nego sales

7/21/2019 Nego Sales

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Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 138074 August 15, 2003

CELY YANG, Petitioner,vs.

HON. COURT O APPEALS, PH!L!PP!NE COMMERC!AL !NTERNAT!ONAL "AN#, AR

EAST "AN# $ TRUST CO., E%U!TA"LE "AN#!NG CORPORAT!ON, PREM

CHAN&!RAMAN! '() ERNAN&O &A*!&, Respondents.

D E C I S I O N

%U!SUM"!NG, J.:

or revie! on certiorari is the decision" of the Court of #ppeals, dated March $%, "&&&, in C#'

(.R. CV No. %$)&*, !hich affir+ed !ith +odification the oint decision of the Re-ional rial

Court /RC0 of Pasa1 Cit1, 2ranch ""3, dated 4ul1 5, "&&%, in Civil Cases Nos. %53&$ and

%5&$.) he trial court dis+issed the co+plaint a-ainst herein respondents ar East 2an6 7 rust

Co+pan1 /E2C0, E8uitable 2an6in- Corporation /E8uitable0, and Philippine Co++ercial

International 2an6 /PCI20 and ruled in favor of respondent ernando David as to the proceeds

of the t!o cashier9s chec6s, includin- the earnin-s thereof pendente lite. Petitioner Cel1 :an-

!as ordered to pa1 David +oral da+a-es of P";;,;;;.;; and attorne19s fees also in the a+ount

of P";;,;;;.;;.

he facts of this case are not disputed, to !it<

On or before Dece+ber $$, "&*3, petitioner Cel1 :an- and private respondent Pre+

Chandira+ani entered into an a-ree+ent !hereb1 the latter !as to -ive :an- a PCI2 +ana-er9s

chec6 in the a+ount of P

5.$ +illion in e=chan-e for t!o /$0 of :an-9s +ana-er9s chec6s, each in

the a+ount of P$.;*3 +illion, both pa1able to the order of private respondent ernando David.:an- and Chandira+ani a-reed that the difference of P$>,;;;.;; in the e=chan-e !ould be their

profit to be divided e8uall1 bet!een the+.

:an- and Chandira+ani also further a-reed that the for+er !ould secure fro+ E2C a dollar

draft in the a+ount of ?S@$;;,;;;.;;, pa1able to PCI2 CD? #ccount No. 5"&%';"">%'$, !hich

Chandira+ani !ould e=chan-e for another dollar draft in the sa+e a+ount to be issued b1 Aan-

Sen- 2an6 Btd. of Aon- on-.

#ccordin-l1, on Dece+ber $$, "&*3, :an- procured the follo!in-<

a0 E8uitable Cashier9s Chec6 No. CCPS "5';;&5>3 in the su+ of P$,;*3,;;;.;;,

dated Dece+ber $$, "&*3, pa1able to the order of ernando David

b0 E2C Cashier9s Chec6 No. $*3;3*, in the a+ount of P$,;*3,;;;.;;, dated

Dece+ber $$, "&*3, li6e!ise pa1able to the order of ernando David and

c0 E2C Dollar Draft No. 533", dra!n on Che+ical 2an6, Ne! :or6, in the a+ount of

?S@$;;,;;;.;;, dated Dece+ber $$, "&*3, pa1able to PCI2 CD? #ccount No.

5"&%';"">%'$.

#t about one o9cloc6 in the afternoon of the sa+e da1, :an- -ave the afore+entioned cashier9s

chec6s and dollar drafts to her business associate, #lbert Bion-, to be delivered to Chandira+ani

b1 Bion-9s +essen-er, Danilo Rani-o. Rani-o !as to +eet Chandira+ani at Philippine rust

2an6, #1ala #venue, Ma6ati Cit1, Metro Manila !here he !ould turn over :an-9s cashier9s

chec6s and dollar draft to Chandira+ani !ho, in turn, !ould deliver to Rani-o a PCI2 +ana-er9s

chec6 in the su+ of P5.$ +illion and a Aan- Sen- 2an6 dollar draft for ?S@$;;,;;;.;; in

e=chan-e.

Chandira+ani did not appear at the rendevous and Rani-o alle-edl1 lost the t!o cashier9s

chec6s and the dollar draft bou-ht b1 petitioner. Rani-o reported the alle-ed loss of the chec6s

and the dollar draft to Bion- at half past four in the afternoon of Dece+ber $$, "&*3. Bion-, in

turn, infor+ed :an-, and the loss !as then reported to the police.

It transpired, ho!ever, that the chec6s and the dollar draft !ere not lost, for Chandira+ani !as

able to -et hold of said instru+ents, !ithout deliverin- the e=chan-e consideration consistin- ofthe PCI2 +ana-er9s chec6 and the Aan- Sen- 2an6 dollar draft.

#t three o9cloc6 in the afternoon or so+e t!o /$0 hours after Chandira+ani and Rani-o !ere to

+eet in Ma6ati Cit1, Chandira+ani delivered to respondent ernando David at China 2an6in-

Corporation branch in San ernando Cit1, Pa+pan-a, the follo!in-< /a0 E2C Cashier9s Chec6

No. $*3;3*, dated Dece+ber $$, "&*3, in the su+ of P$.;*3 +illion and /b0 E8uitable

Cashier9s Chec6 No. CCPS "5';;&5>3, dated Dece+ber $$, "&*3, also in the a+ount of P$.;*3

+illion. In e=chan-e, Chandira+ani -ot ?S@)>;,;;;.;; fro+ David, !hich Chandira+ani

deposited in the savin-s account of his !ife, Pushpa Chandira+ani and his +other, Rani

Re1nandas, !ho held CD? #ccount No. "$5 !ith the ?nited Coconut Planters 2an6 branch in

(reenhills, San 4uan, Metro Manila. Chandira+ani also deposited E2C Dollar Draft No. 533",

dated Dece+ber $$, "&*3, dra!n upon the Che+ical 2an6, Ne! :or6 for ?S@$;;,;;;.;; in

PCI2 CD? #ccount No. 5"&%';"">%'$ on the sa+e date.

Mean!hile, :an- re8uested E2C and E8uitable to stop pa1+ent on the instru+ents she

believed to be lost. 2oth ban6s co+plied !ith her re8uest, but upon the representation of PCI2,

E2C subse8uentl1 lifted the stop pa1+ent order on E2C Dollar Draft No. 533", thus

enablin- the holder of PCI2 CD? #ccount No. 5"&%';"">%'$ to receive the a+ount of

?S@$;;,;;;.;;.

