conso-sep2013 sales cases
TRANSCRIPT
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G.R. No. 109125 December 2, 1994
ANG YU ASUNCION, ARTHUR GO AND KEH
TIONG, petitioners, vs. THE HON. COURT OF APPEALS and BUEN
REALTY DEVELOPMENT CORPORATION, respondents.
Facts: Plaintiffs Ang Yu et al. are lessees of a property owned by
defendants located along Ongpin St., Binondo, Manila since
1935. And since plaintiffs have been good tenants,
respondentsinformed plaintiffs that they are offering to sell thepremises and are giving them priority to acquire the same.
But during the negotiations, however, Bobby Cu Unjieng of
respondents offered a fixed price of P6-million short of
petitioners counter offer of only P5-million.
Petitioners then asked defendant to put the offer in writing to
which defendant acceded. Petitioners further asked that
respondent specify the terms and conditions of the offer to sell
to which the latter did not pay attention anymore.
Felt aggrieved on respondents lack of action to their request,
petitioners sue them. In its complaint, Ang Yu et al. alleged that
respondent failed to specify the terms and conditions of the
offer to sell and such failure was because they now intends to
sell the property to another.
The court a quo dismissed the complaint reasoning that
defendants' offer to sell was never accepted by the plaintiffs for
the reason that the parties did not agree upon the terms and
conditions of the proposed sale, hence, there was no contract of
sale at all. The decision though was with a condition that should
the defendant-seller subsequently offer their property for sale at
a price of P11-million or below, plaintiffs Ang Yu will have the
right of first refusal. On appeal by the petitioners, the appellate
court sustained the findings of the trial court that there was no
meeting of the minds between the parties. The appellate court
likewise ruled to remove the right of first refusalawarded by the
trial court, hence this petition.
Issue: Whether the subject property cannot be sold to another
because of petitioner-plaintiff Ang Yus right of first refusal?
HELD: No. In the law on sales, the so-called "right of first refusal"
is an innovative juridical relation. Needless to point out, it cannot
be deemed a perfected contract of sale under Article 1458 of the
Civil Code. Neither can the right of first refusal, understood in its
normal concept, per se be brought within the purview of an
option under the second paragraph of Article 1479, or possibly of
an offer under Article 1319of the same Code.
An option or an offer would require, among other things,a clear
certainty on both the object and the cause or consideration of
the envisioned contract. In a right of first refusal, while the
object might be made determinate, the exercise of the right,
however, would be dependent not only on the grantor's
eventual intention to enter into a binding juridical relation with
another but also on terms, including the price, that obviously are
yet to be later firmed up. Prior thereto, it can at best be so
described as merely belonging to a class of preparatory juridical
relations governed not by contracts (since the essential elements
to establish the vinculum juris would still be indefinite and
inconclusive) but by, among other laws of general application
the pertinent scattered provisions of the Civil Code on human
conduct.
Even on the premise that such right of first refusal has been
decreed under a final judgment, like here, its breach cannot
justify correspondingly an issuance of a writ of execution under a
judgment that merely recognizes its existence, nor would itsanction an action for specific performance without thereby
negating the indispensable element of consensuality in the
perfection of contracts.It is not to say, however, that the right of
first refusal would be inconsequential for, such as already
intimated above, an unjustified disregard thereof, given, fo
instance, the circumstances expressed in Article 19of the Civi
Code, can warrant a recovery for damages.
EQUATORIAL REALTY DEVELOPMENT, INC. vs. MAYFAIR
THEATER (1996)
VILLONCO REALTY COMPANY, plaintiff-appellee and EDITH
PEREZ DE TAGLE, intervenor-appellee,
vs.
BORMAHECO, INC., FRANCISCO N. CERVANTES and ROSARIO N
CERVANTES, defendants-appellants. Meer, Meer & Meer fo
plaintiff-appellee.
(G.R. No. L-26872; July 25, 1975)
FACTS: Defendants-appellants Spouses Cervantes offered to sell
through a letter, lots 3, 15 and 16 located at 245 Buendia
Avenue, Makati, Rizal with a total area of three thousand five
hundred square meters with the following conditions:
1. Purchase price is P400 per square meter2. A deposit of P100,000;3. The purchase of the Sta. Ana property belonging to Nationa
Shipyards and Steel Corporation (NASSCO) [which was late
on acquired by Bormaheco, Inc. (Spouses company) as the
highest bidder]
In the meanwhile, Bormaheco, Inc. and Villonco Realty Companycontinued their negotiations for the sale of the Buendia Avenue
property. Cervantes and Teofilo Villonco had a final conference
on February 27, 1964. As a result of that conference Villonco
Realty Company, through Teofilo Villonco, in its letter of March
4, 1964 made a revised counter-offer (Romeo Villonco's first
counter-offer was dated February 24, 1964, Exh. C) for the
purchase of the property. The counter-offer was accepted by
Cervantes.
A check for P100,000 (Exh. E) mentioned in the foregoing letter
contract was delivered by Edith Perez de Tagle to Bormaheco
Inc. on March 4, 1964 and was received by Cervantes. In the
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voucher-receipt evidencing the delivery the broker indicated in
her handwriting that the earnest money was "subject to the
terms and conditions embodied in Bormaheco's letter" of
February 12 and Villonco Realty Company's letter of March 4,
1964 (Exh. E-1; 14 tsn).
Then, unexpectedly, in a letter dated March 30, 1964, or twenty-
six days after the signing of the contract of sale, Exhibit D,
Cervantes returned the earnest money, with interest amounting
to P694.24 (at ten percent per annum). Cervantes cited as an
excuse the circumstance that "despite the lapse of 45 days from
February 12, 1964 there is no certainty yet" for the acquisition of
the Punta property (Exh. F; F-I and F-2). Villonco Realty Company
refused to accept the letter and the checks of Bormaheco, Inc.
Cervantes sent them by registered mail. When he rescinded the
contract, he was already aware that the Punta lot had been
awarded to Bormaheco, Inc. (25-26 tsn).
Cervantes alleged that the forty-five day period had already
expired and the sale to Bormaheco, Inc. of the Punta property
had not been consummated. Cervantes said that his letter was a
"manifestation that we are no longer interested to sell" the
Buendia Avenue property to Villonco Realty Company (Annex I of
Stipulation of Facts).
In a letter dated April 7, 1964 Villonco Realty Company returned
the two checks to Bormaheco, Inc., stating that the condition for
the cancellation of the contract had not arisen and at the same
time announcing that an action for breach of contract would be
filed against Bormaheco, Inc. (Annex G of Stipulation of Facts).
On that same date, April 7, 1964 Villonco Realty Company filed
the complaint (dated April 6) for specific performance against
Bormaheco, Inc.
Bormaheco, Inc. in its answers dated May 5 and 25, 1964
pleaded the defense1. That the perfection of the contract of sale was subject to the
conditions (a) "that final acceptance or not shall be made
after 45 days" (sic) and (b) that Bormaheco, Inc. "acquires
the Sta. Ana property".
2. That the three lots were registered in the names of theCervantes spouses and not in the name of Bormaheco, Inc.,
Villonco Realty Company.
The lower court rendered a decision
1. Ordering the Cervantes spouses to execute in favor ofBormaheco, Inc. a deed of conveyance for the three lots in
question and2. Directing Bormaheco, Inc. (a) to convey the same lots to
Villonco Realty Company, (b) to pay the latter, as
consequential damages, the sum of P10,000 monthly from
March 24, 1964 up to the consummation of the sale, (c) to
pay Edith Perez de Tagle the sum of P42,000 as broker's
commission and (d) pay P20,000 as to attorney's fees (Civil
Case No. 8109).
ISSUE: WON the sale was perfected?
HELD: Yes. It should be stressed that there is no evidence as to
what changes were made by Cervantes in Villonco's revised
offer. And there is no evidence that Villonco Realty Company did
not assent to the supposed changes and that such assent was
never made known to Cervantes.
