haystack sales

7/31/2019 Haystack Sales

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ROBERTO Z. LAFORTEZA, GONZALO Z. LAFORTEZA, MICHAEL Z. LAFORTEZA, DENNIS Z.LAFORTEZA, and LEA Z. LAFORTEZA, petitioners,

vs.

ALONZO MACHUCA, respondent.

The following facts as found by the Court of Appeals are undisputed:

The property involved consists of a house and lot located at No. 7757 Sherwood Street, MarceloGreen Village, Paraaque, Metro Manila, covered by Transfer Certificate of Title (TCT) No.(220656) 8941 of the Registered of Deeds of Paraaque (Exhibit "D", Plaintiff, record, pp. 331-332). The subject property is registered in the name of the late Francisco Q. Laforteza, although itis conjugal in nature (Exhibit "8", Defendants, record pp. 331-386).

On August 2, 1988, defendant Lea Zulueta-Laforteza executed a Special Power of Attorney infavor of defendants Roberto Z. Laforteza and Gonzalo Z. Laforteza, Jr., appointing both as herAttorney-in-fact authorizing them jointly to sell the subject property and sign any document for thesettlement of the estate of the late Francisco Q. Laforteza (Exh. "A", Plaintiff, record, pp. 323-325).

Likewise on the same day, defendant Michael Z. Laforteza executed a Special Power of Attorneyin favor of defendants Roberto Z. Laforteza and Gonzalo Laforteza, Jr., likewise, granting thesame authority (Exh. "B", record, pp. 326-328) Both agency instruments contained a provisionthat in any document or paper to exercise authority granted, the signature of both attorneys- in-fact must be affixed.

On October 27, 1988, defendant Dennis Z. Laforteza executed a Special Power of Attorney in

favor of defendant Roberto Z. Laforteza for the purpose of selling the subject property (Exh. "C",Plaintiff, record, pp. 329-330). A year later, on October 30, 1989, Dennis Z. Laforteza executedanother Special Power of Attorney in favor of defendants Roberto Z. Laforteza and GonzaloLaforteza, Jr. naming both attorneys-in-fact for the purpose of selling the subject property andsigning any document for the settlement of the estate of the late Francisco Q. Laforteza. Thesubsequent agency instrument (Exh, "2", record, pp. 371-373) contained similar provisions thatboth attorneys-in-fact should sign any document or paper executed in the exercise of theirauthority.1wphi1.nt

In the exercise of the above authority, on January 20, 1989, the heirs of the late Francisco Q.Laforteza represented by Roberto Z. Laforteza and Gonzalo Z. Laforteza, Jr. entered into aMemorandum of Agreement (Contract to Sell) with the plaintiff 2 over the subject property for thesum of SIX HUNDRED THIRTY THOUSAND PESOS (P630,000.00) payable as follows:

(a) P30,000.00 as earnest money, to be forfeited in favor of the defendants if the sale is noteffected due to the fault of the plaintiff;

(b) P600,000.00 upon issuance of the new certificate of title in the name of the late FranciscoQ. Laforteza and upon execution of an extra-judicial settlement of the decedent's estate with salein favor of the plaintiff (Par. 2, Exh. "E", record, pp. 335-336).


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Significantly, the fourth paragraph of the Memorandum of Agreement (Contract to Sell) datedJanuary 20, 1989 (Exh. "E", supra.) contained a provision as follows:

. . . . Upon issuance by the proper Court of the new title, the BUYER-LESSEE shall be notified inwriting and said BUYER-LESSEE shall have thirty (30) days to produce the balance of

P600,000.00 which shall be paid to the SELLER-LESSORS upon the execution of theExtrajudicial Settlement with sale.

On January 20, 1989, plaintiff paid the earnest money of THIRTY THOUSAND PESOS(P30,000.00), plus rentals for the subject property (Exh. "F", Plaintiff, record, p. 339).

On September 18, 1998 3, defendant heirs, through their counsel wrote a letter (Exh. 1,Defendants, record, p. 370) to the plaintiff furnishing the latter a copy of the reconstituted title tothe subject property, advising him that he had thirty (3) days to produce the balance of SIXHUNDRED PESOS (sic) (P600,000.00) under the Memorandum of Agreement which plaintiffreceived on the same date.

On October 18, 1989, plaintiff sent the defendant heirs a letter requesting for an extension of theTHIRTY (30) DAYS deadline up to November 15, 1989 within which to produce the balance ofSIX HUNDRED THOUSAND PESOS (P600,000.00) (Exh. "G", Plaintiff, record, pp. 341-342).Defendant Roberto Z. Laforteza, assisted by his counsel Atty. Romeo L. Gutierrez, signed hisconformity to the plaintiff's letter request (Exh. "G-1 and "G-2", Plaintiff, record, p. 342). Theextension, however, does not appear to have been approved by Gonzalo Z. Laforteza, thesecond attorney-in-fact as his conformity does not appear to have been secured.

On November 15, 1989, plaintiff informed the defendant heirs, through defendant Roberto Z.Laforteza, that he already had the balance of SIX HUNDRED THOUSAND PESOS(P600,000.00) covered by United Coconut Planters Bank Manager's Check No. 000814 datedNovember 15, 1989 (TSN, August 25, 1992, p. 11; Exhs. "H", record, pp. 343-344; "M", records p.350; and "N", record, p. 351). However, the defendants, refused to accept the balance (TSN,August 24, 1992, p. 14; Exhs. "M-1", Plaintiff, record, p. 350; and "N-1", Plaintiff, record, p. 351).Defendant Roberto Z. Laforteza had told him that the subject property was no longer for sale(TSN, October 20, 1992, p. 19; Exh. "J", record, p. 347).

On November 20, 1998 4, defendants informed plaintiff that they were canceling theMemorandum of Agreement (Contract to Sell) in view of the plaintiff's failure to comply with his

contractual obligations (Exh. "3").

Thereafter, plaintiff reiterated his request to tender payment of the balance of SIX HUNDREDTHOUSAND PESOS (P600,000.00). Defendants, however, insisted on the rescission of theMemorandum of Agreement. Thereafter, plaintiff filed the instant action for specific performance.The lower court rendered judgment on July 6, 1994 in favor of the plaintiff, the dispositive portionof which reads:


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WHEREFORE, judgment is hereby rendered in favor of plaintiff Alonzo Machuca and against thedefendant heirs of the late Francisco Q. Laforteza, ordering the said defendants.

(a) To accept the balance of P600,000.00 as full payment of the consideration for thepurchase of the house and lot located at No. 7757 Sherwood Street, Marcelo Green Village,Paraaque, Metro Manila, covered by Transfer Certificate of Title No. (220656) 8941 of theRegistry of Deeds of Rizal Paraaque, Branch;

(b) To execute a registrable deed of absolute sale over the subject property in favor of theplaintiff;

(c) Jointly and severally to pay the plaintiff the sum of P20,000.00 as attorney's fees pluscost of suit.

SO ORDERED. (Rollo, pp. 74-75). 5

Petitioners appealed to the Court of Appeals, which affirmed with modification the decision of thelower court; the dispositive portion of the Decision reads:

WHEREFORE, the questioned decision of the lower court is hereby AFFIRMED with theMODIFICATION that defendant heirs Lea Zulueta-Laforteza, Michael Z. Laforteza, Dennis Z.

Laforteza and Roberto Z. Laforteza including Gonzalo Z. Laforteza, Jr. are hereby ordered to payjointly and severally the sum of FIFTY THOUSAND PESOS (P50,000.00) as moral damages.

SO ORDERED. 6

Motion for Reconsideration was denied but the Decision was modified so as to absolve GonzaloZ. Laforteza, Jr. from liability for the payment of moral damages. 7 Hence this petition wherein thepetitioners raise the following issues:

I. WHETHER THE TRIAL AND APPELLATE COURTS CORRECTLY CONSTRUED THEMEMORANDUM OF AGREEMENT AS IMPOSING RECIPROCAL OBLIGATIONS.

II. WHETHER THE COURTS A QUO CORRECTLY RULED THAT RESCISSION WILLNOT LIE IN THE INSTANT CASE.


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III. WHETHER THE RESPONDENT IS UNDER ESTOPPEL FROM RAISING THEALLEGED DEFECT IN THE SPECIAL POWER OF ATTORNEY DATED 30 OCTOBER 1989EXECUTED BY DENNIS LAFORTEZA.

IV. SUPPOSING EX GRATIA ARGUMENTI THE MEMORANDUM OF AGREEMENT

IMPOSES RECIPROCAL OBLIGATIONS, WHETHER THE PETITIONERS MAY BECOMPELLED TO SELL THE SUBJECT PROPERTY WHEN THE RESPONDENT FAILED TOMAKE A JUDICIAL CONSIGNATION OF THE PURCHASE PRICE?

V. WHETHER THE PETITIONERS ARE IN BAD FAITH SO TO AS MAKE THEM LIABLEFOR MORAL DAMAGES? 8

The petitioners contend that the Memorandum of Agreement is merely a lease agreement with"option to purchase". As it was merely an option, it only gave the respondent a right to purchasethe subject property within a limited period without imposing upon them any obligation topurchase it. Since the respondent's tender of payment was made after the lapse of the optionagreement, his tender did not give rise to the perfection of a contract of sale.

It is further maintained by the petitioners that the Court of Appeals erred in ruling that rescissionof the contract was already out of the question. Rescission implies that a contract of sale wasperfected unlike the Memorandum of Agreement in question which as previously stated isallegedly only an option contract.