On Dece+ber $*, "&*3, herein petitioner :an- lod-ed a Co+plaint5 for inunction and da+a-es

a-ainst E8uitable, Chandira+ani, and David, !ith pra1er for a te+porar1 restrainin- order, !ith

the Re-ional rial Court of Pasa1 Cit1. he Co+plaint !as doc6eted as Civil Case No. %53&. he

Co+plaint !as subse8uentl1 a+ended to include a pra1er for E8uitable to return to :an- the

a+ount of P$.;*3 +illion, !ith interest thereon until full1 paid.%

http://www.lawphil.net/judjuris/juri2003/aug2003/gr_138074_2003.html#fnt1

















On 4anuar1 "$, "&**, :an- filed a separate case for inunction and da+a-es, !ith pra1er for a

!rit of preli+inar1 inunction a-ainst E2C, PCI2, Chandira+ani and David, !ith the RC of

Pasa1 Cit1, doc6eted as Civil Case No. %5&$. his co+plaint !as later a+ended to include a

pra1er that defendants therein return to :an- the a+ount of P$.;*3 +illion, the value of E2C

Dollar Draft No. 533", !ith interest at "*F annuall1 until full1 paid.>

On ebruar1 &, "&**, upon the filin- of a bond b1 :an-, the trial court issued a !rit of

preli+inar1 inunction in Civil Case No. %53&. # !rit of preli+inar1 inunction !as subse8uentl1

issued in Civil Case No. %5&$ also.

Mean!hile, herein respondent David +oved for dis+issal of the cases a-ainst hi+ and for

reconsideration of the Orders -rantin- the !rit of preli+inar1 inunction, but these +otions !ere

denied. David then elevated the +atter to the Court of #ppeals in a special civil action for

certiorari doc6eted as C#'(.R. SP No. "5*5), !hich !as dis+issed b1 the appellate court.

#s Civil Cases Nos. %53& and %5&$ arose fro+ the sa+e set of facts, the t!o cases !ere

consolidated. he trial court then conducted pre'trial and trial of the t!o cases, but the

proceedin-s had to be suspended after a fire -utted the Pasa1 Cit1 Aall and destro1ed the

records of the courts.

#fter the records !ere reconstituted, the proceedin-s resu+ed and the parties a-reed that the

+one1 in dispute be invested in reasur1 2ills to be a!arded in favor of the prevailin- side. It!as also a-reed b1 the parties to li+it the issues at the trial to the follo!in-<

". Gho, bet!een David and :an-, is le-all1 entitled to the proceeds of E8uitable

2an6in- Corporation /E2C0 Cashier9s Chec6 No. CCPS "5';;&5>3 in the su+

of P$,;*3,;;;.;; dated Dece+ber $$, "&*3, and ar East 2an6 and rust Co+pan1

/E2C0 Cashier9s Chec6 No. $*3;3* in the su+ of P$,;*3,;;;.;; dated Dece+ber

$$, "&*3, to-ether !ith the earnin-s derived therefro+ pendente liteH

$. #re the defendants E2C and PCI2 solidaril1 liable to :an- for havin- allo!ed the

encash+ent of E2C Dollar Draft No. 533", in the su+ of ?S@$;;,;;;.;; plus

interest thereon despite the stop pa1+ent order of Cel1 :an-H3

On 4ul1 5, "&&%, the trial court handed do!n its decision in Civil Cases Nos. %53& and %5&$, to

!it<

GAEREORE, the Court renders ud-+ent in favor of defendant ernando David a-ainst the

plaintiff Cel1 :an- and declarin- the for+er entitled to the proceeds of the t!o /$0 cashier9s

chec6s, to-ether !ith the earnin-s derived therefro+ pendente lite orderin- the plaintiff to pa1

the defendant ernando David +oral da+a-es in the a+ount of P";;,;;;.;; attorne19s fees in

the a+ount of P";;,;;;.;; and to pa1 the costs. he co+plaint a-ainst ar East 2an6 and rust

Co+pan1 /E2C0, Philippine Co++ercial International 2an6 /PCI20 and E8uitable 2an6in-

Corporation /E2C0 is dis+issed. he decision is !ithout preudice to !hatever action plaintiff

Cel1 :an- !ill file a-ainst defendant Pre+ Chandira+ani for rei+burse+ent of the a+ounts

received b1 hi+ fro+ defendant ernando David.

SO ORDERED.*

In findin- for David, the trial court ratiocinated<

he evidence sho!s that defendant David !as a holder in due course for the reason that the

cashier9s chec6s !ere co+plete on their face !hen the1 !ere ne-otiated to hi+. he1 !ere not

1et overdue !hen he beca+e the holder thereof and he had no notice that said chec6s !ere

previousl1 dishonored he too6 the cashier9s chec6s in -ood faith and for value. Ae parted so+e

@$;;,;;;.;; for the t!o /$0 cashier9s chec6s !hich !ere -iven to defendant Chandira+ani he

had also no notice of an1 infir+it1 in the cashier9s chec6s or defect in the title of the dra!er. #s a

+atter of fact, he as6ed the +ana-er of the China 2an6in- Corporation to in8uire as to the

-enuineness of the cashier9s chec6s /tsn, ebruar1 %, "&**, p. $", Septe+ber $;, "&&", pp. ")'"50. #nother proof that defendant David is a holder in due course is the fact that the stop

pa1+ent order on theJ E2C cashier9s chec6 !as lifted upon his in8uir1 at the head office /tsn,

Septe+ber $;, "&&", pp. $5'$%0. he apparent reason for liftin- the stop pa1+ent order !as

because of the fact that E2C realied that the chec6s !ere not actuall1 lost but indeed

reached the pa1ee defendant David.&

:an- then +oved for reconsideration of the RC ud-+ent, but the trial court denied her +otion

in its Order of Septe+ber $;, "&&%.

In the belief that the trial court +isunderstood the concept of a holder in due course and

+isapprehended the factual +ilieu, :an- seasonabl1 filed an appeal !ith the Court of #ppeals,

doc6eted as C#'(.R. CV No. %$)&*.

On March $%, "&&&, the appellate court decided C#'(.R. CV No. %$)&* in this !ise<

GAEREORE, this court A!RMS the ud-+ent of the lo!er court !ith +odification and

hereb1 o+)+s the plaintiff'appellant to -' )/()'(t'--'(t PC!" t 'ou(t o/ T(t

6 Tous'() Psos P25,000.00.

SO ORDERED.";

In affir+in- the trial court9s ud-+ent !ith respect to herein respondent David, the appellate

court found that<

In this case, defendant'appellee had ta6en the necessar1 precautions to verif1, throu-h his ban6,

China 2an6in- Corporation, the -enuineness of !hether /sic0 the cashier9s chec6s he received

fro+ Chandira+ani. #s no stop pa1+ent order !as +ade 1et /at0 the ti+e of the in8uir1,

defendant'appellee had no notice of !hat had transpired earlier bet!een the plaintiff'appellant

and Chandira+ani. #ll he 6ne! !as that the chec6s !ere issued to Chandira+ani !ith !ho+ he

!as he had /sic0 a transaction. urther on, David received the chec6s in 8uestion in due course

because Chandira+ani, !ho at the ti+e the chec6s !ere delivered to David, !as actin- as

:an-9s a-ent.

