of
the contract and si!ned by the party char!ed"
or his a!ent suffices to make the verbal
a!reement enforceable" takin! it out of the
operation of the statute. @mphasis supplied!
""" """ """
In the case at bar, the complaint in its
paragraph $ pleads that the deal had been
closed b# letter and telegram (ecord on
.ppeal, p. 9!, and the letter referred to was
evidentl# the one cop# of which was
appended as @"hibit . to plaintiffs opposition
to the motion to dismiss. The letter,
transcribed above in part, together with the
one marked as .ppendi" B, constitute an
ade/uate memorandum of the transaction.
The# are signed b# the defendant8appellant+
refer to the propert# sold as a Lot in Puerto
Princesa, Palawan, covered b# T.%.T. )o. 59,
give its area as &,09' s/uare meters and the
purchase price of four P2.77! pesos per
s/uare meter pa#able in cash. ?e have in
them, therefore, all the essential terms of the
contract and the# satisf# the re/uirements of
the Statute of Arauds.
Aootnote 95, Paredes vs. @spino, 99 S%(. &777
D&350E!.
?hile there is no written contract of sale of the Pasig
propert# e"ecuted b# BPI in favor of plaintiff, there are
abundant notes and memoranda e"tant in the records
of this case evidencing the elements of a perfected
contract. There is @"hibit P, the letter of Lenneth
(ichard .wad addressed to (oland .romin, authori=ing
the sale of the sub,ect propert# at the price of
P&,777.77 per s/uare meter giving 9< commission to
the broker and instructing that the sale be on cash
basis. %oncomitantl#, on the basis of the instruction of
Mr. .wad, @"h. P!, an authorit# to sell, @"h. B! was
issued b# BPI to Pedro (evilla, *r., representing
.ssetrade %o., authori=ing the latter to sell the propert#
at the initial /uoted price of P&,777.77 per s/uare meter
which was altered on an unaccepted offer b#
Technoland. .fter the letter authorit# was issued to Mr.
(evilla, a letter authorit# was signed b# Mr. .romin
allowing the bu#er to enter the premises of the propert#
to inspect the same @"h. %!. 6n *ul# 3, &300, Pedro
(evilla, *r., acting as agent of BPI, wrote a letter to BPI
informing it that he had procured a bu#er in the name of
Limketkai Sons Milling, Inc. with offices at Limketkai
Bldg., Kreenhills, San *uan, Metro Manila, represented
b# its @"ec. ;ice8President, .lfonso Lim @"h. C!. 6n
*ul# &&, &300, the plaintiff, through .lfonso Lim, wrote a
letter to the bank, through Merlin .lbano, confirming
their transaction regarding the purchase of the sub,ect
propert# @"h. @!. 6n *ul# &0, &300, the plaintiff
tendered upon the officials of the bank a check for
P$$,7'5,777.77 covered b# %heck )o. %.'&700$,
dated *ul# &0, &300. 6n *ul# &, &300, .lfonso Mamora
instructed Mr. .romin in a letter to resubmit new offers
onl# if there is no transaction closed with .ssetrade %o.
@"h. S!. %ombining all these notes and memoranda,
the %ourt is convinced of the e"istence of perfected
contract of sale. .ptl#, the Supreme %ourt, citing
.merican cases with approval, held>
)o particular form of language or instrument
is necessar# to constitute a memorandum or
note in writing under the statute of frauds+
an# document or writing, formal or informal,
written either for the purpose of furnishing
evidence of the contract or for another
purpose, which satisfies all the re/uirements
of the statute as to contents and signature, as
discussed respectivel# infra secs. &408977,
and infra secs. 97&897', is a sufficient
memorandum or note. . memorandum ma#
be written as well with lead pencil as with pen
and ink. It ma# also be filled in on a printed
form. $4 %.*.S., 5'$85'2!.
The note or memorandum re/uired b# the
statute of frauds need not be contained in a
single document, nor, when contained in two
or more papers, need each paper be
sufficient as to contents and signature to
satisf# the statute. Two or more writings
properl# connected ma# be considered
together, matters missing or uncertain in one
ma# be supplied or rendered certain b#
another, and their sufficienc# will depend on
whether, taken together, the# meet the
re/uirements of the statute as to contents
and the re/uirements of the statutes as to
signature, as considered
respectivel# infra secs. &438977 and secs.
97&89&'.
pp. 257825$, 6riginal (T% (ecord!.
The credibilit# of witnesses is also decisive in this case. The trial
court directl# observed the demeanor and manner of testif#ing of
the witnesses while the %ourt of .ppeals relied merel# on the
transcript of stenographic notes.
In this regard, the court of origin had this to sa#>
.part from weighing the merits of the evidence of the
parties, the %ourt had occasion to observe the
demeanor of the witnesses the# presented. This is one
important factor that inclined the %ourt to believe in the
version given b# the plaintiff because its witnesses,
including hostile witness (oland ;. .romin, an assistant
vice8president of the bank, were straightforward, candid
and unhesitating in giving their respective testimonies.
-pon the other hand, the witnesses of BPI were
evasive, less than candid and hesitant in giving their
answers to cross e"amination /uestions. Moreover, the
witnesses for BPI and )BS contradicted each other.
Aernando Sison III insisted that the authorit# to sell
issued to Mr. (evilla was merel# an evidence b# which
a broker ma# convince a prospective bu#er that he had
authorit# to offer the propert# mentioned therein for sale
and did not bind the bank. 6n the contrar#, .lfonso
Mamora, a Senior ;ice8President of the bank, admitted
that the authorit# to sell issued to Mr. Pedro (evilla, *r.
was valid, effective and binding upon the bank being
signed b# two class G.G signatories and that the bank
cannot back out from its commitment in the authorit# to
sell to Mr. (evilla.
?hile .lfredo (amos of )BS insisted that he did not
know personall# and was not ac/uainted with @dmundo
Barcelon, the latter categoricall# admitted that .lfredo
(amos was his friend and that the# have even
discussed in one of the luncheon meetings the matter
of the sale of the Pasig propert# to )BS. Keorge
Aeliciano emphaticall# said that he was not a consultant
of Mr. (amos nor was he connected with him in an#
manner, but his calling card states that he was a
consultant to the chairman of the Pacific (im @"port
and 1oldings %orp. whose chairman is .lfredo (amos.
This deliberate act of Mr. Aeliciano of concealing his
being a consultant to Mr. .lfredo (amos evidentl# was
done b# him to avoid possible implication that he
committed some underhanded maneuvers in
manipulating to have the sub,ect propert# sold to )BS,
instead of being sold to the plaintiff.
pp. 2'282'', 6riginal (T% (ecord.!
6n the matter of credibilit# of witnesses where the findings or
conclusions of the %ourt of .ppeals and the trial court are
contrar# to each other, the pronouncement of the %ourt
in %errano vs. Court of Appeals &35 S%(. &74 D&33&E! bears
stressing>
It is a settled principle of civil procedure that the
conclusions of the trial court regarding the credibilit# of
witnesses are entitled to great respect from the
appellate courts because the trial court had an
opportunit# to observe the demeanor of witnesses while
giving testimon# which ma# indicate their candor or lack
thereof. ?hile the Supreme %ourt ordinaril# does not
rule on the issue of credibilit# of witnesses, that being a
/uestion of fact not properl# raised in a petition under
(ule 2', the %ourt has undertaken to do so in
e"ceptional situations where, for instance, as here, the
trial court and the %ourt of .ppeals arrived at divergent
conclusions on /uestions of fact and the credibilit# of
witnesses.
at p. &&7.!
6n the fourth /uestion of whether or not )BS is an innocent
purchaser for value, the record shows that it is not. It acted in bad
faith.
(espondent )BS ignored the notice of lis pendens annotated on
the title when it bought the lot. It was the willingness and design of
)BS to bu# propert# alread# sold to another part# which led BPI
to dishonor the contract with Limketkai.
Petitioner cites several badges of fraud indicating that BPI and
)BS conspired to prevent petitioner from pa#ing the agreed price
and getting possession of the propert#>
&. The sale was supposed to be done through an authori=ed
broker, but top officials of BPI personall# and directl# took over
this particular sale when a close friend became interested.
9. BPI Senior ;ice President @dmundo Barcelon admitted that
)BS:s President, .lfredo (amos, was his friend+ that the# had
lunch meetings before this incident and discussed )BS:s
purchase of the lot. Barcelon:s father was a business associate of
(amos.
$. Keorge Aeliciano, in behalf of )BS, offered P' million and later
P4 million if petitioner would drop the case and give up the lot.
Aeliciano went to petitioner:s office and haggled with .lfonso Lim
but failed to convince him inspite of various and increasing offers.
2. In a place where big and permanent buildings abound, )BS
had constructed onl# a warehouse marked b# eas# portabilit#.
The warehouse is bolted to its foundations and can easil# be
dismantled.
It is the ver# nature of the deed of absolute sale between BPI and
)BS which, however, clearl# negates an# allegation of good faith
on the part of the bu#er. Instead of the vendee insisting that the
vendor guarantee its title to the land and recogni=e the right of the
vendee to proceed against the vendor if the title to the land turns
out to be defective as when the land belongs to another person,
the reverse is found in the deed of sale between BPI and )BS.
.n# losses which )BS ma# incur in the event the title turns out to
be vested in another person are to be borne b# )BS alone. BPI is
e"pressl# freed under the contract from an# recourse of )BS
against it should BPI:s title be found defective.
)BS, in its repl# memorandum, does not refute or e"plain the
above circumstance s/uarel#. It simpl# cites the badges of fraud
mentioned in 4ria vs. McMickin! 9& Phil. 92$ D&3&9E! and argues
that the enumeration there is e"clusive. The decision in said case
plainl# states Gthe following are some of the circumstances
attending sales which have been denominated b# courts as!
badges of fraud.G There are innumerable situations where fraud is
manifested. 6ne enumeration in a &3&9 decision cannot possibl#
cover all indications of fraud from that time up to the present and
into the future.
The %ourt of .ppeals did not discuss the issue of damages.
Petitioner cites the fee for filing the amended complaint to implead
)BS, sheriffs fees, registration fees, plane fare and hotel
e"penses of %ebu8based counsel. Petitioner also claimed, and
the trial court awarded, damages for the profits and opportunit#
losses caused to petitioner:s business in the amount of
P&7,777,777.77.
?e rule that the profits and the use of the land which were denied
to petitioner because of the non8compliance or interference with a
solemn obligation b# respondents is somehow made up b# the
appreciation in land values in the meantime.
Prescinding from the above, we rule that there was a perfected
contract between BPI and petitioner Limketkai+ that the BPI
officials who transacted with petitioner had full authorit# to bind
the bank+ that the evidence supporting the sale is competent and
admissible+ and that the sale of the lot to )BS during the trial of
the case was characteri=ed b# bad faith.
?1@(@A6(@, the /uestioned ,udgment of the %ourt of .ppeals
is hereb# (@;@(S@C and S@T .SIC@. The *une &7, &33&
,udgment of Branch &'& of the (egional Trial %ourt of The
)ational %apital *udicial (egion stationed in Pasig, Metro Manila
is (@I)ST.T@C e"cept for the award of Ten Million Pesos
P&7,777,777.77! damages which is hereb# C@L@T@C.
S6 6(C@(@C.
G.R. No. 109125 D!"#$ 2, 199%
ANG &U ASUNCION, ARTHUR GO AND KEH
TIONG, petitioners,
vs.
THE HON. COURT OF APPEALS and BUEN REALT&
DE'ELOPMENT CORPORATION, respondents.
Antonio M5 Albano for petitioners5
6mali" %oriano 7 Associates for private respondent5

