contracts 6

8/19/2019 Contracts 6

1/107

G.R. No. 85240 July 12, 1991

HEIRS OF CECILIO (also knon as !"SILIO# CL"$%EL, na&'ly, O%ES)" CL"$%EL, LORE)"HERRER", JOSE CL"$%EL, !ENJ"IN CL"$%EL, *"CI)" CL"$%EL, C"RELI)" CL"$%EL,"RIO CL"$%EL, RO!ER)O CL"$%EL, LEON"R%O CL"$%EL, "RSENI" +ILL"LON, *ER*E)$"CL"$%EL an FELIS" CL"$%EL, petitioners,vs.HON. CO$R) OF "**E"LS, HEIRS OF "C"RIO, ES*ERI%ION", R"-$N%" an CELES)IN", allsuna&' CL"$%EL, respondents.

Ricardo L. Moldez for petitioners.

Juan T. Aquino for private respondents

S"RIEN)O, J.: p

This petition for review on certiorari seeks the reversal of the decision rendered by the Court of Appeals inCA-G.R. CV No. !!"# 1 and the reinstate$ent of the decision of the then Court of %irst &nstance 'C%&( of Ri)al,*ranch C+&, in Civil Case No. -"/-0, entitled. 12eirs of acario Claudel, et al. v. 2eirs of Cecilio Claudel, etal.,1 which dis$issed the co$plaint of the private respondents a3ainst the petitioners for cancellation of titles andreconveyance with da$a3es. 2

As early as 4ece$ber "5, 6#"", *asilio also known as 1Cecilio1 Claudel, ac7uired fro$ the *ureau of 8ands,8ot No. 6"9 of the untinlupa :state ;ubdivision, located in the poblacion of untinlupa, Ri)al, with anarea of 6,6 s7uare $eters< he secured Transfer Certificate of Title 'TCT( No. !6 issued by the Re3istryof 4eeds for the 0rovince of Ri)al in 6#"9< he also declared the lot in his na$e, the latest Ta= 4eclarationbein3 No. #. 2e dutifully paid the real estate ta=es thereon until his death in 6#9. / Thereafter, his widow1*asilia1 and later, her son >ose, one of the herein petitioners, paid the ta=es.

The sa$e piece of land purchased by Cecilio would, however, beco$e the sub?ect of protracted liti3ationthirty-nine years after his death.

Two branches of Cecilio@s fa$ily contested the ownership over the land-on one hand the children of Cecilio,na$ely, odesto, 8oreta, >ose, *en?a$in, 0acita, Car$elita, Roberto, ario, 8eonardo, Nenita, ArseniaVillalon, and %elisa Claudel, and their children and descendants, now the herein petitioners 'hereinafterreferred to as 2:&R; % C:C&8&(, and on the other, the brother and sisters of Cecilio, na$ely, acario,:speridiona, Ray$unda, and Celestina and their children and descendants, now the herein privaterespondents 'hereinafter referred to as ;&*8&NG; % C:C&8&(. &n 6#", the 2:&R; % C:C&8&partitioned this lot a$on3 the$selves and obtained the correspondin3 Transfer Certificates of Title on theirshares, as followsB

TCT No. 9#9#6 6,## s7. $. >ose Claudel

TCT No. 9#9#" 6,## s7. $. odesta Claudel and children

TCT No. 9#9#9 6,## s7. $. Ar$enia C. Villalon

TCT No. 9#9#! 6,## s7. $. %elisa Claudel 4

%our years later, on 4ece$ber , 6#/, private respondents ;&*8&NG; % C:C&8&, filed Civil Case No."/-0 as already adverted to at the outset, with the then Court of %irst &nstance of Ri)al, a 1Co$plaint forCancellation of Titles and Reconveyance with 4a$a3es,1 alle3in3 that !/ years earlier, or so$eti$e in 6#9,their parents had purchased fro$ the late Cecilio Claudel several portions of 8ot No. 6"9 for the su$ of09.. They ad$itted that the transaction was verbal. 2owever, as proof of the sale, the ;&*8&NG; %

C:C&8& presented a subdivision plan of the said land, dated arch ", 6#9, indicatin3 the portionsalle3edly sold to the ;&*8&NG; % C:C&8&.

As already $entioned, the then Court of %irst &nstance of Ri)al, *ranch C+&, dis$issed the co$plaint,disre3ardin3 the above sole evidence 'subdivision plan( presented by the ;&*8&NG; % C:C&8&, thusB


2/107

:=a$inin3 the pleadin3s as well as the evidence presented in this case by the parties, theCourt can not but notice that the present co$plaint was filed in the na$e of the 2eirs ofacario, :spiridiona, Ray$unda and Celestina, all surna$ed Claudel, without na$in3 thedifferent heirs particularly involved, and who wish to recover the lots fro$ the defendants.The Court tried to find this out fro$ the evidence presented by the plaintiffs but to no avail.n this point alone, the Court would not be able to apportion the property to the real party ininterest if ever they are entitled to it as the persons indicated therein is in 3eneric ter$';ection ", Rule 9(. The Court has noticed also that with the e=ception of plaintiff 8a$pitocand 'sic ( the heirs of Ray$unda Claudel are no lon3er residin3 in the property as they have'sic ( left the sa$e in 6#/. *ut $ost i$portant of all the plaintiffs failed to present any

docu$ent evidencin3 the alle3ed sale of the property to their predecessors in interest by thefather of the defendants. Considerin3 that the sub?ect $atter of the supposed sale is a realproperty the absence of any docu$ent evidencin3 the sale would preclude the ad$ission oforal testi$ony ';tatute of %rauds(. oreover, considerin3 also that the alle3ed sale tookplace in 6#9, the action filed by the plaintiffs herein for the recovery of the sa$e $ore thanthirty years after the cause of action has accrued has already prescribed.

D2:R:%R:, the Court renders ?ud3$ent dis$issin3 the co$plaint, withoutpronounce$ent as to costs.

; R4:R:4. 5

n appeal, the followin3 errors were assi3ned by the ;&*8&NG; % C:C&8&B

6. T2: TR&A8 CERT :RR:4 &N 4&;&;;&NG 08A&NT&%%;@ C08A&NT 4:;0&T:CNC8E;&V: :V&4:NC: ;2D&NG T2: 0RT&N ;84 T :AC2 % 08A&NT&%%;@0R:4:C:;;R;.

". T2: TR&A8 CERT :RR:4 &N 284&NG T2AT 08A&NT&%%; %A&8:4 T 0RV: ANF4CE:NT :V&4:NC&NG T2: A88:G:4 ;A8:.

9. T2: TR&A8 CERT :RR:4 &N NT G&V&NG CR:4&T T T2: 08AN, :+2&*&T A,;2D&NG T2: 0RT&N; ;84 T :AC2 % T2: 08A&NT&%%;@ 0R:4:C:;;R;-&N-&NT:R:;T.

!. T2: TR&A8 CERT :RR:4 &N NT 4:C8AR&NG 08A&NT&%%; A; DN:R; % T2:0RT&N CV:R:4 *F T2: 08AN, :+2&*&T A.

. T2: TR&A8 CERT :RR:4 &N NT 4:C8AR&NG TRAN;%:R C:RT&%&CAT:; % T&T8:N;. 9#9#6, 9#9#", 9#9#9 AN4 9#9#! % T2: R:G&;T:R % 4::4; % R&A8 A;NE88 AN4 V&4.

The Court of Appeals reversed the decision of the trial court on the followin3 3roundsB

6. The failure to brin3 and prosecute the action in the na$e of the real party in interest, na$ely the partiesthe$selves, was not a fatal o$ission since the court a quo could have ad?udicated the lots to the ;&*8&NG;% C:C&8&, the parents of the herein respondents, leavin3 it to the$ to ad?udicate the property a$on3the$selves.

". The fact of residence in the disputed properties by the herein respondents had been $ade possible by thetoleration of the deceased Cecilio.

9. The ;tatute of %rauds applies only to e=ecutory contracts and not to consu$$ated sales as in the case atbar where oral evidence $ay be ad$itted as cited in Iñigo v . Estate of Magtoto and Diana, etal . v . Macalio. 8

&n addition,

. . . Given the nature of their relationship with one another it is not unusual that no docu$entto evidence the sale was e=ecuted, . . ., in their blind faith in friends and relatives, in their lackof e=perience and foresi3ht, and in their i3norance, $en, in spite of laws, will $ake andcontinue to $ake verbal contracts. . . . 9


3/107

!. The defense of prescription cannot be set up a3ainst the herein petitioners despite the lapse of over fortyyears fro$ the ti$e of the alle3ed sale in 6#9 up to the filin3 of the 1Co$plaint for Cancellation of Titles andReconveyance . . .1 in 6#/.

Accordin3 to the Court of Appeals, the action was not for the recovery of possession of real property but forthe cancellation of titles issued to the 2:&R; % C:C&8& in 6#9. ;ince the ;&*8&NG; % C:C&8&co$$enced their co$plaint for cancellation of titles and reconveyance with da$a3es on 4ece$ber , 6#/,only four years after the 2:&R; % C:C&8& partitioned this lot a$on3 the$selves and obtained thecorrespondin3 Transfer Certificates of Titles, then there is no prescription of action yet.

Thus the respondent court ordered the cancellation of the Transfer Certificates of Title Nos. 9#9#6, 9#9#",9#9#9, and 9#9#! of the Re3ister of 4eeds of Ri)al issued in the na$es of the 2:&R; % C:C&8& andcorollarily ordered the e=ecution of the followin3 deeds of reconveyanceB

To Celestina Claudel, 8ot 6"9-A with an area of s7. $.

To Ray$unda Claudel, 8ot 6"9-* with an area of ## s7. $.

To :speridiona Claudel, 8ot 6"9-C with an area of # s7. $.

To acario Claudel, 8ot 6"9-4, with an area of #/ s7. $. 10

The respondent court also en?oined that this disposition is without pre?udice to the private respondents, asheirs of their deceased parents, the ;&*8&NG; % C:C&8&, partitionin3 a$on3 the$selves in accordancewith law the respective portions sold to and herein ad?udicated to their parents.

The rest of the land, lots 6"9-: and 6"9-%, with an area of #5 and /,#" s7uare $eters, respectivelywould 3o to Cecilio or his heirs, the herein petitioners. *eyond these apportion$ents, the 2:&R; %C:C&8& would not receive anythin3 else.

The cru= of the entire liti3ation is whether or not the Court of Appeals co$$itted a reversible error indisposin3 the 7uestion of the true ownership of the lots.

And the real issues areB

6. Dhether or not a contract of sale of land $ay be proven orallyB

". Dhether or not the prescriptive period for filin3 an action for cancellation of titles andreconveyance with da$a3es 'the action filed by the ;&*8&NG; % C:C&8&( should becounted fro$ the alle3ed sale upon which they clai$ their ownership '6#9( or fro$ the dateof the issuance of the titles sou3ht to be cancelled in favor of the 2:&R; % C:C&8& '6#/(.

