[G.R. No. 128066. June 19, 2000]JARDINE DAVIES INC., petitioner, vs. COURT OF APPEALS and FAR EAST MILLS SUPPLY CORPORATION,respondents.[G.R. No. 128069 June 19, 2000]PURE FOODS CORPORATION, petitioner, vs.COURT OF APPEALS and FAR EAST MILLS SUPPLY CORPORATION,respondents.D E C I S I O NBELLOSILLO,J.:This is rather a simple case for specific performance with damages which could have been resolved through mediation and conciliation during its infancy stage had the parties been earnest in expediting the disposal of this case. They opted however to resort to full court proceedings and denied themselves the benefits of alternative dispute resolution, thus making the process more arduous and long-drawn.The controversy started in 1992 at the height of the power crisis which the country was then experiencing. To remedy and curtail further losses due to the series of power failures, petitioner PURE FOODS CORPORATION (hereafter PUREFOODS) decided to install two (2) 1500 KW generators in its food processing plant in San Roque, Marikina City.Sometime in November 1992 a bidding for the supply and installation of the generators was held. Several suppliers and dealers were invited to attend a pre-bidding conference to discuss the conditions, propose scheme and specifications that would best suit the needs of PUREFOODS. Out of the eight (8) prospective bidders who attended the pre-bidding conference, only three (3) bidders, namely, respondent FAR EAST MILLS SUPPLY CORPORATION (hereafter FEMSCO), MONARK and ADVANCE POWER submitted bid proposals and gave bid bonds equivalent to 5% of their respective bids, as required.Thereafter, in a letter dated 12 December 1992 addressed to FEMSCO President Alfonso Po, PUREFOODS confirmed the award of the contract to FEMSCO -Gentlemen:This will confirm that Pure Foods Corporation has awarded to your firm the project: Supply and Installation of two (2) units of 1500 KW/unit Generator Sets at the Processed Meats Plant, Bo. San Roque, Marikina, based on your proposal number PC 28-92 dated November 20, 1992, subject to the following basic terms and conditions:1. Lump sum contract ofP6,137,293.00 (VAT included), for the supply of materials and labor for the local portion and the labor for the imported materials, payable by progress billing twice a month, with ten percent (10%) retention. The retained amount shall be released thirty (30) days after acceptance of the completed project and upon posting of Guarantee Bond in an amount equivalent to twenty percent (20%) of the contract price. The Guarantee Bond shall be valid for one (1) year from completion and acceptance of project. The contract price includes future increase/s in costs of materials and labor;2. The project shall be undertaken pursuant to the attached specifications. It is understood that any item required to complete the project, and those not included in the list of items shall be deemed included and covered and shall be performed;3. All materials shall be brand new;4. The project shall commence immediately and must be completed within twenty (20) working days after the delivery of Generator Set to Marikina Plant, penalty equivalent to 1/10 of 1% of the purchase price for every day of delay;5. The Contractor shall put up Performance Bond equivalent to thirty (30%) of the contract price, and shall procure All Risk Insurance equivalent to the contract price upon commencement of the project. The All Risk Insurance Policy shall be endorsed in favor of and shall be delivered to Pure Foods Corporation;6. Warranty of one (1) year against defective material and/or workmanship.Once finalized, we shall ask you to sign the formal contract embodying the foregoing terms and conditions.Immediately, FEMSCO submitted the required performance bond in the amount ofP1,841,187.90 and contractors all-risk insurance policy in the amount ofP6,137,293.00 which PUREFOODS through its Vice President Benedicto G. Tope acknowledged in a letter dated 18 December 1992. FEMSCO also made arrangements with its principal and started the PUREFOODS project by purchasing the necessary materials. PUREFOODS on the other hand returned FEMSCOs Bidders Bond in the amount ofP1,000,000.00, as requested.Later, however, in a letter dated 22 December 1992, PUREFOODS through its Senior Vice President Teodoro L. Dimayuga unilaterally canceled the award as "significant factors were uncovered and brought to (their) attention which dictate (the) cancellation and warrant a total review and re-bid of (the) project." Consequently, FEMSCO protested the cancellation of the award and sought a meeting with PUREFOODS. However, on 26 March 1993, before the matter could be resolved, PUREFOODS already awarded the project and entered into a contract with JARDINE NELL, a division of Jardine Davies, Inc. (hereafter JARDINE), which incidentally was not one of the bidders.FEMSCO thus wrote PUREFOODS to honor its contract with the former, and to JARDINE to cease and desist from delivering and installing the two (2) generators at PUREFOODS. Its demand letters unheeded, FEMSCO sued both PUREFOODS and JARDINE: PUREFOODS for reneging on its contract, and JARDINE for its unwarranted interference and inducement. Trial ensued. After FEMSCO presented its evidence, JARDINE filed aDemurrer to Evidence.On 27 June 1994 the Regional Trial Court of Pasig, Br. 68,[1]granted JARDINEsDemurrer to Evidence. The trial court concluded that "[w]hile it may seem to the plaintiff that by the actions of the two defendants there is something underhanded going on, this is all a matter of perception, and unsupported by hard evidence, mere suspicions and suppositions would not stand up very well in a court of law."[2]Meanwhile trial proceeded as regards the case against PUREFOODS.On 28 July 1994 the trial court rendered a decision ordering PUREFOODS: (a) to indemnify FEMSCO the sum ofP2,300,000.00 representing the value of engineering services it rendered; (b) to pay FEMSCO the sum of US$14,000.00 or its peso equivalent, andP900,000.00 representing contractor's mark-up on installation work, considering that it would be impossible to compel PUREFOODS to honor, perform and fulfill its contractual obligations in view of PUREFOOD's contract with JARDINE and noting that construction had already started thereon; (c) to pay attorneys fees in an amount equivalent to 20% of the total amount due; and, (d) to pay the costs. The trial court dismissed the counterclaim filed by PUREFOODS for lack of factual and legal basis.Both FEMSCO and PUREFOODS appealed to the Court of Appeals. FEMSCO appealed the 27 June 1994 Resolution of the trial court which granted theDemurrer to Evidencefiled by JARDINE resulting in the dismissal of the complaint against it, while PUREFOODS appealed the 28 July 1994 Decision of the same court which ordered it to pay FEMSCO.On 14 August 1996 the Court of Appeals affirmedin totothe 28 July 1994 Decision of the trial court.[3]It also reversed the 27 June 1994 Resolution of the lower court and ordered JARDINE to pay FEMSCO damages for inducing PUREFOODS to violate the latters contract with FEMSCO. As such, JARDINE was ordered to pay FEMSCOP2,000,000.00 for moral damages. In addition, PUREFOODS was also directed to pay FEMSCOP2,000,000.00 as moral damages andP1,000,000.00 as exemplary damages as well as 20% of the total amount due as attorney's fees.On 31 January 1997 the Court of Appeals denied for lack of merit the separate motions for reconsideration filed by PUREFOODS and JARDINE. Hence, these two (2) petitions for review filed by PUREFOODS and JARDINE which were subsequently consolidated.PUREFOODS maintains that the conclusions of both the trial court and the appellate court are premised on a misapprehension of facts. It argues that its 12 December 1992 letter to FEMSCO was not an acceptance of the latter's bid proposal and award of the project but more of a qualified acceptance constituting a counter-offer which required FEMSCO's expressconforme.Since PUREFOODS never received FEMSCOsconforme,PUREFOODS was very well within reason to revoke its qualified acceptance or counter-offer. Hence, no contract was perfected between PUREFOODS and FEMSCO. PUREFOODS also contends that it was never in bad faith when it dealt with FEMSCO. Hence moral and exemplary damages should not have been awarded.Corollarily, JARDINE asserts that the records are bereft of any showing that it had prior knowledge of the supposed contract between PUREFOODS and FEMSCO, and that it induced PUREFOODS to violate the latters alleged contract with FEMSCO. Moreover, JARDINE reasons that FEMSCO, an artificial person, is not entitled to moral damages. But grantingarguendothat the award of moral damages is proper,P2,000,000.00 is extremely excessive.In the main, these consolidated cases present two (2) issues: first, whether there existed a perfected contract between PUREFOODS and FEMSCO; and second, granting there existed a perfected contract, whether there is any showing that JARDINE induced or connived with PUREFOODS to violate the latter's contract with FEMSCO.A contract is defined as "a juridical convention manifested in legal form, by virtue of which one or more persons bind themselves in favor of another or others, or reciprocally, to the fulfillment of a prestation to give, to do, or not to do."[4]There can be no contract unless the following requisites concur: (a) consent of the contracting parties; (b) object certain which is the subject matter of the contract; and, (c) cause of the obligation which is established.[5]A contract binds both contracting parties and has the force of law between them.Contracts are perfected by mere consent, upon the acceptance by the offeree of the offer made by the offeror. From that moment, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.[6]To produce a contract, the acceptance must not qualify the terms of the offer. However, the acceptance may be express or implied.