Petitioner adds that at most, the Memorandum of Agreement (Contract to Sell) is a mere contract

to sell, as indicated in its title. The obligation of the petitioners to sell the property to therespondent was conditioned upon the issuance of a new certificate of title and the execution ofthe extrajudicial partition with sale and payment of the P600,000.00. This is why possession ofthe subject property was not delivered to the respondent as the owner of the property but only asthe lessee thereof. And the failure of the respondent to pay the purchase price in full preventedthe petitioners' obligation to convey title from acquiring obligatory force.

Petitioners also allege that assuming for the sake of argument that a contract of sale was indeedperfected, the Court of Appeals still erred in holding that respondent's failure to pay the purchaseprice of P600,000.00 was only a "slight or casual breach".

The petitioners also claim that the Court of Appeals erred in ruling that they were not ready tocomply with their obligation to execute the extrajudicial settlement. The Power of Attorney toexecute a Deed of Sale made by Dennis Z. Laforteza was sufficient and necessarily included thepower to execute an extrajudicial settlement. At any rate, the respondent is estopped fromclaiming that the petitioners were not ready to comply with their obligation for he acknowledgedthe petitioners' ability to do so when he requested for an extension of time within which to pay thepurchase price. Had he truly believed that the petitioners were not ready, he would not haveneeded to ask for said extension.


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Finally, the petitioners allege that the respondent's uncorroborated testimony that third personsoffered a higher price for the property is hearsay and should not be given any evidentiary weight.Thus, the order of the lower court awarding moral damages was without any legal basis.

The appeal is bereft of merit.

A perusal of the Memorandum Agreement shows that the transaction between the petitioners andthe respondent was one of sale and lease. The terms of the agreement read:

1. For and in consideration of the sum of PESOS: SIX HUNDRED THIRTY THOUSAND(P630,000.00) payable in a manner herein below indicated, SELLER-LESSOR hereby agree tosell unto BUYER-LESSEE the property described in the first WHEREAS of this Agreement withinsix (6) months from the execution date hereof, or upon issuance by the Court of a new owner's

certificate of title and the execution of extrajudicial partition with sale of the estate of FranciscoLaforteza, whichever is earlier;

2. The above-mentioned sum of PESOS: SIX HUNDRED THIRTY THOUSAND(P630,000.00) shall be paid in the following manner:

P30,000.00 as earnest money and as consideration for this Agreement, which amount shall beforfeited in favor of SELLER-LESSORS if the sale is not effected because of the fault or option ofBUYER-LESSEE;

P600,000.00 upon the issuance of the new certificate of title in the name of the late FranciscoLaforteza and upon the execution of an Extrajudicial Settlement of his estate with sale in favor ofBUYER-LESSEE free from lien or any encumbrances.

3. Parties reasonably estimate that the issuance of a new title in place of the lost one, aswell as the execution of extrajudicial settlement of estate with sale to herein BUYER-LESSEE willbe completed within six (6) months from the execution of this Agreement. It is therefore agreedthat during the six months period, BUYER-LESSEE will be leasing the subject property for sixmonths period at the monthly rate of PESOS: THREE THOUSAND FIVE HUNDRED (P3,500.00).

Provided however, that if the issuance of new title and the execution of Extrajudicial Partition iscompleted prior to the expiration of the six months period, BUYER-LESSEE shall only be liablefor rentals for the corresponding period commencing from his occupancy of the premises to theexecution and completion of the Extrajudicial Settlement of the estate, provided further that if afterthe expiration of six (6) months, the lost title is not yet replaced and the extra judicial partition isnot executed, BUYER-LESSEE shall no longer be required to pay rentals and shall continue tooccupy, and use the premises until subject condition is complied by SELLER-LESSOR;


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4. It is hereby agreed that within reasonable time from the execution of this Agreement andthe payment by BUYER-LESSEE of the amount of P30,000.00 as herein above provided,SELLER-LESSORS shall immediately file the corresponding petition for the issuance of a newtitle in lieu of the lost one in the proper Courts. Upon issuance by the proper Courts of the newtitle, the BUYER-LESSEE shall have thirty (30) days to produce the balance of P600,000.00which shall be paid to the SELLER-LESSORS upon the execution of the Extrajudicial Settlementwith sale. 9

A contract of sale is a consensual contract and is perfected at the moment there is a meeting ofthe minds upon the thing which is the object of the contract and upon the price. 10 From thatmoment the parties may reciprocally demand performance subject to the provisions of the lawgoverning the form of

contracts. 11 The elements of a valid contract of sale under Article 1458 of the Civil Code are (1)consent or meeting of the minds; (2) determinate subject matter and (3) price certain money or itsequivalent. 12

In the case at bench, there was a perfected agreement between the petitioners and therespondent whereby the petitioners obligated themselves to transfer the ownership of and deliverthe house and lot located at 7757 Sherwood St., Marcelo Green Village, Paraaque and therespondent to pay the price amounting to six hundred thousand pesos (P600,000.00). All theelements of a contract of sale were thus present. However, the balance of the purchase price wasto be paid only upon the issuance of the new certificate of title in lieu of the one in the name of thelate Francisco Laforteza and upon the execution of an extrajudicial settlement of his estate. Priorto the issuance of the "reconstituted" title, the respondent was already placed in possession ofthe house and lot as lessee thereof for six months at a monthly rate of three thousand fivehundred pesos (P3,500.00). It was stipulated that should the issuance of the new title and theexecution of the extrajudicial settlement be completed prior to expiration of the six-month period,the respondent would be liable only for the rentals pertaining to the period commencing from thedate of the execution of the agreement up to the execution of the extrajudicial settlement. It was

also expressly stipulated that if after the expiration of the six month period, the lost title was notyet replaced and the extrajudicial partition was not yet executed, the respondent would no longerbe required to pay rentals and would continue to occupy and use the premises until the subjectcondition was complied with the petitioners.

The six-month period during which the respondent would be in possession of the property aslessee, was clearly not a period within which to exercise an option. An option is a contractgranting a privilege to buy or sell within an agreed time and at a determined price. An optioncontract is a separate and distinct contract from that which the parties may enter into upon theconsummation of the option. 1 An option must be supported by consideration. 14 An optioncontract is governed by the second paragraph of Article 1479 of the Civil Code 15, which reads:

Art. 1479. . . .

An accepted unilateral promise to buy or to sell a determinate thing for a price certain is bindingupon the promissor if the promise is supported by a consideration distinct from the price.


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In the present case, the six-month period merely delayed the demandability of the contract of saleand did not determine its perfection for after the expiration of the six-month period, there was anabsolute obligation on the part of the petitioners and the respondent to comply with the terms ofthe sale. The parties made a "reasonable estimate" that the reconstitution the lost title of thehouse and lot would take approximately six months and thus presumed that after six months,both parties would be able to comply with what was reciprocally incumbent upon them. The factthat after the expiration of the six-month period, the respondent would retain possession of thehouse and lot without need of paying rentals for the use therefor, clearly indicated that the partiescontemplated that ownership over the property would already be transferred by that time.

The issuance of the new certificate of title in the name of the late Francisco Laforteza and theexecution of an extrajudicial settlement of his estate was not a condition which determined theperfection of the contract of sale. Petitioners' contention that since the condition was not met,they no longer had an obligation to proceed with the sale of the house and lot is unconvincing.The petitioners fail to distinguish between a condition imposed upon the perfection of the contractand a condition imposed on the performance of an obligation. Failure to comply with the first

condition results in the failure of a contract, while the failure to comply with the second conditiononly gives the other party the option either to refuse to proceed with the sale or to waive thecondition. Thus, Art. 1545 of the Civil Code states:

Art. 1545. Where the obligation of either party to a contract of sale is subject to anycondition which is not performed, such party may refuse to proceed with the contract or he maywaive performance of the condition. If the other party has promised that the condition shouldhappen or be performed, such first mentioned party may also treat the nonperformance of thecondition as a breach of warranty.

Where the ownership in the things has not passed, the buyer may treat the fulfillment by the sellerof his obligation to deliver the same as described and as warranted expressly or by implication inthe contract of sale as a condition of the obligation of the buyer to perform his promise to acceptand pay for the thing. 16

In the case at bar, there was already a perfected contract. The condition was imposed only on theperformance of the obligations contained therein. Considering however that the title waseventually "reconstituted" and that the petitioners admit their ability to execute the extrajudicialsettlement of their father's estate, the respondent had a right to demand fulfillment of thepetitioners' obligation to deliver and transfer ownership of the house and lot.

What further militates against petitioners' argument that they did not enter into a contract or saleis the fact that the respondent paid thirty thousand pesos (P30,000.00) as earnest money.Earnest money is something of value to show that the buyer was really in earnest, and given tothe seller to bind the bargain. 17 Whenever earnest money is given in a contract of sale, it isconsidered as part of the purchase price and proof of the perfection of the contract. 18


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We do not subscribe to the petitioners' view that the Memorandum Agreement was a contract tosell. There is nothing contained in the Memorandum Agreement from which it can reasonably bededuced that the parties intended to enter into a contract to sell, i.e. one whereby the prospectiveseller would explicitly reserve the transfer of title to the prospective buyer, meaning, theprospective seller does not as yet agree or consent to transfer ownership of the property subjectof the contract to sell until the full payment of the price, such payment being a positive suspensivecondition, the failure of which is not considered a breach, casual or serious, but simply an eventwhich prevented the obligation from acquiring any obligatory force. 19 There is clearly no expressreservation of title made by the petitioners over the property, or any provision which wouldimpose non-payment of the price as a condition for the contract's entering into force. Although thememorandum agreement was also denominated as a "Contract to Sell", we hold that the partiescontemplated a contract of sale. A deed of sale is absolute in nature although denominated aconditional sale in the absence of a stipulation reserving title in the petitioners until full payment ofthe purchase price. 20 In such cases, ownership of the thing sold passes to the vendee uponactual or constructive delivery thereof. 21 The mere fact that the obligation of the respondent topay the balance of the purchase price was made subject to the condition that the petitioners firstdeliver the reconstituted title of the house and lot does not make the contract a contract to sell forsuch condition is not inconsistent with a contract of sale. 22

The next issue to be addressed is whether the failure of the respondent to pay the balance of thepurchase price within the period allowed is fatal to his right to enforce the agreement.

