Sales Law Cases Art 1458

8/11/2019 Sales Law Cases Art 1458

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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 166862 December 20, 2006

MANILA METAL CONTAINER CORPORATION,petitioner,REYNALDO C. TOLENTINO, intervenor,

vs.PHILIPPINE NATIONAL AN!, respondent,DMCI"PRO#ECT DE$ELOPERS, INC., intervenor.

D ! I S I O N

CALLE#O, SR., J.%

"efore us is a petition for revie# on certiorariof the Decision$of the !ourt of %ppeals &!%' in !%().R. No.*+$- #hich affired the decision/of the Re0ional Trial !ourt &RT!', "ranch 1$, Pasi0 !it2, in !ivil !ase No.3$, and its Resolution-den2in0 the otion for reconsideration filed b2 petitioner Manila Metal !ontainer!orporation &MM!!'.

T&e A'(ece)e'(*

Petitioner #as the o#ner of a 3,4$ s5uare eter parcel of land located in Mandalu2on0 &no# a !it2', MetroManila. The propert2 #as covered b2 Transfer !ertificate of Title &T!T' No. --/463 of the Re0istr2 of Deeds ofRi7al. To secure a P644,444.44 loan it had obtained fro respondent Philippine National "an8 &PN"',petitioner e9ecuted a real estate ort0a0e over the lot. Respondent PN" later 0ranted petitioner a ne# creditaccoodation of P$,444,444.44: and, on Noveber $+, $61-, petitioner e9ecuted an %enden t*of Realstate Mort0a0e over its propert2. On March -$, $63$, petitioner secured another loan of P

+-,444.44 frorespondent PN", pa2able in 5uarterl2 installents of P

-/,+4.44, plus interests and other char0es.

On %u0ust , $63/, respondent PN" filed a petition for e9tra;udicial foreclosure of the r eal estate ort0a0eand sou0ht to have the propert2 sold at public auction for P6$$,-/./$, petitionerrepurchase price of P$,1*,+4.*1 asapproved b2 its SM%D and considerin0 the reliance ade b2 Manila Metal and the lon0 tie thathas elapsed, the approval of the hi0her ana0eent of the "an8 to confir the a0reeent of itsSM%D is clearl2 a potestative condition #hich cannot le0all2 pre;udice Manila Metal #hich hasacted and relied on the approval of SM%D. The "an8 cannot ta8e advanta0e of a condition #hichis entirel2 dependent upon its o#n #ill after acceptin0 and benefitin0 fro the substantial pa2entade b2 Manila Metal.

-. PN" approved the repurchase price of P$,1*,+4.*1 for #hich it accepted P1/,444.44 fro

Manila Metal. PN" cannot ta8e advanta0e of its o#n dela2 and lon0 inaction in deandin0 ahi0her aount based on unilateral coputation of interest rate #ithout the consent of ManilaMetal.
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Petitioner later filed an aended coplaint and supported its clai for daa0es #ith the follo#in0 ar0uentsB

-+. That in order to protect itself a0ainst the #ron0ful and alicious acts of the defendant "an8,plaintiff is constrained to en0a0e the services of counsel at an a0reed fee of P

4,444.44 and toincur liti0ation e9penses of at least P

-4,444.44, #hich the defendant PN" should be condenedto pa2 the plaintiff Manila Metal.

-1. That b2 reason of the #ron0ful and alicious actuations of defendant PN", plaintiff ManilaMetal suffered besirched reputation for #hich defendant PN" is liable for oral daa0es of atleast P

4,444.44.

-3. That for the #ron0ful and alicious act of defendant PN" #hich are hi0hl2 reprehensible,e9eplar2 daa0es should be a#arded in favor of the plaintiff b2 #a2 of e9aple or correction forthe public 0ood of at least P-4,444.44./-

Petitioner pra2ed that, after due proceedin0s, ;ud0ent be rendered in its favor, thusB

a' Declarin0 the %ended Real state Mort0a0e &%nne9 ?%?' null and void and #ithout an2 le0alforce and effect.

b' Declarin0 defendantacceptin0 plaintiff


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TA CO@R !ORT RRD IN DISMISSIN) TA %MNDD !OMPC%INT OF PC%INTIFF(%PPCC%NT.

VIII

TA CO@R !ORT RRD IN NOT %@%RDIN) PC%INTIFF(%PPCC%NT %!T%C, MOR%C%ND MPC%RE D%M%)S, %TTOTRNE


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%ccordin0 to respondent, petitioner 8ne# that the S%MD has no capacit2 to bind respondent and that itsauthorit2 is liited to adinisterin0, ana0in0 and preservin0 the properties and other special assets of PN".The S%MD does not have the po#er to sell, encuber, dispose of, or other#ise alienate the assets, since thepo#er to do so ust eanate fro its "oard of Directors. The S%MD #as not authori7ed b2 respondent


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Section /- of the !orporation !ode e9pressl2 provides that the corporate po#ers of allcorporations shall be e9ercised b2 the board of directors. =ust as a natural person a2 authori7eanother to do certain acts in his behalf, so a2 the board of directors of a corporation validl2dele0ate soe of its functions to individual officers or a0ents appointed b2 it. Thus, contracts oracts of a corporation ust be ade either b2 the board of directors or b2 a corporate a0ent dul2authori7ed b2 the board. %bsent such valid dele0ation>authori7ation, the rule is that thedeclarations of an individual director relatin0 to the affairs of the corporation, but not in the courseof, or connected #ith the perforance of authori7ed duties of such director, are held not bindin0 onthe corporation.

Thus, a corporation can onl2 e9ecute its po#ers and transact its business throu0h its "oard of Directors andthrou0h its officers and a0ents #hen authori7ed b2 a board resolution or its b2(la#s.+$

It appears that the S%MD had prepared a recoendation for respondent to accept petitioner


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Manila

FIRST DIVISION

G.R. No. L"116630 M4 25, 13

TOYOTA SHA7, INC., petitioner,vs.COURT O APPEALS ') LUNA L. SOSA, respondents.

DA$IDE, #R., J!

%t the heart of the present controvers2 is the docuent ar8ed 9hibit ?%? 1for the private respondent, #hich#as si0ned b2 a sales representative of To2ota Sha#, Inc. naed Popon0 "ernardo. The docuent reads asfollo#sB

* =une $636

%)RMNTS "T@N MR. SOS% POPON) "RN%RDO OF TOEOT%

SA%@, IN!.

$. all necessar2 docuents #ill be subitted to TOEOT% SA%@, IN!. &POPON)"RN%RDO' a #ee8 after, upon arrival of Mr. Sosa fro the Province &Marindu5ue'#here the unit #ill be used on the $6th of =une.

/. the do#npa2ent of P$44,444.44 #ill be paid b2 Mr. Sosa on =une $, $636.

-. the TOEOT% SA%@, IN!. CIT %! 2ello#, #ill be pic8(up J

sicK and released b2TOEOT% SA%@, IN!. on the $1th of =une at $4 a..

Ver2 trul2 2ours,

&S0d.' POPON) "RN%RDO.

@as this docuent, e9ecuted and si0ned b2 the petitioner


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Thereafter, Sosa sent t#o letters to To2ota. In the first letter, dated /1 =une $636 and si0ned b2 hi, hedeanded the refund, #ithin five da2s fro receipt, of the do#npa2ent of P$44,444.44 plus interest fro thetie he paid it and the pa2ent of daa0es #ith a #arnin0 that in case of To2ota


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to the anner of pa2ent 0oes into the price such that a disa0reeent on the anner of pa2ent istantaount to a failure to a0ree on the price. Definiteness as to the price is an essential eleent of a bindin0a0reeent to sell personal propert2. 1

Moreover, 9hibit ?%? sho#s the absence of a eetin0 of inds bet#een To2ota and Sosa. For one thin0,Sosa did not even si0n it. For another, Sosa #as #ell a#are fro its title, #ritten in bold letters, vi*.,

%)RMNTS "T@N MR. SOS% POPON)"RN%RDO OF TOEOT% SA%@, IN!.

that he #as not dealin0 #ith To2ota but #ith Popon0 "ernardo and that the latter did not isrepresent that hehad the authorit2 to sell an2 To2ota vehicle. Ae 8ne# that "ernardo #as onl2 a sales representative of To2otaand hence a ere a0ent of the latter. It #as incubent upon Sosa to act #ith ordinar2 prudence andreasonable dili0ence to 8no# the e9tent of "ernardo


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Manila

N "%N!

G.R. No. L"111 A++*( 25, 118

ANDRES :UIROGA,plaintiff(appellant,vs.PARSONS HARD7ARE CO.,defendant(appellee.

Alfre"o Chicote, (ose Arnai* an" Pascual B. A*an*a for appellant.Crossfiel" : ;Brien for appellee.