The rule of thu$b is that a sale of land, once consu$$ated, is valid re3ardless of the for$ it $ay have beenentered into. 11 %or nowhere does law or ?urisprudence prescribe that the contract of sale be put in writin3 beforesuch contract can validly cede or trans$it ri3hts over a certain real property between the parties the$selves.

2owever, in the event that a third party, as in this case, disputes the ownership of the property, the persona3ainst who$ that clai$ is brou3ht can not present any proof of such sale and hence has no $eans toenforce the contract. Thus the ;tatute of %rauds was precisely devised to protect the parties in a contract ofsale of real property so that no such contract is enforceable unless certain re7uisites, for purposes of proof,are $et.

The provisions of the ;tatute of %rauds pertinent to the present controversy, stateB

Art. 6!9 'Civil Code(. The followin3 contracts are unenforceable, unless they are ratifiedB

=== === ===

"( Those that do not co$ply with the ;tatute of %rauds as set forth in this nu$ber. &n thefollowin3 cases, an a3ree$ent hereafter $ade shall be unenforceable by action unless thesa$e, or so$e note or $e$orandu$ thereof, be in writin3, and subscribed by the partychar3ed, or by his a3ent< evidence, therefore, of the a3ree$ent cannot be received withoutthe writin3, or a secondary evidence of its contentsB


4/107

=== === ===

e( An a3ree$ent for the leasin3 for a lon3er period than one year, or for the sale of realproperty or of an interest therein<

=== === ===

':$phasis supplied.(

The purpose of the ;tatute of %rauds is to prevent fraud and per?ury in the enforce$ent of obli3ationsdependin3 for their evidence upon the unassisted $e$ory of witnesses by re7uirin3 certain enu$eratedcontracts and transactions to be evidenced in Dritin3. 12

The provisions of the ;tatute of %rauds ori3inally appeared under the old Rules of :vidence. 2owever whenthe Civil Code was re-written in 6#!# 'to take effect in 6#(, the provisions of the ;tatute of %rauds weretaken out of the Rules of :vidence in order to be included under the title on Enenforceable Contracts in theCivil Code. The transfer was not only a $atter of style but to show that the ;tatute of %rauds is also asubstantive law.

Therefore, e=cept under the conditions provided by the ;tatute of %rauds, the e=istence of the contract ofsale $ade by Cecilio with his siblin3s 1/ can not be proved.

n the second issue, the belated clai$ of the ;&*8&NG; % C:C&8& who filed a co$plaint in court only in6#/ to enforce a li3ht ac7uired alle3edly as early as 6#9, is difficult to co$prehend.

The Civil Code statesB

Art. 66!. The followin3 actions $ust be co$$enced within si= yearsB

'6( Epon an oral contract . . . ':$phasis supplied(.

&f the parties ;&*8&NG; % C:C&8& had alle3edly derived their ri3ht of action fro$ the oral purchase $adeby their parents in 6#9, then the action filed in 6#/ would have clearly prescribed. ore than si= years had

lapsed.

De do not a3ree with the parties ;&*8&NG; % C:C&8& when they reason that an i$plied trust in favor ofthe ;&*8&NG; % C:C&8& was established in 6#", when the 2:&R; % C:C&8& e=ecuted a contract ofpartition over the said properties.

*ut as we had pointed out, the law reco3ni)es the superiority of the torrens title.

Above all, the torrens title in the possession of the 2:&R; % C:C&8& carries $ore wei3ht as proof ofownership than the survey or subdivision plan of a parcel of land in the na$e of ;&*8&NG; % C:C&8&.

The Court has invariably upheld the indefeasibility of the torrens title. No possession by any person of any

portion of the land could defeat the title of the re3istered owners thereof. 14

A torrens title, once re3istered, cannot be defeated, even by adverse, open and notoriouspossession. A re3istered title under the torrens syste$ cannot be defeated by prescription.The title, once re3istered, is notice to the world. All persons $ust take notice. No one canplead i3norance of the re3istration. 15

=== === ===

%urther$ore, a private individual $ay not brin3 an action for reversion or any action whichwould have the effect of cancellin3 a free patent and the correspondin3 certificate of titleissued on the basis thereof, with the result that the land covered thereby will a3ain for$ partof the public do$ain, as only the ;olicitor General or the officer actin3 in his stead $ay doso. 1

&t is true that in so$e instances, the Court did away with the irrevocability of the torrens title, but thecircu$stances in the case at bar varied si3nificantly fro$ these cases.


5/107

&n !ornales v . IA", 1 the defense of indefeasibility of a certificate of title was disre3arded when the transfereewho took it had notice of the flaws in the transferor@s title. No ri3ht passed to a transferee fro$ a vendor who didnot have any in the first place. The transferees bou3ht the land re3istered under the torrens syste$ fro$ vendorswho procured title thereto by $eans of fraud. Dith this knowled3e, they can not invoke the indefeasibility of acertificate of title a3ainst the private respondent to the e=tent of her interest. This is because the torrens syste$ ofland re3istration, thou3h indefeasible, should not be used as a $eans to perpetrate fraud a3ainst the ri3htfulowner of real property.

ere re3istration of the sale is not 3ood enou3h, 3ood faith $ust concur with re3istration. therwisere3istration beco$es an e=ercise in futility. 18

&n A#erol v . !agu#aran, 19 we reversed the decision of the trial court. &n this case, the title was wron3fullyre3istered in another person@s na$e. An i$plied trust was therefore created. This trustee was co$pelled by law toreconvey property fraudulently ac7uired notwithstandin3 the irrevocability of the torrens title. 20

&n the present case, however, the facts belie the clai$ of ownership.

%or several years, when the ;&*8&NG; % C:C&8&, na$ely, acario, :speridiona Ray$unda, andCelestina were livin3 on the contested pre$ises, they re3ularly paid a su$ of $oney, desi3nated as 1ta=es1at first, to the widow of Cecilio, and later, to his heirs. 21 Dhy their pay$ents were never directly $ade to theunicipal Govern$ent of untinlupa when they were intended as pay$ents for 1ta=es1 is difficult to s7uare withtheir clai$ of ownership. De are rather inclined to consider this fact as an ad$ission of non-ownership. And when

we consider also that the petitioners 2:&R; % C:C&8& had individually paid to the $unicipal treasury the ta=escorrespondin3 to the particular portions they were occupyin3, 22 we can readily see the superiority of thepetitioners@ position.

Renato ;ole$a and 4eci$ina Calve), two of the respondents who derive their ri3ht fro$ the ;&*8&NG; %C8AE4:8, bou3ht a portion of the lot fro$ %elisa Claudel, one of the 2:&R; % C8AE4:8. 2/ The Calve)esshould not be payin3 for a lot that they already owned and if they did not acknowled3e %elisa as its owner.

&n addition, before any of the ;&*8&NG; % C:C&8& could stay on any of the portions of the property, theyhad to ask first the per$ission of >ose Claudel a3ain, one of the 2:&R; % C:C&8&. 24 &n fact the onlyreason why any of the heirs of ;&*8&NG; % C:C&8& could stay on the lot was because they were allowed to doso by the 2:&R; % C:C&8&. 25

&n view of the fore3oin3, we find that the appellate court co$$itted a reversible error in deni3ratin3 thetransfer certificates of title of the petitioners to the survey or subdivision plan proffered by the privaterespondents. The Court 3enerally reco3ni)es the profundity of conclusions and findin3s of facts reached bythe trial court and hence sustains the$ on appeal e=cept for stron3 and co3ent reasons inas$uch as the trialcourt is in a better position to e=a$ine real evidence and observe the de$eanor of witnesses in a case.

No clear specific contrary evidence was cited by the respondent appellate court to ?ustify the reversal of thelower court@s findin3s. Thus, in this case, between the factual findin3s of the trial court and the appellatecourt, those of the trial court $ust prevail over that of the latter. 2

D2:R:%R:, the petition is GRANT:4 De R:V:R;: and ;:T A;&4: the decision rendered in CA-G.R.CV No. !!"#, and we hereby R:&N;TAT: the decision of the then Court of %irst &nstance of Ri)al '*ranch"5, 0asay City( in Civil Case No. -"/-0 which ruled for the dis$issal of the Co$plaint for Cancellation ofTitles and Reconveyance with 4a$a3es filed by the 2eirs of acario, :speridiona Ray$unda, andCelestina, all surna$ed C8AE4:8. Costs a3ainst the private respondents.

; R4:R:4.


6/107

G.R. No. 5805 Jun' /0, 199/

HEIRS OF "RI"NO L"G$)"N, Na&'ly FR"NCISC" IC"O, ""%OR L"G$)"N, FE%ERICOL"G$)"N, RIC"R%O L"G$)"N, GO%OFRE%O L"G$)"N, NEI" L"G$)"N, S"L+"%OR L"G$)"N,"L!ER)O L"G$)"N, an HERN"N%I)" L"G$)"N, petitioners,vs.SE+ERIN" IC"O, )ERESI)" IC"O, IGN"CI" IC"O, "RG"RI)" IC"O ERC$RI"L S"G"RIO anR. "G"LLON, respondents.

$ldarico !. Me%orda & Associates for petitioners.

Do#inador M. "anastra for respondents.