We rule in the negative.

Admittedly, the failure of the respondent to pay the balance of the purchase price was a breach ofthe contract and was a ground for rescission thereof. The extension of thirty (30) days allegedlygranted to the respondent by Roberto Z. Laforteza (assisted by his counsel Attorney RomeoGutierrez) was correctly found by the Court of Appeals to be ineffective inasmuch as the

signature of Gonzalo Z. Laforteza did not appear thereon as required by the Special Powers ofAttorney. 2 However, the evidence reveals that after the expiration of the six-month periodprovided for in the contract, the petitioners were not ready to comply with what was incumbentupon them, i.e. the delivery of the reconstituted title of the house and lot. It was only onSeptember 18, 1989 or nearly eight months after the execution of the Memorandum ofAgreement when the petitioners informed the respondent that they already had a copy of thereconstituted title and demanded the payment of the balance of the purchase price. Therespondent could not therefore be considered in delay for in reciprocal obligations, neither partyincurs in delay if the other party does not comply or is not ready to comply in a proper mannerwith what was incumbent upon him. 24

Even assuming for the sake of argument that the petitioners were ready to comply with theirobligation, we find that rescission of the contract will still not prosper. The rescission of a sale ofan immovable property is specifically governed by Article 1592 of the New Civil Code, whichreads:

In the sale of immovable property, even though it may have been stipulated that upon failure topay the price at the time agreed upon the rescission of the contract shall of right take place, thevendee may pay, even after the expiration of the period, as long as no demand for rescission of


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the contract has been made upon him either judicially or by a notarial act. After the demand, thecourt may not grant him a new term. 25

It is not disputed that the petitioners did not make a judicial or notarial demand for rescission. TheNovember 20, 1989 letter of the petitioners informing the respondent of the automatic rescission

of the agreement did not amount to a demand for rescission, as it was not notarized. 26 It wasalso made five days after the respondent's attempt to make the payment of the purchase price.This offer to pay prior to the demand for rescission is sufficient to defeat the petitioners' rightunder article 1592 of the Civil Code. 27 Besides, the Memorandum Agreement between theparties did not contain a clause expressly authorizing the automatic cancellation of the contractwithout court intervention in the event that the terms thereof were violated. A seller cannotunilaterally and extrajudicially rescind a contract or sale where there is no express stipulationauthorizing him to extrajudicially rescind. 28 Neither was there a judicial demand for therescission thereof. Thus, when the respondent filed his complaint for specific performance, theagreement was still in force inasmuch as the contract was not yet rescinded. At any rate,considering that the six-month period was merely an approximation of the time if would take toreconstitute the lost title and was not a condition imposed on the perfection of the contract andconsidering further that the delay in payment was only thirty days which was caused by the

respondents justified but mistaken belief that an extension to pay was granted to him, we agreewith the Court of Appeals that the delay of one month in payment was a mere casual breach thatwould not entitle the respondents to rescind the contract. Rescission of a contract will not bepermitted for a slight or casual breach, but only such substantial and fundamental breach aswould defeat the very object of the parties in making the agreemant. 29

Petitioners' insistence that the respondent should have consignated the amount is notdeterminative of whether respondent's action for specific performance will lie. Petitionersthemselves point out that the effect of cansignation is to extinguish the obligation. It releases thedebtor from responsibility therefor. 30 The failure of the respondent to consignate theP600,000.00 is not tantamount to a breach of the contract for by the fact of tendering payment, hewas willing and able to comply with his obligation.

The Court of Appeals correctly found the petitioners guilty of bad faith and awarded moraldamages to the respondent. As found by the said Court, the petitioners refused to comply with,their obligation for the reason that they were offered a higher price therefor and the respondentwas even offered P100,000.00 by the petitioners' lawyer, Attorney Gutierrez, to relinquish hisrights over the property. The award of moral damages is in accordance with Article 1191 31 of theCivil Code pursuant to Article 2220 which provides that moral damages may be awarded in caseof breach of contract where the defendant acted in bad faith. The amount awarded depends onthe discretion of the court based on the circumstances of each

case. 32 Under the circumstances, the award given by the Court of Appeals amounting to

P50,000.00 appears to us to be fair and reasonable.

ACCORDINGLY, the decision of the Court of Appeals in CA G.R. CV No. 47457 is AFFIRMEDand the instant petition is hereby DENIED.

No pronouncement as to costs.


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JAIME GUINHAWA, G.R. No. 162822

Petitioner,

Present:

PUNO, J., Chairman,

AUSTRIA-MARTINEZ,

- versus - CALLEJO, SR.,

TINGA, and

CHICO-NAZARIO, JJ.

Promulgated:

PEOPLE OF THE PHILIPPINES,

Respondent. August 25, 2005

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

CALLEJO, SR., J.:

Jaime Guinhawa was engaged in the business of selling brand new motor vehicles, includingMitsubishi vans, under the business name of Guinrox Motor Sales. His office and display roomfor cars were located along Panganiban Avenue, Naga City. He employed Gil Azotea as hissales manager.

On March 17, 1995, Guinhawa purchased a brand new Mitsubishi L-300 Versa Van with MotorNo. 4D56A-C8929 and Serial No. L069WQZJL-07970 from the Union Motors Corporation (UMC)in Paco, Manila. The van bore Plate No. DLK 406. Guinhawas driver, Leopoldo Olayan, drovethe van from Manila to Naga City. However, while the van was traveling along the highway inLabo, Daet, Camarines Norte, Olayan suffered a heart attack. The van went out of control,traversed the highway onto the opposite lane, and was ditched into the canal parallel to thehighway.[1] The van was damaged, and the left front tire had to be replaced.


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The incident was reported to the local police authorities and was recorded in the police blotter.[2]The van was repaired and later offered for sale in Guinhawas showroom.[3]

Sometime in October 1995, the spouses Ralph and Josephine Silo wanted to buy a new van fortheir garment business; they purchased items in Manila and sold them in Naga City.[4] Theywent to Guinhawas office, and were shown the L -300 Versa Van which was on display. Thecouple inspected its interior portion and found it beautiful. They no longer inspected the underchassis since they presumed that the vehicle was brand new.[5] Unaware that the van had beendamaged and repaired on account of the accident in Daet, the couple decided to purchase thevan for P591,000.00. Azotea suggested that the couple make a downpayment of P118,200.00,and pay the balance of the purchase price by installments via a loan from the United CoconutPlanters Bank (UCPB), Naga Branch, with the L-300 Versa Van as collateral. Azotea offered tomake the necessary arrangements with the UCPB for the consummation of the loan transaction.The couple agreed. On November 10, 1995, the spouses executed a Promissory Note[6] for theamount of P692,676.00 as payment of the balance on the purchase price, and as evidence of thechattel mortgage over the van in favor of UCPB.

On October 11, 1995, the couple arrived in Guinhawas office to take delivery of the van.Guinhawa executed the deed of sale, and the couple paid the P161,470.00 downpayment, forwhich they were issued Receipt No. 0309.[7] They were furnished a Service Manual[8] whichcontained the warranty terms and conditions. Azotea instructed the couple on how to start thevan and to operate its radio. Ralph Silo no longer conducted a test drive; he and his wifeassumed that there were no defects in the van as it was brand new.[9]

On October 12, 1995, Josephine Silo, accompanied by Glenda Pingol, went to Manila on boardthe L-300 Versa Van, with Glendas husband, Bayani Pingol III, as the driver. Their trip to Manila

was uneventful. However, on the return trip to Naga from Manila on October 15 or 16, 1995,Bayani Pingol heard a squeaking sound which seemed to be coming from underneath the van.They were in Calauag, Quezon, where there were no humps along the road.[10] Pingol stoppedthe van in Daet, Camarines Norte, and examined the van underneath, but found no abnormalitiesor defects.[11] But as he drove the van to Naga City, the squeaking sound persisted.

Believing that the van merely needed grease, Pingol stopped at a Shell gasoline station where itwas examined. The mechanic discovered that some parts underneath the van had been welded.When Pingol complained to Guinhawa, the latter told him that the defects were mere factorydefects. As the defects persisted, the spouses Silo requested that Guinhawa change the vanwith two Charade-Daihatsu vehicles within a week or two, with the additional costs to be takenfrom their downpayment. Meanwhile, the couple stopped paying the monthly amortization ontheir loan, pending the replacement of the van. Guinhawa initially agreed to the couples

proposal, but later changed his mind and told them that he had to sell the van first. The spousesthen brought the vehicle to the Rx Auto Clinic in Naga City for examination. Jesus Rex Raquitico,Jr., the mechanic, examined the van and discovered that it was the left front stabilizer that wasproducing the annoying sound, and that it had been repaired.[12] Raquitico prepared a JobOrder containing the following notations and recommendations:

1. CHECK UP SUSPENSION (FRONT)


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2. REPLACE THE ROD END

3. REPLACE BUSHING

NOTE: FRONT STEP BOARD HAS BEEN ALREADY DAMAGED AND REPAIRED.