A$ANCE;A, J%

On =anuar2 /*, $6$$, in this cit2 of anila, a contract in the follo#in0 tenor #asentered into b2 and bet#een the plaintiff, as part2 of the first part, and =. Parsons &to#hose ri0hts and obli0ations the present defendant later subro0ated itself', as part2of the second partB

!ONTR%!T !TD "E %ND "T@N %NDRS HIRO)%%ND =. P%RSONS, "OTA MR!A%NTS ST%"CISAD INM%NIC%, FOR TA !CSIV S%C OF ?HIRO)%? "DS INTA VIS%E%N ISC%NDS.

%RTI!C $. Don %ndres Huiro0a 0rants the e9clusive ri0ht to sell his beds inthe Visa2an Islands to =. Parsons under the follo#in0 conditionsB

&%' Mr. Huiro0a shall furnish beds of his anufacture to Mr. Parsons for thelatter


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anner stipulated. The price a0reed upon #as the one deterined b2 the plaintiff forthe sale of these beds in Manila, #ith a discount of fro /4 to / per cent, accordin0to their class. Pa2ent #as to be ade at the end of si9t2 da2s, or before, at theplaintiff


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Republic of the PhilippinesSPRM !ORT

Manila

FIRST DIVISION

).R. No. C(/14** =une -4, $61

THE COMMISSIONER O INTERNAL RE$ENUE, petitioner,vs.ENGINEERING E:UIPMENT AND SUPPLY COMPANY AND THE COURT O TAtotal consideration as fi9ed or a0reed upon less the total aount of onthl2 rentalspaid the CSS durin0 the -(2ear lease period shall e9ecute the appropriate Deed toSCC, TR%NSFR and !ONVE the house and lot sub;ect of this !ontract in favor of theCSS, his heirs, successors and assi0ns, to0ether #ith all the fi9tures and accessoriestherein, free fro all liens and encubrances.

"efore the e9piration of the three(2ear lease period provided in the lease contract, nrico e9ercised hisoption to purchase the sub;ect propert2 b2 counicatin0 verball2 and in #ritin0 to Cu7 his #illin0ness

to pa2 the a0reed purchase price, but the spouses %peles supposedl2 i0nored nricoQs anifestation.This propted nrico to see8 recourse fro the aranga$for the enforceent of his ri0ht to purchasethe sub;ect propert2, but despite several notices, the spouses %peles failed to appear beforethe aranga$for settleent proceedin0s. Aence, thearanga$issued to nrico a !ertificate to File%ction.1

In a letter dated /+ =anuar2 $661 to nrico, the spouses %peles deanded that he pa2 his rentalarrears fro =anuar2 $66$ to Deceber $66+ and he vacate the sub;ect propert2 since it #ould beneeded b2 the spouses %peles theselves.

@ithout heedin0 the deand of the spouses %peles, nrico instituted on /- Februar2 $666 a!oplaint for Specific Perforance #ith Daa0es a0ainst the spouses %peles before the RT!,doc8eted as !ivil !ase No. H(66(-+3-*. nricoQs cause of action is founded on para0raph of the!ontract of Cease #ith Option to Purchase vestin0 hi #ith the ri0ht to ac5uire o#nership of thesub;ect propert2 after pa2in0 the a0reed aount of consideration.

Follo#in0 the pre(trial conference, trial on the erits ensued before the RT!.

nrico hiself testified as the sole #itness for his side. Ae narrated that he and Cu7 entered into the!ontract of Cease #ith Option to Purchase on /+ =anuar2 $631, #ith Cu7 si0nin0 the said !ontract atnricoQs office in Tio0 %venue, Hue7on !it2. The !ontract #as notari7ed on the sae da2 asevidenced b2 the !ertification on the Notar2 PublicQs Report issued b2 the !ler8 of !ourt of the RT! ofManila.3

On the other hand, the spouses %peles denied that Cu7 si0ned the !ontract of Cease #ith Option toPurchase, and posited that Cu7Qs si0nature thereon #as a for0er2. To buttress their contention, thespouses %peles offered as evidence Cu7Qs Philippine Passport #hich sho#ed that on /+ =anuar2 $631,the date #hen Cu7 alle0edl2 si0ned the said !ontract, she #as in the nited States of %erica. Thespouses %peles li8e#ise presented several official docuents bearin0 her 0enuine si0natures to reveal

their rear8able discrepanc2 fro the si0nature appearin0 in the disputed lease contract. The spouses%peles aintained that the2 did not intend to sell the sub;ect propert2.6

%fter the spouses %peles established b2 docuentar2 evidence that Cu7 #as not in the countr2 at thetie the !ontract of Cease #ith Option to Purchase #as e9ecuted, nrico, in rebuttal, retracted hisprior declaration that the said !ontract #as si0ned b2 Cu7 on /+ =anuar2 $66+. Instead, nrico averredthat Cu7 si0ned the !ontract after she arrived in the Philippines on -4 Ma2 $631. nrico further relatedthat after Cu7 si0ned the lease contract, she too8 it #ith her for notari7ation, and b2 the tie thedocuent #as returned to hi, it #as alread2 notari7ed.$4

On 3 October /44/, the RT! rendered a Decision in !ivil !ase No. H(66(-+3-* in favor of nrico.Since none of the parties presented a hand#ritin0 e9pert, the RT! relied on its o#n e9aination of thespecien si0natures subitted to resolve the issue of for0er2. The RT! found stri8in0 siilarit2bet#een Cu7Qs 0enuine si0natures in the docuents presented b2 the spouses %peles theselves andher purportedl2 for0ed si0nature in the !ontract of Cease #ith Option to Purchase. %bsent an2 findin0

of for0er2, the RT! bound the parties to the clear and une5uivocal stipulations the2 ade in the leasecontract. %ccordin0l2, the RT! ordered the spouses %peles to e9ecute a Deed of Sale in favor of
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nrico upon the latterQs pa2ent of the a0reed aount of consideration. Thefalloof the RT! DecisionreadsB

@ARFOR, this !ourt finds JnricoQsK coplaint to be substantiated b2 preponderance of evidenceand accordin0l2 orders

&$' JThe spouses %pelesK to copl2 #ith the provisions of the !ontract of Cease #ith Optionto Purchase: and upon pa2ent of total consideration as stipulated in the said !ONTR%!Tfor Jthe spouses %pelesK to e9ecute a Deed of %bsolute Sale in favor of JnricoK, over theparcel of land and the iproveents e9istin0 thereon located at No. 31 Tio0 %venue,

Hue7on !it2.

&/' JThe spouses %pelesK to pa2 JnricoK oral and e9eplar2 daa0es in the respectiveaounts ofP$44,444.44 and P4,444.44.

&-' JThe spouses %pelesK to pa2 attorne2Qs fees of P4,444.44 and costs of the suit.$$

The spouses %peles challen0ed the adverse RT! Decision before the !ourt of %ppeals and ur0ed theappellate court to nullif2 the assailed !ontract of Cease #ith Option to Purchase since Cu7Qs si0naturethereon #as clearl2 a for0er2. The spouses %peles ar0ued that it #as ph2sicall2 ipossible for Cu7 tosi0n the said !ontract on /+ =anuar2 $631 since she #as not in the Philippines on that date andreturned five onths thereafter. The spouses %peles called attention to nricoQs inconsistentdeclarations as to aterial details involvin0 the e9ecution of the lease contract, thereb2 castin0 doubton nricoQs credibilit2, as #ell as on the presued re0ularit2 of the contract as a notari7ed docuent.

On /4 Deceber /44*, the !ourt of %ppeals rendered a Decision in !%().R. !V No. 1+6-- 0rantin0the appeal of the spouses %peles and overturnin0 the ;ud0ent of the RT!. In arr ivin0 at its assaileddecision, the appellate court noted that the Notar2 Public did not observe utost care in certif2in0 thedue e9ecution of the !ontract of Cease #ith Option to Purchase. The !ourt of %ppeals chose not toaccord the disputed !ontract full faith and credence. The !ourt of %ppeals held, thusB

@ARFOR, the fore0oin0 preises considered, the appealed decision dated October 3, /44/ ofthe Re0ional Trial !ourt of Hue7on !it2, "ranch /$ in !ivil !ase No. H(66(-+3-* for specificperforance #ith daa0es is hereb2 RVRSD and a ne# is one entered disissin0 JnricoQsKcoplaint.$/

nricoQs Motion for Reconsideration #as denied b2 the !ourt of %ppeals in a Resolution$-dated /%pril /44.

nrico is presentl2 before this !ourt see8in0 the reversal of the unfavorable ;ud0ent of the !ourt of%ppeals, assi0nin0 the follo#in0 errors theretoB

I.

TA !ORT OF %PP%CS !OMMITTD &sic' RVRSI"C RROR @AN IT "RSAD %SIDTA RCIN) OF TA !ORT % HO PAOCDIN) TA V%CIDITE OF TA !ONTR%!T OF C%S@ITA OPTION TO PR!A%S %ND IN CI TAROF RCD TA%T TA S%ID !ONTR%!T OFC%S @%S % FOR)RE %ND TAS, NCC %ND VOID.