'ITUG, J.:
.ssailed, in this petition for review, is the decision of the %ourt of
.ppeals, dated 72 Cecember &33&, in %.8K.(. SP )o. 95$2'
setting aside and declaring without force and effect the orders of
e"ecution of the trial court, dated $7 .ugust &33& and 94
September &33&, in %ivil %ase )o. 0482&7'0.
The antecedents are recited in good detail b# the appellate court
thusl#>
6n *ul# 93, &304 a Second .mended %omplaint for
Specific Performance was filed b# .ng Hu .suncion and
Leh Tiong, et al., against Bobb# %u -n,ieng, (ose %u
-n,ieng and *ose Tan before the (egional Trial %ourt,
Branch $&, Manila in %ivil %ase )o. 0482&7'0, alleging,
among others, that plaintiffs are tenants or lessees of
residential and commercial spaces owned b#
defendants described as )os. 5$785$0 6ngpin Street,
Binondo, Manila+ that the# have occupied said spaces
since &3$' and have been religiousl# pa#ing the rental
and compl#ing with all the conditions of the lease
contract+ that on several occasions before 6ctober 3,
&305, defendants informed plaintiffs that the# are
offering to sell the premises and are giving them priorit#
to ac/uire the same+ that during the negotiations,
Bobb# %u -n,ieng offered a price of P58million while
plaintiffs made a counter offer of P'8million+ that
plaintiffs thereafter asked the defendants to put their
offer in writing to which re/uest defendants acceded+
that in repl# to defendant:s letter, plaintiffs wrote them
on 6ctober 92, &305 asking that the# specif# the terms
and conditions of the offer to sell+ that when plaintiffs
did not receive an# repl#, the# sent another letter dated
*anuar# 90, &304 with the same re/uest+ that since
defendants failed to specif# the terms and conditions of
the offer to sell and because of information received
that defendants were about to sell the propert#,
plaintiffs were compelled to file the complaint to compel
defendants to sell the propert# to them.
Cefendants filed their answer den#ing the material
allegations of the complaint and interposing a special
defense of lack of cause of action.
.fter the issues were ,oined, defendants filed a motion
for summar# ,udgment which was granted b# the lower
court. The trial court found that defendants: offer to sell
was never accepted b# the plaintiffs for the reason that
the parties did not agree upon the terms and conditions
of the proposed sale, hence, there was no contract of
sale at all. )onetheless, the lower court ruled that
should the defendants subse/uentl# offer their propert#
for sale at a price of P&&8million or below, plaintiffs will
have the right of first refusal. Thus the dispositive
portion of the decision states>
?1@(@A6(@, ,udgment is hereb# rendered
in favor of the defendants and against the
plaintiffs summaril# dismissing the complaint
sub,ect to the aforementioned condition that if
the defendants subse/uentl# decide to offer
their propert# for sale for a purchase price of
@leven Million Pesos or lower, then the
plaintiffs has the option to purchase the
propert# or of first refusal, otherwise,
defendants need not offer the propert# to the
plaintiffs if the purchase price is higher than
@leven Million Pesos.
S6 6(C@(@C.
.ggrieved b# the decision, plaintiffs appealed to this
%ourt in
%.8K.(. %; )o. 9&&9$. In a decision promulgated on
September 9&, &337 penned b# *ustice Segundino K.
%hua and concurred in b# *ustices ;icente ;. Mendo=a
and Aernando .. Santiago!, this %ourt affirmed with
modification the lower court:s ,udgment, holding>
In resume, there was no meeting of the
minds between the parties concerning the
sale of the propert#. .bsent such
re/uirement, the claim for specific
performance will not lie. .ppellants: demand
for actual, moral and e"emplar# damages will
likewise fail as there e"ists no ,ustifiable
ground for its award. Summar# ,udgment for
defendants was properl# granted. %ourts ma#
render summar# ,udgment when there is no
genuine issue as to an# material fact and the
moving part# is entitled to a ,udgment as a
matter of law Karcia vs. %ourt of .ppeals,
&45 S%(. 0&'!. .ll re/uisites obtaining, the
decision of the court a )uo is legall#
,ustifiable.
?1@(@A6(@, finding the appeal
unmeritorious, the ,udgment appealed from is
hereb# .AAI(M@C, but sub,ect to the
following modification> The court a )uo in the
aforestated decision gave the plaintiffs8
appellants the right of first refusal onl# if the
propert# is sold for a purchase price of
@leven Million pesos or lower+ however,
considering the mercurial and uncertain
forces in our market econom# toda#. ?e find
no reason not to grant the same right of first
refusal to herein appellants in the event that
the sub,ect propert# is sold for a price in
e"cess of @leven Million pesos. )o
pronouncement as to costs.
S6 6(C@(@C.
The decision of this %ourt was brought to the Supreme
%ourt b# petition for review on certiorari. The Supreme
%ourt denied the appeal on Ma# 5, &33& Gfor
insufficienc# in form and substancesG .nne" 1,
Petition!.
6n )ovember &', &337, while %.8K.(. %; )o. 9&&9$
was pending consideration b# this %ourt, the %u
-n,ieng spouses e"ecuted a Ceed of Sale .nne" C,
Petition! transferring the propert# in /uestion to herein
petitioner Buen (ealt# and Cevelopment %orporation,
sub,ect to the following terms and conditions>
&. That for and in consideration of the sum of
AIAT@@) MILLI6) P@S6S
P&',777,777.77!, receipt of which in full is
hereb# acknowledged, the ;@)C6(S hereb#
sells, transfers and conve#s for and in favor
of the ;@)C@@, his heirs, e"ecutors,
administrators or assigns, the above8
described propert# with all the improvements
found therein including all the rights and
interest in the said propert# free from all liens
and encumbrances of whatever nature,
e"cept the pending e,ectment proceeding+
9. That the ;@)C@@ shall pa# the
Cocumentar# Stamp Ta", registration fees for
the transfer of title in his favor and other
e"penses incidental to the sale of above8
described propert# including capital gains ta"
and accrued real estate ta"es.
.s a conse/uence of the sale, T%T )o. &7'9'2IT800&
in the name of the %u -n,ieng spouses was cancelled
and, in lieu thereof, T%T )o. &3'0&5 was issued in the
name of petitioner on Cecember $, &337.
6n *ul# &, &33&, petitioner as the new owner of the
sub,ect propert# wrote a letter to the lessees
demanding that the latter vacate the premises.
6n *ul# &5, &33&, the lessees wrote a repl# to petitioner
stating that petitioner brought the propert# sub,ect to
the notice of lis pendens regarding %ivil %ase )o. 048
2&7'0 annotated on T%T )o. &7'9'2IT800& in the
name of the %u -n,iengs.
The lessees filed a Motion for @"ecution dated .ugust
94, &33& of the Cecision in %ivil %ase )o. 0482&7'0 as
modified b# the %ourt of .ppeals in %.8K.(. %; )o.
9&&9$.
6n .ugust $7, &33&, respondent *udge issued an order
.nne" ., Petition! /uoted as follows>
Presented before the %ourt is a Motion for
@"ecution filed b# plaintiff represented b#
.tt#. .ntonio .lbano. Both defendants Bobb#
%u -n,ieng and (ose %u -n,ieng
represented b# .tt#. ;icente Sison and .tt#.
.nacleto Magno respectivel# were dul#
notified in toda#:s consideration of the motion
as evidenced b# the rubber stamp and
signatures upon the cop# of the Motion for
@"ecution.
The gist of the motion is that the Cecision of
the %ourt dated September 9&, &337 as
modified b# the %ourt of .ppeals in its
decision in %. K.(. %;89&&9$, and elevated
to the Supreme %ourt upon the petition for
review and that the same was denied b# the
highest tribunal in its resolution dated Ma# 5,
&33& in K.(. )o.
L834945, had now become final and
e"ecutor#. .s a conse/uence, there was an
@ntr# of *udgment b# the Supreme %ourt as
of *une 5, &33&, stating that the aforesaid
modified decision had alread# become final
and e"ecutor#.
It is the observation of the %ourt that this
propert# in dispute was the sub,ect of
the'otice of #is Pendens and that the
modified decision of this %ourt promulgated
b# the %ourt of .ppeals which had become
final to the effect that should the defendants
decide to offer the propert# for sale for a price
of P&& Million or lower, and considering the
mercurial and uncertain forces in our market
econom# toda#, the same right of first refusal
to herein plaintiffsIappellants in the event that
the sub,ect propert# is sold for a price in
e"cess of @leven Million pesos or more.
?1@(@A6(@, defendants are hereb#
ordered to e"ecute the necessar# Ceed of
Sale of the propert# in litigation in favor of
plaintiffs .ng Hu .suncion, Leh Tiong and
.rthur Ko for the consideration of P&' Million
pesos in recognition of plaintiffs: right of first
refusal and that a new Transfer %ertificate of
Title be issued in favor of the bu#er.
.ll previous transactions involving the same
propert# notwithstanding the issuance of
another title to Buen (ealt# %orporation, is
hereb# set aside as having been e"ecuted in
bad faith.
S6 6(C@(@C.
6n September 99, &33& respondent *udge issued
another order, the dispositive portion of which reads>
?1@(@A6(@, let there be ?rit of @"ecution
issue in the above8entitled case directing the
Ceput# Sheriff (amon @nri/ue= of this %ourt
to implement said ?rit of @"ecution ordering
the defendants among others to compl# with
the aforesaid 6rder of this %ourt within a
period of one &! week from receipt of this
6rder and for defendants to e"ecute the
necessar# Ceed of Sale of the propert# in
litigation in favor of the plaintiffs .ng Hu
.suncion, Leh Tiong and .rthur Ko for the
consideration of P&',777,777.77 and
ordering the (egister of Ceeds of the %it# of
Manila, to cancel and set aside the title
alread# issued in favor of Buen (ealt#
%orporation which was previousl# e"ecuted
between the latter and defendants and to
register the new title in favor of the aforesaid
plaintiffs .ng Hu .suncion, Leh Tiong and
.rthur Ko.
S6 6(C@(@C.
6n the same da#, September 94, &33& the corresponding writ of e"ecution .nne" %,
Petition! was issued.
1
6n 72 Cecember &33&, the appellate court, on appeal to it b#
private respondent, set aside and declared without force and
effect the above /uestioned orders of the court a )uo.
In this petition for review on certiorari, petitioners contend that
Buen (ealt# can be held bound b# the writ of e"ecution b# virtue
of the notice of lis pendens, carried over on T%T )o. &3'0&5
issued in the name of Buen (ealt#, at the time of the latter:s
purchase of the propert# on &' )ovember &33& from the %u
-n,iengs.
?e affirm the decision of the appellate court.
. not too recent development in real estate transactions is the
adoption of such arrangements as the right of first refusal, a
purchase option and a contract to sell. Aor read# reference, we
might point out some fundamental precepts that ma# find some
relevance to this discussion.
.n obligation is a ,uridical necessit# to give, to do or not to do
Art5 --89" Civil Code!. The obligation is constituted upon the
concurrence of the essential elements thereof, vi:> a!
The vinculum &uris or &uridical tie which is the efficient cause
established b# the various sources of obligations law, contracts,
/uasi8contracts, delicts and /uasi8delicts!+ b! the ob&ect which is
the prestation or conduct+ re/uired to be observed to give, to do
or not to do!+ and c! the sub&ect+persons who, viewed from the
demandabilit# of the obligation, are the active obligee! and the
passive obligor! sub,ects.
.mong the sources of an obligation is a contract .rt. &&'4, %ivil
%ode!, which is a meeting of minds between two persons
whereb# one binds himself, with respect to the other, to give
something or to render some service .rt. &$7', %ivil %ode!. .
contract undergoes various stages that include its negotiation or
preparation, its perfection and, finall#, its
consummation. 'e!otiation covers the period from the time the
prospective contracting parties indicate interest in the
contract to the time the contract is concluded perfected!.
The perfection of the contract takes place upon the concurrence
of the essential elements thereof. . contract which
is consensual as to perfection is so established upon a mere
meeting of minds, i.e., the concurrence of offer and acceptance,
on the ob,ect and on the cause thereof. . contract which re/uires,
in addition to the above, the deliver# of the ob,ect of the
agreement, as in a pledge or commodatum, is commonl# referred
to as a real contract. In a solemn contract, compliance with
certain formalities prescribed b# law, such as in a donation of real
propert#, is essential in order to make the act valid, the prescribed
form being thereb# an essential element thereof. The stage
of consummationbegins when the parties perform their respective
undertakings under the contract culminating in the e"tinguishment
thereof.
-ntil the contract is perfected, it cannot, as an independent
source of obligation, serve as a binding ,uridical relation. In sales,
particularl#, to which the topic for discussion about the case at
bench belongs, the contract is perfected when a person, called
the seller, obligates himself, for a price certain, to deliver and to
transfer ownership of a thing or right to another, called the bu#er,
over which the latter agrees. .rticle &2'0 of the %ivil %ode
provides>
.rt. &2'0. B# the contract of sale one of the contracting
parties obligates himself to transfer the ownership of
and to deliver a determinate thing, and the other to pa#
therefor a price certain in mone# or its e/uivalent.
. contract of sale ma# be absolute or conditional.
?hen the sale is not absolute but conditional, such as in a
G%ontract to SellG where invariabl# the ownership of the thing sold
is retained until the fulfillment of a positive suspensive condition
normall#, the full pa#ment of the purchase price!, the breach of
the condition will prevent the obligation to conve# title from
ac/uiring an obligator# force.
2
In Di!nos vs5 Court of Appeals &'0
S%(. $4'!, we have said that, although denominated a GCeed of
%onditional Sale,G a sale is still absolute where the contract is
devoid of an# proviso that title is reserved or the right to
unilaterall# rescind is stipulated, e.g., until or unless the price is
paid. 6wnership will then be transferred to the bu#er upon actual
or constructive deliver# e.g., b# the e"ecution of a public
document! of the propert# sold. ?here the condition is imposed
upon the perfection of the contract itself, the failure of the
condition would prevent such perfection.
(
If the condition is
imposed on the obligation of a part# which is not fulfilled, the other
part# ma# either waive the condition or refuse to proceed with the
sale .rt. &'2', %ivil %ode!.
%
.n unconditional mutual promise to bu# and sell, as long as the
ob,ect is made determinate and the price is fi"ed, can be
obligator# on the parties, and compliance therewith ma#
accordingl# be e"acted.
5
.n accepted unilateral promise which specifies the thin! to be
sold and the price to be paid, hen coupled ith a valuable
consideration distinct and separate from the price, is what ma#
properl# be termed a perfected contract ofoption. This contract is
legall# binding, and in sales, it conforms with the second
paragraph of .rticle &243 of the %ivil %ode, vi=>
.rt. &243. . . .
.n accepted unilateral promise to bu# or to sell a determinate thing for a price certain is
binding upon the promissor if the promise is supported b# a consideration distinct from
the price. &2'&a!
)
6bserve, however, that the option is not the contract of sale
itself.
*
The optionee has the right, but not the obligation, to bu#.
6nce the option is e"ercised timel#, i.e., the offer is accepted
before a breach of the option, a bilateral promise to sell and to
bu# ensues and both parties are then reciprocall# bound to
compl# with their respective undertakings.
+
Let us elucidate a little. . negotiation is formall# initiated b# an
offer. .n imperfect promise 1policitacion3 is merel# an offer. Public
advertisements or solicitations and the like are ordinaril#
construed as mere invitations to make offers or onl# as proposals.
These relations, until a contract is perfected, are not considered
binding commitments. Thus, at an# time prior to the perfection of
the contract, either negotiating part# ma# stop the negotiation.
The offer, at this stage, ma# be withdrawn+ the withdrawal is
effective immediatel# after its manifestation, such as b# its mailing
and not necessaril# when the offeree learns of the withdrawal
Laudico vs. .rias, 2$ Phil. 947!. ?here a period is given to the
offeree within which to accept the offer, the following rules
generall# govern>
&! If the period is not itself founded upon or supported b# a
consideration, the offeror is still free and has the right to withdraw
the offer before its acceptance, or, if an acceptance has been
made, before the offeror:s coming to know of such fact, b#
communicating that withdrawal to the offeree see Art5 -02." Civil
Code; see also Atkins" <roll 7 Co5 vs5 Cua" -/2 Phil5 =.>, holding
that this rule is applicable to a unilateral promise to sell under .rt.
&243, modif#ing the previous decision in %outh ?estern %u!ar
vs5 Atlantic *ulf" =@ Phil5 2.=; see also Art5 -0-=" Civil Code;
Rural Bank of ParaAa)ue" Inc5" vs5 Remolado" -08 %CRA ./=;
%anche: vs5 Ri!os" .8 %CRA 09>!. The right to withdraw,
however, must not be e"ercised whimsicall# or arbitraril#+
otherwise, it could give rise to a damage claim under .rticle &3 of
the %ivil %ode which ordains that Gever# person must, in the
e"ercise of his rights and in the performance of his duties, act with
,ustice, give ever#one his due, and observe honest# and good
faith.G
9! If the period has a separate consideration, a contract of
GoptionG is deemed perfected, and it would be a breach of that
contract to withdraw the offer during the agreed period. The
option, however, is an independent contract b# itself, and it is to
be distinguished from the pro,ected main agreement sub,ect
matter of the option! which is obviousl# #et to be concluded. If, in
fact, the optioner8offeror ithdras the offer before its
acceptancee"ercise of the option! b# the optionee8offeree, the
latter ma# not sue for specific performance on the proposed
contract Gob,ectG of the option! since it has failed to reach its own
stage of perfection. The optioner8offeror, however, renders himself
liable for damages for breach of the option. In these cases, care
should be taken of the real nature of the consideration given, for
if, in fact, it has been intended to be part of the consideration for
the main contract with a right of withdrawal on the part of the
optionee, the main contract could be deemed perfected+ a similar
instance would be an Gearnest mone#G in a contract of sale that
can evidence its perfection Art5 -.>2" Civil Code!.
In the law on sales, the so8called Gright of first refusalG is an
innovative ,uridical relation. )eedless to point out, it cannot be
deemed a perfected contract of sale under .rticle &2'0 of the %ivil
%ode. )either can the right of first refusal, understood in its
normal concept, per se be brought within the purview of an option
under the second paragraph of .rticle &243, afore/uoted, or
possibl# of an offer under .rticle &$&3
9
of the same %ode. .n
option or an offer would re/uire, among other things,
10
a clear
certaint# on both the ob,ect and the cause or consideration of the
envisioned contract. In a right of first refusal, while the ob,ect
might be made determinate, the e"ercise of the right, however,
would be dependent not onl# on the grantor:s eventual intention to
enter into a binding ,uridical relation with another but also on
terms, including the price, that obviousl# are #et to be later firmed
up. Prior thereto, it can at best be so described as merel#
belonging to a class of preparator# ,uridical relations governed not
b# contracts since the essential elements to establish
the vinculum &uris would still be indefinite and inconclusive! but b#,
among other laws of general application, the pertinent scattered
provisions of the %ivil %ode on human conduct.
@ven on the premise that such right of first refusal has been
decreed under a final ,udgment, like here, its breach cannot ,ustif#
correspondingl# an issuance of a writ of e"ecution under a
,udgment that merel# recogni=es its e"istence, nor would it
sanction an action for specific performance without thereb#
negating the indispensable element of consensualit# in the
perfection of contracts.
11
It is not to sa#, however, that the right of
first refusal would be inconse/uential for, such as alread#
intimated above, an un,ustified disregard thereof, given, for
instance, the circumstances e"pressed in .rticle &3
12
of the %ivil
%ode, can warrant a recover# for damages.
The final ,udgment in %ivil %ase )o. 0482&7'0, it must be
stressed, has merel# accorded a Gright of first refusalG in favor of
petitioners. The conse/uence of such a declaration entails no
more than what has heretofore been said. In fine, if, as it is here
so conve#ed to us, petitioners are aggrieved b# the failure of
private respondents to honor the right of first refusal, the remed#
is not a writ of e"ecution on the ,udgment, since there is none to
e"ecute, but an action for damages in a proper forum for the
purpose.
Aurthermore, whether private respondent Buen (ealt#
Cevelopment %orporation, the alleged purchaser of the propert#,
has acted in good faith or bad faith and whether or not it should,
in an# case, be considered bound to respect the registration of
the lis pendens in %ivil %ase )o. 0482&7'0 are matters that must
be independentl# addressed in appropriate proceedings. Buen
(ealt#, not having been impleaded in %ivil %ase )o. 0482&7'0,
cannot be held sub,ect to the writ of e"ecution issued b#
respondent *udge, let alone ousted from the ownership and
possession of the propert#, without first being dul# afforded its da#
in court.
?e are also unable to agree with petitioners that the %ourt of
.ppeals has erred in holding that the writ of e"ecution varies the
terms of the ,udgment in %ivil %ase )o. 0482&7'0, later affirmed
in %.8K.(. %;89&&9$. The %ourt of .ppeals, in this regard, has
observed>
Ainall#, the /uestioned writ of e"ecution is in variance with the decision of the trial court
as modified b# this %ourt. .s alread# stated, there was nothing in said decision
1(
that
decreed the e"ecution of a deed of sale between the %u -n,iengs and respondent
lessees, or the fi"ing of the price of the sale, or the cancellation of title in the name of
petitioner Limpin vs. I.%, &24 S%(. '&5+ Pamantasan ng Lungsod ng Ma#nila vs. I.%,
&2$ S%(. $&&+ Ce Ku=man vs. %., &$4 S%(. 4$7+ Pastor vs. %., &99 S%(. 00'!.
It is likewise /uite obvious to us that the decision in %ivil %ase )o.
0482&7'0 could not have decreed at the time the e"ecution of an#
deed of sale between the %u -n,iengs and petitioners.
?1@(@A6(@, we -P16LC the %ourt of .ppeals in ultimatel#
setting aside the /uestioned 6rders, dated $7 .ugust &33& and
94 September &33&, of the court a )uo. %osts against petitioners.
S6 6(C@(@C.
NICOLAS SANCHE,, plaintiff8appellee,
vs.
SE'ERINA RIGOS, defendant8appellant.
%antia!o B5 Bautista for plaintiff+appellee5
Jesus *5 (illamar for defendant+appellant5