What the record reveals is that the broker, Miss Tagle, acted as
intermediary between the parties. It is safe to assume that the
alleged changes or qualifications made by Cervantes were
approved by Villonco Realty Company and that such approva
was duly communicated to Cervantes or Bormaheco, Inc. by the
broker as shown by the fact that Villonco Realty Company paid,
and Bormaheco, Inc. accepted, the sum of P100,000 as earnest
money or down payment. That crucial fact implies that Cervantes
was aware that Villonco Realty Company had accepted the
modifications which he had made in Villonco's counter-offer
Had Villonco Realty Company not assented to those insertions
and annotations, then it would have stopped payment on its
check for P100,000. The fact that Villonco Realty Company
allowed its check to be cashed by Bormaheco, Inc. signifies that
the company was in conformity with the changes made by
Cervantes and that Bormaheco, Inc. was aware of that
conformity. Had those insertions not been binding, then
Bormaheco, Inc. would not have paid interest at the rate of ten
percent per annum, on the earnest money of P100,000.
The truth is that the alleged changes or qualifications in the
revised counter offer (Exh. D) are not material or are mere
clarifications of what the parties had previously agreed upon.
Thus, Cervantes' alleged insertion in his handwriting of the figure
and the words "12th and" in Villonco's counter-offer is the same
as the statement found in the voucher-receipt for the earnest
money, which reads: "subject to the terms and conditions
embodied in Bormaheco's letter of Feb. 12, 1964 and your letter
of March 4, 1964" (Exh. E-1).
Cervantes allegedly crossed out the word "Nassco" in paragraph
3 of Villonco's revised counter-offer and substituted for it the
word "another" so that the original phrase, "Nassco's property inSta. Ana", was made to read as "another property in Sta. Ana"
That change is trivial. What Cervantes did was merely to adhere
to the wording of paragraph 3 of Bormaheco's original offer (Exh
B) which mentions "another property located at Sta. Ana." His
obvious purpose was to avoid jeopardizing his negotiation with
the Nassco for the purchase of its Sta. Ana property by unduly
publicizing it.
It is noteworthy that Cervantes, in his letter to the broker dated
April 6, 1964 (Annex 1) or after the Nassco property had been
awarded to Bormaheco, Inc., alluded to the "Nassco property"
At that time, there was no more need of concealing from the
public that Bormaheco, Inc. was interested in the Nasscoproperty.
Similarly, Cervantes' alleged insertion of the letters "PA" ( pe
annum) after the word "interest" in that same paragraph 3 of the
revised counter-offer (Exh. D) could not be categorized as a
major alteration of that counter-offer that prevented a meeting
of the minds of the parties. It was understood that the parties
had contemplated a rate of ten percent per annum since ten
percent a month or semi-annually would be usurious.
Appellants Bormaheco, Inc. and Cervantes further contend that
Cervantes, in clarifying in the voucher for the earnest money of
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P100,000 that Bormaheco's acceptance thereof was subject to
the terms and conditions embodied in Bormaheco's letter of
February 12, 1964 and your (Villonco's) letter of March 4, 1964"
made Bormaheco's acceptance "qualified and conditional".
That contention is not correct. There is no incompatibility
between Bormaheco's offer of February 12, 1964 (Exh. B) and
Villonco's counter-offer of March 4, 1964 (Exh. D). The revised
counter-offer merely amplified Bormaheco's original offer.
The controlling fact is that there was agreement between the
parties on the subject matter, the price and the mode of
payment and that part of the price was paid. "Whenever earnest
money is given in a contract of sale, it shall be considered as
part of the price and as proof of the perfection of the contract"
(Art. 1482, Civil Code).
"It is true that an acceptance may contain a request for certain
changes in the terms of the offer and yet be a binding
acceptance. 'So 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, a contract is formed .' "
(Stuart vs. Franklin Life Ins. Co., 165 Fed. 2nd 965, citing Sec. 79,
Williston on Contracts).
Thus, it was held that the vendor's 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 (Stuart vs. Franklin Life
Ins. Co., supra).
ISSUE2: WON the contract was not perfected because of the
condition that Bormaheco, Inc. would acquire the Nassco land
within forty-five days from February 12, 1964 or on or before
March 28, 1964 was not fulfilled?
HELD: STILL PERFECTED. That contention is predicated on theerroneous assumption that Bormaheco, Inc. was to acquire the
Nassco land within forty-five days or on or before March 28,
1964.
The trial court ruled that the forty-five-day period was merely an
estimate or a forecast of how long it would take Bormaheco, Inc.
to acquire the Nassco property and it was not "a condition or a
deadline set for the defendant corporation to decide whether or
not to go through with the sale of its Buendia property".
The record does not support the theory of Bormaheco, Inc. and
the Cervantes spouses that the forty-five-day period was the
time within which (a) the Nassco property and two Pasong Tamolots should be acquired, (b) when Cervantes would secure his
wife's consent to the sale of the three lots and (c) when
Bormaheco, Inc. had to decide what to do with the DBP
encumbrance.
Cervantes in paragraph 3 of his offer of February 12, 1964 stated
that the sale of the Buendia lots would be consummated after he
had consummated the purchase of the Nassco property. Then, in
paragraph 5 of the same offer he stated "that final negotiations
on both properties can be definitely known afterforty-five days"
(See Exh. B).
It is deducible from the tenor of those statements that the
consummation of the sale of the Buendia lots to Villonco Realty
Company was conditioned on Bormaheco's acquisition of the
Nassco land. But it was not spelled out that such acquisition
should be effected within forty-five days from February 12, 1964
Had it been Cervantes' intention that the forty-five days would
be the period within which the Nassco land should be acquired
by Bormaheco, then he would have specified that period in
paragraph 3 of his offer so that paragraph would read in this
wise: "That this sale is to be consummated only after I shall have
consummated my purchase of another property located at Sta
Ana, Manila within forty-five days from the date hereof ." He
could have also specified that period in his "conforme" to
Villonco's counter-offer of March 4, 1964 (Exh. D) so that instead
of merely stating "that this sale shall be subject to favorable
consummation of a property in Sta. Ana we are negotiating" he
could have said: "That this sale shall be subject to favorable
consummation within forty-five days from February 12, 1964 of a
property in Sta. Ana we are negotiating".
No such specification was made. The term of forty-five days was
not a part of the condition that the Nassco property should be
acquired. It is clear that the statement "that final negotiations on
both property can be definitely known after 45 days" does not
and cannot mean that Bormaheco, Inc. should acquire the
Nassco property within forty-five days from February 12, 1964 as
pretended by Cervantes. It is simply a surmise that after forty-
five days (in fact when the forty-five day period should be
computed is not clear) it would be known whether Bormaheco
Inc. would be able to acquire the Nassco property and whether it
would be able to sell the Buendia property. That aforementioned
paragraph 5 does not even specify how long after the forty-five
days the outcome of the final negotiations would be known.
It is interesting to note that in paragraph 6 of Bormaheco's
answer to the amended complaint, which answer was verified by
Cervantes, it was alleged that Cervantes accepted Villonco'srevised counter-offer of March 4, 1964 subject to the condition
that "the final negotiations (acceptance) will have to be made by
defendant within 45 days from said acceptance" (31 Record on
Appeal). If that were so, then the consummation of Bormaheco's
purchase of the Nassco property would be made within forty-five
days from March 4, 1964.
What makes Bormaheco's stand more confusing and untenable
is that in its three answers it invariably articulated the incoherent
and vague affirmative defense that its acceptance of Villonco's
revised counter-offer was conditioned on the circumstance "that
final acceptance or not shall be made after 45 days" whateve
that means. That affirmative defense is inconsistent with theother aforequoted incoherent statement in its third answer tha
"the final negotiations (acceptance) will have to be made by
defendant within 45 days from said acceptance" (31 Record on
Appeal).
