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1. CRUZ vs. FERNANDO 477 scra 173 (200S) G.R. NO.

145470 December 9, 2005


LUIS V. CRUZ and AIDA CRUZ, vs. ALEJANDRO FERNANDO,SR., and RITA FERNANDO

D E C I S I O N
AUSTRIA-MARTINEZ, J.:
For resolution is a petition Ior review on certiorari under Rule 45 oI the Rules oI Court, assailing the
Decision|1| dated October 3, 2000 oI the Court oI Appeals (CA) in CA-G.R. CV No. 61247, dismissing petitioners`
appeal and aIIirming the decision oI the Regional Trial Court (RTC) oI Malolos, Bulacan, Branch 79, in Civil Case No.
877-M-94.

The antecedent Iacts are as Iollows:

Luis V. Cruz and Aida Cruz (petitioners) are occupants oI the Iront portion oI a 710-square meter property located
in Sto. Cristo, Baliuag, Bulacan. On October 21, 1994, spouses Alejandro Fernando, Sr. and Rita Fernando (respondents)
Iiled beIore the RTC a complaint Ior accion publiciana against petitioners, demanding the latter to vacate the premises and
to pay the amount oI P500.00 a month as reasonable rental Ior the use thereoI. Respondents alleged in their complaint
that: (1) they are owners oI the property, having bought the same Irom the spouses Clodualdo and Teresita Glorioso
(Gloriosos) per Deed oI Sale dated March 9, 1987; (2) prior to their acquisition oI the property, the Gloriosos oIIered to
sell to petitioners the rear portion oI the property but the transaction did not materialize due to petitioners` Iailure to
exercise their option; (3) the oIIer to sell is embodied in a Kasunduan dated August 6, 1983 executed beIore the Barangay
Captain; (4) due to petitioners` Iailure to buy the allotted portion, respondents bought the whole property Irom the
Gloriosos; and (5) despite repeated demands, petitioners reIused to vacate the property.|2|

Petitioners Iiled a Motion to Dismiss but the RTC dismissed it Ior lack oI merit in its Order dated March 6,
1995.|3| Petitioners then Iiled their Answer setting Iorth the aIIirmative deIenses that: (1) the Kasunduan is a perIected
contract oI sale; (2) the agreement has already been 'partially consummated as they already relocated their house Irom
the rear portion oI the lot to the Iront portion that was sold to them; (3) Mrs. Glorioso prevented the complete
consummation oI the sale when she reIused to have the exact boundaries oI the lot bought by petitioners surveyed, and the
existing survey was made without their knowledge and participation; and (4) respondents are buyers in bad Iaith having
bought that portion oI the lot occupied by them (petitioners) with Iull knowledge oI the prior sale to them by the
Gloriosos.|4|

AIter due proceedings, the RTC rendered a Decision on April 3, 1998 in Iavor oI respondents. The decretal
portion oI the decision provides:

PREMISES CONSIDERED, the herein plaintiIIs was able to prove by preponderance oI evidence the case oI
accion publiciana, against the deIendants and judgment is hereby rendered as Iollows:

1. Ordering deIendants and all persons claiming under them to vacate placeIully (sic) the premises in question
and to remove their house thereIore (sic);

2. Ordering deIendants to pay plaintiII the sum oI P500.00 as reasonable rental per month beginning October 21,
1994 when the case was Iiled beIore this Court and every month thereaIter until they vacate the subject premises and to
pay the costs oI suit.

The counter claim is hereby DISMISSED Ior lack oI merit. SO ORDERED.|5|

Petitioners appealed the RTC decision but it was aIIirmed by the CA per its Decision dated October 3, 2000.

Hence, the present petition raising the Iollowing issues:

1. Whether the Honorable Court oI Appeals committed an error oI law in holding that the Agreement
(Kasunduan) between the parties was a 'mere oIIer to sell, and not a perIected 'Contract oI Purchase and Sale?

2. Whether the Honorable Court oI Appeals committed an error oI law in not holding that where the parties
clearly gave the petitioners a period oI time within which to pay the price, but did not Iix said period, the remedy oI the
vendors is to ask the Court to Iix the period Ior the payment oI the price, and not an 'accion publiciana?

3. Whether the Honorable Court oI Appeals committed an error oI law in not ordering respondents to at least
deliver the 'back portion oI the lot in question upon payment oI the agreed price thereoI by petitioners, assuming that the
Regional Trial Court was correct in Iinding that the subject matter oI the sale was said 'back portion, and not the 'Iront
portion oI the property?

4. Whether the Honorable Court oI Appeals committed an error oI law in aIIirming the decision oI the trial court
ordering the petitioners, who are possessors in good Iaith, to pay rentals Ior the portion oI the lot possessed by them?|6|

The RTC dwelt on the issue oI which portion was being sold by the Gloriosos to petitioners, Iinding that
it was the rear portion and not the Iront portion that was being sold; while the CA construed the Kasunduan as a mere
contract to sell and due to petitioners` Iailure to pay the purchase price, the Gloriosos were not obliged to deliver to them
(petitioners) the portion being sold.

Petitioners, however, insist that the agreement was a perIected contract oI sale, and their Iailure to pay the
purchase price is immaterial. They also contend that respondents have no cause oI action against them, as the obligation
set in the Kasunduan did not set a period, consequently, there is no breach oI any obligation by petitioners.

The resolution oI the issues in this case principally is dependent on the interpretation oI the Kasunduan dated
August 6, 1983 executed by petitioners and the Gloriosos. The Kasunduan provided the Iollowing pertinent stipulations:

a. Na pumayag ang mga maysumbong (reIerring to the Gloriosos) na pagbilhan ang mga ipinagsumbong
(reIerring to petitioners) na bahagi ng lupa at ang ipagbibili ay may sukat na 213 metrong parisukat humigit kumulang sa
halagang P40.00 bawat metrong parisukat;

b. Na sa titulong papapanaugin ang magiging kabuuang sukat na mauukol sa mga ipinagsusumbong ay 223
metrong parisukat at ang 10 metro nito ay bilang kaloob ng mga maysumbong sa mga Ipinagsusumbong na bahagi ng
right oI way;

c. Na ang right oI way ay may luwang na 1.75 meters magmula sa daang Lopez Jaena patungo sa likuran ng lote
na pagtatayuan ng bahay ng mga Ipinagsusumbong na kanyang bibilhin;

d. Na ang gugol sa pagpapasukat at pagpapanaog ng titulo ay paghahatian ng magkabilang panig na ang panig ay
magbibigay ng halagang hindi kukulanging sa halagang tig-AAPAT NA DAANG PISO (P400.00);

e. Na ang ipinagsusumbong ay tiyakang ililipat ang bahay sa bahaging kanilang nabili o mabibili sa buwan ng
Enero 31, 1984;|7| (Emphasis supplied)

Under Article 1458 oI the Civil Code, a contract oI sale is a contract by which one oI the contracting parties
obligates himselI to transIer the ownership and to deliver a determinate thing, and the other to pay thereIor a
price certain in money or its equivalent. Article 1475 oI the Code Iurther provides that the contract oI sale is
perIected at the moment there is meeting oI the minds upon the thing which is the object oI the contract and upon
the price. From that moment the parties may reciprocally demand perIormance subject to the provisions oI the law
governing the Iorm oI contracts.

In a contract oI sale, the title to the property passes to the vendee upon the delivery oI the thing sold, as
distinguished Irom a contract to sell where ownership is, by agreement, reserved in the vendor and is not to pass to the
vendee until Iull payment oI the purchase price.|8| Otherwise stated, in a contract oI sale, the vendor loses ownership
over the property and cannot recover it until and unless the contract is resolved or rescinded; whereas, in a contract to sell,
title is retained by the vendor until Iull payment oI the price. In the latter contract, payment oI the price is a positive
suspensive condition, Iailure oI which is not a breach but an event that prevents the obligation oI the vendor to convey
title Irom becoming eIIective.

The Kasunduan provides Ior the Iollowing terms and conditions: (a) that the Gloriosos agreed to sell to
petitioners a portion oI the property with an area oI 213 meters at the price oI P40.00 per square meter; (b) that in the title
that will be caused to be issued, the aggregate area is 223 square meters with 10 meters thereoI serving as right oI way; (c)
that the right oI way shall have a width oI 1.75 meters Irom Lopez Jaena road going towards the back oI the lot where
petitioners will build their house on the portion oI the lot that they will buy; (d) that the expenses Ior the survey and Ior
the issuance oI the title will be divided between the parties with each party giving an amount oI no less than P400.00; and
(e) that petitioners will deIinitely relocate their house to the portion they bought or will buy by January 31, 1984.

The Ioregoing terms and conditions show that it is a contract to sell and not a contract oI sale. For one, the
conspicuous absence oI a deIinite manner oI payment oI the purchase price in the agreement conIirms the conclusion that
it is a contract to sell. This is because the manner oI payment oI the purchase price is an essential element beIore a valid
and binding contract oI sale can exist.|9| Although the Civil Code does not expressly state that the minds oI the parties
must also meet on the terms or manner oI payment oI the price, the same is needed, otherwise there is no sale.|10| As
held in Toyota Shaw, Inc. vs. Court oI Appeals,|11| a deIinite agreement on the manner oI payment oI the price is an
essential element in the Iormation oI a binding and enIorceable contract oI sale.
The Kasunduan does not establish any deIinite agreement between the parties concerning the terms oI payment.
What it merely provides is the purchase price Ior the 213-square meter property at P40.00 per square meter.

For another, the telltale provision in the Kasunduan that: 'Na pumayag ang mga maysumbong na pagbilhan ang
mga ipinagsumbong na bahagi ng lupa at angipagbibili ay may sukat na 213 metrong parisukat humigit kumulang sa
halagang P40.00 bawat metrong parisukat, simply means that the Gloriosos only agreed to sell a portion oI the property
and that the portion to be sold measures 213 square meters.

Another signiIicant provision is that which reads: 'Na ang ipinagsusumbong ay tiyakang ililipat ang bahay sa
bahaging kanilang nabili o mabibili sa buwan ng Enero 31, 1984. The Ioregoing indicates that a contract oI sale is yet to
be consummated and ownership oI the property remained in the Gloriosos. Otherwise, why would the alternative term
'mabibili be used iI indeed the property had already been sold to petitioners.

In addition, the absence oI any Iormal deed oI conveyance is a strong indication that the parties did not intend
immediate transIer oI ownership.|12|

Normally, in a contract to sell, the payment oI the purchase price is the positive suspensive condition upon which
the transIer oI ownership depends.|13| The parties, however, are not prohibited Irom stipulating other lawIul conditions
that must be IulIilled in order Ior the contract to be converted Irom a contract to sell or at the most an executory sale into
an executed one.|14|

In the present case, aside Irom the payment oI the purchase price, there existed another suspensive condition, i.e.:
that petitioners will relocate their house to the portion they bought or will buy by January 31, 1984.

Petitioners Iailed to abide by the express condition that they should relocate to the rear portion oI the property
being bought by January 31, 1984. Indeed, the Kasunduandiscloses that it is the rear portion that was being sold by the
Gloriosos, and not the Iront portion as petitioners stubbornly claim. This is evident Irom the provisions establishing a
right oI way Irom Lopez Jaena road going towards the back oI the lot, and requiring them to relocate their house to the
portion being sold by January 31, 1984. Petitioners are presently occupying the Iront portion oI the property. Why the
need Ior a right oI way and Ior petitioners to relocate iI the Iront portion on which their house stands is the portion being
sold?

This condition is a suspensive condition noncompliance oI which prevented the Gloriosos Irom proceeding with
the sale and ultimately transIerring title to petitioners; and the Kasunduan Irom having obligatory Iorce.|15| It is
established by evidence that the petitioners did not transIer their house located in the Iront portion oI the subject property
to the rear portion which, under the Kasunduan, they intended to buy. Thus, no obligation arose on the part oI the
Gloriosos to consider the subject property as having been sold to petitioners because the latter`s non-IulIillment oI the
suspensive condition rendered the contract to sell ineIIective and unperIected.

Petitioners admit that they have not paid a single centavo to the Gloriosos. However, petitioners argue that their
nonpayment oI the purchase price was due to the Iact that there is yet to be a survey made oI the property. But evidence
shows, and petitioners do not dispute, that as early as August 12, 1983, or six days aIter the execution oI theKasunduan, a
survey has already been made and the property was subdivided into Lot Nos. 565-B-1 (Iront portion) and 565-B-2 (rear
portion), with Lot No. 565-B-2 measuring 223 square meters as the portion to be bought by petitioners.

Petitioners question the survey made, asserting that it is a 'table survey made without their knowledge and
participation. It should be pointed out that the Kasunduanmerely provides that the expenses Ior the survey will be divided
between them and that each party should give an amount oI no less than P400.00. Nowhere is it stated that the survey is a
condition precedent Ior the payment oI the purchase price.

Petitioners Iurther claim that respondents have no cause oI action against them because their obligation to pay the
purchase price did not yet arise, as the agreement did not provide Ior a period within which to pay the purchase price.
They argue that respondents should have Iiled an action Ior speciIic perIormance or judicial rescission beIore they can
avail oI accion publiciana.

Notably, petitioners never raised these arguments during the proceedings beIore the RTC. SuIIice it to say that
issues raised Ior the Iirst time on appeal and not raised timely in the proceedings in the lower court are barred by
estoppel.|16| Matters, theories or arguments not brought out in the original proceedings cannot be considered on review
or appeal where they are raised Ior the Iirst time. To consider the alleged Iacts and arguments raised belatedly would
amount to trampling on the basic principles oI Iair play, justice and due process.|17|

Moreover, it would be inutile Ior respondents to Iirst petition the court to Iix a period Ior the perIormance oI the
contract. In the Iirst place, respondents are not parties to the Kasunduan between petitioners and the Gloriosos, and they
have no standing whatsoever to seek such recourse. In the second place, such recourse properly pertains to petitioners. It
was they who should have sought the court`s intercession. II petitioners believed that they have an actionable contract Ior
the sale oI the property, prudence and common sense dictate that they should have sought its enIorcement Iorthwith.
Instead, petitioners whiled away their time.

Furthermore, there is no need Ior a judicial rescission oI the Kasunduan Ior the simple reason that the obligation
oI the Gloriosos to transIer the property to petitioners has not yet arisen. There can be no rescission oI an obligation that
is nonexistent, considering that the suspensive conditions thereIor have not yet happened.|18|

Hence, petitioners have no superior right oI ownership or possession to speak oI. Their occupation oI the
property was merely through the tolerance oI the owners. Evidence on record shows that petitioners and their
predecessors were able to live and build their house on the property through the permission and kindness oI the previous
owner, Pedro Hipolito, who was their relative,|19| and subsequently, Teresita Glorioso, who is also their relative. They
have no title or, at the very least, a contract oI lease over the property. Based as it was on mere tolerance, petitioners`
possession could neither ripen into ownership nor operate to bar any action by respondents to recover absolute possession
thereoI.|20|

There is also no merit to petitioners` contention that respondents are buyers in bad Iaith. As explained in Coronel
vs. Court oI Appeals:

In a contract to sell, there being no previous sale oI the property, a third person buying such property despite the
IulIillment oI the suspensive condition such as the Iull payment oI the purchase price, Ior instance, cannot be deemed a
buyer in bad Iaith and the prospective buyer cannot seek the relieI oI reconveyance oI the property. There is no double
sale in such case. Title to the property will transIer to the buyer aIter registration because there is no deIect in the owner-
seller`s title per se, but the latter, oI course, may be sued Ior damages by the intending buyer.|21| (Emphasis supplied)

A person who occupies the land oI another at the latter's Iorbearance or permission without any contract between
them is necessarily bound by an implied promise that he will vacate upon demand.|22|

Considering that petitioners` continued possession oI the property has already been rendered unlawIul, they are
bound to pay reasonable rental Ior the use and occupation thereoI, which in this case was appropriately pegged by the
RTC at P500.00 per month beginning October 21, 1994 when respondents Iiled the case against them until they vacate the
premises.

Finally, petitioners seek compensation Ior the value oI the improvements introduced on the property. Again, this
is the Iirst time that they are raising this point. As such, petitioners are now barred Irom seeking such relieI.|23|

WHEREFORE, the petition is DENIED. The Decision oI the Court oI Appeals dated October 3, 2000 in CA-
G.R. CV No. 61247 is AFFIRMED. SO ORDERED.

. NAVARRA vs. Planter`s Dev`t Bank G.R. No. 1774 July 12, 2007
JORGE NAVARRA and CARMELITA BERNARDO NAVARRA and RRRC DEVELOPMENT CORPORATION, Petitioners, vs. PLANTERS
DEVELOPMENT BANK and ROBERTO GATCHALIAN REALTY, INC.,

D E C I S I O N

GARCIA,
Assailed and sought to be set aside in this petition Ior review under Rule 45 oI the Rules oI Court is the
decision
|1|
dated September 27, 2004 oI the Court oI Appeals (CA) in CA-G.R. CJ No. 50002, as reiterated in its
resolution
|2|
dated May 8, 2006, denying reconsideration thereoI. The challenged decision reversed that oI the Regional
Trial Court (RTC) oI Makati City, Branch 66, in its Civil Case No. 16917, an action Ior Specific Performance and
Infunction thereat commenced by the herein petitioners against the respondents. The Makati RTC ruled that a perIected
contract oI sale existed in Iavor oI Jorge Navarra and Carmelita Bernardo Navarra (Navarras) over the properties
involved in the suit and accordingly ordered Planters Development Bank (Planters Bank) to execute the necessary deed oI
sale thereIor. The CA reversed that ruling. Hence, this recourse by the petitioners.

The Iacts:
The Navarras are the owners oI Iive (5) parcels oI land located at B.F. Homes, Paraaque and covered by
TransIer CertiIicates oI Title (TCT) Nos. S-58017, S-58011, S-51732, S-51733 and A-14574. All these Iive (5) parcels oI
land are the subject oI this controversy.

On July 5, 1982, the Navarras obtained a loan oI P1,200,000.00 Irom Planters Bank and, by way oI security
thereIor, executed a deed oI mortgage over their aIorementioned Iive (5) parcels oI land. UnIortunately, the couple Iailed
to pay their loan obligation. Hence, Planters Bank Ioreclosed on the mortgage and the mortgaged assets were sold to it
Ior P1,341,850.00, it being the highest bidder in the auction sale conducted on May 16, 1984. The one-year redemption
period expired without the Navarras having redeemed the Ioreclosed properties.

On the other hand, co-petitioner RRRC Development Corporation (RRRC) is a real estate company owned by the
parents oI Carmelita Bernardo Navarra. RRRC itselI obtained a loan Irom Planters Bank secured by a mortgage over
another set oI properties owned by RRRC. The loan having been likewise unpaid, Planters Bank similarly Ioreclosed the
mortgaged assets oI RRRC. Unlike the Navarras, however, RRRC was able to negotiate with the Bank Ior the redemption
oI its Ioreclosed properties by way oI a concession whereby the Bank allowed RRRC to reIer to it would-be buyers oI the
Ioreclosed RRRC properties who would remit their payments directly to the Bank, which payments would then be
considered as redemption price Ior RRRC. Eventually, the Ioreclosed properties oI RRRC were sold to third persons
whose payments thereIor, directly made to the Bank, were in excess by P300,000.00 Ior the redemption price.

In the meantime, Jorge Navarra sent a letter to Planters Bank, proposing to repurchase the Iive (5) lots
earlier auctioned to the Bank, with a request that he be given untilAugust 31, 1985 to pay the down payment
oI P300,000.00. Dated July 18, 1985 and addressed to then Planters Bank President Jesus Tambunting, the letter reads in
Iull:
This will Iormalize my request Ior your kind consideration in allowing my brother and me to buy
back my house and lot and my restaurant building and lot together with the adjacent road lot.

Since my brother, who is working in Saudi Arabia, has accepted this arrangement only recently as
a result oI my urgent oIIer to him, perhaps it will be saIe Ior us to set August 31, 1985 as the last day Ior
the payment oI a P300,000.00 downpayment. I hope you will grant us the opportunity to raise the Iunds
within this period, which includes an allowance Ior delays.

The purchase price, I understand, will be based on the redemption value plus accrued interest at
the prevailing rate up to the date oI our sales contract. Maybe you can give us a long term payment
scheme on the basis oI my brother`s annual savings oI roughly US$30,000.00 everytime he comes home
Ior his home leave.

I realize that this is not a regular transaction but I am seeking your Iavor to give me a chance to
reserve whatever values I can still recover Irom the properties and to avoid any legal complications that
may arise as a consequence oI the total loss oI the Balangay lot. I hope that you will extend to me your
Iavorable action on this grave matter.

In response, Planters Bank, thru its Vice-President Ma. Flordeliza Aguenza, wrote back Navarra via a
letter dated August 16, 1985, thus:

Regarding your letter dated July 18, 1985, requesting that we give up to August 31, 1985 to buy
back your house and lot and restaurant and building subject to a P300,000.00 downpayment on the
purchase price, please be advised that the Collection Committee has agreed to your request.

Please see Mr. Rene Castillo, Head, Acquired Assets Unit, as soon as possible Ior the details oI
the transaction so that they may work on the necessary documentation.

Accordingly, Jorge Navarra went to the OIIice oI Mr. Rene Castillo on August 20, 1985, bringing with him a
letter requesting that the excess payment oI P300,000.00 in connection with the redemption made by the RRRC be applied
as down payment Ior the Navarras` repurchase oI their Ioreclosed properties.

Because the amount oI P300,000.00 was sourced Irom a diIIerent transaction between RRRC and Planters Bank
and involved diIIerent debtors, the Bank required Navarra to submit a board resolution Irom RRRC authorizing him to
negotiate Ior and its behalI and empowering him to apply the excess amount oI P300,000.00 in RRRC`s redemption
payment as down payment Ior the repurchase oI the Navarras` Ioreclosed properties.

Meanwhile, titles to said properties were consolidated in the name oI Planters Bank, and on August 27, 1985, new
certiIicates oI title were issued in its name, to wit: TCT Nos. 97073, 97074, 97075, 97076 and 97077.

Then, on January 21, 1987, Planters Bank sent a letter to Jorge Navarra inIorming him that it could not proceed
with the documentation oI the proposed repurchase oI the Ioreclosed properties on account oI his non- compliance with
the Bank`s request Ior the submission oI the needed board resolution oI RRRC.

In his reply-letter oI January 28, 1987, Navarra claimed having already delivered copies oI the required board
resolution to the Bank. The Bank, however, did not receive said copies. Thus, on February 19, 1987, the Bank sent a
notice to the Navarrras demanding that they surrender and vacate the properties in question Ior their Iailure to exercise
their right oI redemption.

Such was the state oI things when, on June 31, 1987, in the RTC oI Makati City, the Navarras Iiled their
complaint Ior Specific Performance with Infunction against Planters Bank. In their complaint docketed in said court
as Civil Case No. 16917 and raIIled to Branch 66 thereoI, the Navarras, as plaintiIIs, alleged that a perIected contract oI
sale was made between them and Planters Bank whereby they would repurchase the subject properties Ior P1,800,000.00
with a down payment oI P300,000.00.

In its Answer, Planters Bank asserted that there was no perIected contract oI sale because the terms and conditions
Ior the repurchase have not yet been agreed upon.

On September 9, 1988, a portion oI the lot covered by TCT No. 97077 (Iormerly TCT No. A-14574) was sold by
Planters Bank to herein co-respondent Roberto Gatchalian Realty, Inc. (Gatchalian Realty). Consequently, TCT No.
97077 was cancelled and TCT No. 12692 was issued in the name oI Gatchalian Realty. This prompted the Navarras to
amend their complaint by impleading Gatchalian Realty as additional deIendant.

In a decision dated July 10, 1995, the trial court ruled that there was a perIected contract oI sale between the
Navarras and Planters Bank, and accordingly rendered judgment as Iollows:

WHEREFORE, in view oI the Ioregoing, judgment is hereby rendered ordering:

a) the cancellation oI the Deed oI Absolute Sale (Exh. '2) over lot 4137-C between
deIendant Planters Development Bank and deIendant Roberto Gatchalian Realty Corporation (RGRI) with the
vendor bank reIunding all the payments made by the vendee RGRI 'without interest less the Iive percent (5)
broker`s commission:
b) the deIendant Planters Development Bank to execute the Deed oI Absolute Sale over
the lots covered by TCT Nos. 97073, 97074, 97075, 97076, and 97077 in Iavor oI all the plaintiIIs Ior a
consideration oI ONE MILLION EIGHT HUNDRED THOUSAND (P1,800,000.00) less the downpayment oI
P300,000.00 plus interest at the rate oI twenty Iive percent (25) per year Ior Iive (5) years to be paid in Iull upon
the execution oI the contract;
c) the deIendant Planters Development Bank the amount oI TEN THOUSAND PESOS
(P10,000.00) by way oI attorney`s Iees.
d) No costs. SO ORDERED.

ThereIrom, Planters Bank and Gatchalian Realty separately went on appeal to the CA whereat their appellate
recourse were consolidated and docketed as CA-G.R. CJ No. 50002.

As stated at the threshold hereoI, the appellate court, in its decision oI September 27, 2004, reversed that oI the
trial court and ruled that there was no perIected contract oI sale between the parties. Partly says the CA in its decision:

The Court cannot go along with the deduction oI the trial court that the response oI Planters Bank
was Iavorable to Jorge Navarra`s proposal and that the P300,000.00 in its possession is a down payment
and as such suIIicient bases to conclude that there was a valid and perIected contract oI sale. Based on the
turn oI events and the tenor oI the communications between the oIIerors and the creditor bank, it appears
that there was not even a perIected contract to sell, much less a perIected contract oI sale.

Article 1319 cited by the trial court provides that the acceptance to an oIIer must be absolute.
Simply put, there must be unqualiIied acceptance and no condition must tag along. But Jorge Navarra in
trying to convince the bank to agree, had himselI laid out terms in oIIering (1) a downpayment oI
P300,000.00 and setting (2) as deadline August 31, 1985 Ior the payment thereoI. Under these terms and
conditions the bank indeed accepted his oIIer, and these are essentially the contents oI Exhibits 'J and
'K.
But was there compliance? According to the evidence on Iile the P300,000.00, iI at all, was given
beyond the agreed period. The court a quo missed the Iact that the said amount came Irom the excess oI
the proceeds oI the sale to the Pea spouses which Jorge Navarra made to appear was made beIore the
deadline he set oI August 31, 1985. But this is athwart Exhibits 'M-1 and 'N, the Contract to Sell and
the Deed oI Sale between RRRC and the Peas, Ior these were executed only on September 13,
1985 and October 7, 1985 respectively.

xxx xxx xxx

There were two separate and independent loans secured by distinct mortgages on diIIerent
lots and their only commonality is the relationship oI the Navarras and Bernardo Iamilies. It is thus
diIIicult to conceive and to conclude that such Byzantine arrangement was acquiesced to and provided Ior
in that single and simple letter oI the bank.

With their motion Ior reconsideration having been denied by the CA in its resolution oI May 8, 2006, petitioners
are now with this Court via this recourse on their submission that the CA erred -
I
XXX IN CONCLUDING THAT THERE WAS NO PERFECTED CONTRACT TO
REPURCHASE THE FORECLOSED PROPERTIES BETWEEN THE PETITIONERS AND THE
PRIVATE RESPONDENT PLANTERS DEVELOPMENT BANK, AS CORRECTLY FOUND BY THE
TRIAL COURT.
II
XXX IN HOLDING THAT THE PARTIES NEVER GOT PAST THE NEGOTIATION
STAGE.

While the question raised is essentially one oI Iact, oI which the Court normally eschews Irom, yet, given the
conIlicting Iactual Iindings oI the trial and appellate courts, the Court shall go by the exception
|3|
to the general rule and
proceed to make its own assessment oI the evidence.

We DENY.
Petitioners contend that a perIected contract oI sale came into being when respondent Bank, thru a letter
dated August 16, 1985, Iormally accepted the oIIer oI the Navarras to repurchase the subject properties.

In general, contracts undergo three distinct stages, to wit: negotiation, perIection or birth, and
consummation. Negotiation begins Irom the time the prospective contracting parties maniIest their interest in the contract
and ends at the moment oI their agreement. Perfection or birth oI the contract takes place when the parties agree upon the
essential elements oI the contract, i.e., consent, object and price. Consummation occurs when the parties IulIill or
perIorm the terms agreed upon in the contract, culminating in the extinguishment thereoI.
|4|


A negotiation is Iormally initiated by an offer which should be certain with respect to both the object and the
cause or consideration oI the envisioned contract. In order to produce a contract, there must be acceptance, which may be
express or implied, but it must not qualiIy the terms oI the oIIer. The acceptance oI an oIIer must be unqualiIied and
absolute to perIect the contract. In other words, it must be identical in all respects with that oI the oIIer so as to produce
consent or meeting oI the minds.
|5|


Here, the Navarras assert that the Iollowing exchange oI correspondence between them and Planters Bank
constitutes the oIIer and acceptance, thus:

Letter dated July 18, 1985 oI Jorge Navarra:

This will Iormalize my request Ior your kind consideration in allowing my brother and me to buy
back my house and lot and my restaurant building and lot together with the adjacent road lot.

Since my brother, who is working in Saudi Arabia, has accepted this arrangement only recently as
a result oI my urgent oIIer to him, perhaps it will be saIe Ior us to set August 31, 1985 as the last day Ior the
payment oI a P300,000.00 downpayment. I hope you will grant us the opportunity to raise the Iunds within this
period, which includes an allowance Ior delays.

The purchase price, I understand, will be based on the redemption value plus accrued interest at
the prevailing rate up to the date oI our sales contract. Maybe you can give us a long term payment scheme on the
basis oI my brother`s annual savings oI roughly US$30,000.00 everytime he comes home Ior his home leave.

I realize that this is not a regular transaction but I am seeking your Iavor to give me a chance to
reserve whatever values I can still recover Irom the properties and to avoid any legal complications that may arise
as a consequence oI the total loss oI the Balangay lot. I hope that you will extend to me your Iavorable action on
this grave matter.

Letter dated August 16, 1985 oI Planters Bank

Regarding your letter dated July 18, 1985, requesting that we give up to August 31, 1985 to buy
back your house and lot and restaurant and building subject to a P300,000.00 downpayment on the purchase price,
please be advised that the Collection Committee has agreed to your request.

Please see Mr. Rene Castillo, Head, Acquired Assets Unit, as soon as possible for the details
of the transaction so that they may work on the necessary documentation. (Emphasis ours)

Given the above, the basic question that comes to mind is: Was the oIIer certain and the acceptance absolute
enough so as to engender a meeting oI the minds between the parties? DeIinitely not.

While the Ioregoing letters indicate the amount oI P300,000.00 as down payment, they are, however, completely
silent as to how the succeeding installment payments shall be made. At most, the letters merely acknowledge that the
down payment oI P300,000.00 was agreed upon by the parties. However, this Iact cannot lead to the conclusion that a
contract oI sale had been perIected. Quite recently, this Court held that beIore a valid and binding contract oI sale can
exist, the manner oI payment oI the purchase price must Iirst be established since the agreement on the manner oI
payment goes into the price such that a disagreement on the manner oI payment is tantamount to a Iailure to agree on the
price.
|6|


Too, the Navarras` letter/oIIer Iailed to speciIy a deIinite amount oI the purchase price Ior the sale/repurchase oI
the subject properties. It merely stated that the 'purchase price will be based on the redemption value plus accrued interest
at the prevailing rate up to the date oI the sales contract. The ambiguity oI this statement only bolsters the uncertainty oI
the Navarras` so-called 'oIIer Ior it leaves much rooms Ior such questions, as: what is the redemption value? what
prevailing rate oI interest shall be Iollowed: is it the rate stipulated in the loan agreement or the legal rate? when will the
date oI the contract oI sale be based, shall it be upon the time oI the execution oI the deed oI sale or upon the time when
the last installment payment shall have been made? To our mind, these questions need Iirst to be addressed, discussed and
negotiated upon by the parties beIore a deIinite purchase price can be arrived at.

SigniIicantly, the Navarras wrote in the same letter the Iollowing:

Maybe you can give us a long-term payment scheme on the basis oI my brother`s annual savings
oI roughly US$30,000.00 every time he comes home Ior his home leave.

Again, the oIIer was not clear insoIar as concerned the exact number oI years that will comprise the long-term
payment scheme. As we see it, the absence oI a stipulated period within which the repurchase price shall be paid all the
more adds to the indeIiniteness oI the Navarras` oIIer.

Clearly, then, the lack oI a deIinite oIIer on the part oI the spouses could not possibly serve as the basis oI their
claim that the sale/repurchase oI their Ioreclosed properties was perIected. The reason is obvious: one essential element
oI a contract oI sale is wanting: the price certain. There can be no contract oI sale unless the Iollowing elements concur:
(a) consent or meeting oI the minds; (b) determinate subject matter; and (c) price certain in money or its equivalent. Such
contract is born or perIected Irom the moment there is a meeting oI minds upon the thing which is the object oI the
contract and upon the price.
|7|
Here, what is dramatically clear is that there was no meeting oI minds vis-a-visthe price,
expressly or impliedly, directly or indirectly.

Further, the tenor oI Planters Bank`s letter-reply negates the contention oI the Navarras that the Bank Iully
accepted their oIIer. The letter speciIically stated that there is a need to negotiate on the other details of the
transaction
(
beIore the sale may be Iormalized. Such statement in the Bank`s letter clearly maniIests lack oI agreement
between the parties as to the terms oI the purported contract oI sale/repurchase, particularly the mode oI payment oI the
purchase price and the period Ior its payment. The law requires acceptance to be absolute and unqualiIied. As it is, the
Bank`s letter is not the kind which would constitute acceptance as contemplated by law Ior it does not evince any
categorical and unequivocal undertaking on the part oI the Bank to sell the subject properties to the Navarras.

The Navarras` attempt to prove the existence oI a perIected contract oI sale all the more becomes Iutile in the light
oI the evidence that there was in the Iirst place no acceptance oI their oIIer. It should be noted that aside Irom their Iirst
letter dated July 18, 1985, the Navarras wrote another letter dated August 20, 1985, this time requesting the Bank that the
down payment oI P300,000.00 be instead taken Irom the excess payment made by the RRRC in redeeming its own
Ioreclosed properties. The very circumstance that the Navarras had to make this new request is a clear indication that no
deIinite agreement has yet been reached at that point. As we see it, this request constitutes a new oIIer on the part oI the
Navarras, which oIIer was again conditionally accepted by the Bank as in Iact it even required the Navarras to submit a
board resolution oI RRRC beIore it could proceed with the proposed sale/repurchase. The eventual Iailure oI the spouses
to submit the required board resolution precludes the perIection oI a contract oI sale/repurchase between the parties. As
earlier mentioned, contracts are perIected when there is concurrence oI the parties` wills, maniIested by the acceptance by
one oI the oIIer made by the other.
|9|
Here, there was no concurrence oI the oIIer and acceptance as would result in a
perIected contract oI sale.

Evidently, what transpired between the parties was only a prolonged negotiation to buy and to sell, and, at the
most, an oIIer and a counter-oIIer with no deIinite agreement having been reached by them. With the hard reality that no
perIected contract oI sale/repurchase exists in this case, any independent transaction between the Planters Bank and a
third-party, like the one involving the Gatchalian Realty, cannot be aIIected.

HEREFORE, the petition is DENIED and the assailed decision and resolution oI the Court oI Appeals
are AFFIRMED. No pronouncement as to costs. SO ORDERED.

3. VILLANUEVA vs. CA G.R. No. 117108. November 5, 1997
DANIEL C. VILLANUEVA, petitioner, vs. COURT OF APPEALS, LAND REGISTRATION AUTHORITY and OO KIAN TIOK,
respondents.

D E C I S I O N
PANGANIBAN, J.:
May the Register oI Deeds reIuse to register an application Ior a notice oI lis pendens on the ground that the
applicant does not have any title or right oI possession over the subject properties?

The Case
Petitioner seeks reversal oI the Decision|1| oI Respondent Court oI Appeals|2| promulgated on August 31, 1994
in CA-G.R. SP No. 34449, which answered the Ioregoing question in the aIIirmative:

'In view oI the Ioregoing, the Lis Pendens in question is not registrable since it seeks to aIIect property not
belonging to the deIendant |petitioner herein|, and the action oI the Register oI Deeds in denying the registration oI the
same is hereby sustained." |3|

The lis pendens sought to be registered is Civil Case No. 92-2358 pending beIore Branch 74 oI the Regional Trial
Court oI Antipolo, Rizal.|4| xsc

The Facts
The assailed Decision Iairly narrates the Iacts as Iollows: |5|

'Records show that TCT Nos. 262631; 273873 and 2777938 |sic| were issued in the name oI Valiant Realty and
Development Corporation and Filipinas Textile Mills, Inc. and the same were mortgaged in Iavor oI Equitable Banking
Corp. Upon Iailure oI the mortgagors to comply with the terms and conditions oI the mortgage, the bank Ioreclosed the
mortgaged properties |and| sold the same to the Equitable Banking Corp. as the highest bidder at public auction sale.
AIter the expiration oI the redemption period, mortgagors did not exercise the right oI redemption and as a consequence
thereoI, the mortgagee sold all its rights, interests and participation oI said properties to the herein oppositor, Oo Kian
Tiok.
Immediately aIter acquiring the rights, titles and interests oI the bank in said properties, Oo Kian Tiok took
possession up to the present time, except Ior a brieI period oI time when his possession was interrupted by the herein
petitioner |who| together with armed goons, |and| without |any| court order swooped down on the properties and
disarmed the security guards assigned therein and Iorcibly removed the 30 workers thereIrom, which prompted Oo Kian
Tiok to Iile Civil Case No. 92-2358 against Filipinas Textile Mills, Inc., |and| Daniel Villanueva, et als. Ior Recovery oI
Possession and Damages with Prayers Ior Writ oI Preliminary Mandatory Injunction and/or Temporary Order.