[7]For a contract to arise, the acceptance must be made known to the offeror. Accordingly, the acceptance can be withdrawn or revoked before it is made known to the offeror.In the instant case, there is no issue as regards the subject matter of the contract and the cause of the obligation. The controversy lies in the consent - whether there was an acceptance of the offer, and if so, if it was communicated, thereby perfecting the contract.To resolve the dispute, there is a need to determine what constituted the offer and the acceptance. Since petitioner PUREFOODS started the process of entering into the contract by conducting a bidding, Art. 1326 of the Civil Code, which provides that "[a]dvertisements for bidders are simply invitations to make proposals," applies. Accordingly, theTerms and Conditions of the Biddingdisseminated by petitioner PUREFOODS constitutes the "advertisement" to bid on the project. The bid proposals or quotations submitted by the prospective suppliers including respondent FEMSCO, are the offers. And, the reply of petitioner PUREFOODS, the acceptance or rejection of the respective offers.Quite obviously, the 12 December 1992 letter of petitioner PUREFOODS to FEMSCO constituted acceptance of respondent FEMSCOs offer as contemplated by law. The tenor of the letter,i.e.,"This will confirm that Pure Foods has awarded to your firm (FEMSCO) the project," could not be more categorical. While the same letter enumerated certain "basic terms and conditions," these conditions were imposed on the performance of the obligation rather than on the perfection of the contract. Thus, the first "condition" was merely a reiteration of the contract price and billing scheme based on theTerms and Conditions of Biddingand the bid or previous offer of respondent FEMSCO. The second and third "conditions" were nothing more than general statements that all items and materials including those excluded in the list but necessary to complete the project shall be deemed included and should be brand new. The fourth "condition" concerned the completion of the work to be done,i.e., within twenty (20) days from the delivery of the generator set, the purchase of which was part of the contract. The fifth "condition" had to do with the putting up of a performance bond and an all-risk insurance, both of which should be given upon commencement of the project. The sixth "condition" related to the standard warranty of one (1) year. In fine, the enumerated "basic terms and conditions" were prescriptions on how the obligation was to be performed and implemented. They were far from being conditions imposed on the perfection of the contract.In Babasa v. Court of Appeals[8]we distinguished between a condition imposed on the perfection of a contract and a condition imposed merely on the performance of an obligation. While failure to comply with the first condition results in the failure of a contract, failure to comply with the second merely gives the other party options and/or remedies to protect his interests.We thus agree with the conclusion of respondent appellate court which affirmed the trial court -As can be inferred from the actual phrase used in the first portion of the letter, the decision to award the contract has already been made. The letter only serves as a confirmation of such decision. Hence, to the Courts mind, there is already an acceptance made of the offer received by Purefoods. Notwithstanding the terms and conditions enumerated therein, the offer has been accepted and/or amplified the details of the terms and conditions contained in the Terms and Conditions of Bidding given out by Purefoods to prospective bidders.[9]But even grantingarguendothat the 12 December 1992 letter of petitioner PUREFOODS constituted a "conditional counter-offer," respondent FEMCO's submission of the performance bond and contractor's all-risk insurance was an implied acceptance, if not a clear indication of its acquiescence to, the "conditional counter-offer," which expressly stated that the performance bond and the contractor's all-risk insurance should be given upon the commencement of the contract. Corollarily, the acknowledgment thereof by petitioner PUREFOODS, not to mention its return of FEMSCO's bidder's bond, was a concrete manifestation of its knowledge that respondent FEMSCO indeed consented to the "conditional counter-offer." After all, as earlier adverted to, an acceptance may either be express or implied,[10]and this can be inferred from the contemporaneous and subsequent acts of the contracting parties.Accordingly, for all intents and purposes, the contract at that point has been perfected, and respondent FEMSCO'sconformewould only be a mere surplusage. The discussion of the price of the project two (2) months after the 12 December 1992 letter can be deemed as nothing more than a pressure being exerted by petitioner PUREFOODS on respondent FEMSCO to lower the price even after the contract had been perfected. Indeed from the facts, it can easily be surmised that petitioner PUREFOODS was haggling for a lower price even after agreeing to the earlier quotation, and was threatening to unilaterally cancel the contract, which it eventually did. Petitioner PUREFOODS also makes an issue out of the absence of a purchase order (PO). Suffice it to say that purchase orders or POs do not make or break a contract. Thus, even the tenor of the subsequent letter of petitioner PUREFOODS,i.e.,"Pure Foods Corporation is hereby canceling the award to your company of the project," presupposes that the contract has been perfected. For, there can be no cancellation if the contract was not perfected in the first place.Petitioner PUREFOODS also argues that it was never in bad faith. On the contrary, it believed in good faith that no such contract was perfected. We are not convinced. We subscribe to the factual findings and conclusions of the trial court which were affirmed by the appellate court -Hence, by the unilateral cancellation of the contract, the defendant (petitioner PURE FOODS) has acted with bad faith and this was further aggravated by the subsequent inking of a contract between defendant Purefoods and erstwhile co-defendant Jardine. It is very evident that Purefoods thought that by the expedient means of merely writing a letter would automatically cancel or nullify the existing contract entered into by both parties after a process of bidding. This, to the Courts mind, is a flagrant violation of the express provisions of the law and is contrary to fair and just dealings to which every man is due.[11]This Court has awarded in the past moral damages to a corporation whose reputation has been besmirched.[12]In the instant case, respondent FEMSCO has sufficiently shown that its reputation was tarnished after it immediately ordered equipment from its suppliers on account of the urgency of the project, only to be canceled later. We thus sustain respondent appellate court's award of moral damages. We however reduce the award fromP2,000,000.00 toP1,000,000.00, as moral damages are never intended to enrich the recipient. Likewise, the award of exemplary damages by way of example for the public good is excessive and should be reduced toP100,000.00.Petitioner JARDINE maintains on the other hand that respondent appellate court erred in ordering it to pay moral damages to respondent FEMSCO as it supposedly induced PUREFOODS to violate the contract with FEMSCO. We agree. While it may seem that petitioners PUREFOODS and JARDINE connived to deceive respondent FEMSCO, we find no specific evidence on record to support such perception. Likewise, there is no showing whatsoever that petitioner JARDINE induced petitioner PUREFOODS. The similarity in the design submitted to petitioner PUREFOODS by both petitioner JARDINE and respondent FEMSCO, and the tender of a lower quotation by petitioner JARDINE are insufficient to show that petitioner JARDINE indeed induced petitioner PUREFOODS to violate its contract with respondent FEMSCO.WHEREFORE, judgment is hereby rendered as follows:(a) The petition in G.R. No. 128066 is GRANTED. The assailed Decision of the Court of Appeals reversing the 27 June 1994 resolution of the trial court and ordering petitioner JARDINE DAVIES, INC., to pay private respondent FAR EAST MILLS SUPPLY CORPORATIONP2,000,000.00 as moral damages is REVERSED and SET ASIDE for insufficiency of evidence; and(b) The petition in G.R. No. 128069 is DENIED. The assailed Decision of the Court of Appeals ordering petitioner PURE FOODS CORPORATION to pay private respondent FAR EAST MILLS SUPPLY CORPORATION the sum ofP2,300,000.00 representing the value of engineering services it rendered, US$14,000.00 or its peso equivalent, andP900,000.00 representing the contractor's mark-up on installation work, as well as attorney's fees equivalent to twenty percent (20%) of the total amount due, is AFFIRMED. In addtion, petitioner PURE FOODS CORPORATION is ordered to pay private respondent FAR EAST MILLS SUPPLY CORPORATION moral damages in the amount ofP1,000,000.00 and exemplary damages in the amount ofP1,000,000.00. Costs against petitioner.SO ORDERED.

Republic of the PhilippinesSUPREME COURTManilaTHIRD DIVISIONG.R. No. 170115 February 19, 2008PROVINCE OF CEBU,petitioner,vs.HEIRS OF RUFINA MORALES, NAMELY: FELOMINA V. PANOPIO, NENITA VILLANUEVA, ERLINDA V. ADRIANO and CATALINA V. QUESADA,respondents.DECISIONYNARES-SANTIAGO,J.:This is a petition for review on certiorari of the Decision1of the Court of Appeals dated March 29, 2005 in CA-G.R. CV No. 53632, which affirmedin totothe Decision2of the Regional Trial Court of Cebu City, Branch 6, in Civil Case No. CEB-11140 for specific performance and reconveyance of property. Also assailed is the Resolution3dated August 31, 2005 denying the motion for reconsideration.On September 27, 1961, petitioner Province of Cebu leased4in favor of Rufina Morales a 210-square meter lot which formed part of Lot No. 646-A of the Banilad Estate. Subsequently or sometime in 1964, petitioner donated several parcels of land to the City of Cebu. Among those donated was Lot No. 646-A which the City of Cebu divided into sub-lots. The area occupied by Morales was thereafter denominated as Lot No. 646-A-3, for which Transfer Certificate of Title (TCT) No. 308835was issued in favor of the City of Cebu.On July 19, 1965, the city sold Lot No. 646-A-3 as well as the other donated lots at public auction in order to raise money for infrastructure projects. The highest bidder for Lot No. 646-A-3 was Hever Bascon but Morales was allowed to match the highest bid since she had a preferential right to the lot as actual occupant thereof.6Morales thus paid the required deposit and partial payment for the lot.7In the meantime, petitioner filed an action for reversion of donation against the City of Cebu docketed as Civil Case No. 238-BC before Branch 7 of the then Court of First Instance of Cebu. On May 7, 1974, petitioner and the City of Cebu entered into a compromise agreement which the court approved on July 17, 1974.8The agreement provided for the return of the donated lots to petitioner except those that have already been utilized by the City of Cebu. Pursuant thereto, Lot No. 646-A-3 was returned to petitioner and registered in its name under TCT No. 104310.9Morales died on February 20, 1969 during the pendency of Civil Case No. 238-BC.10Apart from the deposit and down payment, she was not able to make any other payments on the balance of the purchase price for the lot.On March 11, 1983, one of the nieces of Morales, respondent Catalina V. Quesada, wrote to then Cebu Governor Eduardo R. Gullas asking for the formal conveyance of Lot No. 646-A-3 to Morales surviving heirs, in accordance with the award earlier made by the City of Cebu.11This was followed by another letter of the same tenor dated October 10, 1986 addressed to Governor Osmundo G. Rama.12The requests remained unheeded thus, Quesada, together with the other nieces of Morales namely, respondents Nenita Villanueva and Erlinda V. Adriano, as well as Morales sister, Felomina V. Panopio, filed an action for specific performance and reconveyance