NOTE: FRONT LEFT SUSPENSION MOUNTING IS NOT ON SPECIFIEDALIGNMENT/MEASUREMENT[13]

Josephine Silo filed a complaint for the rescission of the sale and the refund of their money beforethe Department of Trade and Industry (DTI). During the confrontation between her andGuinhawa, Josephine learned that Guinhawa had bought the van from UMC before it was sold tothem, and after it was damaged in Daet. Subsequently, the spouses Silo withdrew theircomplaint from the DTI.

On February 14, 1996, Josephine Silo filed a criminal complaint for violation of paragraph 1,Article 318 of the Revised Penal Code against Guinhawa in the Office of the City Prosecutor ofNaga City. After the requisite investigation, an Information was filed against Guinhawa in theMunicipal Trial Court (MTC) of Naga City. The inculpatory portion reads:

The undersigned Assistant Prosecutor of Naga City accuses Jaime Guinhawa of the crime ofOTHER DECEITS defined and penalized under Art. 318, par. 1 of the Revised Penal Code,committed as follows:

That on or about October 11, 1995, in the City of Naga, Phi lippines, and within the jurisdiction ofthis Honorable Court, the said accused, being a motor vehicle dealer using the trade name ofGuinhawa Motor Sales at Panganiban Avenue, Naga City, and a dealer of brand new cars, bymeans of false pretenses and fraudulent acts, did then and there willfully, unlawfully andfeloniously defraud private complainant, JOSEPHINE P. SILO, as follows: said accused bymeans of false manifestations and fraudulent representations, sold to said private complainant,as brand new, an automobile with trade name L-300 Versa Van colored beige and the latter paidfor the same in the amount of P591,000.00, when, in truth and in fact, the same was not brandnew because it was discovered less than a month after it was sold to said Josephine P. Silo thatsaid L-300 Versa Van had defects in the underchassis and stepboard and repairs had alreadybeen done thereat even before said sale, as was found upon check-up by an auto mechanic; thatprivate complainant returned said L-300 Versa Van to the accused and demanded its

replacement with a new one or the return of its purchase price from said accused but despitefollow-up demands no replacement was made nor was the purchase price returned to privatecomplainant up to the present to her damage and prejudice in the amount of P591,000.00,Philippine Currency, plus other damages that may be proven in court.[14]


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Guinhawa testified that he was a dealer of brand new Toyota, Mazda, Honda and Mitsubishi cars,under the business name Guinrox Motor Sales. He purchased Toyota cars from ToyotaPhilippines, and Mitsubishi cars from UMC in Paco, Manila.[15] He bought the van from the UMCin March 1995, but did not use it; he merely had it displayed in his showroom in Naga City.[16]He insisted that the van was a brand new unit when he sold it to the couple.[17] The spousesSilo bought the van and took delivery only after inspecting and taking it for a road tests.[18] Hissales manager, Azotea, informed him sometime in November 1995 that the spouses Silo hadcomplained about the defects under the left front portion of the van. By then, the van had akilometer reading of 4,000 kilometers.[19] He insisted that he did not make any false statementor fraudulent misrepresentation to the couple about the van, either before or simultaneous with itspurchase. He posited that the defects noticed by the couple were not major ones, and could berepaired. However, the couple refused to have the van repaired and insisted on a refund of theirpayment for the van which he could not allow. He then had the defects repaired by the UMC.[20]He claimed that the van was never involved in any accident, and denied that his driver, Olayan,met an accident and sustained physical injuries when he drove the van from Manila to NagaCity.[21] He even denied meeting Bayani Pingol.

The accused claimed that the couple filed a Complaint[22] against him with the DTI on January

25, 1996, only to withdraw it later.[23] The couple then failed to pay the amortizations for the van,which caused the UCPB to file a petition for the foreclosure of the chattel mortgage and the saleof the van at public auction.[24]

Azotea testified that he had been a car salesman for 16 years and that he sold brand newvans.[25] Before the couple took delivery of the vehicle, Pingol inspected its exterior, interior, andunderside, and even drove it for the couple.[26] He was present when the van was brought to theRx Auto Clinic, where he noticed the dent on its front side.[27] He claimed that the van neverfigured in any vehicular accident in Labo, Daet, Camarines Norte on March 17, 1995.[28] In fact,he declared, he found no police record of a vehicular accident involving the van on the saiddate.[29] He admitted that Olayan was their driver, and was in charge of taking delivery of carspurchased from the manufacturer in Manila.[30]

On November 6, 2001, the trial court rendered judgment convicting Guinhawa. The fallo of thedecision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring the accused, JAIMEGUINHAWA, guilty of the crime of Other Deceits defined and penalized under Art. 318(1) of theRevised Penal Code, the prosecution having proven the guilt of the accused beyond reasonabledoubt and hereby imposes upon him the penalty of imprisonment from 2 months and 1 day to 4months of Arresto Mayor and a fine of One Hundred Eighty Thousand Seven Hundred and

Eleven Pesos (P180,711.00) the total amount of the actual damages caused to privatecomplainant.

As to the civil aspect of this case which have been deemed instituted with this criminal case,Articles 2201 and 2202 of the Civil Code provides:


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Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted ingood faith is liable shall be those that are the natural and probable consequences of the breach ofthe obligation, and which the parties have foreseen or could have reasonably foreseen at the timethe obligation was constituted.

In case of fraud, malice or wanton attitude, the obligorshall be responsible for all damages whichmay be reasonably attributed to the non-performance of the obligation.

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which arethe natural and probable consequences of the act or omission complained of. It is not necessarythat such damages have been foreseen or could have reasonably been foreseen by thedefendant.

Thus, accused is condemned to pay actual damages in the amount of One Hundred EightyThousand Seven Hundred and Eleven Pesos (Php180,711.00), which represents the 20%downpayment and other miscellaneous expenses paid by the complainant plus the amount ofNineteen Thousand Two Hundred Forty-One (Php19,241.00) Pesos, representing the 1stinstallment payment made by the private complainant to the bank. Accused is, likewise, orderedto pay moral damages in the amount of One Hundred Thousand Pesos (Php100,000.00) in viewof the moral pain suffered by the complainant; for exemplary damages in the amount of TwoHundred Thousand Pesos (Php200,000.00) to serve as deterrent for those businessmen similarlyinclined to take undue advantage over the publics innocence. As for attorneys fees, thereasonable amount of One Hundred Thousand Pesos (Php100,000.00) is hereby awarded.

SO ORDERED.[31]

The trial court declared that the accused made false pretenses or misrepresentations that the vanwas a brand new one when, in fact, it had figured in an accident in Labo, Daet, Camarines Norte,and sustained serious damages before it was sold to the private complainant.

Guinhawa appealed the decision to the Regional Trial Court (RTC) of Naga City, Branch 19, inwhich he alleged that:

1. The lower court erred in its finding that the repair works on the left front portion andunderchassis of the van was the result of the accident in Labo, Camarines Norte, where its driversuffered an attack of hypertension.

2. The lower court erred in its four (4) findings of fact that accused-appellant mademisrepresentation or false pretenses that the van was a brand new car, which constituted deceitas defined in Article 318, paragraph 1 of the Revised Penal Code.


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3. The lower court erred in finding accused-appellant civilly liable to complainant JosephineSilo. But, even if there be such liability, the action therefor has already prescribed and theamount awarded was exhorbitant, excessive and unconscionable.[32]

Guinhawa insisted that he never talked to the couple about the sale of the van; hence, could nothave made any false pretense or misrepresentation.

On August 1, 2002, the RTC affirmed the appealed judgment.[33]

Guinhawa filed a petition for review with the Court of Appeals (CA), where he averred that:

I

THE COURT A QUO ERRED IN CONVICTING PETITIONER OF THE CRIME OF OTHERDECEITS AND SENTENCING HIM TO SUFFER IMPRISONMENT OF TWO MONTHS ANDONE DAY TO FOUR MONTHS OF ARRESTO MAYOR AND TO PAY FINE IN THE AMOUNTOF P180,711.00.

II

THE COURT A QUO ERRED IN ORDERING PETITIONER TO PAY PRIVATE COMPLAINANT

P180,711.00 AS DOWNPAYMENT, P19,241.00 AS FIRST INSTALLMENT WITH UCPB NAGA,P100,000.00 AS MORAL DAMAGES, P200,000.00 AS EXEMPLARY DAMAGES ANDP100,000.00 AS ATTORNEYS FEES.[34]

On January 5, 2004, the CA rendered judgment affirming with modification the decision of theRTC. The fallo of the decision reads:

WHEREFORE, premises considered, the instant petition is hereby partially granted insofar as the

following are concerned: a) the award of moral damages is hereby REDUCED to P10,000.00 andb) the award of attorneys fees and exemplary damages are hereby DELETED for lack of factualbasis. In all other respects, We affirm the decision under review.

Costs against petitioner.


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SO ORDERED.[35]

The CA ruled that the private complainant had the right to assume that the van was brand

new because Guinhawa held himself out as a dealer of brand new vans. According to theappellate court, the act of displaying the van in the showroom without notice to any would-bebuyer that it was not a brand new unit was tantamount to deceit. Thus, in concealing the vanstrue condition from the buyer, Guinhawa committed deceit.