ELO, J.:

This case was certified to us by the Court of Appeals on a 7uestion of law pursuant to ;ection 6 of the>udiciary Act of 6#!5, as a$ended, involved as there is the le3ality of the dis$issal of petitioners@ A$ended

Co$plaint by the trial court based on respondents@ otion to 4is$iss.

n ay "9, 6#", herein petitioners, 2eirs of ariano 8a3utan, filed a Co$plaint 'Civil Case No. ""#9, C%&,a$boan3a del Norte, *r. &( a3ainst respondents ;everina &cao, et al. for 1;pecific 0erfor$ance andHor0ay$ent of &$prove$ents1 in re3ard to two parcels of land, na$ely, 8ot No. !, located at Talon, 0otan3on,4apitan City, covered by ri3inal Certificate of Title No.4-#9", alle3in3 in part as followsB

6. That %eli= &cao and spouses ariano 8a3utan and %rancisca &cao entered into a contractwherein it was a3reed that spouses ariano 8a3utan and %rancisca &cao would cultivate 8otNo. ! above-described on condition that the spouses would cultivate and plant coconutson the land, and the i$prove$ents would be divided e7ually into twoB one-half '6H"( would 3o

to the spouses and the other one-half '6H"( would 3o to %eli= &cao<

66. That as a3reed, spouses ariano 8a3utan and %rancisca &cao with the help of theirchildren, the herein co-plaintiffs, cultivated and i$proved 0arcel &, and planted thereoncoconuts which are now fruit-bearin3. 'pp. "-9< p. 6!, Record on Appeal followin3 p.6", Rollo.(

and 8ot No. #, located at Talawas, 4apitan City, covered by Transfer Certificate of Title No. T-/69,alle3in3 thusB

". That plaintiff A$ador 8a3utan and the defendants andHor their predecessor-in-interestentered into contract to the effect that 0ARC:8 && would be cultivated and i$proved by said

A$ador 8a3utan and to plant thereon coconuts on condition that as consideration thereof, A$ador 8a3utan would be 3iven another parcel of land co$$ensurate to the labor orservices rendered as $entioned above<

"6. That by virtue of and pursuant to the contract above-$entioned, A$ador 8a3utancultivated and i$proved 0arcel && and planted thereon 9 coconut trees by hi$self and thruhired laborers, which coconuts are now fruit bearin3. 'pp. ! and 6/, Rollo.(

Respondents filed their Answer on ay ", 6#. ;ubse7uently, they filed a otion for 8eave to %ile an A$ended Answer, which, aside fro$ reiteratin3 previous defenses of absence of cause of action,prescription, and non-co$pliance with the ;tatute of %rauds, sou3ht to introduce additional defenses oflaches and estoppel aside fro$ averrin3 that both lots were the capital and paraphernal property of %eli=

&cao and %rancisca >aralve 'predecessors-in-interest of respondents(, respectively 'pp. "-"5, Rollo(.

n ctober "6, 6#, the trial court issued an rder ad$ittin3 respondents@ A$ended Answer 'p. 95, Rollo(.Three $onths thereafter, on >anuary, 6/, 6#5, respondents filed a otion to 4is$iss which petitionersopposed, specifically 7uestionin3 respondents@ belated issues on laches and estoppel raised in the A$ended Answer.


7/107

n %ebruary 6, 6#5, the trial court issued a Resolution dis$issin3 petitioners@ A$ended Co$plaint 'pp./#-!,Rollo(, pertinently observin3B

Goin3 over the a$ended co$plaint particularly the above 7uoted aver$ents, the Court in itsorder, dated ctober 6#, 6# counselled the plaintiff, throu3h their lawyerB

=== === ===

ay the Court re$ind Atty. e?orada that in a proper pleadin3, he shouldstate with definiteness and clarity '6( whether the a3ree$ent or contract

alle3ed in the co$plaint was verbal or written< and '"( the date the sa$e wasentered. 'rder, dated ctober 6#, 6#, pp. 6"-69, Record(

The plaintiffs ad$it the a3ree$ent or contract was not inwritin3B

Dhile it is true that the a3ree$ent was not $ade in writin3 'and this wasun7ualifiedly ad$itted by the plaintiffs in their co$plaint(, the fact re$ains thatthe a3ree$ent has already been perfor$ed by the plaintiffs herein by plantin3coconuts and other i$prove$ents on the land in 7uestion. 'pposition to theotion to 4is$iss, dated >anuary "!, 6#5, pp. 69#-69, Record(

;i$ilarly, plaintiffs cannot state with definiteness as to the date the alle3ed a3ree$ent orcontract was entered into, viz B

Dhile it is true that the co$plaint does not state when the a3ree$ent wasentered into andHor $ade between the plaintiffs and the defendants and theirpredecessor-in-interest, by the absence of the date is not the deter$inin3factor as to the basis of plaintiffs cause of action. 'pposition to the otion to4is$iss, dated >anuary "!, 6#5, pp. 69#-69, Record(.

&t is . . . settled that plaintiffs ad$it that the alle3ed a3ree$ent was not in writin3, and theycannot tell the date when sa$e a3ree$ent was $ade.

The Court now asksB Dhat was the a3ree$entI And, who were the parties theretoI

As to 0ARC:8 &, the alle3ed a3ree$ent was recited in par. + of the a$ended co$plaint'7uoted on pa3e 6, botto$, of the Resolution(< the parties were %eli= &cao 'landowner(, andthe spouses ariano 8a3utan and %rancisca &cao 'the tillers(.

As to 0ARC:8 &&, another a3ree$ent was stated in the sa$e a$ended co$plaint in its par.++ '7uoted on pa3e ", top of this Resolution(< the parties were plaintiff A$ador 8a3utan 'thetiller( on the one hand, and the defendant 1andHor1 their predecessor-in-interest on the otherhand, 'as the landowners(.

The land owner 'party( of 0ARC:8 & has been $entioned to be %eli= &cao. Accordin3 to adeath certificate issued by the parish priest of 4apitan City 'Anne= A, otion to 4is$iss, p.6"!, of Record(, %eli= &cao died on Au3ust "", 6#!, at the a3e of !. A3ain, 0ARC:8 &, isnow a re3istered property under ri3inal Certificate of Title No. 0-#9", issued under %ree0atent No. V-##//", n >uly #, 6## 'Anne= G, otion to 4is$iss, pa3e 69, Record(, with12rs. of %eli= &cao1 as the re3istered owners.

The supposed 'tillers' of 0ARC:8 & were the spouses ariano 8a3utan and %rancisca &cao.4ue to the death of the for$er, i.e., ariano 8a3utan, the a$ended co$plaint placed thena$es of his heirs as the plaintiffs. 8ikewise, due to the de$ise of land owner %eli= &cao in6#!, the a$ended co$plaint sued his successor-in-interest as the defendants. And, asstated, the plaintiffs ad$itted that the alle3ed a3ree$ent (as not in (riting and they cannot

state with certainty ()en the alle3ed a3ree$ent was entered into between the land owner'%eli= &cao( and the tillers 'spouses ariano 8a3utan and %rancisca &cao(.

ND, on 0ARC:8 &&. &t has been established that the land owner of this property is %rancisca>aralve 'wife of land owner %eli= &cao of 0arcel &(. Accordin3 to a death certificate issued bythe parish priest of 4apitan City, %rancisca >aralve died on >uly "#, 6#9# at the a3e of 96.'0lease see Anne= 4, otion to 4is$iss, pa3e ", Record(. 0ARC:8 && is a re3istered


8/107

property now under ri3inal Certificate of Title No. #99 issued under %ree 0atent No. V-6"5, on ay 6, 6## 'see Anne= 2, otion to 4is$iss, pa3e 699, Record(, with 12rs. of%rancisca >aralve1 as the re3istered owners.

The supposed 'tiller' of 0ARC:8 &&, accordin3 to par. ++ of the a$ended co$plaint '7uotedon top, pa3e ", this Resolution( J was A$ador 8a3utan, while the supposed 1land owners1of said 0ARC:8 && were the defendants andHor their predecessor-in-interest. The con?unctive-dis?unctive 1AN4HR1 is, to the $ind of the Court, a bad3e of uncertainty, a revelation of avery weak cause on the part of 1tiller1 - plaintiff A$ador 8a3utan and the other co-plaintiffs.They can@t pin-point with definiteness the person or persons with who$ they entered into,

such alle3ed 1un-dated1 and 1unwritten1 a3ree$ent.

'pp. -", Rollo.(

Thereupon, the trial court heldB

The court is of the opinion, as it hereby 284;,

6. That the titles for 0arcels & K &&, are absolutely indefeasible<

". That plaintiffs have no sufficient cause of action<

9. That the 1un-dated1 and 1unwritten1 a3ree$ent, 3rantin3 that it did e=ist is, unenforceableunder the ;tatute of %rauds<

!. That sa$e a3ree$ent, also 3rantin3 it did e=ist, has lon3 prescribed< and

. The plaintiffs@ cause of action has to fail, due to laches on their part.

%R:G&NG CN;&4:R:4, the Court has to dis$iss, as it hereby 4&;&;;:; thea$ended co$plaint of the plaintiffs.

This resolves the otion to 4is$iss filed by the defendants, >anuary 6/, 6#5. 'p. !, Rollo.(

Considerin3 the circu$stance that the case at bar started "6 years a3o, the Court issued a Resolution onarch 6, 6##9 re7uirin3 the parties to 1$ove in the pre$ises1. nly petitioners responded, ur3in3 us todecide the case at the earliest possible ti$e 'p. , Rollo(.

De rule a3ainst the dis$issal.

The $otion to dis$iss was filed lon3 after respondents@ A$ended Answer had been filed. Ender Rule 6/, the$otion to dis$iss $ust be filed (it)in the ti$e for pleadin3, that is, within the period to answer 'Tuason v.Rafor, ;CRA !5 L6#/"M, at p. !59(. Respondents filed their $otion to dis$iss al$ost three $onths afterthey filed their A$ended Answer, which is a violation of the first re7uire$ent on $otions to dis$iss.

Additionally, assu$in3 the propriety of the $otion to dis$iss, the Court does not a3ree that the A$endedCo$plaint could have been dis$issed on the 3round of lack of cause of action. 0etitioners@ alle3ations offacts relative to 0arcels & and &&, sufficiently establish a cause of action.

&t is also unfortunate that the trial court had to elicit an ad$ission fro$ petitioners@ counsel on the absence ofa written a3ree$ent 'p. , Record on Appeal( because the ;tatute of %rauds is not applicable here. Dhat isat issue is respondents@ alle3ed failure to pay of the i$prove$ents on 0arcels & and && to petitioners. r,alternatively, the correspondin3 delivery of of said 0arcels & and &&, respectively. This situation is notcovered by the ;tatute of %rauds, specifically, No. " of Article 6!9 of the new Civil Code since thea3ree$ent had partially been e=ecuted which re$oves the case fro$ the covera3e of the ;tatute of %rauds.