David had no notice, real or constructive, co-ent for hi+ to +a6e further in8uir1 as to an1

infir+it1 in the instru+ent/s0 and defect of title of the holder. o +andate that each holder in8uire

about ever1 aspect on ho! the instru+ent ca+e about !ill undul1 i+pede co++ercial

transactions, #lthou-h (got'9 (st+u(ts )o (ot :o(sttut g' t()+, t o/t(t'; t -': o/ o( 's ' '(s o/ -'(t .














Court of #ppeals are conclusive on the parties and not revie!able b1 this Court the1 carr1 -reat

!ei-ht !hen the factual findin-s of the trial court are affir+ed b1 the appellate court.$"

Second, petitioner fails to point an1 circu+stance !hich should have put David on in8uir1 as to

the !h1 and !herefore of the possession of the chec6s b1 Chandira+ani. David !as not priv1 to

the transaction bet!een petitioner and Chandira+ani. Instead, Chandira+ani and David had a

separate dealin- in !hich it !as precisel1 Chandira+ani9s dut1 to deliver the chec6s to David as

pa1ee. he evidence sho!s that Chandira+ani perfor+ed said tas6 to the letter. Petitioner

ad+its that David too6 the step of as6in- the +ana-er of his ban6 to verif1 fro+ E2C and

E8uitable as to the -enuineness of the chec6s and onl1 accepted the sa+e after bein- assuredthat there !as nothin- !ron- !ith said chec6s. #t that ti+e, David !as not a!are of an1 Kstop

pa1+entK order. ?nder these circu+stances, David thus had no obli-ation to ascertain fro+

Chandira+ani !hat the nature of the latter9s title to the chec6s !as, if an1, or the nature of his

possession. hus, !e cannot hold hi+ -uilt1 of -ross ne-lect a+ountin- to le-al absence of

-ood faith, absent an1 sho!in- that there !as so+ethin- a+iss about Chandira+ani9s

ac8uisition or possession of the chec6s. David did not close his e1es deliberatel1 to the nature

or the particulars of a f raud alle-edl1 co++itted b1 Chandira+ani upon the petitioner, absent

an1 6no!led-e on his part that the action in ta6in- the instru+ents a+ounted to bad faith.$$

2elatedl1, and !e sa1 belatedl1 since petitioner did not raise this +atter in the proceedin-s

belo!, petitioner no! clai+s that David should have been put on alert as the instru+ents in

8uestion !ere crossed chec6s. Pursuant toBataan Cigar & Cigarette Factory, Inc. v. Court of

Appeals, David should at least have in8uired as to !hether he !as ac8uirin- said chec6s for thepurpose for !hich the1 !ere issued, accordin- to petitioner9s sub+ission.

Petitioner9s reliance on the Bataan Cigar case, ho!ever, is +isplaced. he facts in the present

case are not on all fours !ith Bataan Cigar. In the latter case, the crossed chec6s !ere

ne-otiated and sold at a discount b1 the pa1ee, !hile in the instant case, the pa1ee did not

ne-otiate further the chec6s in 8uestion but pro+ptl1 deposited the+ in his ban6 account.

he Ne-otiable Instru+ents Ba! is silent !ith respect to crossed chec6s, althou-h the Code of

Co++erce$)+a6es reference to such instru+ents. Nonetheless, this Court has ta6en udicial

co-niance of the practice that a chec6 !ith t!o parallel lines in the upper left hand corner

+eans that it could onl1 be deposited and not converted into cash.$5 he effects of crossin- a

chec6, thus, relates to the +ode of pa1+ent, +eanin- that the dra!er had intended the chec6for deposit onl1 b1 the r i-htful person, i.e., the pa1ee na+ed therein. In Bataan Cigar, the

rediscountin- of the chec6 b1 the pa1ee 6no!in-l1 violated the avo!ed intention of crossin- the

chec6. hus, in acceptin- the cross chec6s and pa1in- cash for the+, despite the !arnin- of the

crossin-, the subse8uent holder could not be considered in -ood faith and thus, not a holder in

due course. Our rulin- in Bataan Cigar reiterates that in De Ocampo & Co. v. Gatchalian.$%

he factual circu+stances in De Ocampo and in Bataan Cigar are not present in this case. or

here, there is no dispute that the crossed chec6s !ere delivered and dul1 deposited b1 David,

the pa1ee na+ed therein, in his ban6 account. In other !ords, the purpose behind the crossin-

of the chec6s !as satisfied b1 the pa1ee.

Proceedin- to the issue of da+a-es, petitioner +erel1 ar-ues that respondents David and PCI2

are not entitled to da+a-es, attorne19s fees, and costs of suit as both acted in bad faith to!ardsher, as sho!n b1 her version of the facts !hich -ave rise to the instant case.

Respondent David counters that he !as +aliciousl1 and uncere+oniousl1 dra--ed into this suit

for reasons !hich have nothin- to do !ith hi+ at all, but !hich arose fro+ petitioner9s failure to

receive her share of the profit pro+ised her b1 Chandira+ani.!"phi Moreover, in filin- this

suit !hich has lasted for over a decade no!, the petitioner deprived David of the ri-htful

eno1+ent of the t!o chec6s, to !hich he is entitled, under the la!, co+pelled hi+ to hire the

services of counsel to vindicate his ri-hts, and subected hi+ to social hu+iliation and

bes+irched reputation, thus har+in- his standin- as a person of -ood repute in the business

co++unit1 of Pa+pan-a. David thus contends that it is but proper that +oral da+a-es,

attorne19s fees, and costs of suit be a!arded hi+.

or its part, respondent PCI2 stresses that it !as established b1 both the trial court and the

appellate court that it !as needlessl1 dra--ed into this case. Aence, no error !as co++itted b1

the appellate court in declarin- PCI2 entitled to attorne19s fees as it !as co+pelled to liti-ate to

protect itself.