The appellate court denied Guinhawas motion for reconsideration, prompting him to file thepresent petition for review on certiorari, where he contends:

I

THE COURT A QUO ERRED IN NOT HOLDING THAT THE INFORMATION CHARGEDAGAINST PETITIONER DID NOT INFORM HIM OF A CHARGE OF OTHER DECEITS.

II

THE COURT A QUO ERRED IN HOLDING THAT PETITIONER EMPLOYED FRAUD ORDECEIT AS DEFINED UNDER ARTICLE 318, REVISED PENAL CODE.

III

THE COURT A QUO ERRED IN NOT CONSIDERING THE CIRCUMSTANCES POINTING TOTHE INNOCENCE OF THE PETITIONER.[36]

The issues for resolution are (1) whether, under the Information, the petitioner was charged ofother deceits under paragraph 1, Article 318 of the Revised Penal Code; and (2) whether therespondent adduced proof beyond reasonable doubt of the petitioners guilt for the crimecharged.

The petitioner asserts that based on the allegations in the Information, he was charged withestafa through false pretenses under paragraph 2, Article 315 of the Revised Penal Code.Considering the allegation that the private complainant was defrauded of P591,000.00, it is theRTC, not the MTC, which has exclusive jurisdiction over the case. The petitioner maintains thathe is not estopped from assailing this matter because the trial courts lack of jurisdiction can beassailed at any time, even on appeal, which defect cannot even be cured by the evidenceadduced during the trial. The petitioner further avers that he was convicted of other deceits under


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paragraph 1, Article 318 of the Revised Penal Code, a crime for which he was not charged;hence, he was deprived of his constitutional right to be informed of the nature of the chargeagainst him. And in any case, even if he had been charged of other deceits under paragraph 1 ofArticle 318, the CA erred in finding him guilty. He insists that the private complainant merelyassumed that the van was brand new, and that he did not make any misrepresentation to thateffect. He avers that deceit cannot be committed by concealment, the absence of any notice tothe public that the van was not brand new does not amount to deceit. He posits that based onthe principle of caveat emptor, if the private complainant purchased the van without firstinspecting it, she must suffer the consequences. Moreover, he did not attend to the privatecomplainant when they examined the van; thus, he could not have deceived them.

The petitioner maintains that, absent evidence of conspiracy, he is not criminally liable for anyrepresentation Azotea may have made to the private complainant, that the van was brand new.He insists that the respondent was estopped from adducing evidence that the vehicle wasinvolved in an accident in Daet, Camarines Norte on March 17, 1995, because such fact was notalleged in the Information.

In its comment on the petition, the Office of the Solicitor General avers that, as gleaned from thematerial averments of the Information, the petitioner was charged with other deceits underparagraph 1, Article 318 of the Revised Penal Code, a felony within the exclusive jurisdiction ofthe MTC. The petitioner was correctly charged and convicted, since he falsely claimed that thevehicle was brand new when he sold the same to the private complainant. The petitionersconcealment of the fact that the van sustained serious damages as an aftermath of the accidentin Daet, Camarines Norte constituted deceit within the meaning of paragraph 1 of Article 318.

The Information filed against the petitioner reads:

That on or about October 11, 1995, in the City of Naga, Philippines, and within the jurisdiction ofthis Honorable Court, the said accused, being a motor vehicle dealer using the trade name ofGuinhawa Motor Sales at Panganiban Avenue, Naga City, and dealer of brand new cars, bymeans of false pretenses and fraudulent acts, did then and there, willfully, unlawfully andfeloniously defraud private complainant, JOSEPHINE P. SILO, as follows: said accused bymeans of false manifestations and fraudulent representations, sold to said private complainant,as brand new, an automobile with trade name L-300 Versa Van colored beige and the latter paidfor the same in the amount of P591,000.00, when, in truth and in fact, the same was not brandnew because it was discovered less than a month after it was sold to said Josephine P. Silo thatsaid L-300 Versa Van had defects in the underchassis and stepboard and repairs have alreadybeen done thereat even before said sale, as was found upon check-up by an auto mechanic; thatprivate complainant returned said L-300 Versa Van to the accused and demanded itsreplacement with a new one or the return of its purchase price from said accused but despitefollow-up demands no replacement was made nor was the purchase price returned to privatecomplainant up to the present to her damage and prejudice in the amount of P591,000.00,Philippine Currency, plus other damages that may be proven in court.

CONTRARY TO LAW.[37]


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Section 6, Rule 110 of the Rules of Criminal Procedure requires that the Information must allegethe acts or omissions complained of as constituting the offense:

SEC. 6. Sufficiency of complaint or information. A complaint or information is sufficient if itstates the name of the accused; the designation of the offense given by the statute; the acts oromissions complained of as constituting the offense; the name of the offended party; theapproximate date of the commission of the offense; and the place where the offense wascommitted.

When an offense is committed by more than one person, all of them shall be included in thecomplaint or information.

The real nature of the offense charged is to be ascertained by the facts alleged in the body of theInformation and the punishment provided by law, not by the designation or title or caption givenby the Prosecutor in the Information.[38] The Information must allege clearly and accurately theelements of the crime charged.[39]

As can be gleaned from its averments, the Information alleged the essential elements of thecrime under paragraph 1, Article 318 of the Revised Penal Code.

The false or fraudulent representation by a seller that what he offers for sale is brand new (when,in fact, it is not) is one of those deceitful acts envisaged in paragraph 1, Article 318 of the RevisedPenal Code. The provision reads:

Art. 318. Other deceits. The penalty of arresto mayor and a fine of not less than the amount ofthe damage caused and not more than twice such amount shall be imposed upon any personwho shall defraud or damage another by any other deceit not mentioned in the preceding articlesof this chapter.

This provision was taken from Article 554 of the Spanish Penal Code which provides:

El que defraudare o perjudicare a otro, usando de cualquier engao que no se halleexpresado en los artculos anteriores de esta seccin, ser castigado con una multa del tanto alduplo del perjuicio que irrogare; y en caso de reincidencia, con la del duplo y arresto mayor en sugrado medio al mximo.


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For one to be liable for other deceits under the law, it is required that the prosecution mustprove the following essential elements: (a) false pretense, fraudulent act or pretense other thanthose in the preceding articles;

(b) such false pretense, fraudulent act or pretense must be made or executed prior to orsimultaneously with the commission of the fraud; and (c) as a result, the offended party suffereddamage or prejudice.[40] It is essential that such false statement or fraudulent representationconstitutes the very cause or the only motive for the private complainant to part with her property.

The provision includes any kind of conceivable deceit other than those enumerated in Articles315 to 317 of the Revised Penal Code.[41] It is intended as the catchall provision for thatpurpose with its broad scope and intendment.[42]

Thus, the petitioners reliance on paragraph 2(a), Article 315 of the Revised Penal Code ismisplaced. The said provision reads:

2. By means of any of the following false pretenses or fraudulent acts executed prior to orsimultaneously with the commission of the fraud:

(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications,property, credit, agency, business or imaginary transactions; or by means of other similar deceits.

The fraudulent representation of the seller, in this case, that the van to be sold is brand new, isnot the deceit contemplated in the law. Under the principle of ejusdem generis, where astatement ascribes things of a particular class or kind accompanied by words of a genericcharacter, the generic words will usually be limited to things of a similar nature with thoseparticularly enumerated unless there be something in the context to the contrary.[43]

Jurisdiction is conferred by the Constitution or by law. It cannot be conferred by the will of theparties, nor diminished or waived by them. The jurisdiction of the court is determined by the

averments of the complaint or Information, in relation to the law prevailing at the time of the filingof the criminal complaint or Information, and the penalty provided by law for the crime charged atthe time of its commission.

Section 32 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691, provides thatthe MTC has exclusive jurisdiction over offenses punishable with imprisonment not exceeding sixyears, irrespective of the amount of the fine:


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Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal CircuitTrial Courts in Criminal Cases. Except in cases falling within the exclusive original jurisdictionof Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal TrialCourts, and Municipal Circuit Trial Courts shall exercise:

(1) Exclusive original jurisdiction over all violations of city or municipal ordinances committedwithin their respective territorial jurisdiction; and

(2) Exclusive original jurisdiction over all offenses punishable with imprisonment notexceeding six (6) years irrespective of the amount of fine, and regardless of other imposableaccessory or other penalties, including the civil liability arising from such offenses or predicatedthereon, irrespective of kind, nature, value or amount thereof: Provided, however, That inoffenses involving damage to property through criminal negligence, they shall have exclusiveoriginal jurisdiction thereof.

Since the felony of other deceits is punishable by arresto mayor, the MTC had exclusivejurisdiction over the offense lodged against the petitioner.

