G.R. No.

118509 December 1, 1995

LIMKETKAI SONS MILLING, INC., petitioner,
vs.
COURT OF APPEALS, BANK OF THE PHILIPPINE ISLANDS and NATIONAL BOOK
STORE, respondents.

MELO, J.:
The issue in the petition before us is whether or not there was a perfected contract between
petitioner Limketkai Sons Milling, Inc. and respondent Bank of the Philippine Islands (BPI)
covering the sale of a parcel of land, approximately 3.3 hectares in area, and located in Barrio
Bagong Ilog, Pasig City, Metro Manila.
Branch 151 of the Regional Trial Court of the National Capital Judicial Region stationed in Pasig
ruled that there was a perfected contract of sale between petitioner and BPI. It stated that there
was mutual consent between the parties; the subject matter is definite; and the consideration
was determined. It concluded that all the elements of a consensual contract are attendant. It
ordered the cancellation of a sale effected by BPI to respondent National Book Store (NBS)
while the case was pending and the nullification of a title issued in favor of said respondent
NBS.
Upon elevation of the case to the Court of Appeals, it was held that no contract of sale was
perfected because there was no concurrence of the three requisites enumerated in Article 1318
of the Civil Code. The decision of the trial court was reversed and the complaint dismissed.
Hence, the instant petition.
Shorn of the interpretations given to the acts of those who participated in the disputed sale, the
findings of facts of the trial court and the Court of Appeals narrate basically the same events and
occurrences. The records show that on May 14, 1976, Philippine Remnants Co., Inc. constituted
BPI as its trustee to manage, administer, and sell its real estate property. One such piece of
property placed under trust was the disputed lot, a 33,056-square meter lot at Barrio Bagong
Ilog, Pasig, Metro Manila covered by Transfer Certificate of Title No. 493122.
On June 23, 1988, Pedro Revilla, Jr., a licensed real estate broker was given formal authority by
BPI to sell the lot for P1,000.00 per square meter. This arrangement was concurred in by the
owners of the Philippine Remnants.
Broker Revilla contacted Alfonso Lim of petitioner company who agreed to buy the land. On July
8, 1988, petitioner's officials and Revilla were given permission by Rolando V. Aromin, BPI
Assistant Vice-President, to enter and view the property they were buying.
On July 9, 1988, Revilla formally informed BPI that he had procured a buyer, herein petitioner.
On July 11, 1988, petitioner's officials, Alfonso Lim and Albino Limketkai, went to BPI to confirm

the sale. They were entertained by Vice-President Merlin Albano and Asst. Vice-President
Aromin. Petitioner asked that the price of P1,000.00 per square meter be reduced to P900.00
while Albano stated the price to be P1,100.00. The parties finally agreed that the lot would be
sold at P1,000.00 per square meter to be paid in cash. Since the authority to sell was on a first
come, first served and non-exclusive basis, it may be mentioned at this juncture that there is no
dispute over petitioner's being the first comer and the buyer to be first served.
Notwithstanding the final agreement to pay P1,000.00 per square meter on a cash basis,
Alfonso Lim asked if it was possible to pay on terms. The bank officials stated that there was no
harm in trying to ask for payment on terms because in previous transactions, the same had
been allowed. It was the understanding, however, that should the term payment be disapproved,
then the price shall be paid in cash.
It was Albano who dictated the terms under which the installment payment may be approved,
and acting thereon, Alfonso Lim, on the same date, July 11, 1988, wrote BPI through Merlin
Albano embodying the payment initially of 10% and the remaining 90% within a period of 90
days.
Two or three days later, petitioner learned that its offer to pay on terms had been frozen. Alfonso
Lim went to BPI on July 18, 1988 and tendered the full payment of P33,056,000.00 to Albano.
The payment was refused because Albano stated that the authority to sell that particular piece
of property in Pasig had been withdrawn from his unit. The same check was tendered to BPI
Vice-President Nelson Bona who also refused to receive payment.
An action for specific performance with damages was thereupon filed on August 25, 1988 by
petitioner against BPI. In the course of the trial, BPI informed the trial court that it had sold the
property under litigation to NBS on July 14, 1989. The complaint was thus amended to include
NBS.
On June 10, 1991, the trial court rendered judgment in the case as follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendants Bank of the Philippine Islands and National Book Store, Inc.:
1. Declaring the Deed of Sale of the property covered by T.C.T. No. 493122 in the
name of the Bank of the Philippine Islands, situated in Barrio Bagong Ilog, Pasig,
Metro Manila, in favor of National Book Store, Inc., null and void;
2. Ordering the Register of Deeds of the Province of Rizal to cancel the Transfer
Certificate of Title which may have been issued in favor of National Book Store,
Inc. by virtue of the aforementioned Deed of Sale dated July 14, 1989;
3. Ordering defendant BPI, upon receipt by it from plaintiff of the sum of
P33,056,000.00, to execute a Deed of Sale in favor of plaintiff of the
aforementioned property at the price of P1,000.00 per square meter; in default
thereof, the Clerk of this Court is directed to execute the said deed;

