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G.R. No. 109125 December 2, 1994 ANG YU ASUNCION, ARTHUR GO AND KEH TIONG, petitioners, vs. THE HON.

COURT OF APPEALS and BUEN REALTY DEVELOPMENT CORPORATION, respondents. Facts: Plaintiffs Ang Yu et al. are lessees of a property owned by defendants located along Ongpin St., Binondo, Manila since 1935. And since plaintiffs have been good tenants, respondentsinformed plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same. But during the negotiations, however, Bobby Cu Unjieng of respondents offered a fixed price of P6-million short of petitioners counter offer of only P5-million. Petitioners then asked defendant to put the offer in writing to which defendant acceded. Petitioners further asked that respondent specify the terms and conditions of the offer to sell to which the latter did not pay attention anymore. Felt aggrieved on respondents lack of action to their request, petitioners sue them. In its complaint, Ang Yu et al. alleged that respondent failed to specify the terms and conditions of the offer to sell and such failure was because they now intends to sell the property to another. The court a quo dismissed the complaint reasoning that defendants' offer to sell was never accepted by the plaintiffs for the reason that the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contract of sale at all. The decision though was with a condition that should the defendant-seller subsequently offer their property for sale at a price of P11-million or below, plaintiffs Ang Yu will have the right of first refusal. On appeal by the petitioners, the appellate court sustained the findings of the trial court that there was no meeting of the minds between the parties. The appellate court likewise ruled to remove the right of first refusal awarded by the trial court, hence this petition. Issue: Whether the subject property cannot be sold to another because of petitioner-plaintiff Ang Yus right of first refusal? HELD: No. In the law on sales, the so-called "right of first refusal" is an innovative juridical relation. Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code. Neither can the right of first refusal, understood in its normal concept, per se be brought within the purview of an option under the second paragraph of Article 1479, or possibly of an offer under Article 1319 of the same Code. An option or an offer would require, among other things, a clear certainty on both the object and the cause or consideration of the envisioned contract. In a right of first refusal, while the object might be made determinate, the exercise of the right, however, would be dependent not only on the grantor's eventual intention to enter into a binding juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior thereto, it can at best be so described as merely belonging to a class of preparatory juridical

relations governed not by contracts (since the essential elements to establish the vinculum juris would still be indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered provisions of the Civil Code on human conduct. Even on the premise that such right of first refusal has been decreed under a final judgment, like here, its breach cannot justify correspondingly an issuance of a writ of execution under a judgment that merely recognizes its existence, nor would it sanction an action for specific performance without thereby negating the indispensable element of consensuality in the perfection of contracts. It is not to say, however, that the right of first refusal would be inconsequential for, such as already intimated above, an unjustified disregard thereof, given, for instance, the circumstances expressed in Article 19 of the Civil Code, can warrant a recovery for damages.

EQUATORIAL REALTY DEVELOPMENT, INC. vs. MAYFAIR THEATER (1996)

VILLONCO REALTY COMPANY, plaintiff-appellee and EDITH PEREZ DE TAGLE, intervenor-appellee, vs. BORMAHECO, INC., FRANCISCO N. CERVANTES and ROSARIO N. CERVANTES, defendants-appellants. Meer, Meer & Meer for plaintiff-appellee. (G.R. No. L-26872; July 25, 1975) FACTS: Defendants-appellants Spouses Cervantes offered to sell, through a letter, lots 3, 15 and 16 located at 245 Buendia Avenue, Makati, Rizal with a total area of three thousand five hundred square meters with the following conditions: 1. Purchase price is P400 per square meter 2. A deposit of P100,000; 3. The purchase of the Sta. Ana property belonging to National Shipyards and Steel Corporation (NASSCO) [which was later on acquired by Bormaheco, Inc. (Spouses company) as the highest bidder] In the meanwhile, Bormaheco, Inc. and Villonco Realty Company continued their negotiations for the sale of the Buendia Avenue property. Cervantes and Teofilo Villonco had a final conference on February 27, 1964. As a result of that conference Villonco Realty Company, through Teofilo Villonco, in its letter of March 4, 1964 made a revised counter-offer (Romeo Villonco's first counter-offer was dated February 24, 1964, Exh. C) for the purchase of the property. The counter-offer was accepted by Cervantes. A check for P100,000 (Exh. E) mentioned in the foregoing lettercontract was delivered by Edith Perez de Tagle to Bormaheco, Inc. on March 4, 1964 and was received by Cervantes. In the

voucher-receipt evidencing the delivery the broker indicated in her handwriting that the earnest money was "subject to the terms and conditions embodied in Bormaheco's letter" of February 12 and Villonco Realty Company's letter of March 4, 1964 (Exh. E-1; 14 tsn). Then, unexpectedly, in a letter dated March 30, 1964, or twentysix days after the signing of the contract of sale, Exhibit D, Cervantes returned the earnest money, with interest amounting to P694.24 (at ten percent per annum). Cervantes cited as an excuse the circumstance that "despite the lapse of 45 days from February 12, 1964 there is no certainty yet" for the acquisition of the Punta property (Exh. F; F-I and F-2). Villonco Realty Company refused to accept the letter and the checks of Bormaheco, Inc. Cervantes sent them by registered mail. When he rescinded the contract, he was already aware that the Punta lot had been awarded to Bormaheco, Inc. (25-26 tsn). Cervantes alleged that the forty-five day period had already expired and the sale to Bormaheco, Inc. of the Punta property had not been consummated. Cervantes said that his letter was a "manifestation that we are no longer interested to sell" the Buendia Avenue property to Villonco Realty Company (Annex I of Stipulation of Facts). In a letter dated April 7, 1964 Villonco Realty Company returned the two checks to Bormaheco, Inc., stating that the condition for the cancellation of the contract had not arisen and at the same time announcing that an action for breach of contract would be filed against Bormaheco, Inc. (Annex G of Stipulation of Facts). On that same date, April 7, 1964 Villonco Realty Company filed the complaint (dated April 6) for specific performance against Bormaheco, Inc. Bormaheco, Inc. in its answers dated May 5 and 25, 1964 pleaded the defense 1. That the perfection of the contract of sale was subject to the conditions (a) "that final acceptance or not shall be made after 45 days" (sic) and (b) that Bormaheco, Inc. "acquires the Sta. Ana property". 2. That the three lots were registered in the names of the Cervantes spouses and not in the name of Bormaheco, Inc., Villonco Realty Company.

offer. And there is no evidence that Villonco Realty Company did not assent to the supposed changes and that such assent was never made known to Cervantes. What the record reveals is that the broker, Miss Tagle, acted as intermediary between the parties. It is safe to assume that the alleged changes or qualifications made by Cervantes were approved by Villonco Realty Company and that such approval was duly communicated to Cervantes or Bormaheco, Inc. by the broker as shown by the fact that Villonco Realty Company paid, and Bormaheco, Inc. accepted, the sum of P100,000 as earnest money or down payment. That crucial fact implies that Cervantes was aware that Villonco Realty Company had accepted the modifications which he had made in Villonco's counter-offer. Had Villonco Realty Company not assented to those insertions and annotations, then it would have stopped payment on its check for P100,000. The fact that Villonco Realty Company allowed its check to be cashed by Bormaheco, Inc. signifies that the company was in conformity with the changes made by Cervantes and that Bormaheco, Inc. was aware of that conformity. Had those insertions not been binding, then Bormaheco, Inc. would not have paid interest at the rate of ten percent per annum, on the earnest money of P100,000. The truth is that the alleged changes or qualifications in the revised counter offer (Exh. D) are not material or are mere clarifications of what the parties had previously agreed upon. Thus, Cervantes' alleged insertion in his handwriting of the figure and the words "12th and" in Villonco's counter-offer is the same as the statement found in the voucher-receipt for the earnest money, which reads: "subject to the terms and conditions embodied in Bormaheco's letter of Feb. 12, 1964 and your letter of March 4, 1964" (Exh. E-1). Cervantes allegedly crossed out the word "Nassco" in paragraph 3 of Villonco's revised counter-offer and substituted for it the word "another" so that the original phrase, "Nassco's property in Sta. Ana", was made to read as "another property in Sta. Ana". That change is trivial. What Cervantes did was merely to adhere to the wording of paragraph 3 of Bormaheco's original offer (Exh. B) which mentions "another property located at Sta. Ana." His obvious purpose was to avoid jeopardizing his negotiation with the Nassco for the purchase of its Sta. Ana property by unduly publicizing it. It is noteworthy that Cervantes, in his letter to the broker dated April 6, 1964 (Annex 1) or after the Nassco property had been awarded to Bormaheco, Inc., alluded to the "Nassco property". At that time, there was no more need of concealing from the public that Bormaheco, Inc. was interested in the Nassco property. Similarly, Cervantes' alleged insertion of the letters "PA" ( per annum) after the word "interest" in that same paragraph 3 of the revised counter-offer (Exh. D) could not be categorized as a major alteration of that counter-offer that prevented a meeting of the minds of the parties. It was understood that the parties had contemplated a rate of ten percent per annum since ten percent a month or semi-annually would be usurious. Appellants Bormaheco, Inc. and Cervantes further contend that Cervantes, in clarifying in the voucher for the earnest money of