II.

TA !ORT OF %PP%CS !OMMITTD &sic' RVRSI"C RROR @AN !ONTR%RE TO TA

FINDIN)S OF TA !ORT % HO IT RCD TA%T TA DFNS OF FOR)RE @%SS"ST%NTI%CCE %ND !ONVIN!IN)CE PROVN "E !OMPTNT VIDN!.

Sipl2, nrico faults the !ourt of %ppeals for disturbin0 the factual findin0s of the RT! in disre0ard ofthe le0al aphoris that the factual findin0s of the trial court should be accorded 0reat #ei0ht andrespect on appeal.

@e do not a0ree.

nricoQs insistence on the infallibilit2 of the findin0s of the RT! seriousl2 ipairs the discretion of theappellate tribunal to a8e independent deterination of the erits of the case appealed before it.!ertainl2, the !ourt of %ppeals cannot s#allo# hoo8, line, and sin8er the factual conclusions of the trialcourt #ithout cripplin0 the ver2 office of revie#. %lthou0h #e have indeed held that the factual findin0s

of the trial courts are to be accorded 0reat #ei0ht and respect, the2 are not absolutel2 conclusive uponthe appellate court.$*

The reliance of appellate tribunals on the factual findin0s of the trial court is based on the postulate thatthe latter had firsthand opportunit2 to hear the #itnesses and to observe their conduct and deeanordurin0 the proceedin0s. Ao#ever, #hen such findin0s are not anchored on their credibilit2 and theirtestionies, but on the assessent of docuents that are available to appellate a0istrates andsub;ect to their scrutin2, reliance on the trial court finds no application.$

Moreover, appeal b2 #rit of error to the !ourt of %ppeals under Rule *$ of the Revised Rules of !ourt,the parties a2 raise both 5uestions of fact and>or of la#. In fact, it is iperative for the !ourt of%ppeals to revie# the findin0s of fact ade b2 the trial court. The !ourt of %ppeals even has the po#erto tr2 cases and conduct hearin0s, receive evidence and perfor an2 and all acts necessar2 to resolvefactual issues raised in cases fallin0 #ithin its ori0inal and appellate ;urisdiction.$+

nrico assiduousl2 pra2s before this !ourt to sustain the validit2 of the !ontract of Cease #ith Optionto Purchase. nrico asserts that the said !ontract #as voluntaril2 entered into and si0ned b2 Cu7 #hohad it notari7ed herself. The spouses %peles should be obli0ed to respect the ters of the a0reeent,and not be allo#ed to rene0e on their coitent thereunder and frustrate the sanctit2 of contracts.

%0ain, #e are not persuaded. @e a0ree #ith the !ourt of %ppeals that in rulin0 out for0er2, the RT!heavil2 relied on the testion2 proffered b2 nrico durin0 the trial, i0norin0 blatant contradictions thatdestro2 his credibilit2 and the veracit2 of his clais. On direct e9aination, nrico testified that Cu7si0ned the !ontract of Cease #ith Option to Purchase on /+ =anuar2 $631 in his presence,$1but herecanted his testion2 on the atter after the spouses %peles established b2 clear and convincin0evidence that Cu7 #as not in the Philippines on that date.$3In rebuttal, nrico ade a copleteturnabout and claied that Cu7 si0ned the !ontract in 5uestion on -4 Ma2 $631 after her arrival in thecountr2.$6The inconsistencies in nricoQs version of events have seriousl2 ipaired the probative valueof his testion2 and cast serious doubt on his credibilit2. Ais contradictor2 stateents on iportantdetails sipl2 eroded the inte0rit2 of his testion2.

@hile it is true that a notari7ed docuent carries the evidentiar2 #ei0ht conferred upon it #ith respectto its due e9ecution, and has in its favor the presuption of re0ularit2, this presuption, ho#ever, is notabsolute. It a2 be rebutted b2 clear and convincin0 evidence to the contrar2./4nrico hiselfaditted that Cu7 too8 the docuent and had it notari7ed #ithout his presence. Such fact aloneovercoes the presuption of re0ularit2 since a notar2 public is en;oined not to notari7e a docuentunless the persons #ho si0ned the sae are the ver2 sae persons #ho e9ecuted and personall2appeared before the said notar2 public to attest to the contents and truth of #hat are stated therein.

%lthou0h there is no direct evidence to prove for0er2, preponderance of evidence inar0uabl2 favors thespouses %peles. In civil cases, the part2 havin0 the burden of proof ust establish his case b2 apreponderance of evidence. Preponderance of evidence is the #ei0ht, credit, and value of thea00re0ate evidence on either side and is usuall2 considered to be s2non2ous #ith the ter ?0reater#ei0ht of the evidence? or ?0reater #ei0ht of the credible evidence.? Preponderance of evidence is aphrase #hich, in the last anal2sis, eans probabilit2 of the truth. It is evidence #hich is ore

convincin0 to the court as #orthier of belief than that #hich is offered in opposition thereto./$In thecase at bar, the spouses %peles #ere able to overcoe the burden of proof and prove b2 preponderant
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evidence in disputin0 the authenticit2 and due e9ecution of the !ontract of Cease #ith Option toPurchase. In contrast, nrico seeed to rel2 onl2 on his o#n self(servin0 declarations, #ithoutassertin0 an2 proof of corroboratin0 testion2 or circustantial evidence to buttress his clai.

ven assuin0 for the sa8e of ar0uent that #e a0ree #ith nrico that Cu7 voluntaril2 entered into the!ontract of Cease #ith Option to Purchase and personall2 affi9ed her si0nature to the said docuent,the provision on the option to purchase the sub;ect propert2 incorporated in said !ontract still reainsunenforceable.

There is no dispute that #hat nrico sou0ht to enforce in !ivil !ase No. H(66(-+3-* #as his purportedri0ht to ac5uire o#nership of the sub;ect propert2 in the e9ercise of his option to purchase the saeunder the !ontract of Cease #ith Option to Purchase. Ae ultiatel2 #ants to copel the spouses%peles to alread2 e9ecute the Deed of Sale over the sub;ect propert2 in his favor.

%n option is a contract b2 #hich the o#ner of the propert2 a0rees #ith another person that the lattershall have the ri0ht to bu2 the forerQs propert2 at a fi9ed price #ithin a certain tie. It is a conditionoffered or contract b2 #hich the o#ner stipulates #ith another that the latter shall have the ri0ht to bu2the propert2 at a fi9ed price #ithin a certain tie, or under, or in copliance #ith certain ters andconditions: or #hich 0ives to the o#ner of the propert2 the ri0ht to sell or deand a sale.//%n option isnot of itself a purchase, but erel2 secures the privile0e to bu2. It is not a sale of propert2 but a sale ofthe ri0ht to purchase. It is sipl2 a contract b2 #hich the o#ner of the propert2 a0rees #ith anotherperson that he shall have the ri0ht to bu2 his propert2 at a fi9ed price #ithin a certain tie. Ae does notsell his land: he does not then a0ree to sell it: but he does sell soethin0, i.e., the ri0ht or privile0e tobu2 at the election or option of the other part2. Its distin0uishin0 characteristic is that it iposes nobindin0 obli0ation on the person holdin0 the option, aside fro the consideration for the offer./-

It is also soeties called an ?unaccepted offer? and is sanctioned b2 %rticle $*16 of the !ivil !odeB

%rt. $*16. % proise to bu2 and sell a deterinate thin0 for a price certain is reciprocall2 deandable.

%n accepted unilateral proise to bu2 or to sell a deterinate thin0 for a price certain is bindin0 uponthe proissor if the proise is supported b2 a consideration distinct fro the price.

The second para0raph of %rticle $*16 provides for the definition and conse5uent ri0hts and obli0ationsunder an option contract. For an option contract to be valid and enforceable a0ainst the proissor,there ust be a separate and distinct consideration that supports it./*

In the landar8 case of South#estern Su0ar and Molasses !opan2 v. %tlantic )ulf and Pacific!o.,/#e declared that for an option contract to bind the proissor, it ust be supported b2

considerationB

There is no 5uestion that under %rticle $*16 of the ne# !ivil !ode ?an option to sell,? or ?a proise tobu2 or to sell,? as used in said article, to be valid ust be ?supported b2 a consideration distinct frothe price.? This is clearl2 inferred fro the conte9t of said article that a unilateral proise to bu2 or tosell, even if accepted, is onl2 bindin0 if supported b2 a consideration. I' o(&er >or)*, ?' cce(e)+'-(er rom-*e? c' o'4 &@e b-')-' e//ec( -/ *+or(e) b4 co'*-)er(-o', >&-c&me'* (&( (&e o(-o' c' *(- be >-(&)r>', e@e' -/ cce(e), -/ (&e *me -* 'o( *+or(e) b4'4 co'*-)er(-o'. Here -( -* 'o( )-*+(e) (&( (&e o(-o' -* >-(&o+( co'*-)er(-o'. I( c'(&ere/ore be >-(&)r>' 'o(>-(&*(')-' (&e cce('ce m)e o/ -( b4 eee. &phasissupplied.'