4. Ordering the Register of Deeds of Pasig, upon registration of the said deed,
whether executed by defendant BPI or the Clerk of Court and payment of the
corresponding fees and charges, to cancel said T.C.T. No. 493122 and to issue,
in lieu thereof, another transfer certificate of title in the name of plaintiff;
5. Ordering defendants BPI and National Book Store, Inc. to pay, jointly and
severally, to the plaintiff the sums of P10,000,000.00 as actual and consequential
damages and P150,000.00 as attorney's fees and litigation expenses, both with
interest at 12% per annum from date hereof;
6. On the cross-claim of defendant bank against National Book Store, ordering
the latter to indemnify the former of whatever amounts BPI shall have paid to the
plaintiff by reason hereof; and
7. Dismissing the counterclaims of the defendants against the plaintiff and
National Book Store's cross-claim against defendant bank.
Costs against defendants.
(pp. 44-45, Rollo.)
As earlier intimated, upon the decision being appealed, the Court of Appeals (Buena [P], Rasul,
and Mabutas,JJ.), on August 12, 1994, reversed the trial court's decision and dismissed
petitioner's complaint for specific performance and damages.
The issues raised by the parties revolve around the following four questions:
(1) Was there a meeting of the minds between petitioner Limketkai and respondent BPI as to
the subject matter of the contract and the cause of the obligation?
(2) Were the bank officials involved in the transaction authorized by BPI to enter into the
questioned contract?
(3) Is there competent and admissible evidence to support the alleged meeting of the minds?
(4) Was the sale of the disputed land to the NBS during the pendency of trial effected in good
faith?
There is no dispute in regard to the following: (a) that BPI as trustee of the property of Philippine
Remnant Co. authorized a licensed broker, Pedro Revilla, to sell the lot for P1,000.00 per
square meter; (b) that Philippine Remnants confirmed the authority to sell of Revilla and the
price at which he may sell the lot; (c) that petitioner and Revilla agreed on the former buying the
property; (d) that BPI Assistant Vice-President Rolando V. Aromin allowed the broker and the
buyer to inspect the property; and (e) that BPI was formally informed about the broker having
procured a buyer.