The lower court rendered a decision 1. Ordering the Cervantes spouses to execute in favor of Bormaheco, Inc. a deed of conveyance for the three lots in question and 2. Directing Bormaheco, Inc. (a) to convey the same lots to Villonco Realty Company, (b) to pay the latter, as consequential damages, the sum of P10,000 monthly from March 24, 1964 up to the consummation of the sale, (c) to pay Edith Perez de Tagle the sum of P42,000 as broker's commission and (d) pay P20,000 as to attorney's fees (Civil Case No. 8109). ISSUE: WON the sale was perfected? HELD: Yes. It should be stressed that there is no evidence as to what changes were made by Cervantes in Villonco's revised

P100,000 that Bormaheco's acceptance thereof was subject to the terms and conditions embodied in Bormaheco's letter of February 12, 1964 and your (Villonco's) letter of March 4, 1964" made Bormaheco's acceptance "qualified and conditional". That contention is not correct. There is no incompatibility between Bormaheco's offer of February 12, 1964 (Exh. B) and Villonco's counter-offer of March 4, 1964 (Exh. D). The revised counter-offer merely amplified Bormaheco's original offer. The controlling fact is that there was agreement between the parties on the subject matter, the price and the mode of payment and that part of the price was paid. "Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract" (Art. 1482, Civil Code). "It is true that an acceptance may contain a request for certain changes in the terms of the offer and yet be a binding acceptance. 'So long as it is clear that the meaning of the acceptance is positively and unequivocally to accept the offer, whether such request is granted or not, a contract is formed .' " (Stuart vs. Franklin Life Ins. Co., 165 Fed. 2nd 965, citing Sec. 79, Williston on Contracts). Thus, it was held that the vendor's change in a phrase of the offer to purchase, which change does not essentially change the terms of the offer, does not amount to a rejection of the offer and the tender of a counter-offer (Stuart vs. Franklin Life Ins. Co., supra). ISSUE2: WON the contract was not perfected because of the condition that Bormaheco, Inc. would acquire the Nassco land within forty-five days from February 12, 1964 or on or before March 28, 1964 was not fulfilled? HELD: STILL PERFECTED. That contention is predicated on the erroneous assumption that Bormaheco, Inc. was to acquire the Nassco land within forty-five days or on or before March 28, 1964. The trial court ruled that the forty-five-day period was merely an estimate or a forecast of how long it would take Bormaheco, Inc. to acquire the Nassco property and it was not "a condition or a deadline set for the defendant corporation to decide whether or not to go through with the sale of its Buendia property". The record does not support the theory of Bormaheco, Inc. and the Cervantes spouses that the forty-five-day period was the time within which (a) the Nassco property and two Pasong Tamo lots should be acquired, (b) when Cervantes would secure his wife's consent to the sale of the three lots and (c) when Bormaheco, Inc. had to decide what to do with the DBP encumbrance. Cervantes in paragraph 3 of his offer of February 12, 1964 stated that the sale of the Buendia lots would be consummated after he had consummated the purchase of the Nassco property. Then, in paragraph 5 of the same offer he stated "that final negotiations on both properties can be definitely known after forty-five days" (See Exh. B).

It is deducible from the tenor of those statements that the consummation of the sale of the Buendia lots to Villonco Realty Company was conditioned on Bormaheco's acquisition of the Nassco land. But it was not spelled out that such acquisition should be effected within forty-five days from February 12, 1964. Had it been Cervantes' intention that the forty-five days would be the period within which the Nassco land should be acquired by Bormaheco, then he would have specified that period in paragraph 3 of his offer so that paragraph would read in this wise: "That this sale is to be consummated only after I shall have consummated my purchase of another property located at Sta. Ana, Manila within forty-five days from the date hereof ." He could have also specified that period in his "conforme" to Villonco's counter-offer of March 4, 1964 (Exh. D) so that instead of merely stating "that this sale shall be subject to favorable consummation of a property in Sta. Ana we are negotiating" he could have said: "That this sale shall be subject to favorable consummation within forty-five days from February 12, 1964 of a property in Sta. Ana we are negotiating". No such specification was made. The term of forty-five days was not a part of the condition that the Nassco property should be acquired. It is clear that the statement "that final negotiations on both property can be definitely known after 45 days" does not and cannot mean that Bormaheco, Inc. should acquire the Nassco property within forty-five days from February 12, 1964 as pretended by Cervantes. It is simply a surmise that after fortyfive days (in fact when the forty-five day period should be computed is not clear) it would be known whether Bormaheco, Inc. would be able to acquire the Nassco property and whether it would be able to sell the Buendia property. That aforementioned paragraph 5 does not even specify how long after the forty-five days the outcome of the final negotiations would be known. It is interesting to note that in paragraph 6 of Bormaheco's answer to the amended complaint, which answer was verified by Cervantes, it was alleged that Cervantes accepted Villonco's revised counter-offer of March 4, 1964 subject to the condition that "the final negotiations (acceptance) will have to be made by defendant within 45 days from said acceptance" (31 Record on Appeal). If that were so, then the consummation of Bormaheco's purchase of the Nassco property would be made within forty-five days from March 4, 1964. What makes Bormaheco's stand more confusing and untenable is that in its three answers it invariably articulated the incoherent and vague affirmative defense that its acceptance of Villonco's revised counter-offer was conditioned on the circumstance "that final acceptance or not shall be made after 45 days" whatever that means. That affirmative defense is inconsistent with the other aforequoted incoherent statement in its third answer that "the final negotiations (acceptance) will have to be made by defendant within 45 days from said acceptance" (31 Record on Appeal). Thus, Bormaheco's three answers and paragraph 5 of his offer of February 12, 1964 do not sustain at all its theory that the Nassco property should be acquired on or before March 28, 1964. Its rescission or revocation of its acceptance cannot be anchored on that theory which, as articulated in its pleadings, is quite equivocal and unclear.