As a consequence, the herein petitioner, being one oI the deIendants oI the above-mentioned case, Iiled a Iormal
request with the OIIice oI the Register oI Deeds to annotate a corresponding Notice oI Lis Pendens oI Civil Case No. 92-
2358 in the respective Memorandum oI Encumbrances oI TCT Nos. 262631; 273873 and 277938 but the same was denied
registration based on the Iollowing grounds, to wit:

....that Mr. Villanueva is merely asserting possession oI the property not on the title or right over the property.
While it appears that Mr. Villanueva is an oIIicer oI the owner-corporation, Filipinas Textile Mills, Inc., the latter is no
longer the owner thereoI but plaintiII Oo Tian |sic| Tiok. Moreover, no Board Resolution has been submitted indicating
that said Villanueva has been duly authorized by the Iormer owner to Iile the notice oI lis pendens`.

Hence, the petitioner elevated the matter on consulta |to Respondent Land Registration Authority| pursuant to
Section 117 oI P.D. 1529 on the grounds that the herein petitioner, together with his sister Terry Villanueva-Yap, Eden
Villanueva, Susan Villanueva and his brother Frank Villanueva are the lawIul owners oI the 63 oI the beneIicial shares
oI Filipinas Textile Mills, Inc. and are not merely asserting possession but also ownership over the subject properties
contrary to the conclusion submitted by the Register oI Deeds. (Resolution, pp. 1-2)

The consulta was decided against petitioner by Respondent Land Registration Authority and later, on appeal, by
Respondent Court. Hence, this petition Ior review under Rule 45 oI the Rules oI Court.|6|

The Issues
Petitioner assigns the Iollowing errors to Respondent Court: |7|
"A. Not appreciating petitioner`s compliance with all the requirements set Iorth under the Land Registration Act
and the Rules oI Court;
B. Not Iinding that the petitioner duly raised the aIIirmative deIense oI ownership over the properties subject
oI Civil Case No. 92-2358;
C. Not Iinding that the Respondent Land Registration Authority erred in assuming jurisdiction to determine
the issue oI ownership over the properties subject oI civil case no. 92-2358;
D. In aIIirming the resolution oI the Respondent Land Registration Authority in Consulta No. 2131.

The Solicitor General, as counsel Ior Respondent Land Registration Authority, summarizes the issue:|8|
'Whether or not the notice oI lis pendens requested by petitioner to be annotated in the respective memorandum
oI encumbrances at the back oI TCT Nos. 262631, 273873 and 277938 is registrable.

Stated simply, the issue is whether petitioner`s application Ior registration oI the notice oI lis pendens should be
rejected on the ground that it aIIects a property which does not belong to him personally, but is merely claimed by a
corporation, the majority (63) oI which is owned by him and his brothers and sisters.

Respondent Court`s Ruling
In dismissing petitioner`s appeal, Respondent Court ruled:|9|

'Even iI the petitioner were able to comply with all the requirements (reIerring to the Iormalities) Ior the
annotation oI a notice oI lis pendens, it does not necessarily Iollow that he would ipso Iacto be entitled to such
annotation. There is need Ior him to show that he owns the subject property or that he has right or interest vis-a-vis its
possession. The mere possession oI a property does not give rise to the right to annotate. Without such title or interest,
whence would his right to annotate come Irom?

The petitioner contends that the determination oI registrability oI a notice oI lis pendens is ministerial as Iar as the
Register oI Deeds is concerned. On the basis oI the evidence on record, this is exactly what the Register oI Deeds oI Rizal
did - he reIused to annotate because it clearly appears Irom the documents submitted (speciIically, T.C.T. Nos. 262631,
273873 and 277938) that the subject parcels oI land are registered not in the name oI Villanueva but in the name oI
Valiant Realty and Development Corporation and co-deIendant Filipinas Textile Mills, Inc. The Register oI Deeds did
not attempt to go beyond what clearly appears in the aIorementioned TransIer CertiIicates oI Title. He did not attempt, as
the petitioner would imply, to inquire into and try to resolve conIlicting allegations oI the claimants oI the aIoresaid
property.

The Land Registration Authority in its assailed resolution had aptly pointed out that petitioner Villanueva had not
produced a board resolution oI Filipinas Textile Mills, Inc. authorizing him to take possession oI the litigated property.
Hence, although it may be conceded that Villanueva is in possession thereoI, it would appear that his possession is illegal
which would not result in vesting in him any right or interest over the above-cited property. As Iar as the said property is
concerned, Villanueva is a third person, a stranger. There could be no dispute as to the Iact that Filipinas Textile Mills,
Inc. (in the name oI which the contested parcels oI land are registered) and Villanueva are, beIore the law, two separate
and distinct persons. Indubitably Villanueva is not Filipinas Textiles Mills, Inc.

The Court`s Ruling
The petition is meritorious.
Sole Issue: Registration oI Lis Pendens
Who May Register Notice oI Lis Pendens?

Petitioner contends that a notice oI lis pendens may be Iiled in relation to actions 'aIIecting the title to or
possession oI real property. In the instant petition, deIendants in Civil Case No. 92-2358, among whom is petitioner,
'repeatedly and emphatically allege that it is Filipinas Textile Mills, Inc. (FTMI), oI which petitioner is a stockholder,
which owns the properties in question. Thus, an aIIirmative relieI oI ownership is prayed Ior in the answer which
sanctions registration oI the notice oI lis pendens.|10|

Private Respondent Oo Kian Tiok counters10 that the errors and arguments raised in the petition at bar are 'mere
repetitions oI those already discussed in |the| petition Ior review submitted beIore Respondent Court, 'which the latter
had already considered, weighed and resolved adversely to the herein petitioner. |11|

The Solicitor General, on the other hand, asserts:|12|

'Based on the incontrovertible Iacts, the notice oI lis pendens requested by petitioner to be annotated on the back
oI the aIoresaid certiIicates oI title is not registrable, because the registration will aIIect the property obviously not
belonging to petitioner, who is one oI the deIendants in Civil Case No. 92-2358 Iiled beIore the Regional Trial Court oI
Antipolo, Branch 74. It has been consistently held by public respondent LRA, as in Consulta No. 430, Pedro del Rosario,
petitioner versus the Register oI Deeds oI Quezon City, respondent, and in Consulta No. 146, the Register oI Deeds oI
Sorsogon, petitioner, that a notice oI lis pendens is not registrable iI it seeks to aIIect property not belonging to the
deIendant.

The notice oI lis pendens is an announcement to the whole world that a particular real property is in litigation, and
serves as a warning that one who acquires an interest over said property does so at his own risk, or that he gambles on the
result oI the litigation over said property.|13| The registration oI a notice oI lis pendens is governed by Section 24, Rule
14 oI the Rules oI Court:|14|

'Sec. 24. Notice oI lis pendens. In an action aIIecting the title or the right oI possession oI real property, the
plaintiII, at the time oI Iiling the complaint, and the deIendant, at the time oI Iiling his answer, when aIIirmative relieI is
claimed in such answer, or at any time aIterwards, may record in the oIIice oI the registrar oI deeds oI province in which
the property is situated a notice oI the pendency oI the action, containing the names oI the parties and the object oI the
action or deIense, and a description oI the property in that province aIIected thereby. From the time only oI Iiling such
notice Ior record shall a purchaser, or incumbrancer oI the property aIIected thereby, be deemed to have constructive
notice oI the pendency oI the action, and only oI its pendency against parties designated by their real names.

The notice oI lis pendens hereinabove mentioned may be cancelled only upon order oI the court, aIter proper
showing that the notice is Ior the purpose oI molesting the adverse party, or that it is not necessary to protect the rights oI
the party who caused it to be recorded.

In Magdalena Homeowners Association, Inc. vs. Court oI Appeals,|15| this Court enumerated the cases where a
notice oI lis pendens is proper:

'According to Section 24, Rule 14 oI the Rules oI Court and Section 76 oI Presidential Decree No. 1529, a notice
oI lis pendens is proper in the Iollowing cases, viz.:
a) An action to recover possession oI real estate;
b) An action to quiet title thereto;
c) An action to remove clouds thereon;
d) An action Ior partition; and
e) Any other proceedings oI any kind in Court directly aIIecting the title to the land or the use or occupation
thereoI or the buildings thereon.

The notice oI lis pendens--i.e., that real property is involved in an action--is ordinarily recorded without the
intervention oI the court where the action is pending. The notice is but an incident in an action, an extrajudicial one, to be
sure. It does not aIIect the merits thereoI. It is intended merely to constructively advise, or warn, all people who deal
with the property that they so deal with it at their own risk, and whatever rights they may acquire in the property in any
voluntary action transaction are subject to the results oI the action, and may well be inIerior and subordinate to those
which may Iinally be determined and laid down therein. The cancellation oI such a precautionary notice is thereIore also a
mere incident in the action, and may be ordered by the Court having jurisdiction oI it at any given time. And its
continuance or removal--like the continuance or removal oI a preliminary attachment or injunction--is not contingent on
the existence oI a Iinal judgment in the action, and ordinarily has no eIIect on the merits thereoI.

To annotate a notice oI lis pendens, the Iollowing elements must be present: (a) the property must be oI such
character as to be subject to the rule; (b) the court must have jurisdiction both over the person and the res; and (c) the
property or res involved must be suIIiciently described in the pleadings.|16|

Only the Iirst requisite is at issue in this case; the second and the third requisites are not. In explaining the Iirst
requirement, Iormer Senator Vicente J. Francisco wrote:|17|

'x x x to all suits or actions which directly aIIect real property and not only those which involve the question oI
title, but also those which are brought to establish an equitable estate, interest, or right, in speciIic real property or to
enIorce any lien, charge, or encumbrance against it, there being in some cases a lis pendens, although at the
commencement oI the suit there is no present vested interest, claim, or lien in or on the property which it seeks to charge.
It has also been held to apply in the case oI a proceeding to declare an absolute deed a mortgage, or to redeem Irom a
Ioreclosure sale, or to establish a trust, or to suits Ior the settlement and adjustment oI partnership interests. |In: 54 C.J.S.,
577-578|

It is not suIIicient that the title or right oI possession may be incidentally aIIected. Thus a proceeding to IorIeit
the charter oI a corporation does not deprive it oI the power to dispose oI its property, nor does it place such property
within the rule oI lis pendens, so that purchasers thereoI may lose the property or right to the possession through the
appointment oI a receiver. |In: Havemeyer vs. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121, 10 L.R.A.
627 x x x|

In order that the doctrine oI lis pendens may apply, so that purchaser oI property may be bound by the judgment
or decree rendered, it is essential that there be in existence a pending action, suit or proceeding, and there can be no lis
pendens because oI the Iact that an action or suit is contemplated. |In: 54 C.J.S., 583|

Civil Case No. 92-2358, which petitioner sought to annotate, is an action Ior 'recovery oI possession and
damages with prayer Ior writ oI preliminary mandatory injunction and/or temporary restraining order. That civil case is
an accion publiciana or a plenary action in an ordinary civil proceeding to determine the better and legal right to possess
(independently oI title).19 What private respondent sought to recover was not just possession de Iacto but possession de
jure.20 On the other hand, the deIendants in Civil Case No. 92-2358 alleged in their answer that there was Iraud
committed among Bernardino Villanueva, Equitable Banking Corporation and Respondent Oo Kian Tiok, such that the
real estate mortgage was invalid. Hence, the subsequent auction oI the mortgaged property transIerred 'no right, title and
interest whatsoever to Equitable Bank as the highest bidder and thence to private respondent as buyer. In eIIect, the
deIendants in the civil case directly opposed the recovery oI possession prayed Ior by the plaintiII and in Iact challenged
the very validity oI the title oI private respondent. Both contentions oI the parties thus directly put the properties under
the coverage oI the rule, thereby suIIiciently satisIying the Iirst requisite and placing the case squarely within the
parameters set by Magdalena.21

In our jurisdiction, the Iollowing may Iile a notice oI lis pendens:22
'(a) The plaintiII -- at the time oI Iiling the complaint.
(b) The deIendant --
1) at the time oI Iiling his answer (when aIIirmative relieI is claimed in such answer)
2) or at any time aIterwards (See Sec. 24, Rule 14)

Petitioner is one oI the deIendants in Civil Case No. 92-2358.23 Now, is it necessary Ior him to prove to the
Register oI Deeds that the properties to which he seeks annotation oI the notice oI lis pendens belong to him as required
by Respondent Court? We do not believe so. The law does not require such prooI Irom the deIendant. We cannot Iind
any valid reason why we should add to the requirements set in the Rules. The settled doctrine in statutory construction is
that legal intent is determined principally Irom the language oI the statute. Where the language oI a statute is clear and
unambiguous, the law is applied according to its express terms, and interpretation would be resorted to only where a literal
interpretation would be either impossible or absurd or would lead to an injustice.24

We stress that although it is not necessary Ior the applicant to prove his ownership or interest over the property
sought to be aIIected by lis pendens, the applicant must, in the complaint or answer Iiled in the subject litigation, assert a
claim oI possession or title over the subject property in order to give due course to his application. As settled, lis pendens
may be annotated only where there is an action or proceeding in court, which aIIects the title to, or possession oI, real
property.25

Be it remembered that a notation oI lis pendens does not create a nonexistent right or lien. It serves merely as a
warning to a person who purchases or contracts on the subject property that he does so at his peril and subject to the result
oI the pending litigation.26 The registration oI the notice oI lis pendens is done without leave oI court. The Rule merely
requires an aIIirmative relieI to be claimed in the answer to enable a deIendant to apply Ior the annotation oI the notice.27
There is no requirement that the applying deIendant must prove his right or interest over the property sought to be
annotated. In deciding the issue oI whether the application by petitioner is registerable, Respondent Court concluded: 'it
would appear that his possession is illegal which would not result in vesting in him any right or interest over the above-
cited properties.28 This conclusion oI Respondent Court was premature, as it preempted the trial on the merits oI the
main case sought to be registered.

On the other hand, an aIIirmative relieI or deIense is an allegation oI a new matter which, while admitting,
expressly or impliedly, the material allegations oI the complaint would nevertheless prevent or bar recovery by the
plaintiII. AIIirmative deIenses include Iraud, statute oI limitations, release, payment, illegality, statute oI Irauds, estoppel,
Iormer recovery, discharge in bankruptcy, and other matters alleged by way oI conIession and avoidance.29 An
aIIirmative deIense may be an allegation oI new matters -- that is, Iacts diIIerent Irom those averred by the plaintiII
which, iI true, destroys or negates the plaintiII`s right oI action. An aIIirmative deIense admits the Iacts alleged by the
plaintiII, or at least those not necessarily denied by the interposition oI the aIIirmative deIense itselI. Even though an
aIIirmative deIense contains allegations inconsistent with those oI the complaint, the latter must, in the absence oI denials,
nevertheless be taken as admitted in the deIense.30 In the case at bar, the deIendants in Civil Case No. 92-2358 insist that
Iraud attended the agreement among Bernardino Villanueva, Equitable Banking Corporation and Respondent Oo Kian
Tiok. Such Iraud, iI proven true, will deIeat or bar the claim oI said respondent and beneIit the deIendants.

Petitioner in this case was impleaded by private respondent as one oI the deIendants in the trial court; thus, he
Ialls under the deIinition oI the Rules as a party claiming aIIirmative relieI. His status as a mere stockholder can no
longer be questioned in this case, much less his capacity to sue on the mere pretext that he was not authorized by the
corporation to litigate on its behalI. We emphasize that the issue at bar is the right to annotate the pendency oI Civil Case
No. 92-2358, not the legal standing oI petitioner to represent the corporation in the said case.

Wary that the properties which were mortgaged and auctioned would be dissipated and/or passed to innocent
purchasers Ior value, petitioner initiated the move to annotate the lis pendens to protect the corporation`s right. He
correctly acted, considering that there was, as alleged by private respondent, an intra-corporate controversy which
eIIectively barred a common action by the management oI the corporation.31

In any event, a reading oI the allegations in the answer will readily show that deIendants (herein petitioner
included) were not merely asserting a right oI possession over the disputed properties. Rather, they were insisting on their
ownership over the said real estate, claiming that plaintiII (herein private respondent) was 'not entitled at all to their
possession, because he did not have any right, title or interest whatsoever over them.32 The Iollowing allegations in the
answer illustrate the claim oI petitioner Ior aIIirmative relieI:33

'Answering DeIendants, Ior the reasons and Iacts stated herein and in their AIIirmative Allegations and
AIIirmative DeIenses, speciIically deny the Iollowing allegations in the original Complaint dated 08 May 1992:
x x x x x x x x x
3.3.1. The compound located on Amang E. Rodriguez Avenue, Barangay San Roque, Cainta, Rizal is owned by
plaintiII, the truth being that such compound is owned by deIendant FTMI being covered by the titles oI the Subject
Properties which are registered in the name oI deIendant FTMI;
x x x x x x x x x
3.3.4. The compound located on Amang E. Rodriguez Avenue, Barangay San Roque, Cainta, Rizal was being
unlawIully occupied by deIendants Daniel Villanueva, Terry Villanueva-Yu, Susan Villanueva, Eden Villanueva, Frankie
Villanueva, Artemio Tuquero, Mel P. Dimat and Bienvenido Bulaong, the truth being that the occupation oI the
compound by said deIendants was lawIul because they are duly elected and authorized directors, oIIicers and/or
representatives oI deIendant FTMI which is the registered owner thereoI;

3.4 Paragraph 5, insoIar as it is alleged that:
3.4.1. PlaintiII is the lawIul owner oI three (3) parcels oI land together with the properties and improvements that
may be Iound therein, situated in Barangay San Roque, Cainta, Rizal, the truth being that plaintiII has no right, title and
interest whatsoever in the said properties; and

3.4.2. The CertiIication dated 06 April 1992 oI Mr. Vicente A. Garcia, Register oI Deeds oI Pasig, attached as
Annex B` to the Complaint proves that plaintiII Oo Kian Tiok purchased the rights and interests over the titles oI
deIendant FTMI Irom EBC, the truth being that such a CertiIication merely shows that deIendant Bernardino Villanueva
connived and colluded with EBC and plaintiII whereby the Subject Properties were illegally mortgaged, and then sold at
public auction auction |sic| in Iavor oI EBC, and thereaIter allegedly purchased by Oo Kian Tiok through a Redemption
Contract;

3.5 Paragraph 6, in so Iar as it is made to appear that deIendant FTMI is the Iormer-owner oI the three (3) lots
covered by T.C.T. Nos. 262631, 273873, and 277938 oI the Registry oI Deeds Ior the Province oI Rizal, the truth being
that deIendant FTMI remains as the registered owner oI the aIorementioned three (3) lots;

3.6 Paragraph 7, insoIar as it is alleged, that:

3.6.1 DeIendant FTMI obtained a loan oI Twenty Five Million Pesos (P25,000,000.00) Irom EBC, the truth being
that the loan purportedly obtained by deIendant Bernardino Villanueva ostensibly on behalI oI deIendant FTMI was not
duly authorized by deIendant FTMI`s board oI directors, and thus not binding upon deIendant FTMI;

3.6.2 DeIendant FTMI mortgaged the Subject Properties, with all the buildings, improvements, machineries and
equipment thereon, to EBC on 14 July 1982, the truth being that the alleged mortgage was never authorized by deIendant
FTMI`s board oI directors and thereIore, not binding upon deIendant FTMI;
x x x x x x x x x
3.8 Paragraph 10, insoIar as it is stated that deIendant FTMI had one (1) year Irom 01 August 1988, or until 01
August 1989, to redeem the Subject Properties, the truth being that since the Subject Properties were never validly
mortgaged nor Ioreclosed, there was, in reality, no period within which to redeem the Subject Properties.
x x x x x x x x x
3.12. Paragraph 15, insoIar as it is made to appear that:
3.12.1. The action taken on 04 April 1992 is merely an oIIshoot oI an intra-corporate controversy between the
owners and stockholders oI deIendant FTMI, the truth being that the action taken on 04 April 1992 was a valid exercise
by deIendant FTMI and/or its authorized representatives oI its power oI administration over its own properties;

3.12.2. PlaintiII is an innocent bystander and is allegedly being helplessly dragged into the controversy, the truth
being that plaintiII is conniving and colluding with deIendant Bernardino Villanueva in order to wrest ownership and
possession oI the Subject Properties Irom its registered owner, deIendant FTMI, in order to Iavor deIendant Bernardino
Villanueva;

To require that an applicant must prove his ownership or his interest over the property sought to be aIIected with
the notice oI lis pendens will unduly restrict the scope oI the rule. In such case, a party questioning the ownership oI the
registered owner will litigate his or her case without an assurance that the property will be protected Irom unwanted
alienation during the pendency oI the action, thereby deIeating the very purpose and rationale oI the registration.Kyle

WHEREFORE, the petition is hereby GRANTED. The assailed Decision is REVERSED and SET ASIDE. The
Land Registration Authority is hereby ORDERED to annotate the application Ior a notice oI lis pendens in TCT Nos.
262631, 273873 and 277938. No costs. SO ORDERED.

MANILA METAL CONTAINER CORPORATION vs. PNB G.R. No. 1 December ,
Manila Metal Container Corporation, Petitioner, Reynaldo C. Tolentino, Intervenor, vs.Philippine National
Bank, Respondent,Dmci-Project Developers, Inc., Intervenor.

D E C I S I O N


CALLE1O, SR., .:
BeIore us is a petition Ior review on certiorari oI the Decision
1
oI the Court oI Appeals (CA) in CA-G.R. No. 46153
which aIIirmed the decision
2
oI the Regional Trial Court (RTC), Branch 71, Pasig City, in Civil Case No. 58551, and its
Resolution
3
denying the motion Ior reconsideration Iiled by petitioner Manila Metal Container Corporation (MMCC).
The Antecedents
Petitioner was the owner oI a 8,015 square meter parcel oI land located in Mandaluyong (now a City), Metro Manila.
The property was covered by TransIer CertiIicate oI Title (TCT) No. 332098 oI the Registry oI Deeds oI Rizal. To secure
a P900,000.00 loan it had obtained Irom respondent Philippine National Bank (PNB), petitioner executed a real estate mortgage
over the lot. Respondent PNB later granted petitioner a new credit accommodation oI P1,000,000.00; and, on November 16,
1973, petitioner executed an Amendment
4
oI Real Estate Mortgage over its property. On March 31, 1981, petitioner secured
another loan oI P653,000.00 Irom respondent PNB, payable in quarterly installments oI P32,650.00, plus interests and other
charges.
5

On August 5, 1982, respondent PNB Iiled a petition Ior extrajudicial Ioreclosure oI the real estate mortgage and sought
to have the property sold at public auction Ior P911,532.21, petitioner's outstanding obligation to respondent PNB as oI June 30,
1982,
6
plus interests and attorney's Iees.
AIter due notice and publication, the property was sold at public auction on September 28, 1982 where respondent PNB
was declared the winning bidder Ior P1,000,000.00. The CertiIicate oI Sale
7
issued in its Iavor was registered with the OIIice oI
the Register oI Deeds oI Rizal, and was annotated at the dorsal portion oI the title on February 17, 1983. Thus, the period to
redeem the property was to expire on February 17, 1984.
Petitioner sent a letter dated August 25, 1983 to respondent PNB, requesting that it be granted an extension oI time to
redeem/repurchase the property.
8
In its reply dated August 30, 1983, respondent PNB inIormed petitioner that the request had
been reIerred to its Pasay City Branch Ior appropriate action and recommendation.
9


In a letter
10
dated February 10, 1984, petitioner reiterated its request Ior a one year extension Irom February 17, 1984
within which to redeem/repurchase the property on installment basis. It reiterated its request to repurchase the property on
installment.
11
Meanwhile, some PNB Pasay City Branch personnel inIormed petitioner that as a matter oI policy, the bank does
not accept "partial redemption."
12


Since petitioner Iailed to redeem the property, the Register oI Deeds cancelled TCT No. 32098 on June 1, 1984, and
issued a new title in Iavor oI respondent PNB.
13
Petitioner's oIIers had not yet been acted upon by respondent PNB.

Meanwhile, the Special Assets Management Department (SAMD) had prepared a statement oI account, and as oI June
25, 1984 petitioner's obligation amounted to P1,574,560.47. This included the bid price oI P1,056,924.50, interest, advances oI
insurance premiums, advances on realty taxes, registration expenses, miscellaneous expenses and publication cost.
14
When
apprised oI the statement oI account, petitioner remitted P725,000.00 to respondent PNB as "deposit to repurchase," and
OIIicial Receipt No. 978191 was issued to it.
15


In the meantime, the SAMD recommended to the management oI respondent PNB that petitioner be allowed to
repurchase the property Ior P1,574,560.00. In a letter dated November 14, 1984, the PNB management inIormed petitioner that
it was rejecting the oIIer and the recommendation oI the SAMD. It was suggested that petitioner purchase the property
Ior P2,660,000.00, its minimum market value. Respondent PNB gave petitioner until December 15, 1984 to act on the proposal;
otherwise, its P725,000.00 deposit would be returned and the property would be sold to other interested buyers.
16


Petitioner, however, did not agree to respondent PNB's proposal. Instead, it wrote another letter dated December 12,
1984 requesting Ior a reconsideration. Respondent PNB replied in a letter dated December 28, 1984, wherein it reiterated its
proposal that petitioner purchase the property Ior P2,660,000.00. PNB again inIormed petitioner that it would return the deposit
should petitioner desire to withdraw its oIIer to purchase the property.
17
On February 25, 1985, petitioner, through counsel,
requested that PNB reconsider its letter dated December 28, 1984. Petitioner declared that it had already agreed to the SAMD's
oIIer to purchase the property IorP1,574,560.47, and that was why it had paid P725,000.00. Petitioner warned respondent PNB
that it would seek judicial recourse should PNB insist on the position.
18


On June 4, 1985, respondent PNB inIormed petitioner that the PNB Board oI Directors had accepted petitioner's oIIer
to purchase the property, but Ior P1,931,389.53 in cash less the P725,000.00 already deposited with it.
19
On page two oI the
letter was a space above the typewritten name oI petitioner's President, Pablo Gabriel, where he was to aIIix his signature.
However, Pablo Gabriel did not conIorm to the letter but merely indicated therein that he had received it.
20
Petitioner did not
respond, so PNB requested petitioner in a letter dated June 30, 1988 to submit an amended oIIer to repurchase.
Petitioner rejected respondent's proposal in a letter dated July 14, 1988. It maintained that respondent PNB had agreed
to sell the property Ior P1,574,560.47, and that since its P725,000.00 downpayment had been accepted, respondent PNB was
proscribed Irom increasing the purchase price oI the property.
21
Petitioner averred that it had a net balance payable in the
amount oI P643,452.34. Respondent PNB, however, rejected petitioner's oIIer to pay the balance oI P643,452.34 in a letter
dated August 1, 1989.
22


On August 28, 1989, petitioner Iiled a complaint against respondent PNB Ior "Annulment oI Mortgage and Mortgage
Foreclosure, Delivery oI Title, or SpeciIic PerIormance with Damages." To support its cause oI action Ior speciIic perIormance,
it alleged the Iollowing:

34. As early as June 25, 1984, PNB had accepted the down payment Irom Manila Metal in the substantial
amount oI P725,000.00 Ior the redemption/repurchase price oI P1,574,560.47 as approved by its SMAD and
considering the reliance made by Manila Metal and the long time that has elapsed, the approval oI the higher
management oI the Bank to conIirm the agreement oI its SMAD is clearly a potestative condition which cannot legally
prejudice Manila Metal which has acted and relied on the approval oI SMAD. The Bank cannot take advantage oI a
condition which is entirely dependent upon its own will aIter accepting and beneIiting Irom the substantial payment
made by Manila Metal.
35. PNB approved the repurchase price oI P1,574,560.47 Ior which it accepted P725,000.00 Irom Manila
Metal. PNB cannot take advantage oI its own delay and long inaction in demanding a higher amount based on
unilateral computation oI interest rate without the consent oI Manila Metal.
Petitioner later Iiled an amended complaint and supported its claim Ior damages with the Iollowing arguments:
36. That in order to protect itselI against the wrongIul and malicious acts oI the deIendant Bank, plaintiII is
constrained to engage the services oI counsel at an agreed Iee oI P50,000.00 and to incur litigation expenses oI at
least P30,000.00, which the deIendant PNB should be condemned to pay the plaintiII Manila Metal.
37. That by reason oI the wrongIul and malicious actuations oI deIendant PNB, plaintiII Manila Metal suIIered
besmirched reputation Ior which deIendant PNB is liable Ior moral damages oI at least P50,000.00.
38. That Ior the wrongIul and malicious act oI deIendant PNB which are highly reprehensible, exemplary
damages should be awarded in Iavor oI the plaintiII by way oI example or correction Ior the public good oI at
least P30,000.00.
23

Petitioner prayed that, aIter due proceedings, judgment be rendered in its Iavor, thus:
a) Declaring the Amended Real Estate Mortgage (Annex "A") null and void and without any legal Iorce and
eIIect.
b) Declaring deIendant's acts oI extra-judicially Ioreclosing the mortgage over plaintiII's property and setting it
Ior auction sale null and void.
c) Ordering the deIendant Register oI Deeds to cancel the new title issued in the name oI PNB (TCT NO.
43792) covering the property described in paragraph 4 oI the Complaint, to reinstate TCT No. 37025 in the name oI
Manila Metal and to cancel the annotation oI the mortgage in question at the back oI the TCT No.37025 described in
paragraph 4 oI this Complaint.
d) Ordering the deIendant PNB to return and/or deliver physical possession oI the TCT No. 37025described in
paragraph 4 oI this Complaint to the plaintiII Manila Metal.
e) Ordering the deIendant PNB to pay the plaintiII Manila Metal's actual damages, moral and exemplary
damages in the aggregate amount oI not less than P80,000.00 as may be warranted by the evidence and Iixed by this
Honorable Court in the exercise oI its sound discretion, and attorney's Iees oI P50,000.00 and litigation expenses oI at
least P30,000.00 as may be proved during the trial, and costs oI suit.

PlaintiII likewise prays Ior such Iurther relieIs which may be deemed just and equitable in the premises.
24

In its Answer to the complaint, respondent PNB averred, as a special and aIIirmative deIense, that it had acquired
ownership over the property aIter the period to redeem had elapsed. It claimed that no contract oI sale was perIected between it
and petitioner aIter the period to redeem the property had expired.

During pre-trial, the parties agreed to submit the case Ior decision, based on their stipulation oI Iacts.
25
The parties
agreed to limit the issues to the Iollowing:
1. Whether or not the June 4, 1985 letter oI the deIendant approving/accepting plaintiII's oIIer to purchase the
property is still valid and legally enIorceable.
2. Whether or not the plaintiII has waived its right to purchase the property when it Iailed to conIorm with the
conditions set Iorth by the deIendant in its letter dated June 4, 1985.
3. Whether or not there is a perIected contract oI sale between the parties.
26


While the case was pending, respondent PNB demanded, on September 20, 1989, that petitioner vacate the property
within 15 days Irom notice,
27
but petitioners reIused to do so.

On March 18, 1993, petitioner oIIered to repurchase the property Ior P3,500,000.00.
28
The oIIer was however rejected
by respondent PNB, in a letter dated April 13, 1993. According to it, the prevailing market value oI the property was
approximately P30,000,000.00, and as a matter oI policy, it could not sell the property Ior less than its market value.
29
On June
21, 1993, petitioner oIIered to purchase the property Ior P4,250,000.00 in cash.
30
The oIIer was again rejected by respondent
PNB on September 13, 1993.
31


On May 31, 1994, the trial court rendered judgment dismissing the amended complaint and respondent PNB's
counterclaim. It ordered respondent PNB to reIund the P725,000.00 deposit petitioner had made.
32
The trial court ruled that
there was no perIected contract oI sale between the parties; hence, petitioner had no cause oI action Ior speciIic perIormance
against respondent. The trial court declared that respondent had rejected petitioner's oIIer to repurchase the property. Petitioner,
in turn, rejected the terms and conditions contained in the June 4, 1985 letter oI the SAMD. While petitioner had oIIered to
repurchase the property per its letter oI July 14, 1988, the amount oI P643,422.34 was way below the P1,206,389.53 which
respondent PNB had demanded. It Iurther declared that the P725,000.00 remitted by petitioner to respondent PNB on June 4,
1985 was a "deposit," and not a downpayment or earnest money.

On appeal to the CA, petitioner made the Iollowing allegations:
I THE LOWER COURT ERRED IN RULING THAT DEFENDANT-APPELLEE'S LETTER DATED 4 JUNE
1985 APPROVING/ACCEPTING PLAINTIFF-APPELLANT'S OFFER TO PURCHASE THE SUBJECT PROPERTY IS
NOT VALID AND ENFORCEABLE.
II THE LOWER COURT ERRED IN RULING THAT THERE WAS NO PERFECTED CONTRACT OF
SALE BETWEEN PLAINTIFF-APPELLANT AND DEFENDANT-APPELLEE.
III THE LOWER COURT ERRED IN RULING THAT PLAINTIFF-APPELLLANT WAIVED ITS RIGHT TO
PURCHASE THE SUBJECT PROPERTY WHEN IT FAILED TO CONFORM WITH CONDITIONS SET FORTH BY
DEFENDANT-APPELLEE IN ITS LETTER DATED 4 JUNE 1985.
IV THE LOWER COURT ERRED IN DISREGARDING THE FACT THAT IT WAS THE DEFENDANT-
APPELLEE WHICH RENDERED IT DIFFICULT IF NOT IMPOSSIBLE FOR PLAINTIFF-APPELLANT TO COMPLETE
THE BALANCE OF THEIR PURCHASE PRICE.
V THE LOWER COURT ERRED IN DISREGARDING THE FACT THAT THERE WAS NO VALID
RESCISSION OR CANCELLATION OF SUBJECT CONTRACT OF REPURCHASE.
VI THE LOWER COURT ERRED IN DECLARING THAT PLAINTIFF FAILED AND REFUSED TO
SUBMIT THE AMENDED REPURCHASE OFFER.
VII THE LOWER COURT ERRED IN DISMISSING THE AMENDED COMPLAINT OF PLAINTIFF-
APPELLANT.
VIII THE LOWER COURT ERRED IN NOT AWARDING PLAINTIFF-APPELLANT ACTUAL, MORAL AND
EXEMPLARY DAMAGES, ATTOTRNEY'S FEES AND LITIGATION EXPENSES.
33


Meanwhile, on June 17, 1993, petitioner's Board oI Directors approved Resolution No. 3-004, where it waived,
assigned and transIerred its rights over the property covered by TCT No. 33099 and TCT No. 37025 in Iavor oI Bayani Gabriel,
one oI its Directors.
34
ThereaIter, Bayani Gabriel executed a Deed oI Assignment over 51 oI the ownership and management
oI the property in Iavor oI Reynaldo Tolentino, who later moved Ior leave to intervene as plaintiII-appellant. On July 14, 1993,
the CA issued a resolution granting the motion,
35
and likewise granted the motion oI Reynaldo Tolentino substituting petitioner
MMCC, as plaintiII-appellant, and his motion to withdraw as intervenor.
36


The CA rendered judgment on May 11, 2000 aIIirming the decision oI the RTC.
37
It declared that petitioner obviously
never agreed to the selling price proposed by respondent PNB (P1,931,389.53) since petitioner had kept on insisting that the
selling price should be lowered to P1,574,560.47. Clearly thereIore, there was no meeting oI the minds between the parties as to
the price or consideration oI the sale.

The CA ratiocinated that petitioner's original oIIer to purchase the subject property had not been accepted by
respondent PNB. In Iact, it made a counter-oIIer through its June 4, 1985 letter speciIically on the selling price; petitioner did
not agree to the counter-oIIer; and the negotiations did not prosper. Moreover, petitioner did not pay the balance oI the purchase
price within the sixty-day period set in the June 4, 1985 letter oI respondent PNB. Consequently, there was no perIected
contract oI sale, and as such, there was no contract to rescind.

According to the appellate court, the claim Ior damages and the counterclaim were correctly dismissed by the court a
quo Ior no evidence was presented to support it. Respondent PNB's letter dated June 30, 1988 cannot revive the Iailed
negotiations between the parties. Respondent PNB merely asked petitioner to submit an amended oIIer to repurchase. While
petitioner reiterated its request Ior a lower selling price and that the balance oI the repurchase be reduced, however, respondent
rejected the proposal in a letter dated August 1, 1989.
Petitioner Iiled a motion Ior reconsideration, which the CA likewise denied.