The controversy revolves around the interpretation or the significance of the happenings or
events at this point.
Petitioner states that the contract to sell and to buy was perfected on July 11, 1988 when its top
officials and broker Revilla finalized the details with BPI Vice-Presidents Merlin Albano and
Rolando V. Aromin at the BPI offices.
Respondents, however, contend that what transpired on this date were part of continuing
negotiations to buy the land and not the perfection of the sale. The arguments of respondents
center on two propositions (1) Vice-Presidents Aromin and Albano had no authority to bind
BPI on this particular transaction and (2) the subsequent attempts of petitioner to pay under
terms instead of full payment in cash constitutes a counter-offer which negates the existence of
a perfected contract.
The alleged lack of authority of the bank officials acting in behalf of BPI is not sustained by the
record.
At the start of the transactions, broker Revilla by himself already had full authority to sell the
disputed lot. Exhibit B dated June 23, 1988 states, "this will serve as your authority to sell on an
as is, where is basis the property located at Pasig Blvd., Bagong Ilog . . . ." We agree with
Revilla's testimony that the authority given to him was to sell and not merely to look for a buyer,
as contended by respondents.
Revilla testified that at the time he perfected the agreement to sell the litigated property, he was
acting for and in behalf of the BPI as if he were the Bank itself. This notwithstanding and to firm
up the sale of the land, Revilla saw it fit to bring BPI officials into the transaction. If BPI could
give the authority to sell to a licensed broker, we see no reason to doubt the authority to sell of
the two BPI Vice-Presidents whose precise job in the Bank was to manage and administer real
estate property.
Respondent BPI alleges that sales of trust property need the approval of a Trust Committee
made up of top bank officials. It appears from the record that this trust committee meets rather
infrequently and it does not have to pass on regular transactions.
Rolando Aromin was BPI Assistant Vice-President and Trust Officer. He directly supervised the
BPI Real Property Management Unit. He had been in the Real Estate Division since 1985 and
was the head supervising officer of real estate matters. Aromin had been with the BPI Trust
Department since 1968 and had been involved in the handling of properties of beneficial owners
since 1975 (tsn., December 3, 1990, p. 5).
Exhibit 10 of BPI, the February 15, 1989 letter from Senior Vice-President Edmundo Barcelon,
while purporting to inform Aromin of his poor performance, is an admission of BPI that Aromin
was in charge of Torrens titles, lease contracts, problems of tenants, insurance policies,
installment receivables, management fees, quitclaims, and other matters involving real estate
transactions. His immediate superior, Vice-President Merlin Albano had been with the Real
Estate Division for only one week but he was present and joined in the discussions with
petitioner.

There is nothing to show that Alfonso Lim and Albino Limketkai knew Aromin before the incident.
Revilla brought the brothers directly to Aromin upon entering the BPI premises. Aromin acted in
a perfectly natural manner on the transaction before him with not the slightest indication that he
was acting ultra vires. This shows that BPI held Aromin out to the public as the officer routinely
handling real estate transactions and, as Trust Officer, entering into contracts to sell trust
properties.
Respondents state and the record shows that the authority to buy and sell this particular trust
property was later withdrawn from Trust Officer Aromin and his entire unit. If Aromin did not have
any authority to act as alleged, there was no need to withdraw authority which he never
possessed.
Petitioner points to Areola vs. Court of Appeals (236 SCRA 643 [1994]) which cited Prudential
Bank vs. Court of Appeals (22 SCRA 350 [1993]), which in turn relied upon McIntosh vs. Dakota
Trust Co. (52 ND 752, 204 NW 818, 40 ALR 1021), to wit:
Accordingly a banking corporation is liable to innocent third persons where the
representation is made in the course of its business by an agent acting within the
general scope of his authority even though, in the particular case, the agent is
secretly abusing his authority and attempting to perpetrate a fraud upon his
principal or some other person for his own ultimate benefit.
(at pp. 652-653.)
In the present case, the position and title of Aromin alone, not to mention the testimony and
documentary evidence about his work, leave no doubt that he had full authority to act for BPI in
the questioned transaction. There is no allegation of fraud, nor is there the least indication that
Aromin was acting for his own ultimate benefit. BPI later dismissed Aromin because it appeared
that a top official of the bank was personally interested in the sale of the Pasig property and did
not like Aromin's testimony. Aromin was charged with poor performance but his dismissal was
only sometime after he testified in court. More than two long years after the disputed
transaction, he was still Assistant Vice-President of BPI.
The records show that the letter of instruction dated June 14, 1988 from the owner of Philippine
Remnants Co. regarding the sale of the firm's property was addressed to Aromin. The
P1,000.00 figure on the first page of broker Revilla's authority to sell was changed to P1,100.00
by Aromin. The price was later brought down again to P1,000.00, also by Aromin. The
permission given to petitioner to view the lot was signed by Aromin and honored by the BPI
guards. The letter dated July 9, 1988 from broker Revilla informing BPI that he had a buyer was
addressed to Aromin. The conference on July 11, 1988 when the contract was perfected was
with Aromin and Vice-President Albano. Albano and Aromin were the ones who assured
petitioner Limketkai's officers that term payment was possible. It was Aromin who called up
Miguel Bicharra of Philippine Remnants to state that the BPI rejected payment on terms and it
was to Aromin that Philippine Remnants gave the go signal to proceed with the cash sale.
Everything in the record points to the full authority of Aromin to bind the bank, except for the
self-serving memoranda or letters later produced by BPI that Aromin was an inefficient and