The trial ?ud3e also erred when he relied on the defenses of laches and estoppel, which were raised both in

respondent@s A$ended Answer and otion to 4is$iss thus J

6. The principal parties concernin3 the i$prove$ent and cultivation of 0ARC:8 & wereariano 8a3utan 'the tiller(, and %eli= &cao 'the land owner(. &n the herein alternative actionfor specific perfor$ance andHor pay$ent of i$prove$ents, the ones suin3 are the 2eirs ofariano 8a3utan< those bein3 sued are the 2eirs of %eli= &cao. &f, accordin3 to the death


9/107

certificate of %eli= &cao died in 6#! ';ee Anne= A, otion to 4is$iss(, why was the ori3inalco$plaint only filed on ay "9, 6#"I

". *oth 0ARC:8; & K && sub?ect of a %ree 0atent application, and, as a $atter of fact bothparcels are now re3istered properties the titles of which were respectively issued on >uly #,6## and ay 6#, 6##. ;ince, ad$ittedly, the plaintiffs on one hand, and the defendant onthe other hand, live and resides in the sa$e co$$unity 'in 4apitan City(, why didn@t plaintiffsre3ister their opposition to the issuance of a %ree 0atent in favor of the defendants or theirpredecessor-in-interestI

9. There was a certain ;pecial Case No. involvin3 the estates of the deceased 0edro>aralve so$eti$e in 6#!#. Dhy didn@t plaintiffs re3ister their clai$ over 0ARC:8 && whichunder said case was part of the estate of the said 0edro >aralveI

!. And on the $atter of 0ARC:8 &, plaintiffs could have conveniently filed their clai$ in anintestacy proceedin3s in the estate of the deceased %eli= &cao. 'pp. 9-!, Record on Appeal.(

De have ruled in this re3ard thatB

Dhen the co$plaint was dis$issed not because of any evidence presented by the parties, asa result of the trial on the $erits, ut #erel* on a #otion to dis#iss filed by the defendants,

the sufficiency of the $otion should be tested on the stren3th of the alle3ations offacts contained in t)e co#plaint and no ot)er . '4e >esus, et al. v. *elar$ino, et al., # 0hil.9// L6#!M.(

J and J

. . . the issue $ust be passed upon on the basis of the alle3ations assu$in3 the$ to be trueand the court cannot in7uire into the truth of the alle3ations and declare the$ to be false<otherwise, it (ould e a procedural error and a denial of due process to t)e plaintiff. 'Venturav. *ernabe, 95 ;CRA 5 L6#6M, at p. #5< Galeon vs. Galeon, !# ;CRA 6/ L6#9M<e$phasis supplied.(

D2:R:%R:, the order dis$issin3 the co$plaint is ;:T A;&4: and the case is R:AN4:4 to the court aquo for further proceedin3s. No special pronounce$ent is $ade as to costs.

; R4:R:4.


10/107

G.R. No. 118509 %'3'&' 1, 1995

LIE)"I SONS ILLING, INC., petitioner,vs.CO$R) OF "**E"LS, !"N OF )HE *HILI**INE ISL"N%S an N")ION"L !OOS)ORE, respondents.

ELO, J.:

The issue in the petition before us is whether or not there was a perfected contract between petitioner8i$ketkai ;ons illin3, &nc. and respondent *ank of the 0hilippine &slands '*0&( coverin3 the sale of a parcelof land, appro=i$ately 9.9 hectares in area, and located in *arrio *a3on3 &lo3, 0asi3 City, etro anila.

*ranch 66 of the Re3ional Trial Court of the National Capital >udicial Re3ion stationed in 0asi3 ruled thatthere was a perfected contract of sale between petitioner and *0&. &t stated that there was $utual consentbetween the parties< the sub?ect $atter is definite< and the consideration was deter$ined. &t concluded thatall the ele$ents of a consensual contract are attendant. &t ordered the cancellation of a sale effected by *0&

to respondent National *ook ;tore 'N*;( while the case was pendin3 and the nullification of a title issued infavor of said respondent N*;.

Epon elevation of the case to the Court of Appeals, it was held that no contract of sale was perfectedbecause there was no concurrence of the three re7uisites enu$erated in Article 6965 of the Civil Code. Thedecision of the trial court was reversed and the co$plaint dis$issed.

2ence, the instant petition.

;horn of the interpretations 3iven to the acts of those who participated in the disputed sale, the findin3s offacts of the trial court and the Court of Appeals narrate basically the sa$e events and occurrences. Therecords show that on ay 6!, 6#/, 0hilippine Re$nants Co., &nc. constituted *0& as its trustee to $ana3e,

ad$inister, and sell its real estate property. ne such piece of property placed under trust was the disputedlot, a 99,/-s7uare $eter lot at *arrio *a3on3 &lo3, 0asi3, etro anila covered by Transfer Certificate ofTitle No. !#96"".

n >une "9, 6#55, 0edro Revilla, >r., a licensed real estate broker was 3iven for$al authority by *0& to sellthe lot for 06,. per s7uare $eter. This arran3e$ent was concurred in by the owners of the 0hilippineRe$nants.

*roker Revilla contacted Alfonso 8i$ of petitioner co$pany who a3reed to buy the land. n >uly 5, 6#55,petitioner@s officials and Revilla were 3iven per$ission by Rolando V. Aro$in, *0& Assistant Vice-0resident,to enter and view the property they were buyin3.

n >uly #, 6#55, Revilla for$ally infor$ed *0& that he had procured a buyer, herein petitioner. n >uly 66,6#55, petitioner@s officials, Alfonso 8i$ and Albino 8i$ketkai, went to *0& to confir$ the sale. They wereentertained by Vice-0resident erlin Albano and Asst. Vice-0resident Aro$in. 0etitioner asked that the priceof 06,. per s7uare $eter be reduced to 0#. while Albano stated the price to be 06,6.. Theparties finally a3reed that the lot would be sold at 06,. per s7uare $eter to be paid in cash. ;ince theauthority to sell was on a first co$e, first served and non-e=clusive basis, it $ay be $entioned at this ?uncture that there is no dispute over petitioner@s bein3 the first co$er and the buyer to be first served.

Notwithstandin3 the final a3ree$ent to pay 06,. per s7uare $eter on a cash basis, Alfonso 8i$ askedif it was possible to pay on ter$s. The bank officials stated that there was no har$ in tryin3 to ask forpay$ent on ter$s because in previous transactions, the sa$e had been allowed. &t was the understandin3,however, that should the ter$ pay$ent be disapproved, then the price shall be paid in cash.

&t was Albano who dictated the ter$s under which the install$ent pay$ent $ay be approved, and actin3thereon, Alfonso 8i$, on the sa$e date, >uly 66, 6#55, wrote *0& throu3h erlin Albano e$bodyin3 thepay$ent initially of 6O and the re$ainin3 #O within a period of # days.

Two or three days later, petitioner learned that its offer to pay on ter$s had been fro)en. Alfonso 8i$ went to*0& on >uly 65, 6#55 and tendered the full pay$ent of 099,/,. to Albano. The pay$ent was refused


11/107

because Albano stated that the authority to sell that particular piece of property in 0asi3 had been withdrawnfro$ his unit. The sa$e check was tendered to *0& Vice-0resident Nelson *ona who also refused to receivepay$ent.

An action for specific perfor$ance with da$a3es was thereupon filed on Au3ust ", 6#55 by petitionera3ainst *0&. &n the course of the trial, *0& infor$ed the trial court that it had sold the property under liti3ationto N*; on >uly 6!, 6#5#. The co$plaint was thus a$ended to include N*;.

n >une 6, 6##6, the trial court rendered ?ud3$ent in the case as followsB

D2:R:%R:, ?ud3$ent is hereby rendered in favor of plaintiff and a3ainst defendants *ankof the 0hilippine &slands and National *ook ;tore, &nc.B J

6. 4eclarin3 the 4eed of ;ale of the property covered by T.C.T. No. !#96"" in the na$e ofthe *ank of the 0hilippine &slands, situated in *arrio *a3on3 &lo3, 0asi3, etro anila, infavor of National *ook ;tore, &nc., null and void<

". rderin3 the Re3ister of 4eeds of the 0rovince of Ri)al to cancel the Transfer Certificateof Title which $ay have been issued in favor of National *ook ;tore, &nc. by virtue of theafore$entioned 4eed of ;ale dated >uly 6!, 6#5#<

9. rderin3 defendant *0&, upon receipt by it fro$ plaintiff of the su$ of 099,/,., toe=ecute a 4eed of ;ale in favor of plaintiff of the afore$entioned property at the price of06,. per s7uare $eter< in default thereof, the Clerk of this Court is directed to e=ecutethe said deed<

!. rderin3 the Re3ister of 4eeds of 0asi3, upon re3istration of the said deed, whethere=ecuted by defendant *0& or the Clerk of Court and pay$ent of the correspondin3 fees andchar3es, to cancel said T.C.T. No. !#96"" and to issue, in lieu thereof, another transfercertificate of title in the na$e of plaintiff<

. rderin3 defendants *0& and National *ook ;tore, &nc. to pay, ?ointly and severally, to theplaintiff the su$s of 06,,. as actual and conse7uential da$a3es and 06,.as attorney@s fees and liti3ation e=penses, both with interest at 6"O per annu# fro$ datehereof<

/. n the cross-clai$ of defendant bank a3ainst National *ook ;tore, orderin3 the latter toinde$nify the for$er of whatever a$ounts *0& shall have paid to the plaintiff by reasonhereof< and

. 4is$issin3 the counterclai$s of the defendants a3ainst the plaintiff and National *ook;tore@s cross-clai$ a3ainst defendant bank.

Costs a3ainst defendants.

'pp. !!-!, Rollo.(

As earlier inti$ated, upon the decision bein3 appealed, the Court of Appeals '*uena L0M, Rasul, andabutas, JJ .(, on Au3ust 6", 6##!, reversed the trial court@s decision and dis$issed petitioner@s co$plaint for specific perfor$ance and da$a3es.

The issues raised by the parties revolve around the followin3 four 7uestionsB

'6( Das there a $eetin3 of the $inds between petitioner 8i$ketkai and respondent *0& as to the sub?ect$atter of the contract and the cause of the obli3ationI

'"( Dere the bank officials involved in the transaction authori)ed by *0& to enter into the 7uestioned

contractI

'9( &s there co$petent and ad$issible evidence to support the alle3ed $eetin3 of the $indsI

'!( Das the sale of the disputed land to the N*; durin3 the pendency of trial effected in 3ood faithI


12/107

There is no dispute in re3ard to the followin3B 'a( that *0& as trustee of the property of 0hilippine Re$nantCo. authori)ed a licensed broker, 0edro Revilla, to sell the lot for 06,. per s7uare $eter< 'b( that0hilippine Re$nants confir$ed the authority to sell of Revilla and the price at which he $ay sell the lot< 'c(that petitioner and Revilla a3reed on the for$er buyin3 the property< 'd( that *0& Assistant Vice-0residentRolando V. Aro$in allowed the broker and the buyer to inspect the property< and 'e( that *0& was for$allyinfor$ed about the broker havin3 procured a buyer.

The controversy revolves around the interpretation or the si3nificance of the happenin3s or events at thispoint.

0etitioner states that the contract to sell and to buy was perfected on >uly 66, 6#55 when its top officials andbroker Revilla finali)ed the details with *0& Vice-0residents erlin Albano and Rolando V. Aro$in at the *0&offices.

Respondents, however, contend that what transpired on this date were part of continuin3 ne3otiations to buythe land and not the perfection of the sale. The ar3u$ents of respondents center on two propositions J '6(Vice-0residents Aro$in and Albano had no authority to bind *0& on this particular transaction and '"( thesubse7uent atte$pts of petitioner to pay under ter$s instead of full pay$ent in cash constitutes a counter-offer which ne3ates the e=istence of a perfected contract.

The alle3ed lack of authority of the bank officials actin3 in behalf of *0& is not sustained by the record.