It should be underscored that the condition that Bormaheco, Inc. should acquire the Nassco property was fulfilled. As admitted by the appellants, the Nassco property was conveyed to Bormaheco, Inc. on June 26, 1964. As early as January 17, 1964 the property was awarded to Bormaheco, Inc. as the highest bidder. On February 18, 1964 the Nassco Board authorized its General Manager to sell the property to Bormaheco, Inc. (Exh. H). The Economic Coordinator approved the award on March 24, 1964. It is reasonable to assume that had Cervantes been more assiduous in following up the transaction, the Nassco property could have been transferred to Bormaheco, Inc. on or before March 28, 1964, the supposed last day of the forty-five-day period. ISSUE3: WON Bormaheco, Inc. cannot be required to sell the three lots in question because they are conjugal properties of the Cervantes spouses? HELD: It can. It should be remembered that Cervantes, in rescinding the contract of sale and in returning the earnest money, cited as an excuse the circumstance that there was no certainty in Bormaheco's acquisition of the Nassco property (Exh. F and Annex 1). He did not say that Mrs. Cervantes was opposed to the sale of the three lots. He did not tell Villonco Realty Company that he could not bind the conjugal partnership. In truth, he concealed the fact that the three lots were registered "in the name of FRANCISCO CERVANTES, Filipino, of legal age, married to Rosario P. Navarro, as owner thereof in fee simple". He certainly led the Villonco brothers to believe that as president of Bormaheco, Inc. he could dispose of the said lots. He inveigled the Villoncos into believing that he had untrammelled control of Bormaheco, Inc., that Bormaheco, Inc. owned the lots and that he was invested with adequate authority to sell the same. Thus, in Bormaheco's offer of February 12, 1964, Cervantes first identified the three lots as "our property" which "we are offering to sell ..." (Opening paragraph and par. 1 of Exh. B). Whether the prounoun "we" refers to himself and his wife or to Bormaheco, Inc. is not clear. Then, in paragraphs 3 and 4 of the offer, he used the first person and said: "I shall have consummated my purchase" of the Nassco property; "... my negotiations with said property" and "I will return to you your deposit". Those expressions conveyed the impression and generated the belief that the Villoncos did not have to deal with Mrs. Cervantes nor with any other official of Bormaheco, Inc. The pleadings disclose that Bormaheco, Inc. and Cervantes deliberately and studiously avoided making the allegation that Cervantes was not authorized by his wife to sell the three lots or that he acted merely as president of Bormaheco, Inc. That defense was not interposed so as not to place Cervantes in the ridiculous position of having acted under false pretenses when he negotiated with the Villoncos for the sale of the three lots. Villonco Realty Company, in paragraph 2 of its original complaint, alleged that "on February 12, 1964, after some prior negotiations, the defendant (Bormaheco, Inc.) made a formal offer to sell to the plaintiff the property of the said defendant situated at the abovenamed address along Buendia Avenue, Makati, Rizal, under the terms of the letter-offer, a copy of which is hereto attached as Annex A hereof", now Exhibit B (2 Record on Appeal).

That paragraph 2 was not, repeat, was not denied by Bormaheco, Inc. in its answer dated May 5, 1964. It did not traverse that paragraph 2. Hence, it was deemed admitted. However, it filed an amended answer dated May 25, 1964 wherein it denied that it was the owner of the three lots. It revealed that the three lots "belong and are registered in the names of the spouses Francisco N. Cervantes and Rosario N. Cervantes." The three answers of Bormaheco, Inc. contain the following affirmative defense: 13. That defendant's insistence to finally decide on the proposed sale of the land in question after 45 days had not only for its purpose the determination of its acquisition of the said Sta. Ana (Nassco) property during the said period, but also to negotiate with the actual and registered owner of the parcels of land covered by T.C.T. Nos. 43530, 43531 and 43532 in question which plaintiff was fully aware that the same were not in the name of the defendant (sic; Par. 18 of Answer to Amended Complaint, 10, 18 and 34, Record on Appeal). In that affirmative defense, Bormaheco, Inc. pretended that it needed forty-five days within which to acquire the Nassco property and "to negotiate" with the registered owner of the three lots. The absurdity of that pretension stands out in bold relief when it is borne in mind that the answers of Bormaheco, Inc. were verified by Cervantes and that the registered owner of the three lots is Cervantes himself. That affirmative defense means that Cervantes as president of Bormaheco, Inc. needed forty-five days in order to "negotiate" with himself (Cervantes). The incongruous stance of the Cervantes spouses is also patent in their answer to the amended complaint. In that answer they disclaimed knowledge or information of certain allegations which were well-known to Cervantes as president of Bormaheco, Inc. and which were admitted in Bormaheco's three answers that were verified by Cervantes. It is significant to note that Bormaheco, Inc. in its three answers, which were verified by Cervantes, never pleaded as an affirmative defense that Mrs. Cervantes opposed the sale of the three lots or that she did not authorize her husband to sell those lots. Likewise, it should be noted that in their separate answer the Cervantes spouses never pleaded as a defense that Mrs. Cervantes was opposed to the sale of three lots or that Cervantes could not bind the conjugal partnership. The appellants were at first hesitant to make it appear that Cervantes had committed the skullduggery of trying to sell property which he had no authority to alienate. It was only during the trial on May 17, 1965 that Cervantes declared on the witness stand that his wife was opposed to the sale of the three lots, a defense which, as already stated, was never interposed in the three answers of Bormaheco, Inc. and in the separate answer of the Cervantes spouses. That same viewpoint was adopted in defendants' motion for reconsideration dated November 20, 1965. But that defense must have been an afterthought or was evolved post litem motam since it was never disclosed in Cervantes'

letter of rescission and in his letter to Miss Tagle (Exh. F and Annex 1). Moreover, Mrs. Cervantes did not testify at the trial to fortify that defense which had already been waived for not having been pleaded (See sec. 2, Rule 9, Rules of Court). Taking into account the situation of Cervantes vis-a-vis Bormaheco, Inc. and his wife and the fact that the three lots were entirely occupied by Bormaheco's building, machinery and equipment and were mortgaged to the DBP as security for its obligation, and considering that appellants' vague affirmative defenses do not include Mrs. Cervantes' alleged opposition to the sale, the plea that Cervantes had no authority to sell the lots strains the rivets of credibility (Cf. Papa and Delgado vs. Montenegro, 54 Phil. 331; Riobo vs. Hontiveros, 21 Phil. 31). "Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith" (Art. 1159, Civil Code). Inasmuch as the sale was perfected and even partly executed, Bormaheco, Inc., and the Cervantes spouses, as a matter of justice and good faith, are bound to comply with their contractual commitments. Parenthetically, it may be observed that much misunderstanding could have been avoided had the broker and the buyer taken the trouble of making some research in the Registry of Deeds and availing themselves of the services of a competent lawyer in drafting the contract to sell.

An acquaintance hired by the Horillenos, Cresencia Harder, looked for buyers, and the latter came to the interest of Ramon Doromal, Sr. and Jr. In preparation for the execution of the sale (since the brothers and sisters Horilleno were scattered in various parts of the country: Carlos in Ilocos Sur, Mary in Baguio, Soledad and Fe, in Mandaluyong, Rizal, and Rosita in Basilan City), the Horillenos executed various powers of attorney in favor of their niece, Mary H. Jimenez. They also caused preparation of a power of attorney of identical tenor for signature by Javellana, and sent it with a letter of Carlos, dated 18 January 1968 unto her thru Mrs. Harder. Carlos informed Javellana that the price was P4.00 a square meter. It appears, however, that as early as October 1967, Carlos had received in check as earnest money from Ramon Doromal, Jr., the sum of P5,000.00 and the price therein agreed upon was P5.00 a square meter. At any rate, Javellana, not being agreeable, did not sign the power of attorney, and the rest of the co-owners went ahead with their sale of their 6/7. On the observation of Carlos, the deed of sale prepared by their common attorney in fact, Mary H. Jimenez, was signed and ratified in Candon, Ilocos Sur in 1968 and was brought to Carlos in the same month. The Register of Deeds of Iloilo refused to register right away, since the original registered owner, Justice Antonio Horilleno was already dead. Carlos then hired a counsel to file a petition within the cadastral case in 1968; said petition was approved. Thereafter, Carlos caused the registration (Register of Deeds Iloilo) of the order of the cadastral court approving the issuance of a new title in the name of the co-owners, as well as of the deed of sale to the Doromals, as a result of which on that same date, a new title was issued, in the name of the Horillenos to 6/7 and Javellana to 1/7. The Doromals paid Carlos the sum of P97,000.00 by a check of the Chartered Bank which was later substituted by check of PNB, because there was no Chartered Bank Branch in Ilocos Sur. Besides the amount paid in check, the Doromals according to their evidence still paid an additional amount in cash of P18,250.00 since the agreed price was P5.00 a square meter; and thus was consummated the transaction. In June 1968, Arturo H. Villanueva (Javellanas lawyer) arrived at the residence of the Doromals in Dumangas, Iloilo, bringing with him her letter of that date, making