Thus, petitioner Iiled the instant petition Ior review on certiorari, alleging that:
I. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THERE IS NO
PERFECTED CONTRACT OF SALE BETWEEN THE PETITIONER AND RESPONDENT.
II. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THE AMOUNT OF
PHP725,000.00 PAID BY THE PETITIONER IS NOT AN EARNEST MONEY.
III. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THE FAILURE OF
THE PETITIONER-APPELLANT TO SIGNIFY ITS CONFORMITY TO THE TERMS CONTAINED IN PNB'S JUNE 4,
1985 LETTER MEANS THAT THERE WAS NO VALID AND LEGALLY ENFORCEABLE CONTRACT OF SALE
BETWEEN THE PARTIES.
IV. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW THAT NON-PAYMENT OF THE
PETITIONER-APPELLANT OF THE BALANCE OF THE OFFERED PRICE IN THE LETTER OF PNB DATED JUNE 4,
1985, WITHIN SIXTY (60) DAYS FROM NOTICE OF APPROVAL CONSTITUTES NO VALID AND LEGALLY
ENFORCEABLE CONTRACT OF SALE BETWEEN THE PARTIES.
V. THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT HELD THAT THE LETTERS OF PETITIONER-
APPELLANT DATED MARCH 18, 1993 AND JUNE 21, 1993, OFFERING TO BUY THE SUBJECT PROPERTY AT
DIFFERENT AMOUNT WERE PROOF THAT THERE IS NO PERFECTED CONTRACT OF SALE.
38


The threshold issue is whether or not petitioner and respondent PNB had entered into a perIected contract Ior petitioner
to repurchase the property Irom respondent.
Petitioner maintains that it had accepted respondent's oIIer made through the SAMD, to sell the property
IorP1,574,560.00. When the acceptance was made in its letter dated June 25, 1984; it then deposited P725,000.00 with the
SAMD as partial payment, evidenced by Receipt No. 978194 which respondent had issued. Petitioner avers that the SAMD's
acceptance oI the deposit amounted to an acceptance oI its oIIer to repurchase. Moreover, as gleaned Irom the letter oI SAMD
dated June 4, 1985, the PNB Board oI Directors had approved petitioner's oIIer to purchase the property. It claims that this was
the suspensive condition, the IulIillment oI which gave rise to the contract. Respondent could no longer unilaterally withdraw
its oIIer to sell the property Ior P1,574,560.47, since the acceptance oI the oIIer resulted in a perIected contract oI sale; it was
obliged to remit to respondent the balance oI the original purchase price oI P1,574,560.47, while respondent was obliged to
transIer ownership and deliver the property to petitioner, conIormably with Article 1159 oI the New Civil Code.

Petitioner posits that respondent was proscribed Irom increasing the interest rate aIter it had accepted respondent's oIIer
to sell the property Ior P1,574,560.00. Consequently, respondent could no longer validly make a counter-oIIer oI P1,931,789.88
Ior the purchase oI the property. It likewise maintains that, although theP725,000.00 was considered as "deposit Ior the
repurchase oI the property" in the receipt issued by the SAMD, the amount constitutes earnest money as contemplated in Article
1482 oI the New Civil Code. Petitioner cites the rulings oI this Court in Jillonco v. Bormaheco
39
and Topacio v. Court of
Appeals.
40


Petitioner avers that its Iailure to append its conIormity to the June 4, 1984 letter oI respondent and its Iailure to pay the
balance oI the price as Iixed by respondent within the 60-day period Irom notice was to protest respondent's breach oI its
obligation to petitioner. It did not amount to a rejection oI respondent's oIIer to sell the property since respondent was merely
seeking to enIorce its right to pay the balance oI P1,570,564.47. In any event, respondent had the option either to accept the
balance oI the oIIered price or to cause the rescission oI the contract.

Petitioner's letters dated March 18, 1993 and June 21, 1993 to respondent during the pendency oI the case in the RTC
were merely to compromise the pending lawsuit, they did not constitute separate oIIers to repurchase the property. Such oIIer to
compromise should not be taken against it, in accordance with Section 27, Rule 130 oI the Revised Rules oI Court.

For its part, respondent contends that the parties never graduated Irom the "negotiation stage" as they could not agree
on the amount oI the repurchase price oI the property. All that transpired was an exchange oI proposals and counter-proposals,
nothing more. It insists that a deIinite agreement on the amount and manner oI payment oI the price are essential elements in the
Iormation oI a binding and enIorceable contract oI sale. There was no such agreement in this case. Primarily, the concept oI
"suspensive condition" signiIies a Iuture and uncertain event upon the IulIillment oI which the obligation becomes eIIective. It
clearly presupposes the existence oI a valid and binding agreement, the eIIectivity oI which is subordinated to its IulIillment.
Since there is no perIected contract in the Iirst place, there is no basis Ior the application oI the principles governing "suspensive
conditions."
According to respondent, the Statement oI Account prepared by SAMD as oI June 25, 1984 cannot be classiIied as a
counter-oIIer; it is simply a recital oI its total monetary claims against petitioner. Moreover, the amount stated therein could not
likewise be considered as the counter-oIIer since as admitted by petitioner, it was only recommendation which was subject to
approval oI the PNB Board oI Directors.
Neither can the receipt by the SAMD oI P725,000.00 be regarded as evidence oI a perIected sale contract. As gleaned
Irom the parties' Stipulation of Facts during the proceedings in the court a quo, the amount is merely an acknowledgment oI the
receipt oI P725,000.00 as deposit to repurchase the property. The deposit oI P725,000.00 was accepted by respondent on the
condition that the purchase price would still be approved by its Board oI Directors. Respondent maintains that its acceptance oI
the amount was qualiIied by that condition, thus not absolute. Pending such approval, it cannot be legally claimed that
respondent is already bound by any contract oI sale with petitioner.

According to respondent, petitioner knew that the SAMD has no capacity to bind respondent and that its authority is
limited to administering, managing and preserving the properties and other special assets oI PNB. The SAMD does not have the
power to sell, encumber, dispose oI, or otherwise alienate the assets, since the power to do so must emanate Irom its Board oI
Directors. The SAMD was not authorized by respondent's Board to enter into contracts oI sale with third persons involving
corporate assets. There is absolutely nothing on record that respondent authorized the SAMD, or made it appear to petitioner
that it represented itselI as having such authority.

Respondent reiterates that SAMD had inIormed petitioner that its oIIer to repurchase had been approved by the Board
subject to the condition, among others, "that the selling price shall be the total bank's claim as oI documentation date x x x
payable in cash (P725,000.00 already deposited) within 60 days Irom notice oI approval." A new Statement oI Account was
attached therein indicating the total bank's claim to be P1,931,389.53 less deposit oI P725,000.00, or P1,206,389.00.
Furthermore, while respondent's Board oI Directors accepted petitioner's oIIer to repurchase the property, the acceptance was
qualiIied, in that it required a higher sale price and subject to speciIied terms and conditions enumerated therein. This qualiIied
acceptance was in eIIect a counter-oIIer, necessitating petitioner's acceptance in return.

The Ruling of the Court
The ruling oI the appellate court that there was no perIected contract oI sale between the parties on June 4, 1985 is
correct.
A contract is a meeting oI minds between two persons whereby one binds himselI, with respect to the other, to give
something or to render some service.
41
Under Article 1318 oI the New Civil Code, there is no contract unless the Iollowing
requisites concur:
(1) Consent oI the contracting parties;
(2) Object certain which is the subject matter oI the contract;
(3) Cause oI the obligation which is established.
Contracts are perIected by mere consent which is maniIested by the meeting oI the oIIer and the acceptance upon the
thing and the cause which are to constitute the contract.
42
Once perIected, they bind other contracting parties and the obligations
arising thereIrom have the Iorm oI law between the parties and should be complied with in good Iaith. The parties are bound not
only to the IulIillment oI what has been expressly stipulated but also to the consequences which, according to their nature, may
be in keeping with good Iaith, usage and law.
43


By the contract oI sale, one oI the contracting parties obligates himselI to transIer the ownership oI and deliver a
determinate thing, and the other to pay thereIor a price certain in money or its equivalent.
44
The absence oI any oI the essential
elements will negate the existence oI a perIected contract oI sale. As the Court ruled in Boston Bank of the Philippines v.
Manalo:
45

A deIinite agreement as to the price is an essential element oI a binding agreement to sell personal or real
property because it seriously aIIects the rights and obligations oI the parties. Price is an essential element in the
Iormation oI a binding and enIorceable contract oI sale. The Iixing oI the price can never be leIt to the decision oI one
oI the contracting parties. But a price Iixed by one oI the contracting parties, iI accepted by the other, gives rise to a
perIected sale.
46


A contract oI sale is consensual in nature and is perIected upon mere meeting oI the minds. When there is merely an
oIIer by one party without acceptance oI the other, there is no contract.
47
When the contract oI sale is not perIected, it cannot, as
an independent source oI obligation, serve as a binding juridical relation between the parties.
48


In San Miguel Properties Philippines, Inc. v. Huang,
49
the Court ruled that the stages oI a contract oI sale are as
Iollows: (1) negotiation, covering the period Irom the time the prospective contracting parties indicate interest in the contract to
the time the contract is perIected; (2) perfection, which takes place upon the concurrence oI the essential elements oI the sale
which are the meeting oI the minds oI the parties as to the object oI the contract and upon the price; and (3) consummation,
which begins when the parties perIorm their respective undertakings under the contract oI sale, culminating in the
extinguishment thereoI.

A negotiation is Iormally initiated by an oIIer, which, however, must be certain.
50
At any time prior to the perIection oI
the contract, either negotiating party may stop the negotiation. At this stage, the oIIer may be withdrawn; the withdrawal is
eIIective immediately aIter its maniIestation. To convert the oIIer into a contract, the acceptance must be absolute and must not
qualiIy the terms oI the oIIer; it must be plain, unequivocal, unconditional and without variance oI any sort Irom the proposal.
In Adelfa Properties, Inc. v. Court of Appeals,
51
the Court ruled that:
x x x The rule is that except where a Iormal acceptance is so required, although the acceptance must be
aIIirmatively and clearly made and must be evidenced by some acts or conduct communicated to the oIIeror, it may be
shown by acts, conduct, or words oI the accepting party that clearly maniIest a present intention or determination to
accept the oIIer to buy or sell. Thus, acceptance may be shown by the acts, conduct, or words oI a party recognizing the
existence oI the contract oI sale.
52


A qualiIied acceptance or one that involves a new proposal constitutes a counter-oIIer and a rejection oI the original
oIIer. A counter-oIIer is considered in law, a rejection oI the original oIIer and an attempt to end the negotiation between the
parties on a diIIerent basis.
53
Consequently, when something is desired which is not exactly what is proposed in the oIIer, such
acceptance is not suIIicient to guarantee consent because any modiIication or variation Irom the terms oI the oIIer annuls the
oIIer.
54
The acceptance must be identical in all respects with that oI the oIIer so as to produce consent or meeting oI the minds.

In this case, petitioner had until February 17, 1984 within which to redeem the property. However, since it lacked the
resources, it requested Ior more time to redeem/repurchase the property under such terms and conditions agreed upon by the
parties.
55
The request, which was made through a letter dated August 25, 1983, was reIerred to the respondent's main branch Ior
appropriate action.
56
BeIore respondent could act on the request, petitioner again wrote respondent as Iollows:
1. Upon approval oI our request, we will pay your goodselves ONE HUNDRED & FIFTY THOUSAND
PESOS (P150,000.00);
2. Within six months Irom date oI approval oI our request, we will pay another FOUR HUNDRED FIFTY
THOUSAND PESOS (P450,000.00); and
3. The remaining balance together with the interest and other expenses that will be incurred will be paid within
the last six months oI the one year grave period requested Ior.
57

When the petitioner was told that respondent did not allow "partial redemption,"
58
it sent a letter to respondent's
President reiterating its oIIer to purchase the property.
59
There was no response to petitioner's letters dated February 10 and 15,
1984.
The statement oI account prepared by the SAMD stating that the net claim oI respondent as oI June 25, 1984
wasP1,574,560.47 cannot be considered an unqualiIied acceptance to petitioner's oIIer to purchase the property. The statement
is but a computation oI the amount which petitioner was obliged to pay in case respondent would later agree to sell the property,
including interests, advances on insurance premium, advances on realty taxes, publication cost, registration expenses and
miscellaneous expenses.

There is no evidence that the SAMD was authorized by respondent's Board oI Directors to accept petitioner's oIIer and
sell the property Ior P1,574,560.47. Any acceptance by the SAMD oI petitioner's oIIer would not bind respondent. As this Court
ruled in AF Realty Development, Inc. vs. Diesehuan Freight Services, Inc.:
60


Section 23 oI the Corporation Code expressly provides that the corporate powers oI all corporations shall be
exercised by the board oI directors. Just as a natural person may authorize another to do certain acts in his behalI, so
may the board oI directors oI a corporation validly delegate some oI its Iunctions to individual oIIicers or agents
appointed by it. Thus, contracts or acts oI a corporation must be made either by the board oI directors or by a corporate
agent duly authorized by the board. Absent such valid delegation/authorization, the rule is that the declarations oI an
individual director relating to the aIIairs oI the corporation, but not in the course oI, or connected with the perIormance
oI authorized duties oI such director, are held not binding on the corporation.

Thus, a corporation can only execute its powers and transact its business through its Board oI Directors and through its
oIIicers and agents when authorized by a board resolution or its by-laws.
61


It appears that the SAMD had prepared a recommendation Ior respondent to accept petitioner's oIIer to repurchase the
property even beyond the one-year period; it recommended that petitioner be allowed to redeem the property and
pay P1,574,560.00 as the purchase price. Respondent later approved the recommendation that the property be sold to petitioner.
But instead oI the P1,574,560.47 recommended by the SAMD and to which petitioner had previously conIormed, respondent set
the purchase price at P2,660,000.00. In Iine, respondent's acceptance oI petitioner's oIIer was qualiIied, hence can be at most
considered as a counter-oIIer. II petitioner had accepted this counter-oIIer, a perIected contract oI sale would have arisen; as it
turns out, however, petitioner merely sought to have the counter-oIIer reconsidered. This request Ior reconsideration would later
be rejected by respondent.

We do not agree with petitioner's contention that the P725,000.00 it had remitted to respondent was "earnest money"
which could be considered as prooI oI the perIection oI a contract oI sale under Article 1482 oI the New Civil Code. The
provision reads:
ART. 1482. Whenever earnest money is given in a contract oI sale, it shall be considered as part oI the price
and as prooI oI the perIection oI the contract.
This contention is likewise negated by the stipulation oI Iacts which the parties entered into in the trial court:
8. On June 8, 1984, the Special Assets Management Department (SAMD) oI PNB prepared an updated
Statement oI Account showing MMCC's total liability to PNB as oI June 25, 1984 to be P1,574,560.47 and
recommended this amount as the repurchase price oI the subject property.
9. On June 25, 1984, MMCC paid P725,000.00 to PNB as deposit to repurchase the property. 1he deposit of
P725, was accepted by PAB on the condition that the purchase price is still subject to the approval of the PAB
Board.
62


Thus, the P725,000.00 was merely a deposit to be applied as part oI the purchase price oI the property, in the event that
respondent would approve the recommendation oI SAMD Ior respondent to accept petitioner's oIIer to purchase the property
Ior P1,574,560.47. Unless and until the respondent accepted the oIIer on these terms, no perIected contract oI sale would arise.
Absent prooI oI the concurrence oI all the essential elements oI a contract oI sale, the giving oI earnest money cannot establish
the existence oI a perIected contract oI sale.
63


It appears that, per its letter to petitioner dated June 4, 1985, the respondent had decided to accept the oIIer to purchase
the property Ior P1,931,389.53. However, this amounted to an amendment oI respondent's qualiIied acceptance, or an amended
counter-oIIer, because while the respondent lowered the purchase price, it still declared that its acceptance was subject to the
Iollowing terms and conditions:
1. That the selling price shall be the total Bank's claim as oI documentation date (pls. see attached statement oI
account as oI 5-31-85), payable in cash (P725,000.00 already deposited) within sixty (60) days Irom notice oI approval;
2. The Bank sells only whatever rights, interests and participation it may have in the property and you are
charged with Iull knowledge oI the nature and extent oI said rights, interests and participation and waive your right to
warranty against eviction.
3. All taxes and other government imposts due or to become due on the property, as well as expenses including
costs oI documents and science stamps, transIer Iees, etc., to be incurred in connection with the execution and
registration oI all covering documents shall be borne by you;
4. That you shall undertake at your own expense and account the ejectment oI the occupants oI the property
subject oI the sale, iI there are any;
5. That upon your Iailure to pay the balance oI the purchase price within sixty (60) days Irom receipt oI advice
accepting your oIIer, your deposit shall be IorIeited and the Bank is thenceIorth authorized to sell the property to other
interested parties.
6. That the sale shall be subject to such other terms and conditions that the Legal Department may impose to
protect the interest oI the Bank.
64


It appears that although respondent requested petitioner to conIorm to its amended counter-oIIer, petitioner reIused and
instead requested respondent to reconsider its amended counter-oIIer. Petitioner's request was ultimately rejected and
respondent oIIered to reIund its P725,000.00 deposit.

In sum, then, there was no perIected contract oI sale between petitioner and respondent over the subject property.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The assailed decision is AFFIRMED. Costs
against petitioner Manila Metal Container Corporation. SO ORDERED.

5. DIZON vs. CA G.R. No. 122544. January 28, 1999

REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D. BALZA, ESTER ABAD DIZON and
JOSEPH ANTHONY DIZON, RAYMUND A. DIZON, GERARD A. DIZON, and JOSE A. DIZON, JR., petitioners, vs.
COURT OF APPEALS and OVERLAND EXPRESS LINES, INC., respondents.|G.R. No. 124741. January 28, 1999|

REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D. BALZA, ESTER ABAD DIZON and
JOSEPH ANTHONY DIZON, RAYMUND A. DIZON, GERARD A. DIZON, and JOSE A. DIZON, JR., petitioners, vs.
COURT OF APPEALS, HON. MAXIMIANO C. ASUNCION, and OVERLAND EXPRESS LINES, INC., respondents.

D E C I S I O N
MARTINEZ, J.:
Two consolidated petitions were Iiled beIore us seeking to set aside and annul the decisions and resolutions oI
respondent Court oI Appeals. What seemed to be a simple ejectment suit was juxtaposed with procedural intricacies
which Iinally Iound its way to this Court.

G. R. NO. 122544:
On May 23, 1974, private respondent Overland Express Lines, Inc. (lessee) entered into a Contract oI Lease with
Option to Buy with petitioners|1| (lessors) involving a 1,755.80 square meter parcel oI land situated at corner MacArthur
Highway and South "H" Street, Diliman, Quezon City. The term oI the lease was Ior one (1) year commencing Irom May
16, 1974 up to May 15, 1975. During this period, private respondent was granted an option to purchase Ior the amount oI
P3,000.00 per square meter. ThereaIter, the lease shall be on a per month basis with a monthly rental oI P3,000.00.

For Iailure oI private respondent to pay the increased rental oI P8,000.00 per month eIIective June 1976,
petitioners Iiled an action Ior ejectment (Civil Case No. VIII-29155) on November 10, 1976 beIore the then City Court
(now Metropolitan Trial Court) oI Quezon City, Branch VIII. On November 22, 1982, the City Court rendered
judgment|2| ordering private respondent to vacate the leased premises and to pay the sum oI P624,000.00 representing
rentals in arrears and/or as damages in the Iorm oI reasonable compensation Ior the use and occupation oI the premises
during the period oI illegal detainer Irom June 1976 to November 1982 at the monthly rental oI P8,000.00, less payments
made, plus 12 interest per annum Irom November 18, 1976, the date oI Iiling oI the complaint, until Iully paid, the sum
oI P8,000.00 a month starting December 1982, until private respondent Iully vacates the premises, and to pay P20,000.00
as and by way oI attorney's Iees.

Private respondent Iiled a certiorari petition praying Ior the issuance oI a restraining order enjoining the
enIorcement oI said judgment and dismissal oI the case Ior lack oI jurisdiction oI the City Court.

On September 26, 1984, the then Intermediate Appellate Court|3| (now Court oI Appeals) rendered a decision|4|
stating that:

"x x x, the alleged question oI whether petitioner was granted an extension oI the option to buy the property;
whether such option, iI any, extended the lease or whether petitioner actually paid the alleged P300,000.00 to Fidela
Dizon, as representative oI private respondents in consideration oI the option and, whether petitioner thereaIter oIIered to
pay the balance oI the supposed purchase price, are all merely incidental and do not remove the unlawIul detainer case
Irom the jurisdiction oI respondent court. In consonance with the ruling in the case oI Teodoro, Jr. vs. Mirasol (supra),
the above matters may be raised and decided in the unlawIul detainer suit as, to rule otherwise, would be a violation oI the
principle prohibiting multiplicity oI suits. (Original Records, pp. 38-39)."

The motion Ior reconsideration was denied. On review, this Court dismissed the petition in a resolution dated
June 19, 1985 and likewise denied private respondent's subsequent motion Ior reconsideration in a resolution dated
September 9, 1985.|5|

On October 7, 1985, private respondent Iiled beIore the Regional Trial Court (RTC) oI Quezon City (Civil Case
No. Q-45541) an action Ior SpeciIic PerIormance and Fixing oI Period Ior Obligation with prayer Ior the issuance oI a
restraining order pending hearing on the prayer Ior a writ oI preliminary injunction. It sought to compel the execution oI a
deed oI sale pursuant to the option to purchase and the receipt oI the partial payment, and to Iix the period to pay the
balance. In an Order dated October 25, 1985, the trial court denied the issuance oI a writ oI preliminary injunction on the
ground that the decision oI the then City Court Ior the ejectment oI the private respondent, having been aIIirmed by the
then Intermediate Appellate Court and the Supreme Court, has become Iinal and executory.

Unable to secure an injunction, private respondent also Iiled beIore the RTC oI Quezon City, Branch 102 (Civil
Case No. Q-46487) on November 15, 1985 a complaint Ior Annulment oI and RelieI Irom Judgment with injunction and
damages. In its decision|6| dated May 12, 1986, the trial court dismissed the complaint Ior annulment on the ground oI
res judicata, and the writ oI preliminary injunction previously issued was dissolved. It also ordered private respondent to
pay P3,000.00 as attorney's Iees. As a consequence oI private respondent's motion Ior reconsideration, the preliminary
injunction was reinstated, thereby restraining the execution oI the City Court's judgment on the ejectment case.

The two cases were thereaIter consolidated beIore the RTC oI Quezon City, Branch 77. On April 28, 1989, a
decision|7| was rendered dismissing private respondent's complaint in Civil Case No. Q-45541 (speciIic perIormance
case) and denying its motion Ior reconsideration in Civil Case No. 46487 (annulment oI the ejectment case). The motion
Ior reconsideration oI said decision was likewise denied.

On appeal,|8| respondent Court oI Appeals rendered a decision|9| upholding the jurisdiction oI the City Court oI
Quezon City in the ejectment case. It also concluded that there was a perIected contract oI sale between the parties on the
leased premises and that pursuant to the option to buy agreement, private respondent had acquired the rights oI a vendee
in a contract oI sale. It opined that the payment by private respondent oI P300,000.00 on June 20, 1975 as partial payment
Ior the leased property, which petitioners accepted (through Alice A. Dizon) and Ior which an oIIicial receipt was issued,
was the operative act that gave rise to a perIected contract oI sale, and that Ior Iailure oI petitioners to deny receipt
thereoI, private respondent can thereIore assume that Alice A. Dizon, acting as agent oI petitioners, was authorized by
them to receive the money in their behalI. The Court oI Appeals went Iurther by stating that in Iact, what was entered into
was a "conditional contract oI sale" wherein ownership over the leased property shall not pass to the private respondent
until it has Iully paid the purchase price. Since private respondent did not consign to the court the balance oI the purchase
price and continued to occupy the subject premises, it had the obligation to pay the amount oI P1,700.00 in monthly
rentals until Iull payment oI the purchase price. The dispositive portion oI said decision reads:

"WHEREFORE, the appealed decision in Case No. 46487 is AFFIRMED. The appealed decision in Case No.
45541 is, on the other hand, ANNULLED and SET ASIDE. The deIendants-appellees are ordered to execute the deed oI
absolute sale oI the property in question, Iree Irom any lien or encumbrance whatsoever, in Iavor oI the plaintiII-appellant,
and to deliver to the latter the said deed oI sale, as well as the owner's duplicate oI the certiIicate oI title to said property
upon payment oI the balance oI the purchase price by the plaintiII-appellant. The plaintiII-appellant is ordered to pay
P1,700.00 per month Irom June 1976, plus 6 interest per annum, until payment oI the balance oI the purchase price, as
previously agreed upon by the parties. SO ORDERED."

Upon denial oI the motion Ior partial reconsideration (Civil Case No. Q-45541) by respondent Court oI
Appeals,|10| petitioners elevated the case via petition Ior certiorari questioning the authority oI Alice A. Dizon as agent
oI petitioners in receiving private respondent's partial payment amounting to P300,000.00 pursuant to the Contract oI
Lease with Option to Buy. Petitioners also assail the propriety oI private respondent's exercise oI the option when it
tendered the said amount on June 20, 1975 which purportedly resulted in a perIected contract oI sale.

G. R. NO. 124741:
Petitioners Iiled with respondent Court oI Appeals a motion to remand the records oI Civil Case No. 38-29155
(ejectment case) to the Metropolitan Trial Court (MTC), then City Court oI Quezon City, Branch 38, Ior execution oI the
judgment|11| dated November 22, 1982 which was granted in a resolution dated June 29, 1992. Private respondent Iiled a
motion to reconsider said resolution which was denied.

Aggrieved, private respondent Iiled a petition Ior certiorari, prohibition with preliminary injunction and/or
restraining order with this Court (G.R. Nos. 106750-51) which was dismissed in a resolution dated September 16, 1992 on
the ground that the same was a reIiled case previously dismissed Ior lack oI merit. On November 26, 1992, entry oI
judgment was issued by this Court.

On July 14, 1993, petitioners Iiled an urgent ex-parte motion Ior execution oI the decision in Civil Case No. 38-
29155 with the MTC oI Quezon City, Branch 38. On September 13, 1993, the trial court ordered the issuance oI a third
alias writ oI execution. In denying private respondent's motion Ior reconsideration, it ordered the immediate
implementation oI the third writ oI execution without delay.

On December 22, 1993, private respondent Iiled with the Regional Trial Court (RTC) oI Quezon City, Branch
104 a petition Ior certiorari and prohibition with preliminary injunction/restraining order (SP. PROC. No. 93-18722)
challenging the enIorceability and validity oI the MTC judgment as well as the order Ior its execution.

On January 11, 1994, RTC oI Quezon City, Branch 104 issued an order|12| granting the issuance oI a writ oI
preliminary injunction upon private respondent's posting oI an injunction bond oI P50,000.00.

Assailing the aIorequoted order aIter denial oI their motion Ior partial reconsideration, petitioners Iiled a
petition|13| Ior certiorari and prohibition with a prayer Ior a temporary restraining order and/or preliminary injunction
with the Court oI Appeals. In its decision,|14| the Court oI Appeals dismissed the petition and ruled that:

"The avowed purpose oI this petition is to enjoin the public respondent Irom restraining the ejectment oI the
private respondent. To grant the petition would be to allow the ejectment oI the private respondent. We cannot do that
now in view oI the decision oI this Court in CA-G.R. CV Nos. 25153-54. Petitioners' alleged right to eject private
respondent has been demonstrated to be without basis in the said civil case. The petitioners have been shown, aIter all, to
have no right to eject private respondents.

WHEREFORE, the petition is DENIED due course and is accordingly DISMISSED.

SO ORDERED."|15|

Petitioners' motion Ior reconsideration was denied in a resolution|16| by the Court oI Appeals stating that:

"This court in its decision in CA-G.R. CV Nos. 25153-54 declared that the plaintiII-appellant (private respondent
herein) acquired the rights oI a vendee in a contract oI sale, in eIIect, recognizing the right oI the private respondent to
possess the subject premises. Considering said decision, we should not allow ejectment; to do so would disturb the status
quo oI the parties since the petitioners are not in possession oI the subject property. It would be unIair and unjust to
deprive the private respondent oI its possession oI the subject property aIter its rights have been established in a
subsequent ruling.
WHEREFORE, the motion Ior reconsideration is DENIED Ior lack oI merit. SO ORDERED."|17|

Hence, this instant petition.
We Iind both petitions impressed with merit.
First. Petitioners have established a right to evict private respondent Irom the subject premises Ior non-payment
oI rentals. The term oI the Contract oI Lease with Option to Buy was Ior a period oI one (1) year (May 16, 1974 to May
15, 1975) during which the private respondent was given an option to purchase said property at P3,000.00 per square
meter. AIter the expiration thereoI, the lease was Ior P3,000.00 per month.

Admittedly, no deIinite period beyond the one-year term oI lease was agreed upon by petitioners and private
respondent. However, since the rent was paid on a monthly basis, the period oI lease is considered to be Irom month to
month in accordance with Article 1687 oI the New Civil Code.|18| Where the rentals are paid monthly, the lease, even iI
verbal may be deemed to be on a monthly basis, expiring at the end oI every month pursuant to Article 1687, in relation to
Article 1673 oI the Civil Code.|19| In such case, a demand to vacate is not even necessary Ior judicial action aIter the
expiration oI every month.|20|

When private respondent Iailed to pay the increased rental oI P8,000.00 per month in June 1976, the petitioners
had a cause oI action to institute an ejectment suit against the Iormer with the then City Court. In this regard, the City
Court (now MTC) had exclusive jurisdiction over the ejectment suit. The Iiling by private respondent oI a suit with the
Regional Trial Court Ior speciIic perIormance to enIorce the option to purchase did not divest the then City Court oI its
jurisdiction to take cognizance over the ejectment case. OI note is the Iact that the decision oI the City Court was
aIIirmed by both the Intermediate Appellate Court and this Court.

Second. Having Iailed to exercise the option within the stipulated one-year period, private respondent cannot
enIorce its option to purchase anymore. Moreover, even assuming arguendo that the right to exercise the option still
subsists at the time private respondent tendered the amount on June 20, 1975, the suit Ior speciIic perIormance to enIorce
the option to purchase was Iiled only on October 7, 1985 or more than ten (10) years aIter accrual oI the cause oI action as
provided under Article 1144 oI the New Civil Code.|21|

In this case, there was a contract oI lease Ior one (1) year with option to purchase. The contract oI lease expired
without the private respondent, as lessee, purchasing the property but remained in possession thereoI. Hence, there was
an implicit renewal oI the contract oI lease on a monthly basis. The other terms oI the original contract oI lease which are
revived in the implied new lease under Article 1670 oI the New Civil Code|22| are only those terms which are germane to
the lessee`s right oI continued enjoyment oI the property leased.|23| ThereIore, an implied new lease does not ipso Iacto
carry with it any implied revival oI private respondent's option to purchase (as lessee thereoI) the leased premises. The
provision entitling the lessee the option to purchase the leased premises is not deemed incorporated in the impliedly
renewed contract because it is alien to the possession oI the lessee. Private respondent`s right to exercise the option to
purchase expired with the termination oI the original contract oI lease Ior one year. The rationale oI this Court is that:

'This is a reasonable construction oI the provision, which is based on the presumption that when the lessor allows
the lessee to continue enjoying possession oI the property Ior IiIteen days aIter the expiration oI the contract he is willing
that such enjoyment shall be Ior the entire period corresponding to the rent which is customarily paid in this case up to
the end oI the month because the rent was paid monthly. Necessarily, iI the presumed will oI the parties reIers to the
enjoyment oI possession the presumption covers the other terms oI the contract related to such possession, such as the
amount oI rental, the date when it must be paid, the care oI the property, the responsibility Ior repairs, etc. But no such
presumption may be indulged in with respect to special agreements which by nature are Ioreign to the right oI occupancy
or enjoyment inherent in a contract oI lease.|24|

Third. There was no perIected contract oI sale between petitioners and private respondent. Private respondent
argued that it delivered the check oI P300,000.00 to Alice A. Dizon who acted as agent oI petitioners pursuant to the
supposed authority given by petitioner Fidela Dizon, the payee thereoI. Private respondent Iurther contended that
petitioners` Iiling oI the ejectment case against it based on the contract oI lease with option to buy holds petitioners in
estoppel to question the authority oI petitioner Fidela Dizon. It insisted that the payment oI P300,000.00 as partial
payment oI the purchase price constituted a valid exercise oI the option to buy.

Under Article 1475 oI the New Civil Code, 'the contract oI sale is perIected at the moment there is a meeting oI
minds upon the thing which is the object oI the contract and upon the price. From that moment, the parties may
reciprocally demand perIormance, subject to the provisions oI the law governing the Iorm oI contracts. Thus, the
elements oI a contract oI sale are consent, object, and price in money or its equivalent. It bears stressing that the absence
oI any oI these essential elements negates the existence oI a perIected contract oI sale. Sale is a consensual contract and
he who alleges it must show its existence by competent prooI.|25|

In an attempt to resurrect the lapsed option, private respondent gave P300,000.00 to petitioners (thru Alice A.
Dizon) on the erroneous presumption that the said amount tendered would constitute a perIected contract oI sale pursuant
to the contract oI lease with option to buy. There was no valid consent by the petitioners (as co-owners oI the leased
premises) on the supposed sale entered into by Alice A. Dizon, as petitioners` alleged agent, and private respondent. The
basis Ior agency is representation and a person dealing with an agent is put upon inquiry and must discover upon his peril
the authority oI the agent.|26| As provided in Article 1868 oI the New Civil Code,|27| there was no showing that
petitioners consented to the act oI Alice A. Dizon nor authorized her to act on their behalI with regard to her transaction
with private respondent. The most prudent thing private respondent should have done was to ascertain the extent oI the
authority oI Alice A. Dizon. Being negligent in this regard, private respondent cannot seek relieI on the basis oI a
supposed agency.

In Bacaltos Coal Mines vs. Court oI Appeals,|28| we explained the rule in dealing with an agent:

'Every person dealing with an agent is put upon inquiry and must discover upon his peril the authority oI the
agent. II he does not make such inquiry, he is chargeable with knowledge oI the agent`s authority, and his ignorance oI
that authority will not be any excuse. Persons dealing with an assumed agent, whether the assumed agency be a general or
special one, are bound at their peril, iI they would hold the principal, to ascertain not only the Iact oI the agency but also
the nature and extent oI the authority, and in case either is controverted, the burden oI prooI is upon them to establish it.

For the long years that private respondent was able to thwart the execution oI the ejectment suit rendered in Iavor
oI petitioners, we now write Iinis to this controversy and shun Iurther delay so as to ensure that this case would really
attain Iinality.

WHEREFORE, in view oI the Ioregoing, both petitions are GRANTED. The decision dated March 29, 1994 and
the resolution dated October 19, 1995 in CA-G.R. CV No. 25153-54, as well as the decision dated December 11, 1995
and the resolution dated April 23, 1997 in CA-G.R. SP No. 33113 oI the Court oI Appeals are hereby REVERSED and
SET ASIDE.

Let the records oI this case be remanded to the trial court Ior immediate execution oI the judgment dated
November 22, 1982 in Civil Case No. VIII-29155 oI the then City Court (now Metropolitan Trial Court) oI Quezon City,
Branch VIII as aIIirmed in the decision dated September 26, 1984 oI the then Intermediate Appellate Court (now Court oI
Appeals) and in the resolution dated June 19, 1985 oI this Court.

However, petitioners are ordered to REFUND to private respondent the amount oI P300,000.00 which they
received through Alice A. Dizon on June 20, 1975. SO ORDERED.

. PEALOSA vs SANTOS G.R. No. 133749. August 23, 2001
HERNANDO R. PEALOSA alias 'HENRY PEALOSA, petitioner, vs. SEVERINO C. SANTOS
(deceased), Substituted by his heirs: OLIVER SANTOS and ADYLL M. SANTOS, and ADELA DURAN MENDEZ
SANTOS, respondents.

D E C I S I O N
QUISUMBING, J.:
Petitioner appeals by certiorari Irom the decision oI the Court oI Appeals, which aIIirmed the judgment oI the
Regional Trial Court oI Quezon City, Branch 78, in Civil Case No. Q-92-13531, declaring the deed oI absolute sale
entered into between petitioner and respondents as void and inexistent and ordering petitioner to vacate the subject
property and to pay reasonable compensation Ior its use.

The Iacts, as revealed by the records, are as Iollows:

Respondents Severino C. Santos (deceased) and Adela Mendez Santos are registered owners oI a residential
house and lot located at No. 113 Scout Rallos Street, Quezon City under TCT No. PT-23458 (54434).|1| In 1988,
Severino and Adela decided to sell their property and Ior this purpose, negotiated with petitioner Hernando (or Henry)
Pealosa. The property was then occupied by a lessee, Eleuterio Perez, who was given preIerence to buy it under the same
terms oIIered by the buyer.|2| Perez proposed less Iavorable terms|3| and expectedly, Severino rejected his oIIer.

On August 1, 1988, petitioner Henry Pealosa and respondent Severino Santos attempted to enter into an
agreement whereby the latter, Ior a consideration oI P1,800,000.00, would sell to the Iormer the property subject oI the
instant case. The deed oI absolute sale|4| (Iirst deed) evidencing this transaction was signed by Henry but not by
Severino, because according to the latter, Henry 'took time to decide on the matter.|5|

On August 15, 1988, Henry signed a document|6| stating that the Iirst deed was executed between him and
Severino, Ior the sole purpose oI helping the latter eject Perez, the occupant oI the property. Henry acknowledged in said
document that although Severino had agreed to sell the property to him, he had not paid the consideration stated in the
Iirst deed.