The doctrine re5uirin0 the pa2ent of consideration in an option contract enunciated in South#esternSu0ar is resonated in subse5uent cases and reains controllin0 to this da2. @ithout consideration thatis separate and distinct fro the purchase price, an option contract cannot be enforced: that holds true

even if the unilateral proise is alread2 accepted b2 the optionee.

The consideration is ?the #h2 of the contracts, the essential reason #hich oves the contractin0parties to enter into the contract.? This definition illustrates that the consideration conteplated tosupport an option contract need not be onetar2. %ctual cash need not be e9chan0ed for the option.Ao#ever, b2 the ver2 nature of an option contract, as defined in %rticle $*16, the sae is an onerouscontract for #hich the consideration ust be soethin0 of value, althou0h its 8ind a2 var2./+

@e have painsta8in0l2 e9ained the !ontract of Cease #ith Option to Purchase, as #ell as thepleadin0s subitted b2 the parties, and their testionies in open court, for an2 direct evidence orevidence aliunde to prove the e9istence of consideration for the option contract, but #e have foundnone. The onl2 consideration a0reed upon b2 the parties in the said !ontract is the supposed purchaseprice for the sub;ect propert2 in the aount not e9ceedin0 P$. Million, #hich could not be deeed to

be the sae consideration for the option contract since the la# and ;urisprudence e9plicitl2 dictate thatfor the option contract to be valid, it m+*( be *+or(e) b4 co'*-)er(-o' *er(e ') )-*(-'c(/rom (&e r-ce.

In "ible "aptist !hurch v. !ourt of %ppeals,/1#e stressed that an option contract needs to besupported b2 a separate consideration. The consideration need not be onetar2 but could consist ofother thin0s or underta8in0s. Ao#ever, if the consideration is not onetar2, these ust be thin0s orunderta8in0s of value, in vie# of the onerous nature of the option contract. Furtherore, #hen aconsideration for an option contract is not onetar2, said consideration ust be clearl2 specified assuch in the option contract or clause.

In the present case, it is indubitable that no consideration #as 0iven b2 nrico to the spouses %pelesfor the option contract. The absence of onetar2 or an2 aterial consideration 8eeps this !ourt froenforcin0 the ri0hts of the parties under said option contract.

7HEREORE, in vie# of the fore0oin0, the instant Petition is DNID. The Decision dated /4Deceber /44* and Resolution dated / %pril /44 of the !ourt of %ppeals in !%().R. !V No. 1+6--are hereb2 AIRMED. No costs.

SO ORDRD.

MINITA $. CHICO"NA=ARIO%ssociate =ustice
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Manila

N "%N!

G.R. No. 10123 December 2, 1

ANG YU ASUNCION, ARTHUR GO AND !EH TIONG, petitioners,vs.THE HON. COURT O APPEALS ') UEN REALTY DE$ELOPMENTCORPORATION, respondents.

Antonio M. Alano for petitioners.

>mali, Soriano : Associates for private respon"ent.

$ITUG, J!

%ssailed, in this petition for revie#, is the decision of the !ourt of %ppeals, dated 4* Deceber$66$, in !%().R. SP No. /+-* settin0 aside and declarin0 #ithout force and effect the ordersof e9ecution of the trial court, dated -4 %u0ust $66$ and /1 Septeber $66$, in !ivil !ase No.31(*$43.

The antecedents are recited in 0ood detail b2 the appellate court thusl2B

On =ul2 /6, $631 a Second %ended !oplaint for Specific Perforance#as filed b2 %n0 Eu %suncion and eh Tion0, et al., a0ainst "obb2 !un;ien0, Rose !u n;ien0 and =ose Tan before the Re0ional Trial !ourt,"ranch -$, Manila in !ivil !ase No. 31(*$43, alle0in0, aon0 others, thatplaintiffs are tenants or lessees of residential and coercial spaces o#nedb2 defendants described as Nos. +-4(+-3 On0pin Street, "inondo, Manila:that the2 have occupied said spaces since $6- and have been reli0iousl2pa2in0 the rental and copl2in0 #ith all the conditions of the lease contract:that on several occasions before October 6, $63+, defendants inforedplaintiffs that the2 are offerin0 to sell the preises and are 0ivin0 thepriorit2 to ac5uire the sae: that durin0 the ne0otiations, "obb2 !u n;ien0offered a price of P+(illion #hile plaintiffs ade a counter offer of P(illion: that plaintiffs thereafter as8ed the defendants to put their offer in#ritin0 to #hich re5uest defendants acceded: that in repl2 to defendant


21/44

for a price in e9cess of leven Million pesos. Nopronounceent as to costs.

SO ORDRD.

The decision of this !ourt #as brou0ht to the Supree !ourt b2 petition forrevie# on certiorari. The Supree !ourt denied the appeal on Ma2 +, $66$?for insufficienc2 in for and substances? &%nne9 A, Petition'.

On Noveber $, $664, #hile !%().R. !V No. /$$/- #as pendin0consideration b2 this !ourt, the !u n;ien0 spouses e9ecuted a Deed ofSale &%nne9 D, Petition' transferrin0 the propert2 in 5uestion to hereinpetitioner "uen Realt2 and Developent !orporation, sub;ect to thefollo#in0 ters and conditionsB

$. That for and in consideration of the su of FIFTNMICCION PSOS &P$,444,444.44', receipt of #hich infull is hereb2 ac8no#led0ed, the VNDORS hereb2sells, transfers and conve2s for and in favor of theVND, his heirs, e9ecutors, adinistrators orassi0ns, the above(described propert2 #ith all theiproveents found therein includin0 all the ri0hts andinterest in the said propert2 free fro all liens andencubrances of #hatever nature, e9cept the pendin0

e;ectent proceedin0:

/. That the VND shall pa2 the Docuentar2 StapTa9, re0istration fees for the transfer of title in his favorand other e9penses incidental to the sale of above(described propert2 includin0 capital 0ains ta9 andaccrued real estate ta9es.

%s a conse5uence of the sale, T!T No. $4/*>T(33$ in the nae of the !un;ien0 spouses #as cancelled and, in lieu thereof, T!T No. $63$+ #asissued in the nae of petitioner on Deceber -, $664.

On =ul2 $, $66$, petitioner as the ne# o#ner of the sub;ect propert2 #rote aletter to the lessees deandin0 that the latter vacate the preises.

On =ul2 $+, $66$, the lessees #rote a repl2 to petitioner statin0 thatpetitioner brou0ht the propert2 sub;ect to the notice oflis pen"ensre0ardin0!ivil !ase No. 31(*$43 annotated on T!T No. $4/*>T(33$ in the naeof the !u n;ien0s.

The lessees filed a Motion for 9ecution dated %u0ust /1, $66$ of theDecision in !ivil !ase No. 31(*$43 as odified b2 the !ourt of %ppeals in!%().R. !V No. /$$/-.

On %u0ust -4, $66$, respondent =ud0e issued an order &%nne9 %, Petition'5uoted as follo#sB

Presented before the !ourt is a Motion for 9ecutionfiled b2 plaintiff represented b2 %tt2. %ntonio %lbano."oth defendants "obb2 !u n;ien0 and Rose !un;ien0 represented b2 %tt2. Vicente Sison and %tt2.

%nacleto Ma0no respectivel2 #ere dul2 notified intoda2


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copl2 #ith the aforesaid Order of this !ourt #ithin aperiod of one &$' #ee8 fro receipt of this Order and fordefendants to e9ecute the necessar2 Deed of Sale ofthe propert2 in liti0ation in favor of the plaintiffs %n0 Eu

%suncion, eh Tion0 and %rthur )o for theconsideration of P$,444,444.44 and orderin0 theRe0ister of Deeds of the !it2 of Manila, to cancel andset aside the title alread2 issued in favor of "uen Realt2!orporation #hich #as previousl2 e9ecuted bet#eenthe latter and defendants and to re0ister the ne# title infavor of the aforesaid plaintiffs %n0 Eu %suncion, eh

Tion0 and %rthur )o.

SO ORDRD.

On the sae da2, Septeber /1, $66$ the correspondin0 #rit of e9ecution&%nne9 !, Petition' #as issued.1

On 4* Deceber $66$, the appellate court, on appeal to it b2 private respondent, set aside anddeclared #ithout force and effect the above 5uestioned orders of the court a quo.