G.R. No. L-36083 September 5, 1975 Spouses RAMON DOROMAL, SR., and ROSARIO SALAS, and Spouses RAMON DOROMAL, JR., and GAUDELIA VEGA, petitioners, vs.HON. COURT OF APPEALS and FILOMENA JAVELLANA FACTS Lot 3504 of the cadastral survey of Iloilo, situated in the poblacion of La Paz (a districtwith an area of a little more than 2-1/2 hectares was originally decreed in the name of the late Justice Antonio Horilleno in 1916. Before he died, Justice Horilleno executed a last will and testament attesting to the fact that it was a coownership between himself and his brothers and sisters (co-owners: Luis, Soledad, Fe, Rosita, Carlos and Esperanza, all surnamed Horilleno in the proportion of 1/7 undivided ownership each). Since Esperanza had already died, she was succeeded by her only daughter, Filomena Javellana. The co-owners led by Carlos (even though their right had not as yet been annotated in the title) and as to deceased Justice Antonio Horilleno, his daughter Mary, sometime since early 1967, had wanted to sell their shares, or if possible if Filomena Javellana were agreeable, to sell the entire property.

a formal offer to repurchase or redeem the 6/7 undivided share in Lot No. 3504, of the Iloilo Cadastre, which the Doromals bought from her erstwhile coowners, the Horillenos, for the sum of P30,000.00 (the sum Atty. Villanueva has with him which he would deliver to the Doromals as soon as they execute the contract of sale in her favor). The Doromals refused. Subsequently, Javellana filed the case before the CFI Iloilo seeking to exercise her right to redeem the share of the property, as co-owner, at the price stated in the deed of sale, i.e. P30,000.00. The trial judge, after hearing the evidence, ruled in favor of the Doromals, holding that Javellana had no more right, to redeem as she was already informed of the intended sale of the 6/7 share belonging to the Horillenos, and further condemned Javellana to pay attorneys fees, and moral and exemplary damages. Javellana appealed. The Court of Appeals (in CA-GR 47945-R) reversed the trial courts decision and held that although respondent Javellana was informed of her co-owners proposal to sell the land in question to the Doromals she was, however, never notified least of all, in writing, of the actual execution and registration of the corresponding deed of sale, hence, Javellana s right to redeem had not yet expired at the time she made her offer for that purpose thru her letter of 10 June 1968 delivered to the Doromals on even date. The intermediate court further held that the redemption price to be paid by Javellana should be that stated in the deed of sale which is P30,000 notwithstanding that the preponderance of the evidence proves that the actual price paid by the Doromals was P115,250. The Doromals appealed.

ISSUE (2): Whether the letters aforementioned sufficed to comply with the requirement of notice of a sale by co-owners under Article 1623 of the Civil Code. HELD: YES. It cannot be said that the CA erred in holding the same. The SC is of the opinion and so held that for purposes of the co-owner's right of redemption granted by Article 1620 of the Civil Code, the notice in writing which Article 1623 requires to be made to the other co-owners and from receipt of which the 30-day period to redeem should be counted is a notice not only of a perfected sale but of the actual execution and delivery of the deed of sale. This is implied from the latter portion of Article 1623 which requires that before a register of deeds can record a sale by a co-owner, there must be presented to him, an affidavit to the effect that the notice of the sale had been sent in writing to the other co-owners.

ISSUE (1): Whether the sale is said to be perfected during the time of the sending of letters. HELD: NO. While the letters relied upon by the Doromals could convey the idea that more or less some kind of consensus had been arrived at among the other co-owners to sell the property in dispute to the Doromals, it cannot be said definitely that such a sale had even been actually perfected. The difference in the prices per square meter in the two letters negatives the possibility that a price definite had already been agreed upon. While P5,000 might have indeed been paid to Carlos in October 1967, there is nothing to show that the same was in the concept of the earnest money contemplated in Article 1482 of the Civil Code as signifying perfection of the sale. Viewed in the backdrop of the factual milieu thereof extant in the record, said P5,000 were paid in the concept of earnest money as the term was understood under the Old Civil Code, that is, as a guarantee that the buyer would not back out, considering that it is not clear that there was already a definite agreement as to the price then and that the Doromals were decided to buy 6/7 only of the property should Javellana refuse to agree to part with her 1/7 share.

A sale may not be presented to the register of deeds for registration unless it be in the form of a duly executed public instrument. Moreover, the law prefers that all the terms and conditions of the sale should be definite and in writing. As aptly observed by Justice Gatmaitan in the decision under review, Article 1619 of the Civil Code bestows unto a co-owner the right to redeem and "to be subrogated under the same terms and conditions stipulated in the contract", and to avoid any controversy as to the terms and conditions under which the right to redeem may be exercised, it is best that the period therefor should not be deemed to have commenced unless the notice of the disposition is made after the formal deed of disposal has been duly executed. And it being beyond dispute that respondent herein has never been notified in writing of the execution of the deed of sale by which petitioners acquired the subject property, it necessarily follows that her tender to redeem the same made on June 10, 1968 was well within the period prescribed by law. Indeed, it is immaterial when she might have actually come to know about said deed, it appearing she has never been shown a copy thereof through a written communication by either any of the petitioners-purchasers or any of her co-owners-vendees. (Cornejo et al. vs. CA et al., 16 SCRA 775.) ISSUE (3): The petitioners contend that considering said finding of fact of the intermediate court, the CA erred in holding nevertheless that "the redemption price should be that stated in the deed of sale." Is their contention tenable? HELD: NO. The trial court found that "the consideration of P30,000 only was placed in the deed of sale to minimize the payment of the registration fees, stamps and sales tax." With this undisputed fact in mind, it is impossible for the Supreme Court to sanction petitioners' pragmatic but immoral posture. Being patently violative of public policy and injurious to public interest, the seemingly wide practice of understating considerations of transactions for the purpose of evading taxes and fees due to the government must be condemned and all parties guilty thereof

must be made to suffer the consequences of their ill-advised agreement to defraud the state. Verily, the trial court fell short of its devotion and loyalty to the Republic in officially giving its stamp of approval to the stand of petitioners and even berating respondent Javellana as wanting to enrich herself "at the expense of her own blood relatives who are her aunts, uncles and cousins." On the contrary, said "blood relatives" should have been sternly told, as the SC held, that they are in pari-delicto with petitioners in committing tax evasion and should not receive any consideration from any court in respect to the money paid for the sale in dispute. Their situation is similar to that of parties to an illegal contract.