ThereaIter, Henry and Severino executed another deed oI absolute sale|7| (second deed) Ior a higher
consideration oI P2,000,000.00. Although the second deed was originally dated 'August 1988, superimposed upon the
same was the date 'September 12, 1988. This second deed was signed by both parties and duly notarized. It states that
Severino sells and transIers the house and lot to Henry, who had paid the Iull price oI P2,000.000.00 thereIor.

Severino explained that his initial asking price Ior the property was only P1,800,000.00 as shown in the Iirst deed.
But he later asked Ior a higher price because Henry could not give the money as soon as expected. However, Severino
claimed that he made it clear to Henry that he agreed to sell the property under the second deed Ior P2,000,000.00,
provided that payment be immediately eIIected. Severino said that he wanted to use the money to invest in another
property located in Alabang and told Henry that iI payment was made at a later date, the price would be the current market
value at the time oI payment.

Henry then gave Severino P300,000.00 as 'earnest money, purportedly with the understanding that the Iormer
was to pay the balance within 60 days. Otherwise, said amount would be IorIeited in Iavor oI Severino.|8| The latter also
maintained that he signed the second deed only Ior the purpose oI Iacilitating Henry`s acquisition oI a bank loan to
Iinance payment oI the balance oI the purchase price|9| and added that execution oI the second deed was necessary to
enable Henry to Iile a court action Ior ejectment oI the tenant.|10|

AIter execution oI the second deed, Henry Iiled a loan application with the Philippine American LiIe Insurance
Company (Philam LiIe) Ior the amount oI P2,500,000.00.|11| According to Henry, he had agreed with Severino during
the signing oI the second deed, that the balance oI P1,700,000.00 would be paid by means oI a loan, with the property
itselI given as collateral.|12|

Meanwhile, on the strength oI the Iirst deed and as new 'owner oI the property, Henry wrote a letter|13| dated
August 8, 1988 to the lessee, Eleuterio Perez, demanding that the latter vacate the premises within 10 days. Failing in this
eIIort, Henry brought a complaint Ior ejectment|14| against Perez beIore the OIIice oI the Barangay Captain.

On September 1, 1988, a CertiIication To File Action|15| was issued by the barangay lupon. This led to the
subsequent Iiling oI Civil Case No. 88-0439 Ior unlawIul detainer, beIore the Metropolitan Trial Court oI Quezon City,
Branch 43, entitled 'Henry Pealosa, PlaintiII vs. Eleuterio Perez, DeIendant. Claiming that he still had a subsisting
contract oI lease over the property, Perez countersued and brought Civil Case No. Q-88-1062 beIore the Regional Trial
Court oI Quezon City, Branch 96, entitled 'Eleuterio Perez, PlaintiII vs. Severino Santos, et. al, DeIendants. In this latter
case, Perez assailed the validity oI the sale transaction between Henry and Severino and impleaded the Iormer as co-
deIendant oI Severino.

While the aIoresaid court cases were pending resolution, Philam LiIe inIormed Severino through a letter,|16| that
Henry`s loan application had been approved by the company on January 18, 1989. Philam LiIe stated in the letter that oI
the total purchase price oI P2,500,000.00, the amount oI P1,700,000.00 would be paid directly to Severino by Philam
LiIe, while P800,000.00 would be paid by Henry.

The release oI the loan proceeds was made subject to the submission oI certain documents in Severino`s
possession, one oI which is the owner`s duplicate oI the TransIer CertiIicate oI Title (TCT) pertaining to the property.
However, when Henry and Severino met with oIIicials oI Philam LiIe to Iinalize the loan/mortgage contract, Severino
reIused to surrender the owner`s duplicate title and insisted on being paid immediately in cash.|17| As a consequence, the
loan/mortgage contract with Philam LiIe did not materialize.

Subsequently, on April 28, 1989, judgment|18| was rendered by the MTC-QC, Branch 43, in Civil Case No.
0439, ordering the tenant Perez to vacate and surrender possession oI the property to Henry. In said judgment, Henry was
explicitly recognized as the new owner oI the property by virtue oI the contract oI sale dated September 12, 1988, aIter
Iull payment oI the purchase price oI P2,000,000.00, receipt oI which was duly acknowledged by Severino.

Upon Iinality oI said judgment, Henry and his Iamily moved into the disputed house and lot on August 1989, aIter
making repairs and improvements.|19| Henry spent a total oI P700,000.00 Ior the renovation, as evidenced by
receipts.|20|

On July 27, 1992, Severino sent a letter|21| to Henry, through counsel, demanding that Henry vacate the house
and lot, on the ground that Henry did not conclusively oIIer nor tender a price certain Ior the purchase oI the property. The
letter also stated that Henry`s alleged oIIer and promise to buy the property has since been rejected by Severino.

When Henry reIused to vacate the property, Severino brought this action Ior quieting oI title, recovery oI
possession and damages beIore the Regional Trial Court oI Quezon City, Branch 78, on September 28, 1992. Severino
alleged in his complaint|22| that there was a cloud over the title to the property, brought about by the existence oI the
second deed oI sale.

Essentially, Severino averred that the second deed was void and inexistent because: a) there was no cause or
consideration thereIor, since he did not receive the P2,000,000.00 stated in the deed; b) his wiIe, Adela, in whose name
the property was titled, did not consent to the sale nor sign the deed; c) the deed was not registered with the Register oI
Deeds; d) he did not acknowledge the deed personally beIore the notary public; e) his residence certiIicate, as appearing in
the deed, was IalsiIied; and I) the deed is Iictitious and simulated because it was executed only Ior the purpose oI placing
Henry in possession oI the property because he tendered 'earnest money. Severino also claimed that there was no
meeting oI minds with respect to the cause or consideration, since Henry`s varied oIIers oI P1,800,000.00, P2,000,000.00,
and P2,500,000.00, were all rejected by him.

For his part, Henry asserted that he was already the owner oI the property being claimed by Severino, by virtue oI
a Iinal agreement reached with the latter. Contrary to Severino`s claim, the price oI the property was pegged at
P2,000,000.00, as agreed upon by the parties under the second deed. Prior to the Iiling oI the action, his possession oI the
property remained undisturbed Ior three (3) years. Nevertheless, he admitted that since the signing oI the second deed, he
has not paid Severino the balance oI the purchase price. He, however, Iaulted the latter Ior the non-payment, since
according to him, Severino reIused to deliver the owner`s duplicate title to the Iinancing company.

On Aug. 20, 1993, the trial court rendered judgment in Iavor oI Severino and disposed:

WHEREFORE, judgment is rendered as Iollows:
1) DECLARING the 'Deed oI Absolute Sale which was signed by the plaintiII Severino C. Santos as vendor
and the deIendant as vendee and which was entered in the notarial register oI notary public Dionilo MarIil oI Quezon City
as Doc. No. 474, Page No. 95, Book No. 173, Series oI 1988, as inexistent and void Irom the beginning; and
consequently, plaintiII`s title to the property under T.C.T. No. PT-23458 (54434) issued by the Register oI Deeds oI
Quezon City is quieted, sustained and maintained;
2) ORDERING the deIendant to pay plaintiIIs the amount oI P 15, 000.00 a month as reasonable compensation
Ior the use oI the House and Lot located at No. 113 Scout Rallos St., Quezon City, beginning on the month oI August,
1993, until the premises is Iully vacated, (the compensation Ior the use thereoI Irom the time the deIendant had occupied
the premises up to July, 1993, is recompensed Ior the repairs made by him); and
3) ORDERING the plaintiIIs to reimburse the deIendant the amount oI P300,000.00 aIter deIendant had vacated
the premises in question, and the reasonable compensation Ior the use thereoI had been paid.
All other claims and counterclaims are DENIED Ior lack oI legal and Iactual bases. No pronouncement as to
costs. SO ORDERED.|23|

Both Henry and Severino appealed the above decision to the Court oI Appeals. BeIore the appellate court could
decide the same, Severino passed away and was substituted by his wiIe and children as respondents. Henry Iiled a motion
Ior leave to be allowed to deposit P1,700,000.00 in escrow with the Landbank oI the Philippines to answer Ior the money
portion oI the decision.|24| This motion was granted.

On December 29, 1997, the appellate court aIIirmed|25| the judgment oI the trial court and thereaIter, denied
Henry`s motion Ior reconsideration.|26| Thus, Henry brought this petition, citing the Iollowing as alleged errors:

I. THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN CONCLUDING THAT THERE
WAS NO PERFECTED CONTRACT OF SALE BETWEEN SEVERINO C. SANTOS AND PETITIONER HENRY R.
PEALOSA.
II. THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN CONSIDERING NON-PAYMENT
OF THE FULL PURCHASE PRICE AS CAUSE FOR DECLARING A PERFECTED CONTRACT OF SALE AS
NULL AND VOID.
III. THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN REFUSING TO RECOGNIZE
THAT OWNERSHIP OF THE SUBJECT PROPERTY HAD BEEN EFFECTIVELY VESTED UPON PETITIONER
HENRY R. PEALOSA WHEN ACTUAL POSSESSION THEREOF HAD LAWFULLY TRANSFERRED TO
PETITIONER HENRY R. PEALOSA BY VIRTUE OF THE COURT JUDGMENT IN THE EJECTMENT SUIT
AGAINST THE FORMER LESSEE.|27|

The pivotal issue presented beIore us is whether or not the second deed is valid and constitutes evidence oI the
Iinal agreement between the parties regarding the sale transaction entered into by them.

Petitioner maintains that the existence oI a perIected contract oI sale in this case is beyond doubt, since there
clearly was a meeting oI minds between the parties as to the object and consideration oI the contract. According to
petitioner, the agreement oI the parties is evidenced by provisions contained in the second deed, which cannot possibly be
simulated or Iictitious. Subsequent and contemporaneous acts indubitably point to the Iact that the parties truly intended
to be bound by the second deed. Accordingly, the P2,000,000.00 stated therein was the actual price agreed upon by the
parties as consideration Ior the sale.

On the other hand, in their memorandum, respondents insist that the second deed is a complete nullity because, as
Iound by both the appellate and trial court: a) the consideration stated in the deed was not paid; b) Severino`s passport
showed that he was in the U.S. when said deed was notarized; c) Severino did not surrender a copy oI the title at the time
oI the alleged sale; d) petitioner did not pay real estate taxes on the property; e) it was executed only Ior the purpose oI
helping Severino eject the tenant; I) Severino`s wiIe, Adela, did not sign the deed; and g) the various documentary
exhibits proved that there was no price certain accepted or paid.

Respondents additionally argue that petitioner merely seeks a review oI the aIoresaid Iactual Iindings oI the lower
court and that consequently, we should deny the petition on the ground that it raises only Iactual questions.

Considering the pivotal issue presented aIter close scrutiny oI the assigned errors as well as the arguments oI the
parties, we are unable to agree with respondents and we must give due course to the petition.

First oI all, the petition Iiled beIore this Court explicitly questions 'the legal signiIicance and consequences oI the
established Iacts|28| and not the Iindings oI Iact themselves. As pointed out by petitioner, he submits to the Iactual
Iindings oI the lower court, but maintains that its legal conclusions are irreconcilable and inconsistent therewith. He also
states that the grounds relied upon in this petition do not call Ior the weighing oI conIlicting evidence submitted by the
parties. Rather, he merely asks the Court to give due signiIicance to certain undisputed and admitted Iacts spread
throughout the record, which, iI properly appreciated, would justiIy a diIIerent conclusion.

At any rate, in Baricuatro, Jr. vs. Court oI Appeals, 325 SCRA 137, 145 (2000), we reiterated the doctrine that
Iindings oI Iact oI the Court oI Appeals are binding and conclusive upon this Court, subject to certain exceptions, one oI
which is when the judgment is based on a misapprehension oI Iacts. In this case, aIter careIully poring over the records,
we are convinced that the lower courts misappreciated the evidence presented by the parties and that, indeed, a reversal oI
the assailed judgment is in order.

It should have been readily apparent to the trial court that the circumstances it cited in its decision are not proper
grounds Ior holding that the second deed is simulated. Simulation is a declaration oI a Iictitious will, deliberately made by
agreement oI the parties, in order to produce, Ior purposes oI deception, the appearance oI a juridical act which does not
exist or is diIIerent Irom that which was really executed. Its requisites are: a) an outward declaration oI will diIIerent Irom
the will oI the parties; b) the Ialse appearance must have been intended by mutual agreement; and c) the purpose is to
deceive third persons.|29| None oI these requisites is present in this case.

The basic characteristic oI an absolutely simulated or Iictitious contract is that the apparent contract is not really
desired or intended to produce legal eIIects or alter the juridical situation oI the parties in any way.|30| However, in this
case, the parties already undertook certain acts which were directed towards IulIillment oI their respective covenants
under the second deed, indicating that they intended to give eIIect to their agreement.

In particular, as early as August 8, 1988, aIter execution oI the Iirst deed, Severino authorized petitioner to bring
an action Ior ejectment against the overstaying tenant and allowed petitioner to pursue the ejectment case to its Iinal
conclusion, presumably to secure possession oI the property in petitioner`s Iavor. Petitioner also applied Ior a loan, which
was approved by Philam LiIe, to complete payment oI the stipulated price. AIter making extensive repairs with the
knowledge oI Severino, petitioner moved into the premises and actually occupied the same Ior three years beIore this
action was brought. Moreover, simultaneous with the execution oI the second deed, petitioner gave Severino P300,000.00
in earnest money, which under Article 1482|31| oI the New Civil Code, is part oI the purchase price and prooI oI
perIection oI the contract.

What may have led the lower courts into incorrectly believing that the second deed was simulated is Exhibit D - a
document in which petitioner declared that the deed was executed only Ior the purpose oI helping Severino eject the
tenant. However, a perusal oI this document reveals that it made reIerence to the Iirst deed and not the second deed, which
was executed only aIter Exhibit D. So that while the Iirst deed was qualiIied by stipulations contained in Exhibit D, the
same cannot be said oI the second deed which was signed by both parties.

Further, the Iact that Severino executed the two deeds in question, primarily so that petitioner could eject the
tenant and enter into a loan/mortgage contract with Philam LiIe, is to our mind, a strong indication that he intended to
transIer ownership oI the property to petitioner. For why else would he authorize the latter to sue the tenant Ior ejectment
under a claim oI ownership, iI he truly did not intend to sell the property to petitioner in the Iirst place? Needless to state,
it does not make sense Ior Severino to allow petitioner to pursue the ejectment case, in petitioner`s own name, with
petitioner arguing that he had bought the property Irom Severino and thus entitled to possession thereoI, iI petitioner did
not have any right to the property.

Also worth noting is the Iact that in the case Iiled by Severino`s tenant against Severino and petitioner in 1989,
assailing the validity oI the sale made to petitioner, Severino explicitly asserted in his sworn answer to the complaint that
the sale was a legitimate transaction. He Iurther alleged that the ejectment case Iiled by petitioner against the tenant was a
legitimate action by an owner against one who reIuses to turn over possession oI his property.|32|

Our attention is also drawn to the Iact that the genuineness and due execution oI the second deed was not denied
by Severino. Except to allege that he was not physically present when the second deed was notarized beIore the notary
public, Severino did not assail the truth oI its contents nor deny that he ever signed the same. As a matter oI Iact, he even
admitted that he aIIixed his signature on the second deed to help petitioner acquire a loan. This can only signiIy that he
consented to the manner proposed by petitioner Ior payment oI the balance and that he accepted the stipulated price oI
P2,000,000.00 as consideration Ior the sale.

Since the genuineness and due execution oI the second deed was not seriously put in issue, it should be upheld as
the best evidence oI the intent and true agreement oI the parties. Oral testimony, depending as it does exclusively on
human memory, is not as reliable as written or documentary evidence.|33|

It should be emphasized that the non-appearance oI the parties beIore the notary public who notarized the deed
does not necessarily nulliIy nor render the parties` transaction void ab initio. We have held previously that the provision
oI Article 1358|34| oI the New Civil Code on the necessity oI a public document is only Ior convenience, not Ior validity
or enIorceability. Failure to Iollow the proper Iorm does not invalidate a contract. Where a contract is not in the Iorm
prescribed by law, the parties can merely compel each other to observe that Iorm, once the contract has been
perIected.|35| This is consistent with the basic principle that contracts are obligatory in whatever Iorm they may have
been entered into, provided all essential requisites are present.|36|

The elements oI a valid contract oI sale under Art. 1458 oI the Civil Code are: (1) consent or meeting oI the
minds; (2) determinate subject matter; and (3) price certain in money or its equivalent.|37| In the instant case, the second
deed reIlects the presence oI all these elements and as such, there is already a perIected contract oI sale.

Respondent`s contention that the second deed was correctly nulliIied by the lower court because Severino`s wiIe,
Adela, in whose name the property was titled, did not sign the same, is unavailing. The records are replete with
admissions made by Adela that she had agreed with her husband to sell the property|38| which is conjugal in nature|39|
and that she was aware oI this particular transaction with petitioner. She also said that it was Severino who actually
administered their properties with her consent, because she did not consider this as her responsibility.|40|

We also observe that Severino`s testimony in court contained (1) admissions that he indeed agreed to sell the
property and (2) reIerences to petitioner`s Iailure to pay the purchase price.|41| He did not mention that he did not intend
at all to sell the property to petitioner and instead, stressed the Iact that the purchase price had not yet been paid. Why
would Severino stress non-payment iI there was no sale at all?

However, it is well-settled that non-payment oI the purchase price is not among the instances where the law
declares a contract to be null and void. It should be pointed out that the second deed speciIically provides:

That Ior and in consideration oI the sum oI TWO MILLION PESOS (P2,000,000.00), Philippine Currency paid in
Iull by HENRY R. PEALOSA, receipt oI which is hereby acknowledged by me to my Iull satisIaction, I hereby by these
presents, sells (sic), cede, convey and otherwise dispose oI the above described parcel oI land, unto HENRY R.
PEALOSA, his heirs, successors and assigns, Iree Irom all liens and encumbrances.
x x x
(SGD.)
SEVERINO C. SANTOS
VENDOR
x x x|42|

As can be seen Irom above, the contract in this case is absolute in nature and is devoid oI any proviso that title to
the property is reserved in the seller until Iull payment oI the purchase price. Neither does the second deed give Severino a
unilateral right to resolve the contract the moment the buyer Iails to pay within a Iixed period.|43| At most, the non-
payment oI the contract price merely results in a breach oI contract Ior non-perIormance and warrants an action Ior
rescission or speciIic perIormance under Article 1191 oI the Civil Code.|44|

Be that as it may, we agree with petitioner that although the law allows rescission as a remedy Ior breach oI
contract, the same may not be availed oI by respondents in this case. To begin with, it was Severino who prevented Iull
payment oI the stipulated price when he reIused to deliver the owner`s original duplicate title to Philam LiIe. His reIusal
to cooperate was unjustiIied, because as Severino himselI admitted, he signed the deed precisely to enable petitioner to
acquire the loan. He also knew that the property was to be given as security thereIor. Thus, it cannot be said that
petitioner breached his obligation towards Severino since the Iormer has always been willing to and could comply with
what was incumbent upon him.

In sum, the only conclusion which can be deduced Irom the aIoresaid circumstances is that ownership oI the
property has been transIerred to petitioner. Article 1477 oI the Civil Code states that ownership oI the thing sold shall be
transIerred to the vendee upon the actual or constructive delivery thereoI. It is undisputed that the property was placed in
the control and possession oI petitioner|45| when he came into material possession thereoI aIter judgment in the ejectment
case. Not only was the contract oI sale perIected, but also actual delivery oI the property eIIectively consummated the
sale.
WHEREFORE, the petition is GRANTED. The decision oI the Court oI Appeals dated December 29, 1997 and
its resolution dated April 15, 1998 in CA-G.R. CV No. 45206 which had aIIirmed the judgment oI the Regional Trial
Court oI Quezon City, Branch 78, are REVERSED and SET ASIDE. A new judgment is hereby rendered UPHOLDING
the validity oI Exhibit B, the Deed oI Absolute Sale dated September 12, 1988, entered into between the parties. The
Landbank oI the Philippines is Iurther ordered to RELEASE to respondents the amount oI P1,700,000.00 held in escrow,
representing the balance oI the purchase price agreed upon by the parties under the deed oI absolute sale. Finally, the
respondents are ordered to DELIVER to petitioner the owner`s duplicate copy oI TCT No. PT-23458 aIter said release,
with the corresponding payment oI taxes due. Costs against respondents. SO ORDERED.

7. HEIRS OF ERNESTO BIONA vs. CA |G.R. No. 105647.* July 31, 2001|
HEIRS OF ERNESTO BIONA, NAMELY: EDITHA B. BLANCAFLOR, MARIANITA D. DE JESUS, VILMA B.
BLANCAFLOR, ELSIE B. RAMOS and PERLITA B. CARMEN, petitioners, vs. THE COURT OF APPEALS and
LEOPOLDO HILAJOS, respondents.

D E C I S I O N
KAPUNAN, J.:
BeIore us is a petition Ior review on certiorari under Rule 45 oI the Decision oI the Court oI Appeals dated
March 31, 1992, reversing the decision oI the Regional Trial Court, 11th Judicial region, Branch 26, Surallah, South
Cotabato and the Resolution dated May 26, 1992, denying the subsequent motion Ior reconsideration.

Quoting Irom the decision oI the Court oI Appeals, the antecedent Iacts are as Iollows:
On October 23, 1953, the late Ernesto Biona, married to plaintiII-appellee Soledad Biona, was awarded
Homestead Patent No. V-840 over the property subject oI this suit, a parcel oI agricultural land denominated as lot 177 oI
PLS-285-D, located in Bo. 3, Banga, Cotabato, containing an area oI ten (10) hectares, Iorty-three (43) acres and sixty-
eight (68) centares, Original CertiIicate oI Title No. (V-2323) P-3831 was issued in his name by the Register oI Deeds oI
Cotabato (Exh. C). On June 3, 1954, Ernesto and Soledad Biona obtained a loan Irom the then Rehabilitation Finance
Corporation (now the Development Bank oI the Philippines) and put up as collateral the subject property (Exh. 4). On
June 12, 1956, Ernesto Biona died (Exh. B) leaving as his heirs herein plaintiIIs-appellees, namely, his wiIe, Soledad
Estrobillo Vda. De Biona, and Iive daughters, Editha B. BlancaIlor, Marianita B. de Jesus, Vilma B. BlancaIlor, Elsie B.
Ramos and Perlita B. Carmen.

On March 1, 1960, plaintiII-appellee Soledad Biona obtained a loan Irom deIendant-appellant in the amount oI
P1,000 and as security thereIore, the subject property was mortgaged. It was Iurther agreed upon by the contracting
parties that Ior a period oI two years until the debt is paid, deIendant-appellant shall occupy the land in dispute and enjoy
the usuIruct thereoI.

The two-year period elapsed but Soledad Biona was not able to pay her indebtedness. DeIendant-appellant
continued occupying and cultivating the subject property without protest Irom plaintiIIs-appellees.

On July 3, 1962, deIendant-appellant paid the sum oI P1,400.00 to the Development Bank oI the Philippines to
cancel the mortgage previously constituted by the Biona spouses on June 3, 1953 (Exhs. 4 and 6).

ThereaIter, and Ior a period oI not less than twenty-Iive years, deIendant-appellant continued his peaceIul and
public occupation oI the property, declaring it in his name Ior taxation purposes (Exhs. 10 and 11), paying real estate
property taxes thereon (Exhs. 12, 13, 13-a to 13-e, F, G, H and I), and causing the same to be tenanted (Exhs. 7, 8, 9).

On June 19, 1985, plaintiIIs-appellees, Iiled a complaint Ior recovery oI ownership, possession, accounting and
damages, with a prayer Ior a writ oI preliminary mandatory injunction and/ or restraining order against deIendant-
appellant alleging, among others, that the latter had unlawIully been depriving them oI the use, possession and enjoyment
oI the subject property; that the entire parcel oI land, which was devoted and highly suited to palay and corn, was yielding
three harvests annually, with an average oI one hundred twenty (120) sacks oI corn and eighty cavans oI rice per hectare;
that plaintiIIs-appellees were deprived oI its total produce amounting to P150,000.00. PlaintiIIs-appellees prayed Ior the
award oI moral damages in the sum oI P50,000.00, exemplary damages in the amount oI P20,000,00 and litigation
expenses in the amount oI P2,000.00.

On September 19, 1986, deIendant-appellant Iiled his answer with counterclaim traversing the material
allegations in the complaint and alleging, by way oI aIIirmative and special deIenses, that: on September 11, 1961,
Soledad Biona, aIter obtaining the loan oI P1,000.00 Irom deIendant-appellant, approached and begged the latter to buy
the whole oI Lot No. 177 since it was then at the brink oI Ioreclosure by the Development Bank oI the Philippines and she
had no money to redeem the same nor the resources to support herselI and her Iive small children; that deIendant-
appellant agreed to buy the property Ior the amount oI P4,300.00, which consideration was to include the redemption
price to be paid to the Development Bank oI the Philippines; that the purchase price paid by deIendant Iar exceeded the
then current market value oI the property and deIendant had to sell his own eight-hectare parcel oI land in Surallah to help
Soledad Biona; that to evidence the transaction, a deed oI sale was handwritten by Soledad Biona and signed by her and
the deIendant; that at the time oI the sale, halI oI the portion oI the property was already submerged in water and Irom the
years 1969 to 1984, two and one-halI hectares thereoI were eroded by the Allah River; that by virtue oI his continuous and
peaceIul occupation oI the property Irom the time oI its sale and Ior more than twenty- Iive years thereaIter, deIendant
possesses a better right thereto subject only to the rights oI the tenants whom he had allowed to cultivate the land under
the Land ReIorm Program oI the government; that the complaint states no cause oI action; that plaintiII`s alleged right, iI
any, is barred by the statutes oI Iraud. As counterclaim, deIendant-appellant prayed that plaintiIIs-appellees be ordered to
execute a Iormal deed oI sale over the subject property and to pay him actual, moral and exemplary damages as the trial
court may deem proper. He likewise prayed Ior the award oI attorney's Iees in the sum oI P10,000.00.

During the hearing oI the case, plaintiIIs-appellees presented in evidence the testimonies oI Editha Biona
BlancaIlor and Vilma Biona BlancaIlor, and documentary exhibits A to G and their submarkings.

DeIendant-appellant, Ior his part, presented the testimonies oI himselI and Mamerto Famular, including
documentary exhibits 1 to 13, F, G, H, I, and their submarkings.|1|

On January 31, 1990, the RTC rendered a decision with the Iollowing dispositive portion:
I (SIC) VIEW OF THE FOREGOING, decision is hereby rendered:
1. ordering the deIendant to vacate possession oI the lot in question to the extent oI six-tenths (6/10) oI the total
area thereoI and to deliver the same to the plaintiII Soledad Estrobillo Biona upon the latter's payment oI the sum oI
P1,000.00 TO THE FORMER IN REDEMPTION OF ITS MORTGAGE CONSTITUTED UNDER exh. "1" oI
deIendant;
2. ordering the deIendant to vacate the possession oI the remaining Iour-tenths (4/10) oI the area oI the lot in
question, representing the shares oI the children oI the late Ernesto Biona and deliver the same to said plaintiIIs; the
deIendant shall render an accounting oI the net produce oI the area ordered returned to the co-plaintiIIs oI Soledad Biona
commencing Irom the date oI the Iiling oI the complaint until possession thereto has been delivered to said co-plaintiIIs
and to deliver or pay 25 oI said net produce to said co-plaintiIIs;
3. ordering the deIendant to pay the costs oI this suit.

The deIendant's counter-claim are dismissed Ior lack oI merit.SO ORDERED.|2|

DissatisIied, herein private respondent appealed to the Court oI Appeals which reversed the trial court's ruling.
The dispositive portion reads as Iollows:

WHEREFORE, premises considered, the judgment appealed Irom is set aside and a new one entered dismissing
the complaint, and the plaintiIIs-appellees are ordered to execute a registrable deed oI conveyance oI the subject property
in Iavor oI the deIendant-appellant within ten (10) days Irom the Iinality oI this decision. With costs against plaintiIIs-
appellees.|3|

Hence, the instant petition where the Iollowing assignment oI errors were made:
I.- RESPONDENT COURT OF APPEALS ERRED IN CONCLUDING THAT THE SIGNATURE OF
SOLEDAD ESTROBILLO IN THE DEED OF SALE (EXHIBIT "2"), A PRIVATE DOCUMENT, IS GENUINE.
II - RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE DEED OF SALE (EXHIBIT
2) IS VALID AND COULD LEGALLY CONVEY TO PRIVATE RESPONDENT OWNERSHIP AND TITLE OVER
THE SUBJECT PROPERTY.
III - RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT HEREIN PETITIONERS HAD
LOST THEIR RIGHT TO RECOVER THE SUBJECT PROPERTY BY VIRTUE OF THE EQUITABLE PRINCIPLE
OF LACHES.
IV- RESPONDENT COURT OF APPEALS ERRED IN NOT HOLDING THAT PRIVATE RESPONDENT'S
RIGHT OF ACTION UNDER THE DEED OF SALE (EXHIBIT "2") HAD PRESCRIBED.|4|

As correctly pointed out by the Court oI Appeals, the pivotal issue in the instant case is whether or not the deed oI
sale is valid and iI it eIIectively conveyed to the private respondents the subject property.

In ruling in Iavor oI the petitioners, the trial court reIused to give weight to the evidence oI private respondent
which consisted oI (1) the handwritten and unnotarized deed oI sale executed by Soledad Biona in Iavor oI the private
respondent; and (2) the corresponding acknowledgment receipt oI the amount oI P3,500.00 as partial payment Ior the land
in dispute. To the mind oI the trial court, the signature oI Soledad Biona on the deed oI sale was not genuine. There was
no direct evidence to prove that Soledad Biona herselI signed the document. Moreover, the deed oI sale was not notarized
and thereIore, did not convey any rights to the vendee. The trial court also ruled that petitioners' rights over the land have
not allegedly prescribed.

On the other hand, the respondent Court oI Appeals accepted as genuine the deed oI sale (Exh. 2) which "sets
Iorth in unmistakable terms that Soledad Biona agreed Ior the consideration oI P4,500.00, to transIer to deIendant-
appellant Lot 177. The Iact that payment was made is evidenced by the acknowledgment receipt Ior P3,500.00 (Exh. 3)
signed by Soledad Biona, and private respondent previous delivery oI P1,000.00 to her pursuant to the Mutual Agreement
(Exh. 1).

The contract oI sale between the contracting parties was consummated by the delivery oI the subject land to
private respondent who since then had occupied and cultivated the same continuously and peaceIully until the institution
oI this suit."|5|

Given the contrary Iindings oI the trial court and the respondent court, there is a need to re-examine the evidence
altogether. AIter a careIul study, we are inclined to agree with the Iindings and conclusions oI the respondent court as
they are more in accord with the law and evidence on record.

As to the authenticity oI the deed oI sale, we subscribe to the Court oI Appeals' appreciation oI evidence that
private respondent has substantially proven that Soledad Biona indeed signed the deed oI sale oI the subject property in
his Iavor. His categorical statement in the trial court that he himselI saw Soledad Estrobillo aIIix her signature on the deed
oI sale lends credence. This was corroborated by another witness, Mamerto Famular. Although the petitioners consider
such testimony as selI-serving and biased,|6| it can not, however, be denied that private respondent has shown by
competent prooI that a contract oI sale where all the essential elements are present Ior its validity was executed between
the parties.|7| The burden is on the petitioners to prove the contrary which they have dismally Iailed to do. As aptly
stated by the Court oI Appeals:

Having established the due execution oI the subject deed oI sale and the receipt evidencing payment oI the
consideration, the burden now shiIted to plaintiIIs-appellees to prove by contrary evidence that the property was not so
transIerred. They were not able to do this since the very person who could deny the due execution oI the document,
Soledad Biona, did not testiIy. She similarly Iailed to take the witness stand in order to deny her signatures on Exhs. 2
and 3. Admitting as true that she was under medication in Manila while the hearing oI the case was underway, it was easy
enough to get her deposition. Her non-presentation gives rise to the presumption that iI her testimony was taken, the same
would be adverse to the claim by plaintiIIs-appellees.

It must also be noted that under Sec. 22 Rule 132 oI our procedural law, evidence respecting handwriting may
also be given by a comparison, made by the witness or the court, with writings admitted or treated as genuine by the party
against whom the evidence is oIIered. Our own close scrutiny oI the signature oI Soledad Biona appearing on Exh. 1, the
document admitted by the contending parties, reveals that it is the same as the signatures appearing on Exhs. 2 and 3, the
documents in dispute. Admittedly, as was pointed out by the trial court, the "S" in Exhs. 2 and 3 were written in printed
type while that in Exh. 1 is in handwriting type. But a careIul look at the text oI Exh. 2 would reveal that Soledad Biona
alternately wrote the letter "S" in longhand and printed Iorm. Thus, the words "Sum" and "Sept.," Iound in the
penultimate and last paragraphs oI the document, respectively, were both written in longhand, while her name appearing
on Iirst part oI the document, as well as the erased word "Sept." in the last paragraph thereoI were written in printed Iorm.
Moreover, all doubts about the genuineness oI Soledad Biona's signatures on Exhs. 2 and 3 are removed upon their
comparison to her signature appearing on the special power oI attorney (Exh. A) presented in evidence by plaintiIIs-
appellees during trial. In said document, Soledad Biona signed her name using the same Iact that Soledad Estrobillo
Biona wrote her entire name on Exh. 2 while she merely aIIixed her maiden name on the other two documents may have
been due to the lesser options leIt to her when the lawyers who draIted the two documents (Exhs. 2 and 3) already had
typewritten the names "SOLEDAD ESTROBILLO" thereon whereas in Exh. 2, it was Soledad Biona herselI who printed
and signed her own name. Thus, in the special power oI attorney (Exh. A), Soledad Biona signed her name in the same
manner it was typewritten on the document.|8|

We agree with the private respondent that all the requisites Ior a valid contract oI sale are present in the instant
case. For a valuable consideration oI P4,500.00, Soledad Biona agreed to sell and actually conveyed the subject property
to private respondent. The Iact that the deed oI sale was not notarized does not render the agreement null and void and
without any eIIect. The provision oI Article 1358 oI the Civil Code|9| on the necessity oI a public document is only Ior
convenience, and not Ior validity or enIorceability.|10| The observance oI which is only necessary to insure its eIIicacy,
so that aIter the existence oI said contract had been admitted, the party bound may be compelled to execute the proper
document.|11| Undeniably, a contract has been entered into by Soledad Biona and the private respondent. Regardless oI
its Iorm, it was valid, binding and enIorceable between the parties. We quote with Iavor the respondent court's
ratiocination on the matter:

xxx The trial court cannot dictate the manner in which the parties may execute their agreement, unless the law
otherwise provides Ior a prescribed Iorm, which is not so in this case. The deed oI sale so executed, although a private
document, is eIIective as between the parties themselves and also as the third persons having no better title, and should be
admitted in evidence Ior the purpose oI showing the rights and relations oI the contracting parties (Carbonell v. Court oI
Appeals, 69 SCRA 99; Elumbaring v. Elumbaring, 12 Phil. 384). Under Art. 1356 oI the Civil Code, contracts shall be
obligatory in whatever Iorm they may have been entered into provided all the essential requisites Ior their necessary
elements Ior a valid contract oI sale were met when Soledad Biona agreed to sell and actually conveyed Lot 177 to
deIendant-appellant who paid the amount oI P4,500.00 thereIore. The deed oI sale (Exh. 2) is not made ineIIective
merely because it is not notarized or does not appear in a public document. The contract is binding upon the contracting
parties, deIendant-appellant and Soledad Biona, including her successors-in-interest. Pursuant to Art. 1357, plaintiIIs-
appellees may be compelled by deIendant-appellant to execute a public document to embody their valid and enIorceable
contract and Ior the purpose oI registering the property in the latter's name (Clarin v. Rulona, 127 SCRA 512; Heirs oI
Amparo v. Santos, 108 SCRA 43; Araneta v. Montelibano, 14 Phil. 117).|12|

Finally, we Iind no merit in petitioners' contention that their right over the land has not prescribed. The principle
oI laches was properly applied against petitioner. Laches has been deIined as the Iailure or neglect, Ior an unreasonable
and unexplained length oI time, to do that which by exercising due diligence could or should have been done earlier, it is
negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert
it has either abandoned it or declined to assert it.|13| In the instant case, the Court oI Appeals point to the circumstances
that warrant the principle to come into play:

Laches had been deIined to be such neglect or omission to assert a right taken in conjunction with the lapse oI
time and other circumstances causing prejudice to an adverse party, as will bar him in equity (Heirs oI Batiog Lacamen v.
Heirs oI Laruan, 65 SCRA 605, 609-610). In the instant suit, Soledad Biona, at the time oI the execution oI the deed oI
sale (Exh. 2) on September 11, 1961, could only alienate that portion oI Lot 177 belonging to her, which is seven-twelIths
oI the entire property. She had no power or authority to dispose oI the shares oI her co-owners, the Iive daughters oI the
deceased Ernesto Biona, who were entitled to an indivisible Iive-twelIths portion oI the whole property. It is not disputed,
however, that as early as 1960, when Soledad Biona borrowed money Irom deIendant-appellant (Exh. L), the latter
entered, possessed and started occupying the same in the concept oI an owner. He caused its cultivation through various
tenants under CertiIicates oI Land TransIer (Exhs. 7-9), declared the property in his name, religiously paid taxes thereon,
reaped beneIits thereIrom, and executed other acts oI dominion without any protest or interIerence Irom plaintiIIs-
appellees Ior more than twenty-Iive years. Even when the Iive daughters oI the deceased Ernesto Biona were way past the
age oI majority, when they could have already asserted their right to their share, no sale in deIendant-appellant's Iavor was
ever brought or any other action was taken by them to recover their share. Instead, they allowed deIendant-appellant to
peaceIully occupy the property without protest. Although it is true that no title to registered land in derogation oI that oI
the registered owner shall be acquired by prescription or adverse possession as the right to recover possession oI
registered land is imprescriptible, jurisprudence has laid down the rule that a person and his heirs may lose their right to
recover back the possession oI such property and title thereto by reason oI laches. (Victoriano v. Court oI Appeals, 194
SCRA 19; Lola v. CA, 145 SCRA 439, 449). Indeed, it has been ruled in the case oI Miguel v. Catalino, 26 SCRA 234,
239, that:

'Courts can not look with Iavor at parties who, by their silence, delay and inaction, knowingly induce another to
spend time, eIIort and expense in cultivating the land, paying taxes and making improvements thereoI Ior 30 long years,
only to spring Irom ambush and claim title when the possessor's eIIorts and the rise oI land values oIIer an opportunity to
make easy proIit at his expense.'