Thus, Bormaheco's three answers and paragraph 5 of his offer of
February 12, 1964 do not sustain at all its theory that the Nassco
property should be acquired on or before March 28, 1964. Its
rescission or revocation of its acceptance cannot be anchored on
that theory which, as articulated in its pleadings, is quite
equivocal and unclear.
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It should be underscored that the condition that Bormaheco, Inc.
should acquire the Nassco property was fulfilled. As admitted by
the appellants, the Nassco property was conveyed to
Bormaheco, Inc. on June 26, 1964. As early as January 17, 1964
the property was awarded to Bormaheco, Inc. as the highest
bidder. On February 18, 1964 the Nassco Board authorized its
General Manager to sell the property to Bormaheco, Inc. (Exh.
H). The Economic Coordinator approved the award on March 24,
1964. It is reasonable to assume that had Cervantes been more
assiduous in following up the transaction, the Nassco property
could have been transferred to Bormaheco, Inc. on or before
March 28, 1964, the supposed last day of the forty-five-day
period.
ISSUE3: WON Bormaheco, Inc. cannot be required to sell the
three lots in question because they are conjugal properties of
the Cervantes spouses?
HELD: It can. It should be remembered that Cervantes, in
rescinding the contract of sale and in returning the earnest
money, cited as an excuse the circumstance that there was no
certainty in Bormaheco's acquisition of the Nassco property (Exh.
F and Annex 1). He did not say that Mrs. Cervantes was opposed
to the sale of the three lots. He did not tell Villonco Realty
Company that he could not bind the conjugal partnership. In
truth, he concealed the fact that the three lots were registered
"in the name of FRANCISCO CERVANTES, Filipino, of legal age,
married to Rosario P. Navarro, as owner thereof in fee simple".
He certainly led the Villonco brothers to believe that as president
of Bormaheco, Inc. he could dispose of the said lots. He inveigled
the Villoncos into believing that he had untrammelled control of
Bormaheco, Inc., that Bormaheco, Inc. owned the lots and that
he was invested with adequate authority to sell the same.
Thus, in Bormaheco's offer of February 12, 1964, Cervantes first
identified the three lots as "ourproperty" which "we are offering
to sell ..." (Opening paragraph and par. 1 of Exh. B). Whether theprounoun "we" refers to himself and his wife or to Bormaheco,
Inc. is not clear. Then, in paragraphs 3 and 4 of the offer, he used
the first person and said: "I shall have consummated my
purchase" of the Nassco property; "... mynegotiations with said
property" and "I will return to you your deposit". Those
expressions conveyed the impression and generated the belief
that the Villoncos did not have to deal with Mrs. Cervantes nor
with any other official of Bormaheco, Inc.
The pleadings disclose that Bormaheco, Inc. and Cervantes
deliberately and studiously avoided making the allegation that
Cervantes was not authorized by his wife to sell the three lots or
that he acted merely as president of Bormaheco, Inc. Thatdefense was not interposed so as not to place Cervantes in the
ridiculous position of having acted under false pretenses when
he negotiated with the Villoncos for the sale of the three lots.
Villonco Realty Company, in paragraph 2 of its original complaint,
alleged that "on February 12, 1964, after some prior
negotiations, the defendant (Bormaheco, Inc.) made a formal
offer to sell to the plaintiff the property of the said defendant
situated at the abovenamed address along Buendia Avenue,
Makati, Rizal, under the terms of the letter-offer, a copy of which
is hereto attached as Annex A hereof", now Exhibit B (2 Record
on Appeal).
That paragraph 2 was not, repeat, was not denied by
Bormaheco, Inc. in its answer dated May 5, 1964. It did not
traverse that paragraph 2. Hence, it was deemed admitted
However, it filed an amended answer dated May 25, 1964
wherein it denied that it was the owner of the three lots. It
revealed that the three lots "belong and are registered in the
names of the spouses Francisco N. Cervantes and Rosario N
Cervantes."
The three answers of Bormaheco, Inc. contain the following
affirmative defense:
13. That defendant's insistence to finally decide on the
proposed sale of the land in question after 45 days had not
only for its purpose the determination of its acquisition of the
said Sta. Ana (Nassco) property during the said period, but also
to negotiate with the actual and registered owner of the
parcels of land covered by T.C.T. Nos. 43530, 43531 and 43532
in question which plaintiff was fully aware that the same were
not in the name of the defendant (sic; Par. 18 of Answer to
Amended Complaint, 10, 18 and 34, Record on Appeal).
In that affirmative defense, Bormaheco, Inc. pretended that it
needed forty-five days within which to acquire the Nassco
property and "to negotiate" with the registered owner of the
three lots. The absurdity of that pretension stands out in bold
relief when it is borne in mind that the answers of Bormaheco
Inc. were verified by Cervantes and that the registered owner of
the three lots is Cervantes himself. That affirmative defense
means that Cervantes as president of Bormaheco, Inc. needed
forty-five days in order to "negotiate" with himself (Cervantes).
The incongruous stance of the Cervantes spouses is also patent
in their answer to the amended complaint. In that answer they
disclaimed knowledge or information of certain allegations which
were well-known to Cervantes as president of Bormaheco, Incand which were admitted in Bormaheco's three answers that
were verified by Cervantes.
It is significant to note that Bormaheco, Inc. in its three answers,
which were verified by Cervantes, never pleaded as an
affirmative defense that Mrs. Cervantes opposed the sale of the
three lots or that she did not authorize her husband to sell those
lots. Likewise, it should be noted that in their separate answe
the Cervantes spouses never pleaded as a defense that Mrs
Cervantes was opposed to the sale of three lots or tha
Cervantes could not bind the conjugal partnership. The
appellants were at first hesitant to make it appear that Cervantes
had committed the skullduggery of trying to sell property whichhe had no authority to alienate.
It was only during the trial on May 17, 1965 that Cervantes
declared on the witness stand that his wife was opposed to the
sale of the three lots, a defense which, as already stated, was
never interposed in the three answers of Bormaheco, Inc. and in
the separate answer of the Cervantes spouses. That same
viewpoint was adopted in defendants' motion fo
reconsideration dated November 20, 1965.
But that defense must have been an afterthought or was evolved
post litem motam since it was never disclosed in Cervantes
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letter of rescission and in his letter to Miss Tagle (Exh. F and
Annex 1). Moreover, Mrs. Cervantes did not testify at the trial to
fortify that defense which had already been waived for not
having been pleaded (See sec. 2, Rule 9, Rules of Court).
Taking into account the situation of Cervantes vis-a-vis
Bormaheco, Inc. and his wife and the fact that the three lots
were entirely occupied by Bormaheco's building, machinery and
equipment and were mortgaged to the DBP as security for its
obligation, and considering that appellants' vague affirmative
defenses do not include Mrs. Cervantes' alleged opposition to
the sale, the plea that Cervantes had no authority to sell the lots
strains the rivets of credibility (Cf. Papa and Delgado vs.
Montenegro, 54 Phil. 331; Riobo vs. Hontiveros, 21 Phil. 31).
"Obligations arising from contracts have the force of law
between the contracting parties and should be complied with in
good faith" (Art. 1159, Civil Code). Inasmuch as the sale was
perfected and even partly executed, Bormaheco, Inc., and the
Cervantes spouses, as a matter of justice and good faith, are
bound to comply with their contractual commitments.
Parenthetically, it may be observed that much misunderstanding
could have been avoided had the broker and the buyer taken the
trouble of making some research in the Registry of Deeds and
availing themselves of the services of a competent lawyer in
drafting the contract to sell.
G.R. No. L-36083 September 5, 1975
Spouses RAMON DOROMAL, SR., and ROSARIO SALAS, and
Spouses RAMON DOROMAL, JR., and GAUDELIA VEGA,
petitioners, vs.HON. COURT OF APPEALS and FILOMENAJAVELLANA
FACTS
Lot 3504 of the cadastral survey of Iloilo, situated in thepoblacion of La Paz (a districtwith an area of a little
more than 2-1/2 hectares was originally decreed in the
name of the late Justice Antonio Horilleno in 1916.