undesirable officer and who, in fact, was dismissed after he testified in this case. But, of course,
Aromin's alleged inefficiency is not proof that he was not fully clothed with authority to bind BPI.
Respondents' second contention is that there was no perfected contract because petitioner's
request to pay on terms constituted a counter-offer and that negotiations were still in progress at
that point.
Asst. Vice-President Aromin was subpoenaed as a hostile witness for petitioner during trial.
Among his statements is one to the effect that
. . . Mr. Lim offered to buy the property at P900.00 per square meter while Mr.
Albano counter-offered to sell the property at P1,100.00 per square meter but
after the usual haggling, we finally agreed to sell the property at the price of
P1,000.00 per square meter . . .
(tsn, 12-3-90, p. 17; Emphasis supplied.)
Asked if there was a meeting of the minds between the buyer and the bank in respect to the
price of P1,000.00 per square meter, Aromin answered:
Yes, sir, as far as my evaluation there was a meeting of the minds as far as the
price is concerned, sir.
(ibid, p. 17.)
The requirements in the payment of the purchase price on terms instead of cash were
suggested by BPI Vice-President Albano. Since the authority given to broker Revilla specified
cash payment, the possibility of paying on terms was referred to the Trust Committee but with
the mutual agreement that "if the proposed payment on terms will not be approved by our Trust
Committee, Limketkai should pay in cash . . . the amount was no longer subject to the approval
or disapproval of the Committee, it is only on the terms." (ibid, p. 19). This is incontrovertibly
established in the following testimony of Aromin:
A. After you were able to agree on the price of P1,000.00/sq. m.,
since the letter or authority says the payment must be in cash
basis, what transpired later on?
B. After we have agreed on the price, the Lim brothers inquired on
how to go about submitting the covering proposal if they will be
allowed to pay on terms. They requested us to give them a guide
on how to prepare the corresponding letter of proposal. I recall
that, upon the request of Mr. Albino Limketkai, we dictated a guide
on how to word a written firm offer that was to be submitted by Mr.
Lim to the bank setting out the terms of payment but with the
mutual agreement that if his proposed payment on terms will not
be approved by our trust committee, Limketkai should pay the
price in cash.

Q And did buyer Limketkai agree to pay in cash in case the offer of
terms will be cash (disapproved).
A Yes, sir.
Q At the start, did they show their willingness to pay in cash?
A Yes, sir.
Q You said that the agreement on terms was to be submitted to
the trust committee for approval, are you telling the Court that
what was to be approved by the trust committee was the provision
on the payment on terms?
A Yes, sir.
Q So the amount was no longer subject to the approval or
disapproval of the committee, it is only on the terms?
A Yes, sir.
(tsn, Dec. 3, 1990, pp. 18-19; Emphasis supplied.)
The record shows that if payment was in cash, either broker Revilla or Aromin had full authority.
But because petitioner took advantage of the suggestion of Vice-President Albano, the matter
was sent to higher officials. Immediately upon learning that payment on terms was frozen and/or
denied, Limketkai exercised his right within the period given to him and tendered payment in full.
The BPI rejected the payment.
In its Comment and Memorandum, respondent NBS cites Ang Yu Asuncion vs. Court of
Appeals (238 SCRA 602 [1994]) to bolster its case. Contrarywise, it would seem that the legal
principles found in said case strengthen and support petitioner's submission that the contract
was perfected upon the meeting of the minds of the parties.
The negotiation or preparation stage started with the authority given by Philippine Remnants to
BPI to sell the lot, followed by (a) the authority given by BPI and confirmed by Philippine
Remnants to broker Revilla to sell the property, (b) the offer to sell to Limketkai, (c) the
inspection of the property and finally (d) the negotiations with Aromin and Albano at the BPI
offices.
The perfection of the contract took place when Aromin and Albano, acting for BPI, agreed to sell
and Alfonso Lim with Albino Limketkai, acting for petitioner Limketkai, agreed to buy the
disputed lot at P1,000.00 per square meter. Aside from this there was the earlier agreement
between petitioner and the authorized broker. There was a concurrence of offer and
acceptance, on the object, and on the cause thereof.
The phases that a contract goes through may be summarized as follows:

a. preparation, conception or generation, which is the period of negotiation and

bargaining, ending at the moment of agreement of the parties;
b. perfection or birth of the contract, which is the moment when the parties come
to agree on the terms of the contract; and
c. consummation or death, which is the fulfillment or performance of the terms
agreed upon in the contract (Toyota Shaw, Inc. vs. Court of Appeals, G.R. No.
116650, May 23, 1995).
But in more graphic prose, we turn to Ang Yu Asuncion, per Justice Vitug:
. . . A contract undergoes various stages that include its negotiation or
preparation, its perfection and, finally, its consummation. Negotiation covers the
period from the time the prospective contracting parties indicate interest in the
contract to the time the contract is concluded (perfected). Theperfection of the
contract takes place upon the concurrence of the essential elements thereof. A
contract which is consensual as to perfection is so established upon a mere
meeting of minds, i.e., the concurrence of offer and acceptance, on the object
and on the cause thereof. A contract which requires, in addition to the above, the
delivery of the object of the agreement, as in a pledge orcommodatum, is
commonly referred to as a real contract. In a solemn contract, compliance with
certain formalities prescribed by law, such as in a donation of real property, is
essential in order to make the act valid, the prescribed form being thereby an
essential element thereof. The stage of consummation begins when the parties
perform their respective undertakings under the contract culminating in the
extinguishment thereof.
Until the contract is perfected, it cannot, as an independent source of obligation,
serve as a binding juridical relation. In sales, particularly, to which the topic for
discussion about the case at bench belongs, the contract is perfected when a
person, called the seller, obligates himself, for a price certain, to deliver and to
transfer ownership of a thing or right to another, called the buyer, over which the
latter agrees.
(238 SCRA 602; 611 [1994].)
In Villonco Realty Company vs. Bormaheco (65 SCRA 352 [1975]), bearing factual
antecendents similar to this case, the Court, through Justice Aquino (later to be Chief Justice),
quoting authorities, upheld the perfection of the contract of sale thusly:
The contract of sale is perfected at the moment there is a meeting of minds upon
the thing which is the object of the contract and upon the price. From that
moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts. (Art. 1475,Ibid.)
xxx xxx xxx

Consent is manifested by the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract. The offer must be
certain and the acceptance absolute. A qualified acceptance constitutes a
counter-offer (Art. 1319, Civil Code). "An acceptance may be express or implied."
(Art. 1320, Civil Code).
xxx xxx xxx
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., 105 Fed. 2nd 965, citing Sec. 79, Williston on Contracts).
xxx xxx xxx
. . . 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 or a counter-offer. (Stuart vs. Franklin Life Ins.
Co., supra.)
(at pp. 362-363; 365-366.)
In the case at bench, the allegation of NBS that there was no concurrence of the offer and
acceptance upon the cause of the contract is belied by the testimony of the very BPI official with
whom the contract was perfected. Aromin and Albano concluded the sale for BPI. The fact that
the deed of sale still had to be signed and notarized does not mean that no contract had already
been perfected. A sale of land is valid regardless of the form it may have been entered into
(Claudel vs. Court of Appeals, 199 SCRA 113, 119 [1991]). The requisite form under Article 1458
of the Civil Code is merely for greater efficacy or convenience and the failure to comply
therewith does not affect the validity and binding effect of the act between the parties (Vitug,
Compendium of Civil Law and Jurisprudence, 1993 Revised Edition, p. 552). If the law requires
a document or other special form, as in the sale of real property, the contracting parties may
compel each other to observe that form, once the contract has been perfected. Their right may
be exercised simultaneously with action upon the contract (Article 1359, Civil Code).
Regarding the admissibility and competence of the evidence adduced by petitioner, respondent
Court of Appeals ruled that because the sale involved real property, the statute of frauds is
applicable.
In any event, petitioner cites Abrenica vs. Gonda (34 Phil. 739 [1916]) wherein it was held that
contracts infringing the Statute of Frauds are ratified when the defense fails to object, or asks
questions on cross-examination. The succinct words of Justice Araullo still ring in judicial
cadence:
As no timely objection or protest was made to the admission of the testimony of
the plaintiff with respect to the contract; and as the motion to strike out said