Thus, notwithstanding the invalidity oI the sale with respect to the share oI plaintiIIs-appellees, the daughters oI
the late Ernesto Biona, they |allowed| the vendee, deIendant-appellant herein, to enter, occupy and possess the property in
the concept oI an owner without demurrer and molestation Ior a long period oI time, never claiming the land as their own
until 1985 when the property has greatly appreciated in value. Vigilantibus non dormientibus sequitas subvenit.|14|

WHEREFORE, the Petition is DENIED & the assailed Decision oI the Court oI Appeals is AFFIRMED. SO ORDERED.

. SAN MIGUEL PROPERTIES PHILS VS. HUANG 33 SCRA 737 ( |G.R. No. 137290. July 31, 2000|
SAN MIGUEL PROPERTIES PHILIPPINES, INC., petitioner, vs. SPOUSES ALFREDO HUANG and GRACE
HUANG, respondents.

D E C I S I O N
MENDOZA, J.:
This is a petition Ior review oI the decision,|1| dated April 8, 1997, oI the Court oI Appeals which reversed the
decision oI the Regional Trial Court, Branch 153, Pasig City dismissing the complaint brought by respondents against
petitioner Ior enIorcement oI a contract oI sale.

The Iacts are not in dispute.
Petitioner San Miguel Properties Philippines, Inc. is a domestic corporation engaged in the purchase and sale oI
real properties. Part oI its inventory are two parcels oI land totalling 1, 738 square meters at the corner oI Meralco Avenue
and General Capinpin Street, Barrio Oranbo, Pasig City, which are covered by TCT Nos. PT-82395 and PT-82396 oI the
Register oI Deeds oI Pasig City.

On February 21, 1994, the properties were oIIered Ior sale Ior P52,140,000.00 in cash. The oIIer was made to
Atty. Helena M. Dauz who was acting Ior respondent spouses as undisclosed principals. In a letter|2| dated March 24,
1994, Atty. Dauz signiIied her clients` interest in purchasing the properties Ior the amount Ior which they were oIIered by
petitioner, under the Iollowing terms: the sum oI P500,000.00 would be given as earnest money and the balance would be
paid in eight equal monthly installments Irom May to December, 1994. However, petitioner reIused the counter-oIIer.

On March 29, 1994, Atty. Dauz wrote another letter|3| proposing the Iollowing terms Ior the purchase oI the
properties, viz:

This is to express our interest to buy your-above-mentioned property with an area oI 1, 738 sq. meters. For this
purpose, we are enclosing herewith the sum oI P1,000,000.00 representing earnest-deposit money, subject to the
Iollowing conditions.
1. We will be given the exclusive option to purchase the property within the 30 days Irom date oI your
acceptance oI this oIIer.
2. During said period, we will negotiate on the terms and conditions oI the purchase; SMPPI will secure the
necessary Management and Board approvals; and we initiate the documentation iI there is mutual agreement between us.
3. In the event that we do not come to an agreement on this transaction, the said amount oI P1,000,000.00 shall
be reIundable to us in Iull upon demand. . . .

Isidro A. Sobrecarey, petitioner`s vice-president and operations manager Ior corporate real estate, indicated his
conIormity to the oIIer by aIIixing his signature to the letter and accepted the "earnest-deposit" oI P1 million. Upon
request oI respondent spouses, Sobrecarey ordered the removal oI the "FOR SALE" sign Irom the properties.

Atty. Dauz and Sobrecarey then commenced negotiations. During their meeting on April 8, 1994, Sobrecarey
inIormed Atty. Dauz that petitioner was willing to sell the subject properties on a 90-day term. Atty. Dauz countered with
an oIIer oI six months within which to pay.

On April 14, 1994, the parties again met during which Sobrecarey inIormed Atty. Dauz that petitioner had not yet
acted on her counter-oIIer. This prompted Atty. Dauz to propose a Iour-month period oI amortization.

On April 25, 1994, Atty. Dauz asked Ior an extension oI 45 days Irom April 29, 1994 to June 13, 1994 within
which to exercise her option to purchase the property, adding that within that period, "|we| hope to Iinalize |our|
agreement on the matter."|4| Her request was granted.

On July 7, 1994, petitioner, through its president and chieI executive oIIicer, Federico Gonzales, wrote Atty. Dauz
inIorming her that because the parties Iailed to agree on the terms and conditions oI the sale despite the extension granted
by petitioner, the latter was returning the amount oI P1 million given as "earnest-deposit."|5|

On July 20, 1994, respondent spouses, through counsel, wrote petitioner demanding the execution within Iive
days oI a deed oI sale covering the properties. Respondents attempted to return the "earnest-deposit" but petitioner reIused
on the ground that respondents` option to purchase had already expired.

On August 16, 1994, respondent spouses Iiled a complaint Ior speciIic perIormance against petitioner beIore the
Regional Trial Court, Branch 133, Pasig City where it was docketed as Civil Case No. 64660.

Within the period Ior Iiling a responsive pleading, petitioner Iiled a motion to dismiss the complaint alleging that
(1) the alleged "exclusive option" oI respondent spouses lacked a consideration separate and distinct Irom the purchase
price and was thus unenIorceable and (2) the complaint did not allege a cause oI action because there was no "meeting oI
the minds" between the parties and, thereIore, no perIected contract oI sale. The motion was opposed by respondents.

On December 12, 1994, the trial court granted petitioner`s motion and dismissed the action. Respondents Iiled a
motion Ior reconsideration, but it was denied by the trial court. They then appealed to the Court oI Appeals which, on
April 8, 1997, rendered a decision|6| reversing the judgment oI the trial court. The appellate court held that all the
requisites oI a perIected contract oI sale had been complied with as the oIIer made on March 29, 1994, in connection with
which the earnest money in the amount oI P1 million was tendered by respondents, had already been accepted by
petitioner. The court cited Art. 1482 oI the Civil Code which provides that "|w|henever earnest money is given in a
contract oI sale, it shall be considered as part oI the price and as prooI oI the perIection oI the contract." The Iact the
parties had not agreed on the mode oI payment did not aIIect the contract as such is not an essential element Ior its
validity. In addition, the court Iound that Sobrecarey had authority to act in behalI oI petitioner Ior the sale oI the
properties.|7|

Petitioner moved Ior reconsideration oI the trial court`s decision, but its motion was denied. Hence, this petition.

Petitioner contends that the Court oI Appeals erred in Iinding that there was a perIected contract oI sale between
the parties because the March 29, 1994 letter oI respondents, which petitioner accepted, merely resulted in an option
contract, albeit it was unenIorceable Ior lack oI a distinct consideration. Petitioner argues that the absence oI agreement as
to the mode oI payment was Iatal to the perIection oI the contract oI sale. Petitioner also disputes the appellate court`s
ruling that Isidro A. Sobrecarey had authority to sell the subject real properties.|8|

Respondents were required to comment within ten (10) days Irom notice. However, despite 13 extensions
totalling 142 days which the Court had given to them, respondents Iailed to Iile their comment. They were thus considered
to have waived the Iiling oI a comment.

The petition is meritorious.
In holding that there is a perIected contract oI sale, the Court oI Appeals relied on the Iollowing Iindings: (1)
earnest money was allegedly given by respondents and accepted by petitioner through its vice-president and operations
manager, Isidro A. Sobrecarey; and (2) the documentary evidence in the records show that there was a perIected contract
oI sale.
With regard to the alleged payment and acceptance oI earnest money, the Court holds that respondents did not
give the P1 million as "earnest money" as provided by Art. 1482 oI the Civil Code. They presented the amount merely as
a deposit oI what would eventually become the earnest money or downpayment should a contract oI sale be made by
them. The amount was thus given not as a part oI the purchase price and as prooI oI the perIection oI the contract oI sale
but only as a guarantee that respondents would not back out oI the sale. Respondents in Iact described the amount as an
"earnest-deposit." In Spouses Doromal, Sr. v. Court oI Appeals,|9| it was held:

. . . While the P5,000 might have indeed been paid to Carlos in October, 1967, there is nothing to show that the
same was in the concept oI the earnest money contemplated in Art. 1482 oI the Civil Code, invoked by petitioner, as
signiIying perIection oI the sale. Viewed in the backdrop oI the Iactual milieu thereoI extant in the record, We are more
inclined to believe that the said P5,000.00 were paid in the concept oI 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 deIinite agreement as to the price then and that petitioners were decided to buy 6/7 only oI the property should
respondent Javellana reIuse to agree to part with her 1/7 share.|10|

In the present case, the P1 million "earnest-deposit" could not have been given as earnest money as contemplated
in Art. 1482 because, at the time when petitioner accepted the terms oI respondents` oIIer oI March 29, 1994, their
contract had not yet been perIected. This is evident Irom the Iollowing conditions attached by respondents to their letter,
to wit: (1) that they be given the exclusive option to purchase the property within 30 days Irom acceptance oI the oIIer; (2)
that during the option period, the parties would negotiate the terms and conditions oI the purchase; and (3) petitioner
would secure the necessary approvals while respondents would handle the documentation.

The Iirst condition Ior an option period oI 30 days suIIiciently shows that a sale was never perIected. As
petitioner correctly points out, acceptance oI this condition did not give rise to a perIected sale but merely to an option or
an accepted unilateral promise on the part oI respondents to buy the subject properties within 30 days Irom the date oI
acceptance oI the oIIer. Such option giving respondents the exclusive right to buy the properties within the period agreed
upon is separate and distinct Irom the contract oI sale which the parties may enter.|11| All that respondents had was just
the option to buy the properties which privilege was not, however, exercised by them because there was a Iailure to agree
on the terms oI payment. No contract oI sale may thus be enIorced by respondents.

Furthermore, even the option secured by respondents Irom petitioner was Iatally deIective. Under the second
paragraph oI Art. 1479, an accepted unilateral promise to buy or sell a determinate thing Ior a price certain is binding
upon the promisor only iI the promise is supported by a distinct consideration. Consideration in an option contract may be
anything oI value, unlike in sale where it must be the price certain in money or its equivalent. There is no showing here oI
any consideration Ior the option. Lacking any prooI oI such consideration, the option is unenIorceable.

Equally compelling as prooI oI the absence oI a perIected sale is the second condition that, during the option
period, the parties would negotiate the terms and conditions oI the purchase. The stages oI a contract oI sale are as
Iollows: (1) negotiation, covering the period Irom the time the prospective contracting parties indicate interest in the
contract to the time the contract is perIected; (2) perIection, which takes place upon the concurrence oI the essential
elements oI the sale which are the meeting oI the minds oI the parties as to the object oI the contract and upon the price;
and (3) consummation, which begins when the parties perIorm their respective undertakings under the contract oI sale,
culminating in the extinguishment thereoI.|12| In the present case, the parties never got past the negotiation stage. The
alleged "indubitable evidence"|13| oI a perIected sale cited by the appellate court was nothing more than oIIers and
counter-oIIers which did not amount to any Iinal arrangement containing the essential elements oI a contract oI sale.
While the parties already agreed on the real properties which were the objects oI the sale and on the purchase price, the
Iact remains that they Iailed to arrive at mutually acceptable terms oI payment, despite the 45-day extension given by
petitioner.

The appellate court opined that the Iailure to agree on the terms oI payment was no bar to the perIection oI the
sale because Art. 1475 only requires agreement by the parties as to the price oI the object. This is error. In Navarro v.
Sugar Producers Cooperative Marketing Association, Inc.,|14| we laid down the rule that the manner oI payment oI the
purchase price is an essential element beIore a valid and binding contract oI sale can exist. Although the Civil Code does
not expressly state that the minds oI the parties must also meet on the terms or manner oI payment oI the price, the same is
needed, otherwise there is no sale. As held in Toyota Shaw, Inc. v. Court oI Appeals,|15| agreement on the manner oI
payment goes into the price such that a disagreement on the manner oI payment is tantamount to a Iailure to agree on the
price.|16| In Velasco v. Court oI Appeals,|17| the parties to a proposed sale had already agreed on the object oI sale and
on the purchase price. By the buyer`s own admission, however, the parties still had to agree on how and when the
downpayment and the installments were to be paid. It was held:

. . . Such being the situation, it can not, thereIore, be said that a deIinite and Iirm sales agreement between the
parties had been perIected over the lot in question. Indeed, this Court has already ruled beIore that a deIinite agreement on
the manner oI payment oI the purchase price is an essential element in the Iormation oI a binding and enIorceable contract
oI sale. The Iact, thereIore, that the petitioners delivered to the respondent the sum oI P10,000 as part oI the down-
payment that they had to pay cannot be considered as suIIicient prooI oI the perIection oI any purchase and sale
agreement between the parties herein under Art. 1482 oI the new Civil Code, as the petitioners themselves admit that
some essential matter - the terms oI the payment - still had to be mutually covenanted.|18|

Thus, it is not the giving oI earnest money, but the prooI oI the concurrence oI all the essential elements oI the
contract oI sale which establishes the existence oI a perIected sale.

In the absence oI a perIected contract oI sale, it is immaterial whether Isidro A. Sobrecarey had the authority to
enter into a contract oI sale in behalI oI petitioner. This issue, thereIore, needs no Iurther discussion.

WHEREFORE, the decision oI the Court oI Appeals is REVERSED and respondents` complaint is DISMISSED.
SO ORDERED.

9. SANTOS V. CA 337 SCRA 7 ( |G.R. No. 139792. November 22, 2000|
ANTONIO P. SANTOS, petitioner, vs. THE HONORABLE COURT OF APPEALS, METROPOLITAN AUTHORITY,
now known as METROPOLITAN MANILA DEVELOPMENT AUTHORITY, and THE CIVIL SERVICE
COMMISSION, respondents.
D E C I S I O N
DAVIDE, JR., C.J.:
In this petition Ior review on certiorari petitioner assails the decision oI 19 August 1999 oI the Court oI
Appeals|1| in CA-G.R. SP No. 48301, which held that petitioner`s separation pay under Section 11 oI R.A. No. 7924
should be limited to the number oI years oI his service in the Metropolitan Manila Authority (MMA) only, excluding his
years oI service as judge oI the Metropolitan Trial Court (MeTC) oI Quezon City Ior which he has already been given
retirement gratuity and pension.

The undisputed Iacts are as Iollows:
On 18 January 1983, petitioner was appointed Judge oI the MeTC oI Quezon City, and he thereaIter assumed
oIIice. AIter the military-backed EDSA revolt, petitioner was reappointed to the same position.

On 1 April 1992, petitioner optionally retired Irom the Judiciary under R.A. No. 910,|2| as amended, and received
his retirement gratuity under the law Ior his entire years in the government service; and Iive years thereaIter he has been
regularly receiving a monthly pension.

On 2 December 1993, petitioner re-entered the government service. He was appointed Director III oI the TraIIic
Operation Center oI the MMA. His appointment was approved by the Civil Service Commission (CSC).

On 1 March 1995, Congress enacted R.A. No. 7924, which reorganized the MMA and renamed it as Metropolitan
Manila Development Authority (MMDA). Section 11 thereoI reads:

Section 11. Transitory Provisions. To prevent disruption in the delivery oI basic urban services pending the Iull
implementation oI the MMDA`s organizational structure and staIIing pattern, all oIIicials and employees oI the interim
MMA shall continue to exercise their duties and Iunctions and receive their salaries and allowances until they shall have
been given notice oI change oI duties and Iunctions, and oI being transIerred to another oIIice or position.
. . .
The civil service laws, rules and regulations pertinent to the displacement oI personnel aIIected by this Act shall
be strictly enIorced. The national government shall provide such amounts as may be necessary to pay the beneIits
accruing to displaced employees at the rate oI one and one-Iourth (1/) month`s salary Ior every year oI service: Provided,
That, iI qualiIied Ior retirement under existing retirement laws, said employees may opt to receive the beneIits thereunder.

On 16 May 1996, the President oI the Philippines issued Memorandum Order No. 372 approving the Rules and
Regulations Implementing R.A. No. 7924. Pursuant thereto, the MMDA issued Resolution No. 16, series oI 1996, which,
inter alia, authorized the payment oI separation beneIits to the oIIicials and employees oI the Iormer MMA who would be
separated as a result oI the implementation oI R.A. No. 7924.

On 30 August 1996, the MMDA issued a Memorandum to petitioner inIorming him that in view oI his 'voluntary
option to be separated Irom the service his services would automatically cease eIIective at the close oI oIIice hours on 15
September 1996, and that he would be entitled to 'separation beneIits equivalent to one and one-Iourth (1/) monthly
salary Ior every year oI service as provided under Section 11 oI the MMDA Law.

In view oI some doubt or conIusion as to the extent oI his separation beneIits, petitioner submitted a Position
Paper wherein he asserted that since the retirement gratuity he received under R.A. No. 910, as amended, is not an
additional or double compensation, all the years oI his government service, including those years in the Judiciary, should
be credited in the computation oI his separation beneIits under R.A. No. 7924. The Assistant Manager Ior Finance oI the
MMDA reIerred the Position Paper to the Regional OIIice oI the CSC-NCR.

On 7 October 1996, Director IV Nelson Acebedo oI the CSC-NCR handed down an opinion that the payment oI
petitioner`s separation pay must be in accordance with Civil Service Resolution No. 92-063, pertinent portions oI which
read:

|T|he payment oI separation/|retirement| beneIits cannot be subject to the prohibition against the |sic| double
compensation in cases when oIIicers and employees who were previously granted said beneIits are rehired or reemployed
in another government Agency or OIIice. Thus, there is no need Ior separated employees to reIund the
separation/retirement beneIits they received when subsequently reemployed in another government agency or oIIice.

. This being so, while an employee who was paid separation/retirement beneIits is not required to reIund the
same once reemployed in the government service, as aIorestated, Ior reasons oI equity however, it would be proper and
logical that said separation/retirement beneIits should nevertheless be deducted Irom the retirement/|separation| pay to be
received by the employee concerned. Moreover, in this instance, the employee concerned has the option either to reIund
his separation/retirement beneIits and claim his gross retirement/separation pay without any deduction corresponding to
his separation pay received, or not |to| reIund his separation/retirement pay but suIIer a deduction oI his
retirement/separation gratuity Ior the total amount representing his previous separation/retirement pay received.

His motion Ior reconsideration having been denied, petitioner elevated the opinion oI Director Acebedo to the
CSC.

On 21 October 1997, the CSC promulgated Resolution No. 97-4266 aIIirming the opinion oI Director Acebedo
and dismissing petitioner`s appeal. Citing Chaves v. Mathay,|3| it held that petitioner cannot be paid retirement beneIits
twice one under R.A. No. 910, as amended, and another under R.A. No. 7924 Ior the same services he rendered as
MeTC Judge. He can only exercise one oI two options in the computation oI his separation pay under R.A. 7924. These
options are (1) to reIund the gratuity he received under R.A. No. 910, as amended, aIter he retired Irom the MeTC and get
the Iull separation pay Ior his entire years in the government, that is 9 years and 2 months with the MeTC plus two (2)
years and eight (8) months Ior his services as Director III in the deIunct MMA, at the rate oI one and one-Iourth salary Ior
every year oI service pursuant to MMDA Memorandum dated 30 August 1996; or (2) to retain the gratuity pay he
received Ior his services as MeTC Judge but an equivalent amount shall be deducted Irom the separation beneIits due
Irom the Iormer MMA Ior his entire government service.

On 9 June 1998, the CSC promulgated Resolution No. 98-1422 denying petitioner`s motion Ior reconsideration.
Accordingly, petitioner Iiled with the Court oI Appeals a petition to set aside these Resolutions.

On 19 August 1999, the Court oI Appeals promulgated its decision, now challenged in this case. It held that the
CSC was 'correct in dismissing petitioner`s appeal Irom the opinion oI Director Acebedo. It ratiocinated as Iollows:

There is no speciIic rule oI law which applies to petitioner`s case. Nevertheless, the Court Iinds it equitable to
deny his claim Ior payment oI separation pay at the rate oI one and one-Iourth (1/) month`s salary Ior every year oI his
service in government, that is, inclusive oI the number oI years he served as Judge oI the Metropolitan Trial Court oI
Manila |sic|.

Petitioner already received and is continually receiving gratuity Ior his years oI service as a Metropolitan Trial
Court Judge. Equity dictates that he should no longer be allowed to receive Iurther gratuity Ior said years oI service in the
guise oI separation pay.

SuIIice it to state that upon his retirement Irom his oIIice as a Judge, petitioner has already closed a chapter oI his
government service. The State has already shown its gratitude Ior his services when he was paid retirement beneIits under
Republic Act No. 901 |sic|. For that is what retirement beneIits are Ior. Rewards |are| given to an employee who has
given up the best years oI his liIe to the service oI his country (Gov`t. Service Insurance System v. Civil Service
Commission, 245 SCRA 179, 188).

Now, the state again wishes to show its gratitude to petitioner by awarding him separation pay Ior his services as a
director oI the Metro Manila Authority (MMA), another chapter oI petitioner`s government service which has come to a
close by the reorganization oI the MMA into the Metropolitan Manila Development Authority.

The Court, in limiting the computation oI petitioner`s separation pay to the number oI years oI his service at the
MMA, merely is implementing the ruling in 'Chavez, Sr. vs. Mathay (37 SCRA 776), which ruling, iI not actually in
point, is nevertheless applicable owing to its 'common-sense consideration. Said ruling reads:

'The common-sense consideration` stated by Mr. Justice J.B.L. Reyes Ior the Court in Espejo, that iI a retiree is
being credited with his years oI service under his Iirst retirement in computing his gratuity under his second retirement, it
is but just that the retirement gratuity received by him under his Iirst retirement should also be charged to his account,
maniIestly govern the case at bar. It is but in accordance with the rule consistently enunciated by the Court as in Anciano
v. Otadoy, aIIirming Borromeo, that claims Ior double retirement or pension such as petitioner`s, would run roughshod
over the well-settled rule that in the absence oI an express legal exception, pension and gratuity laws should be so
construed as to preclude any person Irom receiving double pension.` (p. 780, underscoring supplied)

The case at bench is not, strictly speaking, about double pension.` It is, however, about the interpretation oI a
gratuity law, viz., Section 11 oI Republic Act No. 7924 which awards separation pay to those government employees who
were displaced by the reorganization oI the MMA into the MMDA, which should be construed to preclude a government
employee Irom receiving double gratuity Ior the same years oI service.

We aIIirm the assailed judgment. We agree with the Court oI Appeals and the Civil Service Commission that Ior
the purpose oI computing or determining petitioner`s separation pay under Section 11 oI R.A. No. 7924, his years oI
service in the Judiciary should be excluded and that his separation pay should be solely conIined to his services in the
MMA.

In the Iirst place, the last paragraph oI Section 11 oI R.A. No. 7924 on the grant oI separation pay at the rate oI
'one and one-Iourth (1/) months oI salary Ior every year oI service cannot by any stretch oI logic or imagination be
interpreted to reIer to the total length oI service oI an MMA employee in the government, i.e., to include such service in
the government outside the MMA. Since it allows the grant oI separation pay to employees who were to be displaced
thereby the separation pay can be based only on the length oI service in the MMA. The displacement amounted to an
abolition oI the oIIice or position oI the displaced employees, such as that oI petitioner. The rule is settled that Congress
may abolish public oIIices. Such a power is a consequent prerogative oI its power to create public oIIices.|4| However,
the power to abolish is subject to the condition that it be exercised in good Iaith.|5| The separation partook oI the nature oI
a disturbance oI compensation; hence, the separation pay must relate only to the employment thus aIIected.

Second, petitioner himselI must have realized that Section 11 does not allow the tacking in oI his previous
government service. II he were convinced that it does he could have instead applied Ior retirement beneIits, since by
adding his years oI service in the MMA to his previous years oI service in the Government he could have retired under the
third paragraph oI Section 11, which pertinently reads:

Provided, That, iI qualiIied Ior retirement under existing retirement laws, said employee may opt to receive the
beneIits thereunder.

Third, aIter the approval oI his optional retirement on 1 April 1992, petitioner was Iully paid oI his retirement
gratuity under R.A. No. 910, as amended; and Iive years thereaIter he has been receiving a monthly pension.

The petitioner cannot take reIuge under the second paragraph oI Section 8 oI Article IX-B oI the Constitution,
which provides:

Pensions or gratuities shall not be considered as additional, double, or indirect compensation.

This provision simply means that a retiree receiving pension or gratuity can continue to receive such pension or
gratuity even iI he accepts another government position to which another compensation is attached.|6|

Indeed, the retirement beneIits which petitioner had received or has been receiving under R.A. No. 910, as
amended, do not constitute double compensation. He could continue receiving the same even iI aIter his retirement he
had been receiving salary Irom the deIunct MMA as Director III thereoI. This is but just because said retirement beneIits
are rewards Ior his services as MeTC Judge, while his salary was his compensation Ior his services as Director III oI the
MMA.

However, to credit his years oI service in the Judiciary in the computation oI his separation pay under R.A. No.
7924 notwithstanding the Iact that he had received or has been receiving the retirement beneIits under R.A. No. 910, as
amended, would be to countenance double compensation Ior exactly the same services, i.e., his services as MeTC Judge.
Such would run counter to the policy oI this Court against double compensation Ior exactly the same services.|7| More
important, it would be in violation oI the Iirst paragraph oI Section 8 oI Article IX-B oI the Constitution, which proscribes
additional, double, or indirect compensation. Said provision reads:

No elective or appointive public oIIicer or employee shall receive additional, double, or indirect compensation,
unless speciIically authorized by law. .

Section 11 oI R.A. No. 7924 does not speciIically authorize payment oI additional compensation Ior years oI
government service outside oI the MMA.

WHEREFORE, Iinding no reversible error in the judgment appealed Irom, the petition in this case is DENIED Ior
want oI merit, and the decision oI 19 August 1999 oI the Court oI Appeals in CA-G.R. SP No. 48301 is AFFIRMED.
Costs against petitioner. SO ORDERED.

1. HEIRS OF VENANCIO BE1ENTING vs. BANEZ 5 SCRA 531 (
G.R. No. 166190 September 20, 2006
HEIRS OF VENANCIO BAJENTING and FELISA S. BAJENTING, NAMELY: Teresita A. Bajenting, Ruel A.
Bajenting, Gilbert A. Bajenting, Cresilda B. Puebla, Imelda B. Salac, Benedictina B. Ravina, Margarita B. Reusora,
Renato A. Bajenting, Lorena A. Bajenting, Elizalde A. Bajenting, Francisco Malda, Jr., B. Selecio Bajenting, Trinidad M.
Antinola, Roland B. Malda, Luisa B. Malda, Arsenia C. Ramirez, Angelina Ricarte, Editha Esteban, Lourdes M. Garcia,
Nora M. Alivio, Francisca B. Espina, Francisco Malda, Sr., and Venencio A. Bajenting, represented by VENENCIO A.
BAJENTING, Attorney-in-Fact, petitioners, vs. ROMEO F. BAEZ, SPOUSES JONATHAN and SONIA LUZ
ALFAFARA, respondents.

D E C I S I O N
CALLEJO, SR., J.:
This is a Petition Ior Review on Certiorari oI the Decision1 oI the Court oI Appeals (CA) in CA-G.R. CV No.
76526, as well as its October 31, 2004 Resolution2 denying the Motion Ior Reconsideration thereoI.

The Iactual and procedural antecedents are as Iollows:
Venancio Bajenting applied Ior a Iree patent over a parcel oI land, Lot 23 (Sgs. 546 D), Davao Cadastre, located
in Langub, Davao City, with an area oI 104,140 square meters. The application was docketed as Free Patent Application
No. IV-45340. In the meantime, Venancio planted Iruit trees in the property3 such as mango, lanzones, coconut and
santol. He and his wiIe, Felisa Bajenting, along with their children, also resided in a house which stood on the property.4

On February 18, 1974, Venancio died intestate.5 His application Ior a Iree patent was thereaIter approved, and on
December 18, 1975, Free Patent No. 577244 was issued in his Iavor. On February 6, 1976, the Register oI Deeds issued
Original CertiIicate oI Title (OCT) No. P-5677 over the property in the name oI "Venancio Bajenting, married to Felisa
Sultan."6 Selecio Bajenting continued cultivating the land.7

In the meantime, the Sangguniang Panglunsod approved City Ordinance No. 263, Series oI 1982 and Resolution
No. 10254 declaring the properties in Langub as a low density residential zone.8

On May 31, 1993, Felisa and the other heirs oI Venancio (Heirs, Ior brevity),9 executed an Extrajudicial
Settlement with Deed oI Absolute Sale over Lot 23. They alleged therein that when Venancio died intestate, they had
agreed to adjudicate unto themselves as heirs oI the deceased the aIoresaid property, as Iollows:

TO: FELISA S. BAJENTING, One halI (1/2) share oI the whole oI Oct. No. P-5677, as her conjugal share; and
the remaining one-halI (1/2) oI OCT No. P-5677.

TO: FELISA S. BAJENTING, MARGARITA BAJENTING, FRANCISCA BAJENTING, SILVERIO
BAJENTING (Deceased) represented by his wiIe and children: Teresita Apas-Bajenting, Renato Bajenting, Gilbert
Bajenting, Criselda Bejenting, Imelda Bajenting, Venancio Bajenting and Elizalde Bajenting; MAXIMA BAJENTING
(Deceased) represented by her husband, Francisco Malda, and children: Lee B. Malda, Angelina B. Malda, Milagros B.
Malda, Editha B. Malda and Susana B. Malda; BENEDICTINA BAJENTING, ARSENIA BAJENTING; and CELECISO
BAJENTING, in equal share pro-indiviso.10

In the same deed, a 50,000 square meter portion oI the property was sold to the spouses Sonia Luz AlIaIara; and
the 54,140 square meter portion to Engr. Romeo F. Baez. The share oI Felisa was included in the portion sold to Engr.
Baez.11 However, the deed was not notarized; neither was the sale approved by the Secretary oI Environment and
Natural Resources. In the Agreement/Receipt executed by Felisa Bajenting and Romeo Baez, the parties declared that
the price oI property was P500,000.00; P350,000.00 was paid by the vendees, the balance oI P150,000.00 to be due and
payable on or beIore December 31, 1993 at the residence oI the vendors.12 The owner's duplicate oI title was turned over
to the vendees. However, the deed was not Iiled with the OIIice oI the Register oI Deeds.

The Heirs, including Felisa, tried to repurchase the property as provided under Section 119 oI Commonwealth Act
No. 141, but Romeo Baez and Sonia AlIaIara did not allow them to exercise their right.

On May 31, 1995, the Heirs, through Venencio Bajenting, Iiled a Complaint Ior recovery oI title against Romeo
Baez and the spouses AlIaIara in the OIIice oI the Barangay Captain. When no settlement was reached, the Heirs Iiled a
complaint Ior Quieting oI Title, Repurchase oI Property, Recovery oI Title plus Damages with the Regional Trial Court,
claiming that they had tried to repurchase the property Irom the deIendants and that the latter had ignored the summons
Irom the Barangay Captain Ior an amicable settlement oI the case. They prayed that aIter due proceedings, judgment be
rendered in their Iavor:

WHEREFORE, PREMISES CONSIDERED, it is prayed oI this Honorable Court that aIter hearing, judgment be
rendered in Iavor oI plaintiIIs and against herein deIendants, by quieting and removing any cloud on the Original
CertiIicate oI Title No. P-5677, Free Patent No. 577244, oI the Registry oI Deeds oI Davao City, and thereaIter ordering
the deIendants to:
a) Return the owner's duplicate copy oI Original CertiIicate oI Title No. P-5677, Free Patent No. 577244 to
plaintiII Iorthwith;
b) Vacate the premises including those who are acting Ior and in their behalI; and,

IN THE ALTERNATIVE, should the deIendants prove their superior right over the subject property (i.e., sale) as
against the herein plaintiIIs that they be ordered to resell back the said property to the plaintiIIs consonant to the provision
oI Sec. 119, C.A. No. 141, and in both instances, deIendants be, jointly and severally, ordered to pay plaintiIIs:
1. P50,000.00 - Moral Damages;
2. P50,000.00 - Exemplary Damages;
3. P70,000.00 - Actual Damages;
4. P50,000.00 - Attorney's Iees.

PlaintiIIs Iurther pray Ior such relieI just and equitable in the premises.13
On October 29, 1996, the Heirs Iiled an Amended Complaint, alleging the Iollowing:

5. Sometime in May 1993, the aIore-described real property was sold to deIendants Ior a consideration oI Five
Hundred Thousand (P500,000.00) Pesos and several months thereaIter, the owner's duplicate copy Original CertiIicate oI
Title No. P-5677, Free Patent No. 577244, was handed to them and, thereaIter, their representative occupied the area. x x
x
6. DeIendants paid only the sum oI THREE HUNDRED FIFTY THOUSAND (P350,000.00) but did not pay the
remaining purchase price in the amount oI ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS. x x x
7. The aIoredescribed property sold to deIendants, being a Free Patent, can be repurchased within Iive (5) years
Irom date oI conveyance (1993) by the applicant, his widow, or legal heirs pursuant to Sec. 119, Commonwealth Act No.
141, as amended, which provides that:

"That every conveyance oI land acquired under the Iree patent provisions, when proper, shall be the subject to
repurchase by the applicant, his widow, or legal heirs, within a period oI Iive (5) years Irom the date oI the conveyance;
(Underscoring supplied).14

x x x x

13. Herein PlaintiIIs have tendered the amount oI THREE HUNDRED FIFTY THOUSAND (P350,000.00) as
repurchase price with the OIIice oI the Clerk oI Court as shown in hereto attached xerox copy oI OIIicial Receipt No.
6547953 as Annex "L."15

The Amended Complaint contained the Iollowing prayer:

WHEREFORE, PREMISES CONSIDERED, it is prayed oI this Honorable Court that aIter hearing, judgment be
rendered ordering deIendants to resell the property back to herein plaintiIIs in accordance with the provision oI Sec. 119,
C.A. No. 141 and ordering deIendants Iurther to:
a) Return the owner's duplicate copy oI Original CertiIicate oI Title No. P-5677, Free Patent No. 577244 to
plaintiIIs Iorthwith;
b) Vacate the premises including those who are acting Ior and in their behalI; and
c) Jointly and severally, pay plaintiIIs:
1) P 50,000.00 - Moral Damages;
2) P 50,000.00 - Exemplary Damages;
3) P 70,000.00 - Actual Damages;
4) P 50,000.00 - Attorney's Iees.
PlaintiIIs Iurther pray Ior such relieI just and equitable in the premises. 16
The Heirs deposited the amount oI P350,000.00 with the Clerk oI Court, and an oIIicial receipt was issued
thereIore.

In their Amended Answer to the Complaint, the deIendants averred, inter alia, that: (1) the plaintiIIs, who did not
sign the Extrajudicial Settlement and Deed oI Absolute Sale, were not heirs oI Venancio Bajenting; (2) it was only
Venencio Bajenting, Jr. who wanted to repurchase the property Ior and in behalI oI a "speculator" i.e., Ior the sole use and
enjoyment oI the interested buyer and not Ior cultivation oI the heirs oI the deceased homesteader; and (3) the Heirs have
not tendered any amount to perIect their repurchase oI the property. They alleged, by way oI Compulsory Counterclaim,
that:

13. The parties herein have entered into an Extrajudicial Settlement oI Estate with Deed oI Absolute Sale to
evidence their agreement over the land in question. However, such deed has not yet been notarized. Pursuant to Art. 1357
in relation to Art. 1358 (1) oI the Civil Code, deIendants may require plaintiIIs to deliver the proper document in the
proper Iorm to evidence the conveyance oI the property subject oI this case and suIIicient to eIIect the transIer oI title to
the same in Iavor oI deIendants;17

The deIendants prayed that, aIter due proceedings, judgment be rendered in their Iavor as Iollows:

WHEREFORE, PREMISES CONSIDERED, it is respectIully prayed oI this Honorable Court that aIter trial on
the merits, a decision be rendered:
1. Finding that plaintiIIs are not entitled to exercise their right to repurchase and conIirming the right oI the
deIendants to continue to own, possess and enjoy the subject property;
2. Ordering plaintiIIs to deliver to deIendants the proper document in the proper Iorm to evidence the conveyance
oI the property subject oI this case and suIIicient to eIIect the transIer oI title to the same in Iavor oI deIendants;
3. Finding that plaintiIIs should pay deIendants, jointly and severally, the sum oI:
a). equivalent to 25 oI the value oI the property as attorney's Iee and P50,000.00 as expenses oI litigation;
b). P100,000.00 Ior each deIendant as moral damages;
c). P50,000.00 Ior each deIendant as exemplary damages;

DeIendants Iurther pray Ior such other equitable and legal relieIs as may be just and proper under the premises.18
During the pre-trial on January 19, 1998, considering the possibility that the parties would amicably settle the
matter (that is, they would agree to entrust the property to a receiver, later sell it to a third party and divide the proceeds
among themselves), the court ordered a resetting oI the case.