CONCEPCION, C.J.:p
.ppeal from a decision of the %ourt of Airst Instance of )ueva
@ci,a to the %ourt of .ppeals, which certified the case to -s, upon
the ground that it involves a /uestion purel# of law.
The record shows that, on .pril $, &35&, plaintiff )icolas Sanche=
and defendant Severina (igos e"ecuted an instrument entitled
G6ption to Purchase,G whereb# Mrs. (igos Gagreed, promised and
committed ... to sellG to Sanche= the sum of P&,'&7.77, a parcel
of land situated in the barrios of .bar and Sibot, municipalit# of
San *ose, province of )ueva @ci,a, and more particularl#
described in Transfer %ertificate of Title )o. )T8&9'90 of said
province, within two 9! #ears from said date with the
understanding that said option shall be deemed Gterminated and
elapsed,G if GSanche= shall fail to e"ercise his right to bu# the
propert#G within the stipulated period. Inasmuch as several
tenders of pa#ment of the sum of Pl,'&7.77, made b# Sanche=
within said period, were re,ected b# Mrs. (igos, on March &9,
&35$, the former deposited said amount with the %ourt of Airst
Instance of )ueva @ci,a and commenced against the latter the
present action, for specific performance and damages.
.fter the filing of defendant:s answer B admitting some
allegations of the complaint, den#ing other allegations thereof,
and alleging, as special defense, that the contract between the
parties Gis a unilateral promise to sell, and the same being
unsupported b# an# valuable consideration, b# force of the )ew
%ivil %ode, is null and voidG B on Aebruar# &&, &352, both parties,
assisted b# their respective counsel, ,ointl# moved for a ,udgment
on the pleadings. .ccordingl#, on Aebruar# 90, &352, the lower
court rendered ,udgment for Sanche=, ordering Mrs. (igos to
accept the sum ,udiciall# consigned b# him and to e"ecute, in his
favor, the re/uisite deed of conve#ance. Mrs. (igos was, likewise,
sentenced to pa# P977.77, as attorne#:s fees, and other costs.
1ence, this appeal b# Mrs. (igos.
This case admittedl# hinges on the proper application of .rticle
&243 of our %ivil %ode, which provides>
.(T. &243. . promise to bu# and sell a determinate
thing for a price certain is reciprocall# demandable.
.n accepted unilateral promise to bu# or to sell a
determinate thing for a price certain is binding upon the
promissor if the promise is supported b# a
consideration distinct from the price.
In his complaint, plaintiff alleges that, b# virtue of the option under
consideration, Gdefendant agreed and committed to sellG and Gthe
plaintiff agreed and committed to bu#G the land described in the
option, cop# of which was anne"ed to said pleading as .nne" .
thereof and is /uoted on the margin.
1
1ence, plaintiff maintains
that the promise contained in the contract is Greciprocall#
demandable,G pursuant to the first paragraph of said .rticle &243.
.lthough defendant had reall# Gagreed, promised and committedG
herself to sell the land to the plaintiff, it is not true that the latter
had, in turn, Gagreed and committed himself G to bu# said propert#.
Said .nne" . does not bear out plaintiff:s allegation to this effect.
?hat is more, since .nne" . has been made Gan integral partG of
his complaint, the provisions of said instrument form part Gand
parcelG
2
of said pleading.
The option did not impose upon plaintiff the obli!ation to
purchase defendant:s propert#. .nne" . is not a Gcontract to bu#
and sell.G It merel# granted plaintiff an GoptionG to bu#. .nd both
parties so understood it, as indicated b# the caption, G6ption to
Purchase,G given b# them to said instrument. -nder the
provisions thereof, the defendant Gagreed, promised and
committedG herself to sell the land therein described to the plaintiff
for P&,'&7.77, but there is nothing in the contract to indicate that
her aforementioned agreement, promise and undertaking is
supported b# a consideration Gdistinct from the priceG stipulated
for the sale of the land.
(el#ing upon .rticle &$'2 of our %ivil %ode, the lower
court presumed the e"istence of said consideration, and this
would seem to be the main factor that influenced its decision in
plaintiff:s favor. It should be noted, however, that>
&! .rticle &$'2 applies to contracts in general, whereas the
second paragraph of .rticle &243 refers to GsalesG in particular,
and, more specificall#, to Gan accepted unilateral promise to bu#
or to sell.G In other words, .rticle &243 is controlling in the case at
bar.
9! In order that said unilateral promise ma# be Gbinding upon the
promisor, .rticle &243 re/uires the concurrence of a condition,
namel#, that the promise be Gsupported b# a consideration distinct
from the price.G .ccordingl#, the promisee can not compel the
promisor to compl# with the promise, unless the former
establishes the e"istence of said distinct consideration. In other
words, the promisee has the burden of provin! such
consideration. Plaintiff herein has not even alle!ed the e"istence
thereof in his complaint.
$! -pon the other hand, defendant e"plicitl# averred in her
answer, and pleaded as a special defense, the absence of said
consideration for her promise to sell and, b# ,oining in the petition
for a ,udgment on the pleadings, plaintiff has impliedl# admitted
the truth of said averment in defendant:s answer. Indeed as earl#
as March &2, &370, it had been held, in Bauermann v5
Casas,
(
that>
6ne who pra#s for ,udgment on the pleadings without
offering proof as to the truth of his own allegations, and
without giving the opposing part# an opportunit# to
introduce evidence, must be understood to admit the
truth of all the material and relevant alle!ations of the
opposin! party" and to rest his motion for &ud!ment on
those alle!ations taken to!ether ith such of his on
as are admitted in the pleadin!s. La Hebana %ompan#
vs. Sevilla, 3 Phil. 9&7!. @mphasis supplied.!
This view was reiterated in Cvan!elista v5 De la
Rosa
%
and MercyDs Incorporated v5 Eerminia (erde.
5
S/uarel# in point is %outhestern %u!ar 7 Molasses Co5 v5
Atlantic *ulf 7 Pacific Co5,
)
from which ?e /uote>
The main contention of appellant is that the option
granted to appellee to sell to it barge )o. &7 for the sum
of P$7,777 under the terms stated above has no legal
effect because it is not supported b# an# consideration
and in support thereof it invokes article &243 of the new
%ivil %ode. The article provides>
G.(T. &243. . promise to bu# and sell a
determinate thing for a price certain is
reciprocall# demandable.
.n accepted unilateral promise to bu# or sell
a determinate thing for a price certain is
binding upon the promisor if the promise is
supported b# a consideration distinct from the
price.G
6n the other hand, .ppellee contends that, even
granting that the Goffer of optionG is not supported b#
an# consideration, that option became binding on
appellant when the appellee gave notice to it of its
acceptance, and that having accepted it within the
period of option, the offer can no longer be withdrawn
and in an# event such withdrawal is ineffective. In
support this contention, appellee invokes article &$92 of
the %ivil %ode which provides>
G.(T. &$92. ?hen the offerer has allowed the
offeree a certain period to accept, the offer
ma# be withdrawn an# time before
acceptance b# communicating such
withdrawal, e"cept when the option is
founded upon consideration as something
paid or promised.G
There is no /uestion that under article &243 of the new
%ivil %ode Gan option to sell,G or Ga promise to bu# or to
sell,G as used in said article, to be valid must be
Gsupported b# a consideration distinct from the price.G
This is clearl# inferred from the conte"t of said article
that a unilateral promise to bu# or to sell, even if
accepted, is onl# binding if supported b# consideration.
In other words, Gan accepted unilateral promise can
onl# have a binding effect if supported b# a
consideration which means that the option can still be
withdrawn, even if accepted, if the same is not
supported b# an# consideration. It is not disputed that
the option is without consideration. It can therefore be
ithdran notithstandin! the acceptance of it by
appellee.
It is true that under article &$92 of the new %ivil %ode,
the general rule regarding offer and acceptance is that,
when the offerer gives to the offeree a certain period to
accept, Gthe offer ma# be withdrawn at an# time before
acceptanceG e"cept when the option is founded upon
consideration, but this general rule must be interpreted
as modified b# the provision of article &243 above
referred to, which applies to Ga promise to bu# and
sellG specifically. .s alread# stated, this rule re/uires
that a promise to sell to be valid must be supported b#
a consideration distinct from the price.
?e are not oblivious of the e"istence of .merican
authorities which hold that an offer, once accepted,
cannot be withdrawn, regardless of whether it is
supported or not b# a consideration &9 .m. *ur. '90!.
These authorities, we note, uphold the !eneral
rule applicable to offer and acceptance as contained in
our new %ivil %ode. But we are prevented from appl#ing
them in view of the specific provision embodied in
article &243. ?hile under the Goffer of optionG in
/uestion appellant has assumed a clear obligation to
sell its barge to appellee and the option has been
e"ercised in accordance with its terms, and there
appears to be no valid or ,ustifiable reason for appellant
to withdraw its offer, this Court cannot adopt a different
attitude because the la on the matter is clear5 4ur
imperative duty is to apply it unless modified by
Con!ress.
1owever, this %ourt itself, in the case of Atkins" <roll and Co5" Inc5
v5 Cua Eian Tek,
+
decided later that%outhestern %u!ar 7
Molasses Co5 v5 Atlantic *ulf 7 Pacific Co5,
9
saw no distinction
between .rticles &$92 and &243 of the %ivil %ode and applied the
former where a unilateral promise to sell similar to the one sued
upon here was involved, treating such promise as an option
which, although not binding as a contract in itself for lack of a
separate consideration, nevertheless generated a bilateral
contract of purchase and sale upon acceptance. Speaking
through .ssociate *ustice, later %hief *ustice, %esar Beng=on,
this %ourt said>
Aurthermore, an option is unilateral> a promise to sell at
the price fi"ed whenever the offeree should decide to
e"ercise his option within the specified time. .fter
accepting the promise and before he e,ercises his
option, the holder of the option is not bound to bu#. 1e
is free either to bu# or not to bu# later. In this case,
however, upon accepting herein petitioner:s offer a
bilateral promise to sell and to bu# ensued, and the
respondent ipso facto assumed the obligation of a
purchaser. 1e did not ,ust get the right subse/uentl# to
bu# or not to bu#. It was not a mere option then+ it was
a bilateral contract of sale.
Lastl#, even supposing that @"h. . granted an option
which is not binding for lack of consideration, the
authorities hold that>
GIf the option is given without a consideration,
it is a mere offer of a contract of sale, which
is not binding until accepted. If, however,
acceptance is made before a withdrawal, it
constitutes a binding contract of sale, even
though the option was not supported b# a
sufficient consideration. ... . 44 %orpus *uris
Secundum, p. 5'9. See also 94 (uling %ase
Law $$3 and cases cited.!
GIt can be taken for granted, as contended b#
the defendant, that the option contract was
not valid for lack of consideration. But it was,
at least, an offer to sell, which was accepted
b# letter, and of the acceptance the offerer
had knowledge before said offer was
withdrawn. The concurrence of both acts B
the offer and the acceptance B could at all
events have generated a contract, if none
there was before arts. &9'2 and &959 of the
%ivil %ode!.G Ma#co vs. Serra, 22 Phil. $$&.!
In other words, since there ma# be no valid contract without a
cause or consideration, the promisor is not bound b# his promise
and ma#, accordingl#, withdraw it. Pending notice of its
withdrawal, his accepted promise partakes, however, of the
nature of an offer to sell which, if accepted, results in a perfected
contract of sale.
This view has the advantage of avoiding a conflict between
.rticles &$92 B on the general principles on contracts B and
&243 B on sales B of the %ivil %ode, in line with the cardinal rule
of statutor# construction that, in construing different provisions of
one and the same law or code, such interpretation should be
favored as will reconcile or harmoni=e said provisions and avoid a
conflict between the same. Indeed, the presumption is that, in the
process of drafting the %ode, its author has maintained a
consistent philosoph# or position. Moreover, the decision
in %outhestern %u!ar 7 Molasses Co5 v5 Atlantic *ulf 7 Pacific
Co5,
10
holding that .rt. &$92 is modifiedb# .rt. &243 of the %ivil
%ode, in effect, considers the latter as an e,ception to the former,
and e"ceptions are not favored, unless the intention to the
contrar# is clear, and it is not so, insofar as said two 9! articles
are concerned. ?hat is more, the reference, in both the second
paragraph of .rt. &243 and .rt. &$92, to an option or promise
supported b# or founded upon a consideration, strongl# suggests
that the two 9! provisions intended to enforce or implement the
same principle.
-pon mature deliberation, the %ourt is of the considered opinion
that it should, as it hereb# reiterates the doctrine laid down in
the Atkins" <roll 7 Co5 case, and that, insofar as inconsistent
therewith, the view adhered to in the%outhestern %u!ar 7
Molasses Co5 case should be deemed abandoned or modified.
?1@(@A6(@, the decision appealed from is hereb# affirmed,
with costs against defendant8appellant Severina (igos. It is so
ordered.
G.R. No. 9*%%2 -.n (0, 199%
PILAR T. OCAMPO, petitioner,
vs.
COURT OF APPEALS and MAGDALENA S.
'ILLARU,, respondents.
Csteban C5 Manuel for petitioner5
'ery D5 Duremdes for private respondent5