Ge have thorou-hl1 perused the records of this case and find no reason to disa-ree !ith the

findin- of the trial court, as affir+ed b1 the appellate court, that<

DJefendant David is entitled to theJ a!ard of +oral da+a-es as he has been needlessl1 and

uncere+oniousl1 dra--ed into this case !hich should have been brou-ht onl1 bet!een the

plaintiff and defendant Chandira+ani.$>

# careful readin- of the findin-s of facts +ade b1 both the trial court and appellate court clearl1

sho!s that the petitioner, in includin- David as a part1 in these proceedin-s, is bar6in- up the

!ron- tree. It is apparent fro+ the factual findin-s that David had no dealin-s !ith the petitioner

and !as not priv1 to the a-ree+ent of the latter !ith Chandira+ani. Moreover, an1 loss !hich

the petitioner incurred !as apparentl1 due to the acts or o+issions of Chandira+ani, and hence,

her recourse should have been a-ainst hi+ and not a-ainst David. 21 needlessl1 dra--in-

David into this case all because he and Chandira+ani 6ne! each other, the petitioner not onl1

undul1 dela1ed David fro+ obtainin- the value of the chec6s, but also caused hi+ an=iet1 and

inured his business reputation !hile !aitin- for its outco+e. Recall that under #rticle $$"3$3 of

the Civil Code, +oral da+a-es include +ental an-uish, serious an=iet1, bes+irched reputation,

!ounded feelin-s, social hu+iliation, and si+ilar inur1. Aence, !e find the a!ard of +oral

da+a-es to be in order.

he appellate court li6e!ise found that li6e David, PCI2 !as dra--ed into this case on

unfounded and baseless -rounds. 2oth !ere thus co+pelled to liti-ate to protect their interests,

!hich +a6es an a!ard of attorne19s fees ustified under #rticle $$;* /$0$* of the Civil Code.

Aence, !e rule that the a!ard of attorne19s fees to David and PCI2 !as proper.

<HEREORE, the instant petition is DENIED. he assailed decision of the Court of #ppeals,

dated March $%, "&&&, in C#'(.R. CV No. %$)&* is #IRMED. Costs a-ainst the petitioner.

SO ORDERED.

























=G.R. No. 137552. >u( 1?, 2000@

RO"ERTO . LAORTEA, GONALO . LAORTEA, M!CHAEL . LAORTEA, &ENN!S .

LAORTEA, '() LEA . LAORTEA, petitioners, vs. ALONO MACHUCA, respondent .

& E C ! S ! O N

GONAGABREYES, J .

his Petition for Revie! on Certiorari see6s the reversal of the Decision of the Court of #ppeals"J in

C# (.R. CV No. 535%3 entitled K#BONLO M#CA?C# versus RO2ERO L. B#OREL#, (ONL#BO

L. B#OREL#, BE# L?B?E#'B#OREL# MICA#EB L. B#OREL#, and DENNIS L.B#OREL#K.

he follo!in- facts as found b1 the Court of #ppeals are undisputed<

Khe propert1 involved consists of a house and lot located at No. 33%3 Sher!ood

Street, Marcelo (reen Villa-e, Paraa8ue, Metro Manila, covered b1 ransfer

Certificate of itle /C0 No. /$$;>%>0 *&5" of the Re-istered of Deeds of

Paraa8ue /E=hibit KDK, Plaintiff, record, pp. ))"'))$0. he subect propert1 is

re-istered in the na+e of the late rancisco . Bafortea, althou-h it is conu-al

in nature /E=hibit K*K, Defendants, record pp. ))"')*>0.

On #u-ust $, "&**, defendant Bea Lulueta'Bafortea e=ecuted a Special Po!erof #ttorne1 in favor of defendants Roberto L. Bafortea and (onalo L. Bafortea,

4r., appointin- both as her #ttorne1'in'fact authoriin- the+ ointl1 to sell the

subect propert1 and si-n an1 docu+ent for the settle+ent of the estate of the

late rancisco . Bafortea /E=h. K#K, Plaintiff, record, pp. )$)')$%0.

Bi6e!ise on the sa+e da1, defendant Michael L. Bafortea e=ecuted a Special

Po!er of #ttorne1 in favor of defendants Roberto L. Bafortea and (onalo

Bafortea, 4r., li6e!ise, -rantin- the sa+e authorit1 /E=h. K2K, record, pp. )$>'

)$*0. 2oth a-enc1 instru+ents contained a provision that in an1 docu+ent or

paper to e=ercise authorit1 -ranted, the si-nature of both attorne1s'in'fact +ust

be affi=ed.

On October $3, "&**, defendant Dennis L. Bafortea e=ecuted a Special Po!erof #ttorne1 in favor of defendant Roberto L. Bafortea for the purpose of sellin-

the subect propert1 /E=h. KCK, Plaintiff, record, pp. )$&'));0. # 1ear later, on

October );, "&*&, Dennis L. Bafortea e=ecuted another Special Po!er of

#ttorne1 in favor of defendants Roberto L. Bafortea and (onalo Bafortea, 4r.

na+in- both attorne1s'in'fact for the purpose of sellin- the subect propert1 and

si-nin- an1 docu+ent for the settle+ent of the estate of the late rancisco .

Bafortea. he subse8uent a-enc1 instru+ent /E=h. K$K, record, pp. )3"')3)0

contained si+ilar provisions that both attorne1s'in'fact should si-n an1 docu+ent

or paper e=ecuted in the e=ercise of their authorit1.

In the e=ercise of the above authorit1, on 4anuar1 $;, "&*&, the heirs of the late

rancisco . Bafortea represented b1 Roberto L. Bafortea and (onalo L.

Bafortea, 4r. entered into a Me+orandu+ of #-ree+ent /Contract to Sell0 !ith

the plaintiff$J over the subect propert1 for the su+ of SI A?NDRED AIR:AO?S#ND PESOS /P>);,;;;.;;0 pa1able as follo!s<

/a0 P

);,;;;.;; as earnest +one1, to be forfeited in favor of the defendants if the

sale is not effected due to the fault of the plaintiff

/b0 P

>;;,;;;.;; upon issuance of the ne! certificate of title in the na+e of the

late rancisco . Bafortea and upon e=ecution of an e=tra'udicial settle+ent of

the decedents estate !ith sale in favor of the plaintiff /Par. $, E=h. KEK, record,

pp. ))%'))>0.

Si-nificantl1, the fourth para-raph of the Me+orandu+ of #-ree+ent /Contract to

Sell0 dated 4anuar1 $;, "&*& /E=h. KEK, supra.0 contained a provision as follo!s<



===. ?pon issuance b1 the proper Court of the ne! title, the 2?:ER'

BESSEE shall be notified in !ritin- and said 2?:ER'BESSEE shall

have thirt1 /);0 da1s to produce the balance of P

>;;,;;;.;; !hich

shall be paid to the SEBBER'BESSORS upon the e=ecution of the

E=traudicial Settle+ent !ith sale.