G.R. No. 126812 November 24, 1998 GOLDENROD, INC., petitioner, vs. COURT OF APPEALS, PIO BARRETO & SONS, INC., PIO BARRETO REALTY DEVELOPMENT, INC. and ANTHONY QUE, respondents. FACTS: Pio Barreto and Sons, Inc. (BARRETO & SONS) owned 43 parcels of registered land with a total area of 18,500 square meters located at Carlos Palanca St., Quiapo, Manila. These properties were mortgaged with United Coconut Planters Bank (UCPB) and until 1988, the obligation remained unpaid making foreclosure of the mortgage imminent. Here comes Goldenrod, Inc. (GOLDENROD), which offered in writing to buy the subject property from BARRETO & SONS. The offer was accepted and resulted for the payment of P1 million earnest money. When the term of existence of BARRETO & SONS expired, all its assets and liabilities including the property located in Quiapo were transferred to respondent Pio Barreto Realty Development, Inc. (BARRETO REALTY). Petitioners and the latter subsequently agreed that petitioner GOLDENROD would be the one to pay the outstanding obligations of BARRETO REALTY with UCPB and, (b) pay the balance of the purchase price in installments within a 3year period. Petitioner, however, did not pay UCPB for the loan obligation of BARRETO REALTY; instead, it asked for an extension of one month to settle, which the bank granted. Petitioner requested another extension of sixty days to pay the loan. This time the bank demurred. Because of the denial by UCPB of its request, petitioner now informed respondent BARRETO REALTY that it could not go through with the purchase anymore and so they now demand the refund of the earnest money of P1 million they earlier gave. When the demand remain unheeded by BARRETO REALTY, petitioner GOLDENROD filed a complaint. In its Answer, private respondent contended that it was the agreement of the parties that the earnest money of P1 million would be forfeited to answer for losses and damages that might be suffered by private respondents in case of failure by petitioner to comply with the terms of their purchase agreement. As an aside, BARRETTO REALTY sold to Asiaworld Trade Center Phils., Inc. (ASIAWORLD) the property subject of this case. Subsequently, the trial court sustained GOLDENRODs complaint and found that there was no written agreement between the parties concerning forfeiture of the earnest money if the sale did not push through. It further declared that the earnest money given by petitioner to respondent BARRETO REALTY was intended to form part of the purchase price; thus, the refusal of the latter to return the money when the sale was not consummated violated Arts. 22 and 23 of the Civil Code against unjust enrichment. On appeal, the Court of Appeals reversed the trial court and ordered the dismissal of the complaint; hence, this petition.

Provisions that supported the conclusion of the SC regarding legal redemption Article 1619 Legal redemption is the right to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transmitted by onerous title. In the present case, the stipulation in the public evidence of the contract, made public by both vendors and vendees is that the price was P30,000.00. Article 1620 and 1623 A co-owner of a thing may exercise the right of redemption in case the share of all the other co- owners or any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one. The law seeks to protect redemptioner and converts his position into one not that of a contractually but of a legally subrogated creditor as to the right of redemption, if the price is not g rossly excessive, what the law had intended redemptioner to pay can be read in Art. 1623, which provides that The right of a legal pre-emption or redemption shall not be exercised except within thirty (30) days from the notice in writing by the prospective vendor, or by the vendor as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof of all possible redemptioners. Disposition The Supreme Court affirmed the decision of the Court of Appeals, with costs against Spouses Doromal Sr. and Doromal Jr.

Issue: Whether inthe absence of a specific stipulation, may the seller of real estate keep/forfeit the earnest money to answer for damages in the event the sale fails? Held: No. We sustain petitioner. Under Art. 1482 of the Civil Code, whenever earnest money is given in a contract of sale, it shall be considered as part of the purchase price and as proof of the perfection of the contract. It was an advance payment which must be deducted from the total price. Hence, the parties could not have intended that the earnest money or advance payment would be forfeited when the buyer should fail to pay the balance of the price, especially in the absence of a clear and express agreement thereon. By reason of its failure to make payment, petitioner, through its agent, informed private respondents that it would no longer push through with the sale. In other words, petitioner resorted to extrajudicial rescission of its agreement with private respondents. Rescission of reciprocal contracts may be extrajudicially rescinded unless successfully impugned in court. If the party does not oppose the declaration of rescission of the other party, specifying the grounds therefor, and it fails to reply or protest against it, its silence thereon suggests an admission of the veracity and validity of the rescinding party's claim. Private respondents did not interpose any objection to the rescission by petitioner of the agreement after it received the broker's letter rescinding the sale [due non-approval of the loan in UCPB]. Art. 1385 of the Civil Code provides that rescission creates the obligation to return the things which were the object of the contract together with their fruits and interest. The vendor is therefore obliged to return the purchase price paid to him by the buyer if the latter rescinds the sale, or when the transaction was called off and the subject property had already been sold to a third person, as what obtained in this case. Therefore, by virtue of the extrajudicial rescission of the contract to sell by petitioner without opposition from private respondents who, in turn, sold the property to other persons, private respondent BARRETTO REALTY, as the vendor, had the obligation to return the earnest money of P1,000,000.00 plus legal interest from the date it received notice of rescission from petitioner. It would be most inequitable if respondent BARRETTO REALTY would be allowed to retain petitioner's payment of P1,000,000.00 and at the same time appropriate the proceeds of the second sale made to another.

In essence, the theory of petitioners is that while it is true that they did express willingness to sell to private respondents the subject property for P6,500,000 provided the latter made known their own decision to buy it not later than July 31, 1978, the respondents' reply that they were agreeable was not absolute, so much so that when ultimately petitioners' representative went to Cebu City with a prepared and duly signed contract for the purpose of perfecting and consummating the transaction, respondents and said representative found variance between the terms of payment stipulated in the prepared document and what respondents had in mind, hence the bankdraft which respondents were delivering to petitioners' representative was returned and the document remained unsigned by respondents. Hence the action below for specific performance. FACTS: On July 12, 1978, petitioners, thru a certain Pedro C. Gamboa, sent to respondents a letter offering to sell the Sotto property situated at Tacloban City for P6,500,000. In the said letter, it is said that I am giving you and the other occupants the preference, but such priority has to be exercised within a given number of days as I do not want to lose the opportunity if you are not interested. I am therefore gluing you and the rest of the occupants until July 31, 1978 within which to decide whether you want to buy the property. If I do not hear from you by July 31, I will offer or close the deal with the other interested buyer. Reacting to the foregoing letter, a telegram was sent by "Yao King Ong & tenants" to Atty. Pedro Gamboa in Cebu City stating we agree to buy property proceed Tacloban to negotiate details. On July 27, 1978, Atty. Gamboa wired Yao King Ong in Tacloban City stating PROPOSAL ACCEPTED ARRIVING TUESDAY MORNING WITH CONTRACT PREPARE PAYMENT BANK DRAFT It is alleged by the respondents that when Atty. Gamboa arrived in Tacloban City bringing with him the prepared contract to purchase and to sell referred to in his telegram dated July 27, 1978for the purpose of closing the sale with an original term of payment of P2M on the date of the execution of the contract; the balance of P4.5M shall be fully paid within 90 days. However, to the complete surprise of respondents, the petitioner (except def. Tacloban City Ice Plant, Inc.) without giving notice to respondents, changed the mode of payment with respect to the balance of P4,500,000.00 by imposing upon respondents to pay same amount within thirty (30) days from execution of the contract instead of the former term of ninety (90) days. Petitioners filed a motion to dismiss which was denied by respondent judge.

SUGA SOTTO YUVIENCO, BRITANIA SOTTO, and MARCELINO SOTTO, petitioners, vs. HON. AUXENCIO C. DACUYCUY, Judge of the CFI of Leyte, DELY RODRIGUEZ, FELIPE ANG CRUZ, CONSTANCIA NOGAR, MANUEL GO, INOCENTES DIME, WILLY JULIO, JAIME YU, OSCAR DY, DY CHIU SENG, BENITO YOUNG, FERNANDO YU, SEBASTIAN YU, CARLOS UY, HOC CHUAN and MANUEL DY, respondents. (G.R. No. L-55048 May 27, 1981)

ISSUE: WON there is a perfected contract of sale? HELD: No. In this respect, the governing legal provision is, of course, Article 1319 of the Civil Code which provides: ART. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are constitute the contract. The offer must be certain the acceptance absolute. A qualified acceptance constitute a counter-offer.