BELLOSILLO, J.:
Two 9! documents, an G.greement to Sell (eal Propert#G and a
G%ontract to Sell,G covering the same parcel of land were
e"ecuted b# a seller in favor of two 9! different bu#ers. Both
bu#ers now assert against each other a better title to the propert#.
In dispute is an &0,9578s/uare meter lot in the Poblacion of
Tigbauan, Iloilo, described in Plan Psu899$535, L.(.%. %ase )o.
)854', L.(.%. (ecord )o. )8$0025, and registered under 6riginal
%ertificate of Title )o. 78442$ in the name of seller Severino
Tolosa. 6n 97 .ugust &342, Tolosa mortgaged the land to the
Philippine ;eterans Bank and had the encumbrance annotated on
his certificate of title under @ntr# )o. 9$0$'$.
6n &4 March &34', Tolosa and Pilar T. 6campo, the latter being
then represented b# Teresa T. Borres,
1
entered into a contract
whereb# Tolosa undertook to sell the same parcel of land to
6campo not later than &' Ma# &34' for P99,777.77, P&,777.77 of
which was paid upon e"ecution thereof.
2
6n 9& .pril &34', the parties entered into an G.greement to Sell
(eal Propert#G
(
whereb# Tolosa Gsells, cedes and transfersG the
land to 6campo in consideration of P9',777.77, P&9,'77.77 of
which was paid upon signing of the deed and the balance to be
due within si" 5! months thereafter. Paragraph 2 of the contract
provides that Gimmediatel# upon complete pa#ment of the
purchase price . . . b# the ;@)C@@, the ;@)C6( . . . agrees to
e"ecute and deliver unto the ;@)C@@ whatever pertinent
document or documents necessar# to implement this sale and to
transfer title to the ;@)C@@.G
Before the si"8month period to complete the pa#ment of the
purchase price e"pired, 6campo paid but onl# the total of
P&5,477.77.
%
)evertheless Tolosa accepted her subse/uent late
pa#ments amounting to P$,377.77.
5
Meanwhile, the sub,ect
propert# was involved in a boundar# dispute.
)
6n 5 *une &345, upon learning of the mortgage lien, 6campo
caused her adverse claim to be annotated on TolosaNs certificate
of title as @ntr# )o. 9433$5.
In his letter to 6campo dated &' March &344, Tolosa sought the
cancellation of 6campoNs adverse claim and presented her with
two options, namel#, a refund of pa#ments made, or a share from
the net proceeds if sold to a third part#.
*
6n even date, 6campo
through counsel wrote Tolosa e"pressing her readiness to pa# the
balance of the purchase price, which was P',277.77, should
Tolosa be read# to deliver to her the deed of absolute sale and
the ownerNs duplicate of 6%T )o. 78442$ for purposes of
registration.
+
6n $ *une &344, Tolosa and Magdalena S. ;illaru= e"ecuted a
G%ontract to SellG
9
whereb# Tolosa Gsells, cedes, transfers, and
conve#sG to ;illaru= the same land in consideration of
P32,$77.77. The amount of P&',777.77 was to be paid upon
e"ecution and the balance upon cancellation of all liens and
encumbrances from the certificate of title. The contract stipulated
the immediate conve#ance of the ph#sical possession of the land
to ;illaru=, although no deed of definite sale would be delivered to
her unless the price was full# paid. The contract noted the
supposed ,udicial termination of the boundar# dispute over the
land.
6n &3 *ul# &344, Tolosa wrote 6campo offering to reimburse her
what she paid provided she would sign a document canceling her
adverse claim.
10
Aailing to convince 6campo, Tolosa filed a
petition in the %ourt of Airst Instance of Iloilo to cancel the
adverse claim of 6campo. 6n $7 *ul# &344, *udge (icardo M.
Ilarde denied the petition.
11
6n 2 .ugust &344, another adverse
claim was caused to be annotated b# 6campo on 6%T )o. 78
442$ under @ntr# )o. $799'4.
12
6n 4 6ctober &344, Tolosa filed an action for GBreach of %ontract,
Camages and Juieting of TitleG against Teresa Borres.
1(
Borres
claimed in her answer that she was merel# the agent of 6campo
who was the real part# in interest. Borres however died so that
the trial court, on 9 *ul# &343, ordered her substitution b#
defendant 6campo. Magdalena S. ;illaru=, then claiming to have
alread# bought the land, intervened in the case.
6n 3 6ctober &343, during the pendenc# of %ivil %ase )o. &9&5$,
Tolosa succeeded in securing from another branch of the court
the cancellation of the adverse claims of 6campo without notice
to her.
1%
This paved the wa# for the registration on 9$ )ovember
&343 of the contract of sale of ;illaru= dated 0 .ugust &343 and
the subse/uent issuance of Transfer %ertificate of Title )o. T8
&7779& in her name which canceled the 6riginal %ertificate of
Title )o. 78442$ of Tolosa.
6n &$ 6ctober &30&, 6campo filed a third8part# complaint against
;illaru=.
15
6n 4 *anuar# &300, *udge *ulian H. @reOo of the (egional Trial
%ourt of Iloilo, Branch 94, rendered a decision in %ivil %ase )o.
&9&5$ dismissing the complaint of Tolosa as well as the complaint
in intervention of ;illaru= B
&. Ceclaring the contract to sell e"ecuted between
plaintiff Severino Tolosa and third8part# defendant
Magdalena ;illaru= as null and void as well as the
Transfer of %ertificate of Title issued in connection
therewith, if an#+
9. 6rdering plaintiff Tolosa to e"ecute the
corresponding deed of sale in favor of third8part#
plaintiff Pilar T. 6campo over the lot in litigation upon
the latterNs pa#ment of the balance of P2,277.77+
$. 6rdering plaintiff Tolosa to vacate and deliver
possession of the lot in /uestion to Pilar T. 6campo+
2. 6rdering plaintiff to pa# Pilar T. 6campo P&7,777.77
as attorne#Ns fees, P$7,777.77 as moral damages,
P9,777.77 as litigation e"penses, and costs.
1er motion for reconsideration having been denied on 95 March
&300, ;illaru= appealed to the %ourt of .ppeals. 6n && 6ctober
&337, the &5th Civision of the %ourt of .ppeals,
1)
in %.8K.(. )o.
&0290, reversed and set aside the trial courtNs decision B
&. Ceclaring Magdalena S. ;illaru= the absolute owner
of the parcel of land covered b# T%T )o. T8&7779& of
the (egister of Ceeds of Iloilo+
9. 6rdering the (egister of Ceeds of Iloilo to annotate
at the back of T%T )o. T8&7779& the adverse claims
filed b# Pilar 6campo under @ntr# )o. 9433$5 and
$799'4 found in 6%T )o. 78442$+ and
$. 6rdering the parties to pa# proportionate costs.
The appellate court upheld the sale in favor of ;illaru= on the
theor# that the 9& .pril &34' agreement of Tolosa and 6campo
was merel# a contract to sell. It claimed that in the absence of a
deed of absolute sale in favor of 6campo, in relation to par. 2 of
the contract, Tolosa retained ownership over the land and validl#
conve#ed the same to ;illaru=.
The agreement between Tolosa and 6campo dated 9& .pril &34'
although titled G.greement to Sell (eal Propert#G was a perfected
contract of absolute sale wherein Tolosa forthwith sold, ceded and
transferred the land to 6campo. It provided GDTEhat for and in
consideration of the sum of T?@)TH8AI;@ T16-S.)C P@S6S
P9',777.77!, Philippine %urrenc#, to be paid b# the ;@)C@@
unto the (C'D4R, the latter hereb# %C##%" CCDC% and
TRA'%BCR% in favor of the former B her heirs and assigns, the
above8described parcel of land, free from all liens and
encumbrances.G
In Di!nos v5 CA,
1*
we laid down the criteria that>
. . . a deed of sale is absolute in nature although
denominated as a GCeed of %onditional SaleG where
nowhere in the contract in /uestion is a proviso or
stipulation to the effect that title to the propert# sold is
reserved in the vendor until full pa#ment of the
purchase price, nor is there a stipulation giving the
vendor the right to unilaterall# rescind the contract the
moment the vendee fails to pa# within a fi"ed period
Taguba v. ;da. de Leon, &$9 S%(. 499+ Lu=on
Brokerage %o., Inc. v. Maritime Building %o., Inc., 05
S%(. $7'!.
The conditions mentioned in Cignos, reiterating Taguba and
Lu=on Brokerage %o., Inc., were not found in the sub,ect contract
to indicate that it was indeed a mere contract to sell or a deed of
conditional sale. %ontrar# to the interpretation of the appellate
court, we find nothing significant about par. 2 of the contract which
provides that B
. . . immediatel# upon complete pa#ment of the
purchase price herein b# the ;@)C@@, the ;@)C6(
hereb# agrees to e"ecute and deliver unto the ;@)C@@
whatever pertinent document or documents necessar#
to implement this sale and to transfer title to the
;@)C@@.
Paragraph 2 pertains to the undertaking of the seller to e"ecute
and deliver to the bu#er an# document deemed necessar# b# law
to implement the sale and transfer title since the parties were
unsure of what documents were pertinent. If the intent was for the
seller to retain ownership and possession of the land through non8
deliver# of certain documents unless the price be full# paid, par. 2
alone should be inutile+ it should have been complemented with
a proviso that the sale would not be implemented nor the title
considered transferred unless another document specificall# for
said purpose be first e"ecuted and delivered to the bu#er. In this
regard, no right to retain ownership and possession of the land
pending full pa#ment of the price can be inferred from the fact that
no deliver# was made to 6campo.
1+
The failure of the bu#er to pa# the price in full within a fi"ed period
does not, b# itself, bar the transfer of the ownership or
possession,
19
much less dissolve the contract of sale. ?e held
in De la Cru: v5 #e!aspi>
20
. . . the# err in the assertion that as plaintiff failed to pa# the price after the e"ecution of
the document of sale as agreed previousl#, the contract became null and void for lack of
consideration. It cannot be denied that when the document was signed the cause or
consideration e"isted> P2'7. The document specificall# said so+ and such was
undoubtedl# the agreement. Subse/uent non8pa#ment of the price at the time agreed
upon did not convert the contract into one without cause or consideration> a nudum
pactum Lev# vs. *ohnson, 2 Phil. 5'7+ Puato vs. Mendo=a, 52 Phil. 2'4!. The situation
was rather one in which there is failure to pa# the consideration, with its resultant
conse/uences. In other words, when after the notari=ation of the contract, plaintiff failed
to hand the mone# to defendants, as he previousl# promised, there was default on his
part at most, and defendantsN right was to demand interest B legal interest B for the
dela#, pursuant to article &'7& $! of the %ivil %ode
21
;illaruel vs. Tan Ling, 2$ Phil.
9'&!, or to demand rescission in court. @scueta vs. Pardo, 29 6ff. Ka=. 94'3+ %ortes vs.
BibaOo, 2& Phil. 930.! Such failure, however, did not ipso facto resolve the contract, no
stipulation to that effect having been alleged %f. ?arner Barnes P %o. vs. In=a, 2$ Phil.
'7'!. )either was there an# agreement nor allegation that pa#ment on time was essential
%f. .bella vs. Arancisco, '' Phil. 244+ Berg vs. Magdalena @state, 39 Phil. &&7!.
-nder .rt. &'39 of the %ivil %ode, the failure of 6campo to
complete her pa#ment of the purchase price within the stipulated
period merel# accorded Tolosa the option to rescind the contract
of sale upon ,udicial or notarial demand.
22
1owever, the letter of 9 .ugust &344 claimed to have been sent
b# Tolosa to 6campo rescinding the contract of sale
2(
was
defective because it was not notari=ed
2%
and, more importantl#, it
was not proven to have been received b# 6campo.
25
Likewise, %ivil %ase )o. &9&5$ could not be considered a ,udicial
demand under .rt. &'39 of the %ivil %ode because it did not pra#
for the rescission of the contract. .lthough the complaint sought
the cancellation of 6campoNs adverse claim on TolosaNs 6%T and
for the refund of the pa#ments made, these could not be
e/uivalent to a rescission. In other words, seeking discharge from
contractual obligations and an offer for restitution is not the same
as abrogation of the contract. To rescind is GDtEo declare a contract
void in its inception and to put an end to it as though it never
were.G
2)
It is GDnEot merel# to terminate it and release parties from
further obligations to each other but to abrogate it from the
beginning and restore parties to relative positions which the#
would have occupied had no contract ever been made.G
2*
@ven assuming ar!uendo that %ivil %ase )o. &9&5$ was a valid
,udicial demand, rescission is not granted as a matter of course.
Before %ivil %ase )o. &9&5$ was filed on 4 6ctober &344,
6campo not onl# paid Tolosa a total of P97,577.77 but also
discharged TolosaNs mortgage debt in the amount of P2,2'$.2&.
1ad not Tolosa ordered the Philippine ;eterans Bank to return the
mortgage debt pa#ment b# 6campo,
2+
the purchase price would
have been deemed full# paid.
If onl# to accentuate her intention to make good her contractual
obligations, 6campo offered to pa# the balance of the purchase
price in her letter of &' March &344 or more than four months
before Tolosa allegedl# wrote his letter of rescission on 9 .ugust
&344, and more than si" months before the filing of %ivil %ase )o.
&9&5$ on 4 6ctober &344. This offer to pa# prior to the demand
for rescission is sufficient to defeat TolosaNs prerogative under .rt.
&'39 of the %ivil %ode.
Tolosa, on the other hand, is now precluded from raising the issue
of late pa#ments. 1is un/ualified acceptance of pa#ments after
the si"8month period e"pired constitutes waiver of the period and,
hence, of the ground to rescind under .rt. &'39.
In an# case, however, the breach on the part of 6campo was onl#
slight if not outweighed b# the bad faith of Tolosa in reneging in
his own prestations, hence, ,udicial rescission of the contract
cannot be ,ustified. An!eles v5 Calasan:
29
is apropos F
The right to rescind the contract for non8performance of
one of its stipulations . . . is not absolute. In6niversal
Bood Corp5 v5 Court of Appeals $$ S%(. &! the %ourt
stated> The general rule is that rescission of a contract
will not be permitted for a slight or casual breach, but
onl# for such substantial and fundamental breach as
would defeat the ver# ob,ect of the parties in making the
agreement Song Ao P %o. v. 1awaiian8Philippine %o.,
24 Phil., 09&, 094!. The /uestion of whether a breach of
a contract is substantial depends upon the attendant
circumstances %orpus v. 1on. .likpala, et al., L89$474
P L89$497, *an. &4, &350! . . .
The defendants8appellants state that the plaintiffs8
appellees violated Section two of the contract to sell . . .
because the# failed to pa# the .ugust installment,
despite demand, for more than four 2! months.
The breach of the contract adverted to b# the
defendants8appellants is so slight and casual when we
consider that apart from the initial downpa#ment of
P$39.77 the plaintiffs8appellees had alread# paid the
monthl# installments for a period of almost nine 3!
#ears. In other words, in onl# a short time, the entire
obligation would have been paid. Aurthermore, although
the principal obligation was onl# P$397.77 e"cluding
the 4 percent interest, the plaintiffs8appellees had
alread# paid an aggregate amount of P2,'$$.$0. To
sanction the rescission made b# the defendants8
appellants will work in,ustice to the plaintiffs8appellees
See *.M. Tua=on and %o., Inc. v. *avier, $& S%(.
093!. It would un,ustl# enrich the defendants8appellants.
.rticle &9$2 of the %ivil %ode which provides that GDIEf
the obligation has been substantiall# performed in good
faith, the obligator ma# recover as though there had
been a strict and complete fulfillment, less damages
suffered b# the obligee,G also militates against the
unilateral act of the defendants8appellants in canceling
the contract.
. . . ?e agree with the plaintiffs8appellees that when the
defendants8appellants, instead of availing of their right
to rescind, have accepted and received dela#ed
pa#ments of installments, though the plaintiffs8
appellees have been in arrears be#ond the grace
period mentioned in paragraph 5 of the contract, the
defendants8appellants have waived and are now
estopped from e"ercising their alleged right of
rescission. In Ce *u:man v5 *uieb 20 S%(. 50!, we
held . . . But defendants do not den# that in spite of the
long arrearages, neither the# nor their predecessor . . .
even took steps to cancel the option or to e,ect the
appellees from the home8lot in /uestion. 6n the
contrar#, it is admitted that the dela#ed pa#ments were
received without protest or /ualification. . . . -nder
these circumstances, ?e cannot but agree with the
lower court that at the time appellees e"ercised their
option, appellants had alread# forfeited their right to
invoke the above8/uoted provision regarding the
nullif#ing effect of the non8pa#ment of si"8months
rentals b# appellees b# their having accepted without
/ualification on *ul# 9&, &352 the full pa#ment b#
appellees of all their arrearages.
?hile the contract dated $ *une &344 in favor of ;illaru= is also a
contract of sale, that of 6campo dated 9& .pril &34' should
prevail pursuant to .rt. &'22 of the %ivil code on double
sales.
(0
?hile ;illaru= ma# have registered his contract or came
into possession ahead of 6campo, ;illaru= was never in good
faith.
Since 6campo had her adverse claim annotated on TolosaNs 6%T
on 5 *une &345, ;illaru= could not profess innocence thereof
when she signed her contract on $ *une &344+ in fact, her full
pa#ment of the purchase price was made dependent, among
others, on the cancelation of this claim. Moreover, ;illaru=
admitted having been informed b# Tolosa of the first sale to
6campo while still negotiating to bu# the land.
(1
Lnowledge of the
foregoing should have impelled ;illaru= to investigate the
circumstances of the annotation since this is e/uivalent to
registration of 6campoNs contract of sale as against ;illaru=. In
sum, 6campo having the older title in good faith and considering
that personal knowledge thereof b# ;illaru= constitutes
registration as against the latter, 6campo should be considered
the preferred bu#er.
Incidentall#, the stipulation in the contract of ;illaru= conve#ing
the land in her favor bows to TolosaNs admission at the witness
stand on &' Ma# &307 that he never actuall# delivered the
possession of the propert# to an#one.
(2
Arom the foregoing, although the decision of the trial court
ordering Tolosa to e"ecute another deed of sale in favor of
6campo alread# became final as against him for failing to appeal
therefrom, there is no more need for it. Aor practical purposes, it
is enough that we order ;illaru= to reconve# the propert# to
6campo.
?1@(@A6(@, the decision of the %ourt of .ppeals is
(@;@(S@C and S@T .SIC@ and the decision dated 4 *anuar#
&300 of the (egional Trial %ourt of Iloilo, Branch 94, in %ivil %ase
)o. &9&5$ is (@I)ST.T@C, with the modification that respondent
Magdalena S. ;illaru= is directed to reconve# the sub,ect land
now covered b# T%T )o. T8&7779& in her name to petitioner Pilar
T. 6campo, without pre,udice to Severino Tolosa collecting from
petitioner Pilar T. 6campo the balance of the purchase price of
P2,277.77 which nevertheless ma# be deducted from the
monetar# awards made b# the trial court in favor of petitioner
6campo.
S6 6(C@(@C.
SPOUSES ADIEL DE LA CENA G.R. No. 160805
and CARIDAD AREVALO DE
LA CENA,
Petitioners,



- versus -




Present:

QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES,
INGA, an!
"ELASCO, #R$, JJ$

SPOUSES JOSE BRIONES and
HERMINIA LLEDO BRIONES,
Respon!ents$
Pro%u&'ate!:

Nove%(er )*, )++,
x x
DECISION
!UISUMBING, J.:
-or revie. on /ertiorari are the 0e/ision
"1#
!ate! Nove%(er )1, )++) o2 the
Court o2 Appea&s in CA-G$R$ C" No$ *3331, an! its Reso&ution !ate! O/to(er 4,,
)++3, !en5in' the %otion 2or re/onsi!eration$ he appe&&ate /ourt reverse! the
!e/ision !ate! #u&5 )6, 4773 o2 the Re'iona& ria& Court o2 Le'a8pi Cit5, Bran/h ,,
in Civi& Case No$ 9)*9 2or :uietin' o2 tit&e, re/over5 o2 possession an! !a%a'es$

he 2a/ts are as 2o&&o.s:

Invo&ve! in this /ase is a si;-%eter (5 nine-%eter portion o2 a 4,+44-s:uare
%eter &ot &o/ate! at Ba'u%(a5an, 0ara'a, A&(a5$ he .ho&e &ot is no. re'istere!
un!er rans2er Certi2i/ate o2 it&e <C= No$ -1*,++ in the na%e o2 petitioners,
spouses A!ie& !e &a Cena an! Cari!a! Areva&o !e &a Cena <the !e &a Cenas=$
"$#
It
.as previous&5 o.ne! (5 the spouses Antonio an! #ose2a Areva&o <the Areva&os=,
parents o2 petitioner Cari!a! Areva&o !e &a Cena$

So%eti%e in 47,7, the respon!ents, spouses #ose an!
>er%inia Briones <the Brioneses=, rente! 2ro% the Areva&os, a house /onstru/te!
on the /onteste! portion o2 the a2ore%entione! &ot$ -ive %onths &ater, respon!ents
(ou'ht the house$ hen on #anuar5 34, 4766, respon!ents a&so (ou'ht the
/onteste! portion o2 sai! &ot 2ro% the Areva&os$ he5
pai! P4,),+ as !o.npa5%ent$
"%#

Un?no.n to the Brioneses, the .ho&e &ot ha! (een %ort'a'e! (5 the
Areva&os to A&(a5 0eve&op%ent Ban?$ On Apri& )*, 4767, C No$ -1*,++ .as
issue! to petitioners, .ho pai! an unspe/i2ie! a%ount to the Areva&os 2or the .ho&e
&ot an! P7,+++ to the (an? representin' the (a&an/e o2 the &oan o(taine! (5 the
Areva&os$
"&#

herea2ter, petitioners !e &a Cenas !e%an!e! that
respon!ents Brioneses va/ate the /onteste! portion$ @hen respon!ents re2use!
an! a2ter a barangay /on/i&iation 2ai&e!, petitioners 2i&e! (e2ore
the Re'iona& ria& Court o2 Le'a8pi Cit5 a /o%p&aint 2or :uietin' o2 tit&e, re/over5
o2 possession, an! !a%a'es a'ainst respon!ents$

he tria& /ourt !e/i!e! in 2avor o2 petitioners !e &a Cenas, !isposin' o2 the
/ase as 2o&&o.s:
@>ERE-ORE, pre%ises /onsi!ere!, !e/ision is here(5 ren!ere!:
4= 0e/&arin' the /&ai% o2 o.nership o2 !e2en!ants
Arespon!ents hereinB upon the propert5 in :uestion (ase!
upon e;hi(it C4D as inva&i! an! ine22e/AtBive an! is
preEu!i/ia& to the tit&e o2 the p&ainti22s Apetitioners hereinB
an! /astin' a /&ou! upon sai! tit&e .hi/h /&ou! is here(5
or!ere! re%ove! an! the p&ainti22sF tit&e here(5 or!ere!
:uiete!$
)= he p&ainti22s are here(5 or!ere! to pa5 the
!e2en!ants P31,71)$73 as rei%(urse%ent 2or the va&ue o2
the e;penses in/urre! (5 the !e2en!ants in renovatin' or
repairs inurin' to p&ainti22s (ene2its$
3= @ithin thirt5 <3+= !a5s 2ro% the pa5%ent o2 the
a2oresai! P31,71)$73 (5 the p&ainti22s to the !e2en!ants, the
!e2en!ants sha&& va/ate the propert5 in :uestion &eavin' the
house (ehin!$
*= Costs a'ainst (oth p&ainti22s an! !e2en!ants$
SO OR0ERE0$
"5#
@hi&e the tria& /ourt 2oun! that there .as a per2e/te! /ontra/t o2 sa&e o2 the
/onteste! portion (et.een respon!ents Brioneses an! the Areva&os, it sai! that the
sa&e !i! not (in! petitioners !e &a Cenas (e/ause, <4= the a/?no.&e!'%ent
re/eipt
"6#
issue! (5 the Areva&os o2 the !o.npa5%ent o2 respon!ents .as not a
pu(&i/ !o/u%ent un!er Arti/&e 4319 <4=
"'#
o2 the Civi& Co!eG an! <)= the sa&e .as
unre'istere!$ he tria& /ourt 2urther note! that petitioners !e &a Cenas .ere
una.are o2 the previous sa&e o2 the /onteste! portion to
the Brioneses$ Nonethe&ess, it 2au&te! petitioners !e &a Cenas 2or not as/ertainin'
the nature o2 respon!ents BrionesesF possession o2 the /onteste! portion, sin/e the
2or%er .ere a.are that the Brioneses ha! pur/hase! the house that stoo! thereon$
Upon respon!entsF appea&, the Court o2 Appea&s reverse! the tria& /ourtFs
!e/ision$ hus,
(HERE)ORE, the appea& is GRAN*ED$ he assai&e! !e/ision
is REVERSED an! SE* ASIDE$ he parties sha&&, at their e;pense
share an! share a&i?e, /ause a SURVE+ to !eter%ine their respe/tive
portions o2 Lot No$ ) /onsistent .ith this !e/ision$ herea2ter, in
a//or!an/e .ith the sai! surve5, the Re'ister o2 0ee!s o2 A&(a5
sha&& ISSUE a ne. trans2er /erti2i/ate o2 tit&e to !e2en!ants-appe&&ants
Arespon!ents hereinB 2or the portion pertainin' to the%, .hi&e the
re%ainin' portion o2 Lot No$ ) sha&& /ontinue to pertain to p&ainti22s-
appe&&ees Apetitioners hereinB un!er their C No$ -1*,++$
SO ORDERED$
"8#
he appe&&ate /ourt si%i&ar&5 he&! that there .as a per2e/te! /ontra/t o2 sa&e
o2 the /onteste! portion (ase! on the re/eipt a/?no.&e!'in' the !o.npa5%ent$
",#
he appe&&ate /ourt 2oun! that the sa&e ha! (een /onsu%%ate! an! it too? note
o2 respon!entsF 2u&& pa5%ent o2 the pur/hase pri/e o2 P,,+++ on insta&&%ent (asis,
as testi2ie! to (5 respon!ent >er%inia Briones$
"10#
he appe&&ate /ourt a&so
/on/&u!e! that petitioner Cari!a! Areva&o !e &a Cena ha! ?no.n o2 the sa&e o2 the
house an! the /onteste! portion to respon!ents$ hus, the appe&&ate /ourt ru&e! that
even i2 petitioners .ere 2irst to re'ister the sa&e, their re'istration .as tainte! .ith
(a! 2aith$

he appe&&ate /ourt !enie! petitionersF %otion 2or re/onsi!eration$

>en/e, the instant petition raisin' the 2o&&o.in' issues:
4$ @>E>ER OR NO >ERE EHISE0 A PER-ECE0
CONRAC O- SALE BE@EEN PEIIONERSF
PRE0ECESSORS-IN-INERES, >E ARE"ALO SPOUSES
AN0 >E RESPON0ENSG AN0
)$ ASSUMING >A >ERE @AS SUC> A PER-ECE0
CONRAC O- SALE, @>E>ER OR NO >E PEIIONERS
>A0 INO@LE0GE >EREO- PRIOR O >E REGISRAION
O- >E PROPERJ IN >EIR NAMES$
"11#
@e .i&& reso&ve the issues in the or!er presente!$ Petitioners /onten! that
the Court o2 Appea&s erre! in ru&in' that there .as a per2e/te! /ontra/t o2 sa&e
(ase! on the re/eipt a/?no.&e!'in' the !o.npa5%ent$ Petitioners a&so /onten!
that the re/eipt neither state! the portion so&!, nor the pri/e, nor the (u5er$ he5
aver that there ha! 5et (een no %eetin' o2 the %in!s upon the o(Ee/t o2 the
/ontra/t an! the pri/e$

Respon!ents /ounter that a /ontra/t o2 sa&e is per2e/te! (5 %ere a'ree%ent
o2 the partiesG even .ithout the re/eipt a/?no.&e!'in' the !o.npa5%ent, there
/ou&! sti&& (e a per2e/te! /ontra/t o2 sa&e$

At this Eun/ture, .e note that petitioners !i! not appea& the tria& /ourtFs
2in!in' that there .as a per2e/te! /ontra/t o2 sa&e o2 the /onteste! portion to
respon!ents$ B5 not appea&in', petitioners are !ee%e! to have a//epte! the tria&
/ourtFs 2a/tua& 2in!in's an! /on/&usions o2 &a. on this %atter$
"1$#

In a!!ition, a /ontra/t o2 sa&e is per2e/te! (5 %ere /onsent, upon a %eetin'
o2 the %in!s on the o(Ee/t o2 the /ontra/t an! the pri/e$
"1%#
@hen the Areva&os
a//epte! theP4,),+ as !o.npa5%ent, the5 ha! a'ree! to the sa&e o2 the /onteste!
portion to respon!ents$ In 2a/t, the /ontra/t o2 sa&e ha! a&rea!5 (een
/onsu%%ate!$ >en/e, its en2or/e%ent /annot (e (arre! (5 the Statute o2 -rau!s,
.hi/h app&ies on&5 to an e;e/utor5 a'ree%ent$
"1&#

@e note that the Areva&os !e&ivere! the /onteste! portion to respon!entsG the
respon!ents ha! pai! the P4,),+ as !o.npa5%entG the !o.npa5%ent .as re/eive!G
the respon!ents ha! pai! on insta&&%ent the (a&an/e o2 the 2u&& pur/hase pri/e
o2 P,,+++G
"15#
so%e insta&&%ents .ere pai! .ee?&5 as !e%an!e! (5 the Areva&os
.ho !i! not issue re/eiptsG
"16#
P*++ o.e! (5 the Areva&os to respon!ent
>er%inia BrionesFs %other, .as a&so use! to o22set the pri/eG
"1'#
respon!ents pai!
the &ast insta&&%ent in 479+G
"18#
an! respon!ents /ontinue! their a/tua&
possession$ Moreover, o.nership o2 the thin' so&! .as trans2erre! to the (u5er
upon a/tua& or /onstru/tive !e&iver5$
"1,#

Petitioners a&so /onten! that the Court o2 Appea&s erre! in /on/&u!in' that
the5 ?ne. o2 the sa&e (et.een the Areva&os an! respon!ents$ he5 insist that the5
ha! no ?no.&e!'e o2 the sa&e o2 the /onteste! portion to respon!ents$ >en/e, the5
/&ai% the5 .ere (u5ers in 'oo! 2aith .ho ha! a&so in 'oo! 2aith 2irst re'istere! the
sa&e$

In a !ou(&e sa&e o2 i%%ova(&e propert5, as in this /ase, o.nership (e&on's to
the person .ho in 'oo! 2aith 2irst re/or!e! it in the re'istr5 o2 propert5$
"$0#
he
re:uire%ent is t.o-2o&!: a/:uisition in 'oo! 2aith an! re'istration in 'oo!
2aith$ But here, petitioners 2ai&e! to sho. that the5 .ere in 'oo! 2aith (e/ause as
se/on! (u5ers the5 .ere not i'norant o2 the 2irst sa&e to respon!ents 2ro% the ti%e
petitioners a/:uire! the .ho&e &ot unti& the tit&e .as trans2erre! to the%$
"$1#

he re/or!s revea& that petitioner Cari!a! Areva&o !e &a Cena ha! testi2ie!
on !ire/t e;a%ination that at the ti%e the5 a/:uire! the .ho&e &ot 2ro%
her parents, respon!ents .ere a&rea!5 sta5in' on the /onteste! portion, thus:
: No., at the ti%e 5ou a/:uire! the propert5 .a5 (a/? in
4767 .ere the Arespon!entsB a&rea!5 sta5in' in the propert5 in :uestionK
a Jes, sir, -./0 1/2/ a32/ad0 4-a05n6 5n -./ 72o7/2-0$
"$$#
<E%phasis supp&ie!$=
-urther, Cari!a! ?ne. o2 respon!entsF /&ai% that the5 (ou'ht the house 2ro%
the 2or%erFs parents$ She a&so ?ne. that respon!ents renovate! the house a2ter
the5 (ou'ht it, as revea&e! (5 the testi%on5 o2 Cari!a! on a!!itiona& !ire/t
e;a%ination:
: A0oB 5ou have an5 ?no.&e!'e .hen the Arespon!entsB
starte! renovatin' the houseK

a It .as &on' ti%e (ut the renovation .as 'ra!ua&$ *./0
.a8/ 4-a2-/d -./ 2/no8a-5on 1./n -./0 a33/6/d30 792:.a4/d 5-$
"$%#
<E%phasis supp&ie!$=
he re/or!s a&so revea& that Cari!a! testi2ie! on /ross-e;a%ination that she
ta&?e! to respon!ents on&5 a2ter herein petitioners ha! (ou'ht the .ho&e &ot, to .it:
: I a% as?in' 5ou .hether 5ou ta&?e! to Arespon!entsB .hen
5ou (ou'ht the propert5K

a I -a3;/d -o -./< a=-/2 1/ 792:.a4/d -./ 72o7/2-0$
"$&#
<E%phasis supp&ie!$=
hus, Cari!a!Fs testi%on5 (e&ie petitionersF /ontention that their C?no.&e!'e
o2 respon!entsF /&ai%s over the A/onteste!B portion arose on&5 a2ter, not (e2ore, the
&ot ha! (een tit&e! or re'istere! in their na%eD or Con&5 a2ter the !e%an! to va/ate
.as re/eive! (5D
"$5#
respon!ents$ On !ire/t e;a%ination, Cari!a! testi2ie!:
: 0i! Arespon!entsB /o%p&5 .ith 5our !e%an!sK

a he5 !i! not$
: @h5K 0o 5ou ?no. the reason .h5 the5 re2use!K

a I .a8/ >//n ./a25n6 4-o25/4 >/:a94/ -./0 .a8/ >//n
-/335n6 7/o73/ -.a- -./0 .a8/ a32/ad0 792:.a4/d -./ 72o7/2-0$
: @hen .as thatAKB @hen !i! 5ou &earn o2 su/h a&&e'ation
o2 the Arespon!entsBK

a E8/n >/=o2/ 1/ a4;/d -./< -o 8a:a-/ 1/ .a8/ >//n
./a25n6 4-o25/4 a32/ad0$
"$6#
<E%phasis supp&ie!$=
Patent&5, petitioners %a!e no e22orts to /&ari25 the true nature o2 respon!entsF
possession, !espite ?no.in' o2 the &atterFs /&ai% o2 o.nership an! a/tua&, visi(&e
an! pu(&i/ possession o2 the /onteste! portion$ One .ho (u5s rea& propert5 in
a/tua& possession o2 another shou&! at &east in:uire as to the ri'ht o2 the ones in
possession$ A(sent su/h in:uir5, petitioners /annot (e re'ar!e! as (ona 2i!e
(u5ers as a'ainst respon!ents, the ones in possession o2 the /onteste! portion$
"$'#
he ru&e is that i2 a (u5er in a !ou(&e sa&e re'isters the sa&e a2ter he has
a/:uire! ?no.&e!'e that there .as a previous sa&e o2 the sa%e propert5 to a thir!
part5 or that another person /&ai%s sai! propert5 in a previous sa&e, the re'istration
.i&& /onstitute a re'istration in (a! 2aith an! .i&& not /on2er on hi% an5 ri'ht$
"$8#

(HERE)ORE, the petition is DENIED 2or &a/? o2 %erit$ Petitioners
are ORDERED to re/onve5 to respon!ents the si;-%eter (5 nine-%eter /onteste!
portion o2 the &ot /overe! (5 rans2er Certi2i/ate o2 it&e No$ -1*,++$ herea2ter,
the Re'ister o2 0ee!s o2 A&(a5 sha&& issue the /orrespon!in' trans2er /erti2i/ate o2
tit&e o2 the re/onve5e! portion$ A&& e;penses 2or the purpose sha&& (e share!
e:ua&&5 (5 the parties$ he re%ainin' area /overe! (5 C No$ -1*,++ sha&&
re%ain .ith petitioners$