On February 6, 1998, the plaintiIIs, through counsel, Iiled a ManiIestation with the trial court. The pertinent
portion reads:
3. PlaintiIIs are willing to receive the amount oI FIVE MILLION (P5,000,000.00) Pesos, as an additional
purchase price oI their property covered by Original CertiIicate oI Title No. P-5677 within the period oI two (2) months
counted Irom today. Should the deIendant cannot (sic) pay said amount, the plaintiIIs will no longer agree to the payment
oI P5,000,000.00.
4. Although, the plaintiIIs have no intention whatsoever to sell the property, but in order to settle the case
amicably, they are willing to look Ior interested buyers oI the property, subject matter oI this repurchase, to sell the same
Ior a consideration oI not less than P5,000,000.00. And out oI the said purchase price, PlaintiIIs are willing to give, by
way oI settlement to deIendant, the amount equivalent to twenty percent (20) oI the proceeds;
5. PlaintiIIs shall go on with the presentation oI their evidence;
6. During the pendency oI this case, receiver shall be appointed to take charge oI the property;
7. PlaintiIIs are willing to meet the deIendant Ior the discussion oI the Ioregoing on February 11, 1998 at 2:30 in
the aIternoon.19

The case was reIerred to the Barangay Captain and the Lupon Tagapamayapa Ior a possible settlement, to no
avail.20

The Heirs presented Vicente Ravino, the husband oI Benedicta Bajenting, one oI the daughters oI Venancio and
Felisa. He testiIied that Felisa had died intestate on January 21, 1996.21 For a period oI two years, he had been demanding
that the vendee pay the balance oI the purchase price, P150,000.00, but the latter Iailed to pay the amount. The Heirs
authorized Venencio Bajenting22 to represent them Ior the purpose oI repurchasing the property Irom the deIendants.

The deIendants adduced evidence that the Sangguniang Panglunsod approved Ordinance No. 4042, Series oI
1996, classiIying the properties in Langub as part oI a low density property zone.23 Such properties were primarily
intended Ior housing development with at least 20 dwelling units per hectare density and below per hectare.24 They
pointed out that under Presidential Decree (P.D.) No. 957, the lots could be used as Iirst class residential. The City
Planning OIIice and the Regional Development Council had, likewise, recommended to the National Economic
Development Authority the plan to establish an astrodome, a government center to house government agencies, as well as
the construction oI a circumIerential road; however, no money had yet been appropriated to implement the said plans.25

Anne Reyes, a real estate agent, testiIied that in March 1993, Venencio Bajenting and Margarita Bajenting-
Reusora, another heir, asked her to help them sell the property Ior P350,000.00. She agreed. To enable her to oIIer the
property Ior sale, the Bajentings entrusted to her a copy oI the owner's duplicate oI OCT No. P-5677, Tax Declaration No.
D-8-8-159, Tax Clearance dated October 22, 1991 and a CertiIicate Irom the City Assessor.26 However, she Iailed to sell
the property. In December 1995, Margarita saw her again and asked her to return the said documents because she
(Margarita) wanted to sell the property Ior P10,000,000.00. Margarita told her that the property had been earlier sold Ior a
cheaper price, but she was requested to accompany any prospective buyers willing to pay P10,000,000.00 to Venencio
Bajenting who had a special power oI attorney to sell the property in behalI oI the Heirs.27 AIter her meeting with
Margarita, nothing happened. On cross-examination, Anne admitted that she had no written authority to sell the
property.28 In December 1995, she inquired Irom Engr. Baez iI he was willing to resell the property to the heirs oI
Venancio Bajenting.29 In February 1996, Engr. Baez, accompanied by Atty. Susan Cariaga, saw her (Anne) and asked iI
the Bajentings were indeed going to repurchase the property; she answered in the aIIirmative and volunteered to testiIy.30

Ermelinda Oyco testiIied that during the proceedings oI the case in the OIIice oI the Barangay Captain, Margarita
told her and her sister that the Bajentings were going to repurchase the property and would resell the same. She told
Margarita that she had a prospective buyer, but withheld the person's identity. Margarita told her that the Bajentings
would sell the property Ior P10,000,000.00. Venencio Bajenting conIirmed the price and told her that she would receive a
3 commission iI she succeeded in selling the property.31 On cross-examination, she declared that she was invited to
testiIy Ior Engr. Baez and that she agreed because she pitied him.

On rebuttal, Venencio Bajenting testiIied and declared that he did not meet Oyco and her mother in December
1996, and that they had no interest to sell the property.32

BeIore she could testiIy, Margarita Reusora died on August 24, 1997.33
On March 1, 2002, the trial court rendered judgment in Iavor oI the Heirs. The dispositive portion reads:

FOR THE FOREGOING, judgment is hereby rendered in Iavor oI plaintiIIs and against deIendants, ordering the
latter to vacate subject property covered by Original CertiIicate oI Title No. T-5677 and deliver said CertiIicate oI Title to
plaintiIIs within ten (10) days Irom receipt hereoI.

Accordingly, the Clerk oI Court oI the Regional Trial Court, Davao City, is hereby ordered to release the amount
oI P350,000.00 deposited by plaintiIIs in Iavor oI deIendants, representing the repurchase money oI subject property,
evidenced by OIIicial Receipt No. 6547953, dated October 11, 1996. Further, the compulsory counter-claim Iiled by
deIendants against plaintiIIs is hereby DISMISSED. SO ORDERED.34

The RTC ruled that while there is evidence that Iirst-class subdivisions are being developed in the vicinity, no
budget had been appropriated Ior the plans to construct the government center and the sports complex. However, it
declared that the deIendants Iailed to present any evidence that the plaintiIIs were repurchasing the property Ior and in
behalI oI a Iinancier.

The spouses AlIaIara, and Baez Iiled a motion Ior reconsideration, which the court denied. It declared that the
ruling oI this Court in Santana V. Marias35 is not applicable, and that it was the case oI Hernaez v. Mamalio36 that was
controlling.

The spouses AlIaIara, and Baez appealed the Decision to the CA, alleging that:

FIRST ASSIGNED ERROR

THE TRIAL COURT ERRED IN NOT FINDING THAT PLAINTIFFS' PURPOSE IN REPURCHASING THE
PROPERTY IS ONLY TO BE ABLE TO SELL THE SAME TO ANOTHER BUYER FOR A HIGHER PRICE OR
MERELY FOR SPECULATION.

SECOND ASSIGNED ERROR

THE TRIAL COURT ERRED IN NOT FINDING THAT THERE WAS NO PROPER BARANGAY
CONCILIATION BEFORE THIS CASE WAS FILED IN THE REGIONAL TRIAL COURT AND THAT THIS
DEFECT WAS NEVER CURED.37

They averred that the trial court erred in not applying the ruling oI this Court in Santana v. Marias,38 reiterated
in Quisumbing v. Court oI Appeals39 and Lacorda v. Intermediate Appellate Court.40 They maintained that the Heirs
were exercising their right to repurchase the property Ior commercial purposes, not Ior the purpose oI using the property
Ior their Iamily home. They asserted that the property is surrounded by Iirst-class subdivisions and is classiIied as a low-
density residential zone.

On February 27, 2004, the CA rendered judgment granting the appeal, and reversed the Decision oI the trial court.
The CA ruled that as gleaned Irom the evidence on record and the pleadings oI the Heirs, the property was sought to be
repurchased Ior proIit, and not to preserve it Ior themselves and their Iamilies.41 The appellate court applied the ruling in
the Santana case.

The Heirs Iiled a motion Ior the reconsideration oI the Decision, which the CA denied Ior lack oI merit.

Hence, the instant Petition Ior Review on Certiorari, where petitioners allege that the CA erred in disregarding the
Iindings oI the trial court based on the evidence on record in applying the Santana case, and in not resolving the issue oI
respondents' Iailure to pay the balance oI the purchase price oI the property.

They insist that the Iactual backdrop in Santana is substantially diIIerent Irom that in this case. The speculative
purpose ascribed to them may as well apply to respondents, who reIused to resell the property to petitioner, knowing that
the value oI the property had considerably increased. As between the petitioners and the respondents, the law should be
applied in their Iavor, being the heirs oI the beneIiciaries under Commonwealth Act 141, as amended.

The petitioners aver that respondents Iailed to prove with clear and convincing evidence that they were exercising
their right to repurchase the property only Ior the purpose oI reselling the same at a higher price, thereby rendering
nugatory Section 119 oI Commonwealth Act 141. The collective testimonies oI Reyes and Oyco were hearsay and
inadmissible in evidence under the dead man's statute, Margarita Reusora having died on August 24, 1997 beIore the
witnesses had even testiIied. Neither Margarita nor Venencio Bajenting could have inIormed Reyes and Oyco that the
petitioners were selling the property Ior P10,000,000.00 because petitioners, through Venencio Bajenting, had Iiled a case
against the respondents in the OIIice oI the Barangay Captain. They insist that the CA erred in declaring as selI-serving
the testimony oI petitioner Venencio Bajenting.

Worse, petitioners aver, the CA ignored the Iact that respondents had not paid them the balance oI the purchase
price oI the property worth P150,000.00; thus, they would have to Iile a separate suit to collect the amount.

For their part, respondents aver that only petitioner Venencio Bajenting signed the veriIication and certiIication oI
non-Iorum shopping in the petition. Petitioners Iailed to attach any power oI attorney authorizing Venencio Bajenting to
sign the VeriIication and CertiIication Against Forum Shopping Ior and in their behalI. As Iound by the CA, the
testimonies oI Reyes and Oyco were credible and deserving oI Iull probative weight. Indeed, their testimonies are
buttressed by the trial court's Order dated January 19, 1998. They add that the Iindings oI the CA are binding on this
Court, and that the dead man's statute does not apply to the testimonies oI Reyes and Oyco, being as they were, mere
witnesses not parties to the case.

Respondents maintain that the ruling oI this Court in Santana which reiterated its ruling in Simeon v. Pea,42
applies in this case. They Iurther claim that the CA cannot be Iaulted Ior not ordering them to pay the balance oI
P150,000.00 to petitioners because it was not contained in their prayer.

Petitioners counter that they mentioned the non-payment by respondents oI the balance oI the purchase price,
P150,000.00 to emphasize their point that it was unIair Ior the CA to reverse the decision oI the RTC.

The issues are as Iollows: (a) whether or not petitioners complied with the rule on veriIication and certiIication
against Iorum shopping; (b) whether petitioners are entitled to repurchase the property Irom respondents; and (c) whether
petitioners are obliged to execute a notarized deed oI absolute sale over the property.

The petition has no merit.

On the Iirst issue, the Court notes that, oI the 23 petitioners, only petitioner Venencio Bajenting signed the
VeriIication and CertiIication oI Non-Forum Shopping. Petitioners did not append to their petition a special power oI
attorney authorizing petitioner Venencio Bajenting to sign the CertiIication Ior and in their behalI. The rule is that the
certiIication oI non-Iorum shopping must be signed by all the petitioners or plaintiIIs and the signing by only one oI them
is not suIIicient. However, in Cavile v. Heirs oI Clarita Cavile,43 the Court made the Iollowing pronouncement:

The rule is that the certiIicate oI non-Iorum shopping must be signed by all the petitioners or plaintiIIs in a case
and the signing by only one oI them is insuIIicient. However, the Court has also stressed that the rules on Iorum shopping,
which were designed to promote and Iacilitate the orderly administration oI justice, should not be interpreted with such
absolute literalness as to subvert its own ultimate and legitimate objective. The rule oI substantial compliance may be
availed oI with respect to the contents oI the certiIication. This is because the requirement oI strict compliance with the
provisions regarding the certiIication oI non-Iorum shopping merely underscores its mandatory nature in that the
certiIication cannot be altogether dispensed with or its requirements completely disregarded. It does not thereby interdict
substantial compliance with its provisions under justiIiable circumstance.

We Iind that the execution by Thomas George Cavile, Sr. in behalI oI all the other petitioners oI the certiIicate oI
non-Iorum shopping constitutes substantial compliance with the Rules. All the petitioners, being relatives and co-owners
oI the properties in dispute, share a common interest thereon. They also share a common deIense in the complaint Ior
partition Iiled by the respondents. Thus, when they Iiled the instant petition, they Iiled it as a collective, raising only one
argument to deIend their rights over the properties in question. There is suIIicient basis, thereIore, Ior Thomas George
Cavili, Sr. to speak Ior and in behalI oI his co-petitioners that they have not Iiled any action or claim involving the same
issues in another court or tribunal, nor is there other pending action or claim in another court or tribunal involving the
same issues. Moreover, it has been held that the merits oI substantive aspects oI the case may be deemed as "special
circumstance" Ior the Court to take cognizance oI a petition Ior review although the certiIication against Iorum shopping
was executed and signed by only one oI the petitioners.44

In the present case, we Iind and so rule that petitioners substantially complied with the Rules oI Court. Petitioners,
as heirs oI the spouses Venancio and Felisa Bajenting (the patentees), sought to exercise their right under Section 119, Act
141 to repurchase the property within the statutory period thereIor. Petitioner Venencio Bajenting was empowered to act
Ior and in their behalI beIore the Barangay Captain and in the RTC Ior the enIorcement oI their right as such heirs.
Petitioners have not Iiled any action against respondents in another court or tribunal involving the same issues and
property.

We note that the Secretary oI Agriculture and Natural Resources had not approved the sale oI the property (by the
heirs oI the patentee) to respondents. It bears stressing that Free Patent No. 577244 which was granted in Iavor oI
Venancio Bajenting on December 18, 1975 is subject to the Iollowing conditions therein:

NOW, THEREFORE, KNOW YE, That by authority oI the Constitution oI the Philippines, and in conIormity
with the provisions thereoI and oI the aIorecited Republic Act No. 782 and Commonwealth Act No. 141, as amended,
there is hereby granted unto said VENANCIO BAJENTING, Filipino, oI legal age, married to Felisa Sultan, and residing
in Langub, Ma-a, Davao City the tract oI land above-described.

TO HAVE AND TO HOLD the said tract oI land, with the appurtenances thereunto oI right belonging unto the
said VENANCIO BEJENTING and to his heirs and assigns Iorever, subject to the provisions oI Sections 118, 119, 121,
122 and 124 oI Commonwealth Act No. 141, as amended, which provide that except in Iavor oI the Government or any oI
its branches, units, or institutions, the land hereby acquired shall be inalienable and shall not be subject to encumbrance
Ior a period oI Iive (5) years Irom the date oI this patent, and shall not be liable Ior the satisIaction oI any debt contracted
prior to the expiration oI said period; that every conveyance oI land acquired under the Iree patent provisions, when
proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period oI Iive years Irom the
date oI the conveyance; that it shall not be encumbered, alienated, or transIerred to any person, not qualiIied to acquire
lands oI the public domain under said Commonwealth Act No. 141, as amended; and that it shall not be subject to any
encumbrance whatsoever in Iavor oI any corporation, association or partnership except with the consent oI the grantee and
the approval oI the Secretary oI Natural Resources and solely Ior educational, religious or charitable purposes or Ior a
right oI way; and subject Iinally to all conditions and public easements and servitudes recognized and prescribed by law
especially those mentioned in Sections 109, 110, 111, 113 and 114 oI Commonwealth Act No. 141, as amended, and the
right oI the Government to administer and protect the timber Iound thereon Ior a term oI Iive (5) years Irom the date oI
this patent, provided; however, that the grantee or heirs may cut and utilize such timber as may be needed Ior his use or
their personal use.

Sections 118, 119 and 122 oI Commonwealth Act No. 141, as amended, reads:

SEC. 118. Except in Iavor oI the Government or any oI its branches, units, or institutions, or legally constituted
banking corporations, lands acquired under Iree patent or homestead provisions shall not be subject to encumbrance or
alienation Irom the date oI the approval oI the application and Ior a term oI Iive years Irom and aIter the date oI issuance
oI the patent or grant nor shall they become liable to the satisIaction oI any debt contracted prior to the expiration oI said
period; but the improvements or crops on the land may be mortgaged or pledged to qualiIied persons, associations, or
corporations.

No alienation, transIer, or conveyance oI any homestead aIter Iive years and beIore twenty-Iive years aIter
issuance oI title shall be valid without the approval oI the Secretary oI Agricultural and Natural Resources, which
approval shall not be denied except on constitutional and legal grounds.45

SEC. 119. Every conveyance oI land acquired under the Iree patent or homestead provisions, when proper, shall
be subject to repurchase by the applicant, his widow, or legal heirs, within a period oI Iive years Irom the date oI the
conveyance.
SEC. 122. No land originally acquired in any manner under the provisions oI this Act, nor any permanent
improvement on such land, shall be encumbered, alienated, or transIerred, except to persons, corporations, associations, or
partnerships who may acquire lands oI the public domain under this Act or to corporations organized in the Philippines
authorized thereIore by their charters.

Except in cases oI hereditary succession, no land or any portion thereoI originally acquired under the Iree patent,
homestead, or individual sale provisions oI this Act, or any permanent improvement on such land, shall be transIerred or
assigned to any individual, nor shall such land or any permanent improvement thereon be leased to such individual, when
the area oI said land, added to that oI his own, shall exceed one hundred and Iorty-Iour hectares. Any transIer, assignment,
or lease made in violation hereoI shall be null and void.46

OCT No. P-5677 was issued to and in the name oI Venancio Bajenting over the property on February 6, 1976.
The 25-year period provided in Section 118 oI the law was to expire on February 6, 2001. However, in May 1999, Felisa
Bajenting and her children sold the property to respondents without the approval oI the Secretary oI Environment and
Natural Resources (Iormerly the Department oI Agriculture and Natural Resources). There is no showing in the records
that the Secretary oI Environment and Natural Resources had approved the sale.

The Iailure oI the vendors to secure the approval oI the Secretary oI the DENR does not, ipso Iacto, make the sale
void. The approval may be secured later, producing the eIIect oI ratiIying and adopting the transaction as iI the sale had
been previously authorized. The approval oI the sale subsequent thereto would have the eIIect oI the Secretary's
ratiIication and adoption as iI the sale had been previously authorized.47 The Secretary may disapprove the sale on legal
grounds.

The second issue is Iactual because it involves the determination oI petitioners' intention to repurchase the
property to enable them to amass a heIty net proIit oI P9,635,000.00 Irom its resale to a third party, and not Ior the
purpose oI preserving the same Ior themselves and their Iamilies' use as envisioned in Com. Act No. 141, as amended.

Section 1, Rule 45 oI the Rules oI Court provides that only questions oI law and not Iactual issues may be raised
in this Court. Settled is the rule that the jurisdiction oI this Court in cases brought beIore it Irom the CA via Rule 45 oI the
Rules oI Court is limited to reviewing errors oI law. However, while the Iindings oI Iact oI the CA are conclusive on this
Court, there are, likewise, recognized exceptions, to wit: (1) when the Iindings are grounded entirely on speculations,
surmises or conjectures; (2) when the inIerence made is maniIestly mistaken, absurd, or impossible; (3) when there is a
grave abuse oI discretion; (4) when the judgment is based on misappreciation oI Iacts; (5) when the Iindings oI Iact are
conIlicting; (6) when in making its Iindings are contrary to the admissions oI both appellant and appellee; (7) when the
Iindings are contrary to those oI the trial court; (8) when the Iindings are conclusions without citation oI speciIic evidence
on which they are based; (9) when the Iacts set Iorth in the petition as well as in the petitioner's main and reply brieIs are
not disputed by the respondent; and (10) when the Iindings oI Iact are premised on the supposed absence oI evidence and
contradicted by the evidence on record.48

In the present case, the Iindings and conclusions oI the trial court are contrary to those oI the CA. Indeed, the trial
court gave no probative weight to the testimonies oI Reyes and Oyco despite the absence oI any Iactual and legal basis Ior
it to do so. It is thus imperative Ior the Court to delve into and resolve this Iactual issue.

As elucidated by this Court, the object oI the provisions oI Act 141, as amended, granting rights and privileges to
patentees or homesteaders is to provide a house Ior each citizen where his Iamily may settle and live beyond the reach oI
Iinancial misIortune and to inculcate in the individuals the Ieelings oI independence which are essential to the
maintenance oI Iree institution. The State is called upon to ensure that the citizen shall not be divested oI needs Ior
support, and reclined to pauperism.49 The Court, likewise, emphasized that the purpose oI such law is conservation oI a
Iamily home in keeping with the policy oI the State to Ioster Iamilies as the Iactors oI society, and thus promote public
welIare. The sentiment oI patriotism and independence, the spirit oI citizenship, the Ieeling oI interest in public aIIairs, are
cultivated and Iostered more readily when the citizen lives permanently in his own house with a sense oI its protection and
durability.50 It is intended to promote the spread oI small land ownership and the preservation oI public land grants in the
names oI the underprivileged Ior whose beneIits they are specially intended and whose welIare is a special concern oI the
State.51 The law is intended to commence ownership oI lands acquired as homestead by the patentee or homesteader or
his heirs.52

In Simeon v. Pea,53 the Court declared that the law was enacted to give the homesteader or patentee every
chance to preserve Ior himselI and his Iamily the land that the State had gratuitously given to him as a reward Ior his labor
in cleaning and cultivating it. In that sense, the law becomes unqualiIied and unconditional. Its basic objective, the Court
stressed, is to promote public policy, that is, to provide home and decent living Ior destitutes, aimed at providing a class oI
independent small landholders which is the bulwark oI peace and order.

To ensure the attainment oI said objectives, the law gives the patentee, his widow or his legal heirs the right to
repurchase the property within Iive years Irom date oI the sale. However, the patentee, his widow or legal heirs should not
be allowed to take advantage oI the salutary policy oI the law to enable them to recover the land only to dispose oI it again
to amass a heIty proIit to themselves.54 The Court cannot sustain such a transaction which would put a premium on
speculation which is contrary to the philosophy behind Section 119 oI Act 141, as amended.

In this case, we agree with the ruling oI the CA that, based on the pleadings oI the parties and the evidence on
record, petitioners, through Venencio Bajenting and Margarita Reusora, sought to repurchase the property only Ior the
purpose oI reselling the same Ior P10,000,000.00 and in the process, amass a net proIit amounting to P9,650,000.00. We
quote, with approval, the Iindings oI the CA, thus:

The almost conclusive eIIect oI the Iindings oI the trial court cannot be denied. This is anchored on the practical
recognition oI the vantage position oI the trial judge in observing the demeanor oI the witness. However, such rule admits
certain exceptions. Almost as well-recognized as the general rule is the exception that We may nonetheless reverse the
Iactual Iindings oI the trial court iI by the evidence on record, or lack oI it, it appears that the trial court erred. We Iind
that such exception exists in the present case.

The lack oI documentary evidence proving that plaintiIIs constituted Reyes and Oyco as agents Ior the sale oI the
subject property merely shows that Reyes and Oyco were not constituted as agents in accordance with the speciIic Iorm
prescribed by law. It does not, however, render their testimonies improbable nor does it have any tendency to lessen the
credibility oI their testimonies respecting the Iact sought to be proven. What is material and should have been considered
by the trial court were the assertions oI Reyes and Oyco stating that plaintiII made negotiations Ior them to Iind a buyer
Ior the subject property since it would prove that plaintiIIs want to repurchase the subject property only in order to resell it
to another at a higher price.

The testimony oI plaintiII Venencio Bajenting denying the claim oI Reyes and Oyco cannot be given much
weight and credence. Being one who has a direct interest in the case, Venencio Bajenting necessarily has a motive Ior
coloring his testimony. Besides, apart Irom his denials, his testimony is uncorroborated. In contrast, there is no evidence
that Reyes and Oyco were actuated by any ill motive in testiIying against plaintiIIs. In Iact, their testimonies even show
that their mother is a relative oI plaintiIIs.

The proIit motivation behind the instant complaint Ior repurchase is Iurther shown by plaintiIIs' declaration in
their Opposition to deIendants' motion Ior reconsideration, that "the Three Hundred FiIty Thousand (P350,000.00) Pesos
given Ior the ten-hectare land would be too small Ior deIendant to own the property." Evidently, it is the same proIit
motivation that impelled plaintiIIs to agree to a settlement during the early stages oI the proceedings beIore the trial court.
In the ManiIestation Iiled by plaintiIIs on February 4, 1998, plaintiIIs expressed their agreement to a settlement but only iI
deIendants pay them an additional purchase price oI Five Million Pesos (PhP5,000,000.00) or iI the subject property were
to be sold to an interested buyer Ior no less than the said amount with 80 oI the proceeds going to the plaintiIIs and
oIIering 20 thereoI to deIendant.

In Iine, the trial court committed an error in not applying the doctrine laid down in the Santana case. As in the
Santana case, plaintiIIs' motive in Iiling the present complaint Ior repurchase is not Ior the purpose oI preserving the
subject property Ior themselves and their Iamily but to dispose oI it again at a much greater proIit Ior themselves. Hence,
the repurchase should not be allowed.55

We note that petitioner Venencio Bajenting is merely a mechanic. He had not explained to the trial court how he
and his co-heirs were able to produce P350,000.00 in 1996 and deposit the same with the Clerk oI Court when they Iiled
their amended complaint. There is no evidence on record that petitioners were Iinancially capable to produce the amount
in 1996, considering that they had to sell the property Ior P500,000.00 three years earlier. The Ioregoing circumstances
buttress the contention oI respondents that petitioners, through Venencio Bajenting, sought to repurchase the property Ior
no other purpose than to generate a heIty proIit oI P9,650,000.00.

That petitioners had no intention oI retaining the property Ior their and their Iamilies' use and purpose is IortiIied
by the Iact that during pre-trial, they maniIested their willingness to have the property sold to a third party and, Irom the
proceeds thereoI, to receive the amount oI P5,000,000.00; and that in the meantime, a receiver would be appointed by the
court.

Contrary to the allegations oI petitioners, the collective testimonies oI Reyes and Oyco are admissible in evidence
despite the Iact that when they testiIied, Margarita Reusora was already dead. Section 20(a), Rule 130 oI the Revised
Rules oI Court reads:

Section 20. DisqualiIication by reason oI interest or relationship. The Iollowing persons cannot testiIy as to
matters in which they are interested, directly or indirectly as herein enumerated:

(a) Parties or assignors oI parties to a case, or persons in whose behalI a case is prosecuted, against an executor or
administrator or other representative oI a deceased person, or against a person oI unsound mind, upon a claim or demand
against the estate oI such deceased person or against such person oI unsound mind, cannot testiIy as to any matter oI Iact
occurring beIore the death oI such deceased person or beIore such became oI unsound mind.

The bar under aIorequoted rule applies only to parties to a case, or assignors oI parties to a case or persons in
whose behalI a case is prosecuted. Reyes and Oyco were mere witnesses Ior respondents, not parties in the court a quo,
nor assignors oI any oI the parties in whose behalI the case was prosecuted. Their testimonies were presented only to
prove that the petitioners intended to repurchase the property Ior proIit, and not Ior the purpose oI preserving it Ior their
and their Iamilies' use and enjoyment.56

We agree with the ruling oI the CA that the ruling in Santana v. Marias57 applies in this case. As in Santana, the
property in this case was no longer agricultural but residential and commercial, in the midst oI several high-class
residential subdivisions. The government had planned to construct in the vicinity a circumIerential road, a government
center and an astrodome. As in Santana, petitioners, through counsel, declared their willingness to settle the case Ior the
amount oI P5,000,000.00 and the sale oI the property to a third party. The money which petitioners were to use to
repurchase the property was not theirs, but the money oI petitioner Venencio Bajenting's employer.

Petitioner cannot Iind solace in the ruling oI this Court in Hernaez v. Mamalio,58 which in part reads:

In an action to enIorce the right to repurchase a homestead within Iive (5) years Irom the sale thereoI, it is oI no
consequence what exactly might be the motive oI the plaintiII, and it is unnecessary Ior the Court to inquire beIore hand
into his Iinancial capacity to make the repurchase Ior the simple reason that such question will resolve itselI should he Iail
to make the corresponding tender oI payment within the prescribed period.

First. The decision oI the trial court ordering petitioner to execute a deed oI sale over the property in Iavor oI
respondent is grounded on the Iact that his record on appeal oI petitioner, as appellant, does not contain suIIicient relevant
data showing that the appeal was Iiled on time;

Second. The ruling in Hernaez has not been reiterated by this Court. On the other hand, this Court in Lacorda v.
Intermediate Appellate Court,59 ruled that:

While it is true that the oIIer to repurchase was made within the statutory period both the trial and appellate courts
Iound as a Iact that the petitioners did not really intend to derive their livelihood Irom it but to resell part oI it Ior a
handsome proIit. It is now settled that homesteaders should not be allowed to take advantage oI the salutary policy behind
the Public Land Law to enable them to recover the land in question Irom vendees only to dispose oI it again at much
greater proIit. (Simeon v. Pea, L-29049, Dec. 29, 1970, 36 SCRA 619 and other cases cited therein.)60

In a case oI recent vintage, Fontanilla, Sr. v. Court oI Appeals,61 this Court reiterated the doctrine that:

The Ioregoing construction is merely in keeping with the purpose oI Section 119 "to enable the Iamily oI the
applicant or grantee to keep their homestead" Ior it is well settled that the law must be construed liberally in order to
carry out that purpose." As we held in Ferrer v. Magente

"x x x The applicant Ior a homestead is to be given all the inducement that the law oIIers and is entitled to its Iull
protection. Its blessings, however, do not stop with him. This is particularly so in this case as the appellee is the son oI the
deceased. There is no question then as to his status oI being a legal heir. The policy oI the law is not diIIicult to
understand. The incentive Ior a pioneer to venture into developing virgin land becomes more attractive iI he is assured
that his eIIort will not go Ior naught should perchance his liIe be cut short. This is merely a recognition oI how closely
bound parents and children are in Filipino Iamily. Logic, the sense oI Iitness and oI right, as well as pragmatic
considerations thus call Ior continued adherence to the policy that not the individual applicant alone but those so closely
related to him as are entitled to legal succession may take Iull advantage oI the beneIits the law conIers.62

On the third issue, we agree with respondents' contention that petitioners are obliged to execute a notarized deed
oI absolute sale over the property upon payment oI the P150,000.00 balance oI the purchase price oI the property. A
contract oI sale is a consensual contract. Upon the perIection oI the contract, the parties may reciprocally demand
perIormance. The vendee may compel transIer oI ownership oI the object oI the sale, and the vendor may require the
vendee to pay the thing sold. In this case, the balance oI the purchase price oI the property was due on or beIore December
31, 1993.

IN VIEW OF ALL THE FOREGOING, the Petition is DENIED Ior lack oI merit. The Decision oI the Court oI
Appeals in CA-G.R. CV No. 76526 is AFFIRMED with MODIFICATION. Petitioners are ORDERED to execute in Iavor
oI respondents a Deed oI Absolute Sale over the property upon payment oI P150,000.00, the balance oI the purchase
price. This is without prejudice to any action the Secretary oI the Department oI Environment and Natural Resources may
take on the sale oI the property by the petitioners to the respondents. No costs. SO ORDERED.

11. GABELO VS. CA 31 SCRA 3 (1999 |G.R. No. 111743. October 8, 1999|
Visitacion Gabelo, Erlinda Abella, Petra Perez, Erlinda Traquena, Ben Cardinal, Eduardo Traquena, Leopoldo Traquena, MariIe Tubalas, Ulysis
Mateo, Jocelyn Fernandez, AlIonso Placido, Leonardo Traquena, Susan Rendon And Mateo Trinidad, Petitioners, Vs. Court OI Appeals, Ursula
Maglente, Consolacion Berja, Mercedita Ferrer, Thelma Abella, Antonio Ngo, And Philippine Realty Corporation, Respondents.

D E C I S I O N
PURISIMA, J.:
This is a Petition Ior Review on Certiorari under Rule 45 oI the Revised Rules oI Court, oI the decision oI the
Court oI Appeals, dated April 29, 1993, in CA-G.R. CV No. 33178, aIIirming the decision oI the Regional Trial Court oI
Manila, Branch 38, in Civil Case No. 89-48057, entitled 'Philippine Realty Corporation vs. Ursula Maglente, et al.,
declaring the deIendants (herein respondents) as the rightIul party to purchase the land under controversy, and ordering
the plaintiII, Philippine Realty Corporation (PRC, Ior brevity), to execute the corresponding Contract oI Sale/Contract to
Sell in Iavor oI the deIendants aIorenamed.

The antecedent Iacts culminating in the Iiling oI the present petition are as Iollows:
On January 15, 1986, Philippine Realty Corporation, owner oI a parcel oI land at 400 Solana Street, Intramuros,
Manila, with an area oI 675.80 square meters, and covered by TransIer CertiIicate oI Title No. 43989, entered into a
Contract oI Lease thereover with the herein private respondent, Ursula Maglente. The lease was Ior a period oI three (3)
years at a monthly rental oI P3,000.00 during the Iirst year, P3,189.78 per month in the second year and P3,374.00
monthly Ior the third year. The lease contract stipulated:

'12. That the LESSOR shall have the right to sell any part oI the entire leased land Ior any amount or
consideration it deems convenient, subject to the condition, however, that the LESSEE shall be notiIied about it sixty (60)
days in advance; that the LESSEE shall be given the Iirst priority to buy it; and in the event that the LESSEE cannot
aIIord to buy, the Iinal buyer shall respect this lease Ior the duration oI the same, except in cases oI exproriation.

It also prohibited the lessee to 'cede, transIer, mortgage, sublease or in any manner encumber the whole or part oI
the leased land and its improvements or its rights as LESSEE oI the leased land, without the previous consent in writing oI
the LESSOR contained in a public instrument.

However, aIter the execution oI the lease agreement, respondent Maglente started leasing portions oI the leased
area to the herein petitioners, Visitacion Gabelo, Erlinda Abella, Petra Perez, Erlinda Traquena, Ben Cardinal, Eduardo
Traquena, Leopoldo Traquena, MariIe Tubalas, Ulysis Mateo, Jocelyn Fernandez, AlIonso Placido, Leonardo Traquena,
Susan Rendon and Mateo Trinidad, who erected their respective houses thereon.

On March 9, 1987, when the lease contract was about to expire, the Philippine Realty Corporation, through its
Junior Trust and Property OIIicers, Mr. Leandro Buguis and Mr. Florentino B. Rosario, sent a written oIIer to sell subject
properties to respondent Ursula Maglente. The said letter stated:

'We wish to inIorm you that the Archdiocese oI Manila has now decided to open Ior sale the properties it own
(sic) in the District oI Intramuros, Manila. However, beIore we acccept oIIers Irom other parties we are oI course giving
the Iirst priority to our tenants or lessees oI Intramuros lots.

Responding to such written oIIer, Maglente wrote a letter, dated February 2, 1988, to the Roman Catholic
Archbishop oI Manila maniIesting an intention to exercise her right oI Iirst priority to purchase the property as stipulated
in the lease contract.

On February 15, 1988, a Memorandum on the oIIer oI Maglente to purchase the property was prepared and
presented to Msgr. Domingo Cirilos, president oI Philippine Realty Corporation, at the oIIered price oI P1,800.00 per
square meter or Ior a total amount oI P1,216,440.00, with a downpayment oI P100,000.00; the balance oI the purchase
price payable within ten (10) years with interest at the rate oI eighteen (18) percent per annum. Msgr. Cirilos Iound the
oIIer acceptable and approved the same.

On May 11, 1988, Maglente gave a partial downpayment oI P25,000.00 and additional P25,000.00 on May 20,
1988. In a letter, dated January 28, 1989, Maglente inIormed the said corporation that there were other persons who were
her co-buyers, actually occupying the premises, namely: Consolacion Berja, Mercedita Ferrer, Thelma Abella and
Antonio Ngo within their respective areas oI 100, 50, 60 and 400 square meters.

On January 30, 1989 Maglente paid her back rentals oI P60,642.16 and P50,000.00 more, to complete her
downpayment oI P100,000.00.

On February 1989, Philippine Realty Corporation (PRC) received copy oI a letter sent by the herein petitioners to
the Archbishop oI Manila, Jaime Cardinal Sin, expressing their desire to purchase the portions oI subject property on
which they have been staying Ior a long time. And so, PRC met with the petitioners who apprised the corporation oI their
being actual occupants oI the leased premises and oI the impending demolition oI their houses which Maglente threatened
to cause. Petitioners then asked PRC to prevent the demolition oI their houses which might result in trouble and violence.

On February 23, 1989, in order to resolve which group has the right to purchase subject property as between the
petitioners/sublessees oI Maglente, and respondent Maglente, and her co-buyers, PRC brought a Complaint in Interpleader
against the herein petitioners and private respondents, docketed as Civil Case No. 89-48057 beIore Branch 38 oI the
Regional Trial Court oI Manila.