Before he died, Justice Horilleno executed a last willand testament attesting to the fact that it was a co-
ownership between himself and his brothers and sisters
(co-owners: Luis, Soledad, Fe, Rosita, Carlos and
Esperanza, all surnamed Horilleno in the proportion of
1/7 undivided ownership each).
Since Esperanza had already died, she was succeededby her only daughter, Filomena Javellana.
The co-owners led by Carlos (even though their righthad not as yet been annotated in the title) and as to
deceased Justice Antonio Horilleno, his daughter Mary,
sometime since early 1967, had wanted to sell their
shares, or if possible if Filomena Javellana were
agreeable, to sell the entire property.
An acquaintance hired by the Horillenos, CresenciaHarder, looked for buyers, and the latter came to the
interest of Ramon Doromal, Sr. and Jr.
In preparation for the execution of the sale (since thebrothers and sisters Horilleno were scattered in various
parts of the country: Carlos in Ilocos Sur, Mary in
Baguio, Soledad and Fe, in Mandaluyong, Rizal, and
Rosita in Basilan City), the Horillenos executed various
powers of attorney in favor of their niece, Mary H
Jimenez. They also caused preparation of a power of
attorney of identical tenor for signature by Javellana
and sent it with a letter of Carlos, dated 18 January
1968 unto her thru Mrs. Harder.
Carlos informed Javellana that the price was P4.00 asquare meter. It appears, however, that as early as
October 1967, Carlos had received in check as earnest
money from Ramon Doromal, Jr., the sum of P5,000.00
and the price therein agreed upon was P5.00 a square
meter.
At any rate, Javellana, not being agreeable, did not signthe power of attorney, and the rest of the co-owners
went ahead with their sale of their 6/7.
On the observation of Carlos, the deed of sale preparedby their common attorney in fact, Mary H. Jimenez, was
signed and ratified in Candon, Ilocos Sur in 1968 and
was brought to Carlos in the same month.
The Register of Deeds of Iloilo refused to register rightaway, since the original registered owner, Justice
Antonio Horilleno was already dead.
Carlos then hired a counsel to file a petition within thecadastral case in 1968; said petition was approved.
Thereafter, Carlos caused the registration (Register ofDeeds Iloilo) of the order of the cadastral court
approving the issuance of a new title in the name of the
co-owners, as well as of the deed of sale to the
Doromals, as a result of which on that same date, a
new title was issued, in the name of the Horillenos to
6/7 and Javellana to 1/7.
The Doromals paid Carlos the sum of P97,000.00 by acheck of the Chartered Bank which was later
substituted by check of PNB, because there was no
Chartered Bank Branch in Ilocos Sur.
Besides the amount paid in check, the Doromalsaccording to their evidence still paid an additiona
amount in cash of P18,250.00 since the agreed price
was P5.00 a square meter; and thus was consummated
the transaction.
In June 1968, Arturo H. Villanueva (Javellanas lawyerarrived at the residence of the Doromals in Dumangas
Iloilo, bringing with him her letter of that date, making
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a formal offer to repurchase or redeem the 6/7
undivided share in Lot No. 3504, of the Iloilo Cadastre,
which the Doromals bought from her erstwhile co-
owners, the Horillenos, for the sum of P30,000.00 (the
sum Atty. Villanueva has with him which he would
deliver to the Doromals as soon as they execute the
contract of sale in her favor). The Doromals refused.
Subsequently, Javellana filed the case before the CFIIloilo seeking to exercise her right to redeem the share
of the property, as co-owner, at the price stated in the
deed of sale, i.e. P30,000.00. The trial judge, after
hearing the evidence, ruled in favor of the Doromals,
holding that Javellana had no more right, to redeem as
she was already informed of the intended sale of the
6/7 share belonging to the Horillenos, and further
condemned Javellana to pay attorneys fees, and moral
and exemplary damages. Javellana appealed.
The Court of Appeals (in CA-GR 47945-R) reversed thetrial courts decision and held that although respondent
Javellana was informed of her co-owners proposal to
sell the land in question to the Doromals she was,
however, never notified least of all, in writing, of the
actual execution and registration of the corresponding
deed of sale, hence, Javellana s right to redeem had
not yet expired at the time she made her offer for that
purpose thru her letter of 10 June 1968 delivered to the
Doromals on even date. The intermediate court further
held that the redemption price to be paid by Javellana
should be that stated in the deed of sale which is
P30,000 notwithstanding that the preponderance of
the evidence proves that the actual price paid by the
Doromals was P115,250. The Doromals appealed.
ISSUE (1): Whether the sale is said to be perfected during the
time of the sending of letters.
HELD: NO. While the letters relied upon by the Doromals could
convey the idea that more or less some kind of consensus had
been arrived at among the other co-owners to sell the property
in dispute to the Doromals, it cannot be said definitely that such
a sale had even been actually perfected. The difference in the
prices per square meter in the two letters negatives the
possibility that a price definite had already been agreed upon.
While P5,000 might have indeed been paid to Carlos in October
1967, there is nothing to show that the same was in the concept
of the earnest money contemplated in Article 1482 of the Civil
Code as signifying perfection of the sale. Viewed in the backdrop
of the factual milieu thereof extant in the record, said P5,000
were paid in the concept of earnest money as the term was
understood under the Old Civil Code, that is, as a guarantee that
the buyer would not back out, considering that it is not clear that
there was already a definite agreement as to the price then and
that the Doromals were decided to buy 6/7 only of the property
should Javellana refuse to agree to part with her 1/7 share.
ISSUE (2): Whether the letters aforementioned sufficed to
comply with the requirement of notice of a sale by co-owners
under Article 1623 of the Civil Code.
HELD: YES. It cannot be said that the CA erred in holding the
same. The SC is of the opinion and so held that for purposes o
the co-owner's right of redemption granted by Article 1620 of
the Civil Code, the notice in writing which Article 1623 requires
to be made to the other co-owners and from receipt of which
the 30-day period to redeem should be counted is a notice notonly of a perfected sale but of the actual execution and delivery
of the deed of sale. This is implied from the latter portion of
Article 1623 which requires that before a register of deeds can
record a sale by a co-owner, there must be presented to him, an
affidavit to the effect that the notice of the sale had been sent in
writing to the other co-owners.
A sale may not be presented to the register of deeds for
registration unless it be in the form of a duly executed public
instrument. Moreover, the law prefers that all the terms and
conditions of the sale should be definite and in writing. As aptlyobserved by Justice Gatmaitan in the decision under review
Article 1619 of the Civil Code bestows unto a co-owner the right
to redeem and "to be subrogated under the same terms and
conditions stipulated in the contract", and to avoid any
controversy as to the terms and conditions under which the righ
to redeem may be exercised, it is best that the period therefor
should not be deemed to have commenced unless the notice of
the disposition is made after the formal deed of disposal has
been duly executed. And it being beyond dispute that
respondent herein has never been notified in writing of the
execution of the deed of sale by which petitioners acquired the
subject property, it necessarily follows that her tender to redeem
the same made on June 10, 1968 was well within the periodprescribed by law. Indeed, it is immaterial when she might have
actually come to know about said deed, it appearing she has
never been shown a copy thereof through a written
communication by either any of the petitioners-purchasers or
any of her co-owners-vendees. (Cornejo et al. vs. CA et al., 16
SCRA 775.)
ISSUE (3): The petitioners contend that considering said finding
of fact of the intermediate court, the CA erred in holding
nevertheless that "the redemption price should be that stated in
the deed of sale."
Is their contention tenable?