Acceptance made by letter or telegram does not bind offerer except from the time it came to his knowledge. The contract, in a case, is presumed to have been entered into in the place where the offer was made. In the instant case, We can lay aside, for the moment, petitioners' contention that the letter of July 12, 1978 of Atty. Pedro C. Gamboa to respondents Yao King Ong and his companions constitute an offer that is "certain", although the petitioners claim that it was a mere expression of willingness to sell the subject property and not a direct offer of sale to said respondents. What We consider as more important and truly decisive is what is the correct juridical significance of the telegram of respondents instructing Atty. Gamboa to "proceed to Tacloban to negotiate details." We underline the word "negotiate" advisedly because to Our mind it is the key word that negates and makes it legally impossible for Us to hold that respondents' acceptance of petitioners' offer, assuming that it was a "certain" offer indeed, was the "absolute" one that Article 1319 above-quoted requires. Dictionarilly, the implication of "to negotiate" is practically the opposite of the Idea that an agreement has been reached. Webster's Third International Dictionary, Vol. II (G. & C. Merriam Co., 1971 Philippine copyright) gives the meaning of negotiate as "to communicate or confer with another so as to arrive at the settlement of some matter; meet with another so as to arrive through discussion at some kind of agreement or compromise about something; to arrange for or bring about through conference or discussion; work at or arrive at or settle upon by meetings and agreements or compromises ". Importantly, it must be borne in mind that Yao King Ong's telegram simply says "we agree to buy property". It does not necessarily connote acceptance of the price but instead suggests that the details were to be subject of negotiation. Respondents now maintain that what the telegram refers to as "details" to be "negotiated" are mere "accidental elements", not the essential elements of the contract. They even invite attention to the fact that they have alleged in their complaint (Par. 6) that it was as early as "in the month of October, 1977 (that) negotiations between plaintiffs and defendants for the purchase and sale (in question) were made, thus resulting to offers of same defendants and counter-offer of plaintiffs". But to Our mind such alleged facts precisely indicate the failure of any meeting of the minds of the parties, and it is only from the letter and telegrams above-quoted that one can determine whether or not such meeting of the minds did materialize. As We see it, what such allegations bring out in bold relief is that it was precisely because of their past failure to arrive at an agreement that petitioners had to put an end to the uncertainty by writing the letter of July 12, 1978. On the other hand, that respondents were all the time agreeable to buy the property may be conceded, but what impresses Us is that instead of "absolutely" accepting the "certain" offer if there was one of the petitioners, they still insisted on further negotiation of details. For anyone to read in the telegram of Yao that they accepted the price of P6,500,000.00 would be an inference not necessarily warranted by the words "we agree to buy" and "proceed Tacloban to negotiate details". If indeed the details being left by them for further negotiations were merely accidental or formal ones, what need was there to say in the telegram that they had

still "to negotiate (such) details", when, being unessential per their contention, they could have been just easily clarified and agreed upon when Atty. Gamboa would reach Tacloban? Anent the telegram of Atty. Gamboa of July 27, 1978, also quoted earlier above, We gather that it was in answer to the telegram of Yao. Considering that Yao was in Tacloban then while Atty. Gamboa was in Cebu, it is difficult to surmise that there was any communication of any kind between them during the intervening period, and none such is alleged anyway by respondents. Accordingly, the claim of respondents in their complaint below that there was an agreement of a down payment of P2 M, with the balance of P4.5M to be paid within 90 days afterwards is rather improbable to imagine to have actually happened. The alleged subsequent agreement about the P2 M down and P4.5 M in 90 days may at best be deemed as a distinct cause of action. And placed against the insistence of petitioners, as demonstrated in the two deeds of sale taken by Atty. Gamboa to Tacloban, that there was no agreement about 90 days, an issue of fact arose, which could warrant a trial in order for the trial court to determine whether or not there was such an agreement about the balance being payable in 90 days instead of the 30 days stipulated as alleged. Our conclusion, therefore, is that although there was no perfected contract of sale in the light of the letter of Atty. Gamboa of July 12, 1978 and the letter-reply thereto of Yao; it being doubtful whether or not, under Article 1319 of the Civil Code, the said letter may be deemed as an offer to sell that is "certain", and more, the Yao telegram is far from being an "absolute" acceptance under said article, still there appears to be a cause of action alleged in Paragraphs 8 to 12 of the respondents' complaint, considering it is alleged therein that subsequent to the telegram of Yao, it was agreed that the petitioners would sell the property to respondents for P6.5 M, by paving P2 M down and the balance in 90 days and which agreement was allegedly violated when in the deeds prepared by Atty. Gamboa and taken to Tacloban, only 30 days were given to respondents. But the foregoing conclusion is not enough to carry the day for respondents. It only brings Us to the question of whether or not the claim for specific performance of respondents is enforceable under the Statute of Frauds. In this respect, We may view the situation at hand from two angles, namely, (1) that the allegations contained in paragraphs 8 to 12 of respondents' complaint should be taken together with the documents already aforementioned and (2) that the said allegations constitute a separate and distinct cause of action. We hold that either way We view the situation, the conclusion is inescapable that the claim of respondents that petitioners have unjustifiably refused to proceed with the sale to them of the property in question is unenforceable under the Statute of Frauds. It is nowhere alleged in said paragraphs 8 to 12 of the complaint that there is any writing or memorandum, much less a duly signed agreement to the effect that the price of P6,500,000 fixed by petitioners for the real property herein involved was agreed to be paid not in cash but in installments as alleged by respondents. The only documented indicative of the non-whollycash payment existing in the record is that stipulated in Annexes 9 and 10 of respondents, the deeds already signed by the

petitioners and taken to Tacloban by Atty. Gamboa for the signatures of the respondents. In other words, the 90-day term for the balance of P4.5 M insisted upon by respondents choices not appear in any note, writing or memorandum signed by either the petitioners or any of them, not even by Atty. Gamboa. Hence, looking at the pose of respondents that there was a perfected agreement of purchase and sale between them and petitioners under which they would pay in installments of P2 M down and P4.5 M within ninety 90) days afterwards it is evident that such oral contract involving the "sale of real property" comes squarely under the Statute of Frauds (Article 1403, No. 2(e), Civil Code.) On the other score of considering the supposed agreement of paying installments as partly supported by the letter and telegram earlier quoted herein, His Honor declared with well studied ratiocination, albeit legally inaccurate, that: The next issue relate to the State of Frauds. It is contended that plaintiffs' action for specific performance to compel the defendants to execute a good and sufficient conveyance of the property in question (Sotto land and building) is unenforceable because there is no other note memorandum or writing except annexes "C", "C-l" and "D", which by themselves did not give birth to a contract to sell. The argument is not well founded. The rules of pleading limit the statement of the cause of action only to such operative facts as give rise to the right of action of the plaintiff to obtain relief against the wrongdoer. The details of probative matter or particulars of evidence, statements of law, inferences and arguments need not be stated. Thus, Sec. 1 of Rule 8 provides that 'every pleading shall contain in a methodical and logical form, a plain concise and direct statement of the ultimate facts on which the party pleading relies for his claim or defense, as the case may be, omitting the statement of mere evidentiary facts.' Exhibits need not be attached. The contract of sale sued upon in this case is supported by letters and telegrams annexed to the complaint and plaintiffs have announced that they will present additional evidences during the trial to prove their cause of action. The plaintiffs having alleged that the contract is backed up by letters and telegrams, and the same being sufficient memorandum, the complaint states a cause of action and they should be given their day in court and allowed to substantiate their allegations (Parades vs. Espino, 22 SCRA 1000). (Pp 165166, Record.) The foregoing disquisition of respondent judge misses at least two (2) juridical substantive aspects of the Statute of Frauds insofar as sale of real property is concerned. First, His Honor assumed that the requirement of perfection of such kind of contract under Article 1475 of the Civil Code which provides that "(t)he contract of sale is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price", the Statute would no longer apply as long as the total price or consideration is mentioned in some note or memorandum and there is no need of any indication of the manner in which such total price is to be paid. We cannot agree. In the reality of the economic world and the exacting demands of business interests monetary in character, payment on installments or staggered payment of the total price is entirely a different matter from cash payment,