On March 11, 1991, aIter trial on the merits, the lower court oI origin rendered judgment in Iavor oI respondent
Maglente and her group, disposing thus:

'WHEREFORE, premises considered, judgment is hereby rendered as Iollows:
1. Declaring the deIendants Ursula Maglente, Consolacion Berja, Mercedita Ferrer, Thelma Abella and Antonio
Ngo as the rightIul party to purchase the land in controversy; and
2. Ordering plaintiII Philippine Realty Corporation to execute the corresponding contract oI sale/contract to sell
in Iavor oI the deIendants aIorementioned in accordance with this Decision within thirty (30) days Irom notice thereoI.

DissatisIied with the aIoresaid decision below, the Gabelo group (petitioners here) appealed to the Court oI
Appeals, which aIIirmed the disposition oI the trial court appealed Irom.

Undaunted, petitioners Iound their way to this Court via the present petition, assigning as sole error the ruling oI
the Court oI Appeals upholding the right oI the private respondents, Consolacion Berja and Antonio Ngo, to purchase
subject property.

Petitioners theorize that they are tenants oI Ursula Maglente on the land in dispute, which they are occupying, and
as such actual occupants they have the preIerential right to purchase the portions oI land respectively occupied by them;
that the private respondents, Thelma Abella and Antonio Ngo, have never been occupants oI the contested lot, and that, as
deIined in the Pre-trial Order|1| issued below, the issue Ior resolution should have been limited to whether or not Berja
and Ngo actually occupied the premises in question because occupation thereon is the basis oI the right to purchase
subject area.

Petitioners` contention is untenable. There is no legal basis Ior the assertion by petitioners that as actual
occupants oI the said property, they have the right oI Iirst priority to purchase the same.

As regards the Ireedom oI contract, it signiIies or implies the right to choose with whom to contract. PRC is thus
Iree to oIIer its subject property Ior sale to any interested person. It is not duty bound to sell the same to the petitioners
simply because the latter were in actual occupation oI the property absent any prior agreement vesting in them as
occupants the right oI Iirst priority to buy, as in the case oI respondent Maglente. As a matter oI Iact, because it (PRC)
contracted only with respondent Maglente, it could even evict the petitioners Irom the premises occupied by them
considering that the sublease contract between petitioners and Maglente was inked without the prior consent in writing oI
PRC, as required under the lease contract. Thus, although the other private respondents were not parties to the lease
contract between PRC and Maglente, the Iormer could Ireely enter into a contract with them.

So also, the contract oI sale having been perIected, the parties thereto are already bound thereby and petitioners
can no longer assert their right to buy. It is well-settled that a contract oI sale is perIected the moment there is a meeting
oI the minds oI the contracting parties upon the thing which is the object oI the contract and upon the price.|2| From the
time a party accepts the other party`s oIIer to sell within the stipulated period without qualiIication, a contract oI sale is
deemed perIected.|3|

In the case under consideration, the contract oI sale was already perIected - PRC oIIered the subject lot Ior sale to
respondent Maglente and her group through its Junior Trust and Property OIIicers. Respondent Maglente and her group
accepted such oIIer through a letter addressed to the Roman Catholic Archbishop oI Manila, dated February 2, 1988,
maniIesting their intention to purchase the property as provided Ior under the lease contract. Thus, there was already an
oIIer and acceptance giving rise to a valid contract. As a matter oI Iact, respondents have already completed payment oI
their downpayment oI P100,000.00. ThereIore, as borne by evidence on record, the requisites under Article 1318 oI the
Civil Code|4| Ior a perIected contract have been met.
Anent petitioners` submission that the sale has not been perIected because the parties have not aIIixed their
signatures thereto, suIIice it to state that under the law, the meeting oI the minds between the parties gives rise to a
binding contract although they have not aIIixed their signatures to its written Iorm.|5|

WHEREFORE, the petition is hereby DENIED Ior lack oI merit and the decision oI the Court oI Appeals in CA-
G.R. CV No. 33178 AFFIRMED. No pronouncement as to costs. SO ORDERED.

1. PILIPINAS SHELL PETROLEUM CORP VS. GABONSENG 49 SCRA 35 (
G.R. No. 163562 July 21, 2006
Pilipinas Shell Petroleum Corporation, Petitioner, - versus -Carlos Ang Gobonseng, Jr., Respondent.

D E C I S I O N
GARCIA, J
In this petition Ior review under Rule 45 oI the Rules oI Court, petitioner Pilipinas Shell Petroleum Corporation
(Pilipinas Shell, hereaIter) seeks the reversal and setting aside oI the Decision|1| dated October 10, 2003 oI the Court oI
Appeals (CA) in CA-G.R. CV No. 63777, as reiterated in its Resolution|2| oI April 13, 2004, reversing an earlier decision
oI the Regional Trial Court (RTC) oI Negros Oriental, Dumaguete City, Branch 40, in a suit Ior collection oI rentals with
damages thereat commenced by the herein respondent Carlos Ang Gobonseng against, among others, the herein
petitioner. The rentals sought to be collected pertain to a gasoline station at Lot No. 853-A, located at corner Real
Urdaneta streets, Dumaguete City.

The Iactual backdrop:
Sometime on January 5, 1982, one Julio Tan Pastor, original owner oI Lot No. 853-A, sold it to the respondent Ior
P1.3 million, albeit in the covering Deed oI Absolute Sale executed by the parties, the amount indicated was only
P13,000.00, evidently to avoid payment oI the correct legal Iees in the registration and transIer oI title to the vendee. On
the same date, however, the parties, in order to reIlect their real intentions, executed a Memorandum oI Agreement
thereunder spelling out the true terms and conditions oI their transaction, to wit:

'1. Purchase price is P1,300,000.00 (P1.3 million);
2. P500,000.00 shall be paid upon the execution oI the Deed oI Sale. Out oI this amount part shall be paid to
whatever mortgage obligation there is with the Philippines National Bank and/or any other bank involving lot no. 853-A;
and its improvements;
3. Balance oI P800,000.00 will be paid in Iive (5) years at a yearly payment oI P160,000.00 the Iirst payment to
be paid one year Irom date hereoI and succeeding Iour installments every year thereaIter;
4. All obligations or liabilities on or involving lot no. 853-A or its improvements such as electric bills, water
bills, telephone bills, etc., shall be Ior the account oI the VENDOR which iI not paid will be automatically deductible
Irom the Iirst payment oI the remaining balance;
5. Real property taxes Iull Ior 1981 over lot no. 853-A and its improvements, capital gains tax, documentary
stamp tax, sales tax shall be shouldered by the VENDOR; Registration expenses shall be shouldered by the VENDEE;
6. Upon the execution oI the Deed oI Sale, ownership and possession shall automatically pass to the VENDEE;
The VENDOR agrees to pay a penalty oI P500.00 Ior every day oI delay in vacating the property;

Respondent, armed with the inaccurate Deed oI Absolute Sale earlier executed by Julio Tan Pastor, and
notwithstanding the Memorandum oI Agreement aIorementioned, succeeded in registering the conveying instrument with
the Registry oI Deeds and was then issued TransIer CertiIicate oI Title (TCT) No. 13607 over Lot No. 853-A in his own
name.

In the meantime, vendor Tan Pastor presented Ior encashment the postdated checks issued to him by
respondent as payment Ior the subject lot. UnIortunately, the drawee bank dishonored those checks Ior a variety oI
reasons, namely, drawn against insuIIicient Iunds, stop payment order or closed account. This prompted vendor Tan
Pastor to Iile against respondent a criminal action Ior violation oI Batas Pambansa (BP) 22, otherwise known as the
Bouncing Checks Law, docketed as Criminal Case No. 7071, entitled People oI the Philippines v. Carlos Ang Gobonseng,
Jr., oI the xxx.

It appears that prior to the sale oI Lot No. 853-A to respondent, Tan Pastor had been operating thereon a
gasoline station, Iirst with Flying A, subsequently with Getty Oil, and later with Basic Land Oil and Energy Corporation
(BLECOR).
In 1982, Pilipinas Shell acquired BLECOR, including all the latter`s assets, liabilities and contracts.
ThereaIter, Tan Pastor remained as the distributor oI Pilipinas Shell products and continued to operate the gas station on
Lot No. 853-A until 1991.

Sometime in 1991, respondent sent demand letters to Pilipinas Shell Ior payment by the latter oI rentals Ior
its occupancy and use oI his property. Responding to said letters, Pilipinas Shell disowned liability Ior the rentals,
explaining that the gas station on Lot No. 853-A was a dealer-owned Iilling station, hence the demands Ior rental payment
must be directed to Tan Pastor. In any event, Pilipinas Shell, hoping Ior an amicable settlement oI the controversy
between respondent and Tan Pastor relative to Lot No. 853-A, Iacilitated a meeting between the two.

True enough, on January 30, 1992, thru the eIIorts oI Pilipinas Shell, Tan Pastor and respondent executed an
Agreement|3| embodying the Iollowing terms and conditions:

'The parties herein have agreed, as Iollows:
1. For humanitarian, peace, and other considerations, Carlos A. Gobonseng, Jr., the OWNER, hereby allows
Julio Tan Pastor the use oI Lot No. 853-A at Corner Real-Urdaneta Streets, Dumaguete City, covered by TCT No. 13607,
as a gas/ Iuel/ gasoline/ oil/ Iilling, selling and servicing, station, and Ior such other use appropriate, or related, to the
same, without any rental Ior a period oI THREE (3) YEARS Irom January 1st 1992, or up to December 31st 1994, NON-
EXTENDIBLE;
2. Consistent with the Ioregoing, Julio Tan Pastor is authorized to enter into any business contract with a third
person Ior the use oI said property Ior a period oI THREE (3) YEARS Irom JANUARY 1st 1992 or up to DECEMBER
31st 1994, the DEADLINE;
3. No construction, renovation or repair, shall be done by Julio Tan Pastor, without the PRIOR written consent
oI the owner, Carlos A. Gobonseng, Jr.;
4. All improvements, including old and new constructions, repairs, replacements, and other removable items,
shall automatically belong in ownership to the owner, Carlos A. Gobonseng, Jr., upon and at the time oI completion oI
construction oI work, installation or repair or replacement, excluding those owned or constructed by Shell Petroleum
Corp., or Francisco 'Baludoy Salva, which shall automatically belong to Carlos Ang Gobonseng, Jr. upon the expiration
oI the lease contract which the latter executed in Iavor oI Francisco C. Salva;
5. Subject to the terms and conditions stipulated in the contract oI lease between Carlos Ang Gobonseng, Jr. and
Francisco C. Salva, Julio Tan Pastor and children or heirs, or Lessee, or third person, obligate and undertake to VACATE
Lot No. 853-A NOT later than December 31, 1994. On December 31, 1994, PEACEFUL POSSESSION oI the property
and premises shall be TURNED OVER to the owner, Carlos A. Gobonseng, Jr., otherwise, a penalty oI P5,000.00 Ior
every day oI delay in vacating the premises is imposed;
6. All the parties herein have no more Iurther claimes against each other, and waived, abandoned, relinquished,
any such claim or claims;

ThereaIter, Tan Pastor executed and Iiled in Criminal Case No. 7071 an AIIidavit oI Desistance thereunder
making known his lack oI interest in Iurther pursuing the case, which was eventually dismissed.

The controversy could have ended there were it not Ior the Iact that on November 13, 1992, in the RTC oI Negros
Oriental, respondent Iiled a civil suit Ior collection oI rentals and damages against Tan Pastor and Pilipinas Shell. In his
complaint, docketed as Civil Case No. 10389, respondent, as plaintiII, alleged ownership oI Lot No. 853-A on the basis oI
TCT No. 13607. He Iurther averred that since 1982, he had been paying the realty taxes due thereon and that Tan Pastor
and Pilipinas Shell continued occupying said lot and using the same as a gasoline and service station without paying
rentals thereIor. He thus prayed that judgment be rendered ordering Tan Pastor and petitioner to pay him rentals and
damages Ior their use and occupation oI his lot Irom 1982 to 1991.

In its Answer, Pilipinas Shell countered that plaintiII`s claim Ior unpaid rentals had no basis because the
gasoline station on his property is a dealer-owned Iilling station, as evidenced by a certiIication|4| issued by the president
oI the Shell Dealers Association oI the Philippines. Pilipinas Shell likewise emphasized that Lot No. 853-A was initially
the subject oI controversy between respondent and Tan Pastor until 1992 when, thru its eIIorts, the warring parties
executed an Agreement whereunder both (Tan Pastor and respondent) made it expressly clear that they 'have no more
Iurther claims against each other, and waived, abandoned, relinquished, any such claim or claims. On this premise,
Pilipinas Shell argued that respondent`s demand Ior rentals is devoid oI any legal or Iactual basis.

In the meantime, Tan Pastor died, leaving his heirs who were accordingly substituted as Pilipinas Shell`s co-
deIendant in the case.

On March 15, 1999, the trial court came out with its decision|5| rendering judgment Ior Pilipinas Shell and
its co-deIendants, to wit:

WHEREFORE, premises considered, plaintiII`s complaint Ior collection oI rental and damages against Pilipinas
Shell and the heirs oI Julio Tan Pastor is hereby dismissed Ior lack oI cause oI action against them.

Further, plaintiII (Gobonseng) is hereby ordered to pay deIendant Pilipinas Shell the amount oI P150,000.00 Ior
the other deIendants, the heirs oI Julio Tan Pastor.

The cross-claim Iiled by deIendant Pilipinas Shell Petroleum Corporation against its co-deIendants, the heirs oI
Julio Tan Pastor is hereby denied Ior lack oI legal basis.SO ORDERED.

ThereIrom, respondent went to the CA.
As stated at the threshold hereoI, the CA, in its Decision|6| oI October 10, 2003, reversed that oI the trial
court, thus:

'WHEREFORE, in view oI the Ioregoing considerations, the decision appealed Irom is hereby REVERSED and
SET ASIDE and a new one is entered, ordering appellee Pilipinas Shell Petroleum Corporation to pay unto appellant:
P8,000 per month as reasonable compensation Ior the use and occupation oI Lot No. 853-A as a Shell reIilling station
starting Irom 1982 until 1991 plus interest at 12 per annum until Iully paid and attorney`s Iees oI 20 oI the total
amount due the appellant, without prejudice to its cross-claim against its co-deIendants, which is hereby reinstated and
prompt resolution oI which by the court a quo is hereby directed. SO ORDERED.

With its motion Ior reconsideration having been denied by the CA in its equally challenged Resolution|7| oI
April 13, 2004, Pilipinas Shell is now with this Court raising the Iollowing issues:

1) Whether or not the decision oI the Honorable Court oI Appeals in upholding the ownership by
Respondent oI Lot 853-A is in accordance with the provision oI Article 1496 oI the Civil Code oI the Philippines
considering that there was no delivery yet to the Respondent oI the property which was the subject oI a contract oI sale
between him and Julio Tan Pastor;

2) Whether or not the decision oI the Honorable Court oI Appeals making the Petitioner liable Ior the
payment oI rentals Ior the use oI Lot 853-A by Julio Tan Pastor as an operator oI a dealer-owned Iilling station is
consistent with Article 1157 oI the Civil Code oI the Philippines which provides Ior the legal sources oI obligation;

3) Whether or not the decision oI the Honorable Court oI Appeals in reversing the Iindings oI Iacts oI
the trial court on the ground that the judge who penned the decision is not the one who heard the testimonies oI all the
witnesses, is in accordance with the general rule that the trial court`s decision is to be given credence and accorded due
preIerence by the appellate court.



Then, as now, respondent insists that he had suIIiciently established his ownership oI Lot No. 853-A thru
the Deed oI Absolute Sale, the Memorandum oI Agreement between him and Tan Pastor, TCT No. 13607 and his IaithIul
and religious payments oI the real estate taxes due on the property. To him, the existence oI a gasoline station in his
property since 1982 entitles him to the payment oI rentals by Pilipinas Shell.

Pilipinas Shell, on the other hand, contends that respondent is without cause oI action against it. It asserts
non-liability Ior rentals because the gasoline station on Lot 853-A was operated by Tan Pastor as a dealer-owned station.
Expounding on this concept, Pilipinas Shell explained that in a dealer-owned Iilling station, the owner oI the lot is at the
same time the operator oI the station, with Pilipinas Shell merely providing the dealer-owner with certain equipment and
Iacilities Ior the operation oI his gas station. Pilipinas Shell Iurther alleged that it was made aware oI the change in the
ownership oI Lot No. 853-A only in the latter part oI 1991 when it received a letter Irom respondent demanding payment
oI rentals thereIor.

Apparently, Tan Pastor did not see the need to inIorm Pilipinas Shell oI the change in ownership oI the
subject lot primarily because according to him, ownership oI the lot remained with him until Iull payment oI the agreed
price shall have been eIIected. As it appears, Pilipinas Shell totally believed Tan Pastor`s representation since there was
indeed a pending criminal case Ior violation oI BP 22 against respondent, coupled by the Iact that Tan Pastor continued to
be in possession and use oI Lot No. 853-A as a Iilling and service station Ior Pilipinas Shell`s petroleum products until
1992.
We grant the petition.
Anent the issue oI ownership oI Lot No. 853-A, we hold that this particular question has already been
rendered moot by subsequent events and acts oI respondent and Tan Pastor. SigniIicantly, respondent and Tan Pastor both
admit and agree that said lot was the subject oI the Deed oI Absolute Sale between them. Despite contrasting allegations
on the payment oI the contract price, both agreed on the object and consideration oI the sale.

It must be stressed that a contract oI sale is not a real, but a consensual contract. In Buenaventura v. Court oI
Appeals,|8| this Court made it clear that a contract oI sale, being consensual in nature, becomes valid and binding upon
the meeting oI the minds oI the parties as to the object and the price. II there is a meeting oI the minds, the contract is
valid despite the manner oI payment, or even iI the manner oI payment was breached.

In Iine, it is not the act oI payment oI the contract price that determines the validity oI a contract oI sale. The
manner oI payment and the payment itselI oI the agreed price have nothing to do with the perIection oI the contract.
Payment oI the price goes into the perIormance oI the contract. Failure oI a party to eIIect payment oI the contract price
results in a right to demand the IulIillment or cancellation oI the obligation under an existing valid contract.|9|

Here, the controversy between Tan Pastor and respondent with respect to the manner oI payment or the breach
thereoI does not vitiate the validity and binding eIIect oI their contract oI sale. In this light, respondent cannot thus be
Iaulted Ior registering the document oI sale and successIully securing TCT No. 13607 covering Lot No. 853-A in his
name.
However, coming to the more basic issue herein oI whether or not respondent is entitled to the payment oI rentals
by Pilipinas Shell Ior the use and occupancy oI Lot No. 853-A, the Court Iinds and so holds that respondent`s claim has
no basis in Iact and in law.

To the mind oI the Court, respondent`s entitlement to rentals turns on the nature oI the gasoline station being
operated by Tan Pastor on the subject lot. To resolve this, we must necessarily venture into determining whether the
gasoline station thereat was dealer-owned or company-owned. Undoubtedly, this exercise involves an examination oI
Iacts which is normally beyond the ambit oI this Court. For, well-settled is the rule that this Court, not being a trier oI
Iacts, does not normally embark in the evaluation oI evidence adduced during trial. The rule, however, admits oI
exceptions. So it is that in Sampayan v. Court oI Appeals,|10| the Court held:

'|i|t is a settled rule that in the exercise oI the Supreme Court's power oI review, the Court is not a trier oI Iacts
and does not normally undertake the re-examination oI the evidence presented by the contending parties' during the trial
oI the case considering that the Iindings oI Iacts oI the CA are conclusive and binding on the Court. However, the Court
had recognized several exceptions to this rule, to wit: (1) when the Iindings are grounded entirely on speculation, surmises
or conjectures; (2) when the inIerence made is maniIestly mistaken, absurd or impossible; (3) when there is grave abuse oI
discretion; (4) when the judgment is based on a misapprehension oI Iacts; (5) when the Iindings oI Iacts are conIlicting;
(6) when in making its Iindings the Court oI Appeals went beyond the issues oI the case, or its Iindings are contrary to the
admissions oI both the appellant and the appellee; (7) when the Iindings are contrary to the trial court; (8) when the
Iindings are conclusions without citation oI speciIic evidence on which they are based; (9) when the Iacts set Iorth in the
petition as well as in the petitioner's main and reply brieIs are not disputed by the respondent; (10) when the Iindings oI
Iact are premised on the supposed absence oI evidence and contradicted by the evidence on record; and (11) when the
Court oI Appeals maniIestly overlooked certain relevant Iacts not disputed by the parties, which, iI properly considered,
would justiIy a diIIerent conclusion.

To the Court, exceptions (5), (7) and (11), above, Iind application in the instant case. And aIter a careIul
evaluation oI the evidence, the Court Iinds Ior the petitioner.

To begin with, the trial court`s conclusion that Tan Pastor operated the gasoline station in his capacity as dealer-
owner is well-supported by the evidence on record. Pilipinas Shell has shown clear and convincing prooI that the outlet at
Lot No. 853-A was dealer-owned gas station as per the CertiIication oI the president oI the Shell Dealers Association oI
the Philippines. It may be that such a certiIication, coming as it does Irom the president oI petitioner`s dealers association,
does not warrant the probative value it otherwise deserves. It bears emphasis, however, that respondent himselI does not
dispute the Iact that he never demanded rental payments Irom Tan Pastor Irom 1982 to 1991. It was only aIter the
criminal case Ior bouncing checks was dismissed that he claimed entitlement to rentals. Prior thereto, he never demanded
Ior any rental payment, much less instituted any action to enIorce the same.

Besides, and as correctly observed by the trial court, there was an admission by the respondent himselI that, since
1982 up to 1991, he had been in the possession oI Lot No. 853-A and nobody else. Coming as it does Irom the respondent
no less, that statement commands great weight and respect. The lower court succinctly summarizes:

'There was no legal basis Ior plaintiII Carlos Gobonseng, Jr. to demand payment Irom Pilipinas Shell as he
himselI admitted that he was in possession oI the property Irom 1982 to 1991. As his testimony is against his interest, it
became more believable the lack oI legal anchorage to base his demand Ior rental payment Irom 1982 to 1992. No less
than the Court who asked him the questions and hereunder is his answer:
'Court:
Q -- Who was in possession oI the property since 1982 up to 1991?
A -- I am the actual possessor Irom 1982 to 1991.
Q -- Is it not a Iact that it was Julio Tan Pastor`s who was in possession oI that property since 1982 and up to
1991?
A -- No, it is not, Your Honor.
x x x x x x
Q -- You mean to tell the Court that prior to 1992 Julio Tan Pastor was not in possession oI the property in
question?
A -- Not in possession, Your Honor. As an operator, Your Honor, selling the shell products, Your Honor.
Q -- Who was in possession oI that property?
A -- Me, myselI, Your Honor. (TSN, p. 5, 5-29-96)

What is more, respondent and Tan Pastor had already executed an Agreement|11| whereunder they declared that
they had 'no more Iurther claims against each other, and waived, abandoned, relinquished, any such claim or claims. II
anything else, such declaration evidenced respondent`s stance in not collecting rentals Ior the use oI the subject property
as he even in Iact allowed Tan Pastor the 'use oI Lot No. 853-A at Corner Real-Urdaneta Streets, Dumaguete City,
covered by TCT No. 13607, as a gas/ Iuel/ gasoline/ oil/ Iilling, selling and servicing, station, and Ior such other use
appropriate, or related, to the same, without any rental Ior a period oI THREE (3) YEARS Irom January 1st 1992, or up to
December 31st 1994, NON-EXTENDIBLE. (Emphasis supplied.)

Thus, respondent is now estopped Irom demanding payment oI rentals Irom Tan Pastor or Pilipinas Shell. In Bank
oI the Philippine Islands v. Casa Montessori International,|12| we ruled:

'Estoppel precludes individuals Irom denying or asserting, by their own deed or representation, anything contrary
to that established as the truth, in legal contemplation. Our rules on evidence even make a juris et de jure presumption that
whenever one has, by one`s own act or omission, intentionally and deliberately led another to believe a particular thing to
be true and to act upon that belieI, one cannot in any litigation arising Irom such act or omission be permitted to IalsiIy
that supposed truth.


Lastly, respondent insists that Pilipinas Shell had recognized his ownership oI Lot No. 853-A and his right to
collect rentals when the latter, through a letter,|13| sought his permission to reIurbish the gasoline station located thereat.

We are not persuaded.

A careIul scrutiny oI the letter reIerred to would reveal that it was made and sent to respondent on February 7,
1992, a Iew days aIter Tan Pastor and respondent had made amends and executed an Agreement to waive any and all
Iurther claims against each other. Clearly, Pilipinas Shell was made aware oI this development and the change in the
ownership oI Lot No. 853-A. To reiterate, Pilipinas Shell was even instrumental in this amicable settlement oI the
controversy between respondent and Tan Pastor. Hence, it is but proper Ior Pilipinas Shell to address respondent in
seeking permission to make any improvements on the lot.

We note that in the decision under review, the CA made a Iinding that there is not enough evidence Ior it
to competently pass upon and make a ruling on the nature oI the gasoline station situated on Lot No. 853-A. We rule
and so hold that such a Iinding all the more strengthens the trial court`s decision as more in accord with the evidence
adduced in the course oI the proceedings thereat. As it is, the trial court`s decision reIlects and shows its distinct
advantage oI having heard the witnesses themselves, observed their deportment and their manner oI testiIying and
behavior during trial.

Finally, respondent submits that the CA correctly set aside the trial court`s decision on the ground that the judge
who heard most oI the witnesses was other than the judge who ultimately penned the decision in the case. On this score,
respondent argues that the Iindings oI Iact oI the trial court cannot be given credence and accorded due deIerence.

The Court does not agree. The circumstance that the judge who wrote the decision had not heard the testimonies
oI the witnesses does not automatically taint his decision. Here, the decision oI the trial court made reIerence to several
transcripts oI stenographic notes taken in the course oI trial. Likewise, several exhibits were reIerred to and used as
evidence to substantiate the trial court`s conclusions. The validity oI a decision is not necessarily impaired by the Iact that
its ponente only took over Irom a colleague who had earlier presided at the trial. This circumstance alone cannot be
the basis Ior the reversal oI the trial court`s decision unless there is a clear showing oI grave abuse oI discretion in the
appreciation or a misapprehension oI the Iacts,|14| oI which we Iind none.

WHEREFORE, the instant petition is GRANTED and the assailed Decision and Resolution oI the CA are
REVERSED and SET ASIDE. The decision dated March 15, 1999 oI the RTC in Civil Case No. 10389 is REINSTATED.
No pronouncement as to costs .SO ORDERED.

13. BALADAD VS. RUBLICO 595 SCRA 15 (9 G.R. No. 160743 August 4, 2009
CORNELIA BALADAD (Represented by Heinrich M. Angeles and Rex Aaron A. Baladad),Petitioner, - versus -SERGIO A. RUBLICO and
SPOUSES LAUREANO F. YUPANO, Respondents.

DECISION
NACHURA, J.:
BeIore us is a petition Ior review oI the November 5, 2002 Decision|1| oI the Court oI Appeals (CA), as well as
its November 10, 2003 Resolution|2| in CA-G.R. CV No. 34979, which reversed and set aside the September 9, 1991
Decision|3| oI Branch 133 oI the Regional Trial Court (RTC) oI Makati City, in a complaint Ior annulment oI sale,
cancellation oI title and damages|4| Iiled by petitioner Cornelia Baladad against herein respondents.

Below are the antecedent Iacts.
Two parcels oI land located in what was then called the Municipality oI Makati, Province oI Rizal were registered
in the name oI Julian Angeles on December 20, 1965 under TransIer CertiIicate oI Title (TCT) No. 155768.|5| On
December 3, 1968, Julian and Corazon Rublico, aIter co-habiting Ior some time, got married. Julian was already 65 years
old then, while Corazon was already 67.|6| At that time, Corazon already had a son, respondent Sergio A. Rublico, by
TeoIilo Rublico, who died sometime beIore the outbreak oI the Second World War.|7| AIter TeoIilo`s death, Corazon
cohabited with PanIilo de Jesus and then, later, with Julian. Julian died on February 2, 1969|8| leaving no compulsory
heirs|9| except his wiIe and his brother, Epitacio.

On February 4, 1985, while on her death bed, Cornelia was surrounded by Iour individuals her niece, petitioner
Cornelia Baladad; her nephew, Vicente Angeles; a certain Rosie Francisco; and notary public Atty. Julio Francisco who
had been called, accompanied by Cornelia herselI to Corazon`s house, to notarize a deed entitled Extrajudicial Settlement
oI Estate with Absolute Sale. In his testimony, Atty. Francisco said that Corazon imprinted her thumbmark on the
document aIter he read and explained the contents thereoI in Tagalog to her.|10| In the said document, Corazon and
Epitacio adjudicated unto themselves the two lots registered in the name oI Julian with three-Iourths (/) oI the property
going to Corazon and the remaining one-Iourth (/) to Epitacio. The document also stated that both Corazon and Epitacio
conveyed by way oI absolute sale both their shares in the said lots in Iavor oI Cornelia, Epitacio`s daughter, in exchange
Ior the amount oI P107,750.00. Corazon`s thumbmark was imprinted at the bottom oI the said deed, while Vicente,
Epitacio`s son, signed in behalI oI Epitacio by virtue oI a power oI attorney.|11| There was no signature oI Cornelia on
the said document.

Two days later, Corazon passed away.
Title over the said lots remained in the name oI Julian, but on July 20, 1987, more than two years aIter Corazon`s
death, respondent Sergio executed an AIIidavit oI Adjudication by Sole Heir oI Estate oI Deceased Person|12|
adjudicating unto himselI the same parcels oI land which had been subject oI the deed oI sale between Corazon and
Cornelia. On October 27, 1987, Sergio Iiled a petition Ior reconstitution oI the owner`s copy oI TCT No. 155768 averring
that aIter the death oI Corazon, he tried to locate the copy oI the title but to no avail.|13| The petition was granted on
January 11, 1988|14| and a new owner`s duplicate title (TCT No. 155095) was issued in the name oI Sergio on April 18,
1988.|15|

On May 31, 1988, Sergio sold the two lots to spouses Laureano and Felicidad Yupano Ior P100,000.00.|16|
Sergio`s certiIicate oI title was cancelled and TCT No. 155338 was issued in Iavor oI the Yupanos. On July 26, 1988, the
said title was also cancelled and TCT Nos. 156312|17| and 156313|18| separately covering the two parcels oI land were
issued. On July 17, 1990, Cornelia caused the annotation on the said TCTs oI her adverse claim over the said properties.

Meanwhile, there were seven Iamilies who occupied the lots and paid rentals to Julian and, later, to Corazon.
AIter Corazon`s death, they paid rentals to Cornelia through PaciIica Alvaro, and later to Cornelia`s brother, Vicente,
when Cornelia transIerred her residence to the United States. When the Yupanos demanded payment oI rentals Irom the
tenants, the latter Iiled a complaint Ior interpleader on May 19, 1989. The case was docketed as Civil Case No. 89-3947.
On September 3, 1990, Branch 148 oI the Makati RTC rendered a Decision|19| declaring the Yupanos as the legal and
lawIul owners oI the two lots.

On August 3, 1990, a month beIore the promulgation oI the decision, Cornelia Iiled a complaint Ior annulment oI
sale, cancellation oI title and damages, which is now the subject oI this Rule 45 petition. Cornelia argued that Sergio
knew oI the sale made by Corazon in her Iavor and was even given part oI the proceeds. Cornelia also averred that the
Yupanos could not be considered as buyers in good Iaith, because they only lived a block Irom the disputed properties and
had knowledge that the two lots had been sold to Cornelia prior to Corazon`s death.|20|

For their part, respondents argued that the Extrajudicial Settlement with Absolute Sale dated February 4, 1985
could not have been executed because at the time, Corazon was already dying. Ignacio Rublico, Sergio`s son, also
testiIied that he saw Vicente Angeles holding the hand oI Corazon to aIIix her thumbmark on a blank sheet oI paper.|21|
Sergio also argued that the property was originally bought by his mother, but was only registered in the name oI Julian in
keeping with the tradition at that time.|22|

AIter the trial, Branch 133 oI the Makati RTC ruled in Iavor oI Cornelia.|23| Upon appeal, the CA reversed the
RTC ruling|24| prompting Cornelia to Iile a motion Ior reconsideration,|25| but the same was denied Ior lack oI
merit.|26| Hence, this petition.

The determinative issue is the validity oI the Extrajudicial Settlement oI Estate with Absolute Sale purportedly
executed by Corazon prior to her death.

We Iind in Iavor oI petitioner.

The Extrajudicial Settlement oI Estate with Absolute Sale executed by Corazon and Epitacio through the latter`s
attorney-in-Iact, Vicente Angeles, partakes oI the nature oI a contract. To be precise, the said document contains two
contracts, to wit: the extrajudicial adjudication oI the estate oI Julian Angeles between Corazon and Epitacio as Julian`s
compulsory heirs, and the absolute sale oI the adjudicated properties to Cornelia. While contained in one document, the
two are severable and each can stand on its own. Hence, Ior its validity, each must comply with the requisites prescribed
in Article 1318 oI the Civil Code, namely (1) consent oI the contracting parties; (2) object certain, which is the subject
matter oI the contract; and (3) cause oI the obligation which is established.

During the trial, respondents argued that the document was not valid because at the time it was executed, Corazon
was already weak and could not have voluntarily given her consent thereto. One oI the witnesses Ior the deIense even
testiIied that it was Vicente who placed Corazon`s thumbprint on a blank document, which later turned out to be the
Extrajudicial Adjudication with Absolute Sale. We are, however, inclined to agree with the RTC`s Iinding on this matter,
viz:
Ignacio is not a reliable witness. He was very certain the event took place on February 4, 1985 and Corazon was
already dead. This was his testimony on cross-examination. He had Iorgotten that Corazon died on February 6, 1985 or
two days aIter. So, when conIronted with this contradiction, he had to change his stance and claim that Corazon was still
alive when it happened.|27|

It is also noteworthy that in the course oI the trial, respondents did not question Corazon`s mental state at the time
she executed the said document.

Respondents only Iocused on her physical weakness, arguing that she could not have executed the deed because
she was already dying and, thus, could not appear beIore a notary public.|28| Impliedly, thereIore, respondents indulged
the presumption that Corazon was still oI sound and disposing mind when she agreed to adjudicate and sell the disputed
properties on February 4, 1985.

Respondents also Iailed to reIute the testimony oI Atty. Francisco, who notarized the deed, that he personally read
to Corazon the contents oI the Extrajudicial Settlement oI Estate with Absolute Sale, and even translated its contents to
Tagalog.

And, most important oI all is the Iact that the subject deed is, on its Iace, unambiguous. When the terms oI a
contract are lawIul, clear and unambiguous, Iacial challenge cannot be allowed. We should not go beyond the provisions
oI a clear and unambiguous contract to determine the intent oI the parties thereto, because we will run the risk oI
substituting our own interpretation Ior the true intent oI the parties.

It is immaterial that Cornelia`s signature does not appear on the Extrajudicial Settlement oI Estate with Absolute
Sale. A contract oI sale is perIected the moment there is a meeting oI the minds upon the thing which is the object oI the
contract and upon the price.|29| The Iact that it was Cornelia herselI who brought Atty. Francisco to Corazon`s house to
notarize the deed shows that she had previously given her consent to the sale oI the two lots in her Iavor. Her subsequent
act oI exercising dominion over the subject properties Iurther strengthens this assumption.

Based on these Iindings, we are constrained to uphold the validity oI the disputed deed. Accordingly,
respondent Sergio Rublico never had the right to sell the subject properties to the Yupanos, because he never owned them
to begin with. Nemo dat quod non habet. Even beIore he could inherit any share oI the properties Irom his mother,
Corazon, the latter had already sold them to Cornelia.

The Yupanos, Ior their part, cannot Ieign ignorance oI all these, and argue that Sergio`s certiIicate oI title
was clean on its Iace. Even prior to May 31, 1988, when they bought the properties Irom Sergio, it had been widely
known in the neighborhood and among the tenants residing on the said lots that ownership oI the two parcels oI land had
been transIerred to Cornelia as, in Iact, it was Cornelia`s brother, Vicente, who had been collecting rentals on the said
properties. The Yupanos lived only a block away Irom the disputed lots.|30| The husband, Laureano Yupano, was
relatively close to Julian and to Epitacio and had known Cornelia beIore the latter leIt to live in the United States Irom
1979 to 1983.|31| BeIore he bought the property Irom Sergio, Laureano himselI veriIied that there were tenants who had
been paying rentals to Vicente.|32| All these should have alerted him to doubt the validity oI Sergio`s title over the said
lots. Yet, the Yupanos chose to ignore these obvious indicators.

In Abad v. Guimba,|33| we explained:
|A|s a rule, the purchaser is not required to explore Iurther than what the CertiIicate indicates on its Iace. This
rule, however, applies only to innocent purchasers Ior value and in good Iaith; it excludes a purchaser who has knowledge
oI a deIect in the title oI the vendor, or oI Iacts suIIicient to induce a reasonable prudent man to inquire into the status oI
the property.|34|

We thus declare the AIIidavit oI Adjudication by Sole Heir oI Estate oI Deceased person executed by Sergio
Rublico to be void and without any eIIect. The sale made by him to spouses Yupano is, likewise, declared null and void.
Respondent Sergio Rublico is ordered to return the amount oI P100,000.00 paid to him by spouses Laureano Yupano, less
the amount spent on the acquisition oI the invalid title procured by him with the acquiescence oI the Yupanos.