On the merits of the petition, the Court agrees with the petitioners contention that there is noevidence on record that he made direct and positive representations or assertions to the privatecomplainant that the van was brand new. The record shows that the private complainant and herhusband Ralph Silo were, in fact, attended to by Azotea. However, it bears stressing that the

representation may be in the form of words, or conduct resorted to by an individual to serve as anadvantage over another. Indeed, as declared by the CA based on the evidence on record:

Petitioner cannot barefacedly claim that he made no personal representation that the hereinsubject van was brand new for the simple reason that nowhere in the records did he ever refutethe allegation in the complaint, which held him out as a dealer of brand new cars. It has thusbecome admitted that the petitioner was dealing with brand new vehicles a fact which, up tonow, petitioner has not categorically denied. Therefore, when private complainant went topetitioners showroom, the former had every right to assume that she was being sold brand newvehicles there being nothing to indicate otherwise. But as it turned out, not only did privatecomplainant get a defective and used van, the vehicle had also earlier figured in a road accidentwhen driven by no less than petitioners own driver.[44]

Indeed, the petitioner and Azotea obdurately insisted in the trial court that the van was brandnew, and that it had never figured in vehicular accident. This representation was accentuated bythe fact that the petitioner gave the Service Manual to the private complainant, which manual


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contained the warranty terms and conditions, signifying that the van was brand new. Believingthis good faith, the private complainant decided to purchase the van for her buy-and-sell andgarment business, and even made a downpayment of the purchase price.

As supported by the evidence on record, the van was defective when the petitioner sold it to the

private complainant. It had ditched onto the shoulder of the highway in Daet, Camarines Norte onits way from Manila to Naga City. The van was damaged and had to be repaired; the rod end andbushing had to be replaced, while the left front stabilizer which gave out a persistent annoyingsound was repaired. Some parts underneath the van were even welded together. Azotea andthe petitioner deliberately concealed these facts from the private complainant when she boughtthe van, obviously so as not to derail the sale and the profit from the transaction.

The CA is correct in ruling that fraud or deceit may be committed by omission. As the Court heldin People v. Balasa:[45]

Fraud, in its general sense, is deemed to comprise anything calculated to deceive, including allacts, omissions, and concealment involving a breach of legal or equitable duty, trust, orconfidence justly reposed, resulting in damage to another, or by which an undue andunconscientious advantage is taken of another. It is a generic term embracing all multifariousmeans which human ingenuity can device, and which are resorted to by one individual to securean advantage over another by false suggestions or by suppression of truth and includes allsurprise, trick, cunning, dissembling and any unfair way by which another is cheated. On theother hand, deceit is the false representation of a matter of fact whether by words or conduct, byfalse or misleading allegations, or by concealment of that which should have been disclosedwhich deceives or is intended to deceive another so that he shall act upon it to his legal injury.[46]

It is true that mere silence is not in itself concealment. Concealment which the law denounces asfraudulent implies a purpose or design to hide facts which the other party sought to know.[47]Failure to reveal a fact which the seller is, in good faith, bound to disclose may generally beclassified as a deceptive act due to its inherent capacity to deceive.[48] Suppression of amaterial fact which a party is bound in good faith to disclose is equivalent to a falserepresentation.[49] Moreover, a representation is not confined to words or positive assertions; itmay consist as well of deeds, acts or artifacts of a nature calculated to mislead another and thusallow the fraud-feasor to obtain an undue advantage.[50]

Fraudulent nondisclosure and fraudulent concealment are of the same genre. Fraudulent

concealment presupposes a duty to disclose the truth and that disclosure was not made whenopportunity to speak and inform was presented, and that the party to whom the duty of disclosure,as to a material fact was due, was induced thereby to act to his injury.[51]

Article 1389 of the New Civil Code provides that failure to disclose facts when there is a duty toreveal them constitutes fraud. In a contract of sale, a buyer and seller do not deal from equalbargaining positions when the latter has knowledge, a material fact which, if communicated to thebuyer, would render the grounds unacceptable or, at least, substantially less desirable.[52] If, in


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a contract of sale, the vendor knowingly allowed the vendee to be deceived as to the thing sold ina material matter by failing to disclose an intrinsic circumstance that is vital to the contract,knowing that the vendee is acting upon the presumption that no such fact exists, deceit isaccomplished by the suppression of the truth.[53]

In the present case, the petitioner and Azotea knew that the van had figured in an accident,was damaged and had to be repaired. Nevertheless, the van was placed in the showroom, thusmaking it appear to the public that it was a brand new unit. The petitioner was mandated toreveal the foregoing facts to the private complainant. But the petitioner and Azotea evenobdurately declared when they testified in the court a quo that the vehicle did not figure in anaccident, nor had it been repaired; they maintained that the van was brand new, knowing that theprivate complainant was going to use it for her garment business. Thus, the private complainantbought the van, believing it was brand new.

Significantly, even when the petitioner was apprised that the private complainant had discoveredthe vans defects, the petitioner agreed to replace the van, but changed his mind and insisted that

it must be first sold.

The petitioner is not relieved of his criminal liability for deceitful concealment of materialfacts, even if the private complainant made a visual inspection of the vans interior and exteriorbefore she agreed to buy it and

failed to inspect its under chassis. Case law has it that where the vendee made only a partialinvestigation and relies, in part, upon the representation of the vendee, and is deceived by suchrepresentation to his injury, he may maintain an action for such deceit.[54] The seller cannot beheard to say that the vendee should not have relied upon the fraudulent concealment; thatnegligence, on the part of the vendee, should not be a defense in order to prevent the vendorfrom unjustifiably escaping with the fruits of the fraud.

In one case,[55] the defendant who repainted an automobile, worked it over to resemble anew one and delivered it to the plaintiff was found to have warranted and represented that theautomobile being sold was new. This was found to be a false representation of an existing fact;and, if it was material and induced the plaintiff to accept something entirely different from thatwhich he had contracted for, it clearly was a fraud which, upon its discovery and a tender of theproperty back to the seller, [it] entitled the plaintiff to rescind the trade and recover the purchasemoney.[56]

On the petitioners insistence that the private complainant was proscribed from charging

him with estafa based on the principle of caveat emptor, case law has it that this rule onlyrequires the purchaser to exercise such care and attention as is usually exercised by ordinarilyprudent men in like business affairs, and only applies to defects which are open and patent to theservice of one exercising such care.[57] In an avuncular case, it was held that:

The rule of caveat emptor, like the rule of sweet charity, has often been invoked tocover a multitude of sins; but we think its protecting mantle has never been stretched to thisextent. It can only be applied where it is shown or conceded that the parties to the contract stand


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on equal footing and have equal knowledge or equal means of knowledge and there is no relationof trust or confidence between them. But, where one party undertakes to sell to another propertysituated at a distance and of which he has or claims to have personal knowledge and of which thebuyer knows nothing except as he is informed by the seller, the buyer may rightfully rely on thetruth of the sellers representations as to its kind, quality, and value made in the course ofnegotiation for the purpose of inducing the purchase. If, in such case, the representations proveto be false, neither law nor equity will permit the seller to escape responsibility by the plea that thebuyer ought not to have believed him or ought to have applied to other sources to ascertain thefacts. [58]

It bears stressing that Azotea and the petitioner had every opportunity to reveal to theprivate complainant that the van was defective. They resolved to maintain their silence, to theprejudice of the private complainant, who was a garment merchant and who had no specialknowledge of parts of motor vehicles. Based on the surrounding circumstances, she relied on herbelief that the van was brand new. In fine, she was the innocent victim of the petitionersfraudulent nondisclosure or concealment.

The petitioner cannot pin criminal liability for his fraudulent omission on his general manager,Azotea. The two are equally liable for their collective fraudulent silence. Case law has it thatwherever the doing of a

certain act or the transaction of a given affair, or the performance of certain business is confidedto an agent, the authority to so act will, in accordance with a general rule often referred to, carrywith it by implication the authority to do all of the collateral acts which are the natural and ordinaryincidents of the main act or business authorized.[59]

The MTC sentenced the petitioner to suffer imprisonment of from two months and one day,as minimum, to four months of arresto mayor, as maximum. The CA affirmed the penaltyimposed by the trial court. This is erroneous. Section 2 of Act 4103, as amended, otherwiseknown as the Indeterminate Sentence Law, provides that the law will not apply if the maximumterm of imprisonment does not exceed one year:

SEC. 2. This Act shall not apply to persons convicted of offenses punished with deathpenalty or life-imprisonment; to those convicted of treason, conspiracy or proposal to committreason; to those convicted of misprision of treason, rebellion, sedition or espionage; to thoseconvicted of piracy; to those who are habitual delinquents; to those who shall have escaped fromconfinement or evaded sentence; to those who having been granted conditional pardon by theChief Executive shall have violated the terms thereof; to those whose maximum term ofimprisonment does not exceed one year, not to those already sentenced by final judgment at thetime of approval of this Act, except as provided in Section 5 hereof. (As amended by Act No.4225.)

In this case, the maximum term of imprisonment imposed on the petitioner was four monthsand one day of arresto mayor. Hence, the MTC was proscribed from imposing an indeterminate


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penalty on the petitioner. An indeterminate penalty may be imposed if the minimum of thepenalty is

one year or less, and the maximum exceeds one year. For example, the trial court may imposean indeterminate penalty of six months of arresto mayor, as minimum, to two years and fourmonths of prision correccional, as maximum, since the maximum term of imprisonment it imposedexceeds one year. If the trial court opts to impose a penalty of imprisonment of one year or less,it should not impose an indeterminate penalty, but a straight penalty of one year or less instead.Thus, the petitioner may be sentenced to a straight penalty of one year, or a straight penalty ofless than one year, i.e., ten months or eleven months. We believe that considering the attendantcircumstances, a straight penalty of imprisonment of six months is reasonable.

Conformably with Article 39 in relation to paragraph 3, Article 38 of the Revised Penal Code, thepetitioner shall suffer subsidiary imprisonment if he has no property with which to pay the penaltyof fine.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The assailed Decision andResolution are AFFIRMED WITH MODIFICATION. Considering the surrounding circumstancesof the case, the petitioner is hereby sentenced to suffer a straight penalty of six (6) monthsimprisonment. The petitioner shall suffer subsidiary imprisonment in case of insolvency.