In this petition for revie# on certiorari, petitioners contend that "uen Realt2 can be held boundb2 the #rit of e9ecution b2 virtue of the notice of lis pen"ens, carried over on T!T No. $63$+issued in the nae of "uen Realt2, at the tie of the latter


23/44

sta0e, a2 be #ithdra#n: the #ithdra#al is effective iediatel2 after its anifestation, such asb2 its ailin0 and not necessaril2 #hen the offeree learns of the #ithdra#al &Caudico vs. %rias,*- Phil. /14'. @here a period is 0iven to the offeree #ithin #hich to accept the offer, thefollo#in0 rules 0enerall2 0overnB

&$' If the period is not itself founded upon or supported b2 a consideration, the offeror is still freeand has the ri0ht to #ithdra# the offer before its acceptance, or, if an acceptance has beenade, before the offeror


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FIRST DIVISION

G.R. No. 13550 Oc(ober 1, 2003

SPOUSES GOMER ') LEONOR RAMOS,Petitioners,vs.SPOUSES SANTIAGO ') MINDA HERUELA, SPOUSES CHERRY ') RAYMONDPALLORI,Respondents.

D ! I S I O N

CARPIO, J!

The !ase

"efore the !ourt is a petition for revie#$assailin0 the Decision/dated /- %u0ust /444 and theOrder dated /4 Septeber /444 of the Re0ional Trial !ourt &?trial court?' of Misais Oriental,"ranch /$, in !ivil !ase No. 63(4+4. The trial court disissed the plaintiffsQ action for recover2 ofo#nership #ith daa0es.

The %ntecedent Facts

The spouses )oer and Ceonor Raos &?spouses Raos?' o#n a parcel of land, consistin0 of$,33- s5uare eters, covered b2 Transfer !ertificate of Title &?T!T?' No. $+- of the Re0isterof Deeds of !a0a2an de Oro !i t2. On $3 Februar2 $634, the spouses Raos ade ana0reeent #ith the spouses Santia0o and Minda Aeruela &?spouses Aeruela?'-coverin0 -4+s5uare eters of the land &?land?'. %ccordin0 to the spouses Raos, the a0reeent is a contractof conditional sale. The spouses Aeruela alle0e that the contract is a sale on installent basis.

On /1 =anuar2 $663, the spouses Raos filed a coplaint for Recover2 of O#nership #ithDaa0es a0ainst the spouses Aeruela. The case #as doc8eted as !ivil !ase No. 63(4+4. Thespouses Raos alle0e that out of theP$,-44*consideration for the sale of the land, thespouses Aeruela paid onl2 P*,444. The last installent that the spouses Aeruela paid #as on

$3 Deceber $63$. The spouses Raos assert that the spouses AeruelaQs un;ust refusal to pa2the balance of the purchase price caused the cancellation of the Deed of !onditional Sale. In=une $63/, the spouses Raos discovered that the spouses Aeruela #ere alread2 occup2in0 aportion of the land. !herr2 and Ra2ond Pallori &?spouses Pallori?', dau0hter and son(in(la#,respectivel2, of the spouses Aeruela, erected another house on the land. The spouses Aeruelaand the spouses Pallori refused to vacate the land despite deand b2 the spouses Raos.

The spouses Aeruela alle0e that the contract is a sale on installent basis. The2 paid P/,444 asdo#n pa2ent and ade the follo#in0 installent pa2entsB

-$ March $634 P/44/ Ma2 $634 P*44 &for %pril and Ma2 $634'/4 =une $634 P/44 &for =une $634'3 October $634 P44 &for =ul2, %u0ust and part of Septeber

$634'

March $63$ P*44 &for October and Noveber $634'$3 Deceber $63$ P-44 & for Deceber $634 and par t of =anuar2

$63$'

The spouses Aeruela further alle0e that the -4+ s5uare eters specified in the contract #asreduced to /3/ s5uare eters because upon subdivision of the land, /* s5uare eters becaepart of the road. The spouses Aeruela clai that in March $63/, the2 e9pressed their #illin0nessto pa2 the balance of P$$,-44 but the spouses Raos refused their offer.

T&e R+-' o/ (&e Tr- Co+r(

In its Decisiondated /- %u0ust /444, the trial court ruled that the contract is a sale b2installent. The trial court ruled that the spouses Raos failed to copl2 #ith Section * ofRepublic %ct No. +/ &?R% +/?',+as follo#sB

S!. *. In case #here less than t#o 2ears of installents #ere paid, the seller shall 0ive thebu2er a 0race period of not less than si9t2 da2s fro the date the installent becae due. If thebu2er fails to pa2 the installents due at the e9piration of the 0race period, the seller a2 cancelthe contract after thirt2 da2s fro receipt b2 the bu2er of the notice of cancellation or thedeand for rescission of the contract b2 a notarial act.

The dispositive portion of the Decision readsB

@ARFOR, the coplaint is hereb2 disissed and plaintiffJsK are ordered to e9ecute thecorrespondin0 Deed of Sale in favor of defendants after the latter have paid the reainin0balance of leven Thousand and Three Aundred Pesos &P$$,-44.44'.

Plaintiffs are further ordered to pa2 defendants the su of P/4,444.44, as %ttorne2Qs feesand P$4,444.44 as liti0ation e9penses.

SO ORDRD.1

In an Order3dated /4 Septeber /444, the trial court denied the spouses RaosQ otion forreconsideration.

Aence, this petition.

T&e I**+e*

The spouses Raos raise the follo#in0 issuesB

I. @hether R% +/ is applicable to an absolute sale of l and:

II. @hether %rticles $$6$ and $6/ of the !ivil !ode are applicable to the present case:

III. @hether the spouses Raos have a ri0ht to cancel the sale:

IV. @hether the spouses Aeruela have a ri0ht to daa0es .6
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25/44

T&e R+-' o/ (&e Co+r(

The petition is partl2 eritorious.

The "#ree$ent is a %ontract to &ell

In its Decision, the trial court ruled on #hether the contract ade b2 the parties is a conditionalsale or a sale on installent. The spouses RaosQ preise is that since the trial court ruled thatthe contract is a sale on installent, the trial court also in effect declared that the sale is anabsolute sale. The spouses Raos alle0e that R% +/ is not applicable to an absolute sale.

%rticle $*3 of the !ivil !ode provides that a contract of sale a2 be absolute or conditional. %contract of sale is absolute #hen title to the propert2 passes to the vendee upon deliver2 of thethin0 sold.$4% deed of sale is absolute #hen there is no stipulation in the contract that title to thepropert2 reains #ith the seller until full pa2ent of the purchase price.$$The sale is alsoabsolute if there is no stipulation 0ivin0 the vendor the ri0ht to cancel unilaterall2 the contract theoent the vendee fails to pa2 #ithin a fi9ed period.$/In a conditional sale, as in a contract tosell, o#nership reains #ith the vendor and does not pass to the vendee until full pa2ent ofthe purchase price.$-The full pa2ent of the purchase price parta8es of a suspensive condition,and non(fulfillent of the condition prevents the obli0ation to sell fro arisin0.$*

In this case, the a0reeent of the parties is ebodied in a one(pa0e, hand#rittendocuent.$The docuent does not contain the usual ters and conditions of a foral deed ofsale. The ori0inal docuent, elevated to this !ourt as part of the Records, is torn in part. Onl2the #ords ?CMNT "%SIS? is le0ible on the title. The naes and addresses of the parties andthe identit2 of the propert2 cannot be ascertained. The a0reeent onl2 provides for the follo#in0ters of the saleB

TRMJSK OF S%CB

PRI! PR SHM P4.44 -4+ SHM P $,-44.44

DO@N P%EMNT &T@O TAOS%ND PSOS' /,444.44

"%C%N! P%E%"C %T MINIMM OF P/44.44 P $-,-44.44

PR MONTA NTIC FCCE P%ID

In 'anuel v (odri#ue), et al.,$+the !ourt ruled that to be a #ritten contract, all the ters ustbe in #ritin0, so that a contract partl2 in #ritin0 and partl2 oral is in le0al effect an oral contract.The !ourt reiterated the 'anuelrulin0 in"lfonso v %ourt of "ppealsB$1

999 In Manuel, ?onl2 the price and the ters of pa2ent #ere in #ritin0,? but the ost iportantatter in the controvers2, the alle0ed transfer of title #as never ?reduced to an2 #rittendocuent.J?K It #as held that the contract should not be considered as a #ritten but an oral one:not a sale but a proise to sell: and that ?the absence of a foral deed of conve2ance? #as astron0 indication ?that the parties did not intend iediate transfer of title, but onl2 a transferafter full pa2ent of the price.? nder these circustances, the !ourt ruled %rticle $4* of the!ivil !ode of $336 &%rt. $6/ of the present !ode' to be inapplicable to the contract incontrovers2 a contract to sell or proise to sell ?#here title reains #ith the vendor until

fulfillent of a positive suspensive condition, such as full pa2ent of the price 9 9 J9K.

The records sho# that the spouses Aeruela did not iediatel2 ta8e actual, ph2sicalpossession of the land. %ccordin0 to the spouses Raos, in March $63$, the2 allo#ed the nieceof the spouses Aeruela to occup2 a portion of the land. Indeed, the spouses Raos alle0ed thatthe2 onl2 discovered in =une $63/ that the spouses Aeruela #ere alread2 occup2in0 the land. Intheir ans#er to the coplaint, the spouses Aeruela and the spouses Pallori alle0ed that theiroccupation of the land is la#ful because havin0 ade partial pa2ents of the purchase price,?the2 alread2 considered theselves o#ners? of the land.$3!learl2, there #as no transfer of titleto the spouses Aeruela. The spouses Raos retained their o#nership of the land. This onl2sho#s that the parties did not intend the transfer of o#nership until full pa2ent of the purchaseprice.