WHEREFORE, premises considered, the Decision oI the Court oI Appeals in CA-G.R. CV No. 34979 dated
November 5, 2002 is hereby REVERSED and SET ASIDE. Accordingly, the Decision oI the Regional Trial Court oI
Makati dated September 9, 1991 is REINSTATED with MODIFICATION in that:
1. the Extrajudicial Adjudication oI Estate with Absolute Sale dated February 4, 1985 as VALID;
2. the sale between respondent Sergio Rublico and Spouses Laureano Yupano is NULL and VOID. Respondent
Sergio Rublico is ordered to return the P100,000.00 paid by the Yupanos, less the amount spent on the acquisition oI the
invalid title procured by him with the acquiescence oI the Yupanos; and
3. the Register oI Deeds oI Makati is ordered to CANCEL TransIer CertiIicate oI Title Nos. 156312 and 156313
in the name oI Laureano Yupano and, in lieu thereoI, RESTORE TransIer CertiIicate No. 155768.SO ORDERED.

14. CANTEMPRATE VS. CRS REALTY DEV'T CORP. 57 SCRA 49 (9 G.R. No. 171399 May 8, 2009
VICENTA CANTEMPRATE, ZENAIDA DELFIN, ELVIRA MILLAN, FEVITO G. OBIDOS, MACARIO YAP, CARMEN YAP, LILIA CAMACHO, LILIA
MEJIA, EMILIA DIMAS, ESTRELLA EUGENIO, MILAGROS L. CRUZ, LEONARDO ECAT, NORA MASANGKAY, JESUS AYSON, NILO SAMIA and
CARMENCITA LORNA RAMIREZ, Petitioners,vs. CRS REALTY DEVELOPMENT CORPORATION, CRISANTA SALVADOR, CESAR CASAL, BENNIE
CUASON and CALEB ANG, Respondents.

D E C I S I O N
TINGA, J.:
This is a petition Ior review on certiorari1 under Rule 45 oI
the 1997 Rules oI Civil Procedure assailing the decision2 and resolution3 oI the Court oI Appeals in CA-G.R. SP
No. 81859. The Court oI Appeals decision aIIirmed the decision4 oI the OIIice oI the President, which adopted the
decision5 oI the Housing Land Use and Regulatory Board (HLURB) dismissing petitioners` complaint Ior lack oI
jurisdiction, while the resolution denied petitioners` motion Ior reconsideration.

The Iollowing Iactual antecedents are matters oI record.
Herein petitioners Vicenta Cantemprate, Zenaida DelIin, Elvira Millan, Fevito G. Obidos, Macario Yap, Carmen
Yap, Lilia Camacho, Lilia Mejia, Emilia Dimas, Estrella Eugenio, Milagros L. Cruz, Leonardo Ecat, Nora Masangkay,
Jesus Ayson, Nilo Samia, Carmencita Morales and Lorna Ramirez were among those who Iiled beIore the HLURB a
complaint6 Ior the delivery oI certiIicates oI title against respondents CRS Realty Development Corporation (CRS
Realty), Crisanta Salvador and Cesar Casal.7

The complaint alleged that respondent Casal was the owner oI a parcel oI land situated in General Mariano
Alvarez, Cavite known as the CRS Farm Estate while respondent Salvador was the president oI respondent CRS Realty,
the developer oI CRS Farm Estate. Petitioners averred that they had bought on an installment basis subdivision lots Irom
respondent CRS Realty and had paid in Iull the agreed purchase prices; but notwithstanding the Iull payment and despite
demands, respondents Iailed and reIused to deliver the corresponding certiIicates oI title to petitioners. The complaint
prayed that respondents be ordered to deliver the certiIicates oI title corresponding to the lots petitioners had purchased
and paid in Iull and to pay petitioners damages.8

An amended complaint9 was subsequently Iiled impleading other respondents, among them, the Heirs oI
Vitaliano and Enrique Laudiza, who were the predecessors-in-interest oI respondent Casal, herein respondents Bennie
Cuason and Caleb Ang, to whom respondent Casal purportedly transIerred the subdivision lots and one Leticia Ligon. The
amended complaint alleged that by virtue oI the deed oI absolute sale executed between respondent Casal and respondents
Ang and Cuason, TransIer CertiIicate oI Title (TCT) No. 669732 covering the subdivided property was issued in the
names oI respondents Ang and Cuason as registered owners thereoI.10

The amended complaint prayed Ior additional relieIs, namely: (1) that petitioners be declared the lawIul owners oI
the subdivision lots; (2) that the deed oI absolute sale executed between respondent Casal and respondents Cuason and
Ang and TCT No. 669732 be nulliIied; and (3) that respondents Cuason and Ang be ordered to reconvey the subdivision
lots to petitioners.11

In his answer,12 respondent Casal averred that despite his willingness to deliver them, petitioners reIused to
accept the certiIicates oI title with notice oI lis pendens covering the subdivision lots. The notice oI lis pendens pertained
to Civil Case No. BCV-90-14, entitled "Heirs oI Vitaliano and Enrique Laudiza, represented by their Attorney-In-Fact
Rosa Medina, PlaintiIIs, v. Cesar E. Casal, CRS Realty and Development Corporation and the Register oI Deeds oI
Cavite, DeIendants," which was pending beIore the Regional Trial Court (RTC), Branch 19, Bacoor, Cavite. Leticia Ligon
was said to have intervened in the said civil case.13

By way oI special and aIIirmative deIenses, respondent Casal Iurther averred that the obligation to deliver the
certiIicate oI titles without encumbrance Iell on respondent CRS Realty on the Iollowing grounds: (1) as stipulated in the
subdivision development agreement between respondents Casal and CRS Realty executed on 06 September 1988, the
certiIicates oI title oI the subdivision lots would be transIerred to the developer or buyers thereoI only upon Iull payment
oI the purchase price oI each lot; (2) the contracts to sell were executed between petitioners and respondent CRS Realty;
and (3) the monthly amortizations were paid to respondent CRS Realty and not to respondent Casal.14

Respondent Casal also alleged that he subsequently entered into a purchase agreement over the unsold portions oI
the subdivision with respondents Ang, Cuason and one Florinda Estrada who assumed the obligation to reimburse the
amortizations already paid by petitioners.15

In her answer, respondent Salvador alleged that the Iailure by respondent Casal to comply with his obligation
under the Iirst agreement to deliver to CRS or the buyers the certiIicates oI title was caused by the annotation oI the notice
oI lis pendens on the certiIicate oI title covering the subdivision property. Respondent Salvador Iurther averred that the
prior agreements dated 6 September 1988 and 08 August 1989 between respondents Casal and CRS Realty were
superseded by an agreement dated 30 August 1996 between respondents Casal and Salvador. In the subsequent
agreement, respondent Casal purportedly assumed Iull responsibility Ior the claims oI the subdivision lot buyers while
respondent Salvador sold her share in CRS Realty and relinquished her participation in the business.

Respondents Ang and Cuason claimed in their answer with counterclaim16 that respondent Casal remained the
registered owner oI the subdivided lots when they were transIerred to them and that the Iailure by petitioners to annotate
their claims on the title indicated that they were unIounded. Respondent CRS Realty and the Heirs oI Laudiza were
declared in deIault Ior Iailure to Iile their respective answers.17

On 18 December 1998, HLURB Arbiter Ma. Perpetua Y. Aquino rendered a decision18 primarily ruling that the
regular courts and not the HLURB had jurisdiction over petitioners` complaint, thus, the complaint Ior quieting oI title
could not be given due course. The Heirs oI Laudiza and Ligon were dropped as parties on the ground oI lack oI cause oI
action. However, she Iound respondents CRS Realty, Casal and Salvador liable on their obligation to deliver the
certiIicates oI title oI the subdivision lots to petitioners who had paid in Iull the purchase price oI the properties. She also
Iound as Iraudulent and consequently nulliIied the subsequent transIer oI a portion oI the subdivision to respondents Ang
and Cuason.

The dispositive portion oI the decision reads:
WHEREFORE, in view oI the Ioregoing, judgement |sic| is hereby rendered as Iollows:
1) For respondents CRS Realty and Development Corp., Crisanta Salvador, and Cesar Casal to, jointly and
severally:
a) cause the delivery or to deliver the individual titles, within thirty (30) days Irom the Iinality oI the decision, to
the Iollowing complainants who have Iully paid the purchase price oI their lots, and to whom Deeds oI Sale were issued,
to wit:

1. Vicenta Cantemprate Lots 1 to 8 Block 2 Lots 5 &
6 Block 13
2. Leonardo/Felicidad Ecat Lots 21, 23 & 25 Block 11
3. Jesus Ayson Lot 2 Block 9
4. Lilia Camacho Lot 4 Block 11
5. Zenaida DelIin Lot 2 Block 3
6. Natividad Garcia Lot 8 Block 11
7. Nora Masangkay Lot 7 Block 13
8. Elvira Millan Lot 10 Block 13
9. Fevito Obidos Lot 1 Block 3
10. JoseIina Quinia Lot 1 & 2 Block 12
11. Nilo Samia Lot 1 Block 9
12. Rosel Vedar Lot 10 Block 4
13. Macario/Carmen Yap Lot 14 Block 4
14. Estrella/Danilo Eugerio Lot 10 Block 5
15. Nerissa Cabanag Lot 5 Block 4
16. Milagros Cruz Lots 11 & 13 to 16 Block 3
17. Erlinda Delleva Lot 6 Block 4
18. Lilia Mejia Lot 2 & 3 Block 4
19. Carmen Yap/H. Capulso Lot 13 Block 11
20. Mercedes Montano Lot 4 Block 4
21. Teresita Manuel Lot 11 Block 5
22. Amalia Sambile Lot 3 Block 3
23. Carmencita Lorna Ramirez Lot 13 Block 13
24. Emilia Dimas Lot 16 Block 13
25. Rosita Torres Lot 2 Block 13
26. Alladin Abubakar Lot 9 Block 6
27. Manuel Andaya Lot 5 & 6 Block 11
28. Remigio Araya Lot 11 Block 4
29. J. Ayson/R. Elquiero Lot 5 Block 3
30. L. Bernal/D. Morada Lot 19 Block 11
31. Rosa Nely Buna Lot 9 Block 5
32. Nestor Calderon Lot 6 Block 3
33. Ernesto Capulso Lot 15 Block 11
34. Jorge Chiuco Lots 12, 13 & 15 to 17 Block 4
35. Carolina Cruz Lot 4 Block 14
36. Erna Daniel Lot 6 Block 5
37. Zenaida De Guzman Lots 19, 20 & 21 Block 10
38. Joselito De Lara Lot 1 Block 11
39. J. De Lara/N. Gusi Lot 11, Block 11
40. Virginia De La Paz Lot 22, Block 11
41. Anastacia De Leon Lot 10, Block 11
42. Salvador De Leon Lot 7 & 8 Block 4
43. JoseIina De Vera Lot 20 Block 11
44. Julieta Danzon Lot 4 Block 13
45. Constancia Diestro Lot 17 Block 13
46. Corazon Ducusin Lots 14, 16 & 18 Block 11
47. Juanita Flores Lots 2 & 4 Block 5
48. Remedios Galman Lot 12 Block 11
49. Mila Galamay Lot 12 Block 5
50. Grace Baptist Church Lot 24 Block 11
51. Rizalina Guerrero Lot 26 Block 10
52. Nema Ida Lot 9 Block 4
53. Milagros Jamir Lot 8 Block 13
54. Violeta JoseI Lots 3 & 5 Block 5
55. Marivic Ladines Lot 3 Block 13
56. Eulogio Legacion Lots 8 & 9 Block 3
57. Emerita Mauri Lot 12 Block 3
58. Mina Mary & Co. Lot 1 Block 4
59. Babyrose Navarro Lot 22 Block 10
60. Lauretto Nazarro Lots 14 to 18 Block 10
61. Amelia Nomura Lots 4 & 5 Block 9
62. Virgilio Ocampo Lot 5 Block 12
63. Norma Paguagan Lot 8 Block 12
64. Nicostrato Pelayo Lots 7 & 9 Block 11
65. Gloria Racho Lot 1 Block 5
66. Pepito Ramos Lot 9 Block 13
67. Pedro Rebustillo Lot 8 Block 5
68. S. Recato/A. Rebullar Lot 11 Block 13
69. Laura Regidor Lot 4 Block 3
70. Zenaida Santos Lot 7 Block 5
71. R. Sarmiento/H. Eugenio Lot 1 Block 13
72. Lourdes Teran Lot 17 Block 6
73. R. Valdez/F. Corre Lot 3 Block 9
74. Teodoro Velasco Lot 17 Block 11
75. Edgardo Villanueva Lots 1 to 5 Block 1
76. Gregorio Yao Lots 2 & 3 Block 11
77. Willie Atienza Lot 3 Block 12
78. Z. Zacarias/A. Guevarra Lot 6 Block 12

That as concern|ed| complainant LEONARDO/FELICIDAD ECAT, whose total lost area is deIicient by 278
square meters Irom the 2,587 square meters provided Ior in the Contract to Sell and that covered by the Deed oI Sale
which is 2,309 square meters, Ior respondents to deliver the deIiciency by the execution oI the Deed oI Sale on the said
portion and the delivery oI the titles on their three (3) lots.

b) submit to the Register oI Deeds oI Trece Martires City, Cavite a certiIied true copy oI the approved subdivision
plan oI CRS Farm Estate, as well as photocopies oI the technical description oI complainants` individual lots, blue prints
and tracing cloth: In the event that said respondents cannot surrender said documents, complainants are hereby ordered to
secure said documents and be the ones to submit them to the Register oI Deeds;

c) to reIund to complainants the expenses they`ve incurred in registering their individual Deeds oI Sale with the
Register oI Deeds oI Trece Martires City, Cavite;

d) pay each oI the complainants the sum oI P10,000.00|,| as actual damages; the sum oI P15,000.00|,| as moral
damages; and the sum oI P20,000.00|,| as exemplary damages;

e) pay complainants the sum oI P30,000.00 as and by way oI attorney`s Iees;

I) pay to the Board the sum oI P20,000.00 as administrative Iine Ior violation oI section 25 oI P.D. No. 957 in
relation to sections 38 and 39 oI the same decree.

2.) The sale oI the subject property in whole to respondents Caleb Ang and Bennie Cuason is hereby declared
annulled and oI no eIIect especially that which pertains to the portion oI the subdivision which have already been
previously sold by the respondent CRS Realty to herein complainants, prior to the sale made by respondent Cesar Casal to
Caleb Ang and Bennie Cuason. As a consequence thereoI, respondents Ang and Cuason are hereby ordered to surrender
to the Register oI Deeds oI Trece Martires City, Cavite, the owner`s duplicate copy oI TCT No. 669732 in order Ior the
said Register oI Deeds to issue the corresponding certiIicates oI title to all complainants named herein;

3.) The Register oI Deeds oI Trece Martires City, Cavite is hereby ordered to cancel TCT No. 669732 and
reinstate TCT No. T-2500 in the name oI Cesar Casal, Irom which the individual titles oI herein complainants would be
issued, with all the annotations oI encumbrances inscribed at the back oI TCT No. 669732 carried over to the said
reinstated title.

All other claims and counterclaims are hereby dismissed.

SO ORDERED.19

From the decision oI the HLURB Arbiter, respondents Casal, Cuason and Ang, as well as Leticia Ligon, Iiled
separate petitions Ior review beIore the Board oI Commissioners (Board).

On 22 November 1999, the Board rendered a decision,20 aIIirming the HLURB Arbiter`s ruling that the HLURB
had no jurisdiction over an action Ior the quieting oI title, the nulliIication oI a certiIicate oI title or the reconveyance oI a
property. Notably, the Board reIerred to an earlier case, HLURB Case No. REM-A-0546, involving respondent Casal and
the Heirs oI Laudiza, where the Board deIerred the issuance oI a license to sell in Iavor oI CRS Farm Estate until the issue
oI ownership thereoI would be resolved in Civil Case No. BCV-90-14 pending beIore the RTC oI Bacoor, Cavite.

Furthermore, the Board ruled that to allow petitioners to proceed with the purchases oI the subdivision lots would
be preempting the proceedings beIore the RTC oI Bacoor, Cavite and compounding the prejudice caused to petitioners.
Thus, the Board dismissed the complaint Ior quieting oI title but ordered the reIund oI the amounts paid by petitioners and
other buyers to CRS Realty, to wit:

WHEREFORE, premises considered, judgment is hereby rendered, MODIFYING the Decision dated December
18, 1998 by the OIIice below, to wit:

1. The complaint Ior quieting oI title against Cesar Casal, Bennie Cuason, Caleb Ang, Heirs oI Vitaliano and
Enrique Laudiza, and Leticia Ligon is DISMISSED Ior lack oI jurisdiction.

2. Ordering CRS Realty and/or any oI the OIIicers to reIund to complainants Ior all payments made plus 12
Irom the time the contract to sell is executed until Iully paid.

3. All other claims and counterclaims are hereby DISMISSED.

4. Directing CRS to pay P10,000.00 as administrative Iine Ior each and every sale without license.

Let case be reIerred to the Legal Services Group (LSG) Ior possible criminal prosecution against the OIIicers oI
CRS Realty and Casal.

SO ORDERED.21

Ligon, respondent Casal and herein petitioners Iiled separate motions Ior reconsideration. On 28 November 2000,
the Board issued a resolution,22 modiIying its Decision dated 22 November 2009 by imposing the payment oI damages in
Iavor oI petitioners, thus:

WHEREFORE, based on the Ioregoing:

1. The decision oI this Board dated November 22, 1999 is hereby MODIFIED to read as Iollows:

WHEREFORE, premises considered, judgment is hereby rendered, MODIFYING the Decision dated December
18, 1998 by the OIIice below, thus:

1. The complaint Ior quieting oI title against Cesar Casal, Bennie Cuason, Caleb Ang, Heirs oI Vitaliano and
Enrique Laudiza and Leticia Ligon is DISMISSED Ior lack oI jurisdiction;

2. CRS Realty and/or any oI the oIIicers jointly and severally is/are ordered to reIund to complainants, at the
complainant`s option, all payments made Ior the purchase oI the lots plus 12 interest Irom the time the contract to sell is
executed until Iully paid and cost oI improvement, iI any;

3. CRS Realty and/or any oI its oIIicers jointly and severally is/are ordered |to| pay each oI the complainants the
sum oI P30,000.00 as and by way |oI| moral damages, P30,000.00 as and by way oI exemplary damages, and P20,000.00
as attorney`s Iees;

4. CRS Realty and/or any oI its oIIicers is/are hereby ordered to pay this Board P10,000.00 as administrative Iine
Ior each and every sale executed without license

5. All other claims and counterclaims are hereby DISMISSED.

Let the case be reIerred to the Legal Services Group (LSG) Ior possible criminal prosecution against the oIIicers
oI CRS Realty and Casal.

2. Complainants` Motion Ior Reconsideration, save in so Iar as we have above given due course, is hereby
DISMISSED.

3. Likewise respondents` Motion Ior Reconsideration are hereby DISMISSED Ior lack oI merit.

4. Respondent Bennie Cuason`s Motion to Cancel Lis Pendens is hereby DENIED, the same being premature.

Let the records be elevated to the OIIice oI the President in view oI the appeal earlier Iiled by complainants.

SO ORDERED.23

Upon appeal, the OIIice oI the President (OP) on 03 December 2003 aIIirmed in toto both the decision and
resolution oI the Board.24 Aggrieved, petitioners elevated the matter to the Court oI Appeals via a Rule 43 petition Ior
review.

BeIore the Court oI Appeals, petitioners argued that the OP erred in rendering a decision which adopted by mere
reIerence the decision oI the HLURB and that the HLURB erred in ruling that it had no jurisdiction over petitioners`
complaint, in not nulliIying the deed oI absolute sale executed between respondent Casal and respondents Cuason and
Ang and in ordering the reIund oI the amounts paid by petitioners Ior the subdivision lots.25

On 21 June 2005, the Court oI Appeals rendered the assailed decision,26 aIIirming the OP Decision dated 03
December 2003. On 03 February 2006, the appellate court denied petitioners` motion Ior reconsideration Ior lack oI
merit.27

Hence, the instant petition, essentially praying Ior judgment ordering the cancellation oI the deed oI absolute sale
entered between respondent Casal, on the one hand, and respondents Ang and Cuason, on the other, the delivery oI the
certiIicates oI title oI the subdivision lots, and the payment oI damages to petitioners.

Petitioners have raised the Iollowing issues: (1) whether or not the absence oI a license to sell has rendered the
sales void; (2) whether or not the subsequent sale to respondent Cuason and Ang constitutes double sale; (3) whether or
not the HLURB has jurisdiction over petitioners` complaint; and (4) whether a minute decision conIorms to the
requirement oI Section 14, Article VIII oI the Constitution.28

We shall resolve the issues in seriatim.

Petitioners assail the Court oI Appeals` ruling that the lack oI the requisite license to sell on the part oI respondent
CRS Realty rendered the sales void; hence, neither party could compel perIormance oI each other`s contractual
obligations.

The only requisite Ior a contract oI sale or contract to sell to exist in law is the meeting oI minds upon the thing
which is the object oI the contract and the price, including the manner the price is to be paid by the vendee. Under Article
1458 oI the New Civil Code, in a contract oI sale, whether absolute or conditional, one oI the contracting parties obliges
himselI to transIer the ownership oI and deliver a determinate thing, and the other to pay thereIor a price certain in money
or its equivalent.29

In the instant case, the Iailure by respondent CRS Realty to obtain a license to sell the subdivision lots does not
render the sales void on that ground alone especially that the parties have impliedly admitted that there was already a
meeting oI the minds as to the subject oI the sale and price oI the contract. The absence oI the license to sell only subjects
respondent CRS Realty and its oIIicers civilly and criminally liable Ior the said violation under Presidential Decree (P.D.)
No. 95730 and related rules and regulations. The absence oI the license to sell does not aIIect the validity oI the already
perIected contract oI sale between petitioners and respondent CRS Realty.

In Co Chien v. Sta. Lucia Realty and Development, Inc.,31 the Court ruled that the requisite registration and
license to sell under P.D. No. 957 do not aIIect the validity oI the contract between a subdivision seller and buyer. The
Court explained, thus:

A review oI the relevant provisions oI P.D. |No.| 957 reveals that while the law penalizes the selling subdivision
lots and condominium units without prior issuance oI a CertiIicate oI Registration and License to sell by the HLURB, it
does not provide that the absence thereoI will automatically render a contract, otherwise validly entered, void. Xxx

As Iound by the Court oI Appeals, in the case at bar, the requirements oI Sections 4 and 5 oI P.D. |No.| 957 do
not go into the validity oI the contract, such that the absence thereoI would automatically render the contract null and
void. It is rather more oI an administrative convenience in order to allow a more eIIective regulation oI the industry. x x
x32

The second and third issues are interrelated as they pertain to whether the HLURB has jurisdiction over
petitioners` complaint Ior the delivery oI certiIicates oI titles and Ior quieting oI title.

Petitioners are partly correct in asserting that under Section 1 oI P.D. No. 1344,33 an action Ior speciIic
perIormance to compel respondents to comply with their obligations under the various contracts Ior the purchase oI lots
located in the subdivision owned, developed and/or sold by respondents CRS Realty, Casal and Salvador is within the
province oI the HLURB.

The HLURB has exclusive jurisdiction over the complaint Ior speciIic perIormance to compel respondents CRS
Realty, Casal and Salvador as subdivision owners and developers to deliver to petitioners the certiIicates oI title aIter Iull
payment oI the subdivision lots. On this score, the Court aIIirms the Iindings oI HLURB Arbiter Aquino with respect to
the obligation oI respondents Casal, Salvador and CRS Realty to deliver the certiIicates oI title oI the subdivision to
petitioners pursuant to their respective contracts to sell.

Indeed, under Section 25 oI P.D. No. 957, among the obligations oI a subdivision owner or developer is the
delivery oI the subdivision lot to the buyer by causing the transIer oI the corresponding certiIicate oI title over the subject
lot.34 The provision states:

Sec. 25. Issuance oI Title.The owner or developer shall deliver the title oI the lot or unit to the buyer upon Iull
payment oI the lot or unit. No Iee, except those required Ior the registration oI the deed oI sale in the Registry oI Deeds,
shall be collected Ior the issuance oI such title. In the event a mortgage over the lot or unit is outstanding at the time oI the
issuance oI the title to the buyer, the owner or developer shall redeem the mortgage or the corresponding portion thereoI
within six months Irom such issuance in order that the title over any Iully paid lot or unit may be secured and delivered to
the buyer in accordance herewith.

In the instant case, the contract to sell itselI expressly obliges the vendor to cause the issuance oI the
corresponding certiIicate oI title upon Iull payment oI the purchase price, to wit:

3. Title to said parcel oI land shall remain in the name oI the VENDOR until complete payment oI the agreed
price by the VENDEE and all obligations herein stipulated, at which time the VENDOR agrees to cause the issuance oI a
certiIicate oI title in the Land Registration Act and the restrictions as may be provided in this Contract.35

From the Ioregoing it is clear that upon Iull payment, the seller is duty-bound to deliver the title oI the unit to the
buyer. Thus, Ior instance, even with a valid mortgage over the lot, the seller is still bound to redeem said mortgage
without any cost to the buyer apart Irom the balance oI the purchase price and registration Iees.36

There is no question that respondents Casal, Salvador and CRS Realty breached their obligations to petitioners
under the contracts to sell. It is settled that a breach oI contract is a cause oI action either Ior speciIic perIormance or
rescission oI contracts.37 Respondents Casal, Salvador and CRS Realty have the obligation to deliver the corresponding
clean certiIicates oI title oI the subdivision lots, the purchase price oI which have been paid in Iull by petitioners. That the
subject subdivision property is involved in a pending litigation between respondent Casal and persons not parties to the
instant case must not prejudice petitioners.

Respondents` obligation to deliver the corresponding certiIicates oI title is simultaneous and reciprocal. Upon the
Iull payment oI the purchase price oI the subdivision lots, respondents` obligation to deliver the certiIicates oI title
becomes extant. Respondents must cause the delivery oI the certiIicates oI title to petitioners Iree oI any encumbrance.
But since the lots are involved in litigation and there is a notice oI lis pendens at the back oI the titles involved,
respondents have to be given a reasonable period oI time to work on the adverse claims and deliver clean titles to
petitioners. The Court believes that six (6) months is a reasonable period Ior the purpose.

Should respondents Iail to deliver such clean titles at the end oI the period, they ought to pay petitioners actual or
compensatory damages. Article 1191 oI the Civil Code sanctions the right to rescind the obligation in the event that
speciIic perIormance becomes impossible, to wit:

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one oI the obligors should not
comply with what is incumbent upon him.

The injured party may choose between the IulIillment and the rescission oI the obligation, with the payment oI
damages in either case. He may also seek rescission, even aIter he has chosen IulIillment, iI the latter should become
impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the Iixing oI a period.

This is understood to be without prejudice to the rights oI third persons who have acquired the thing, in
accordance with Articles 1385 and 1388 and the Mortgage Law.38

Rescission creates the obligation to return the object oI the contract. It can be carried out only when the one who
demands rescission can return whatever he may be obliged to restore. Rescission abrogates the contract Irom its inception
and requires a mutual restitution oI the beneIits received.39 Thus, respondents Casal, Salvador and CRS Realty must
return the beneIits received Irom the contract to sell iI they cannot comply with their obligation to deliver the
corresponding certiIicates oI title to petitioners.

Under Article 2199 oI the Civil Code, actual or compensatory damages are those awarded in satisIaction oI, or in
recompense Ior, loss or injury sustained. They proceed Irom a sense oI natural justice and are designed to repair the wrong
that has been done, to compensate Ior the injury inIlicted and not to impose a penalty.40 Also, under Article 2200,
indemniIication Ior damages shall comprehend not only the value oI the loss suIIered, but also that oI the proIits which
the obligee Iailed to obtain. Thus, there are two kinds oI actual or compensatory damages: one is the loss oI what a person
already possesses, and the other is the Iailure to receive as a beneIit that which would have pertained to him.41

In the event that respondents Casal, Salvador and CRS Realty cannot deliver clean certiIicates oI title to
petitioners, the latter must be reimbursed not only oI the purchase price oI the subdivision lots sold to them but also oI the
incremental value arising Irom the appreciation oI the lots. Thus, petitioners are entitled to actual damages equivalent to
the current market value oI the subdivision lots.

In Solid Homes, Inc. v. Spouses Tan,42 the Court ordered instead the payment oI the current market value oI the
subdivision lot aIter it was established that the subdivision owner could no longer comply with its obligation to develop
the subdivision property in accordance with the approved plans and advertisements.

On this score, in its Decision dated 28 November 2000 which was aIIirmed by the OP and the Court oI Appeals,
the Board Iound respondent CRS Realty and its oIIicers solidarily liable to reIund the complainants or herein petitioners
the installments paid by them including interest, to pay them moral and exemplary damages and attorney`s Iees and to pay
the corresponding Iine to the Board. The decision, however, Iailed to name the responsible oIIicers oI respondent CRS
Realty who should be solidarily liable petitioners.

The 18 December 1998 Decision oI the HLURB Arbiter is quite instructive on this matter, thus:

Obviously, respondents CRS Realty Development Corporation, Crisanta R. Salvador and Cesar E. Casal, avoided
responsibility and liability Ior their Iailure to comply with their contractual and statutory obligation to deliver the titles to
the individual lots oI complainants, by "passing the buck" to each other. The Board|,| however, is not oblivious to the
various schemes willIully employed by developers and owners oI subdivision projects to subtly subvert the law, and
evade their obligations to lot buyers, as it Iinds the justiIications advanced by respondents CRS Realty Development
Corp., Crisanta R. Salvador, and Cesar E. Casal grossly untenable. The Iailure in the implementation oI the agreement
dated 06 September 1998 entered into by respondent CRS, Salvador and Casal involving the subject property should not
operate and work to prejudice complainants, who are lot buyers in good Iaith and who have complied with their
obligations by paying in Iull the price oI their respective lots in accordance with the terms and conditions oI their contract
to sell. Respondent Casal is not without recourse against respondents CRS Realty or Salvador Ior the violation oI their
agreement and as such, the same reason could not be made and utilized as a convenient excuse to evade their obligation
and responsibility to deliver titles to complainants.

Under the so called "doctrine oI estoppel," where one oI two innocent persons, as respondents CRS Development
Corp./Crisanta R. Salvador and Cesar E. Casal claimed themselves to be, must suIIer, he whose acts occasioned the loss
must bear it. In the herein case, it is respondents` CRS Realty Development Corp./Crisanta Salvador and Cesar E. Casal
who must bear the loss. x x x43

In denying any liability, respondent Salvador argues that even beIore the Iiling oI the case beIore the HLURB, the
agreements between her and respondent Casal involving the development and sale oI the subdivision lots were superseded
by an agreement dated 30 August 1996, whereby respondent Casal purportedly assumed Iull responsibility over the claims
oI the subdivision lot buyers while respondent Salvador sold her share in CRS Realty and relinquished her participation in
the business.

The subsequent agreement which purportedly rescinded the subdivision development agreement between
respondents Casal and Salvador could not aIIect third persons like herein petitioners because oI the basic civil law
principle oI relativity oI contracts which provides that contracts can only bind the parties who entered into it, and it cannot
Iavor or prejudice a third person, even iI he is aware oI such contract and has acted with knowledge thereoI.44 The Iact
remains that the contracts to sell involving the subdivision lots were entered into by and between petitioners, as vendees,
and respondent Salvador, on behalI oI respondent CRS Realty as vendor. As one oI the responsible oIIicers oI respondent
CRS Realty, respondent Salvador is also liable to petitioners Ior the Iailure oI CRS Realty to perIorm its obligations under
the said contracts and P.D. No. 957, notwithstanding that respondent Salvador had subsequently divested herselI oI her
interest in the CRS Realty.

One oI the purposes oI P.D. No. 957 is to discourage and prevent unscrupulous owners, developers, agents and
sellers Irom reneging on their obligations and representations to the detriment oI innocent purchasers.45 The Court cannot
countenance a patent violation on the part oI the said respondents that will cause great prejudice to petitioners. The Court
must be vigilant and should punish, to the Iullest extent oI the law, those who prey upon the desperate with empty
promises oI better lives, only to Ieed on their aspirations.46

As regards petitioners` prayer to declare them the absolute owners oI the subdivision lots, the HLURB correctly
ruled that it had no

jurisdiction over the same. Petitioners` amended complaint47 included a cause oI action Ior reconveyance oI the
subdivision lots to petitioners and/or the quieting oI petitioners` title thereto and impleaded a diIIerent set oI deIendants,
namely, the Heirs oI Laudiza and respondents Ang and Cuason, who allegedly bought the subdivision lots previously sold
to petitioners.

In Spouses Suntay v. Gocolay,48 the Court held that the HLURB has no jurisdiction over the issue oI ownership,
possession or interest in the condominium unit subject oI the dispute therein because under Section 19 oI Batas Pambansa
(B.P.) Blg. 129,49 the Regional Trial Courts shall exercise exclusive original jurisdiction in all civil actions which involve
the title to, or possession oI, real property, or any interest therein.

In view oI the aIorequoted delineation oI jurisdiction between the HLURB and the RTCs, the HLURB has no
jurisdiction to declare petitioners as absolute owners oI the subdivision lots as against the Heirs oI Laudiza who Iiled an
action Ior reconveyance against respondent Casal, which is still pending beIore the RTC.

However, nothing prevents the HLURB Irom adjudicating on the issue oI whether the alleged subsequent sale oI
the subdivision lots to respondents Ang and Cuason constituted a double sale because the issue is intimately related to
petitioners` complaint to compel respondents CRS Realty, Casal and Salvador to perIorm their obligation under the
contracts to sell. Considering that the alleged subsequent sale to respondents Ang and Cuason apparently would constitute
a breach oI respondents` obligation to issue the certiIicate oI title to petitioners, iI not an unsound business practice
punishable under Section 1 oI P.D. No. 1344,50 the HLURB cannot shirk Irom its mandate to enIorce the laws Ior the
protection oI subdivision buyers.

In Union Bank oI the Philippines v. Housing and Land Use Regulatory Board,51 the Court upheld HLURB`s
jurisdiction over a condominium unit buyer`s complaint to annul the certiIicate oI title over the unit issued to the highest
bidder in the Ioreclosure oI the mortgage constituted on the unit by the condominium developer without the consent oI the
buyer.

The remand oI the instant case to the HLURB is in order so that the HLURB may determine iI the alleged
subsequent sale to respondents Ang and Cuason oI those lots initially sold to petitioners constituted a double sale and was
tainted with Iraud as opposed to the respondents` claim that only the unsold portions oI the subdivision property were sold
to them.

One Iinal note. Contrary to petitioners` contention, the decision oI the OP does not violate the mandate oI Section
14, Article VIII oI the Constitution, which provides that "No decision shall be rendered by any court without expressing
therein clearly and distinctly the Iacts and the law on which it is based."1avvphi1.zw

The OP decision ruled that "the Iindings oI Iact and conclusions oI law oI the oIIice a quo are amply supported by
substantial evidence" and that it is "bound by said Iindings oI Iacts and conclusions oI law and hereby adopt(s) the
assailed resolution by reIerence."

The Court Iinds these legal bases in conIormity with the requirements oI the Constitution. The Court has
sanctioned the use oI memorandum decisions, a species oI succinctly written decisions by appellate courts in accordance
with the provisions oI Section 40, B.P. Blg. 129 on the grounds oI expediency, practicality, convenience and docket status
oI our courts. The Court has declared that memorandum decisions comply with the constitutional mandate.52

As already discussed, the Court aIIirms the ruling oI the HLURB Arbiter insoIar as it ordered respondents Casal,
Salvador and CRS Realty, jointly and severally, to cause the delivery oI clean certiIicates oI title to petitioners at no cost
to the latter. Said respondents have six months Irom the Iinality oI this decision to comply with this directive, Iailing
which they shall pay petitioners actual damages equivalent to the current market value oI the subdivision lots sold to
them, as determined by the HLURB.

However, the Court Iinds in order and accordingly aIIirms the Board`s award oI moral and exemplary damages
and attorney`s Iees in Iavor oI each petitioner, as well as the imposition oI administrative Iine, against respondents Casal,
Salvador and CRS Realty.

WHEREFORE, the instant petition Ior review on certiorari is PARTLY GRANTED. The decision and resolution
oI the Court oI Appeals in CA-G.R. SP No. 81859, which upheld the decisions oI the OIIice oI the President and the
Housing and Land Use Regulatory Board, are AFFIRMED in all respects except Ior the Iollowing MODIFICATIONS, to
wit:

(1) Respondents CRS Realty, Cesar E. Casal and Crisanta R. Salvador are ORDERED to secure and deliver to
each oI petitioners the corresponding certiIicates oI titles, Iree oI any encumbrance, in this names Ior the lots they
respectively purchased and Iully paid Ior, within six (6) months Irom the Iinality oI this Decision and, in case oI deIault,
jointly and severally to pay petitioners the prevailing or current Iair market value oI the lots as determined by the Housing
and Land Use Regulatory Board; and

(2) Without prejudice to the implementation oI the other relieIs granted in this Decision, including the relieIs
awarded by the HLURB which are aIIirmed in this Decision, this case is REMANDED to the HLURB Ior the purpose oI
determining (a) the prevailing or current Iair market value oI the lots and (b) the validity oI the subsequent sale oI the lots
to respondents Bennie Cuason and Caleb Ang by ascertaining whether or not the sale was attended with Iraud and
executed in bad Iaith. No costs. SO ORDERED.

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