On 4anuar1 $;, "&*&, plaintiff paid the earnest +one1 of AIR: AO?S#ND

PESOS /P);,;;;.;;0, plus rentals for the subect propert1 /E=h. KK, Plaintiff,

record, p. ))&0.

On Septe+ber "*, "&&*)J, defendant heirs, throu-h their counsel !rote a letter

/E=h. ", Defendants, record, p. )3;0 to the plaintiff furnishin- the latter a cop1 of

the reconstituted title to the subect propert1, advisin- hi+ that he had thirt1 /)0

da1s to produce the balance of SI A?NDRED PESOS /sic0 /P>;;,;;;.;;0

under the Me+orandu+ of #-ree+ent !hich plaintiff received on the sa+e date.

On October "*, "&*&, plaintiff sent the defendant heirs a letter re8uestin- for an

e=tension of the AIR: /);0 D#:S deadline up to Nove+ber "%, "&*& !ithin

!hich to produce the balance of SI A?NDRED AO?S#ND PESOS

/P>;;,;;;.;;0 /E=h. K(K, Plaintiff, record, pp. )5"')5$0. Defendant Roberto L.

Bafortea, assisted b1 his counsel #tt1. Ro+eo B. (utierre, si-ned his

confor+it1 to the plaintiffs letter re8uest /E=h. K('" and K('$K, Plaintiff, record, p.

)5$0. he e=tension, ho!ever, does not appear to have been approved b1

(onalo L. Bafortea, the second attorne1'in'fact as his confor+it1 does notappear to have been secured.

On Nove+ber "%, "&*&, plaintiff infor+ed the defendant heirs, throu-h defendant

Roberto L. Bafortea, that he alread1 had the balance of SI A?NDRED

AO?S#ND PESOS /P>;;,;;;.;;0 covered b1 ?nited Coconut Planters 2an6

Mana-ers Chec6 No. ;;;*"5 dated Nove+ber "%, "&*& /SN, #u-ust $%, "&&$,

p. "" E=hs. KAK, record, pp. )5)')55 KMK, records p. )%; and KNK, record, p.

)%"0. Ao!ever, the defendants, refused to accept the balance /SN, #u-ust $5,

"&&$, p. "5 E=hs. KM'"K, Plaintiff, record, p. )%; and KN'"K, Plaintiff, record, p.

)%"0. Defendant Roberto L. Bafortea had told hi+ that the subect propert1 !as

no lon-er for sale /SN, October $;, "&&$, p. "& E=h. K4K, record, p. )530.

On Nove+ber $;, "&&*5J, defendants infor+ed the plaintiff that the1 !erecancelin- the Me+orandu+ of #-ree+ent /Contract to Sell0 in vie! of the

plaintiffs failure to co+pl1 !ith his contractual obli-ations /E=h. K)K0.

hereafter, plaintiff reiterated his re8uest to tender pa1+ent of the balance of SI

A?NDRED AO?S#ND PESOS /P>;;,;;;.;;0. Defendants, ho!ever, insisted

on the rescission of the Me+orandu+ of #-ree+ent. hereafter, plaintiff filed the

instant action for specific perfor+ance. he lo!er court rendered ud-+ent on

4ul1 >, "&&5 in favor of the plaintiff, the dispositive portion of !hich reads<

GAEREORE, ud-+ent is hereb1 rendered in favor of plaintiff #lono

Machuca and a-ainst the defendant heirs of the late rancisco .

Bafortea, orderin- the said defendants.

/a0 o accept the balance of P>;;,;;;.;; as full pa1+ent of the consideration for

the purchase of the house and lot located at No. 33%3 Sher!ood Street, Marcelo

(reen Villa-e, Paraa8ue, Metro Manila, covered b1 ransfer Certificate of itle

No. /$$;>%>0 *&5" of the Re-istr1 of Deeds of Rial Paraa8ue, 2ranch

/b0 o e=ecute a re-istrable deed of absolute sale over the subect propert1 in

favor of the plaintiff

/c0 4ointl1 and severall1 to pa1 the plaintiff the su+ of P$;,;;;.;; as attorne1s

fees plus cost of suit.

SO ORDERED. /Rollo, pp. 35'3%0.K%J

Petitioners appealed to the Court of #ppeals, !hich affir+ed !ith +odification the decision of the lo!er

court the dispositive portion of the Decision reads<

KGAEREORE, the 8uestioned decision of the lo!er court is hereb1 #IRMED

!ith the MODIIC#ION that defendant heirs Bea Lulueta'Bafortea, Michael L.

Bafortea, Dennis L. Bafortea and Roberto L. Bafortea includin- (onalo L.

Bafortea, 4r. are hereb1 ordered to pa1 ointl1 and severall1 the su+ of I:

AO?S#ND PESOS /P%;,;;;.;;0 as +oral da+a-es.

SO ORDERED.K>J

Motion for Reconsideration !as denied but the Decision !as +odified so as to absolve (onalo L.

Bafortea, 4r. fro+ liabilit1 for the pa1+ent of +oral da+a-es.3J Aence this petition !herein the

petitioners raise the follo!in- issues<

D!. <HETHER THE TR!AL AN& APPELLATE COURTS CORRECTLY

CONSTRUE& THE MEMORAN&UM O AGREEMENT AS !MPOS!NG

REC!PROCAL O"L!GAT!ONS.

!!. <HETHER THE COURTS A %UO CORRECTLY RULE& THAT RESC!SS!ON

<!LL NOT L!E !N THE !NSTANT CASE.

!!!. <HETHER THE RESPON&ENT !S UN&ER ESTOPPEL ROM RA!S!NG

THE ALLEGE& &EECT !N THE SPEC!AL PO<ER O ATTORNEY &ATE& 30

OCTO"ER 18 EFECUTE& "Y &ENN!S LAORTEA.

!*. SUPPOS!NG EF GRAT!A ARGUMENT! THE MEMORAN&UM O

AGREEMENT !MPOSES REC!PROCAL O"L!GAT!ONS, <HETHER THE

PET!T!ONERS MAY "E COMPELLE& TO SELL THE SU">ECT PROPERTY

<HEN THE RESPON&ENT A!LE& TO MA#E A >U&!C!AL CONS!GNAT!ON

O THE PURCHASE PR!CE

*. <HETHER THE PET!T!ONERS ARE !N "A& A!TH SO TO AS MA#E THEM

L!A"LE OR MORAL &AMAGESD=8@



he petitioners contend that the Me+orandu+ of #-ree+ent is +erel1 a lease a-ree+ent !ith Koption

to purchaseK. #s it !as +erel1 an option, it onl1 -ave the respondent a ri-ht to purchase the subect

propert1 !ithin a li+ited period !ithout i+posin- upon the+ an1 obli-ation to purchase it. Since the

respondents tender of pa1+ent !as +ade after the lapse of the option a-ree+ent, his tender did not

-ive rise to the perfection of a contract of sale.