HELD: NO. The trial court found that "the consideration of
P30,000 only was placed in the deed of sale to minimize the
payment of the registration fees, stamps and sales tax." With this
undisputed fact in mind, it is impossible for the Supreme Cour
to sanction petitioners' pragmatic but immoral posture. Being
patently violative of public policy and injurious to public interest
the seemingly wide practice of understating considerations of
transactions for the purpose of evading taxes and fees due to the
government must be condemned and all parties guilty thereo
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must be made to suffer the consequences of their ill-advised
agreement to defraud the state.
Verily, the trial court fell short of its devotion and loyalty to the
Republic in officially giving its stamp of approval to the stand of
petitioners and even berating respondent Javellana as wanting
to enrich herself "at the expense of her own blood relatives who
are her aunts, uncles and cousins." On the contrary, said "blood
relatives" should have been sternly told, as the SC held, that they
are in pari-delicto with petitioners in committing tax evasion andshould not receive any consideration from any court in respect
to the money paid for the sale in dispute. Their situation is
similar to that of parties to an illegal contract.
Provisions that supported the conclusion of the SC regarding
legal redemption
Article 1619
Legal redemption is the right to be subrogated, upon the same
terms and conditions stipulated in the contract, in the place of
one who acquires a thing by purchase or dation in payment, or
by any other transaction whereby ownership is transmitted by
onerous title. In the present case, the stipulation in the public
evidence of the contract, made public by both vendors and
vendees is that the price was P30,000.00.
Article 1620 and 1623
A co-owner of a thing may exercise the right of redemption in
case the share of all the other co- owners or any of them, are
sold to a third person. If the price of the alienation is grossly
excessive, the redemptioner shall pay only a reasonable one.
The law seeks to protect redemptioner and converts his position
into one not that of a contractually but of a legally subrogated
creditor as to the right of redemption, if the price is not grossly
excessive, what the law had intended redemptioner to pay can
be read in Art. 1623, which provides that
The right of a legal pre-emption or redemption shall not be
exercised except within thirty (30) days from the notice in writing
by the prospective vendor, or by the vendor as the case may be.
The deed of sale shall not be recorded in the Registry of
Property, unless accompanied by an affidavit of the vendor that
he has given written notice thereof of all possible
redemptioners.
Disposition
The Supreme Court affirmed the decision of the Court of
Appeals, with costs against Spouses Doromal Sr. and Doromal Jr.
G.R. No. 126812 November 24, 1998
GOLDENROD, INC., petitioner, vs. COURT OF APPEALS, PIO
BARRETO & SONS, INC., PIO BARRETO REALTY DEVELOPMENT
INC. and ANTHONY QUE, respondents.
FACTS: Pio Barreto and Sons, Inc. (BARRETO & SONS) owned 43
parcels of registered land with a total area of 18,500 square
meters located at Carlos Palanca St., Quiapo, Manila. These
properties were mortgaged with United Coconut Planters Bank(UCPB) and until 1988, the obligation remained unpaid making
foreclosure of the mortgage imminent.
Here comes Goldenrod, Inc. (GOLDENROD), which offered in
writing to buy the subject property from BARRETO & SONS. The
offer was accepted and resulted for the payment of P1
million earnest money.
When the term of existence of BARRETO & SONS expired, all its
assets and liabilities including the property located in Quiapo
were transferred to respondent Pio Barreto Realty Development
Inc. (BARRETO REALTY). Petitioners and the latter subsequently
agreed that petitioner GOLDENROD would be the one to pay theoutstanding obligations of BARRETO REALTY with UCPB and, (b)
pay the balance of the purchase price in installments within a 3-
year period.
Petitioner, however, did not pay UCPB for the loan obligation of
BARRETO REALTY; instead, it asked for an extension of one
month to settle, which the bank granted. Petitioner requested
another extension of sixty days to pay the loan. This time the
bank demurred.
Because of the denial by UCPB of its request, petitioner now
informed respondent BARRETO REALTY that it could not go
through with the purchase anymore and so they now demand
the refund of the earnest money of P1 million they earlier gave
When the demand remain unheeded by BARRETO REALTY
petitioner GOLDENROD filed a complaint. In its Answer
private respondent contended that it was the agreement of the
parties that the earnest money of P1 million would be forfeited
to answer for losses and damages that might be suffered by
private respondents in case of failure by petitioner to comply
with the terms of their purchase agreement.
As an aside, BARRETTO REALTY sold to Asiaworld Trade Center
Phils., Inc. (ASIAWORLD) the property subject of this case.
Subsequently, the trial court sustained GOLDENRODs complain
and found that there was no written agreement between the
parties concerning forfeiture of the earnest money if the sale did
not push through. It further declared that the earnest money
given by petitioner to respondent BARRETO REALTY was
intended to form part of the purchase price; thus, the refusal of
the latter to return the money when the sale was not
consummated violated Arts. 22 and 23 of the Civil Code against
unjust enrichment. On appeal, the Court of Appeals reversed the
trial court and ordered the dismissal of the complaint; hence,
this petition.
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Issue: Whether inthe absence of a specific stipulation, may the
seller of real estate keep/forfeit the earnest money to answer for
damages in the event the sale fails?
Held: No. We sustain petitioner. Under Art. 1482 of the Civil
Code, whenever earnest money is given in a contract of sale, it
shall be considered as part of the purchase price and as proof of
the perfection of the contract. It was an advance payment which
must be deducted from the total price. Hence, the parties could
not have intended that the earnest money or advance paymentwould be forfeited when the buyer should fail to pay the balance
of the price, especially in the absence of a clear and express
agreement thereon. By reason of its failure to make payment,
petitioner, through its agent, informed private respondents that
it would no longer push through with the sale. In other words,
petitioner resorted to extrajudicial rescission of its agreement
with private respondents.
Rescission of reciprocal contracts may be extrajudicially
rescinded unless successfully impugned in court. If the party
does not oppose the declaration of rescission of the other party,
specifying the grounds therefor, and it fails to reply or protest
against it, its silence thereon suggests an admission of theveracity and validity of the rescinding party's claim.
Private respondents did not interpose any objection to the
rescission by petitioner of the agreement after it received the
broker's letter rescinding the sale [due non-approval of the loan
in UCPB].
Art. 1385 of the Civil Code provides that rescission creates the
obligation to return the things which were the object of the
contract together with their fruits and interest. The vendor is
therefore obliged to return the purchase price paid to him by the
buyer if the latter rescinds the sale, or when the transaction was
called off and the subject property had already been sold to athird person, as what obtained in this case. Therefore, by virtue
of the extrajudicial rescission of the contract to sell by petitioner
without opposition from private respondents who, in turn, sold
the property to other persons, private respondent BARRETTO
REALTY, as the vendor, had the obligation to return the earnest
money of P1,000,000.00 plus legal interest from the date it
received notice of rescission from petitioner. It would be most
inequitable if respondent BARRETTO REALTY would be allowed
to retain petitioner's payment of P1,000,000.00 and at the same
time appropriate the proceeds of the second sale made to
another.
SUGA SOTTO YUVIENCO, BRITANIA SOTTO, and MARCELINO
SOTTO, petitioners,
vs.
HON. AUXENCIO C. DACUYCUY, Judge of the CFI of Leyte, DELY
RODRIGUEZ, FELIPE ANG CRUZ, CONSTANCIA NOGAR, MANUEL
GO, INOCENTES DIME, WILLY JULIO, JAIME YU, OSCAR DY, DY
CHIU SENG, BENITO YOUNG, FERNANDO YU, SEBASTIAN YU,
CARLOS UY, HOC CHUAN and MANUEL DY, respondents.