JAIME D. ANG, PETITIONER, VS. COURT OF APPEALS AND BRUNO SOLEDAD,RESPONDENTS.

D E C I S I O N

CARPIO MORALES, J.:

Under a "car-swapping" scheme, respondent Bruno Soledad (Soledad) sold his Mitsubishi GSRsedan 1982 model to petitioner Jaime Ang (Ang) by Deed of Absolute Sale[1] dated July 28,1992. For his part, Ang conveyed to Soledad his Mitsubishi Lancer model 1988, also by Deed ofAbsolute Sale[2] of even date. As Ang's car was of a later model, Soledad paid him an additionalP55,000.00.

Ang, a buyer and seller of used vehicles, later offered the Mitsubishi GSR for sale through FarEastern Motors, a second-hand auto display center. The vehicle was eventually sold to a certainPaul Bugash (Bugash) for P225,000.00, by Deed of Absolute Sale[3] dated August 14, 1992.Before the deed could be registered in Bugash's name, however, the vehicle was seized by virtueof a writ of replevin[4] dated January 26, 1993 issued by the Cebu City Regional Trial Court(RTC), Branch 21 in Civil Case No. CEB-13503, "BA Finance Corporation vs. Ronaldo andPatricia Panes," on account of the alleged failure of Ronaldo Panes, the owner of the vehicle priorto Soledad, to pay the mortgage debt[5] constituted thereon.


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To secure the release of the vehicle, Ang paid BA Finance the amount of P62,038.47[6] on March23, 1993. Soledad refused to reimburse the said amount, despite repeated demands, drawingAng to charge him for Estafa with abuse of confidence before the Office of the City Prosecutor,Cebu City. By Resolution[7] of July 15, 1993, the City Prosecutor's Office dismissed the complaintfor insufficiency of evidence, drawing Ang to file on November 9, 1993 the first[8] of threesuccessive complaints for damages against Soledad before the RTC of Cebu City where it wasdocketed as Civil Case No. Ceb-14883.

Branch 19 of the Cebu City RTC, by Order[9] dated May 4, 1995, dismissed Civil Case No. Ceb-14883 for failure to submit the controversy to barangay conciliation.

Ang thereafter secured a certification to file action and again filed a complaint for damages,[10]docketed as Ceb-17871, with the RTC of Cebu City, Branch 14 which dismissed it, by Order[11]dated March 27, 1996, on the ground that the amount involved is not within its jurisdiction.

Ang thereupon filed on July 15, 1996 with the Municipal Trial Court in Cities (MTCC) acomplaint,[12] docketed as R-36630, the subject of the instant petition.

After trial, the MTCC dismissed the complaint on the ground of prescription, vz:

It appearing that the Deed of Sale to plaintiff o[f] subject vehicle was dated and executed on 28July 1992, the complaint before the Barangay terminated 21 September 1995 per Certification toFile Action attached to the Complaint, and this case eventually was filed with this Court on 15 July1996, this action has already been barred since more than six (6) months elapsed from thedelivery of the subject vehicle to the plaintiff buyer to the filing of this action, pursuant to theaforequoted Article 1571."[13] (Emphasis and underscoring supplied)

His motion for reconsideration having been denied, Ang appealed to the RTC, Branch 7 of whichaffirmed the dismissal of the complaint, albeit it rendered judgment in favor of Ang "for the sake ofjustice and equity, and in consonance with the salutary principle of non-enrichment at another'sexpense." The RTC ratiocinated:

x x x x

[I]t was error for the Court to rely on Art. 1571 of the Civil Code to declare the action as havingprescribed, since the action is not one for the enforcement of the warranty against hidden defects.Moreover, Villostas vs. Court of Appeals declared that the six-month prescriptive period for aredhibitory action applies only to implied warranties. There is here an express warranty. If at all,

what applies is Art. 1144 of the Civil Code, the general law on prescription, which states, interalia, that actions 'upon a written contract' prescribes in ten (10) years [Engineering & MachineryCorporation vs. Court of Appeals, G.R. No. 52267, January 24, 1996].

More appropriate to the discussion would be defendant's warranty against eviction, which heexplicitly made in the Deed of Absolute Sale: I hereby covenant my absolute ownership to (sic)the above-described property and the same is free from all liens and encumbrances and I willdefend the same from all claims or any claim whatsoever..."


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Still the Court finds that plaintiff cannot recover under this warranty. There is no showing ofcompliance with the requisites.

x x x x

Nonetheless, for the sake of justice and equity, and in consonance with the salutary principle ofnon-enrichment at another's expense, defendant should reimburse plaintiff the P62,038.47 whichon March 23, 1993 he paid BA Finance Corporation to release the mortgage on the car.(Emphasis and underscoring supplied)[14]

The RTC thus disposed as follows:

Wherefore, judgment is rendered directing defendant to pay plaintiff P62,038.47, the amount thelatter paid BA Finance Corporation to release the mortgage on the vehicle, with interest at thelegal rate computed from March 23, 1993. Except for this, the judgment in the decision of the trial

court, dated October 8, 2001 dismissing the claims of plaintiff is affirmed." (Underscoringsupplied)[15]

Soledad's Motion for Reconsideration was denied by Order[16] of December 12, 2002, hence, heelevated the case to the Court of Appeals, Cebu City.

The appellate court, by the challenged Decision[17] of August 30, 2006, noting the sole issue tobe resolved whether the RTC erred in directing Soledad to pay Ang the amount the latter paid toBA Finance plus legal interest, held that, following Goodyear Phil., Inc. v. Anthony Sy,[18] Ang"cannot anymore seek refuge under the Civil Code provisions granting award of damages forbreach of warranty against eviction for the simple fact that three years and ten months have

lapsed from the execution of the deed of sale in his favor prior to the filing of the instantcomplaint." It further held:

It bears to stress that the deed of absolute sale was executed on July 28, 1992, and the instantcomplaint dated May 15, 1996 was received by the MTCC on July 15, 1996.

While it is true that someone unjustly enriched himself at the expense of herein respondent, weagree with petitioner (Soledad) that it is not he.

The appellate court accordingly reversed the RTC decision and denied the petition.

By Resolution[19] of April 25, 2007, the appellate court denied Ang's motion for reconsideration, itfurther noting that when Ang settled the mortgage debt to BA Finance, he did so voluntarily inorder to resell the vehicle, hence, Soledad did not benefit from it as he was unaware of themortgage constituted on the vehicle by the previous owner.

The appellate court went on to hold that Soledad "has nothing to do with the transaction anymore;his obligation ended when he delivered the subject vehicle to the respondent upon the perfection


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of the contract of sale." And it reiterated its ruling that the action, being one arising from breachof warranty, had prescribed, it having been filed beyond the 6-month prescriptive period.

The appellate court brushed aside Ang's contention that Soledad was the proximate cause of theloss due to the latter's failure to thoroughly examine and verify the registration and ownership of

the previous owner of the vehicle, given that Ang is engaged in the business of buying and sellingsecond-hand vehicles and is therefore expected to be cautious in protecting his rights under thecircumstances.

Hence, the present recourse - petition for review on certiorari, Ang maintaining that his cause ofaction had not yet prescribed when he filed the complaint and he should not be blamed for payingthe mortgage debt.

To Ang, the ruling in Goodyear v. Sy is not applicable to this case, there being an expresswarranty in the herein subject Deed of Absolute Sale and, therefore, the action based thereonprescribes in ten (10) years following Engineering & Machinery Corp. v. CA[20] which held thatwhere there is an express warranty in the contract, the prescriptive period is the one specified inthe contract or, in the absence thereof, the general rule on rescission of contract.

Ang likewise maintains that he should not be blamed for paying BA Finance and should thus beentitled to reimbursement and damages for, following Carrascoso, Jr. v. Court of Appeals,[21] incase of breach of an express warranty, the seller is liable for damages provided that certainrequisites are met which he insists are present in the case at bar.

The resolution of the sole issue of whether the complaint had prescribed hinges on adetermination of what kind of warranty is provided in the Deed of Absolute Sale subject of thepresent case.

A warranty is a statement or representation made by the seller of goods, contemporaneously andas part of the contract of sale, having reference to the character, quality or title of the goods, andby which he promises or undertakes to insure that certain facts are or shall be as he thenrepresents them.[22]

Warranties by the seller may be express or implied. Art. 1546 of the Civil Code defines express

warranty as follows:

"Art. 1546. Any affirmation of fact or any promise by the seller relating to the thing is an expresswarranty if the natural tendency of such affirmation or promise is to induce the buyer to purchasethe same, and if the buyer purchases the thing relying thereon. No affirmation of the value of thething, nor any statement purporting to be a statement of the seller's opinion only, shall beconstrued as a warranty, unless the seller made such affirmation or statement as an expert and itwas relied upon by the buyer." (Emphasis and underscoring supplied)


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On the other hand, an implied warranty is that which the law derives by application or inferencefrom the nature of the transaction or the relative situation or circumstances of the parties,irrespective of any intention of the seller to create it.[23] Among the implied warranty provisionsof the Civil Code are: as to the seller's title (Art. 1548), against hidden defects and encumbrances(Art. 1561), as to fitness or merchantability (Art. 1562), and against eviction (Art. 1548).