It is further +aintained b1 the petitioners that the Court of #ppeals erred in rulin- that rescission of the

contract !as alread1 out of the 8uestion. Rescission i+plies that a contract of sale !as perfected

unli6e the Me+orandu+ of #-ree+ent in 8uestion !hich as previousl1 stated is alle-edl1 onl1 an

option contract.

Petitioner adds that at +ost, the Me+orandu+ of #-ree+ent /Contract to Sell0 is a +ere contract to

sell, as indicated in its title. he obli-ation of the petitioners to sell the propert1 to the respondent !as

conditioned upon the issuance of a ne! certificate of title and the e=ecution of the e=traudicial partition

!ith sale and pa1+ent of the P>;;,;;;.;;. his is !h1 possession of the subect propert1 !as not

delivered to the respondent as the o!ner of the propert1 but onl1 as the lessee thereof. #nd the failure

of the respondent to pa1 the purchase price in full prevented the petitioners obli-ation to conve1 title

fro+ ac8uirin- obli-ator1 force.

Petitioners also alle-e that assu+infor the sa6e of ar-u+ent that a contract of sale !as indeed

perfected, the Court of #ppeals still erred in holdin- that respondents failure to pa1 the purchase price

of P>;;,;;;.;; !as onl1 a Ksli-ht or casual breachK.

he petitioners also clai+ that the Court of #ppeals erred in rulin- that the1 !ere not read1 to co+pl1

!ith their obli-ation to e=ecute the e=traudicial settle+ent. he Po!er of #ttorne1 to e=ecute a Deed of

Sale +ade b1 Dennis L. Bafortea !as sufficient and necessaril1 included the po!er to e=ecute an

e=traudicial settle+ent. #t an1 rate, the respondent is estopped fro+ clai+in- that the petitioners !ere

not read1 to co+pl1 !ith their obli-ation for he ac6no!led-ed the petitioners abilit1 to do so !hen he

re8uested for an e=tension of ti+e !ithin !hich to pa1 the purchase price. Aad he trul1 believed that

the petitioners !ere not read1, he !ould not have needed to as6 for said e=tension.

inall1, the petitioners alle-e that the respondents uncorroborated testi+on1 that third persons offered

a hi-her price for the propert1 is hearsa1 and should not be -iven an1 evidentiar1 !ei-ht. hus, the

order of the lo!er court a!ardin- +oral da+a-es !as !ithout an1 le-al basis.

he appeal is bereft of +erit.

# perusal of the Me+orandu+ #-ree+ent sho!s that the transaction bet!een the petitioners and the

respondent !as one of sale and lease. he ter+s of the a-ree+ent read<

K". or and in consideration of the su+ of PESOS< SI A?NDRED AIR:

AO?S#ND /P>);,;;;.;;0 pa1able in a +anner herein belo! indicated,

SEBBER'BESSOR hereb1 a-ree to sell unto 2?:ER'BESSEE the propert1

described in the first GAERE#S of this #-ree+ent !ithin si= />0 +onths fro+ the

e=ecution date hereof, or upon issuance b1 the Court of a ne! o!ners certificate

of title and the e=ecution of e=traudicial partition !ith sale of the estate of

rancisco Bafortea, !hichever is earlier

$. he above'+entioned su+ of PESOS< SI A?NDRED AIR: AO?S#ND

/P>);,;;;.;;0 shall be paid in the follo!in- +anner<

P);,;;;.;;' as earnest +one1 and as consideration for this

#-ree+ent, !hich a+ount shall be forfeited in favor of SEBBER'

BESSORS if the sale is not effected because of the fault or option of

2?:ER'BESSEE

P>;;,;;;.;;' upon the issuance of the ne! certificate of title in the

na+e of the late rancisco Bafortea and upon the e=ecution of an

E=traudicial Settle+ent of his estate !ith sale in favor of 2?:ER'

BESSEE free fro+ lien or an1 encu+brances.

). Parties reasonabl1 esti+ate that the issuance of a ne! title in place of the lost

one, as !ell as the e=ecution of e=traudicial settle+ent of estate !ith sale to

herein 2?:ER'BESSEE !ill be co+pleted !ithin si= />0 +onths fro+ the

e=ecution of this #-ree+ent. It is therefore a-reed that durin- the si= +onths

period, 2?:ER'BESSEE !ill be leasin- the subect propert1 for si= +onths

period at the +onthl1 rate of PESOS< AREE AO?S#ND IVE A?NDRED

/P),%;;.;;0. Provided ho!ever, that if the issuance of ne! title and the e=ecution

of E=traudicial Partition is co+pleted prior to the e=piration of the si= +onths

period, 2?:ER'BESSEE shall onl1 be liable for rentals for the correspondin-

period co++encin- fro+ his occupanc1 of the pre+ises to the e=ecution and

co+pletion of the E=traudicial Settle+ent of the estate, provided further that if

after the e=piration of si= />0 +onths, the lost title is not 1et replaced and the

e=tra udicial partition is not e=ecuted, 2?:ER'BESSEE shall no lon-er be

re8uired to pa1 rentals and shall continue to occup1, and use the pre+ises untilsubect condition is co+plied b1 SEBBER'BESSOR

5. It is hereb1 a-reed that !ithin reasonable ti+e fro+ the e=ecution of this

#-ree+ent and the pa1+ent b1 2?:ER'BESSEE of the a+ount of P);,;;;.;;

as herein above provided, SEBBER'BESSORS shall i++ediatel1 file the

correspondin- petition for the issuance of a ne! title in lieu of the lost one in the

proper Courts. ?pon issuance b1 the proper Courts of the ne! title, the 2?:ER'

BESSEE shall have thirt1 /);0 da1s to produce the balance of P>;;,;;;.;; !hich

shall be paid to the SEBBER'BESSORS upon the e=ecution of the E=traudicial

Settle+ent !ith sale.K&J

# contract of sale is a consensual contract and is perfected at the +o+ent there is a +eetin- of the

+inds upon the thin- !hich is the obect of the contract and upon the price.";J ro+ that +o+ent the

parties +a1 reciprocall1 de+and perfor+ance subect to the provisions of the la! -overnin- the for+

of contracts.""J he ele+ents of a valid contract of sale under #rticle "5%* of the Civil Code are /"0

consent or +eetin- of the +inds /$0 deter+inate subect +atter and /)0 price certain in +one1 or its

e8uivalent."$J

In the case at bench, there !as a perfected a-ree+ent bet!een the petitioners and the respondent