(G.R. No. L-55048 May 27, 1981)
In essence, the theory of petitioners is that while it is true that
they did express willingness to sell to private respondents the
subject property for P6,500,000 provided the latter made known
their own decision to buy it not later than July 31, 1978, the
respondents' reply that they were agreeable was not absolute
so much so that when ultimately petitioners' representative
went to Cebu City with a prepared and duly signed contract for
the purpose of perfecting and consummating the transaction
respondents and said representative found variance between
the terms of payment stipulated in the prepared document and
what respondents had in mind, hence the bankdraft which
respondents were delivering to petitioners' representative was
returned and the document remained unsigned by respondents
Hence the action below for specific performance.
FACTS: On July 12, 1978, petitioners, thru a certain Pedro C
Gamboa, sent to respondents a letter offering to sell the Sotto
property situated at Tacloban City for P6,500,000. In the said
letter, it is said that I am giving you and the other occupants the
preference, but such priority has to be exercised within a given
number of days as I do not want to lose the opportunity if you
are not interested. I am therefore gluing you and the rest of the
occupants until July 31, 1978 within which to decide whether you
want to buy the property. If I do not hear from you by July 31,
will offer or close the deal with the other interested buyer.
Reacting to the foregoing letter, a telegram was sent by "Yao
King Ong & tenants" to Atty. Pedro Gamboa in Cebu City stating
we agree to buy property proceed Tacloban to negotiate
details.
On July 27, 1978, Atty. Gamboa wired Yao King Ong in Tacloban
City stating PROPOSAL ACCEPTED ARRIVING TUESDAY
MORNING WITH CONTRACT PREPARE PAYMENT BANK DRAFT
It is alleged by the respondents that when Atty. Gamboa arrived
in Tacloban City bringing with him the prepared contract topurchase and to sell referred to in his telegram dated July 27,
1978for the purpose of closing the sale with an original term o
payment of P2M on the date of the execution of the contract
the balance of P4.5M shall be fully paid within 90 days. However
to the complete surprise of respondents, the petitioner (excep
def. Tacloban City Ice Plant, Inc.) without giving notice to
respondents, changed the mode of payment with respect to the
balance of P4,500,000.00 by imposing upon respondents to pay
same amount within thirty (30) days from execution of the
contract instead of the former term of ninety (90) days.
Petitioners filed a motion to dismiss which was denied by
respondent judge.
ISSUE: WON there is a perfected contract of sale?
HELD: No. In this respect, the governing legal provision is, o
course, Article 1319 of the Civil Code which provides:
ART. 1319. Consent is manifested by the meeting of the offer
and the acceptance upon the thing and the cause which are
constitute the contract. The offer must be certain the
acceptance absolute. A qualified acceptance constitute a
counter-offer.
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Acceptance made by letter or telegram does not bind offerer
except from the time it came to his knowledge. The contract,
in a case, is presumed to have been entered into in the place
where the offer was made.
In the instant case, We can lay aside, for the moment,
petitioners' contention that the letter of July 12, 1978 of Atty.
Pedro C. Gamboa to respondents Yao King Ong and his
companions constitute an offer that is "certain", although the
petitioners claim that it was a mere expression of willingness to
sell the subject property and not a direct offer of sale to said
respondents. What We consider as more important and truly
decisive is what is the correct juridical significance of the
telegram of respondents instructing Atty. Gamboa to "proceed
to Tacloban to negotiate details." We underline the word
"negotiate" advisedly because to Our mind it is the key word that
negates and makes it legally impossible for Us to hold that
respondents' acceptance of petitioners' offer, assuming that it
was a "certain" offer indeed, was the "absolute" one that Article
1319 above-quoted requires.
Dictionarilly, the implication of "to negotiate" is practically the
opposite of the Idea that an agreement has been reached.
Webster's Third International Dictionary, Vol. II (G. & C. Merriam
Co., 1971 Philippine copyright) gives the meaning of negotiate as
"to communicate or confer with another so as to arrive at the
settlement of some matter; meet with another so as to arrive
through discussion at some kind of agreement or compromise
about something; to arrange for or bring about through
conference or discussion; work at or arrive at or settle upon by
meetings and agreements or compromises ". Importantly, it
must be borne in mind that Yao King Ong's telegram simply says
"we agree to buy property". It does not necessarily connote
acceptance of the price but instead suggests that the details
were to be subject of negotiation.
Respondents now maintain that what the telegram refers to as"details" to be "negotiated" are mere "accidental elements", not
the essential elements of the contract. They even invite
attention to the fact that they have alleged in their complaint
(Par. 6) that it was as early as "in the month of October, 1977
(that) negotiations between plaintiffs and defendants for the
purchase and sale (in question) were made, thus resulting to
offers of same defendants and counter-offer of plaintiffs". But to
Our mind such alleged facts precisely indicate the failure of any
meeting of the minds of the parties, and it is only from the letter
and telegrams above-quoted that one can determine whether or
not such meeting of the minds did materialize. As We see it,
what such allegations bring out in bold relief is that it was
precisely because of their past failure to arrive at an agreementthat petitioners had to put an end to the uncertainty by writing
the letter of July 12, 1978. On the other hand, that respondents
were all the time agreeable to buy the property may be
conceded, but what impresses Us is that instead of "absolutely"
accepting the "certain" offer if there was one of the
petitioners, they still insisted on further negotiation of details.
For anyone to read in the telegram of Yao that they accepted the
price of P6,500,000.00 would be an inference not necessarily
warranted by the words "we agree to buy" and "proceed
Tacloban to negotiate details". If indeed the details being left by
them for further negotiations were merely accidental or formal
ones, what need was there to say in the telegram that they had
still "to negotiate (such) details", when, being unessential per
their contention, they could have been just easily clarified and
agreed upon when Atty. Gamboa would reach Tacloban?
Anent the telegram of Atty. Gamboa of July 27, 1978, also
quoted earlier above, We gather that it was in answer to the
telegram of Yao. Considering that Yao was in Tacloban then
while Atty. Gamboa was in Cebu, it is difficult to surmise that
there was any communication of any kind between them during
the intervening period, and none such is alleged anyway by
respondents. Accordingly, the claim of respondents in their
complaint below that there was an agreement of a down
payment of P2 M, with the balance of P4.5M to be paid within 90
days afterwards is rather improbable to imagine to have actually
happened.
The alleged subsequent agreement about the P2 M down and
P4.5 M in 90 days may at best be deemed as a distinct cause of
action. And placed against the insistence of petitioners, as
demonstrated in the two deeds of sale taken by Atty. Gamboa to
Tacloban, that there was no agreement about 90 days, an issue
of fact arose, which could warrant a trial in order for the tria
court to determine whether or not there was such an agreement
about the balance being payable in 90 days instead of the 30
days stipulated as alleged. Our conclusion, therefore, is that
although there was no perfected contract of sale in the light of
the letter of Atty. Gamboa of July 12, 1978 and the letter-reply
thereto of Yao; it being doubtful whether or not, under Article
1319 of the Civil Code, the said letter may be deemed as an offer
to sell that is "certain", and more, the Yao telegram is far from
being an "absolute" acceptance under said article, still there
appears to be a cause of action alleged in Paragraphs 8 to 12 of
the respondents' complaint, considering it is alleged therein that
subsequent to the telegram of Yao, it was agreed that the
petitioners would sell the property to respondents for P6.5 M, by
paving P2 M down and the balance in 90 days and which
agreement was allegedly violated when in the deeds prepared byAtty. Gamboa and taken to Tacloban, only 30 days were given to
respondents.
But the foregoing conclusion is not enough to carry the day fo
respondents. It only brings Us to the question of whether or not
the claim for specific performance of respondents is enforceable
under the Statute of Frauds. In this respect, We may view the
situation at hand from two angles, namely, (1) that the
allegations contained in paragraphs 8 to 12 of respondents
complaint should be taken together with the documents already
aforementioned and (2) that the said allegations constitute a
separate and distinct cause of action. We hold that either way
We view the situation, the conclusion is inescapable that theclaim of respondents that petitioners have unjustifiably refused
to proceed with the sale to them of the property in question is
unenforceable under the Statute of Frauds.