of property against petitioner, which was docketed as Civil Case No. CEB-11140 before Branch 6 of the Regional Trial Court of Cebu City.13They also consigned with the court the amount of P13,450.00 representing the balance of the purchase price which petitioner allegedly refused to accept.14Panopio died shortly after the complaint was filed.15Respondents averred that the award at public auction of the lot to Morales was a valid and binding contract entered into by the City of Cebu and that the lot was inadvertently returned to petitioner under the compromise judgment in Civil Case No. 238-BC. They alleged that they could not pay the balance of the purchase price during the pendency of said case due to confusion as to whom and where payment should be made. They thus prayed that judgment be rendered ordering petitioner to execute a final deed of absolute sale in their favor, and that TCT No. 104310 in the name of petitioner be cancelled.16Petitioner filed its answer but failed to present evidence despite several opportunities given thus, it was deemed to have waived its right to present evidence.17On March 6, 1996, the trial court rendered judgment, the dispositive part of which reads:WHEREFORE, judgment is rendered in favor of the plaintiffs and against the defendant Province of Cebu, hereby directing the latter to convey Lot 646-A-3 to the plaintiffs as heirs of Rufina Morales, and in this connection, to execute the necessary deed in favor of said plaintiffs.No pronouncement as to costs.SO ORDERED.18In ruling for the respondents, the trial court held thus:[T]he Court is convinced that there was already a consummated sale between the City of Cebu and Rufina Morales. There was the offer to sell in that public auction sale. It was accepted by Rufina Morales with her bid and was granted the award for which she paid the agreed downpayment. It cannot be gainsaid that at that time the owner of the property was the City of Cebu. It has the absolute right to dispose of it thru that public auction sale. The donation by the defendant Province of Cebu to Cebu City was not voided in that Civil Case No. 238-BC. The compromise agreement between the parties therein on the basis of which judgment was rendered did not provide nullification of the sales or disposition made by the City of Cebu. Being virtually successor-in-interest of City of Cebu, the defendant is bound by the contract lawfully entered into by the former. Defendant did not initiate any move to invalidate the sale for one reason or another. Hence, it stands as a perfectly valid contract which defendant must respect. Rufina Morales had a vested right over the property. The plaintiffs being the heirs or successors-in-interest of Rufina Morales, have the right to ask for the conveyance of the property to them. While it may be true that the title of the property still remained in the name of the City of Cebu until full payment is made, and this could be the reason why the lot in question was among those reverted to the Province, the sellers obligation under the contract was, for all legal purposes, transferred to, and assumed by, the defendant Province of Cebu. It is then bound by such contract.19Petitioner appealed to the Court of Appeals which affirmed the decision of the trial courtin toto. Upon denial of its motion for reconsideration, petitioner filed the instant petition under Rule 45 of the Rules of Court, alleging that the appellate court erred in:FINDING THAT RUFINA MORALES AND RESPONDENTS, AS HER HEIRS, HAVE THE RIGHT TO EQUAL THE BID OF THE HIGHEST BIDDER OF THE SUBJECT PROPERTY AS LESSEES THEREOF;FINDING THAT WITH THE DEPOSIT AND PARTIAL PAYMENT MADE BY RUFINA MORALES, THE SALE WAS IN EFFECT CLOSED FOR ALL LEGAL PURPOSES, AND THAT THE TRANSACTION WAS PERFECTED AND CONSUMMATED;FINDING THAT LACHES AND/OR PRESCRIPTION ARE NOT APPLICABLE AGAINST RESPONDENTS;FINDING THAT DUE TO THE PENDENCY OF CIVIL CASE NO. 238-BC, PLAINTIFFS WERE NOT ABLE TO PAY THE AGREED INSTALLMENTS;AFFIRMING THE DECISION OF THE TRIAL COURT IN FAVOR OF THE RESPONDENTS AND AGAINST THE PETITIONERS.20The petition lacks merit.The appellate court correctly ruled that petitioner, as successor-in-interest of the City of Cebu, is bound to respect the contract of sale entered into by the latter pertaining to Lot No. 646-A-3. The City of Cebu was the owner of the lot when it awarded the same to respondents predecessor-in-interest, Morales, who later became its owner before the same was erroneously returned to petitioner under the compromise judgment. The award is tantamount to a perfected contract of sale between Morales and the City of Cebu, while partial payment of the purchase price and actual occupation of the property by Morales and respondents effectively transferred ownership of the lot to the latter. This is true notwithstanding the failure of Morales and respondents to pay the balance of the purchase price.Petitioner can no longer assail the award of the lot to Morales on the ground that she had no right to match the highest bid during the public auction. Whether Morales, as actual occupant and/or lessee of the lot, was qualified and had the right to match the highest bid is a foregone matter that could have been questioned when the award was made. When the City of Cebu awarded the lot to Morales, it is assumed that she met all qualifications to match the highest bid. The subject lot was auctioned in 1965 or more than four decades ago and was never questioned. Thus, it is safe to assume, as the appellate court did, that all requirements for a valid public auction sale were complied with.A sale by public auction is perfected "when the auctioneer announces its perfection by the fall of the hammer or in other customary manner".21It does not matter that Morales merely matched the bid of the highest bidder at the said auction sale. The contract of sale was nevertheless perfected as to Morales, since she merely stepped into the shoes of the highest bidder.Consequently, there was a meeting of minds between the City of Cebu and Morales as to the lot sold and its price, such that each party could reciprocally demand performance of the contract from the other.22A contract of sale is a consensual contract and is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance subject to the provisions of the law governing the form of contracts. The elements of a valid contract of sale under Article 1458 of the Civil Code are: (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent.23All these elements were present in the transaction between the City of Cebu and Morales.There is no merit in petitioners assertion that there was no perfected contract of sale because no "Contract of Purchase and Sale" was ever executed by the parties. As previously stated, a contract of sale is a consensual contract that is perfected upon a meeting of minds as to the object of the contract and its price. Subject to the provisions of the Statute of Frauds, a formal document is not necessary for the sale transaction to acquire binding effect.24For as long as the essential elements of a contract of sale are proved to exist in a given transaction, the contract is deemed perfected regardless of the absence of a formal deed evidencing the same.Similarly, petitioner erroneously contends that the failure of Morales to pay the balance of the purchase price is evidence that there was really no contract of sale over the lot between Morales and the City of Cebu. On the contrary, the fact that there was an agreed price for the lot proves that a contract of sale was indeed perfected between the parties. Failure to pay the balance of the purchase price did not render the sale inexistent or invalid, but merely gave rise to a right in favor of the vendor to either demand specific performance or rescission of the contract of sale.25It did not abolish the contract of sale or result in its automatic invalidation.As correctly found by the appellate court, the contract of sale between the City of Cebu and Morales was also partially consummated. The latter had paid the deposit and downpayment for the lot in accordance with the terms of the bid award. She first occupied the property as a lessee in 1961, built a house thereon and was continuously in possession of the lot as its owner until her death in 1969. Respondents, on the other hand, who are all surviving heirs of Morales, likewise occupied the property during the latters lifetime and continue to reside on the property to this day.26The stages of a contract of sale are as follows: (1)negotiation, covering the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is perfected; (2)perfection, which takes place upon the concurrence of the essential elements of the sale which are the meeting of the minds of the parties as to the object of the contract and upon the price; and (3)consummation, which begins when the parties perform their respective undertakings under the contract of sale, culminating in the extinguishment thereof.27In this case, respondents predecessor had undoubtedly commenced performing her obligation by making a down payment on the purchase price. Unfortunately, however, she was not able to complete the payments due to legal complications between petitioner and the city.Thus, the City of Cebu could no longer dispose of the lot in question when it was included as among those returned to petitioner pursuant to the compromise agreement in Civil Case No. 238-BC. The City of Cebu had sold the property to Morales even though there remained a balance on the purchase price and a formal contract of sale had yet to be executed. Incidentally, the failure of respondents to pay the balance on the purchase price and the non-execution of a formal agreement was sufficiently explained by the fact that the trial court, in Civil Case No. 238-BC, issued a writ of preliminary injunction enjoining the city from further disposing the donated lots. According to respondents, there was confusion as to the circumstances of payment considering that both the city and petitioner had refused to accept payment by virtue of the injunction.28It appears that the parties simply mistook Lot 646-A-3 as among those not yet sold by the city.The City of Cebu was no longer the owner of Lot 646-A-3 when it ceded the same to petitioner under the compromise agreement in Civil Case No. 238-BC. At that time, the city merely retained rights as an unpaid seller but had effectively transferred ownership of the lot to Morales. As successor-in-interest of the city, petitioner could only acquire rights that its predecessor had over the lot. These rights include the right to seek rescission or fulfillment of the terms of the contract and the right to damages in either case.29In this regard, the records show that respondent Quesada wrote to then Cebu Governor Eduardo R. Gullas on March 11, 1983, asking for the formal conveyance of Lot 646-A-3 pursuant to the award and sale earlier made by the City of Cebu. On October 10, 1986, she again wrote to Governor Osmundo G. Rama reiterating