The earlier cited ruling in Engineering & Machinery Corp. states that "the prescriptive period forinstituting actions based on a breach of express warranty is that specified in the contract, and inthe absence of such period, the general rule on rescission of contract, which is four years (Article1389, Civil Code)."

As for actions based on breach of implied warranty, the prescriptive period is, under Art. 1571(warranty against hidden defects of or encumbrances upon the thing sold) and Art. 1548(warranty against eviction), six months from the date of delivery of the thing sold.

The following provision of the Deed of Absolute Sale reflecting the kind of warranty made bySoledad reads:

x x x x

I hereby covenant my absolute ownership to (sic) the above-described property and the same isfree from all liens and encumbrances and I will defend the same from all claims or any claimwhatsoever; will save the vendee from any suit by the government of the Republic of thePhilippines.

x x x x (Emphasis supplied)

In declaring that he owned and had clean title to the vehicle at the time the Deed of Absolute Salewas forged, Soledad gave an implied warranty of title. In pledging that he "will defend the samefrom all claims or any claim whatsoever [and] will save the vendee from any suit by thegovernment of the Republic of the Philippines," Soledad gave a warranty against eviction.

Given Ang's business of buying and selling used vehicles, he could not have merely relied onSoledad's affirmation that the car was free from liens and encumbrances. He was expected tohave thoroughly verified the car's registration and related documents.

Since what Soledad, as seller, gave was an implied warranty, the prescriptive period to file abreach thereof is six months after the delivery of the vehicle, following Art. 1571. But even if thedate of filing of the action is reckoned from the date petitioner instituted his first complaint fordamages on November 9, 1993, and not on July 15, 1996 when he filed the complaint subject ofthe present petition, the action just the same had prescribed, it having been filed 16 months afterJuly 28, 1992, the date of delivery of the vehicle.


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On the merits of his complaint for damages, even if Ang invokes breach of warranty againsteviction as inferred from the second part of the earlier-quoted provision of the Deed of AbsoluteSale, the following essential requisites for such breach, vz:

"A breach of this warranty requires the concurrence of the following circumstances:

(1) The purchaser has been deprived of the whole or part of the thing sold;

(2) This eviction is by a final judgment;

(3) The basis thereof is by virtue of a right prior to the sale made by the vendor; and

(4) The vendor has been summoned and made co-defendant in the suit for eviction at the

instance of the vendee.

In the absence of these requisites, a breach of the warranty against eviction under Article 1547cannot be declared." [24] (Emphasis supplied),

have not been met. For one, there is no judgment which deprived Ang of the vehicle. Foranother, there was no suit for eviction in which Soledad as seller was impleaded as co-defendantat the instance of the vendee.

Finally, even under the principle of solutio indebiti which the RTC applied, Ang cannot recover

from Soledad the amount he paid BA Finance. For, as the appellate court observed, Ang settledthe mortgage debt on his own volition under the supposition that he would resell the car. It turnedout that he did pay BA Finance in order to avoid returning the payment made by the ultimatebuyer Bugash. It need not be stressed that Soledad did not benefit from Ang's paying BAFinance, he not being the one who mortgaged the vehicle, hence, did not benefit from theproceeds thereof.

WHEREFORE, the petition is, in light of the foregoing disquisition, DENIED

NUTRIMIX FEEDS CORPORATION, petitioner,vs.COURT OF APPEALS and SPOUSESEFREN AND MAURA EVANGELISTA, respondents.

D E C I S I O N

CALLEJO, SR., J.:

For review on certiorari is the Decision1 of the Court of Appeals in CA-G.R. CV No. 59615modifying, on appeal, the Joint Decision2 of the Regional Trial Court of Malolos, Bulacan, Branch9, in Civil Case No. 1026-M-933 for sum of money and damages with prayer for issuance of writ


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of preliminary attachment, and Civil Case No. 49-M-944 for damages. The trial court dismissedthe complaint of the respondents, ordering them to pay the petitioner the unpaid value of theassorted animal feeds delivered to the former by the latter, with legal interest thereon from thefiling of the complaint, including attorneys fees.

The Factual Antecedents

On April 5, 1993, the Spouses Efren and Maura Evangelista, the respondents herein, started todirectly procure various kinds of animal feeds from petitioner Nutrimix Feeds Corporation. Thepetitioner gave the respondents a credit period of thirty to forty-five days to postdate checks to beissued in payment for the delivery of the feeds. The accommodation was made apparentlybecause of the company presidents close friendship with Eugenio Evangelista, the brother ofrespondent Efren Evangelista. The various animal feeds were paid and covered by checks withdue dates from July 1993 to September 1993. Initially, the respondents were good payingcustomers. In some instances, however, they failed to issue checks despite the deliveries ofanimal feeds which were appropriately covered by sales invoices. Consequently, the

Sales InvoiceNumber

Date Amount

21334 June 23, 1993 P 7,260.0021420 June 26, 1993 6,990.0021437 June 28, 1993 41,510.0021722 July 12, 1993 45,185.0022048 July 26, 1993 44,540.0022054 July 27, 1993 45,246.0022186 August 2, 1993 84,900.00

Total: P275,631.00===========

respondents incurred an aggregate unsettled account with the petitioner in the amount ofP766,151.00. The breakdown of the unpaid obligation is as follows:

Bank Check Number Due Date AmoUnited Coconut Planters Bank BTS052084 July 30, 1993 P 47,760

-do- BTS052087 July 30, 1993 131,340.-do- BTS052091 July 30, 1993 59,700.0-do- BTS062721 August 4, 1993 47,860.0-do- BTS062720 August 5, 1993 43,780.0-do- BTS062774 August 6, 1993 15,000.0-do- BTS062748 September 11, 1993 47,180.0-do- BTS062763 September 11, 1993 48,440.0-do- BTS062766 September 18, 1993 49,460.0

Total: P490,520

=======When the above-mentioned checks were deposited at the petitioners depository bank, the samewere, consequently, dishonored because respondent Maura Evangelista had already closed heraccount. The petitioner made several demands for the respondents to settle their unpaidobligation, but the latter failed and refused to pay their remaining balance with the petitioner.

On December 15, 1993, the petitioner filed with the Regional Trial Court of Malolos, Bulacan, acomplaint, docketed as Civil Case No. 1026-M-93, against the respondents for sum of money anddamages with a prayer for issuance of writ of preliminary attachment. In their answer withcounterclaim, the respondents admitted their unpaid obligation but impugned their liability to the


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petitioner. They asserted that the nine checks issued by respondent Maura Evangelista weremade to guarantee the payment of the purchases, which was previously determined to beprocured from the expected proceeds in the sale of their broilers and hogs. They contended thatinasmuch as the sudden and massive death of their animals was caused by the contaminatedproducts of the petitioner, the nonpayment of their obligation was based on a just and legalground.

On January 19, 1994, the respondents also lodged a complaint for damages against thepetitioner, docketed as Civil Case No. 49-M-94, for the untimely and unforeseen death of theiranimals supposedly effected by the adulterated animal feeds the petitioner sold to them. Withinthe period to file an answer, the petitioner moved to dismiss the respondents complaint on theground of litis pendentia. The trial court denied the same in a Resolution 5 dated April 26, 1994,and ordered the consolidation of the case with Civil Case No. 1026-M-93. On May 13, 1994, thepetitioner filed its Answer with Counterclaim, alleging that the death of the respondents animalswas due to the widespread pestilence in their farm. The petitioner, likewise, maintained that itreceived information that the respondents were in an unstable financial condition and even soldtheir animals to settle their obligations from other enraged and insistent creditors. It, moreover,theorized that it was the respondents who mixed poison to its feeds to make it appear that thefeeds were contaminated.

A joint trial thereafter ensued.

During the hearing, the petitioner presented Rufino Arenas, Nutrimix Assistant Manager, as itslone witness. He testified that on the first week of August 1993, Nutrimix President EfrenBartolome met the respondents to discuss the possible settlement of their unpaid account. Thesaid respondents still pleaded to the petitioner to continue to supply them with animal feedsbecause their livestock were supposedly suffering from a disease.6

For her part, respondent Maura Evangelista testified that as direct buyers of animal feeds fromthe petitioner, Mr. Bartolome, the company president, gave them a discount of P12.00 per bagand a credit term of forty-five to seventy-five days.7For the operation of the respondents poultryand piggery farm, the assorted animal feeds sold by the petitioner were delivered in their

residence and stored in an adjacent bodega made of concrete wall and galvanized iron sheetroofing with monolithic flooring.8

It appears that in the morning of July 26, 1993, three various kinds of animal feeds, numbering130 bags, were delivered to the residence of the respondents in Sta. Rosa, Marilao, Bulacan. Thedeliveries came at about 10:00 a.m. and were fed to the animals at approximately 1:30 p.m. atthe respondents farm in Balasing, Sta. Maria, Bulacan. At about 8:30 p.m., respondent MauraEvangelista received a radio message from a worker in her farm, warning her that the chickenswere dying at rapid intervals. When the respondents arrived at their farm, they witnessed thedeath of 18,000 broilers, averaging 1.7 kilos in weight, approximately forty-one to forty-five daysold. The broilers then had a prevailing market price of P46.00 per kilo.9

On July 27, 1993, the respondents received another delivery of 160 bags of animal feeds from

the petitioner, some of which were distributed to the contract growers of the respondents. At thattime, respondent Maura Evangelista requested the representative of the petitioner to notify Mr.Bartolome of the fact that their broilers died after having been fed with the an

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