It is nowhere alleged in said paragraphs 8 to 12 of the complaint
that there is any writing or memorandum, much less a duly
signed agreement to the effect that the price of P6,500,000
fixed by petitioners for the real property herein involved was
agreed to be paid not in cash but in installments as alleged by
respondents. The only documented indicative of the non-wholly
cash payment existing in the record is that stipulated in Annexes
9 and 10 of respondents, the deeds already signed by the
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petitioners and taken to Tacloban by Atty. Gamboa for the
signatures of the respondents. In other words, the 90-day term
for the balance of P4.5 M insisted upon by respondents choices
not appear in any note, writing or memorandum signed by
either the petitioners or any of them, not even by Atty.
Gamboa. Hence, looking at the pose of respondents that there
was a perfected agreement of purchase and sale between them
and petitioners under which they would pay in installments of
P2 M down and P4.5 M within ninety 90) days afterwards it is
evident that such oral contract involving the "sale of real
property" comes squarely under the Statute of Frauds (Article
1403, No. 2(e), Civil Code.)
On the other score of considering the supposed agreement of
paying installments as partly supported by the letter and
telegram earlier quoted herein, His Honor declared with well
studied ratiocination, albeit legally inaccurate, that:
The next issue relate to the State of Frauds. It is contended
that plaintiffs' action for specific performance to compel the
defendants to execute a good and sufficient conveyance of the
property in question (Sotto land and building) is unenforceable
because there is no othernote memorandum or writing except
annexes "C", "C-l" and "D", which by themselves did not give
birth to a contract to sell. The argument is not well founded.
The rules of pleading limit the statement of the cause of action
only to such operative facts as give rise to the right of action of
the plaintiff to obtain relief against the wrongdoer. The details
of probative matter or particulars of evidence, statements of
law, inferences and arguments need not be stated. Thus, Sec.
1 of Rule 8 provides that 'every pleading shall contain in a
methodical and logical form, a plain concise and direct
statement of the ultimate facts on which the party pleading
relies for his claim or defense, as the case may be, omitting the
statement of mere evidentiary facts.' Exhibits need not be
attached. The contract of sale sued upon in this case is
supported by letters and telegrams annexed to the complaintand plaintiffs have announced that they will present additional
evidences during the trial to prove their cause of action. The
plaintiffs having alleged that the contract is backed up by
letters and telegrams, and the same being sufficient
memorandum, the complaint states a cause of action and they
should be given their day in court and allowed to substantiate
their allegations (Parades vs. Espino, 22 SCRA 1000). (Pp 165-
166, Record.)
The foregoing disquisition of respondent judge misses at least
two (2) juridical substantive aspects of the Statute of Frauds
insofar as sale of real property is concerned. First, His Honor
assumed that the requirement of perfection of such kind ofcontract under Article 1475 of the Civil Code which provides that
"(t)he contract of sale is perfected at the moment there is a
meeting of the minds upon the thing which is the object of the
contract and upon the price", the Statute would no longer apply
as long as the total price or consideration is mentioned in some
note or memorandum and there is no need of any indication of
the manner in which such total price is to be paid.
We cannot agree. In the reality of the economic world and the
exacting demands of business interests monetary in character,
payment on installments or staggered payment of the total
price is entirely a different matter from cash payment,
considering the unpredictable trends in the sudden fluctuation
of the rate of interest. In other words, it is indisputable that the
value of money - varies from day to day, hence the
indispensability of providing in any sale of the terms of
payment when not expressly or impliedly intended to be in
cash.
Thus, We hold that in any sale of real property on installments
the Statute of Frauds read together with the perfection
requirements of Article 1475 of the Civil Code must be
understood and applied in the sense that the idea of payment
on installments must be in the requisite of a note or
memorandum therein contemplated. Stated otherwise, the
inessential elements" mentioned in the case of Parades vs
Espino, 22 SCRA 1000, relied upon by respondent judge must be
deemed to include the requirement just discussed when it comes
to installment sales. There is nothing in the monograph re the
Statute of Frauds appearing in 21 SCRA 250 also cited by His
Honor indicative of any contrary view to this ruling of Ours, fo
the essence and thrust of the said monograph refers only to the
form of the note or memorandum which would comply with the
Statute, and no doubt, while such note or memorandum need
not be in one single document or writing and it can be in just
sufficiently implicit tenor, imperatively the separate notes must
when put together', contain all the requisites of a perfected
contract of sale. To put it the other way, under the Statute of
Frauds, the contents of the note or memorandum, whether in
one writing or in separate ones merely indicative for an
adequate understanding of all the essential elements of the
entire agreement, may be said to be the contract itself, except as
to the form.
Secondly, We are of the considered opinion that under the rules
on proper pleading, the ruling of the trial court that, even if the
allegation of the existence of a sale of real property in a
complaint is challenged as barred from enforceability by the
Statute of Frauds, the plaintiff may simply say there aredocuments, notes or memoranda without either quoting them in
or annexing them to the complaint, as if holding an ace in the
sleeves is not correct. To go directly to the point, for Us to
sanction such a procedure is to tolerate and even encourage
undue delay in litigation, for the simple reason that to await the
stage of trial for the showing or presentation of the requisite
documentary proof when it already exists and is asked to be
produced by the adverse party would amount to unnecessarily
postponing, with the concomitant waste of time and the
prolongation of the proceedings, something that can
immediately be evidenced and thereby determinable with
decisiveness and precision by the court without further delay.
G.R. No. 115849 January 24, 1996
FIRST PHILIPPINE INTERNATIONAL BANK (Formerly Producers
Bank of the Philippines) and MERCURIO RIVERA, petitioners,
vs.
COURT OF APPEALS, CARLOS EJERCITO, in substitution of
DEMETRIO DEMETRIA, and JOSE JANOLO,respondents.
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Petitioner First Philippine International Bank (formerly Producers
Bank of the Philippines; petitioner Bank, for brevity) is a banking
institution organized and existing under the laws of the Republic
of the Philippines. Petitioner Mercurio Rivera (petitioner Rivera,
for brevity) is of legal age and was, at all times material to this
case, Head-Manager of the Property Management Department
of the petitioner Bank.
Respondent Carlos Ejercito (respondent Ejercito, for brevity) is of
legal age and is the assignee of original plaintiffs-appelleesDemetrio Demetria and Jose Janolo.
Respondent Court of Appeals is the court which issued the
Decision and Resolution sought to be set aside through this
petition.
FACTS
(1) In the course of its banking operations, the
defendant Producer Bank of the Philippines acquired six
(6) parcels of land with a total area of 101 hectares
located at Don Jose, Sta. Rose, Laguna. The property
used to be owned by BYME Investment andDevelopment Corporation which had them mortgaged
with the bank as collateral for a loan. The original
plaintiffs, Demetrio Demetria and Jose O. Janolo,
wanted to purchase the property and thus initiated
negotiations for that purpose.
(2) In the early part of August 1987 said plaintiffs, upon
the suggestion of BYME investment's legal counsel, Jose
Fajardo, met with defendant Mercurio Rivera, Manager
of the Property Management Department of the
defendant bank. The meeting was held pursuant to
plaintiffs' plan to buy the property. After the meeting,
plaintiff Janolo made a formal purchase offer to thebank through a letter
(3) Defendant Rivera made a formal reply in behalf of
the bank also indicating the baks counter-offer at
P5.5M for more than 101 hectares on lot basis.
(4) Plaintiff Janolo in his corresponding letter amended
his previous offer and instead proposed to buy the
subject lot at P4.250M in cash.
(5) There was no reply to plaintiffs letter. What took
place was a meeting in September 1987 between the
plaintiffs and Luis Co, the Senior Vice-President of
defendant bank. Rivera as well as the BYME lawyer also
attended the meeting. Two days later, Janolo sent to
bak through Rivera a letter accepting the offer for them
to purchase the property at Sta. Rosa, Laguna, formerly
owned by Byme Investment, for a total price of PESOS:
FIVE MILLION FIVE HUNDRED THOUSAND
(P5,500,000.00).