her previous request. This means that petitioner had known, at least as far back as 1983, that the city sold the lot to respondents predecessor and that the latter had paid the deposit and the required down payment. Despite this knowledge, however, petitioner did not avail of any rightful recourse to resolve the matter.Article 1592 of the Civil Code pertinently provides:Article 1592. In the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the time agreed upon the rescission of the contract shall of right take place,the vendee may pay, even after the expiration of the period,as long as no demand for rescission of the contract has been made upon him either judicially or by notarial act. After the demand, the court may not grant him a new term. (Underscoring supplied)Thus, respondents could still tender payment of the full purchase price as no demand for rescission had been made upon them, either judicially or through notarial act. While it is true that it took a long time for respondents to bring suit for specific performance and consign the balance of the purchase price, it is equally true that petitioner or its predecessor did not take any action to have the contract of sale rescinded. Article 1592 allows the vendee to pay as long as no demand for rescission has been made.30The consignation of the balance of the purchase price before the trial court thus operated as full payment, which resulted in the extinguishment of respondents obligation under the contract of sale.Finally, petitioner cannot raise the issue of prescription and laches at this stage of the proceedings. Contrary to petitioners assignment of errors, the appellate court made no findings on the issue because petitioner never raised the matter of prescription and laches either before the trial court or Court of Appeals. It is basic that defenses and issues not raised below cannot be considered on appeal.31Thus, petitioner cannot plead the matter for the first time before this Court.WHEREFORE,in view of the foregoing, the petition is herebyDENIEDand the decision and resolution of the Court of Appeals in CA-G.R. CV No. 53632 areAFFIRMED.SO ORDERED.

G.R. No. 128690.January 21, 1999]ABS-CBN BROADCASTING CORPORATION,petitioners, vs.HONORABLE COURT OF APPEALS, REPUBLIC BROADCASTING CORP., VIVA PRODUCTIONS, INC., and VICENTE DEL ROSARIO,respondents.D E C I S I O NDAVIDE, JR.,C.J.:In this petition for review oncertiorari, petitioners ABS-CBN BroadcastingCorp. (hereinafter ABS-CBN) seeks to reverse and set aside the decision[1]of 31 October 1996 and the resolution[2]of 10 March 1997 of the Court of Appeals in CA-G.R. CV No. 44125.The former affirmed with modification the decision[3]of 28 April 1993 of the Regional Trial Court (RTC) of Quezon City, Branch 80, in Civil Case No. Q-12309.The latter denied the motion to reconsider the decision of 31 October 1996.The antecedents, as found by the RTC and adopted by the Court of Appeals, are as follows:In 1990, ABS-CBN and VIVA executed a Film Exhibition Agreement (Exh. A) whereby Viva gave ABS-CBN an exclusive right to exhibit some Viva films.Sometime in December 1991, in accordance with paragraph 2.4 [sic] of said agreement stating that-1.4 ABS-CBN shall have the right of first refusal to the next twenty-four (24) Viva filmsfor TV telecast under such terms as may be agreed upon by the parties hereto, provided, however, that such right shall be exercised by ABS-CBN from the actual offer in writing.Viva, through defendant Del Rosario, offered ABS-CBN, through its vice-president Charo Santos-Concio, a list of three (3) film packages (36 title) from which ABS-CBN may exercise its right of first refusal under the afore-said agreement (Exhs. 1 par. 2, 2, 2-A and 2-B Viva).ABS-CBN, however through Mrs. Concio, can tick off only ten (10) titles (from the list) we can purchase (Exh. 3 Viva) and therefore did not accept said list (TSN, June 8, 1992, pp. 9-10).The titles ticked off by Mrs. Concio are not the subject of the case at bar except the film Maging Sino Ka Man.For further enlightenment, this rejection letter dated January 06, 1992 (Exh 3 Viva) is hereby quoted:6 January 1992Dear Vic,This is not a very formal business letter I am writing to you as I would like to express my difficulty in recommending the purchase of the three film packages you are offering ABS-CBN.From among the three packages I can only tick off 10 titles we can purchase.Please see attached.I hope you will understand my position.Most of the action pictures in the list do not have big action stars in the cast.They are not for primetime.In line with this I wish to mention that I have not scheduled for telecast several action pictures in our very first contract because of the cheap production value of these movies as well as the lack of big action stars.As a film producer, I am sure you understand what I am trying to say as Viva produces only big action pictures.In fact, I would like to request two (2) additional runs for these movies as I can only schedule them in out non-primetime slots.We have to cover the amount that was paid for these movies because as you very well know that non-primetime advertising rates are very low.These are the unaired titles in the first contract.1.Kontra Persa [sic]2.Raider Platoon3.Underground guerillas4.Tiger Command5.Boy de Sabog6.lady Commando7. Batang Matadero8.RebelyonI hope you will consider this request of mine.The other dramatic films have been offered to us before and have been rejected because of the ruling of MTRCB to have them aired at 9:00 p.m. due to their very adult themes.As for the 10 titles I have choosen [sic] from the 3 packages please consider including all the other Viva movies produced last year, I have quite an attractive offer to make.Thanking you and with my warmest regards.(Signed)Charo Santos-ConcioOn February 27, 1992, defendant Del Rosario approached ABS-CBNs Ms. Concio, with a list consisting of 52 original movie titles (i.e., not yet aired on television) including the 14 titles subject of the present case, as well as 104 re-runs (previously aired on television) from which ABS-CBN may choose another 52 titles, as a total of 156 titles, proposing to sell to ABS-CBN airing rights over this package of 52 originals and 52 re-runs forP60,000,000.00 of whichP30,000,000.00 will be in cash andP30,000,000.00 worth of television spots (Exh. 4 to 4-C Viva; 9 Viva).On April 2, 1992, defendant Del Rosario and ABS-CBNs general manager, Eugenio Lopez III, met at the Tamarind Grill Restaurant in Quezon City to discuss the package proposal of VIVA.What transpired in that lunch meeting is the subject of conflicting versions.Mr. Lopez testified that he and Mr. Del Rosario allegedly agreed that ABS-CBN was granted exclusive film rights to fourteen (14) films for a total consideration ofP36 million; that he allegedly put this agreement as to the price and number of films in a napkin and signed it and gave it to Mr. Del Rosario (Exh. D; TSN, pp. 24-26, 77-78, June 8, 1992).On the other hand.Del Rosario denied having made any agreement with Lopez regarding the 14 Viva films; denied the existence of a napkin in which Lopez wrote something; and insisted that what he and Lopez discussed at the lunch meeting was Vivas film package offer of 104 films (52 originals and 52 re-runs) for a total price ofP60 million.Mr. Lopez promising [sic]to make a counter proposal which came in the form of a proposal contract Annex C of the complaint (Exh. 1 Viva; Exh C ABS-CBN).On April 06, 1992, Del Rosario and Mr. Graciano Gozon of RBS Senior vice-president for Finance discussed the terms and conditions of Vivas offer to sell the 104 films, after the rejection of the same package by ABS-CBN.On April 07, 1992, defendant Del Rosario received through his secretary , a handwritten note from Ms. Concio, (Exh. 5 Viva), which reads: Heres the draft of the contract.I hope you find everything in order, to which was attached a draft exhibition agreement (Exh. C ABS-CBN; Exh. 9 Viva p. 3) a counter-proposal covering 53 films, 52 of which came from the list sent by defendant Del Rosario and one film was added by Ms. Concio, for a consideration ofP35 million.Exhibit C provides that ABS-CBN is granted film rights to 53 films and contains a right of first refusal to 1992 Viva Films.The said counter proposal was however rejected by Vivas Board of Directors [in the] evening of the same day, April 7, 1992, as Viva would not sell anything less than the package of 104 films forP60 million pesos (Exh. 9 Viva), and such rejection was relayed to Ms. Concio.On April 29, 1992, after the rejection of ABS-CBN and following several negotiations and meetings defendant Del Rosario and Vivas President Teresita Cruz, in consideration ofP60 million, signed a letter of agreement dated April 24, 1992, granting RBS the exclusive right to air 104 Viva-produced and/or acquired films (Exh. 7-A - RBS; Exh. 4 RBS) including the fourteen (14) films subject of the present case.[4]On 27 May 1992, ABS-CBN filed before the RTC a complaint for specific performance with a prayer for a writ of preliminary injunction and/or temporary restraining order against private respondents Republic Broadcasting Corporation[5](hereafter RBS), Viva Production (hereafter VIVA), and Vicente del Rosario.The complaint was docketed as Civil Case No. Q-92-12309.On 28 May 1992, the RTC issued a temporary restraining order[6]enjoining private respondents from proceeding with the airing, broadcasting, and televising of the fourteen VIVA films subject of the controversy, starting with the filmMaging Sino Ka Man,which was scheduled to be shown on private respondent RBS channel 7 at seven oclock in the evening of said date.On 17 June 1992, after appropriate proceedings, the RTC issued an order[7]directing the issuance of a writ of preliminary injunction upon ABS-CBNs posting of aP35 million bond.ABS-CBN moved for the reduction of the bond,[8]while private respondents moved for reconsideration of the order and offered to put up a counterbond.[9]In the meantime, private respondents filed separate answer with counterclaim.[10]RBS also set up a cross-claim against VIVA.On 3 August 1992, the RTC issued an order[11]dissolving the writ of preliminary injunction upon the posting by RBS of aP30 million counterbond to answer for whatever damages ABS-CBN might suffer by virtue of such dissolution.However, it reduced petitioners injunction bond toP15 million as a condition precedent for the reinstatement of the writ of preliminary injunction should private respondents be unable to post a counterbond.At the pre-trial[12]on 6 August 1992, the parties upon suggestion of the court, agreed to explore the possibility of an amicable settlement.In the meantime, RBS prayed for and was granted reasonable time within which to put up aP30 million counterbond in the event that no settlement would be reached.As the parties failed to enter into an amicable settlement, RBS posted on 1 October 1992 a counterbond, which the RTC approved in its Order of 15 October 1992.