considering the unpredictable trends in the sudden fluctuation of the rate of interest. In other words, it is indisputable that the value of money - varies from day to day, hence the indispensability of providing in any sale of the terms of payment when not expressly or impliedly intended to be in cash. Thus, We hold that in any sale of real property on installments, the Statute of Frauds read together with the perfection requirements of Article 1475 of the Civil Code must be understood and applied in the sense that the idea of payment on installments must be in the requisite of a note or memorandum therein contemplated. Stated otherwise, the inessential elements" mentioned in the case of Parades vs. Espino, 22 SCRA 1000, relied upon by respondent judge must be deemed to include the requirement just discussed when it comes to installment sales. There is nothing in the monograph re the Statute of Frauds appearing in 21 SCRA 250 also cited by His Honor indicative of any contrary view to this ruling of Ours, for the essence and thrust of the said monograph refers only to the form of the note or memorandum which would comply with the Statute, and no doubt, while such note or memorandum need not be in one single document or writing and it can be in just sufficiently implicit tenor, imperatively the separate notes must, when put together', contain all the requisites of a perfected contract of sale. To put it the other way, under the Statute of Frauds, the contents of the note or memorandum, whether in one writing or in separate ones merely indicative for an adequate understanding of all the essential elements of the entire agreement, may be said to be the contract itself, except as to the form. Secondly, We are of the considered opinion that under the rules on proper pleading, the ruling of the trial court that, even if the allegation of the existence of a sale of real property in a complaint is challenged as barred from enforceability by the Statute of Frauds, the plaintiff may simply say there are documents, notes or memoranda without either quoting them in or annexing them to the complaint, as if holding an ace in the sleeves is not correct. To go directly to the point, for Us to sanction such a procedure is to tolerate and even encourage undue delay in litigation, for the simple reason that to await the stage of trial for the showing or presentation of the requisite documentary proof when it already exists and is asked to be produced by the adverse party would amount to unnecessarily postponing, with the concomitant waste of time and the prolongation of the proceedings, something that can immediately be evidenced and thereby determinable with decisiveness and precision by the court without further delay.

G.R. No. 115849

January 24, 1996

FIRST PHILIPPINE INTERNATIONAL BANK (Formerly Producers Bank of the Philippines) and MERCURIO RIVERA, petitioners, vs. COURT OF APPEALS, CARLOS EJERCITO, in substitution of DEMETRIO DEMETRIA, and JOSE JANOLO,respondents.

Petitioner First Philippine International Bank (formerly Producers Bank of the Philippines; petitioner Bank, for brevity) is a banking institution organized and existing under the laws of the Republic of the Philippines. Petitioner Mercurio Rivera (petitioner Rivera, for brevity) is of legal age and was, at all times material to this case, Head-Manager of the Property Management Department of the petitioner Bank. Respondent Carlos Ejercito (respondent Ejercito, for brevity) is of legal age and is the assignee of original plaintiffs-appellees Demetrio Demetria and Jose Janolo. Respondent Court of Appeals is the court which issued the Decision and Resolution sought to be set aside through this petition. FACTS (1) In the course of its banking operations, the defendant Producer Bank of the Philippines acquired six (6) parcels of land with a total area of 101 hectares located at Don Jose, Sta. Rose, Laguna. The property used to be owned by BYME Investment and Development Corporation which had them mortgaged with the bank as collateral for a loan. The original plaintiffs, Demetrio Demetria and Jose O. Janolo, wanted to purchase the property and thus initiated negotiations for that purpose. (2) In the early part of August 1987 said plaintiffs, upon the suggestion of BYME investment's legal counsel, Jose Fajardo, met with defendant Mercurio Rivera, Manager of the Property Management Department of the defendant bank. The meeting was held pursuant to plaintiffs' plan to buy the property. After the meeting, plaintiff Janolo made a formal purchase offer to the bank through a letter (3) Defendant Rivera made a formal reply in behalf of the bank also indicating the baks counter-offer at P5.5M for more than 101 hectares on lot basis. (4) Plaintiff Janolo in his corresponding letter amended his previous offer and instead proposed to buy the subject lot at P4.250M in cash. (5) There was no reply to plaintiffs letter. What took place was a meeting in September 1987 between the plaintiffs and Luis Co, the Senior Vice-President of defendant bank. Rivera as well as the BYME lawyer also attended the meeting. Two days later, Janolo sent to bak through Rivera a letter accepting the offer for them to purchase the property at Sta. Rosa, Laguna, formerly owned by Byme Investment, for a total price of PESOS: FIVE MILLION FIVE HUNDRED THOUSAND (P5,500,000.00). (6) Rivera, through a letter, informed Demetria that the property which [the plaintiffs] have proposed to buy

are yet under study by the newly replaced Acting Conservator of the bank. (7) Series of demands were made by the plaintiffs for compliance by the bank with what plaintiff considered as a perfected contract of sale, which demands were in one form or another refused by the bank. As detailed by the trial court in its decision, on November 17, 1987, plaintiffs through a letter to defendant Rivera tendered payment of the amount of P5.5 million "pursuant to the perfected sale agreement." Defendants refused to receive both the payment and the letter. Instead, the parcels of land involved in the transaction were advertised by the bank for sale to any interested buyer. Plaintiffs demanded the execution by the bank of the documents on what was considered as a "perfected agreement." (8) The demands were communicated with the Acting Conservator but the plaintiffs got no response so they made a second tender of payment (in the same amount). (9) For receiving no response for four months, plaintiffs made a final demand for compliance by the bank with its obligations under the considered perfected contract of sale. In a reply letter by the defendants through Acting Conservator Encarnacion, they repudiated the authority of defendant Rivera and claimed that his dealings with the plaintiffs, particularly his counteroffer of P5.5 Million are unauthorized or illegal. On that basis, the defendants justified the refusal of the tenders of payment and the non-compliance with the obligations under what the plaintiffs considered to be a perfected contract of sale. (10) Plaintiffs filed a suit for specific performance with damages against the bank, its Manager Rivera and Acting Conservator Encarnacion. The basis of the suit was that the transaction had with the bank resulted in a perfected contract of sale, The defendants took the position that there was no such perfected sale because the defendant Rivera is not authorized to sell the property, and that there was no meeting of the minds as to the price. In the course of the proceedings in the respondent Court, Carlos Ejercito was substituted in place of Demetria and Janolo, in view of the assignment of the latters' rights in the matter in litigation to said private respondent. During the pendency of the proceedings in the CA, Henry Co and several other stockholders of the Bank filed an with the Regional Trial Court of Makatiagainst Encarnacion, Demetria and Janolo "to declare any perfected sale of the property as unenforceable and to stop Ejercito from enforcing or implementing the sale". (11) The trial Court declared the existence of a perfected sale and ordered defendant Producers Bank of the Philippines, upon finality of this decision and receipt from the plaintiffs the amount of P5.5 Million, to execute in favor of said plaintiffs a deed of absolute

sale over the aforementioned six (6) parcels of land, and to immediately deliver to the plaintiffs the owner's copies of T.C.T., inclusive, for purposes of registration of the same deed and transfer of the six (6) titles in the names of the plaintiffs. The CA denied the MR of petitioners and modified the ruling of the trial court as to damages (eliminated). ISSUE: Whether or not there was a perfected contract of sale. HELD: YES. On the basis of the evidence already in the record and as appreciated by the lower courts, the inevitable conclusion is simply that there was a perfected contract of sale. Article 1318 of the Civil Code enumerates the requisites of a valid and perfected contract as follows: "(1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established." There is no dispute on requisite no. 2. The object of the questioned contract consists of the six (6) parcels of land in Sta. Rosa, Laguna with an aggregate area of about 101 hectares, more or less, and covered by Transfer Certificates of Title. There is, however, a dispute on the first and third requisites. Petitioners allege that "there is no counter-offer made by the Bank, and any supposed counter-offer which Rivera (or Co) may have made is unauthorized. Since there was no counter-offer by the Bank, there was nothing for Ejercito (in substitution of Demetria and Janolo) to accept." They disputed the factual basis of the respondent Court's findings that there was an offer made by Janolo for P3.5 million, to which the Bank counter-offered P5.5 million. The Court has perused the evidence but cannot find fault with the said Court's findings of fact. Verily, in a petition under Rule 45 such as this, errors of fact if there be any - are, as a rule, not reviewable. The mere fact that respondent Court (and the trial court as well) chose to believe the evidence presented by respondent more than that presented by petitioners is not by itself a reversible error. In fact, such findings merit serious consideration by the Court, particularly where, as in this case, said courts carefully and meticulously discussed their findings. This is basic. Petitioners also alleged that Demetria's and Janolo's P4.25 million counter-offer in the letter dated September 17, 1987 extinguished the Bank's offer of P5.5 million.They disputed the respondent Court's finding that "there was a meeting of minds when on 30 September 1987 Demetria and Janolo through a letter dated September 30, 1987)"accepted" Rivera's counter offer of P5.5 million. Indeed, the Court sees no reason to disturb the lower courts' (both the RTC and the CA) common finding that private respondents' evidence is more in keeping with truth and logic that during the meeting on September 28, 1987, Luis Co and Rivera "confirmed that the P5.5 million price has been passed upon by the Committee and could no longer be lowered ". Hence, assuming arguendo that the counter-offer of P4.25 million extinguished the offer of P5.5 million, Luis Co's reiteration of the said P5.5 million price during the September 28, 1987 meeting revived the said offer. And by virtue of the September