evidence came too late; and, furthermore, as the defendants themselves, by the
cross-questions put by their counsel to the witnesses in respect to said contract,
tacitly waived their right to have it stricken out, that evidence, therefore, cannot
be considered either inadmissible or illegal, and court, far from having erred in
taking it into consideration and basing his judgment thereon, notwithstanding the
fact that it was ordered to be stricken out during the trial, merely corrected the
error he committed in ordering it to be so stricken out and complied with the rules
of procedure hereinbefore cited.
(at p. 748.)
In the instant case, counsel for respondents cross-examined petitioner's witnesses at length on
the contract itself, the purchase price, the tender of cash payment, the authority of Aromin and
Revilla, and other details of the litigated contract. Under the Abrenica rule (reiterated in a
number of cases, among them Talosig vs. Vda. de Nieba 43 SCRA 472 [1972]), even assuming
that parol evidence was initially inadmissible, the same became competent and admissible
because of the cross-examination, which elicited evidence proving the evidence of a perfected
contract. The cross-examination on the contract is deemed a waiver of the defense of the
Statute of Frauds (Vitug, Compendium of Civil Law and Jurisprudence, 1993 Revised
Edition, supra, p. 563).
The reason for the rule is that as pointed out in Abrenica "if the answers of those witnesses
were stricken out, the cross-examination could have no object whatsoever, and if the questions
were put to the witnesses and answered by them, they could only be taken into account by
connecting them with the answers given by those witnesses on direct examination" (pp. 747748).
Moreover, under Article 1403 of the Civil Code, an exception to the unenforceability of contracts
pursuant to the Statute of Frauds is the existence of a written note or memorandum evidencing
the contract. The memorandum may be found in several writings, not necessarily in one
document. The memorandum or memoranda is/are written evidence that such a contract was
entered into.
We cite the findings of the trial court on this matter:
In accordance with the provisions of Art. 1403 of the Civil Code, the existence of
a written contract of the sale is not necessary so long as the agreement to sell
real property is evidenced by a written note or memorandum, embodying the
essentials of the contract and signed by the party charged or his agent. Thus, it
has been held:
The Statute of Frauds, embodied in Article 1403 of the Civil Code
of the Philippines,does not require that the contract itself be
written. The plain test of Article 1403, Paragraph (2) is clear that a
written note or memorandum, embodying the essentials of the
contract and signed by the party charged, or his agent suffices to

make the verbal agreement enforceable, taking it out of the

operation of the statute. (Emphasis supplied)
xxx xxx xxx
In the case at bar, the complaint in its paragraph 3 pleads that the
deal had been closed by letter and telegram (Record on Appeal, p.
2), and the letter referred to was evidently the one copy of which
was appended as Exhibit A to plaintiffs opposition to the motion to
dismiss. The letter, transcribed above in part, together with the
one marked as Appendix B, constitute an adequate memorandum
of the transaction. They are signed by the defendant-appellant;
refer to the property sold as a Lot in Puerto Princesa, Palawan,
covered by T.C.T. No. 62, give its area as 1,825 square meters
and the purchase price of four (P4.00) pesos per square meter
payable in cash. We have in them, therefore, all the essential
terms of the contract and they satisfy the requirements of the
Statute of Frauds.
(Footnote 26, Paredes vs. Espino, 22 SCRA 1000 [1968]).
While there is no written contract of sale of the Pasig property executed by BPI in
favor of plaintiff, there are abundant notes and memoranda extant in the records
of this case evidencing the elements of a perfected contract. There is Exhibit P,
the letter of Kenneth Richard Awad addressed to Roland Aromin, authorizing the
sale of the subject property at the price of P1,000.00 per square meter giving 2%
commission to the broker and instructing that the sale be on cash basis.
Concomitantly, on the basis of the instruction of Mr. Awad, (Exh. P), an authority
to sell, (Exh. B) was issued by BPI to Pedro Revilla, Jr., representing Assetrade
Co., authorizing the latter to sell the property at the initial quoted price of
P1,000.00 per square meter which was altered on an unaccepted offer by
Technoland. After the letter authority was issued to Mr. Revilla, a letter authority
was signed by Mr. Aromin allowing the buyer to enter the premises of the
property to inspect the same (Exh. C). On July 9, 1988, Pedro Revilla, Jr., acting
as agent of BPI, wrote a letter to BPI informing it that he had procured a buyer in
the name of Limketkai Sons Milling, Inc. with offices at Limketkai Bldg.,
Greenhills, San Juan, Metro Manila, represented by its Exec. Vice-President,
Alfonso Lim (Exh. D). On July 11, 1988, the plaintiff, through Alfonso Lim, wrote a
letter to the bank, through Merlin Albano, confirming their transaction regarding
the purchase of the subject property (Exh. E). On July 18, 1988, the plaintiff
tendered upon the officials of the bank a check for P33,056,000.00 covered by
Check No. CA510883, dated July 18, 1988. On July 1, 1988, Alfonso Zamora
instructed Mr. Aromin in a letter to resubmit new offers only if there is no
transaction closed with Assetrade Co. (Exh. S). Combining all these notes and
memoranda, the Court is convinced of the existence of perfected contract of sale.
Aptly, the Supreme Court, citing American cases with approval, held:

No particular form of language or instrument is necessary to

constitute a memorandum or note in writing under the statute of
frauds; any document or writing, formal or informal, written either
for the purpose of furnishing evidence of the contract or for
another purpose, which satisfies all the requirements of the statute
as to contents and signature, as discussed respectively infra secs.
178-200, and infra secs. 201-205, is a sufficient memorandum or
note. A memorandum may be written as well with lead pencil as
with pen and ink. It may also be filled in on a printed form. (37
C.J.S., 653-654).
The note or memorandum required by the statute of frauds need
not be contained in a single document, nor, when contained in two
or more papers, need each paper be sufficient as to contents and
signature to satisfy the statute. Two or more writings properly
connected may be considered together, matters missing or
uncertain in one may be supplied or rendered certain by another,
and their sufficiency will depend on whether, taken together, they
meet the requirements of the statute as to contents and the
requirements of the statutes as to signature, as considered
respectively infra secs. 179-200 and secs. 201-215.
(pp. 460-463, Original RTC Record).
The credibility of witnesses is also decisive in this case. The trial court directly observed the
demeanor and manner of testifying of the witnesses while the Court of Appeals relied merely on
the transcript of stenographic notes.
In this regard, the court of origin had this to say:
Apart from weighing the merits of the evidence of the parties, the Court had
occasion to observe the demeanor of the witnesses they presented. This is one
important factor that inclined the Court to believe in the version given by the
plaintiff because its witnesses, including hostile witness Roland V. Aromin, an
assistant vice-president of the bank, were straightforward, candid and
unhesitating in giving their respective testimonies. Upon the other hand, the
witnesses of BPI were evasive, less than candid and hesitant in giving their
answers to cross examination questions. Moreover, the witnesses for BPI and
NBS contradicted each other. Fernando Sison III insisted that the authority to sell
issued to Mr. Revilla was merely an evidence by which a broker may convince a
prospective buyer that he had authority to offer the property mentioned therein
for sale and did not bind the bank. On the contrary, Alfonso Zamora, a Senior
Vice-President of the bank, admitted that the authority to sell issued to Mr. Pedro
Revilla, Jr. was valid, effective and binding upon the bank being signed by two
class "A" signatories and that the bank cannot back out from its commitment in
the authority to sell to Mr. Revilla.

