G.R. No.

L-8988

March 30, 1916

HARTFORD BEAUMONT, assignee of W. Borck, plaintiff-appellee, vs. MAURO PRIETO, BENITO LEGARDA, JR., and BENITO VALDES as administrator of the estate of Benito Legarda, deceased, and BENITO VALDES, defendants and appellants. (See U.S. Supreme Court decision in this same case., p. 985, post.) Hausserman, Cohn & Fisher (and subsequently) Gilbert, Cohn & Fisher, and Escaler & Salas and Ledesma, Lim & Irurreta Goyena for appellants Legarda and Valdes. No appearance for the other appellants. Beaumont & Tenney and Aitken & DeSelms for appellee. ARAULLO, J.: Negotiations having been had, prior to December 4, 1911, between W. Borck and Benito Valdes, relative to the purchase, at first, of a part of the Nagtajan Hacienda, situated in the district of Sampaloc of this city of Manila and belonging to Benito Legarda, and later on, of the entire hacienda, said Benito Valdes, on the date above-mentioned, addressed to said Borck the following letter (Exhibit E): MANILA, December 4, 1911.

Mr. W. BORCK, Real Estate Agent, Manila, P.I. SIR: In compliance with your request I herewith give you an option for three months to buy the property of Mr. Benito Legarda known as the Nagtahan Hacienda, situated in the district of Sampaloc, Manila, and consisting of about, 1,993,000 sq. meters of land, for the price of its assessed government valuation. B. VALDES.

1911, the defendant Benito Valdez gave to the plaintiff the document written and signed by him, Valdes, quoted at the beginning of this decision, to wit, the letter afore-mentioned, which document is inserted in the amendment to the complaint; that on January 19, 1912, while the offer or option mentioned in said document still stood, the plaintiff in writing accepted the terms of said offer and requested of Valdes to be allowed to inspect the property, titles and other documents pertaining to the property, and offered to pay to the defendant, immediately and in cash as soon as a reasonable examination could be made of said property titles and other documents, the price stipulated in the contract for said hacienda which is also described in the complaint, as well as its value and the revenue annually obtainable therefrom; that, in spite of the frequent demands made by the plaintiff, the defendants ha persistently refused to deliver to him the property titles and other documents relative to said property and to execute any instrument of conveyance thereof in his favor; that the plaintiff, on account of said refusal on the part of the defendant Valdes, based on instructions from the defendant Legarda, had suffered damages in the amount of P760,000, and, by the tardiness, failure and refusal of the defend to comply with his obligation, the plaintiff had incurred great expense and suffered great losses, whereby he was prejudiced in the mount of P80,000; that the plaintiff was and had been, on all occasions, willing to comply with the obligation imposed upon him to pay to the defendants the full stipulated price. The plaintiff concluded by praying: (1) That the defendant Valdes be ordered to execute the necessary formal document as proof of the contract or obligation before referred to, and to incorporate the same in a public instrument, and that the defendant Legarda be ordered to convey in absolute sale to the plaintiff, either directly or through the defendant Valdes, by a property deed, the said Nagtajan Hacienda, described in the complaint; (2) that both defendants and each of them be ordered and required to render an account to the plaintiff of such rents and profits as they may have collected from the said property from the 19th of January, 1912, until the date of the execution of the judgment that may be rendered in these proceedings, together with legal interest on the amounts thereof; (3) that, in case it can shown that specific performance of the contract is impossible, that the defendant be ordered to pay the plaintiff damages in the sum of P760,000; and finally, that the plaintiff have recovered the interests and the costs in these proceedings. While this complaint was not yet amended, the defendant Valdes filed a demurer, on the grounds that there was a misjoinder of parties on account of the erroneous inclusion therein of the defendant Valdes, that the complaint did not set forth fact that constituted a cause of action against said defendant, and that it was ambiguous, unintelligible and vague. This demurrer was overruled on April 11, 1912. The defendant Benito Legarda also interposed a demurrer to the amended complaint on the grounds that the facts therein set forth did not constitute a right of action against him. This demurrer was likewise overruled on June 26, 1912. On the 22nd of the same month of June, the court, ruling on a petition made in voluntary insolvency proceedings brought on May 10, 1912, by the plaintiff W. Borck, and in view of the agreement entered into in said proceedings by all of the latter's creditors, ordered that the plaintiff Borck be substituted in the instant proceedings by Hartford Beaumont, as the trustee appointed therein and representative of the said plaintiff's creditors, the assignee of his rights, in said proceedings. The defendant Benito Valdes, answering the complaint as amended, denied each and all of the allegations thereof from paragraph 4, except those which the admitted in the special defense, in which he alleged: (1) That the option given by him to the plaintiff was an option without