(" *552 is the "pplicable +aw

The trial court did not err in appl2in0 R% +/ to the present case.

%rticles $$6$$6and $6//4of the !ivil !ode are applicable to contracts of sale. In contracts tosell, R% +/ applies. In (illo v %ourt of "ppeals,/$the !ourt declaredB

999 no#n as the Maceda Ca#, R.%. No. +/ reco0ni7es in conditional sales of all 8inds of realestate &industrial, coercial, residential' the ri0ht of the seller to cancel the contract upon non(pa2ent of an installent b2 the bu2er, #hich is sipl2 an event that prevents the obli0ation ofthe vendor to conve2 title fro ac5uirin0 bindin0 force. It also provides the ri0ht of the bu2er oninstallents in case he defaults in the pa2ent of succeedin0 installents 999.

Sections - and * of R% +/ provideB

Sec. -. In all transactions or contracts involvin0 the sale or financin0 of real estate on installentpa2ents, includin0 residential condoiniu apartents but e9cludin0 industrial lots,coercial buildin0s and sales to tenants under Republic %ct Nubered Thirt2(ei0ht hundredfort2(four as aended b2 Republic %ct Nubered Si9t2(three hundred ei0ht2(nine, #here thebu2er has paid at least t#o 2ears of installents, the bu2er is entitled to the follo#in0 ri0hts incase he defaults in the pa2ent of succeedin0 installentsB

&a' To pa2, #ithout additional interest, the unpaid installents due #ithin the total 0race periodearned b2 hi, #hich is hereb2 fi9ed at the rate of one onth 0race period for ever2 one 2ear ofinstallent pa2ents adeBProvi"e",That this ri0ht shall be e9ercised b2 the bu2er onl2 once inever2 five 2ears of the life of the contract and its e9tensions, if an2.

&b' If the contract is cancelled, the seller shall refund to the bu2er the cash surrender value ofthe pa2ents on the propert2 e5uivalent to fift2 per cent of the total pa2ents ade and, afterfive 2ears of installents, an additional five per cent ever2 2ear but not to e9ceed ninet2 per centof the total pa2ents adeB Provi"e",That the actual cancellation of the contract shall ta8eplace after thirt2 da2s fro receipt b2 the bu2er of the notice of cancellation or the deand forrescission of the contract b2 a notarial act and upon full pa2ent of the cash surrender value tothe bu2er.

Do#n pa2ents, deposits or options on the contract shall be included in the coputation of thetotal nuber of installents ade.

Sec. *. In case #here less than t#o 2ears of installents #ere paid, the seller shall 0ive thebu2er a 0race period of not less than si9t2 da2s fro the date the installent becae due. If the

bu2er fails to pa2 the installents due at the e9piration of the 0race period, the seller a2 cancel
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26/44

the contract after thirt2 da2s fro receipt b2 the bu2er of the notice of cancellation or thedeand for rescission of the contract b2 a notarial act.

In this case, the spouses Aeruela paid less than t#o 2ears of installents. Thus, Section * of R%+/ applies. Ao#ever, there #as neither a notice of cancellation nor deand for rescission b2notarial act to the spouses Aeruela. In ly$pia -ousin#, .nc v Panasiatic Travel %orp,//the!ourt ruled that the vendor could 0o to court to deand ;udicial rescission in lieu of a notarial actof rescission. Ao#ever, an action for reconve2ance is not an action for rescission. The !ourte9plained in ly$piaB

The action for reconve2ance filed b2 petitioner #as predicated on an assuption that its contractto sell e9ecuted in favor of respondent bu2er had been validl2 cancelled or rescinded. Therecords #ould sho# that, indeed, no such cancellation too8 place at an2 tie prior to theinstitution of the action for reconve2ance. 999

999

999 Not onl2 is an action for reconve2ance conceptuall2 different fro an action for rescissionbut that, also, the effects that flo# fro an affirative ;ud0ent in either case #ould beateriall2 dissiilar in various respects. The ;udicial resolution of a contract 0ives rise to utualrestitution #hich is not necessaril2 the situation that can arise in an action for reconve2ance.

%dditionall2, in an action for rescission &also often tered as resolution', unli8e in an action forreconve2ance predicated on an e9tra;udicial rescission &rescission b2 notarial act', the !ourt,instead of decreein0 rescission, a2 authori7e for a ;ust cause the fi9in0 of a period./-

In the present case, there bein0 no valid rescission of the contract to sell, the action forreconve2ance is preature. Aence, the spouses Aeruela have not lost the statutor2 0raceperiod #ithin #hich to pa2. The trial court should have fi9ed the 0race period to si9t2 da2sconforabl2 #ith Section * of R% +/.

The spouses Aeruela are not entirel2 fault(free. The2 have been reiss in perforin0 theirobli0ation. The trial court found that the spouses Aeruela offered once to pa2 the balance of thepurchase price. Ao#ever, the spouses Aeruela did not consi0n the pa2ent durin0 thependenc2 of the case. In the ean#hile, the spouses Aeruela en;o2ed the use of the land.

For the breach of obli0ation, the court, in its discretion, and appl2in0 %rticle //46 of the !ivil!ode,/*a2 a#ard interest at the rate of +G per annu on the aount of daa0es./Thespouses Aeruela have been en;o2in0 the use of the land since $63/. In $66, the2 allo#ed theirdau0hter and son(in(la#, the spouses Pallori, to construct a house on the land. nder thecircustances, the !ourt dees it proper to a#ard interest at +G per annu on the balance ofthe purchase price.

The records do not sho# #hen the spouses Raos ade a deand fro the spouses Aeruelafor pa2ent of the balance of the purchase price. The coplaint onl2 alle0ed that the spousesAeruelaQs ?un;ust refusal to pa2 in full the purchase price 999 has caused the Deed of!onditional Sale to be rescinded, revo8ed and annulled.?/+The coplaint did not specif2 #henthe spouses Raos ade the deand for pa2ent. For purposes of coputin0 the le0alinterest, the rec8onin0 period should be the filin0 on /1 =anuar2 $663 of the coplaint forreconve2ance, #hich the spouses Raos erroneousl2 considered an action for rescission of thecontract.

The !ourt notes the reduction of the land area fro -4+ s5uare eters to /3/ s5uare eters.

pon subdivision of the land, /* s5uare eters becae part of the road. Ao#ever, Santia0oAeruela e9pressed his #illin0ness to pa2 for the -4+ s5uare eters a0reed upon despite the

reduction of the land area./1Thus, there is no dispute on the aount of the purchase price even#ith the reduction of the land area.

n the "ward of "ttorney/s ees and +iti#ation 1penses

The trial court ordered the spouses Raos to pa2 the spouses Aeruela and the spouses Pallorithe aount ofP/4,444 as attorne2Qs fees and P$4,444 as liti0ation e9penses. %rticle //43/3ofthe !ivil !ode provides that sub;ect to certain e9ceptions, attorne2Qs fees and e9penses ofliti0ation, other than ;udicial costs, cannot be recovered in the absence of stipulation. None ofthe enuerated e9ceptions applies to this case. Further, the polic2 of the la# is to put no

preiu on the ri0ht to liti0ate./6

Aence, the a#ard of attorne2Qs fees and liti0ation e9pensesshould be deleted.

7HEREORE, #e AIRMthe Decision dated /- %u0ust /444 of the Re0ional Trial !ourt ofMisais Oriental, "ranch /$, disissin0 the coplaint for Recover2 of O#nership #ithDaa0es, #ith the follo#in0 MODIICATION B

$. The spouses Aeruela shall pa2 the spouses Raos P$$,-44 as balance of the purchase priceplus interest at +G per annu fro /1 =anuar2 $663. The spouses Aeruela shall pa2 #ithin +4da2s fro finalit2 of this Decision:

/. pon pa2ent, the spouses Raos shall e9ecute a deed of absolute sale of the land anddeliver the certificate of title in favor of the spouses Aeruela:

-. In case of failure to thus pa2 #ithin +4 da2s fro finalit2 of this Decision, the spouses Aeruelaand the spouses Pallori shall iediatel2 vacate the preises #ithout need of further deand,and the do#n pa2ent and installent pa2ents of P*,444 paid b2 the spouses Aeruela shallconstitute rental for the land:

*. The a#ard of P/4,444 as attorne2Qs fees and P$4,444 as liti0ation e9penses in favor of thespouses Aeruela and the spouses Pallori is deleted.

SO ORDERED.