30, 1987 letter accepting this revived offer, there was a meeting of the minds, as the acceptance in said letter was absolute and unqualified. The Bank's repudiation, through Conservator Encarnacion, of Rivera's authority and action, particularly the latter's counteroffer of P5.5 million, as being "unauthorized and illegal" came only on May 12, 1988 or more than seven (7) months after Janolo' acceptance. Such delay, and the absence of any circumstance which might have justifiably prevented the Bank from acting earlier, clearly characterizes the repudiation as nothing more than a last-minute attempt on the Bank's part to get out of a binding contractual obligation.

On Riveras Authority Be that as it may, and in addition to the foregoing disquisitions by the Court of Appeals, let us review the question of Rivera's authority to act and petitioner's allegations that the P5.5 million counter-offer was extinguished by the P4.25 million revised offer of Janolo. Here, there are questions of law which could be drawn from the factual findings of the respondent Court. They also delve into the contractual elements of consent and cause. The authority of a corporate officer in dealing with third persons may be actual or apparent. From the evidence found by respondent Court, it is obvious that petitioner Rivera has apparent or implied authority to act for the Bank in the matter of selling its acquired assets. In the very recent case of Limketkai Sons Milling, Inc. vs. Court of Appeals, et. al., the Court, through Justice Jose A. R. Melo, affirmed the doctrine of apparent authority as it held that the apparent authority of the officer of the Bank of P.I. in charge of acquired assets is borne out by similar circumstances surrounding his dealings with buyers. To be sure, petitioners attempted to repudiate Rivera's apparent authority through documents and testimony which seek to establish Rivera's actual authority. These pieces of evidence, however, are inherently weak as they consist of Rivera's selfserving testimony and various inter-office memoranda that purport to show his limited actual authority, of which private respondent cannot be charged with knowledge. In any event, since the issue is apparent authority, the existence of which is borne out by the respondent Court's findings, the evidence of actual authority is immaterial insofar as the liability of a corporation is concerned. Disposition The Court denies the petition. The assailed Decision is affirmed. Moreover, petitioner Bank is reprimanded for engaging in forumshopping and warned that a repetition of the same or similar acts will be dealt with more severely. Costs against petitioners.

G.R. No. 92871 August 2, 1991 - MARIA P. VDA. DE JOMOC, ET AL., petitioners,

vs. THE COURT OF APPEALS, REGIONAL TRIAL COURT OF MISAMIS ORIENTAL, 10th Judicial Region, Br. 25, respondents. G.R. No. 92860 August 2, 1991 - SPOUSES LIM LEONG KANG & LIM PUE KING, petitioners, vs. MAURA SO & HON. COURT OF APPEALS (Eleventh Division), respondents. FACTS:Petitioner Maria P. Vda. Jomoc, as administratrix and in behalf of all the heirs of the deceased Pantaleon Jomoc, filed a suit to recover the property of the estate subject of fictitious sale. When the trial court decided in favor of petitioner, Sps. Mariano & Maria So, the last of the transferees and intervenor, appealed. During the pendency of the appeal Jomoc executed a Deed of Extrajudicial Settlement and Sale of Land with private respondent Maria So for P300,000.00. The document was not yet signed by all the parties nor notarized but So had made partial payments amounting to P49,000.00. Mariano So agreed to settle the case by executing a Deed of Reconveyance in favor of the heirs of Pantaleon Jomoc which then resulted in the dismissal of his appeal. Consequently, on 28 February 1983 the heirs of Jomoc executed a another extra-judicial settlement with absolute sale in favor of spouses-intervenors Lim Leong Kang and Lim Pue filing. Maura So demanded from the Jomoc family the execution of a final deed of conveyance which Jomoc ignored. Maria So sued the heirs for specific performance to compel them to execute the proper registrable deed of sale over the lot and filed a notice of lis pendens with the Register of Deeds. It was on the same date, allegedly upon the Jomocs belief that Maura So had backed out from the transaction that the Jomocs executed the other extrajudicial settlement with sale of registered land in favor of the spouses Lim for a consideration of P200,000.00 part of which amount was allegedly intended to be returned to Maura So as reimbursement. The spouses Lim, however, registered their settlement and sale only on 27 April 1983. The lower court, finding that there was no sufficient evidence to show complainant respondents withdrawal from the sale, concluded that: (1) the case is one of double sale; (2) the spouses intervenors are registrants in bad faith who registered their questioned deed of sale long after the notice of lis pendens of Civil Case 8983 was recorded. On appeal, the trial court decision was affirmed except for the award of moral and exemplary damages and attorneys fees and expenses for litigation. Hence, the petitions.

subsequent sale to petitioner spouses Lim is null and void. 2) Whether there was a double sale 3) Whether spousesintervenors Lim Leong Kang and Lim Pue are buyers in good faith. HELD: Maura So did not subsequently abandon her intention of purchasing the subject lot. The facts reveal an agreement between the contracting parties to the effect that the consideration of P300,000 or whatever balance remains after deducting the advanced payments thereon, shall be paid upon the termination of (Mariano Sos) appeal in the case invo lving the property in question. Even if the sums paid by Maura So were allegedly intended to expedite the dismissal of the appeal of Mariano So, such payment only indicates interest in acquiring the subject lot. In addition, the claim by the defendants petitioners that the payments were for the gathering of the several heirs from far places to sign confirms Maura Sos continuing interest. The terms and the actual intention of the parties are clear and no reform requiring parole evidence is being sought to elucidate the intention further. The oral evidence offered by defendants-petitioners to show a subsequent refusal to proceed with the sale cannot be considered to reverse the express intention in the contract. The issue of double sale had to be resolved to determine whether or not complainant Maura So was entitled to the reliefs prayed for. There was no hard evidence to show that the vinculum or contractual relation between petitioners-heirs and Maura So had been cut-off. Yet, petitioners-heirs sold the same lot to spouses Lim. The case requires the discernment of who has the better right to the property. Article 1544 of the Civil Code provides that should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. In view of this provision, the spouses Lim do not have a better right. They purchased the land with full knowledge of a previous sale to Maura So and without requiring from the vendors-heirs any proof of the prior vendees revocation of her purchase. Neither the spouses Lim cannot be said to be buyers in good faith as they should have exercised extra caution in their purchase especially if at the time of the sale, the land was still covered by TCT 19648 bearing the name of Mariano So and was not yet registered in the name of the heirs of Pantaleon Jomoc, although it had been reconveyed to said heirs. When they registered the sale on 27 April 1983 after having been charged with notice of lis pendens annotated as early as 28 February 1983, they did so in bad faith or on the belief that a registration may improve their position being subsequent buyers of the same lot. Under Article 1544, mere registration is not enough to acquire new title. Good faith must concur.

ISSUE: 1) Whether or not private respondent Maura So abandoned or backed out from the agreement for the purchase of a lot belonging to the heirs of Pantaleon Jomoc, so that the

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