Costs a'ainst petitioners$

SO ORDERED.
JOSE V. LAGON, petitioner, vs. HOOVEN COMALCO INDUS*RIES,
INC., respondent.
D E C I S I O N
BELLOSILLO, J.?
his petition 2or revie. on certiorari see?s to set asi!e the 0e/ision o2 the Court o2 Appea&s
o2 )9 Apri& 4776 .hi/h in turn set asi!e the !e/ision o2 the Re'iona& ria& Court o2 0avao Cit5
an! or!ere! petitioner #ose "$ La'on to pa5 respon!ent >ooven Co%a&/o In!ustries, In/$
<>OO"EN= the a%ount o2 P,7,3)7$++ .ith interest at t.e&ve per/ent <4)L= per annu%
/o%pute! 2ro% the 2i&in' o2 the /o%p&aint unti& 2u&&5 pai!, p&us attorne5Fs 2ees an! /osts,
A4B
as
.e&& as the Reso&ution o2 the appe&&ate /ourt !en5in' re/onsi!eration thereo2$
A)B
Petitioner #ose "$ La'on is a (usiness%an an! o.ner o2 a /o%%er/ia& (ui&!in' in a/uron',
Su&tan Iu!arat$ Respon!ent >OO"EN on the other han! is a !o%esti/ /orporation ?no.n to (e
the (i''est %anu2a/turer an! insta&&er o2 a&u%inu% %ateria&s in the /ountr5 .ith (ran/h o22i/e at
E$ Quirino Avenue, 0avao Cit5$
So%eti%e in Apri& 4794 La'on an! >OO"EN entere! into t.o <)= /ontra/ts, (oth
!eno%inate! Proposal, .here(5 2or a tota& /onsi!eration o2 P4+*,96+$++ >OO"EN a'ree! to
se&& an! insta&& various a&u%inu% %ateria&s in La'onFs /o%%er/ia& (ui&!in' in a/uron', Su&tan
Iu!arat$
A3B
Upon e;e/ution o2 the /ontra/ts, La'on pai! >OO"EN P*9,++$++ in a!van/e$
A*B
On )* -e(ruar5 4796 respon!ent >OO"EN /o%%en/e! an a/tion 2or su% o2 %one5 .ith
!a%a'es an! attorne5Fs 2ees a'ainst petitioner La'on (e2ore the Re'iona& ria& Court o2 0avao
Cit5$ >OO"EN a&&e'e! in its /o%p&aint that on !i22erent o//asions, it !e&ivere! an! insta&&e!
severa& /onstru/tion %ateria&s in the /o%%er/ia& (ui&!in' o2 La'on pursuant to their /ontra/tsG
that the tota& /ost o2 the &a(or an! %ateria&s a%ounte! toP446,3)7$++ out o2 .hi/h P,7,3)7$++
re%aine! unpai! even a2ter the /o%p&etion o2 the proEe/tG an!, !espite repeate! !e%an!s, La'on
2ai&e! an! re2use! to &i:ui!ate his in!e(te!ness$ >OO"EN a&so pra5e! 2or attorne5Fs 2ees an!
&iti'ation e;penses, an! in support thereo2, presente! its OIC, A&(erto "i&&anueva, an! its
e%p&o5ee, Ernesto Ar'ente, an! other .itnesses, as .e&& as severa& !o/u%entar5 evi!en/e
/onsistin' %ain&5 o2 the t.o <)= proposa&s, invoi/es an! !e&iver5 re/eipts$
La'on, in his ans.er, !enie! &ia(i&it5 an! averre! that >OO"EN .as the part5 'ui&t5 o2
(rea/h o2 /ontra/t (5 2ai&in' to !e&iver an! insta&& so%e o2 the %ateria&s spe/i2ie! in the
proposa&sG that as a /onse:uen/e he .as /o%pe&&e! to pro/ure the un!e&ivere! %ateria&s 2ro%
other sour/esG that as re'ar!s the %ateria&s !u&5 !e&ivere! an! insta&&e! (5 >OO"EN, the5 .ere
2u&&5 pai!$ >e /ounter/&ai%e! 2or a/tua&, %ora&, e;e%p&ar5, te%perate an! no%ina& !a%a'es, as
.e&& as 2or attorne5Fs 2ees an! e;penses o2 &iti'ation$
On 7 O/to(er 4796, upon re:uest o2 (oth parties, the tria& /ourt /on!u/te! an o/u&ar
inspe/tion o2 La'onFs /o%%er/ia& (ui&!in' to !eter%ine .hether the ite%s a&&e'e! in the
/o%p&aint an! appearin' in the invoi/es an! !e&iver5 re/eipts ha! (een !e&ivere! an! insta&&e! on
the pre%ises$ he resu&t o2 the o/u&ar inspe/tion .as -
4= .ith respe/t to the ite%s /overe! (5 E;hi(it CAD an! su(%ar?in's that there are
on&5 seventeen <46= &i'ht !i22users, 43 in the /ei&in' o2 the 'roun! an! * on the
%e88anine <O/u&ar Inspe/tion, SN, pp$ 1 to ,=G )= on E;hi(it CBD an! su(%ar?in's,
there are on&5 t.ent5-three <)3= &i'ht a&u%inu% (o;es, 4* a&u%inu% (o;es in the
/ei&in' o2 the %e88anine an! 7 on the /ei&in' o2 the 'roun! 2&oor <O/u&ar Inspe/tion,
SN, p$ 6=G 3= on E;hi(it CC-4,D the ite%s are %issin' in the area .here the5 .ere
suppose! to (e insta&&e!G *= on E;hi(it CC-),D a!%itte! (5 !e2en!ant La'on .hen he
state! that CI .i&& a!%it that these .ere insta&&e! (5 the p&ainti22 (ut I !o not ?no.
e;a/t&5 the %ateria&s, (ut I rea&&5 a//ept that these .ere insta&&e! so%eti%e in 4794,
(e2ore the o//upation o2 the 0BP$ But I have pai! that a&rea!5 in 4794$ I /ou&! not
i!enti25 the %ateria&s !e&ivere! in 4794 (e/ause I !o not ?no. the e;a/t na%es o2
those %ateria&s$D <O/u&ar Inspe/tion, SN, p$ 4)=G 1= on E;hi(it CC-),D the '&asses are
not tinte! (ut p&ain .hiteG on E;hi(it CC-3,D the %ateria&s /annot (e 2or%e! <si/= in
the p&a/e .here the5 are suppose! to (e <O/u&ar Inspe/tion, SN, p$6=G ,= E;hi(it C0D
an! C0-4,D that the %ateria&s .ere supp&ie! (5 p&ainti22 (ut the5 !i! not insta&&
the%$ It .as the !e2en!ant .ho /ause! the insta&&ation thereo2 <O/u&ar Inspe/tion,
SN, p$ 43$=G an! 6= E;hi(it CE-4,D as NU- Main an! Cross-Runners an! supp&ie! (5
p&ainti22 (ut p&ainti22 !i! not insta&&$ he5 ha! it insta&&e! <O/u&ar Inspe/tion, SN, p$
4*=$
In !ue /ourse the tria& /ourt ren!ere! a !e/ision part&5 on the (asis o2 the resu&t o2 the o/u&ar
inspe/tion 2in!in' that the tota& a/tua& !e&iveries an! insta&&ations %a!e (5 >OO"EN
/ost P96,4*+$++$ 0e!u/tin' there2ro%P*9,+++$++ .hi/h La'on pai! in a!van/e upon e;e/ution
o2 their /ontra/ts .ith no 2urther pa5%ents appearin' to have (een %a!e therea2ter,
on&5 P37,4*+$++ re%aine! unpai! an! .here La'on in/urre! in !e&a5$ he tria& /ourt a&so
a.ar!e! >OO"EN P3,)11$++ as attorne5Fs 2ees, (ut sustaine! La'onFs /ounter/&ai%s an!
a.ar!e! hi% P),,4)+$++ as a/tua& !a%a'es representin' the va&ue o2 the un!e&ivere! an!
uninsta&&e! %ateria&s, an!P3+,+++$++ as attorne5Fs 2ees in a!!ition to &iti'ation e;penses
o2 P*1,13*$1+$ A//or!in' to the /ourt a quo
A1B
M
As a resu&t o2 the partia& (rea/h o2 /ontra/t on p&ainti22Ns <>ooven Co%a&/o= part, the
!e2en!ant is entit&e! to a/tua& !a%a'es on&5 to the e;tent o2 the un!e&ivere! %ateria&s
an! un!one &a(or or to the a%ount o2 P),,4)+$++$ his P),,4)+$++ .i&& (e partia&&5
o22sette! <si/= to the P37,4*+$++ unpai! (a&an/e o2 the !e2en!ant <La'on=, so that the
!i22eren/e that re%ain <si/= pa5a(&e to p&ainti22 is P43,+)+$++$ Evi!en/e is insu22i/ient
to sho. that (a! 2aith e;iste! in the 2i&in' o2 the instant /o%p&aint 2or /o&&e/tion
a'ainst the !e2en!ant$ P&ainti22Ns o(stinate /on!u/t in prose/utin' its /&ai% spen!in'
2or &iti'ation e;penses an! 2or its &a.5ers ne'ate the e;isten/e o2 (a! 2aith$ he 2a/t
a&one that the 2in!in's o2 2a/t sho. an unpai! a//ount o2 the !e2en!ant is proo2 that
the /o%p&aint is not /o%p&ete&5 un2oun!e! thou'h evi!en/e sho.s a&so that p&ainti22
is 'ui&t5 o2 partia& (rea/h o2 /ontra/t (5 reason o2 2ai&ure to /o%p&ete&5 !e&iver an!
insta&& the %ateria&s !e2en!ant or!ere! pursuant to the /ontra/t so that p&ainti22 is
&ia(&e 2or !a%a'es$ As p&ainti22 a/te! in 'oo! 2aith in the 2i&in' o2 the instant
/o%p&aint in the (e&ie2 that it has a va&i! /ause o2 a/tion a'ainst the !e2en!ant to
en2or/e its /&ai%, en'a'in' a &a.5er to prose/ute it, p&ainti22 is entit&e! to a reasona(&e
attorne5Fs 2ees e:uiva&ent to )1L o2 the /o&&e/ti(&e a%ount o2 P43,+)+$++ or the
a%ount o2 P3,))1$++$ 0e2en!antNs /&ai% o2 attorne5Fs 2ees in the a%ount
o2 P41),,)7$41 is in the opinion o2 the /ourt /&ear&5 unreasona(&e an! un/ons/iona(&e
/onsi!erin' the nature o2 the a/tion an! the a%ount invo&ve!$ he /ourt has the po.er
to re!u/e it to ren!er it reasona(&e an! /ons/iona(&e .hether the /ontra/t 2or
attorne5Ns 2ees is .ritten or ora&$ he attorne5Fs 2ees is 2i;e! at P3+,+++$++$ he
!e2en!ant presente! evi!en/e o2 &iti'ation e;penses in/urre! in the /ourse o2 the tria&
2or p&ane 2are o2 its &a.5er in /o%in' to 0avao Cit5 2ro% Mani&a 2ro% 4796 up to
#u&5 477+ in the tota& a%ount o2 P3*,63+$1+ as evi!en/e! (5 E;hi(it C44D to C44-E$D
he re/or!s sho. that the !e2en!antFs /ounse& /a%e to 0avao Cit5 2ro% Mani&a to
atten! e&even <44= hearin's o2 the /ase an! the p&ane 2are 2ro% 4796 up to Au'ust,
4797 is P),1)*$1+ an! 2ro% Au'ust 4797 to #une 477+ is P3,++6$1+$ >ote& e;penses
o2 !e2en!antFs /ounse& at the Ma'uin!anao >ote& .here he .as (i&&ete! ever5ti%e he
/a%e to 0avao Cit5 to atten! the tria& a%ounte! to P44,9)*$++ as evi!en/e! (5
E;hi(it C46,D the /erti2i/ation issue! (5 the sai! hote& %ana'e%ent$ So that the tota&
a%ount o2 the a/tua& !a%a'e su22ere! (5 !e2en!ant is P*1,13*$1+$ Sai! a%ount
o2 P*1,13*$1+ is partia&&5 o22sette! <si/= (5 the a%ount o2 P43,+)+$++ representin' the
unpai! o(&i'ation o2 the !e2en!ant to the p&ainti22 so that the p&ainti22 is sti&& &ia(&e to
pa5 the !e2en!ant the !i22eren/e in the a%ount o2 P3),14*$1+$
Both parties appea&e! to the Court o2 Appea&s$ In its 0e/ision o2 )9 Apri& 4776, the
appe&&ate /ourt set asi!e the Eu!'%ent o2 the tria& /ourt an! reso&ve! the /ase in 2avor o2
>OO"EN$ It he&! that the tria& /ourt erre! in re&5in' so&e&5 on the resu&ts o2 the o/u&ar
inspe/tion sin/e the !e&iver5 an! insta&&ation o2 the %ateria&s in :uestion starte! as ear&5 as 4794,
.hi&e the o/u&ar inspe/tion .as /on!u/te! on&5 in 4796 or si; <,= 5ears &ater, a2ter the entire
%e88anine .as a&tere! an! the .ho&e (ui&!in' renovate!$ he appe&&ate /ourt a&so stresse! that
the testi%onies o2 >OO"ENNs .itnesses .ere strai'ht2or.ar!, /ate'ori/a& an! supporte! (5
!o/u%entar5 evi!en/e o2 the !ispute! transa/tions, an! that a&& La'on /ou&! o22er .as a %ere
!enia&, un/orro(orate! an! se&2-servin' state%ents re'ar!in' his transa/tions .ith
>OO"EN$ he !e/reta& portion o2 the assai&e! !e/ision o2 the Court o2 Appea&s rea!s -
ACCOR0INGLJ, 2in!in' the !e/ision o2 Au'ust ),, 4774 appea&e! 2ro% a22&i/te! (5
reversi(&e errors, the sa%e is here(5 SE ASI0E, an! a ne. one entere! or!erin' the
!e2en!ant-appe&&ant <La'on= to pa5 p&ainti22-appe&&ant <>ooven Co%a&/o=:
he a%ount o2 P,7,3)7$++ p&us interest o2 4)L per annu% /o%pute! 2ro% the !ate o2
the 2i&in' o2 the /o%p&aint, unti& 2u&&5 pai!$
-i2teen per/ent <41L= o2 the a%ount !ue, as an! (5 .a5 o2 attorne5Fs 2ees$
0e2en!ant-appe&&ant to pa5 /osts$
PetitionerNs %otion 2or re/onsi!eration havin' (een !enie! he no. hopes to se/ure re&ie2
2ro% this Court (5 /onten!in' that: <a= he Court o2 Appea&s erre! in ho&!in' that the tria& /ourt
/ou&! not re&5 on the resu&ts o2 the o/u&ar inspe/tion /on!u/te! on his /o%%er/ia& (ui&!in' in
a/uron', Su&tan Iu!aratG an!, <(= he assai&e! !e/ision o2 the appe&&ate /ourt is (ase! on
spe/u&ations an! /ontrar5 to the evi!en/e a!!u/e! !urin' the tria&$
he ar'u%ents in the petition u&ti%ate&5 (oi& !o.n to the so&e issue o2 .hether a&& the
%ateria&s spe/i2ie! in the /ontra/ts ha! (een !e&ivere! an! insta&&e! (5 respon!ent in petitionerFs
/o%%er/ia& (ui&!in' in a/uron', Su&tan Iu!arat$ he :uestion is (asi/a&&5 2a/tua& invo&vin' as
it !oes an eva&uation o2 the /on2&i/tin' evi!en/e presente! (5 the /onten!in' parties, in/&u!in'
the e;isten/e an! re&evan/e o2 spe/i2i/ surroun!in' /ir/u%stan/es, to !eter%ine the truth or
2a&sit5 o2 a&&e'e! 2a/ts$
@hi&e 2a/tua& issues are not .ithin the provin/e o2 this Court, as it is not a trier o2 2a/ts an!
is not re:uire! to e;a%ine or /ontrast the ora& an! !o/u%entar5 evi!en/e de novo,
A,B
neverthe&ess,
the Court has the authorit5 to revie. an!, in proper /ases, reverse the 2a/tua& 2in!in's o2 &o.er
/ourts in these instan/es: <a= .hen the 2in!in's o2 2a/t o2 the tria& /ourt are in /on2&i/t .ith those
o2 the appe&&ate /ourtG <(= .hen the Eu!'%ent o2 the appe&&ate /ourt is (ase! on %isapprehension
o2 2a/tsG an!, </= .hen the appe&&ate /ourt %ani2est&5 over&oo?e! /ertain re&evant 2a/ts .hi/h, i2