[13]On 19 October 1992, ABS-CBN filed a motion for reconsideration[14]of the 3 August and 15 October 1992 Orders, which RBS opposed.[15]On 29 October, the RTC conducted a pre-trial.[16]Pending resolution of its motion for reconsideration, ABS-CBN filed with the Court of Appeals a petition[17]challenging the RTCs Order of 3 August and 15 October 1992 and praying for the issuance of a writ of preliminary injunction to enjoin the RTC from enforcing said orders.The case was docketed as CA-G.R. SP No. 29300.On 3 November 1992, the Court of Appeals issued a temporary restraining order[18]to enjoin the airing, broadcasting, and televising of any or all of the films involved in the controversy.On 18 December 1992, the Court of Appeals promulgated a decision[19]dismissing the petition in CA-G.R. SP No. 29300 for being premature.ABS-CBN challenged the dismissalin a petition for review filed with this Court on 19 January 1993, which was docketed s G.R. No. 108363.In the meantime the RTC received the evidence for the parties in Civil Case No. Q-92-12309.Thereafter, on 28 April 1993, it rendered a decision[20]in favor of RBS and VIVA and against ABS-CBN disposingas follows:WHEREFORE, under cool reflection and prescinding from the foregoing, judgment is rendered in favor of defendants and against the plaintiff.(1)The complaint is hereby dismissed;(2)Plaintiff ABS-CBN is ordered to pay defendant RBS the following:a)P107,727.00 the amount of premium paid by RBS to the surety which issued defendants RBSs bond to lift the injunction;b)P191,843.00 for the amount of print advertisement for Maging Sino Ka Man in various newspapers;c)Attorneys fees in the amount ofP1 million;d)P5 million as and by way of moral damages;e)P5 million as and by way of exemplary damages;(3)For the defendant VIVA, plaintiffABS-CBN is ordered to payP212,000.00 by way of reasonable attorneys fees.(4)The cross-claim of defendant RBS against defendant VIVA is dismissed.(5)Plaintiff to pay the costs.According to the RTC, there was no meeting of minds on the price and terms of the offer.The alleged agreement between Lopez III and Del Rosario was subject to the approval of the VIVA Board of Directors, and said agreement was disapproved during the meeting of the Board on 7 April 1992.Hence, there was no basis for ABS-CBNs demand that VIVA signed the 1992 Film Exhibition Agreement.Furthermore, the right of first refusal under the 1990 Film Exhibition Agreement had previously been exercised per Ms. Concios letter to Del Rosario ticking off ten titles acceptable to them, which would have made the 1992 agreement an entirely new contract.On 21 June 1993, this Court denied[21]ABS-CBNs petition for review in G.R. No. 108363, as no reversible error was committed by the Court of Appeals in its challenged decision and the case had become moot and academic in view of the dismissal of the main action by the courta quoin its decision of 28 April 1993.Aggrieved by the RTCs decision, ABS-CBN appealed to the Court of Appeals claiming that there was a perfected contract between ABS-CBN and VIVA granting ABS-CBN the exclusive right to exhibit the subject films.Private respondents VIVA and Del Rosario also appealed seeking moral and exemplary damages and additional attorneys fees.In its decision of 31 October 1996, the Court of Appeals agreed with the RTC that the contract between ABS-CBN and VIVA had not been perfected, absent the approval by the VIVA Board of Directors of whatever Del Rosario, its agent, might have agreed with Lopez III.The appellate court did not even believe ABS-CBNs evidence that Lopez III actually wrote down such an agreement on a napkin,as the same was never produced in court.It likewise rejected ABS-CBNs insistence on its right of first refusal and ratiocinated as follows:As regards the matter of right of first refusal, it may be true that a Film Exhibition Agreement was entered into between Appellant ABS-CBN and appellant VIVA under Exhibit A in 1990 and that parag. 1.4 thereof provides:1.4ABS-CBN shall have the right of first refusal to the next twenty-four (24) VIVA films for TV telecast under such terms as may be agreed upon by the parties hereto, provided, however, that such right shall be exercised by ABS-CBN within a period of fifteen (15) days from the actual offer in writing (Records, p. 14).[H]owever, it is very clear that said right of first refusal in favor of ABS-CBN shall still be subjected to such terms as may be agreed upon by the parties thereto, and that the said right shall be exercised by ABS-CBN within fifteen (15) days from the actual offer in writing.Said parag. 1.4 of the agreement Exhibit A on the right of first refusal did not fix the price of the film right to the twenty-four (24) films, nor did it specify the terms thereof.The same are still left to be agreed upon by the parties.In the instant case, ABS-CBNs letter of rejection Exhibit 3 (Records, p. 89) stated that it can only tick off ten (10) films, and the draft contract Exhibit C accepted only fourteen (14) films, while parag. 1.4 of Exhibit A speaks of the next twenty-four (24) films.The offer of VIVA was sometime in December 1991, (Exhibits 2, 2-A, 2-B; Records, pp. 86-88; Decision, p. 11, Records, p. 1150), when the first list of VIVA films was sent by Mr. Del Rosario to ABS-CBN.The Vice President of ABS-CBN, Mrs. Charo Santos-Concio, sent a letter dated January 6, 1992 (Exhibit 3, Records, p. 89) where ABS-CBN exercised its right of refusal by rejecting the offer of VIVA.As aptly observed by the trial court, with the said letter of Mrs. Concio of January 6, 1992, ABS-CBN had lost its right of first refusal.And even if We reckon the fifteen (15) day period from February 27, 1992 (Exhibit 4 to 4-C) when another list was sent to ABS-CBN after the letter of Mrs. Concio, still the fifteen (15) day period within which ABS-CBN shall exercise its right of first refusal has already expired.[22]Accordingly, respondent court sustained the award factual damages consisting in the cost of print advertisements and the premium payments for the counterbond, there being adequate proof of the pecuniary loss which RBS has suffered as a result of the filing of the complaint by ABS-CBN.As to the award of moral damages, the Court of Appeals found reasonable basis therefor, holding that RBSs reputation was debased by the filing of the complaint in Civil Case No. Q-92-12309 and by the non-showing of the filmMaging Sino Ka Man.Respondent court also held that exemplary damages were correctly imposed by way of example or correction for the public good in view of the filing of the complaint despite petitioners knowledge that the contract with VIVA had not been perfected.It also upheld the award of attorneys fees, reasoning that with ABS-CBNs act of instituting Civil Case No. Q-92-12309, RBS was unnecessarily forced to litigate.The appellate court, however, reduced the awards of moral damages toP2 million, exemplary damages toP2 million, and attorneys fees toP500,000.00.On the other hand, respondent Court of Appeals denied VIVA and Del Rosarios appeal because it was RBS and not VIVA which was actually prejudiced when the complaint was filed by ABS-CBN.Its motion for reconsideration having been denied, ABS-CBN filed the petition in this case, contending that the Court of Appeals gravely erred inIRULING THAT THERE WAS NO PERFECTED CONTRACT BETWEEN PETITIONER AND PRIVATE RESPONDENT VIVA NOTWITHSTANDINGPREPONFERANCE OF EVIDENCE ADDUCED BY PETITIONER TO THE CONTRARY.IIIN AWARDING ACTUAL AND COMPENSATORY DAMAGES IN FAVOR OF PRIVATE RESPONDENT RBS.IIIIN AWARDING MORAL AND EXEMPLARY DAMAGES IN FAVOR OF PRIVATE RESPONDENT RBS.IVIN AWARDING ATORNEYS FEES OF RBS.ABS-CBN claims that it had yet to fully exercise its right of first refusal over twenty-four titles under the 1990 Film Exhibition Agreement, as it had chosen only ten titles from the first list.It insists that we give credence to Lopezs testimony that he and Del Rosario met at the Tamarind Grill Restaurant, discussed the terms and conditions of the second list (the 1992 Film Exhibition Agreement) and upon agreement thereon, wrote the same on a paper napkin.It also asserts that the contract has already been effective, as the elements thereof, namely, consent, object, and consideration were established.It then concludes that the Court of Appeals pronouncements were not supported by law and jurisprudence, as per our decision of 1 December 1995 in Limketkai Sons Milling, Inc. v. Court of Appeals,[23]which citedToyota Shaw, Inc. v. Court of Appeals;[24]Ang YuAsuncion v. Court of Appeals,[25]andVillonco Realty Company v. Bormaheco, Inc.[26]Anent the actual damages awarded to RBS, ABS-CBN disavows liability therefor.RBS spent for the premium on the counterbond of its own volition in order to negate the injunction issued by the trial court after the parties had ventilated their respective positions during the hearings for the purpose.The filing of the counterbond was an option available to RBS, but it can hardly be argued that ABS-CBN compelled RBS to incur such expense.Besides, RBS had another available option,i.e.,move for the dissolution of the injunction; or if it was determined to put up a counterbond, it could have presented a cash bond.Furthermore under Article 2203 of the Civil Code, the party suffering loss injury is also required to exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission.As regards the cost of print advertisements, RBS had not convincingly established that this was a loss attributable to the non-showing of Maging Sino Ka Man; on the contrary, it was brought out during trial that with or without the case or injunction, RBS would have spent such an amount to generate interest in the film.ABS-CBN further contends that there was no other clear basis for the awards of moral and exemplary damages.The controversy involving ABS-CBN and RBS did not in any way originate from business transaction between them.The claims for such damages did not arise from any contractual dealings or from specific acts committed by ABS-CBN against RBS that may be characterized as wanton, fraudulent, or reckless; they arose by virtue only of the filing of the complaint.An award of moral and exemplary damages is not warranted where the record is bereft of any proof that a party acted maliciously or in bad faith in filing an action.[27]In any case, free resort to courts for redress of wrongs is a matter of public policy.The law recognizes the right of every one to sue for that which he honestly believes to be his right without fear of standing trial for damages where by lack of sufficientevidence, legal technicalities, or a different interpretation of the laws on the matter, the case would lose ground.[28]One who, makes use of his own legal right does no injury.[29]If damage results from filing of the complaint, it isdamnum absque injuria.[30]Besides, moral damages are generally not awarded in favor of a juridical person, unless it enjoys a good reputation that was debased by the offending party resulting in social humiliation.