ANTONIO T. CARPIO

%ssociate =ustice
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Manila

S!OND DIVISION

G.R. No. 13866 #+'e 25, 2003

HEIRS O #ESUS M. MASCU;ANA, rere*e'(e) b4 #OSE MA. R. MASCU;ANA,petitioners,vs.

COURT O APPEALS, A:UILINO ARTE, ') SPOUSES RODOLO ') CORA=ONLAYUMAS,respondents.

D ! I S I O N

CALLE#O, SR., J!

This is a petition for revie# on certiorariof the Decision$of the !ourt of %ppeals &!%' in !%().R. !VNo. -$$1 affirin0 the Decision/of the Re0ional Trial !ourt &RT!' of San !arlos !it2, Ne0rosOccidental, #hich ordered the disissal of the petitionersQ coplaint for recover2 of possession anddaa0es.

The %ntecedents

)ertrudis @uthrich and her si9 other siblin0s #ere the co(o#ners of a parcel of land identified as CotNo. $/* of the San !arlos !it2, Ne0ros Occidental !adastre, #ith an area of $,1/6 s5uare eters andcovered b2 Transfer !ertificate of Title &T!T' No. $*-(R &T(/66-1'(-3.-Over tie, )ertrudis and t#oother co(o#ners sold each of their one(seventh &$>1' shares, or a total area of 1*$ s5uare eters, to=esus Mascuana. The latter then sold a portion of his $*4(s5uare(eter undivided share of thepropert2 to Diosdado Suilhi0. Mascuana later sold an additional $+4(s5uare(eter portion toSuilhi0 on %pril 1, $6+$. Ao#ever, the parties a0reed to revo8e the said deed of sale and, in lieuthereof, e9ecuted a Deed of %bsolute Sale on %u0ust $/, $6+$. In the said deed, Mascuana, asvendor, sold an undivided *+6(s5uare(eter portion of the propert2 for P*,+64.44, #ith P-,+64.44 asdo#n pa2ent, and under the follo#in0 ters of pa2entB

That the balance of ON TAOS%ND PSOS &P$,444.44' shall be paid b2 the VND unto theVNDOR as soon as the above(portions of Cot $/* shall have been surve2ed in the nae of theVND and all papers pertinent and necessar2 to the issuance of a separate !ertificate of Title in thenae of the VND shall have been prepared.*

On Deceber -$, $6+$, Mascuana and =ose ). stabillo e9ecuted a Deed of 9chan0e and%bsolute Sale of Real state,in #hich stabillo deeded to Mascuana a portion of his propert2abuttin0 that of Suilhi0 on the southeast.

In the eantie, a surve2 #as conducted for the co(o#ners of Cot No. $/* on =ul2 6, $6+/. Thesubdivision plan of the said lot #as approved b2 the Director of Cands on %u0ust /, $6+/. The portionof the propert2 deeded to Suilhi0 #as identified in the said plan as Cot No. $/*(".+

Mean#hile, Mascuana died intestate on %pril /4, $6+ and #as survived b2 his heirs, va M. llisin,Renee Ae#lett, !aren Vda. de Opea, Marilou D2 and =ose Ma. R. Mascuana.

On %pril /*, $6+3, Suilhi0 e9ecuted a Deed of Sale of Real Propert2 1on a portion of Cot No. $/*("

#ith an area of *+6 s5uare eters and the iproveents thereon, in favor of !ora7on Ca2uas, the#ife of =ud0e Rodolfo Ca2uas, for the price of P$$,444.44. The spouses Ca2uas then had the

propert2 subdivided into t#o lotsB Cot No. $/*("(/ #ith an area of 1$ s5uare eters under the nae of=esus Mascuana, and Cot No. $/*("($, #ith an area of *+6 s5uare eters under their naes.3Thespouses Ca2uas too8 possession of the propert2 and caused the cuttin0 of tall 0rasses thereon.pon the plea of a reli0ious or0ani7ation, the2 allo#ed a chapel to be constructed on a portion of thepropert2.6In =anuar2 $63, the spouses Ca2uas allo#ed %5uilino "arte to sta2 on a portion of thepropert2 to #ard off s5uatters.$4"arte and his 8in, Rosto "arte, then had their houses constructed onthe propert2.

On October $, $63, the spouses Ca2uas received a Cetter$$fro the counsel of Renee Tedre#,offerin0 to bu2 their share of the propert2 for S$,444.44. For her part, !ora7on Ca2uas #rotePepito Mascuana, offerin0 to pa2 the aount of P$,444.44, the balance of the purchase price of the

propert2 under the deed of absolute sale e9ecuted b2 Mascuana and Suilhi0 on %u0ust $/,$6+$.$/Ao#ever, the addressee refused to receive the ail atter.$-

n8no#n to the spouses Ca2uas, T!T No. 363+$*#as issued over Cot No. $/*(" in the nae of=esus Mascuana on March $1, $63+.

On Noveber $1, $63+, the heirs of Mascuana filed a !oplaint$for recover2 of possession of CotNo. $/*(" and daa0es #ith a #rit of preliinar2 in;unction, alle0in0 that the2 o#ned the sub;ect lot b2virtue of successional ri0hts fro their deceased father. The2 averred that "arte surreptitiousl2 enteredthe preises, fenced the area and constructed a house thereon #ithout their consent. %ttached asanne9es to the coplaint #ere T!T No. 363+ and a certification$+fro the Office of the !it2 Treasurer,Cand Ta9 Division, vouchin0 that the propert2 in 5uestion #as o#ned b2 the petitioners and that the2had paid the ta9es thereon until $66/.

In his ans#er to the coplaint, "arte aditted havin0 occupied a portion of Cot No. $/*(", but claiedthat he secured the perission of Rodolfo Ca2uas, the o#ner of the sub;ect propert2. Ae added thathe did not fence the propert2, and that the petitioners did not use the sae as a passa0e#a2 in 0oin0to "roce Street fro their house. "arte raised the follo#in0 special defensesB &a' the petitioners #ereestopped fro assertin0 o#nership over the lot in 5uestion because the2 did not ob;ect #hen heoccupied the said portion of the lot: &b' neither did the petitioners protest #hen a church #as built onthe propert2, or #hen residential houses #ere constructed thereon: &c' the petitioners still as8ed "arteand the other occupants #hether the2 had notified Rodolfo Ca2uas of the constructions on thepropert2: and &d' the heirs of Mascuana, throu0h the la#2er of Mrs. Renee M. Tedre#, even #rote aletter$1to Rodolfo Ca2uas on October $, $63, e9pressin0 her #illin0ness to bu2 the sub;ect propert2for S$,444.44.

On %pril 3, $66$, the spouses Ca2uas filed a Motion for Ceave to Intervene,$3alle0in0 therein thatthe2 had a le0al interest in Cot No. $/*("($ as its bu2ers fro Suilhi0, #ho in turn purchased thesae fro Mascuana. In their ans#er in intervention,$6the spouses Ca2uas alle0ed that the2 #erethe true o#ners of the sub;ect propert2 and that the2 had #anted to pa2 the ta9es thereon, but the

Cand Ta9 cler8 refused to receive their pa2ents on account that the petitioners had alread2 adesuch pa2ent. The spouses Ca2uas further aintained that the petitioners had no cause of actiona0ainst "arte, as the2 had authori7ed hi to occup2 a portion of Cot No. $/*("($. The spousesCa2uas also averred that the petitioners #ere estopped fro den2in0 their ri0ht of o#nership andpossession of the sub;ect lot, as one of the had even offered to repurchase a portion of Cot No. $/*(" via letter. The said spouses interposed a counterclai for daa0es, claiin0 o#nership over thepropert2, and pra2ed, thusB

@ARFOR, it is ost respectfull2 pra2ed that this AONOR%"C !ORT render ;ud0ent in favorof the Intervenors and the defendant %5uilino "arte, orderin0B

$. That the coplaint a0ainst %5uilino "arte be disissed #ith costs a0ainst the plaintiff:

/. That the Intervenors spouses =ud0e Rodolfo S. Ca2uas and !ora7on %. Ca2uas be

declared as the le0al and true o#ners of Cot $/*(":
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-. That the plaintiffs should deliver iediatel2 to the Intervenors, T!T No. 363+ #hich is intheir possession:

*. That the plaintiffs be ade to pa2 to the Intervenors the su of TAIRTE TAOS%ND&P-4,444.44' PSOS oral daa0es: TN TAOS%ND &P$4,444.44' PSOS attorne2Qsfees plus TAR ANDRD &P-44.44' PSOS as appearance fee per hearin0.

Intervenors pra2 for such other relief and reedies as a2 be deeed b2 this Aonorable !ourt as ;ustand e5uitable in the preises.