While Alfredo Ramos of NBS insisted that he did not know personally and was
not acquainted with Edmundo Barcelon, the latter categorically admitted that
Alfredo Ramos was his friend and that they have even discussed in one of the
luncheon meetings the matter of the sale of the Pasig property to NBS. George
Feliciano emphatically said that he was not a consultant of Mr. Ramos nor was
he connected with him in any manner, but his calling card states that he was a
consultant to the chairman of the Pacific Rim Export and Holdings Corp. whose
chairman is Alfredo Ramos. This deliberate act of Mr. Feliciano of concealing his
being a consultant to Mr. Alfredo Ramos evidently was done by him to avoid
possible implication that he committed some underhanded maneuvers in
manipulating to have the subject property sold to NBS, instead of being sold to
the plaintiff.
(pp. 454-455, Original RTC Record.)
On the matter of credibility of witnesses where the findings or conclusions of the Court of
Appeals and the trial court are contrary to each other, the pronouncement of the Court
in Serrano vs. Court of Appeals (196 SCRA 107 [1991]) bears stressing:
It is a settled principle of civil procedure that the conclusions of the trial court
regarding the credibility of witnesses are entitled to great respect from the
appellate courts because the trial court had an opportunity to observe the
demeanor of witnesses while giving testimony which may indicate their candor or
lack thereof. While the Supreme Court ordinarily does not rule on the issue of
credibility of witnesses, that being a question of fact not properly raised in a
petition under Rule 45, the Court has undertaken to do so in exceptional
situations where, for instance, as here, the trial court and the Court of Appeals
arrived at divergent conclusions on questions of fact and the credibility of
witnesses.
(at p. 110.)
On the fourth question of whether or not NBS is an innocent purchaser for value, the record
shows that it is not. It acted in bad faith.
Respondent NBS ignored the notice of lis pendens annotated on the title when it bought the lot.
It was the willingness and design of NBS to buy property already sold to another party which led
BPI to dishonor the contract with Limketkai.
Petitioner cites several badges of fraud indicating that BPI and NBS conspired to prevent
petitioner from paying the agreed price and getting possession of the property:
1. The sale was supposed to be done through an authorized broker, but top officials of BPI
personally and directly took over this particular sale when a close friend became interested.

2. BPI Senior Vice President Edmundo Barcelon admitted that NBS's President, Alfredo Ramos,
was his friend; that they had lunch meetings before this incident and discussed NBS's purchase
of the lot. Barcelon's father was a business associate of Ramos.
3. George Feliciano, in behalf of NBS, offered P5 million and later P7 million if petitioner would
drop the case and give up the lot. Feliciano went to petitioner's office and haggled with Alfonso
Lim but failed to convince him inspite of various and increasing offers.
4. In a place where big and permanent buildings abound, NBS had constructed only a
warehouse marked by easy portability. The warehouse is bolted to its foundations and can
easily be dismantled.
It is the very nature of the deed of absolute sale between BPI and NBS which, however, clearly
negates any allegation of good faith on the part of the buyer. Instead of the vendee insisting that
the vendor guarantee its title to the land and recognize the right of the vendee to proceed
against the vendor if the title to the land turns out to be defective as when the land belongs to
another person, the reverse is found in the deed of sale between BPI and NBS. Any losses
which NBS may incur in the event the title turns out to be vested in another person are to be
borne by NBS alone. BPI is expressly freed under the contract from any recourse of NBS
against it should BPI's title be found defective.
NBS, in its reply memorandum, does not refute or explain the above circumstance squarely. It
simply cites the badges of fraud mentioned in Oria vs. McMicking (21 Phil. 243 [1912]) and
argues that the enumeration there is exclusive. The decision in said case plainly states "the
following are some of the circumstances attending sales which have been denominated by
courts (as) badges of fraud." There are innumerable situations where fraud is manifested. One
enumeration in a 1912 decision cannot possibly cover all indications of fraud from that time up
to the present and into the future.
The Court of Appeals did not discuss the issue of damages. Petitioner cites the fee for filing the
amended complaint to implead NBS, sheriffs fees, registration fees, plane fare and hotel
expenses of Cebu-based counsel. Petitioner also claimed, and the trial court awarded, damages
for the profits and opportunity losses caused to petitioner's business in the amount of
P10,000,000.00.
We rule that the profits and the use of the land which were denied to petitioner because of the
non-compliance or interference with a solemn obligation by respondents is somehow made up
by the appreciation in land values in the meantime.
Prescinding from the above, we rule that there was a perfected contract between BPI and
petitioner Limketkai; that the BPI officials who transacted with petitioner had full authority to bind
the bank; that the evidence supporting the sale is competent and admissible; and that the sale
of the lot to NBS during the trial of the case was characterized by bad faith.
WHEREFORE, the questioned judgment of the Court of Appeals is hereby REVERSED and
SET ASIDE. The June 10, 1991 judgment of Branch 151 of the Regional Trial Court of The

National Capital Judicial Region stationed in Pasig, Metro Manila is REINSTATED except for the
award of Ten Million Pesos (P10,000,000.00) damages which is hereby DELETED.
SO ORDERED.