[31]As regards the award of attorneys fees, ABS-CBN maintains that the same had no factual, legal, or equitable justification.In sustaining the trial courts award, the Court of Appeals acted in clear disregard of the doctrine laid down inBuan v. Camaganacan[32]that the text of the decision should state the reason why attorneys fees are being awarded; otherwise, the award should be disallowed.Besides, no bad faith has been imputed on, much less proved as having been committed by, ABS-CBN.It has been held that where no sufficient showing of bad faith would be reflected in a partys persistence in a case other than an erroneous conviction of the righteousness of his cause, attorneys fees shall not be recovered as cost.[33]On the other hand, RBS asserts that there was no perfected contract between ABS-CBN and VIVA absent meeting of minds between them regarding the object and consideration of the alleged contract.It affirms that ABS-CBNs claim of a right of first refusal was correctly rejected by the trial court.RBS insists the premium it had paid for the counterbond constituted a pecuniary loss upon which it may recover.It was obliged to put up the counterbond due to the injunction procured by ABS-CBN.Since the trial court found that ABS-CBN had no cause of action or valid claim against RBS and, therefore not entitled to the writ of injunction, RBS could recover from ABS-CBN the premium paid on the counterbond.Contrary to the claim of ABS-CBN, the cash bond would prove to be more expensive, as the loss would be equivalent to the cost of money RBS would forego in case theP30 million came from its funds or was borrowed from banks.RBS likewise asserts that it was entitled to the cost of advertisements for the cancelled showing of the film Maging Sino Ka Man because the print advertisements were out to announce the showing on a particular day and hour on Channel 7,i.e.,in its entirety at one time, not as series to be shown on a periodic basis.Hence, the print advertisements were good and relevant for the particular date of showing, and since the film could not be shown on that particular date and hour because of the injunction, the expenses for the advertisements had gone to waste.As regards moral and exemplary damages, RBS asserts that ABS-CBN filed the case and secured injunctions purely for the purpose of harassing and prejudicing RBS.Pursuant then to Articles 19 and 21 of the Civil Code, ABS-CBN must be held liable for such damages.CitingTolentino,[34]damages may be awarded in cases of abuse of rights even if the done is not illicit, and there is abuse of rights where a plaintiff institutes an action purely for the purpose of harassing or prejudicing the defendant.In support of its stand that a juridical entity can recover moral and exemplary damages, private respondent RBS cited People v. Manero,[35]where it was stated that such entity may recover moral and exemplary damages if it has a good reputation that is debased resulting in social humiliation.It then ratiocinates; thus:There can be no doubt that RBS reputation has been debased by ABS-CBNs acts in this case.When RBS was not able to fulfill its commitment to the viewing public to show the film Maging Sino Ka Man on the scheduled dates and times (and on two occasions that RBS advertised), it sufferedserious embarrassment and social humiliation.When the showing was cancelled, irate viewers called up RBS offices and subjected RBS to verbal abuse (Announce kayo ng announce, hindi ninyo naman ilalabas, nanloloko yata kayo) (Exh. 3-RBS, par.3).This alone was not something RBS brought upon itself.It was exactly what ABS-CBN had planted to happen.The amount of moral and exemplary damages cannot be said to be excessive.Two reasons justify the amount of the award.The first is that the humiliation suffered by RBS, is national in extent. RBS operations as a broadcasting company is [sic] nationwide.Its clientele, like that of ABS-CBN, consists of those who own and watch television.It is not an exaggeration to state, and it is a matter of judicial notice that almost every other person in the country watches television.The humiliation suffered by RBS is multiplied by the number of televiewers who had anticipated the showing of the film, Maging Sino Ka Man on May 28 and November 3, 1992 but did not see it owing to the cancellation.Added to this are the advertisers who had placed commercial spots for the telecast and to whom RBS had a commitment in consideration of the placement to show the film in the dates and times specified.The second is that it is a competitor that caused RBS suffer the humiliation.The humiliation and injury are far greater in degree when caused by an entity whose ultimate business objective is to lure customers (viewers in this case) away from the competition.[36]For their part, VIVA and Vicente del Rosario contend that the findings of fact of the trial court and the Court of Appeals do not support ABS-CBNs claim that there was a perfected contract.Such factual findings can no longer be disturbed in this petition for review under Rule 45, as only questions of law can be raised, not questions of fact.On the issue of damages and attorneys fees, they adopted the arguments of RBS.The key issues for our consideration are (1) whether there was a perfected contract between VIVA and ABS-CBN, and (2) whether RBS is entitled to damages and attorneys fees.It may be noted that that award of attorneys fees ofP212,000 in favor of VIVA is not assigned as another error.IThe first issue should be resolved against ABS-CBN.A contract is a meeting of minds between two persons whereby one binds himself to give something or render some service to another[37]for a consideration.There is no contract unless the following requisites concur: (1) consent of the contracting parties; (2) object certain which is the subject of the contract; and (3) cause of the obligation, which is established.[38]A contract undergoes three stages:(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.[39]Contracts that are consensual in nature are perfected upon mere meeting of the minds.Once there is concurrence between the offer and the acceptance upon the subject matter, consideration, and terms of payment a contract is produced.The offer must be certain.To convert the offer into a contract, the acceptance must be absolute and must not qualify the terms of the offer; it must be plain, unequivocal, unconditional, and without variance of any sort from the proposal.A qualified acceptance, or one that involves a new proposal, constitutes a counter-offer and is a rejection of the original offer.Consequently, when something is desired which is not exactly what is proposed in the offer, such acceptance is not sufficient to generate consent because any modification or variation from the terms of the offer annuls the offer.[40]When Mr. Del Rosario of Viva met Mr. Lopez of ABS-CBN at the Tamarind Grill on 2 April 1992 to discuss the package of films, said package of 104 VIVA films was VIVAs offer to ABS-CBN to enter into a new Film Exhibition Agreement.But ABS-CBN, sent through Ms. Concio, counter-proposal in the form a draft contract proposing exhibition of 53 films for a consideration ofP35 million.This counter-proposal could be nothing less than the counter-offer of Mr. Lopez during his conference with Del Rosario at Tamarind Grill Restaurant.Clearly, there was no acceptance of VIVAs offer, for it was met by a counter-offer which substantially varied the terms of the offer.ABS-CBNs reliance in Limketkai Sons Milling, Inc. v. Court of Appeals[41]andVillonco Realty Company v. Bormaheco, Inc.,[42]is misplaced.In these cases, it was held that an acceptance may contain a request for certain changes in the terms of the offer and yet be a binding acceptance as long as it is clear that the meaning of the acceptance is positively and unequivocally to accept the offer, whether such request is granted or not. This ruling was, however, reversed in the resolution of 29 March 1996,[43]which ruled that the acceptance of an offer must be unqualified and absolute,i.e.,it must be identical in all respects with that of the offer so as to produce consent or meetings of the minds.On the other hand, inVillonco,cited inLimketkai,the alleged changes in the revised counter-offer were not material but merely clarificatory of what had previously been agreed upon.It cited the statement inStuart v. Franklin Life Insurance Co.[44]that a vendors change in a phrase of the offer to purchase, which change does not essentially change the terms of the offer, does not amount to a rejection of the offer and the tender of a counter-offer.[45]However, when any of the elements of the contract is modified upon acceptance, such alteration amounts to a counter-offer.In the case at bar, ABS-CBN made no unqualified acceptance of VIVAs offerhence, they underwent period of bargaining.ABS-CBN then formalized its counter-proposals or counter-offer in a draft contract.VIVA through its Board of Directors, rejected such counter-offer.Even if it be concededarguendothat Del Rosario had accepted the counter-offer, the acceptance did not bind VIVA, as there was no proof whatsoever that Del Rosario had the specific authority to do so.Under the Corporation Code,[46]unless otherwise provided by said Code, corporate powers, such as the power to enter into contracts, are exercised by the Board of Directors.However, the Board may delegate such powers to either an executive committee or officials or contracted managers.The delegation, except for the executive committee, must be for specific purposes.[47]Delegation to officers makes the latter agents of the corporation; accordingly, the general rules of agency as to the binding effects of their acts would apply.