!hereb1 the petitioners obli-ated the+selves to transfer the o!nership of and deliver the house and lot

located at 33%3 Sher!ood St., Marcelo (reen Villa-e, Paraa8ue and the respondent to pa1 the price

a+ountin- to si= hundred thousand pesos /P>;;,;;;.;;0. #ll the ele+ents of a contract of sale !ere

thus present. Ao!ever, the balance of the purchase price !as to be paid onl1 upon the issuance of the

ne! certificate of title in lieu of the one in the na+e of the late rancisco Bafortea and upon the

e=ecution of an e=traudicial settle+ent of his estate. Prior to the issuance of the KreconstitutedK title,

the respondent !as alread1 placed in possession of the house and lot as lessee thereof for si= +onths

at a +onthl1 rate of three thousand five hundred pesos /P),%;;.;;0. It !as stipulated that should theissuance of the ne! title and the e=ecution of the e=traudicial settle+ent be co+pleted prior to



e=piration of the si='+onth period, the respondent !ould be liable onl1 for the rentals pertainin- to the

period co++encin- fro+ the date of the e=ecution of the a-ree+ent up to the e=ecution of the

e=traudicial settle+ent. It !as also e=pressl1 stipulated that if after the e=piration of the si= +onth

period, the lost title !as not 1et replaced and the e=traudicial partition !as not 1et e=ecuted, the

respondent !ould no lon-er be re8uired to pa1 rentals and !ould continue to occup1 and use the

pre+ises until the subect condition !as co+plied !ith b1 the petitioners.

he si='+onth period durin- !hich the respondent !ould be in possession of the propert1 as lessee,

!as clearl1 not a period !ithin !hich to e=ercise an option. #n option is a contract -rantin- a privile-e

to bu1 or sell !ithin an a-reed ti+e and at a deter+ined price. #n option contract is a separate and

distinct contract fro+ that !hich the parties +a1 enter into upon the consu++ation of the option.")J

#n option +ust be supported b1 consideration."5J #n option contract is -overned b1 the second

para-raph of #rticle "53& of the Civil Code"%J, !hich reads<

K#rticle "53&. ===

#n accepted unilateral pro+ise to bu1 or to sell a deter+inate thin- for a price

certain is bindin- upon the pro+issor if the pro+ise is supported b1 a

consideration distinct fro+ the price.K

In the present case, the si='+onth period +erel1 dela1ed the de+andabilit1 of the contract of sale and

did not deter+ine its perfection for after the e=piration of the si='+onth period, there !as an absolute

obli-ation on the part of the petitioners and the respondent to co+pl1 !ith the ter+s of the sale. he

parties +ade a Kreasonable esti+ateK that the reconstitution of the lost title of the house and lot !ould

ta6e appro=i+atel1 si= +onths and thus presu+ed that after si= +onths, both parties !ould be able to

co+pl1 !ith !hat !as reciprocall1 incu+bent upon the+. he fact that after the e=piration of the si='

+onth period, the respondent !ould retain possession of the house and lot !ithout need of pa1in-

rentals for the use therefor, clearl1 indicated that the parties conte+plated that o!nership over the

propert1 !ould alread1 be transferred b1 that ti+e.

he issuance of the ne! certificate of title in the na+e of the late rancisco Bafortea and the

e=ecution of an e=traudicial settle+ent of his estate !as not a condition !hich deter+ined the

perfection of the contract of sale. Petitioners contention that since the condition !as not +et, the1 no

lon-er had an obli-ation to proceed !ith the sale of the house and lot is unconvincin-. he petitioners

fail to distin-uish bet!een a condition i+posed upon the perfection of the contract and a condition

i+posed on the perfor+ance of an obli-ation. ailure to co+pl1 !ith the first condition results in the

failure of a contract, !hile the failure to co+pl1 !ith the second condition onl1 -ives the other part1 theoption either to refuse to proceed !ith the sale or to !aive the condition. hus, #rt. "%5% of the Civil

Code states<

K#rt. "%5%. Ghere the obli-ation of either part1 to a contract of sale is subect to

an1 condition !hich is not perfor+ed, such part1 +a1 refuse to proceed !ith the

contract or he +a1 !aive perfor+ance of the condition. If the other part1 has

pro+ised that the condition should happen or be perfor+ed, such first +entioned

part1 +a1 also treat the nonperfor+ance of the condition as a breach of

!arrant1.

Ghere the o!nership in the thin-s has not passed, the bu1er +a1 treat the

fulfill+ent b1 the seller of his obli-ation to deliver the sa+e as described and as

!arranted e=pressl1 or b1 i+plication in the contract of sale as a condition of the

obli-ation of the bu1er to perfor+ his pro+ise to accept and pa1 for the

thin-.K">J

In the case at bar, there !as alread1 a perfected contract. he condition !as i+posed onl1 on the

perfor+ance of the obli-ations contained therein. Considerin- ho!ever that the title !as eventuall1

KreconstitutedK and that the petitioners ad+it their abilit1 to e=ecute the e=traudicial settle+ent of their

fathers estate, the respondent had a ri-ht to de+and fulfill+ent of the petitioners obli-ation to deliver

and transfer o!nership of the house and lot.

Ghat further +ilitates a-ainst petitioners ar-u+ent that the1 did not enter into a contract of sale is the

fact that the respondent paid thirt1 thousand pesos /P);,;;;.;;0 as earnest +one1. Earnest +one1 is

so+ethin- of value to sho! that the bu1er !as reall1 in earnest, and -iven to the seller to bind the

bar-ain."3J Ghenever earnest +one1 is -iven in a contract of sale, it is considered as part of the

purchase price and proof of the perfection of the contract."*J

Ge do not subscribe to the petitioners vie! that the Me+orandu+ #-ree+ent !as a contract to sell.

here is nothin- contained in the Me+orandu+ #-ree+ent fro+ !hich it can reasonabl1 be deduced

that the parties intended to enter into a contract to sell, i.e. one !hereb1 the prospective seller !ould

e=plicitl1 reserve the transfer of title to the prospective bu1er, +eanin-, the prospective seller does not

as 1et a-ree or consent to transfer o!nership of the propert1 subect of the contract to sell until the full

pa1+ent of the price, such pa1+ent bein- a positive suspensive condition, the failure of !hich is notconsidered a breach, casual or serious, but si+pl1 an event !hich prevented the obli-ation fro+

ac8uirin- an1 obli-ator1 force."&J here is clearl1 no e=press reservation of title +ade b1 the

petitioners over the propert1, or an1 provision !hich !ould i+pose non'pa1+ent of the price as a

condition for the contracts enterin- into force. #lthou-h the +e+orandu+ a-ree+ent !as also

deno+inated as a KContract to SellK, !e hold that the parties conte+plated a contract of sale. # deed of

sale is absolute in nature althou-h deno+inated a conditional sale in the absence of a stipulation

reservin- title in the petitioners until full pa1+ent of the purchase price.$;J In such cases, o!nership of

the thin- sold passes to the vendee upon actual or constructive deliver1 thereof.$"J he +ere fact that

the obli-ation of the respondent to pa1 the balance of the purchase price !as +ade subect to the

condition that the petitioners first deliver the reconstituted title of the house and lot does not +a6e the

contract a contract to sell for such condition is not inconsistent !ith a contract of sale.$$J

he ne=t issue to be addressed is !hether the failure of the respondent to pa1 the balance of the

purchase price !ithin the period allo!ed is fatal to his ri-ht to enforce the a-ree+ent.