At the start of the transactions, broker Revilla by hi$self already had full authority to sell the disputed lot.:=hibit * dated >une "9, 6#55 states, 1this will serve as your authority to sell on an as is, where is basis theproperty located at 0asi3 *lvd., *a3on3 &lo3 . . . .1 De a3ree with Revilla@s testi$ony that the authority 3ivento hi$ was to sell and not $erely to loo+ for a u*er , as contended by respondents.

Revilla testified that at the ti$e he perfected the a3ree$ent to sell the liti3ated property, he was actin3 forand in behalf of the *0& as if he were the *ank itself. This notwithstandin3 and to fir$ up the sale of the land,Revilla saw it fit to brin3 *0& officials into the transaction. &f *0& could 3ive the authority to sell to a licensedbroker, we see no reason to doubt the authority to sell of the two *0& Vice-0residents whose precise ?ob inthe *ank was to $ana3e and ad$inister real estate property.

Respondent *0& alle3es that sales of trust property need the approval of a Trust Co$$ittee $ade up of top

bank officials. &t appears fro$ the record that this trust co$$ittee $eets rather infre7uently and it does nothave to pass on re3ular transactions.

Rolando Aro$in was *0& Assistant Vice-0resident and Trust fficer. 2e directly supervised the *0& Real0roperty ana3e$ent Enit. 2e had been in the Real :state 4ivision since 6#5 and was the headsupervisin3 officer of real estate $atters. Aro$in had been with the *0& Trust 4epart$ent since 6#/5 andhad been involved in the handlin3 of properties of beneficial owners since 6# 'tsn., 4ece$ber 9, 6##, p.(.

:=hibit 6 of *0&, the %ebruary 6, 6#5# letter fro$ ;enior Vice-0resident :d$undo *arcelon, whilepurportin3 to infor$ Aro$in of his poor perfor$ance, is an ad$ission of *0& that Aro$in was in char3e ofTorrens titles, lease contracts, proble$s of tenants, insurance policies, install$ent receivables, $ana3e$ent

fees, 7uitclai$s, and other $atters involvin3 real estate transactions. 2is i$$ediate superior, Vice-0residenterlin Albano had been with the Real :state 4ivision for only one week but he was present and ?oined in thediscussions with petitioner.

There is nothin3 to show that Alfonso 8i$ and Albino 8i$ketkai knew Aro$in before the incident. Revillabrou3ht the brothers directly to Aro$in upon enterin3 the *0& pre$ises. Aro$in acted in a perfectly natural$anner on the transaction before hi$ with not the sli3htest indication that he was actin3 ultra vires. Thisshows that *0& held Aro$in out to the public as the officer routinely handlin3 real estate transactions and, asTrust fficer, enterin3 into contracts to sell trust properties.

Respondents state and the record shows that the authority to buy and sell this particular trust property waslater withdrawn fro$ Trust fficer Aro$in and his entire unit. &f Aro$in did not have any authority to act asalle3ed, there was no need to withdraw authority which he never possessed.

0etitioner points to Areola vs. "ourt of Appeals '"9/ ;CRA /!9 L6##!M( which cited rudential !an+vs. "ourt of Appeals '"" ;CRA 9 L6##9M(, which in turn relied upon McIntos) vs. Da+ota Trust "o. '" N4", "! ND 565, ! A8R 6"6(, to witB


13/107

Accordin3ly a bankin3 corporation is liable to innocent third persons where the representationis $ade in the course of its business by an a3ent actin3 within the 3eneral scope of hisauthority even thou3h, in the particular case, the a3ent is secretly abusin3 his authority andatte$ptin3 to perpetrate a fraud upon his principal or so$e other person for his own ulti$atebenefit.

'at pp. /"-/9.(

&n the present case, the position and title of Aro$in alone, not to $ention the testi$ony and docu$entaryevidence about his work, leave no doubt that he had full authority to act for *0& in the 7uestioned

transaction. There is no alle3ation of fraud, nor is there the least indication that Aro$in was actin3 for hisown ulti$ate benefit. *0& later dis$issed Aro$in because it appeared that a top official of the bank waspersonally interested in the sale of the 0asi3 property and did not like Aro$in@s testi$ony. Aro$in waschar3ed with poor perfor$ance but his dis$issal was only so$eti$e after he testified in court. ore than twolon3 years after the disputed transaction, he was still Assistant Vice-0resident of *0&.

The records show that the letter of instruction dated >une 6!, 6#55 fro$ the owner of 0hilippine Re$nantsCo. re3ardin3 the sale of the fir$@s property was addressed to Aro$in. The 06,. fi3ure on the first pa3eof broker Revilla@s authority to sell was chan3ed to 06,6. by Aro$in. The price was later brou3ht downa3ain to 06,., also by Aro$in. The per$ission 3iven to petitioner to view the lot was si3ned by Aro$inand honored by the *0& 3uards. The letter dated >uly #, 6#55 fro$ broker Revilla infor$in3 *0& that he hada buyer was addressed to Aro$in. The conference on >uly 66, 6#55 when the contract was perfected was

with Aro$in and Vice-0resident Albano. Albano and Aro$in were the ones who assured petitioner8i$ketkai@s officers that ter$ pay$ent was possible. &t was Aro$in who called up i3uel *icharra of0hilippine Re$nants to state that the *0& re?ected pay$ent on ter$s and it was to Aro$in that 0hilippineRe$nants 3ave the 3o si3nal to proceed with the cash sale. :verythin3 in the record points to the fullauthority of Aro$in to bind the bank, e=cept for the self-servin3 $e$oranda or letters later produced by *0&that Aro$in was an inefficient and undesirable officer and who, in fact, was dis$issed after he testified in thiscase. *ut, of course, Aro$in@s alle3ed inefficiency is not proof that he was not fully clothed with authority tobind *0&.

Respondents@ second contention is that there was no perfected contract because petitioner@s re7uest to payon ter$s constituted a counter-offer and that ne3otiations were still in pro3ress at that point.

Asst. Vice-0resident Aro$in was subpoenaed as a hostile witness for petitioner durin3 trial. A$on3 hisstate$ents is one to the effect that J

. . . r. 8i$ offered to buy the property at 0#. per s7uare $eter while r. Albanocounter-offered to sell the property at 06,6. per s7uare $eter but after the usualha33lin3, (e finall* agreed to sell the property at the price of 06,. per s7uare $eter . . .

'tsn, 6"-9-#, p. 6< :$phasis supplied.(

Asked if there was a $eetin3 of the $inds between the buyer and the bank in respect to the price of06,. per s7uare $eter, Aro$in answeredB

Fes, sir, as far as $y evaluation there was a $eetin3 of the $inds as far as the price isconcerned, sir.

'iid , p. 6.(

The re7uire$ents in the pay$ent of the purchase price on ter$s instead of cash were su33ested by *0&Vice-0resident Albano. ;ince the authority 3iven to broker Revilla specified cash pay$ent, the possibility ofpayin3 on ter$s was referred to the Trust Co$$ittee but with the $utual a3ree$ent that 1if the proposedpay$ent on ter$s will not be approved by our Trust Co$$ittee, 8i$ketkai should pay in cash . . . thea$ount was no lon3er sub?ect to the approval or disapproval of the Co$$ittee, it is only on the ter$s.1 ' iid ,p. 6#(. This is incontrovertibly established in the followin3 testi$ony of Aro$inB

A. After you were able to a3ree on the price of 06,.Hs7. $., since theletter or authority says the pay$ent $ust be in cash basis, what transpiredlater onI

*. After (e )ave agreed on t)e price, the 8i$ brothers in7uired on how to 3oabout sub$ittin3 the coverin3 proposal if they will be allowed to pay on ter#s.


14/107

They re7uested us to 3ive the$ a 3uide on how to prepare the correspondin3letter of proposal. & recall that, upon the re7uest of r. Albino 8i$ketkai, wedictated a 3uide on how to word a written fir$ offer that was to be sub$ittedby r. 8i$ to the bank settin3 out the ter$s of pay$ent but (it) t)e #utualagree#ent t)at if )is proposed pa*#ent on ter#s (ill not e approved * ourtrust co##ittee, Li#+et+ai s)ould pa* t)e price in cas).

P And did buyer 8i$ketkai a3ree to pay in cash in case the offer of ter$s willbe cash 'disapproved(.

A -es, sir .

P At the start, did they show their willin3ness to pay in cashI

A -es, sir .

P Fou said that the a3ree$ent on ter$s was to be sub$itted to the trustco$$ittee for approval, are *ou telling t)e "ourt t)at ()at (as to eapproved * t)e trust co##ittee (as t)e provision on t)e pa*#ent on ter#sI

A -es, sir .

P o t)e a#ount (as no longer su%ect to t)e approval or disapproval of t)eco##ittee, it is onl* on t)e ter#sI

A -es, sir .

'tsn, 4ec. 9, 6##, pp. 65-6#< :$phasis supplied.(

The record shows that if pay$ent was in cash, either broker Revilla or Aro$in had full authority. *ut becausepetitioner took advanta3e of the su33estion of Vice-0resident Albano, the $atter was sent to hi3her officials.&$$ediately upon learnin3 that pay$ent on ter$s was fro)en andHor denied, 8i$ketkai e=ercised his ri3htwithin the period 3iven to hi$ and tendered pay$ent in full. The *0& re?ected the pay$ent.

&n its Co$$ent and e$orandu$, respondent N*; cites Ang -u Asuncion vs. "ourt of Appeals '"95 ;CRA/" L6##!M( to bolster its case. Contrarywise, it would see$ that the le3al principles found in said casestren3then and support petitioner@s sub$ission that the contract was perfected upon the $eetin3 of the$inds of the parties.

The ne3otiation or preparation sta3e started with the authority 3iven by 0hilippine Re$nants to *0& to sellthe lot, followed by 'a( the authority 3iven by *0& and confir$ed by 0hilippine Re$nants to broker Revilla tosell the property, 'b( the offer to sell to 8i$ketkai, 'c( the inspection of the property and finally 'd( thene3otiations with Aro$in and Albano at the *0& offices.

The perfection of the contract took place when Aro$in and Albano, actin3 for *0&, a3reed to sell and Alfonso

8i$ with Albino 8i$ketkai, actin3 for petitioner 8i$ketkai, a3reed to buy the disputed lot at 06,. pers7uare $eter. Aside fro$ this there was the earlier a3ree$ent 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 3oes throu3h $ay be su$$ari)ed as followsB

a. preparation, conception or 3eneration, which is the period of ne3otiation and bar3ainin3,endin3 at the $o$ent of a3ree$ent of the parties<

b. perfection or birth of the contract, which is the $o$ent when the parties co$e to a3ree onthe ter$s of the contract< and

c. consu$$ation or death, which is the fulfill$ent or perfor$ance of the ter$s a3reed uponin the contract 'Toyota ;haw, &nc. vs. Court of Appeals, G.R. No. 66//, ay "9, 6##(.