[48]For such officers to be deemed fully clothed by the corporation to exercise a power of the Board, the latter must specially authorize them to do so.that Del Rosario did not have the authority to accept ABS-CBNs counter-offer was best evidenced by his submission of the draft contract to VIVAs Board of Directors for the latters approval.In any event, there was between Del Rosario and Lopez III no meeting of minds.The following findings of the trial court are instructive:A number of considerations militate against ABS-CBNs claim that a contract was perfected at that lunch meeting on April 02, 1992 at the Tamarind Grill.FIRST, Mr. Lopez claimed that what was agreed upon at the Tamarind Grill referred to the price and the number of films, which he wrote on a napkin.However, Exhibit C containsnumerous provisions which were not discussed at the Tamarind Grill, if Lopez testimony was to be believed nor could they have been physically written on a napkin.There was even doubt as to whether it was a paper napkin or cloth napkin.In short what were written in Exhibit C were not discussed, and therefore could not have been agreed upon, by the parties.How then could this court compel the parties to sign Exhibit C when the provisions thereof were not previously agreed upon?SECOND, Mr. Lopez claimed that what was agreed upon as the subject matter of the contract was 14 films.The complaint in fact prays for delivery of 14 films.But Exhibit C mentions 53 films as its subject matter.Which is which?If Exhibit C reflected the true intent of the parties, then ABS-CBNs claim for 14 films in its complaint is false or if what it alleged in the complaint is true, then Exhibit C did not reflect what was agreed upon by the parties.This underscores the fact that there was no meeting of the minds as to the subject matter of the contract, so as to preclude perfection thereof.For settled is the rule that there can be no contract where there is no object certain which is its subject matter (Art. 1318, NCC).THIRD, Mr. Lopez [sic] answer to question 29 of his affidavit testimony (Exh. D) States:We were able to reach an agreement.VIVA gave us the exclusive license to show these fourteen (14) films, and we agreed to pay Viva the amount ofP16,050,000.00 as well as grant Viva commercial slots worthP19,950,000.00.We had already earmarked thisP16,050,000.00.which gives a total consideration ofP36 million (P19,951,000.00 plusP16,050,000.00 equalsP36,000,000.00).On cross-examination Mr. Lopez testified:QWhat was written in this napkin?AThe total price, the breakdown the known Viva movies, the 7 blockbuster movies and the other 7 Viva movies because the price was broken down accordingly.The none [sic] Viva and the seven other Viva movies and the sharing between the cash portion and the concerned spot portion in the total amount ofP35 million pesos.Now, which is which?P36 million orP35 million?This weakens ABS-CBNs claim.FOURTH.Mrs. Concio, testifying for ABS-CBN stated that she transmitted Exhibit C to Mr. Del Rosario with a handwritten note, describing said Exhibit C as a draft.(Exh. 5 Viva; tsn pp. 23-24, June 08, 1992).The said draft has a well defined meaning.Since Exhibit C is only a draft, or a tentative, provisional or preparatory writing prepared for discussion, the terms and conditions thereof could not have been previously agreed upon by ABS-CBN and Viva.Exhibit C could not therefore legally bind Viva, not having agreed thereto.In fact, Ms. Concio admitted that the terms and conditions embodied in Exhibit C were prepared by ABS-CBNs lawyers and there was no discussion on said terms and conditions.As the parties had not yet discussed the proposed terms and conditions in Exhibit C, and there was no evidence whatsoever that Viva agreed to the terms and conditions thereof, said document cannot be a binding contract.The fact that Viva refused to sign Exhibit C reveals only two [sic] well that it did not agree on its terms and conditions, and this court has no authority to compel Viva to agree thereto.FIFTH.Mr. Lopez understand [sic] that what he and Mr. Del Rosario agreed upon at the Tamarind Grill was only provisional, in the sense that it was subject to approval by the Board of Directors of Viva.He testified:QNow, Mr. Witness, and after that Tamarinf meeting the second meeting wherein you claimed that you have the meeting of the minds between you and Mr. Vic del Rosario, what happened?AVic Del Rosario was supposed to call us up and tell us specifically the result of the discussion with the Board of Directors.QAnd you are referring to the so-called agreement which you wrote in [sic] a piece of paper?AYes, sir.QSo, he was going to forward that to the board of Directors for approval?AYes, sir (Tsn, pp. 42-43, June 8, 1992)QDid Mr. Del Rosario tell you that he will submit it to his Board for approval?AYes, sir.(Tsn, p. 69, June 8, 1992).The above testimony of Mr. Lopez shows beyond doubt that he knew Mr. Del Rosario had no authority to bind Viva to a contract with ABS-CBN until and unless its Board of Directors approved it.The complaint, in fact, alleges that Mr. Del Rosario is the Executive Producer of defendant Viva which is a corporation. (par. 2, complaint).As a mere agent of Viva, Del Rosario could not bind Viva unless what he did is ratified by its Directors.(Vicente vs.Geraldez, 52 SCRA 210; Arnold vs. Willets and Paterson, 44 Phil. 634).As a mere agent, recognized as such by plaintiff, Del Rosario could not be held liable jointly and severally with Viva and his inclusion as party defendant has no legal basis.(Salonga vs. Warner Barnes [sic],COLTA, 88 Phil. 125; Salmon vs. Tan, 36 Phil. 556).The testimony of Mr. Lopez and the allegations in the complaint are clear admissions that what was supposed to have been agreed upon at the Tamarind Grill between Mr. Lopez and Del Rosario was not a binding agreement.It is as it should be because corporate power to enter into a contract is lodged in the Board of Directors.(Sec. 23, Corporation Code).Without such board approval by the Viva board, whatever agreement Lopez and Del Rosario arrived at could not ripen into a valid binding upon Viva (Yao Ka Sin Trading vs. Court of Appeals, 209 SCRA 763).The evidence adduced shows that the Board of Directors of Viva rejected Exhibit C and insisted that the film package for 104 films be maintained (Exh. 7-1 Cica).[49]The contention that ABS-CBN had yet to fully exercise its right of first refusal over twenty-four films under the 1990 Film Exhibition Agreement and that the meeting between Lopez and Del Rosario was a continuation of said previous contract is untenable.As observed by the trial court, ABS-CBNs right of first refusal had already been exercised when Ms. Concio wrote to Viva ticking off ten films.Thus:[T]he subsequent negotiation with ABS-CBN two (2) months after this letter was sent, was for an entirely different package.Ms. Concio herself admitted on cross-examination to having used or exercised the right of first refusal.She stated that the list was not acceptable and was indeed not accepted by ABS-CBN, (Tsn, June 8, 1992, pp. 8-10).Even Mr. Lopez himself admitted that the right of first refusal may have been already exercised by Ms. Concio (as she had).(TSN, June 8, 1992, pp. 71-75).Del Rosario himself knew and understand [sic] that ABS-CBN has lost its right of first refusal when his list of 36 titles were rejected (Tsn, June 9, 1992, pp. 10-11).[50]IIHowever, we find for ABS-CBN on the issue of damages.We shall first take up actual damages.Chapter 2, Title XVIII, Book IV of the Civil Code is the specific law on actual or compensatory damages.Except as provided by law or by stipulation, one is entitled to compensation for actual damages only for such pecuniary loss suffered by him as he has duly proved.[51]The indemnification shall comprehend not only the value of the loss suffered, but also that of the profits that the obligee failed to obtain.[52]In contracts and quasi-contracts the damages which may be awarded are dependent on whether the obligor acted with good faith or otherwise.In case of good faith, the damages recoverable are those which are the natural and probable consequences of the breach of the obligation and which the parties have foreseen or could have reasonably foreseen at the time of the constitution of the obligation.If the obligor acted with fraud, bad faith, malice, or wanton attitude, he shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation.[53]In crimes and quasi-delicts, the defendants shall be liable for all damages which are the natural and probable consequences of the act or omission complained of, whether or not such damages have been foreseen or could have reasonably been foreseen by the defendant.[54]Actual damages may likewise be recovered for loss or impairment of earning capacity in cases of temporary or permanent personal injury, or for injury to the plaintiffs business standing or commercial credit.[55]The claim of RBS for actual damages did not arise from contract, quasi-contract, delict, or quasi-delict.It arose from the fact of filing of the complaint despite ABS-CBNs alleged knowledge of lack of cause of action.Thus paragraph 12 of RBSs Answer with Counterclaim and Cross-claim under the heading COUNTERCLAIM specifically alleges:12.ABS-CBN filed the complaint knowing fully well that it has no cause of action against RBS.As a result thereof, RBS suffered actual damages in the amount ofP6,621,195.32.[56]Needless to state the award of actual damages cannot be comprehended under the above law on actual damages.RBS could only probably take refuge under Articles 19, 20, and 21 of the Civil Code, which read as follows:ART. 19. Every person must, in the exercise of hid rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.ART. 20. Every person who, contrary to law, wilfully or negligently causes damage to another shall indemnify the latter for the same.ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.It may further be observed that in cases where a writ of preliminary injunction is issued, the damages which the defendant may suffer by reason of the writ are recoverable from the injunctive bond.[57]In this case, ABS-CBN had not yet filed the required bond; as a matter of fact, it asked for reduction of the bond and even went to the Court of Appeals to challenge the order on the matter.Clearly then, it was not necessary for RBS to file a counterbond.Hence, ABS-CBN cannot be held responsible for the premium RBS paid for the counterbond.Neither could ABS-CBN be liable for the print advertisements for Maging Sino Ka Man for lack of sufficient legal basis.The RTC issued a temporary restraining order and later, a writ of preliminary injunction on the basis of its determination that there existed sufficient ground for the issuance thereof.Notably, the RTC did not dissolve the injunction on the ground of lack of legal and factual basis, but because of the plea of RBS that it be allowed to put up a counterbond.As regards attorneys fees, the law is clear that in the absence of stipulation, attorneys fees may be recovered as actual or compensatory damages under any of the circumstances provided for in Article 2208 of the Civil Code.[58]The general rule is that attorneys fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate.[59]They are not to be awarded every time a party wins a suit.The power of the court t award attorneys fees under Article 2208 demands factual, legal, and equitable justification.[60]Even when a claimant is compelled to litigate with third persons or to incur expenses to protect his rights, still attorneys fees may not be awarded where no sufficient showing of bad faith could be reflected in a partys persistence in a case other than an erroneous conviction of the righteousness of his cause.[61]As to moral damages the law is Section 1, Chapter 3, Title XVIII, Book IV of the Civil Code.Article 2217 thereof defines what are included in moral damages, while Article 2219 enumerates the cases where they may be recovered.Article 2220 provides that moral damages may be recovered in breaches of contract where the defendant acted fraudulently or in bad faith.RBSs claim for moral damages could possibly fall only under item (10) of Article 2219, thereof which reads:(10)Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35.Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer.[62]The award is not meant to enrich the complainant at the expense of the defendant, but to enable the injured party to obtain means, diversion, or amusements that will serve to obviate the moral suffering he has undergone.It is aimed at the restoration, within the limits of the possible, of the spiritualstatus quo ante, and should be proportionate to the suffering inflicted.[63]Trial courts must then guard against the award of exorbitant damages; they should exercise balanced restrained and measured objectivity to avoid suspicion that it was due to passion, prejudice, or corruption or the part of the trial court.[64]The award of moral damages cannot be granted in favor of a corporation because, being anartificial person and having existence only in legal contemplation, it has no feelings, no emotions, no senses.It cannot, therefore, experience physical suffering and mental anguish, which can be experienced only by one having a nervous system.[65]The statement inPeople v. Manero[66]andMambulao Lumber Co. v. PNB[67]that a corporation may recover moral damages if it has a good reputation that is debased, resulting in social humiliation is anobiter dictum.On this score alone the award for damages must be set aside, since RBS is a corporation.The basic law on exemplary damages is Section 5 Chapter 3, Title XVIII, Book IV of the Civil Code.These are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated, or compensatory damages.[68]They are recoverable in criminal cases as part of the civil liability when the crime was committed with one or more aggravating circumstances;[69]in quasi-delicts, if the defendant acted with gross negligence;[70]and in contracts and quasi-contracts, if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.[71]It may be reiterated that the claim of RBS against ABS-CBN is not based on contract, quasi-contract, delict, or quasi-delict.Hence, the claims for moral and exemplary damages can only be based on Articles 19, 20, and 21 of the Civil Code.The elements of abuse of right under Article 19 are the following: (1) the existence of a legal right or duty, (2) which is exercised in bad faith, and (3) for the sole intent of prejudicing or injuring another.Article 20 speaks of the general sanction for all provisions of law which do not especially provide for their own sanction; while Article 21 deals with actscontra bonus mores, and has the following elements: (1) there is an act which is legal, (2) but which is contrary to morals, good custom, public order, or public policy, and (3) and it is done with intent to injure.[72]Verily then, malice or bad faith is at the core of Articles 19, 20, and 21.Malice or bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.[73]Such must be substantiated by evidence.[74]There is no adequate proof that ABS-CBN was inspired by malice or bad faith.It was honestly convinced of the merits of its cause after it had undergone serious negotiations culminating in its formal submission of a draft contract.Settled is the rule that the adverse result of an action does notper semake the action wrongful and subject the actor to damages, for the law could not have meant impose a penalty on the right to litigate.If damages result from a persons exercise of a right, it isdamnum absque injuria.[75]WHEREFORE, the instant petition is GRANTED.The challenged decision of the Court of Appeals in CA-G.R. CV No. 44125 is hereby REVERSED except as to unappealed award of attorneys fees in favor of VIVA Productions, Inc.No pronouncement as to costs.SO ORDERED.

[G.R. No. 126699. August 7, 1998]AYALA CORPORATION,petitioner, vs.RAY BURTON DEVELOPMENT CORPORATION,respondent.D E C I S I O NMARTINEZ,J.:Petitioner Ayala Corporation (AYALA) is the owner of the Ayala estate located in Makati City.The said estate was originally a raw land which was subdivided for sale into different lots devoted for residential, commercial and industrial purposes.The development of the estate consisted of road and building construction and installation of a central sewerage treatment plant and drainage system which services the whole Ayala Commercial Area.On March 20, 1984, Karamfil Import-Export Company Ltd. (KARAMFIL) bought from AYALA a piece of land identified as Lot 26, Block 2 consisting of 1,188 square meters, located at what is now known as H.V. de la Costa Street, Salcedo Village, Makati City.The said land, which is now the subject of this case, is more particularly described as follows:A parcel of land (Lot 26, Block 2, of the subdivision plan [LRC] Psd-6086, being a portion of Block D, described as plan [LRC] Psd-5812 LRC [GLRO] Rec. No. 2029) situated in the Municipality of Makati, Province of Rizal, Is. of Luzon.Bounded on the NE., points 2 to 3 by Lot 31, Block 2 (Creek 6.00 m. wide) of the subdivision plan, on the SE., points 3 to 4 by Lot 27, Block 2 of the Subdivision plan; on the SW, points 4 to 5, by proposed Road, 17.00 m. wide (Block C[LRC] Psd-5812); points 5 to 1 by Street Lot 2 (17.00 m. wide) of the subdivision plan.On the NW, points 1 to 2 by Lot 25, Block 2 of the subdivision plan.x x x beginning, containing an area of ONE THOUSAND ONE HUNDRED EIGHTY EIGHT (1,188) SQUARE METERS.The transaction was documented in a Deed of Sale[1]of even date, which provides, among others, that the vendee would comply with certain special conditions and restrictions on the use or occupancy of the land, among which are -Deed Restrictions:[2]a) The total height of the building to be constructed on the lot shall not be more than forty-two (42) meters, nor shall it have a total gross floor area of more than five (5) times the lot area; andb) The sewage disposal must be by means of connection into the sewerage system servicing the area.Special Conditions:[3]a) The vendee must obtain final approval from AYALA of the building plans and specifications of the proposed structures that shall be constructed on the land;b)The lot shall not be sold without the building having been completed; andc)Any breach of the stipulations and restrictions entitles AYALA to rescission of the contract.As a result of the sale, a Transfer Certificate of Title No. 132086[4]was issued in the name of KARAMFIL. The said special conditions and restrictions were attached as an annex to the deed of sale and incorporated in the Memorandum of Encumbrances at the reverse side of the title of the lot as Entry No. 2432/T-131086.On February 18, 1988, KARAMFIL sold the lot to Palmcrest Development and Realty Corporation (PALMCREST) under a Deed of Absolute Sale[5]of even date. This deed was submitted to AYALA for approval in order to obtain the latters waiver of the special condition prohibiting the resale of the lot until after KARAMFIL shall have constructed a building thereon.AYALA gave its written conformity to the sale but reflecting in its approval the same special conditions/restrictions as in the previous sale.AYALAs conformity was annotated on the deed of sale.[6]PALMCREST did not object to the stipulated conditions and restrictions.[7]PALMCREST in turn sold the lot to Ray Burton Development Corporation (RBDC), now respondent, on April 11, 1988, with the agreement that AYALA retains possession of the Owners Duplicate copy of the title until a building is erected on said parcel of land in accordance with the requirements and/or restrictions of AYALA.[8]The Deed of Absolute Sale[9]executed on the said date was also presented to AYALA for approval since no building had yet been constructed on the lot at the time of the sale.As in the KARAMFIL-PALMCREST transaction, AYALA gave its conformity to the sale, subject to RBDCs compliance with the special conditions/restrictions which were annotated in the deed of sale, thus:With our conformity, subject to the compliance by the Vendees of the Special Conditions of Sale on the reverse side of the Deed of Sale dated March 20, 1984 per Doc. No. 140, Page No. 29, Book No. 1, Series of 1984 of the Notary Public Silverio Aquino.[10]The conditions and restrictions of the sale were likewise entered as encumbrances at the reverse side of the Transfer Certificate of Title No. 155384 which was later issued in the name of RBDC.[11]Like PALMCREST, RBDC was not also averse to the aforesaid conditions and restrictions.[12]Sometime in June of 1989, RBDC submitted to AYALA for approval a set of architectural plans for the construction of a5-storeyoffice building on the subject lot, with a height of25.85 metersand a total gross floor area of 4,989.402 square meters.[13]The building was to be known as Trafalgar Tower but later renamed Trafalgar Plaza. Since the building was well within the 42-meter height restriction, AYALA approved the architectural plans.Upon written request[14]made by RBDC, AYALA likewise agreed to release the owners copy of the title covering the subject lot to the China Banking Corporation as guarantee of the loan granted to RBDC for the construction of the 5-storey building.Meanwhile, on November 28, 1989, RBDC, together with the Makati Developers Association, Inc. (MADAI), of which RBDC is a member, and other lot owners, filed a complaint against AYALA before the Housing and Land Use Regulatory Board (HLRB), docketed as HLRB Case No. REM-A-0818 (OAALA-REM-111489-4240).The complaint sought the nullification of the very same Deed Restrictions incorporated in the deeds of sale of the lots purchased by the complainants from AYALA and annotated on their certificates of title, on the grounds,inter alia, that said restrictions purportedly: (a) place unreasonable control over the lots sold by AYALA, thereby depriving the vendees of the full enjoyment of the lots they bought, in violation of Article 428 of the Civil Code; (b) have been superseded by Presidential Decree No. 1096 (the National Building Code) and Metro Manila Commission Zoning Ordinance No. 81-01; (c) violate the constitutional provision on equal protection of the laws, since the restrictions are imposed without regard to reasonable standards or classifications; and (d) are contracts of adhesion[15]since AYALA would not sell the lots unless the buyers agree to the deed restrictions.The complaint also alleged that AYALA is inestoppelfrom enforcing the restrictions in question when it allowed the construction of other high-rise buildings in Makati City beyond the height and floor area limits.AYALA was further charged with unsound business practice.Early in June of 1990, RBDC made another set of building plans for Trafalgar Plaza and submitted the same for approval, this time to the Building Official of the Makati City Engineers Office,[16]notto AYALA.In these plans, the building was to be26-storeyhigh, or a height of98.60meters,with a total gross floor area of 28,600 square meters.After having obtained the necessary building permits from the City Engineers Office, RBDC began to construct Trafalgar Plaza in accordance with these new plans.On July 11, 1990, the majority of the lot owners in the Maka