%t the trial, intervenor Rodolfo Ca2uas testified that he and his #ife bou0ht the sub;ect propert2 in$6+3, and that nobod2 ob;ected to their possession of the land, includin0 the petitioners. In $614, areli0ious or0ani7ation as8ed his perission to construct a chapel on the disputed lot: he allo#ed theconstruction since the sae #ould be used for the fiesta.Ae further declared that part of the chapelstill stood on the propert2. In $63, a fire ra7ed the to#nQs public ar8et, thereb2 dislocatin0 nuerouspeople. "arte #as one of the fire victis, #ho also happened to be a 0ood friend and politicalsupporter of Rodolfo. Out of 0ood#ill, "arte #as allo#ed to occup2 a portion of the said lot, alon0 #ithsoe other fire victis. Rodolfo clarified that the others #ere to sta2 there onl2 on a teporar2 basis,but aditted that "arteQs children also sta2ed in the sub;ect propert2./4

Rodolfo Ca2uas further narrated that in $631, !ora7on #rote one of the petitioners(heirs, PepitoMascuana, re5uestin0 that the title of the lot be transferred in Suilhi0Qs nae so that the2 couldli8e#ise arran0e for the conve2ance of the title in their naes. Pepito failed to clai the letter, andthereafter, filed a case of e;ectent a0ainst "arte and Rodolfo Ca2uasQ brother(in(la#, Pepito %ntonio.The case, the #itness added, #as disissed as a0ainst the t#o parties. Offered in evidence #ere thefollo#in0B a S#orn Stateent on the !urrent and Fair Mar8et Value of the Real Propert2 issued in $61-as re5uired b2 Presidential Decree No. 1+, and ta9 receipts./$

Rodolfo Ca2uas aditted on cross(e9aination that at the tie the2 bou0ht the propert2 froSuilhi0, the title #as still in the possession of the @uthrich fail2. Ae added that he filed an adverseclai before the Re0ister of Deeds of San !arlos !it2, Ne0ros Occidental, on Cot No. $/*(" in =anuar2$63+, or after the case had alread2 been filed in court. Castl2, the #itness deposed that he did notfence the propert2 after bu2in0 the sae, but that his brother(in(la# constructed a coco(luber 2ardthereon upon his authorit2.//

On =anuar2 -4, $66+, the trial court rendered ;ud0ent in favor of "arte and the spouses Ca2uas.The falloof the decision readsB

@ARFOR, preises considered, ;ud0ent is hereb2 rendered in favor of Intervenors(counterclaiants and defendant and a0ainst plaintiffs(counterclai defendants orderin0 as follo#sB

$. The disissal of the plaintiffQs coplaint #ith costs a0ainst the:

/. The plaintiffs to ;ointl2 pa2 Intervenors(counterclaiants no# RT! =ud0e Rodolfo S.Ca2uas and !ora7on %. Ca2uasB

&a' P$4,444.44 for attorne2Qs fees: and

&b' P-4,444.44 as oral daa0es:

-. The plaintiffs, as counterclai defendants, to copl2 #ith the above(stated obli0ation oftheir late father, Mr. =esus Mascuana, under the Deed of %bsolute Sale, 9h. ?-?, pp. 6/(6-, 9p., thru plaintiff Mr. =ose Mascuana, includin0 the dese0ra0ation &sic' surve2 todese0re0ate the *+6(s5uare(eter portion of said Cot No. $/*(", San !arlos !adastre, thisprovince, sold to the late Diosdado Suilhi0, if the sae has not 2et been done despite

#hat has been said herein earlier to said effect, and the e9ecution of the Final Deed of Salein their capacit2 as the heirs and successors(in(interest of the late Mr. =esus Mascuana,thru Mr. =ose Mascuana, coverin0 the *+6(s5uare(eter dese0re0ated portion of said CotNo. $/*(", #ithin si9t2 &+4' da2s counted fro the finalit2 of this Decision, in favor of theIntervenors(spouses, after #hich the said Intervenors(spouses shall pa2 the, thru Mr. =oseMascuana, the P$,444.44 balance due to the as successors(in(interest of the late Mr.=esus Mascuana:

*. In case plaintiffs fail to copl2 #ith #hat are herein ordered for the to do, the !ler8 of!ourt V of this !ourt to do all that the2 #ere to do as herein ordered in the te9t anddispositive portion hereof, at the e9pense of Intervenors spouses to be later reibursed b2

plaintiffs, includin0 the dese0ra0ation &sic' surve2 of said *+6(s5uare(eter portion of saidCot JNo.K $/*(", San !arlos !adastre, Ne0ros Occidental, if the sae has not 2et beendone and the e9ecution of the Final Deed of Sale on behalf of all the plaintiffs as heirs andsuccessors(in(interest of the late Mr. =esus Mascuana coverin0 the said dese0re0atedportion of *+6 s5uare eters of the aforesaid lot, in favor of Intervenors spouses, to the endthat separate title therefor a2 be issued in their naes, after the2 shall have paidthe P$,444.44 balance due plaintiffs under said Deed of %bsolute Sale, 9h. ?-.?

SO ORDRD./-

Forth#ith, the petitioners appealed the case to the !%, raisin0 the follo#in0 issues of fact and la#B

a. @hether or not the contract of alienation of Cot No. $/*(" in favor of Diosdado Suilhi0in $6+$ #as a contract to sell or a contract of sale:

b. @hether or not Diosdado Suilhi0 had an2 ri0ht to sell Cot No. $/*(" in favor ofintervenor !ora7on Ca2uas in $6+3./*

On Ma2 , /44-, the !% affired the decision of the trial court. It ruled that the contract bet#een thepetitionersQ father and Suilhi0 #as one of sale. Foreost, the !% e9plained, the contract #asdenoinated as a ?Deed of %bsolute Sale.? The stipulations in the contract li8e#ise revealed the clearintention on the part of the vendor &Mascuana' to alienate the propert2 in favor of the vendee&Suilhi0'. In three various docuents, the late Mascuana even ade declarations that Suilhi0 #asalread2 the o#ner of the disputed land. The !% added that the adission a2 be 0iven in evidencea0ainst Mascuana and his predecessors(in(interest under Section /+, Rule $-4 of the Revised Ruleson vidence. %s to the ar0uent that the contract bet#een Mascuana and Suilhi0 #as not effectivebecause it #as sub;ect to a suspensive condition that did not occur, the !% ruled that the conditionreferred to b2 the petitioners refers onl2 to the pa2ent of the balance of the purchase price and not tothe effectivit2 of the contract./avvphi/.*-I

%s to the petitionersQ contention that even if the contract #ere one of sale, o#nership cannot betransferred to Suilhi0 because Mascuana #as not 2et the o#ner of the lot at the tie of the alle0edsale, the appellate court ruled that the re0istration of the land to be sold is not a prere5uisite to acontract of sale.

The Present Petition

%00rieved, the petitioners filed the instant petition for revie# on certiorari#ith this !ourt, #here thefollo#in0 lone le0al issue #as raisedB

@%S TA S%C OF COT NO. $/*(" M%D "E =SS M. M%S!U%N% IN F%VOR OF DIOSD%DOSMICAI) % !ONTR%!T TO SCC OR !ONTR%!T OF S%CL/
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@e note that the ori0inal action of the petitioners a0ainst %5uilino "arte #as one for recover2 ofpossession of Cot No. $/*(". @ith the intervention of the respondents Rodolfo and !ora7on Ca2uas#ho claied o#nership over the propert2, and the ac5uiescence of the parties, evidence #as adducedto prove #ho, bet#een the petitioners &as plaintiffs' and the respondents &as defendants(intervenors'#ere the la#ful o#ners of the sub;ect propert2 and entitled to its possession.

The petitioners resolutel2 contend that the Deed of %bsolute Sale dated %u0ust $/, $6+$ bet#een theirfather and Suilhi0 #as a ere contract to sell because at the tie of the said sale, the lateMascuana #as not 2et the re0istered o#ner of Cot No. $/* or an2 of its portions. The2 assert thatSuilhi0 could not have ac5uired an2 ri0hts over the lot due to the fact that a person can onl2 sell #hathe o#ns or is authori7ed to sell, and the bu2er can ac5uire no ore than #hat the seller can transfer

le0all2. Finall2, the petitioners insist that the docuent in controvers2 #as sub;ect to a suspensivecondition, not a resolutor2 condition, #hich is a t2pical attribute of a contract of sale.

The petition is denied for lac8 of erit.

The issues raised b2 the petitioners in this case are factual, and under Rule * of the Rules of !ourt,onl2 5uestions of la# a2 be raised in this !ourt, the reason bein0 that this !ourt is not a trier of facts.It is not to re(e9aine the evidence on record and to calibrate the sae. Moreover, the findin0s andconclusions of the trial court as affired b2 the !% are conclusive on the !ourt, absent of an2 evidencethat the trial court, as #ell as the !% i0nored, isinterpreted and isconstrued facts andcircustances of substance #hich, if considered, #ould alter or reverse the outcoe of the case./+

@e have revie#ed the records and find no ;ustification for a reversal or even a odification of theassailed decision of the !%.

ven on the erits of the petition, the !ourt finds that the decision of the trial court as #ell as the rulin0of the !% are based on the ev

Sales Law Cases Art 1458

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Transcript of Sales Law Cases Art 1458