proper&5 /onsi!ere!, .ou&! Eusti25 a !i22erent /on/&usion$
A6B
his /ase 2a&&s s:uare&5 .ithin the
2ore'oin' e;/eptions$
Be2ore !e&vin' into the %erits o2 this /ase, .e 2in! it ne/essar5 to !es/ri(e an! !etai& the
nature an! /ontents o2 the vita& !o/u%entar5 e;hi(its upon .hi/h respon!ent >OO"EN (ase!
its /&ai%s, thus -
Ex.5>5- @)A Unda-/d P2o7o4a3?
I$ -or the supp&5 o2 %ateria&s an! insta&&ation o2 suspen!e! a&u%inu% /ei&in' runners:
Area: ),)7+ s:$ 2t$
Materia&s: NU- Main O Cross runners
NU-1 Peri%eter %ou&!in's
G$I$ .ire han'ers
A&u%inu% straps sti22eners
B&in! Rivets an! S/re.s P4*,44+$++
La(or /har'e *,)3+$++
49,**+$++
II$ One <4= set: ,1 ; ,9 JP a&u%inu% /&a!!in' 4,41+$++
P47,17+$++
0e&iver5 an! Insta&&ation /har'e 4,9,+$++
P)4,*1+$++
Ex.5>5- @)1A B P2o7o4a3 da-/d % A7253 1,81
C>oovenD A&u%inu% Case%ent @in!o.s Ano&o? -inish Manua&&5 Operate!, .ith
,$+ %% Bron8epane inte! G&ass
-ive <1= sets: ,1D ; 4),-4P)D <.P transo%=
One <4= set: ,1D ; 4),-4P)D <.P AC provision=
.o <)= sets: 37-4P)D ; 4)1-4P)D -!o-
One <4= set: 37-4P)D ; 96D -!o-
One <4= set: 37-4P)D ; ))3D -!o-
One <4= set: ,1D ; 16-4P)D <.P transo%=
One <4= set: ,1D ; *D -!o-
C>oovenD A&u%inu% Entran/es an! -i;e! @in!o.s Ano&o? -inish, .ith ,$+ %%
Bron8epane inte! G&ass
One <4= set: 4++-4P)D ; 6,-4P)D, !ou(&e sash, !ou(&e a/tin' s.in' !oor, .ith transo%$
.o <)= sets: 9+D ; )69D, 2i;e! pane&s )4,6*+$++
C>oovenD A&u%inu% S&i!in' @in!o.s -a(ri/ate! -ro% S0-Se/tions, Ano&o?
-inish, .ith ,$+ %% Bron8epane inte! G&ass
One <4= set: 1* ; 474
One <4= set: *1 ; 3+) 44,,1+$++
61,7)+$++
A!!: 0e&iver5 an! Insta&&ation /har'e 6,1++$++
P93,*)+$++
Ex.5>5- @AA M Invoi/e No$ 44+7* !ate! )7 0e/e%(er 479)
Ei'ht5 Si; <9,= Pie/es, )$+ %% >ishi&ite P3,**+$++
0i22users
Ex.5>5- @BA M Invoi/e No$ 44+71 !ate! )7 0e/e%(er 479)
-ort5-hree Pie/es: -or the Supp&5 an!
Insta&&ation o2 Li'ht Bo;es -a(ri/ate! 2ro%
GA$ +3) A&u%inu% P&ain Sheet
0e&iver5 an! Insta&&ersF su(sisten/e P1,649$1+
Ex.5>5- @CA M Invoi/e No$ 4*3*7 !ate! )7 0e/e%(er 479*
-ive <1= sets 4$,14% 3$)43% >ooven A&u%inu% Case%ent .in!o.s, Ano&o?
2inish, %anua&&5 operate! .ith ,$+ Bron8epane tinte!
'&ass$
One <4= set 4$,14 % 3$3,6% - !o - .ith aP/ provision
.o <)= sets 4$++ % 3$499% - !o - - !o -
One <4= set 4$++ % )$)4+ % - !o - - !o -
One <4= set 4$++ % 1$,,* % - !o - - !o -
One <4= set 4$,14% 4$*,4 % - !o - - !o - .ith transo%
One <4= set 4$,14% 4$99+ % - !o - .ith transo%
One <4= set 4$,14% 4$1)* % - !o - - !o -
One <4= set )$113% 4$7*3 % >ooven a&u%inu% !ou(&e sash, !ou(&e a/tin'
s.in' !oor, .ith transo%, .ith ,$+ %% Bron8e-pane
tinte! '&ass$
.o <)= sets )$+3)% 6$+,4 % -i;e! .in!o.s, Ano&o? 2inish$
One <4= set $636 % 6$+,4 % A&u%inu% tu(u&ars .ith a&u%inu% JP-4++
/&a!!in', Ano&o? 2inish$
One <4= set 4$4*3% *$914% >ooven a&u%inu% s&i!in' .in!o.s 2a(ri/ate!
2ro% S0 se/tions, Ano&o? 2inish, .ith ,$+ %%
Bron8epane tinte! '&ass, .ith 4$99 % tu(u&ar posts$
One <4= set 4$4*3% 6$,64% - !o - P61,)74$93
*L ta; 3,+44$,6
69,3+3$1+
0e&iver5 O Su(s$ 6,1++$++
P91,9+3$1+
Ex.5>5- @DA M Invoi/e No$ 4*),1 !ate! )7 Septe%(er 479*
-or the supp&5 o2 %ateria&s an! insta&&ation o2 a&u%inu% stu//o e%(osse! sheet
on spira& stair/ase P1,34+$++
Ex.5>5- @EA M Invoi/e No$ 4*),* !ate! )7 Nove%(er 479*
-or the supp&5 o2 %ateria&s an! insta&&ation o2 suspen!e! a&u%inu% /ei&in' s5ste%$
Materia&s: NU-* %ain an! /ross runners
NU-1 peri%eter %ou&!in's
GI .ire han'ers
A&u% strap sti22eners
B&in! rivets an! s/re.s P46,+16$++
Ex.5>5- @A1A M 0e&iver5 Re/eipt !ate! 7 #une 4794
.ent5 <)+= pie/es Li'ht (o;es 2a(ri/ate! 2ro% a&u%inu% sheets
-ort5 <*+= pie/es )$+ %% ; )*D ; )*D >ishi&ite 0i22users
Lu%p su% /ost in/&u!in' !is/ount an! 0e&iver5 an!
Insta&&er Su(sisten/e
P*,3*+$++
Ex.5>5- @A$A M 0e&iver5 Re/eipt !ate! 9 Au'ust 4794
.ent5 <)+= pie/es Li'ht (o;es 2a(ri/ate! 2ro% $+3)D a&u%inu% p&ain sheet
.ent5 Seven <)6= )$+ %% ; )*D ; )*D >ishi&ite 0i22users
A!!: 0e&iver5 O Insta&&ers Su(sisten/e P49+$++
Ex.5>5- @A%A M 0e&iver5 Re/eipt, !ate! 9 0e/e%(er 4794
47 p/s$ )$+ %% ; )D ;)D >ishi&ite 0i22users P*+$++
Ex.5>5- @B1A M 0e&iver5 Re/eipt !ate! )1 #une 4794
A!!itiona& three <3= p/s$ Li'ht (o;es 2a(ri/ate! 2ro% $+3) A&u%inu% sheets
P4*+$++
Ex.5>5- @C1A M 0e&iver5 Re/eipt !ate! )1 Au'ust 4793
o /han'e a&u% tu(u&ar 2ra%es 2or s&i!in' .in!o.s <ite% 4+ O 44= 2ro% *1D L ;
to 7*D ; 6*$D
o /han'e .i!th o2 one <4= set: ite% 4 2ro% 4),-4P) to 43)-4P)$
o a!!: one <4= set ,1D> ; ,+D a&u%inu% /ase%ent .in!o.s .ith ,$+ %% tinte!
'&ass$
o e;ten! a&u% tu(u&ars o2 2i;e! .in!o.s on )
n!
2&oor (5 )7DL an! insta&&ation o2 JP-
a&u%inu% /&a!!in' P9,,*+$++
Ex.5>5- @C$A M 0e&iver5 Re/eipt !ate! )1 Au'ust 4793
>ooven A&u% Case%ent @in!o.s Ano&o? -inish Manua&&5 Operate! .ith ,$+
%% Bron8epane inte! G&ass:
-ive <1= sets: ,1D ; 4),-4P)D .ith transo%
One <4= set: ,1D ; 4),-4P) .ith AC provision
.o <)= sets: 37-4P) ; 4)1-4P) - !o -
One <4= set: 37-4P)D ; 96D - !o -
One <4= set: 37-4P)D ; ))3D - !o -
One <4= set: ,1D ; 16-4P)D .ith transo%
One <4= set: ,1D ; 6*D - !o -
P*),13+$++
>ooven A&u% Entran/es O -i;e! @in!o.s Ano&o? -inish .ith ,$+ %%
Bron8epane inte! G&ass:
One <4= set: 4++-4P) ; 6,-4P), !ou(&e sash, !ou(&e a/tin' s.in' !oor, .ith transo%
.o <)= sets: 9+D ; )69D 2i;e! pane&s P)4,6*+$++
Ex.5>5- @C%A M 0e&iver5 Re/eipt !ate! )1 Au'ust 4793
>oven A&u% S&i!in' @in!o.s -a(ri/ate! 2ro% S0 Se/tions Ano&o? -inish .ith
,$+ %% Bron8epane inte! G&ass:
One <4= set: *1D ; 474D
One <4= set: *1D ; 3+)D P44,,1+$++
A!!: 0e&iver5 an! Insta&&ation 6,1++$++
Less: 6L 0is/ount ,,)1,$1+
P66,4,3$1+
Ex.5>5- @D1A M 0e&iver5 Re/eipt !ate! )1 Au'ust 4793
-or the supp&5 o2 %ateria&s an! insta&&ation o2 a&u%inu% stu//o e%(osse! sheet
on spira& stair/ase: One <4= set 3)D > ; 3+*D @L P1,34+$++
Ex.5>5- @E1A M 0e&iver5 Re/eipt !ate! )1 Au'ust 4793
NU- %ain an! /ross runners
NU-1 Peri%eter %ou&!in's
G$I$ @ire >an'ers
A&u%inu% straps sti22eners
B&in! rivets an! s/re.s P46,+16$++
@e have /are2u&&5 an! !i&i'ent&5 /onsi!ere! the 2ore'oin' e;hi(its an! .e are 2u&&5
/onvin/e! that the %ass o2 !o/u%entar5 evi!en/e a!!u/e! (5 respon!ent su22ers 2ro% patent
irre'u&arities an! %ateria& in/onsisten/ies on their 2a/es, raisin' serious :uestions re:uirin'
/o'ent e;p&anations$ hese 2&a.s inevita(&5 !ep&ete the .ei'ht o2 its evi!en/e, .ith the resu&t
that 2or &a/? o2 the re:uisite :uantu% o2 evi!en/e, respon!ent !is%a&&5 2ai&e! in the &o.er /ourt
to !is/har'e its (ur!en ne/essar5 to prevai& in this /ase$
-irst&5, the :uantit5 o2 %ateria&s an! the a%ounts state! in the !e&iver5 re/eipts !o not ta&&5
.ith those in the invoi/es /overin' the%, not.ithstan!in' that, a//or!in' to >OO"EN OIC
A&(erto "i&&anueva, the invoi/es .ere (ase! %ere&5 on the !e&iver5 re/eipts$
A9B
-or instan/e, on&5
e&even <44= ite%s .ere &iste! in E;hs$ QC-)Q an! QC-3Q .ith a tota& .orth o2 P66,4,3$1+$ But in
E;h$ QC,Q .hi/h .as the invoi/e 2or E;hs$ QC-)Q an! QC-3,Q there .ere thirteen <43= ite%s
enu%erate! 2or a tota& .orth o2 P91,9+3$1+$ I2 E;h$ QCQ is suppose! to (e (ase! on E;hs$ QC-)Q
an! QC-3,Q .e /annot un!erstan! the apparent !is/repan/5 in the ite%s &iste! in those !o/u%ents
.hen the5 a&& re2erre! to the sa%e %ateria&s$
Se/on!&5, the tota& va&ue o2 the %ateria&s as re2&e/te! in a&& the invoi/es is P446,3)7$++ .hi&e
un!er the !e&iver5 re/eipts it is on&5 P44),96+$1+, or a !i22eren/e o2 P*,*19$++$ Moreover, the
%ateria&s &iste! in the t.o <)= Proposals, upon .hi/h >OO"EN (ase! its /&ai%s, is on&5 2or the
tota& su% o2 P4+*,96+$++$ Curious&5 then, .h5 .ou&! the %ateria&s suppose!&5 !e&ivere! (5
>OO"EN (e more than what was contracted and purchased by LagonK his /ir/u%stan/e
un!ers/ores the nee! to ree;a%ine the stren'th, i2 not .ea?ness, o2 respon!entFs /ause$
hir!&5, un!er the Proposals >OO"EN (oun! itse&2 to invoi/e the %ateria&s Q.hen
/o%p&ete an! rea!5 2or ship%ent$Q O!!&5, the re/or!s sho. that the invoi/es .ere prepare!
severa& 5ears a2ter the %ateria&s .ere a&&e'e!&5 !e&ivere! an! insta&&e! /o%p&ete&5 on petitionerFs
(ui&!in'$ A&(erto "i&&anueva testi2ie! that their proEe/t .ith petitioner .as /o%p&ete! so%eti%e
in Au'ust 4794 an! that therea2ter no 2urther insta&&ation .as !one in the (ui&!in'$
A7B
But the
!ispute! invoi/es %ar?e! E;hs$ QAQ an! QBQ .ere prepare! on&5 on )7 0e/e%(er 479)G E;hs$
QCQ an! Q0Q .ere prepare! on&5 on )7 0e/e%(er 479*G an!, E;h$ QEQ .as prepare! on&5 on )7
Nove%(er 479*$ As 2or the !e&iver5 re/eipts, E;hs$ QC-4,Q QC-),Q QC-3Q an! QE-4Q .ere
prepare! on&5 on )1 Au'ust 4793 or t.o <)= 5ears a2ter the /o%p&etion o2 the proEe/t, .hi&e E;h$
QA-3Q .as prepare! on&5 on 9 0e/e%(er 4794 or so%e 2our <*= %onths a2ter the !ate o2
/o%p&etion$
Even %ore stran'e is the 2a/t that >OO"EN institute! the present a/tion 2or /o&&e/tion o2
su% o2 %one5 a'ainst La'on on&5 on )* -e(ruar5 4796, or %ore than 2ive <1= 5ears a2ter the
suppose! /o%p&etion o2 the proEe/t$ In!ee!, it is /ontrar5 to /o%%on e;perien/e that a /re!itor
.ou&! ta?e its o.n s.eet ti%e in /o&&e/tin' its /re!it, %ore so in this /ase .hen the a%ount
invo&ve! is not %inis/u&e (ut su(stantia&$
-ourth&5, the !e%an! &etter o2 )1 Au'ust 4793
A4+B
sent to petitioner (5 respon!ent 2urther
(etra5s the 2a&sit5 o2 its /&ai%s -
0ear Mr$ La'on:
he (earer, Mr$ -er%in PiRero, is an authori8e! representative o2 this /o%pan5$ >e
.i&& arran'e 2or 5our a//eptan/e o2 the /o%p&ete a&u%inu% an! '&ass insta&&ation .e
have un!erta?en 2or 5our (ui&!in'$ >e has .ith hi% the !e&iver5 re/eipts 2or 5our
si'nature so .ith a state%ent o2 a//ount sho.in' 5our (a&an/e$ Iin!&5 2avor us .ith
a partia& pa5%ent to /over our operation /osts$ A&so ?in!&5 re&a5 to hi% a&& other
insta&&ations 5ou .ish us to un!erta?e$
>opin' 2or 5our 2avora(&e a/tion, .e sha&& re%ain$
"er5 ru&5 Jours,
>ooven Co%a&/o In!ustries, In/$
0avao Bran/h
<S'!$= A&(erto P$ "i&&anueva
I2, as /&ai%e! (5 >OO"EN, a&& the %ateria&s .ere /o%p&ete&5 !e&ivere! an! insta&&e! in
petitionerFs (ui&!in' as ear&5 as Au'ust 4794, .h5 then .ou&! it !e%an! partia& pa5%ent on&5
t.o <)= 5ears &aterK his /ir/u%stan/e is ver5 si'ni2i/ant espe/ia&&5 /onsi!erin' that un!er
the Proposals the ter%s o2 pa5%ent shou&! (e 1+L !o.n Qan! the balance to be paid in fullQ
upon /o%p&etion$ Moreover, it is surprisin' that the partia& pa5%ent !e%an!e! .as on&5 Qto
/over operation /osts$Q As /orre/t&5 o(serve! (5 petitioner, !e%an! 2or pa5%ent o2 operation
/osts is t5pi/a& o2 a sti&& on-'oin' proEe/t .here the /ontra/tor nee!s 2un!s to !e2ra5 his
e;penses$ I2 there .as /o%p&ete insta&&ation, .h5 .ou&! respon!ent !e%an! pa5%ent 2or
operation /osts on&5K @h5 not en2or/e the .ho&e a%ount o2 in!e(te!nessK A&& these /&ear&5
su''est that there .as no 2u&& an! /o%p&ete !e&iver5 an! insta&&ation o2 %ateria&s or!ere! (5
petitioner$
-i2th&5, a&& the !e&iver5 re/eipts !i! not appear to have (een si'ne! (5 petitioner or his !u&5
authori8e! representative a/?no.&e!'in' re/eipt o2 the %ateria&s &iste! therein$ A /&oser
e;a%ination o2 the re/eipts /&ear&5 sho.e! that the !e&iveries .ere %a!e to a /ertain #ose Ru(in,
/&ai%e! to (e petitionerFs !river, Ar%an!o La'on, an! a /ertain (oo??eeper$ Un2ortunate&5 2or