*ut in $ore 3raphic prose, we turn to Ang -u Asuncion, per >ustice Vitu3B


15/107

. . . A contract under3oes various sta3es that include its ne3otiation or preparation, itsperfection and, finally, its consu$$ation. /egotiation covers the period fro# the ti$e theprospective contractin3 parties indicate interest in the contract to the ti$e the contract isconcluded 'perfected(. The perfectionof the contract takes place upon the concurrence of theessential ele$ents thereof. A contract which isconsensual as to perfection is so establishedupon a $ere $eetin3 of $inds, i .e., the concurrence of offer and acceptance, on the ob?ectand on the cause thereof. A contract which re7uires, in addition to the above, the delivery ofthe ob?ect of the a3ree$ent, as in a pled3e or co##odatu#, is co$$only referred to asa real contract. &n a sole#n contract, co$pliance with certain for$alities prescribed by law,such as in a donation of real property, is essential in order to $ake the act valid, the

prescribed for$ bein3 thereby an essential ele$ent thereof. The sta3e of consu$$ationbe3ins when the parties perfor$ their respective undertakin3s under the contract cul$inatin3in the e=tin3uish$ent thereof.

Entil the contract is perfected, it cannot, as an independent source of obli3ation, serve as abindin3 ?uridical relation. &n sales, particularly, to which the topic for discussion about thecase at bench belon3s, the contract is perfected when a person, called the seller, obli3ateshi$self, for a price certain, to deliver and to transfer ownership of a thin3 or ri3ht to another,called the buyer, over which the latter a3rees.

'"95 ;CRA /"< /66 L6##!M.(

&n 0illonco Realt* "o#pan* vs. !or#a)eco '/ ;CRA 9" L6#M(, bearin3 factual antecendents si$ilar tothis case, the Court, throu3h >ustice A7uino 'later to be Chief >ustice(, 7uotin3 authorities, upheld theperfection of the contract of sale thuslyB

The contract of sale is perfected at the $o$ent there is a $eetin3 of $inds upon the thin3which is the ob?ect of the contract and upon the price. %ro$ that $o$ent, the parties $ayreciprocally de$and perfor$ance, sub?ect to the provisions of the law 3overnin3 the for$ ofcontracts. 'Art. 6!, Iid .(

=== === ===

Consent is $anifested by the $eetin3 of the offer and the acceptance upon the thin3 and the

cause which are to constitute the contract. The offer $ust be certain and the acceptanceabsolute. A 7ualified acceptance constitutes a counter-offer 'Art. 696#, Civil Code(. 1Anacceptance $ay be e=press or i$plied.1 'Art. 69", Civil Code(.

=== === ===

It is true t)at an acceptance #a* contain a request for certain c)anges in t)e ter#s of t)eoffer and *et e a inding acceptance. 1o long as it is clear t)at t)e #eaning of t)eacceptance is positivel* and unequivocall* to accept t)e offer, ()et)er suc) request isgranted or not, a contract is for#ed .1 ';tuart vs. %ranklin 8ife &ns. Co., 6 %ed. "nd #/,citin3 ;ec. #, Dilliston on Contracts(.

=== === ===

. . . the vendor@s chan3e in a phrase of the offer to purchase, which chan3e does notessentially chan3e the ter$s of the offer, does not a$ount to a re?ection of the offer and thetender or a counter-offer. ';tuart vs. %ranklin 8ife &ns. Co., supra.(

'at pp. 9/"-9/9< 9/-9//.(

&n the case at bench, the alle3ation of N*; that there was no concurrence of the offer and acceptance uponthe cause of the contract is belied by the testi$ony of the very *0& official with who$ the contract wasperfected. Aro$in and Albano concluded the sale for *0&. The fact that the deed of sale still had to be si3nedand notari)ed does not $ean that no contract had already been perfected. A sale of land is valid re3ardlessof the for$ it $ay have been entered into 'Claudel vs. Court of Appeals, 6## ;CRA 669, 66# L6##6M(. There7uisite for$ under Article 6!5 of the Civil Code is $erely for 3reater efficacy or convenience and thefailure to co$ply therewith does not affect the validity and bindin3 effect of the act between the parties'0itug , Co$pendiu$ of Civil 8aw and >urisprudence, 6##9 Revised :dition, p. "(. &f the law re7uires adocu$ent or other special for$, as in the sale of real property, the contractin3 parties $ay co$pel each


16/107

other to observe that for$, once the contract has been perfected. Their ri3ht $ay be e=ercisedsi$ultaneously with action upon the contract 'Article 69#, "ivil "ode(.

Re3ardin3 the ad$issibility and co$petence of the evidence adduced by petitioner, respondent Court of Appeals ruled that because the sale involved real property, the statute of frauds is applicable.

&n any event, petitioner cites Arenica vs. 1onda '9! 0hil. 9# L6#6/M( wherein it was held that contractsinfrin3in3 the ;tatute of %rauds are ratified when the defense fails to ob?ect, or asks 7uestions on cross-e=a$ination. The succinct words of >ustice Araullo still rin3 in ?udicial cadenceB

As no ti$ely ob?ection or protest was $ade to the ad$ission of the testi$ony of the plaintiffwith respect to the contract< and as the $otion to strike out said evidence ca$e too late< and,further$ore, as the defendants the$selves, by the cross-7uestions put by their counsel tothe witnesses in respect to said contract, tacitly waived their ri3ht to have it stricken out, thatevidence, therefore, cannot be considered either inad$issible or ille3al, and court, far fro$havin3 erred in takin3 it into consideration and basin3 his ?ud3$ent thereon, notwithstandin3the fact that it was ordered to be stricken out durin3 the trial, $erely corrected the error heco$$itted in orderin3 it to be so stricken out and co$plied with the rules of procedurehereinbefore cited.

'at p. !5.(

&n the instant case, counsel for respondents cross-e=a$ined petitioner@s witnesses at len3th on the contractitself, the purchase price, the tender of cash pay$ent, the authority of Aro$in and Revilla, and other detailsof the liti3ated contract. Ender the Arenica rule 'reiterated in a nu$ber of cases, a$on3 the$ Talosi3 vs.Vda. de Nieba !9 ;CRA !" L6#"M(, even assu$in3 that parol evidence was initially inad$issible, the sa$ebeca$e co$petent and ad$issible because of the cross-e=a$ination, which elicited evidence provin3 theevidence of a perfected contract. The cross-e=a$ination on the contract is dee$ed a waiver of the defenseof the ;tatute of %rauds '0itug , Co$pendiu$ of Civil 8aw and >urisprudence, 6##9 Revised :dition, supra,p. /9(.

The reason for the rule is that as pointed out in Arenica 1if the answers of those witnesses were strickenout, t)e cross2e3a#ination could )ave no o%ect ()atsoever, and if t)e questions (ere put to t)e (itnessesand ans(ered * t)e#, t)e* could onl* e ta+en into account * connecting t)e# (it) t)e ans(ers given *

t)ose (itnesses on direct e3a#ination1 'pp. !-!5(.

oreover, under Article 6!9 of the Civil Code, an e=ception to the unenforceability of contracts pursuant tothe ;tatute of %rauds is the e=istence of a written note or $e$orandu$ evidencin3 the contract. The$e$orandu$ $ay be found in several writin3s, not necessarily in one docu$ent. The $e$orandu$ or$e$oranda isHare written evidence that such a contract was entered into.

De cite the findin3s of the trial court on this $atterB

&n accordance with the provisions of Art. 6!9 of the Civil Code, the e=istence of a writtencontract of the sale is not necessary so lon3 as the a3ree$ent to sell real property isevidenced by a written note or $e$orandu$, e$bodyin3 the essentials of the contract and

si3ned by the party char3ed or his a3ent. Thus, it has been heldB

The ;tatute of %rauds, e$bodied in Article 6!9 of the Civil Code of the0hilippines, does not require t)at t)e contract itself e (ritten. T)e plain testof Article 4567, aragrap) 89: is clear t)at a (ritten note or #e#orandu#,e#od*ing t)e essentials of t)e contract and signed * t)e part* c)arged, or)is agent suffices to #a+e t)e veral agree#ent enforceale, ta+ing it out oft)e operation of t)e statute. ':$phasis supplied(

=== === ===

&n the case at bar, the co$plaint in its para3raph 9 pleads that the deal hadbeen closed by letter and tele3ra$ 'Record on Appeal, p. "(, and the letterreferred to was evidently the one copy of which was appended as :=hibit A toplaintiffs opposition to the $otion to dis$iss. The letter, transcribed above inpart, to3ether with the one $arked as Appendi= *, constitute an ade7uate$e$orandu$ of the transaction. They are si3ned by the defendant-appellant<refer to the property sold as a 8ot in 0uerto 0rincesa, 0alawan, covered by


17/107

T.C.T. No. /", 3ive its area as 6,5" s7uare $eters and the purchase price offour '0!.( pesos per s7uare $eter payable in cash. De have in the$,therefore, all the essential ter$s of the contract and they satisfy there7uire$ents of the ;tatute of %rauds.

'%ootnote "/, 0aredes vs. :spino, "" ;CRA 6 L6#/5M(.

Dhile there is no written contract of sale of the 0asi3 property e=ecuted by *0& in favor ofplaintiff, there are abundant notes and $e$oranda e=tant in the records of this caseevidencin3 the ele$ents of a perfected contract. There is :=hibit 0, the letter of Qenneth

Richard Awad addressed to Roland Aro$in, authori)in3 the sale of the sub?ect property at theprice of 06,. per s7uare $eter 3ivin3 "O co$$ission to the broker and instructin3 thatthe sale be on cash basis. Conco$itantly, on the basis of the instruction of r. Awad, ':=h.0(, an authority to sell, ':=h. *( was issued by *0& to 0edro Revilla, >r., representin3 Assetrade Co., authori)in3 the latter to sell the property at the initial 7uoted price of06,. per s7uare $eter which was altered on an unaccepted offer by Technoland. Afterthe letter authority was issued to r. Revilla, a letter authority was si3ned by r. Aro$inallowin3 the buyer to enter the pre$ises of the property to inspect the sa$e ':=h. C(. n>uly #, 6#55, 0edro Revilla, >r., actin3 as a3ent of *0&, wrote a letter to *0& infor$in3 it thathe had procured a buyer in the na$e of 8i$ketkai ;ons illin3, &nc. with offices at 8i$ketkai*ld3., Greenhills, ;an >uan, etro anila, represented by its :=ec. Vice-0resident, Alfonso8i$ ':=h. 4(. n >uly 66, 6#55, the plaintiff, throu3h Alfonso 8i$, wrote a letter to the bank,

throu3h erlin Albano, confir$in3 their transaction re3ardin3 the purchase of the sub?ectproperty ':=h. :(. n >uly 65, 6#55, the plaintiff tendered upon the officials of the bank acheck for 099,/,. covered by Check No. CA6559, dated >uly 65, 6#55. n >uly 6,6#55, Alfonso a$ora instructed r. Aro$in in a letter to resub$it new offers only if there isno transaction closed with Assetrade Co. ':=h. ;(. Co$binin3 all these notes and$e$oranda, the Court is convinced of the e=istence of perfected contract of sale. Aptly, the;upre$e Court, citin3 A$erican cases with approval, heldB

No particular for$ of lan3ua3e or instru$ent is necessary to constitute a$e$orandu$ or note in writin3 under the statute of frauds< any docu$ent orwritin3, for$al or infor$al, written either for the purpose of furnishin3evidence of the contract or for another purpose, which satisfies all the

re7uire$ents of the statute as to contents and si3nature, as discussedrespectively infra secs. 65-", and infra secs. "6-", is a sufficient$e$orandu$ or note. A $e$orandu$ $ay be written as well with lead pencilas with pen and ink. &t $ay also be filled in on a printed for$. '9 C.>.;., /9-/!(.