Ge rule in the ne-ative.

#d+ittedl1, the failure of the respondent to pa1 the balance of the purchase price !as a breach of the

contract and !as a -round for rescission thereof. he e=tension of thirt1 /);0 da1s alle-edl1 -ranted to

the respondent b1 Roberto L. Bafortea /assisted b1 his counsel #ttorne1 Ro+eo (utierre0 !as

correctl1 found b1 the Court of #ppeals to be ineffective inas+uch as the si-nature of (onalo L.

Bafortea did not appear thereon as re8uired b1 the Special Po!ers of #ttorne1.$)J Ao!ever, the

evidence reveals that after the e=piration of the si='+onth period provided for in the contract, the

petitioners !ere not read1 to co+pl1 !ith !hat !as incu+bent upon the+, i.e. the deliver1 of the

reconstituted title of the house and lot. It !as onl1 on Septe+ber "*, "&*& or nearl1 ei-ht +onths after

the e=ecution of the Me+orandu+ of #-ree+ent !hen the petitioners infor+ed the respondent that

the1 alread1 had a cop1 of the reconstituted title and de+anded the pa1+ent of the balance of the

purchase price. he respondent could not therefore be considered in dela1 for in reciprocal obli-ations,



neither part1 incurs in dela1 if the other part1 does not co+pl1 or is not read1 to co+pl1 in a proper

+anner !ith !hat !as incu+bent upon hi+.$5J

Even assu+infor the sa6e of ar-u+ent that the petitioners !ere read1 to co+pl1 !ith their obli-ation,

!e find that rescission of the contract !ill still not prosper. he rescission of a sale of an i++ovable

propert1 is specificall1 -overned b1 #rticle "%&$ of the Ne! Civil Code, !hich reads<

KIn the sale of i++ovable propert1, even thou-h it +a1 have been stipulated that

upon failure to pa1 the price at the ti+e a-reed upon the rescission of the

contract shall of ri-ht ta6e place, the vendee +a1 pa1, even after the e=piration of the period, as lon- as no de+and for rescission of the contract has been +ade

upon hi+ either udiciall1 or b1 a notarial act. #fter the de+and, the court +a1 not

-rant hi+ a ne! ter+.K$%J

It is not disputed that the petitioners did not +a6e a udicial or notarial de+and for rescission. he

Nove+ber $;, "&*& letter of the petitioners infor+in- the respondent of the auto+atic rescission of the

a-ree+ent did not a+ount to a de+and for rescission, as it !as not notaried.$>J It !as also +ade

five da1s after the respondents atte+pt to +a6e the pa1+ent of the purchase price. his offer to pa1

prior to the de+and for rescission is sufficient to defeat the petitioners ri-ht under article "%&$ of the

Civil Code.$3J 2esides, the Me+orandu+ #-ree+ent bet!een the parties did not contain a clause

e=pressl1 authoriin- the auto+atic cancellation of the contract !ithout court intervention in the event

that the ter+s thereof !ere violated. # seller cannot unilaterall1 and e=traudiciall1 rescind a contract of

sale !here there is no e=press stipulation authoriin- hi+ to e=traudiciall1 rescind.$*J Neither !as

there a udicial de+and for the rescission thereof. hus, !hen the respondent filed his co+plaint forspecific perfor+ance, the a-ree+ent !as still in force inas+uch as the contract !as not 1et rescinded.

#t an1 rate, considerin- that the si='+onth period !as +erel1 an appro=i+ation of the ti+e it !ould

ta6e to reconstitute the lost title and !as not a condition i+posed on the perfection of the contract and

considerin- further that the dela1 in pa1+ent !as onl1 thirt1 da1s !hich !as caused b1 the

respondents ustified but +ista6en belief that an e=tension to pa1 !as -ranted to hi+, !e a-ree !ith

the Court of #ppeals that the dela1 of one +onth in pa1+ent !as a +ere casual breach that !ould not

entitle the respondents to rescind the contract. Rescission of a contract !ill not be per+itted for a sli-ht

or casual breach, but onl1 such substantial and funda+ental breach as !ould defeat the ver1 obect of

the parties in +a6in- the a-ree+ent.$&J

Petitioners insistence that the respondent should have consi-nated the a+ount is not deter+inative of

!hether respondents action for specific perfor+ance !ill lie. Petitioners the+selves point out that the

effect of consi-nation is to e=tin-uish the obli-ation. It releases the debtor fro+ responsibilit1 therefor.

);J he failure of the respondent to consi-nate the P>;;,;;;.;; is not tanta+ount to a breach of the

contract for b1 the fact of tenderin- pa1+ent, he !as !illin- and able to co+pl1 !ith his obli-ation.

he Court of #ppeals correctl1 found the petitioners -uilt1 of bad faith and a!arded +oral da+a-es to

the respondent. #s found b1 the said Court, the petitioners refused to co+pl1 !ith their obli-ation for

the reason that the1 !ere offered a hi-her price therefor and the respondent !as even offered

P";;,;;;.;; b1 the petitioners la!1er, #ttorne1 (utierre, to relin8uish his ri-hts over the propert1. he

a!ard of +oral da+a-es is in accordance !ith #rticle ""&")"J of the Civil Code pursuant to #rticle

$$$; !hich provides that +oral da+a-es +a1 be a!arded in case of a breach of contract !here the

defendant acted in bad faith. he a+ount a!arded depends on the discretion of the court based on the

circu+stances of each case.)$J ?nder the circu+stances, the a!ard -iven b1 the Court of #ppeals

a+ountin- to P%;,;;;.;; appears to us to be fair and reasonable.

ACCOR&!NGLY, the decision of the Court of #ppeals in C# (.R. CV No. 535%3 is #IRMED and the

instant petition is hereb1 DENIED.

No pronounce+ent as to costs.

SO OR&ERE&.

nego sales

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