>OO"EN, the i!entities o2 these persons .ere never (een esta(&ishe!, an! there is no .a5 o2
!eter%inin' no. .hether the5 .ere in!ee! authori8e! representatives o2 petitioner$ Para'raph 3
o2 ea/h Proposal is e;p&i/it on this point -
3$ ; ; ; the se&&erFs responsi(i&it5 en!s .ith !e&iver5 o2 the %er/han!ise to /arrier in
'oo! /on!ition, to (u5er, or to (u5erFs authori8e! QRe/eiverP0epositor5Q na%e! on
the 2a/e o2 this proposa& <underscoring supplied=$
As a(ove spe/i2i/a&&5 state!, !e&iveries %ust (e %a!e to the (u5er or his !u&5 authori8e!
representative na%e! in the /ontra/ts$ In other .or!s, un&ess the (u5er spe/i2i/a&&5 !esi'nate!
so%eone to re/eive the !e&iver5 o2 %ateria&s an! his na%e is .ritten on the Proposals opposite
the .or!s QAuthori8e! Re/eiverP0epositor5,Q the se&&er is un!er o(&i'ation to !e&iver to the (u5er
on&5 an! to no other personG other.ise, the !e&iver5 .ou&! (e inva&i! an! the se&&er .ou&! not (e
!is/har'e! 2ro% &ia(i&it5$ In the present /ase, petitioner !i! not na%e an5 person in
the Proposals .ho .ou&! re/eive the !e&iveries in his (eha&2, .hi/h %eant that >OO"EN .as
(oun! to !e&iver e;/&usive&5 to petitioner$
Si;th&5, it is a&so o(vious 2ro% the /onteste! !e&iver5 re/eipts that so%e i%portant !etai&s
.ere not supp&ie! or .ere &e2t in (&an?, i$e$, tru/? nu%(ers, persons .ho !e&ivere! the %ateria&s,
invoi/e an! s$ o$ nu%(ers$ he persons .ho !e&ivere! the %ateria&s .ere potentia& .itnesses
.ho /ou&! she! &i'ht on the /ir/u%stan/es surroun!in' the a&&e'e! !e&iveries o2 the %ateria&s to
petitioner$ Moreover, it /ou&! have (een easier 2or >OO"EN to pinpoint responsi(i&it5 to an5 o2
its e%p&o5ees 2or the non-!e&iver5 o2 the %ateria&s$
@e are not una.are o2 the s&ipsho! %anner o2 preparin' re/eipts, or!er s&ips an! invoi/es,
.hi/h un2ortunate&5 has (e/o%e a /o%%on (usiness pra/ti/e o2 tra!ers an! (usiness%en$ In
%ost /ases, these /o%%er/ia& 2or%s are not a&.a5s 2u&&5 a//o%p&ishe! to /ontain a&& the
ne/essar5 in2or%ation !es/ri(in' the .ho&e (usiness transa/tion$ he sa&es /&er?s %ere&5
in!i/ate a !es/ription an! the pri/e o2 ea/h ite% so&! .ithout (otherin' to 2i&& up a&& the avai&a(&e
spa/es in the parti/u&ar re/eipt or invoi/e, an! .ithout proper re'ar! 2or an5 &e'a& reper/ussion
2or su/h ne'&e/t$ Certain&5, it .ou&! not hurt i2 (usiness%en an! tra!ers .ou&! strive to %a?e
the re/eipts an! invoi/es the5 issue /o%p&ete, as 2ar as pra/ti/a(&e, in %ateria& parti/u&ars$ hese
!o/u%ents are not %ere s/raps o2 paper (ere2t o2 pro(ative va&ue (ut vita& pie/es o2 evi!en/e o2
/o%%er/ia& transa/tions$ he5 are .ritten %e%oria&s o2 the !etai&s o2 the /onsu%%ation o2
/ontra/ts$
Given this patheti/ state o2 respon!entNs evi!en/e, ho. /ou&! it (e sai! that respon!ent ha!
satis2a/tori&5 prove! its /aseK Essentia&&5, respon!ent has the (ur!en o2 esta(&ishin' its
a22ir%ative a&&e'ations o2 /o%p&ete !e&iver5 an! insta&&ation o2 the %ateria&s, an! petitionerFs
2ai&ure to pa5 there2or$ In this re'ar!, its evi!en/e on its !is/har'e o2 that !ut5 is 'ross&5
ane%i/$ @e e%phasi8e that &iti'ations /annot (e proper&5 reso&ve! (5 suppositions, !e!u/tions,
or even presu%ptions, .ith no (asis in evi!en/e, 2or the truth %ust have to (e !eter%ine! (5 the
har! ru&es o2 a!%issi(i&it5 an! proo2$
he Court o2 Appea&s ho.ever 2au&te! the tria& /ourt 2or suppose!&5 re&5in' solely on the
resu&ts o2 the o/u&ar inspe/tion on the pre%ises, .hi/h .ere not /on/&usive sin/e the inspe/tion
.as /on!u/te! severa& 5ears a2ter the !ispute! %ateria&s .ere a&&e'e!&5 insta&&e! therein$
@e !isa'ree$ he o/u&ar inspe/tion .as %a!e (5 the Eu!'e hi%se&2, at the re:uest o2 (oth
petitioner an! respon!ent, 2or the e;/&usive purpose o2 !eter%inin' .hether the %ateria&s su(Ee/t
o2 this /ase .ere a/tua&&5 !e&ivere! an! insta&&e!$ here is there2ore no (asis to 'ive &itt&e
evi!entiar5 va&ue on the resu&ts o2 the o/u&ar inspe/tion, as the Court o2 Appea&s .ou&!, an!
/har'e the tria& /ourt .ith error 2or re&5in' thereon$ It is no. rather &ate 2or an5 o2 the parties to
!is/&ai% the%, espe/ia&&5 .hen the5 are not in his or its 2avor$ -urther%ore, a /ursor5 rea!in' o2
the !e/ision o2 the /ourt a quo .i&& at on/e sho. that it .as not pre%ise! so&e&5 on the resu&ts o2
the o/u&ar inspe/tion (ut .as &i?e.ise pre!i/ate! on other evi!en/e presente! (5 the parties an!
.e&&-/onsi!ere! 2a/ts an! /ir/u%stan/es !is/usse! (5 the tria& /ourt in its ratio decidendi$ @e
/annot i'nore the 2a/tua& 2in!in's o2 the tria& /ourt, .hi/h %ust /arr5 'reat .ei'ht in the
eva&uation o2 evi!entiar5 2a/ts, an! in the a(sen/e o2 an5 in!i/ation sho.in' 'rave error
/o%%itte! (5 tria& /ourt, the appe&&ate /ourt is (oun! to respe/t su/h 2in!in's o2 2a/t$
@e hasten to a!! ho.ever that petitioner is not entire&5 2ree 2ro% an5 &ia(i&it5 to
respon!ent$ Petitioner a!%itte! the !e&iver5 o2 %ateria&s un!er E;hs$ QAQ an! its su(%ar?in's,
QBQ an! its su(%ar?in's, Q0,Q Q0-4Q an! QE$Q @ith respe/t to E;h$ QC-),Q petitioner
a/?no.&e!'e! his o(&i'ation un!er the 2irst hea!in', Ite%s Nos$ 3, * an! 1, an! the se/on!
hea!in', an! !enie! the rest$ Conse:uent&5, he shou&! (e %a!e &ia(&e there2or in the tota&
a%ount o2 P19,69,$,1$ -ro% this a%ount, petitionerFs !o.n pa5%ent o2 P*9,+++$++ shou&! (e
!e!u/te!$
It is insiste! (5 petitioner in his appea& (rie2 2i&e! (e2ore the Court o2 Appea&s that the
se/on! ite% un!er the se/on! hea!in' o2 E;h$ QC-)Q shou&! (e e;/&u!e! in the /o%putation
sin/e he never a!%itte! &ia(i&it5 there2or$
@e are not persua!e!$ he trans/ript o2 steno'raphi/ notes sho.s that !urin' the o/u&ar
inspe/tion /ounse& 2or respon!ent %ani2este! in e22e/t that petitioner a!%itte! the !e&iver5 an!
insta&&ation o2 the se/on! ite% in his (ui&!in', an! petitioner !i! not interpose an5 o(Ee/tion to
respon!entNs %ani2estation -
AJ$ QUISONES: @e .ou&! &i?e to %a?e o2 re/or! that !e2en!ant <La'on= a!%its that
p&ainti22 <>ooven Co%a&/o= !e&ivere! an! insta&&e! Ite% No$ 4 un!er the se/on! /o&u%n
o2 E;hi(it CC-)D .hi/h is the 2ront !oor o2 the 'roun! 2&oor$
AJ$ RICO: 0e2en!ant ho.ever a!!s that these .ere insta&&e! in 4794 an! ha! a&rea!5 pai! 2or the
sai! ite%$
AJ$ QUISONES: I .ou&! &i?e to %a?e o2 re/or! a&so that !e2en!ant a!%its the !e&iver5 an!
insta&&ation o2 Ite% No$ ) un!er the se/on! /o&u%n o2 E;hi(it CC-)D as havin' (een !e&ivere! an!
insta&&e! (5 the p&ainti22 in 4794 .ith the :ua&i2i/ation, ho.ever, that he ha! a&rea!5 pai! the
sa%e$
COUR: Are 5ou statin' that a&& these insta&&e! ite%s on the 'roun! 2&oor .ere a&& pai! (5 5ouK
MR$ LAGON: Jes, Jour >onor$
A44B
Petitioner /annot no. (e hear! to /o%p&ain a'ainst its in/&usion in the /o%putation o2 his
&ia(i&it5 sin/e his si&en/e virtua&&5 a%ounte! to a/:uies/en/e$ he si&en/e o2 one o2 the
/ontra/tin' parties an! his 2ai&ure to protest a'ainst the /&ai%s o2 the other part5, .hen he is
/har'ea(&e .ith the !ut5 to !o so, stron'&5 su''est an a!%ission o2 the vera/it5 an! va&i!it5 o2
the other part5Fs /&ai%s$
In su%, petitionerFs tota& &ia(i&it5 to respon!ent %a5 (e /o%pute! as 2o&&o.s:
<4= Ite%s un!er E;h$ CA,D /onsistin' o2 46
&i'ht !i22users at P*+$++ ea/h P ,9+$++
<)= Ite%s un!er E;h$ CB,D /onsistin' o2 )3
&i'ht (o;es at P*+$++ ea/h 3,))+$++
<3= hir!, 2ourth an! 2i2th ite%s un!er the 2irst
hea!in' o2 E;h$ QC-)Q .hi/h on the (asis o2
their %easure%ents /onstitute on&5 4P3 o2
the tota& /osts o2 %ateria&s &iste! therein 4*,46,$,1
<*= Ite%s un!er the se/on! hea!in' o2
E;h$ CC-)D )4,6*+$++
<1= Ite%s un!er E;hs$ C0D an! C0-4D *,9,+$++
<,= Ite%s un!er E;h$ CE-4D 4*,44+$++
P19,69,$,1
Less: Stipu&ate! 6L !is/ount *,*+9$77
P1*,366$,,
Less: A!van/e pa5%ent %a!e (5 petitioner
to >ooven Co%a&/o *9,+++$++
Un7a5d Ba3an:/ o= 7/-5-5on/2 P,,366$,,
Not.ithstan!in' the (rea/h o2 /ontra/t (5 respon!ent in 2ai&in' to !e&iver an! insta&& in the
pre%ises o2 petitioner a&& the stipu&ate! %ateria&s, .e neverthe&ess a//e!e to the ri'ht o2
respon!ent to re/over the unpai! (a&an/e 2ro% petitioner 2or the %ateria&s a/tua&&5 !e&ivere!$
he ne;t point o2 in:uir5 is the propriet5 o2 a.ar!in' !a%a'es, attorne5Fs 2ees an! &iti'ation
e;penses$
@e are not in a//or! .ith the tria& /ourtFs ru&in' that petitioner is entit&e! to a/tua& !a%a'es
to the e;tent o2 the un!e&ivere! %ateria&s an! un!one &a(or in the a%ount o2 P),,4)+$++$ here
is no proo2 that petitioner a&rea!5 pai! 2or the va&ue o2 the un!e&ivere! an! uninsta&&e! %ateria&s
to respon!ent$ here2ore, petitioner %a5 not (e !ee%e! to have su22ere! an5 su/h !a%a'e$ @e
have !e/&are! in no un/ertain ter%s that a/tua& or /o%pensator5 !a%a'es /annot (e presu%e!
(ut %ust (e prove! .ith reasona(&e !e'ree o2 /ertaint5$
A4)B
A /ourt /annot re&5 on spe/u&ations,
/onEe/tures or 'uess.or? as to the 2a/t o2 !a%a'e (ut %ust !epen! upon /o%petent proo2 that
the5 have in!ee! (een su22ere! (5 the inEure! part5 an! on the (asis o2 the (est evi!en/e
o(taina(&e as to the a/tua& a%ount thereo2$
A43B
It %ust point out spe/i2i/ 2a/ts that /ou&! provi!e
the 'au'e 2or %easurin' .hatever /o%pensator5 or a/tua& !a%a'es .ere (orne$
But .e a'ree .ith petitioner that he is entit&e! to %ora& !a%a'es$ >OO"ENNs (a! 2aith &ies
not so %u/h on its (rea/h o2 /ontra/t - as there .as no sho.in' that its 2ai&ure to /o%p&5 .ith its
part o2 the (ar'ain .as %otivate! (5 i&& .i&& or !one .ith 2rau!u&ent intent - (ut rather on its
appa&&in' te%erit5 to sue petitioner 2or pa5%ent o2 an a&&e'e! unpai! (a&an/e o2 the pur/hase
pri/e not.ithstan!in' ?no.&e!'e o2 its 2ai&ure to %a?e /o%p&ete !e&iver5 an! insta&&ation o2 a&&
the %ateria&s un!er their /ontra/ts$ It is i%%ateria& that, a2ter the tria&, petitioner .as 2oun! to (e
&ia(&e to respon!ent to the e;tent o2 P,,366$,,$ PetitionerNs ri'ht to .ithho&! 2u&& pa5%ent o2 the
pur/hase pri/e prior to the !e&iver5 an! insta&&ation o2 a&& the %er/han!ise /annot (e !enie! sin/e
un!er the /ontra/ts the (a&an/e o2 the pur/hase pri/e (e/a%e !ue an! !e%an!a(&e on&5 upon the
/o%p&etion o2 the proEe/t$ Conse:uent&5, the resu&tin' so/ia& hu%i&iation an! !a%a'e to
petitionerNs reputation as a respe/te! (usiness%an in the /o%%unit5, o//asione! (5 the 2i&in' o2
this suit provi!e su22i/ient 'roun!s 2or the a.ar! o2P1+,+++$++ as %ora& !a%a'es$
Moreover, /onsi!erin' the 2a/t that petitioner .as !ra.n into this &iti'ation (5 respon!ent
an! .as /o%pe&&e! to hire an attorne5 to prote/t an! !e2en! his interest, an! ta?in' into a//ount
the .or? !one (5 sai! attorne5 throu'hout the pro/ee!in's, as re2&e/te! in the re/or!, .e !ee% it
Eust an! e:uita(&e to a.ar! attorne5Ns 2ees 2or petitioner in the a%ount o2 P3+,+++$++$
A4*B
In
a!!ition, .e a'ree .ith the tria& /ourt that petitioner is entit&e! to re/over P*,,11*$1+ as a/tua&
!a%a'es in/&u!in' &iti'ation e;penses as this a%ount is su22i/ient&5 supporte! (5 the evi!en/e$
A41B
(HERE)ORE, the assai&e! 0e/ision o2 the Court o2 Appea&s !ate! )9 Apri& 4776 is
MO0I-IE0$ Petitioner #ose "$ La'on is or!ere! to pa5 respon!ent >ooven Co%a&/o In!ustries,
In/$, P,,366$,, representin' the va&ue o2 the unpai! %ateria&s a!%itte!&5 !e&ivere! to hi%$ On
the other han!, respon!ent is or!ere! to pa5 petitioner P1+,+++$++ as %ora& !a%a'es, P3+,+++$++
as attorne5Ns 2ees an! P*,,11*$1+ as a/tua& !a%a'es an! &iti'ation e;penses$
SO ORDERED.