The note or $e$orandu$ re7uired by the statute of frauds need not becontained in a sin3le docu$ent, nor, when contained in two or $ore papers,need each paper be sufficient as to contents and si3nature to satisfy thestatute. Two or $ore writin3s properly connected $ay be consideredto3ether, $atters $issin3 or uncertain in one $ay be supplied or renderedcertain by another, and their sufficiency will depend on whether, taken

to3ether, they $eet the re7uire$ents of the statute as to contents and there7uire$ents of the statutes as to si3nature, as consideredrespectively infra secs. 6#-" and secs. "6-"6.

'pp. !/-!/9, ri3inal RTC Record(.

The credibility of witnesses is also decisive in this case. The trial court directly observed the de$eanor and$anner of testifyin3 of the witnesses while the Court of Appeals relied $erely on the transcript ofsteno3raphic notes.

&n this re3ard, the court of ori3in had this to sayB

Apart fro$ wei3hin3 the $erits of the evidence of the parties, the Court had occasion toobserve the de$eanor of the witnesses they presented. This is one i$portant factor thatinclined the Court to believe in the version 3iven by the plaintiff because its witnesses,includin3 hostile witness Roland V. Aro$in, an assistant vice-president of the bank, werestrai3htforward, candid and unhesitatin3 in 3ivin3 their respective testi$onies. Epon the other hand, the witnesses of *0& were evasive, less than candid and hesitant in 3ivin3 theiranswers to cross e=a$ination 7uestions. oreover, the witnesses for *0& and N*;


18/107

contradicted each other. %ernando ;ison &&& insisted that the authority to sell issued to r.Revilla was $erely an evidence by which a broker $ay convince a prospective buyer that hehad authority to offer the property $entioned therein for sale and did not bind the bank. nthe contrary, Alfonso a$ora, a ;enior Vice-0resident of the bank, ad$itted that the authorityto sell issued to r. 0edro Revilla, >r. was valid, effective and bindin3 upon the bank bein3si3ned by two class 1A1 si3natories and that the bank cannot back out fro$ its co$$it$ent inthe authority to sell to r. Revilla.

Dhile Alfredo Ra$os of N*; insisted that he did not know personally and was notac7uainted with :d$undo *arcelon, the latter cate3orically ad$itted that Alfredo Ra$os was

his friend and that they have even discussed in one of the luncheon $eetin3s the $atter ofthe sale of the 0asi3 property to N*;. Geor3e %eliciano e$phatically said that he was not aconsultant of r. Ra$os nor was he connected with hi$ in any $anner, but his callin3 cardstates that he was a consultant to the chair$an of the 0acific Ri$ :=port and 2oldin3s Corp.whose chair$an is Alfredo Ra$os. This deliberate act of r. %eliciano of concealin3 hisbein3 a consultant to r. Alfredo Ra$os evidently was done by hi$ to avoid possiblei$plication that he co$$itted so$e underhanded $aneuvers in $anipulatin3 to have thesub?ect property sold to N*;, instead of bein3 sold to the plaintiff.

'pp. !!-!, ri3inal RTC Record.(

n the $atter of credibility of witnesses where the findin3s or conclusions of the Court of Appeals and the

trial court are contrary to each other, the pronounce$ent of the Court in errano vs. "ourt of Appeals '6#/;CRA 6 L6##6M( bears stressin3B

&t is a settled principle of civil procedure that the conclusions of the trial court re3ardin3 thecredibility of witnesses are entitled to 3reat respect fro$ the appellate courts because thetrial court had an opportunity to observe the de$eanor of witnesses while 3ivin3 testi$onywhich $ay indicate their candor or lack thereof. Dhile the ;upre$e Court ordinarily does notrule on the issue of credibility of witnesses, that bein3 a 7uestion of fact not properly raised ina petition under Rule !, the Court has undertaken to do so in e=ceptional situations where,for instance, as here, the trial court and the Court of Appeals arrived at diver3ent conclusionson 7uestions of fact and the credibility of witnesses.

'at p. 66.(

n the fourth 7uestion of whether or not N*; is an innocent purchaser for value, the record shows that it isnot. &t acted in bad faith.

Respondent N*; i3nored the notice of lis pendens annotated on the title when it bou3ht the lot. &t was thewillin3ness and desi3n of N*; to buy property already sold to another party which led *0& to dishonor thecontract with 8i$ketkai.

0etitioner cites several bad3es of fraud indicatin3 that *0& and N*; conspired to prevent petitioner fro$payin3 the a3reed price and 3ettin3 possession of the propertyB

6. The sale was supposed to be done throu3h an authori)ed broker, but top officials of *0& personally anddirectly took over this particular sale when a close friend beca$e interested.

". *0& ;enior Vice 0resident :d$undo *arcelon ad$itted that N*;@s 0resident, Alfredo Ra$os, was hisfriend< that they had lunch $eetin3s before this incident and discussed N*;@s purchase of the lot. *arcelon@sfather was a business associate of Ra$os.

9. Geor3e %eliciano, in behalf of N*;, offered 0 $illion and later 0 $illion if petitioner would drop the caseand 3ive up the lot. %eliciano went to petitioner@s office and ha33led with Alfonso 8i$ but failed to convincehi$ inspite of various and increasin3 offers.

!. &n a place where bi3 and per$anent buildin3s abound, N*; had constructed only a warehouse $arked byeasy portability. The warehouse is bolted to its foundations and can easily be dis$antled.

&t is the very nature of the deed of absolute sale between *0& and N*; which, however, clearly ne3ates anyalle3ation of 3ood faith on the part of the buyer. &nstead of the vendee insistin3 that the vendor 3uarantee itstitle to the land and reco3ni)e the ri3ht of the vendee to proceed a3ainst the vendor if the title to the landturns out to be defective as when the land belon3s to another person, the reverse is found in the deed of


19/107

sale between *0& and N*;. Any losses which N*; $ay incur in the event the title turns out to be vested inanother person are to be borne by N*; alone. *0& is e=pressly freed under the contract fro$ any recourseof N*; a3ainst it should *0&@s title be found defective.

N*;, in its reply $e$orandu$, does not refute or e=plain the above circu$stance s7uarely. &t si$ply citesthe bad3es of fraud $entioned in ;ria vs. McMic+ing '"6 0hil. "!9 L6#6"M( and ar3ues that the enu$erationthere is e=clusive. The decision in said case plainly states 1the followin3 are so$e of the circu$stancesattendin3 sales which have been deno$inated by courts 'as( bad3es of fraud.1 There are innu$erablesituations where fraud is $anifested. ne enu$eration in a 6#6" decision cannot possibly cover allindications of fraud fro$ that ti$e up to the present and into the future.

The Court of Appeals did not discuss the issue of da$a3es. 0etitioner cites the fee for filin3 the a$endedco$plaint to i$plead N*;, sheriffs fees, re3istration fees, plane fare and hotel e=penses of Cebu-basedcounsel. 0etitioner also clai$ed, and the trial court awarded, da$a3es for the profits and opportunity lossescaused to petitioner@s business in the a$ount of 06,,..

De rule that the profits and the use of the land which were denied to petitioner because of the non-co$pliance or interference with a sole$n obli3ation by respondents is so$ehow $ade up by theappreciation in land values in the $eanti$e.

0rescindin3 fro$ the above, we rule that there was a perfected contract between *0& and petitioner8i$ketkai< that the *0& officials who transacted with petitioner had full authority to bind the bank< that the

evidence supportin3 the sale is co$petent and ad$issible< and that the sale of the lot to N*; durin3 the trialof the case was characteri)ed by bad faith.

D2:R:%R:, the 7uestioned ?ud3$ent of the Court of Appeals is hereby R:V:R;:4 and ;:T A;&4:.The >une 6, 6##6 ?ud3$ent of *ranch 66 of the Re3ional Trial Court of The National Capital >udicialRe3ion stationed in 0asi3, etro anila is R:&N;TAT:4 e=cept for the award of Ten illion 0esos'06,,.( da$a3es which is hereby 4:8:T:4.

; R4:R:4.


20/107

6G.R. No. 14811. "7l 14, 2004

"N)ONIO . LI)ONJ$" an "$RELIO . LI)ONJ$", JR., petitioners, vs. "R- "NN GR"CE FERN"N%E:,

HEIRS OF *": )IC:ON ELEOSI%", '7's'n;' y GREGORIO ). ELEOSI%", HEIRS OF %OINGO

!. )IC:ON, '7's'n;' y "R- E%I")RI< ). FERN"N%E:, CRIS)E)" )IC:ON, E+"NGELINE

JILL R. )IC:ON, ERLIN%" ). !ENI)E:, %OINIC )IC:ON, JOSEFIN" L$IS" *I"ON)E, JOHN

%OES an J"NE %OES, respondents.

% E C I S I O N

C"LLEJO, SR., J .

This is a petition for review on certiorari of the 4ecisionL6M of the Court of Appeals in CA-G.R. CV No. /!#!,

which reversed and set aside the >une "9, 6### 4ecisionL"M of the Re3ional Trial Court of 0asi3 City, *ranch /5, in

Civil Case No. //"#, as well as its Resolution dated April 9, "6 denyin3 the petitioners $otion for

reconsideration of the aforesaid decision.

The heirs of 4o$in3o *. Tic)onL9M are the owners of a parcel of land located in ;an 0ablo City, covered by

Transfer Certificate of Title 'TCT( No. T-9/// of the Re3ister of 4eeds of ;an 0ablo City.L!M n the other hand, the

heirs of 0a) Tic)on :leosida, represented by Gre3orio T. :leosida, are the owners of a parcel of land located

in ;an 0ablo City, covered by TCT No. 9/!, also of the Re3ister of 4eeds of ;an 0ablo City.

LM

The Case for the 0etitioners

;o$eti$e in ;epte$ber 6##, rs. 8ourdes Ali$ario and A3apito %isico who worked as brokers, offered to

sell to the petitioners, Antonio Q. 8iton?ua and Aurelio Q. 8iton?ua, >r., the parcels of land covered by TCT Nos.