(6) Rivera, through a letter, informed Demetria that the
property which [the plaintiffs] have proposed to buy
are yet under study by the newly replaced Acting
Conservator of the bank.
(7) Series of demands were made by the plaintiffs for
compliance by the bank with what plaintiff considered
as a perfected contract of sale, which demands were in
one form or another refused by the bank. As detailed
by the trial court in its decision, on November 17, 1987
plaintiffs through a letter to defendant Rivera tendered
payment of the amount of P5.5 million "pursuant to theperfected sale agreement." Defendants refused to
receive both the payment and the letter. Instead, the
parcels of land involved in the transaction were
advertised by the bank for sale to any interested buyer
Plaintiffs demanded the execution by the bank of the
documents on what was considered as a "perfected
agreement."
(8) The demands were communicated with the Acting
Conservator but the plaintiffs got no response so they
made a second tender of payment (in the same
amount).
(9) For receiving no response for four months, plaintiffs
made a final demand for compliance by the bank with
its obligations under the considered perfected contrac
of sale. In a reply letter by the defendants through
Acting Conservator Encarnacion, they repudiated the
authority of defendant Rivera and claimed that his
dealings with the plaintiffs, particularly his counter
offer of P5.5 Million are unauthorized or illegal. On that
basis, the defendants justified the refusal of the tenders
of payment and the non-compliance with the
obligations under what the plaintiffs considered to be a
perfected contract of sale.
(10) Plaintiffs filed a suit for specific performance with
damages against the bank, its Manager Rivera and
Acting Conservator Encarnacion. The basis of the suit
was that the transaction had with the bank resulted in a
perfected contract of sale, The defendants took the
position that there was no such perfected sale because
the defendant Rivera is not authorized to sell the
property, and that there was no meeting of the minds
as to the price. In the course of the proceedings in the
respondent Court, Carlos Ejercito was substituted in
place of Demetria and Janolo, in view of the assignment
of the latters' rights in the matter in litigation to said
private respondent. During the pendency of theproceedings in the CA, Henry Co and several other
stockholders of the Bank filed an with the Regional Tria
Court of Makatiagainst Encarnacion, Demetria and
Janolo "to declare any perfected sale of the property as
unenforceable and to stop Ejercito from enforcing o
implementing the sale".
(11) The trial Court declared the existence of a
perfected sale and ordered defendant Producers Bank
of the Philippines, upon finality of this decision and
receipt from the plaintiffs the amount of P5.5 Million
to execute in favor of said plaintiffs a deed of absolute
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sale over the aforementioned six (6) parcels of land,
and to immediately deliver to the plaintiffs the owner's
copies of T.C.T., inclusive, for purposes of registration
of the same deed and transfer of the six (6) titles in the
names of the plaintiffs. The CA denied the MR of
petitioners and modified the ruling of the trial court as
to damages (eliminated).
ISSUE: Whether or not there was a perfected contract of sale.
HELD: YES. On the basis of the evidence already in the record
and as appreciated by the lower courts, the inevitable conclusion
is simply that there was a perfected contract of sale.
Article 1318 of the Civil Code enumerates the requisites of a valid
and perfected contract as follows: "(1) Consent of the
contracting parties; (2) Object certain which is the subject matter
of the contract; (3) Cause of the obligation which is established."
There is no dispute on requisite no. 2. The object of the
questioned contract consists of the six (6) parcels of land in Sta.
Rosa, Laguna with an aggregate area of about 101 hectares,
more or less, and covered by Transfer Certificates of Title. There
is, however, a dispute on the first and third requisites.
Petitioners allege that "there is no counter-offer made by the
Bank, and any supposed counter-offer which Rivera (or Co) may
have made is unauthorized. Since there was no counter-offer by
the Bank, there was nothing for Ejercito (in substitution of
Demetria and Janolo) to accept." They disputed the factual basis
of the respondent Court's findings that there was an offer made
by Janolo for P3.5 million, to which the Bank counter-offered
P5.5 million. The Court has perused the evidence but cannot find
fault with the said Court's findings of fact. Verily, in a petition
under Rule 45 such as this, errors of fact if there be any - are,
as a rule, not reviewable. The mere fact that respondent Court
(and the trial court as well) chose to believe the evidencepresented by respondent more than that presented by
petitioners is not by itself a reversible error. In fact, such findings
merit serious consideration by the Court, particularly where, as
in this case, said courts carefully and meticulously discussed their
findings. This is basic.
Petitioners also alleged that Demetria's and Janolo's P4.25
million counter-offer in the letter dated September 17,
1987 extinguishedthe Bank's offer of P5.5 million.They disputed
the respondent Court's finding that "there was a meeting of
minds when on 30 September 1987 Demetria and Janolo through
a letter dated September 30, 1987)"accepted" Rivera's counter
offer of P5.5 million.
Indeed, the Court sees no reason to disturb the lower courts'
(both the RTC and the CA) common finding that private
respondents' evidence is more in keeping with truth and logic
that during the meeting on September 28, 1987, Luis Co and
Rivera "confirmed that the P5.5 million price has been passed
upon by the Committee and could no longer be lowered ".
Hence, assuming arguendo that the counter-offer of P4.25
million extinguished the offer of P5.5 million, Luis Co's reiteration
of the said P5.5 million price during the September 28, 1987
meeting revivedthe said offer. And by virtue of the September
30, 1987 letter accepting this revivedoffer, there was a meeting
of the minds, as the acceptance in said letter was absolute and
unqualified.
The Bank's repudiation, through Conservator Encarnacion, of
Rivera's authority and action, particularly the latter's counter
offer of P5.5 million, as being "unauthorized and illegal" came
only on May 12, 1988 or more than seven (7) months after
Janolo' acceptance. Such delay, and the absence of any
circumstance which might have justifiably prevented the Bankfrom acting earlier, clearly characterizes the repudiation as
nothing more than a last-minute attempt on the Bank's part to
get out of a binding contractual obligation.
On Riveras Authority
Be that as it may, and in addition to the foregoing disquisitions
by the Court of Appeals, let us review the question of Rivera's
authority to act and petitioner's allegations that the P5.5 million
counter-offer was extinguished by the P4.25 million revised offer
of Janolo. Here, there are questions of law which could be drawn
from the factual findings of the respondent Court. They alsodelve into the contractual elements of consent and cause.
The authority of a corporate officer in dealing with third persons
may be actual or apparent. From the evidence found by
respondent Court, it is obvious that petitioner Rivera has
apparent or implied authority to act for the Bank in the matter of
selling its acquired assets. In the very recent case ofLimketka
Sons Milling, Inc. vs. Court of Appeals, et. al., the Court, through
Justice Jose A. R. Melo, affirmed the doctrine of apparent
authority as it held that the apparent authority of the officer of
the Bank of P.I. in charge of acquired assets is borne out by
similar circumstances surrounding his dealings with buyers.
To be sure, petitioners attempted to repudiate Rivera's apparent
authority through documents and testimony which seek to
establish Rivera's actualauthority. These pieces of evidence
however, are inherently weak as they consist of Rivera's self-
serving testimony and various inter-office memoranda that
purport to show his limited actual authority, of which private
respondent cannot be charged with knowledge. In any event,
since the issue is apparent authority, the existence of which is
borne out by the respondent Court's findings, the evidence of
actual authority is immaterial insofar as the liability of a
corporation is concerned.
Disposition
The Court denies the petition. The assailed Decision is affirmed
Moreover, petitioner Bank is reprimanded for engaging in forum-
shopping and warned that a repetition of the same or similar
acts will be dealt with more severely. Costs against petitioners.
G.R. No. 92871 August 2, 1991 - MARIA P. VDA. DE JOMOC, ET
AL., petitioners
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