9/! and 9///. The petitioners were shown a locator plan and copies of the titles showin3 that the owners of

the properties were represented by ary ediatri= %ernande) and Gre3orio T. :leosida, respectively. The brokers

told the petitioners that they were authori)ed by respondent %ernande) to offer the property for sale. The

petitioners, thereafter, $ade two ocular inspections of the property, in the course of which they saw so$e people

3atherin3 coconuts.

&n the afternoon of Nove$ber ", 6##, the petitioners $et with respondent %ernande) and the two brokers

at the petitioners office in andaluyon3 City.L/M The petitioners and respondent %ernande) a3reed that the

petitioners would buy the property consistin3 of 9/,!" s7uare $eters, for the price of 06 per s7uare $eter, or

the total su$ of 0,#5,. They also a3reed that the owners would shoulder the capital 3ains ta=, transfer ta=

and the e=penses for the docu$entation of the sale. The petitioners and respondent %ernande) also a3reed to

$eet on 4ece$ber 5, 6## to finali)e the sale. &t was also a3reed upon that on the said date, respondent

%ernande) would present a special power of attorney e=ecuted by the owners of the property, authori)in3 her to

sell the property for and in their behalf, and to e=ecute a deed of absolute sale thereon. The petitioners would also

re$it the purchase price to the owners, throu3h respondent %ernande). 2owever, only A3apito %isico attended the

$eetin3. 2e infor$ed the petitioners that respondent %ernande) was encounterin3 so$e proble$s with the

tenants and was tryin3 to work out a settle$ent with the$. LM After a few weeks of waitin3, the petitioners wrote

respondent %ernande) on>anuary , 6##, de$andin3 that their transaction be finali)ed by >anuary 9, 6##/. L5M

Dhen the petitioners received no response fro$ respondent %ernande), the petitioners sent her another

8etter L#M dated %ebruary 6, 6##/, askin3 that the 4eed of Absolute ;ale coverin3 the property be e=ecuted in

accordance with their verbal a3ree$ent dated Nove$ber ", 6##. The petitioners also de$anded the turnover of

the sub?ect properties to the$ within fifteen days fro$ receipt of the said letter< otherwise, they would have no

option but to protect their interest throu3h le3al $eans.

Epon receipt of the above letter, respondent %ernande) wrote the petitioners on %ebruary 6!, 6##/L6M and

clarified her stand on the $atter in this wiseB

6( &t is not true & a3reed to shoulder re3istration fees and other $iscellaneous e=penses, etc. & do not recall we

ever discussed about the$. Nonetheless, & $ade an assurance at that ti$e that there was no liensHencu$brances

and tenants on $y property 'TCT 9/(.

"( &t is not true that we a3reed to $eet on 4ece$ber 5, 6## in order to si3n the 4eed of Absolute ;ale. The truth

of the $atter is that you were the one who e$phatically stated that you would prepare a Contract to ;ell and

http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn1


21/107

re7uested us to co$e back first week of 4ece$ber as you would be leavin3 the country then. &n fact, what you

were de$andin3 fro$ us was to apprise you of the status of the property, whether we would be able to ascertain

that there are really no tenants. s. Ali$ario and & left your office, but we did not assure you that we would be

back on the first week of 4ece$ber.

Enfortunately, so$e people suddenly appeared and clai$in3 to be tenants for the entire properties 'includin3

those belon3in3 to $y other relatives.( Another thin3, the *aran3ay Captain now refuses to 3ive a certification that

our properties are not tenanted.

Thereafter, & infor$ed $y broker, s. 8ulu Ali$ario, to relay to r. A3apito that due to the appearance of alle3edtenants who are de$andin3 for a one-hectare share, $y cousin and & have thereby chan3ed our $ind and that the

sale will no lon3er push throu3h. & specifically instructed her to infor$ you thru your broker that we will not be

attendin3 the $eetin3 to be held so$eti$e first week of 4ece$ber.

&n view thereof, & re3ret to for$ally infor$ you now that we are no lon3er sellin3 the property until all proble$s are

fully settled. De have not de$anded and received fro$ you any earnest $oney, thereby, no obli3ations e=ist. &n

the $eanti$e, we hope that in the future we will eventually be able to transact business since we still have other

properties in ;an 0ablo City.L66M

Appended thereto was a copy of respondent %ernande) letter to the petitioners dated >anuary 6/, 6##/, in

response to the latters >anuary , 6##/ letter.L6"M

n April 6", 6##/, the petitioners filed the instant Co$plaint for specific perfor$ance with da$a3es L69M a3ainst

respondent %ernande) and the re3istered owners of the property. &n their co$plaint, the petitioners alle3ed, inter

alia, the followin3B

!. n " Nove$ber 6##, defendants offered to sell to plaintiffs two '"( parcels of land covered by Transfer

Certificates of Title Nos. 9/// and 9/! $easurin3 a total of 9/,!" s7uare $eters in *arrio Concepcion, ;an

0abloCity. After a brief ne3otiation, defendants co$$itted and specifically a3reed to sell to plaintiffs 99,## s7uare

$eters of the two '"( afore$entioned parcels of land at 0 6. per s7uare $eter.

. The parties also une7uivocally a3reed to the followin3B

'a( The transfer ta= and all the other fees and e=penses for the titlin3 of the sub?ect property in plaintiffs na$es

would be for defendants account.

'b( The plaintiffs would pay the entire purchase price of 0,#5,. for the afore$entioned 99,## s7uare

$eters of land in plaintiffs office on 5 4ece$ber 6##.

/. 4efendants repeatedly assured plaintiffs that the two '"( sub?ect parcels of land were free fro$ all liens and

encu$brances and that no s7uatters or tenants occupied the$.

. 0laintiffs, true to their word, and relyin3 in 3ood faith on the co$$it$ent of defendants, pursued the purchase

of the sub?ect parcels of lands. n >anuary 6##/, plaintiffs sent a letter of even date to defendants, settin3 the

date of sale and pay$ent on 9 >anuary 6##/.

.6 4efendants received the letter on 6" >anuary 6##/ but did not reply to it.

5. n 6 %ebruary 6##/, plaintiffs a3ain sent a letter of even date to defendants de$andin3 e=ecution of the 4eed

of ;ale.

5.6 4efendants received the sa$e on / %ebruary 6##/. A3ain, there was no reply. 4efendants thus rene3ed on

their co$$it$ent a second ti$e.

#. n 6! %ebruary 6##/, defendant %ernande) sent a written co$$unication of the sa$e date to plaintiffs

enclosin3 therein a copy of her 6/ >anuary 6##/ letter to plaintiffs which plaintiffs never received

before. 4efendant %ernande) stated in her 6/ >anuary 6##/ letter that despite the $eetin3 of $inds a$on3 the

parties over the 99,## s7uare $eters of land for 0 6. per s7uare $eter on " Nove$ber 6##, defendants

suddenly had a chan3e of heart and no lon3er wished to sell the sa$e. 0ara3raph / thereof un7uestionably

http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn13


22/107

shows defendants previous a3ree$ent as above-$entioned and their un?ustified breach of their obli3ations under

it.

6. 4efendants cannot unilaterally, whi$sically and capriciously cancel a perfected contract to sell.

66. 0laintiffs intended to use the sub?ect property for their subdivision pro?ect to support plaintiffs 7uarry

operations, processin3 of a33re3ate products and $anufacture of construction $aterials. Conse7uently, by reason

of defendants failure to honor their ?ust obli3ations, plaintiffs suffered, and continue to suffer, actual da$a3es,

consistin3 in unreali)ed profits and cost of $oney, in the a$ount of at least 0 illion.

6". 0laintiffs also suffered sleepless ni3hts and $ental an=iety on account of defendants fraudulent actuations for

which reason defendants are liable to plaintiffs for $oral da$a3es in the a$ount of at least 06. illion.

69. *y reason of defendants above-described fraudulent actuations, plaintiffs, despite their willin3ness and ability

to pay the a3reed purchase price, have to date been unable to take delivery of the title to the sub?ect

property.4efendants acted in a wanton, fraudulent and $alevolent $anner in violatin3 the contract to sell. *y way

of e=a$ple or correction for the public 3ood, defendants are liable to plaintiff for e=e$plary da$a3es in the

a$ount of0,..

6!. 4efendants bad faith and refusal to honor their ?ust obli3ations to plaintiffs constrained the latter to liti3ate and

to en3a3e the services of undersi3ned counsel for a fee in the a$ount of at least 0",..

L6!M

The petitioners prayed that, after due hearin3, ?ud3$ent be rendered in their favor orderin3 the respondents

to

'a( ;ecure at defendants e=pense all clearances fro$ the appropriate 3overn$ent a3encies that will enable

defendants to co$ply with their obli3ations under the Contract to ;ell<

'b( :=ecute a Contract to ;ell with ter$s a3reed upon by the parties<

'c( ;olidarily pay the plaintiffs the followin3 a$ountsB

6. 0,,. in actual da$a3es<

". 06,,. in $oral da$a3es<

9. 0,. in e=e$plary da$a3es<

!. 0",. in attorneys fees. L6M

n >uly , 6##/, respondent %ernande) filed her Answer to the co$plaint. L6/M ;he clai$ed that while the

petitioners offered to buy the property durin3 the $eetin3 of Nove$ber ", 6##, she did not accept the offer<

thus, no verbal contract to sell was ever perfected. ;he specifically alle3ed that the said contract to sell wasunenforceable for failure to co$ply with the statute of frauds. ;he also $aintained that even

assu$in3 arguendo that she had, indeed, $ade a co$$it$ent or pro$ise to sell the property to the petitioners,

the sa$e was not bindin3 upon her in the absence of any consideration distinct and separate fro$ the price. ;he,

thus, prayed that ?ud3$ent be rendered as followsB

6. 4is$issin3 the Co$plaint, with costs a3ainst the plaintiffs<

". n the CENT:RC8A&, orderin3 plaintiffs to pay defendant $oral da$a3es in the a$ount of not

less than 0",,. and e=e$plary da$a3es in the a$ount of not less than 0,. and

attorneys fees and rei$burse$ent e=penses of liti3ation in the a$ount of 09,..L6M

n ;epte$ber "!, 6##, the trial court, upon $otion of the petitioners, declared the other respondents in

default for failure to file their responsive pleadin3 within the re3le$entary period. L65M At the pre-trial conference held

on arch ", 6##5, the parties a3reed that the followin3 issues were to be resolved by the trial courtB '6( whether or

not there was a perfected contract to sell< '"( in the event that there was, indeed, a perfected contract to sell,

whether or not the respondents breached the said contract to sell< and '9( the corollary issue of da$a3es. L6#M

http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2004/apr2004/148116.htm#_f

contracts 6

Documents