Subsequent to the said date, W. Borck addressed to Benito Valdes several letters relative to the purchase and sale of the hacienda, and as he did not obtain what he expected or believe he was entitled to obtain from Valdes, he filed the complaint that originated these proceedings, which was amended on the 10th of the following month, April, by bringing his action not only against Benito Valdes but also against Benito Legarda, referred to in the letter above quoted. In said amended complaint it is alleged that the defendant Benito Legarda was the owners of fee simple of the Nagtajan Hacienda, and that Benito Valdes was his attorney in fact and had acted as such on the occasions reffered to in the complaint by virtue of a power of attorney duly executed under notarial seal and presented in the office of the register of deeds, a copy of which, marked as Exhibit A, was attached to the complaint; that on or above December 4,

consideration and subject to the approval of the defendant Legarda; (2) that, as the defendant Legarda has not approved said option, it had no value whatever, according to the understanding and agreement between himself and the plaintiff; (3) that the option offered by him to the plaintiff had not been accepted by the latter within a reasonable period of time nor during the time it was in force, in accordance with the conditions agreed upon between the parties; (4) that he sighed the letter of December 4, in which he tendered to the plaintiff the option which has given rise to this suit, through deceit employed by the plaintiff with respect to its contents, for the plaintiff had stated to him that it was written in accordance with what had been agreed upon by both parties, without which statement he would not have signed it; (5) that the plaintiff, on the prior to January 19, 1912, was insolvent, and had neither proven his solvency nor offered to pay the price in cash, as he had agreed to do; and (6) that he, Valdes, was merely a general attorney in fact of the defendant Benito Legarda and had no interest whatever in the subject-matter of the suit, nor in the litigation, and in all his acts had carried out the instructions of the said Legarda. He finally prayed that the complaint be dismissed with costs against the plaintiff. The defendant Benito Legarda, answering the complaint, denied each and all of the allegations thereof, from paragraph 3, except such as he expressly admitted and were contained in the special defense inserted in said answer, in which he alleged: (1) That his codefendant Benito Valdes, though his attorney-in-fact, had instructions not to give any option on the hacienda in question without Legarda's previous knowledge and consent; (2) that on and before December 4, 1911, the plaintiff had knowledge of the scope and limitations of the powers conferred upon the defendant Valdes; (3) that the latter gave the option, alleged by the plaintiff, without his (Legarda's) knowledge or consent, thus violating the instructions he had given to the said Valdes; (4) that he had disapproved and rejected the option in question as soon as he had learned of it; (5) that he had been informed, and therefore alleged as true, that the option said to have been executed in behalf of the plaintiff had been obtained by the latter by a false and malicious interruption of the letter of December 4, 1911, and that the plaintiff, availing himself of such interpretation, induced the defendant Valdes to sign the said option; (6) that the option said to have been tendered to the plaintiff had not been legally accepted; and (7) that on the subsequently to January 19, 1912, the date on which, according to the plaintiff, a tender of payment of the price of the Nagtajan Hacienda, in accordance with its assessed value, was made to his codefendant Valdes, as well as to the date of the answer, the plaintiff was insolvent. After the hearing, in which the respective parties presented their evidence, the Court of First Instance of this city of Manila, on February 12, 1912, rendered judgment in which he found; (1) That the instrument Exhibit E that is, the letter of December 4, 1911, quoted at the beginning of this decision), as supported by Exhibit A (the power of attorney, a copy of which accompanied the complaint) and as confirmed by Exhibit G (the letter of January 19, 1912, addressed by the plaintiff Borck to the defendant Valdes, presented in evidence at the trial and of which mention will be made elsewhere herein), constituted a contract by which the principal defendant undertook to convey to the plaintiff the property therein described; (2) that the plaintiff made a sufficient tender of performance, of his part, of the contract, in accordance with section 347 of the Code of Civil Procedure; (3) that the defendants had failed to execute such conveyance in accordance with said contract, and that the plaintiff was entitled to the specific performance thereof, and to the net income, if any, obtained from the land since January 19, 1912, but that he had not shown sufficient loss which entitle him to additional damage unless it subsequently should appear that a conveyance could not be made. The court accordingly decreed: (1) That upon the payment by the plaintiff to the principal defendant, Benito Legarda, or to the clerk of the court, of the sum of P307,000, the said defendant, or his

codefendant and attorney-in-fact, should execute and deliver to the plaintiff good and sufficient conveyance, free of all incumbrance, of the property described in Exhibits B and C, attached to the plaintiffs complaint, so far as the same was included within the terms of Exhibit G; (2) that upon the said defendants' failure to execute such conveyance within a reasonable time after such payment, the clear of the court should execute one, and the same together with the decree, should constitute a true conveyance; (3) that if for any sufficient reason such conveyance could not then be made, the plaintiff should have and recover from the defendant Legarda, as alternative damages, the sum of P73,000, with interest thereon at 6 per cent per annum from March 13, 1912; and (4) that the defendants should render an accounting, within thirty days, of the income and profits derived from said property since January 19, 1912, and pay the costs of the proceedings. The parties having being notified of this judgment, the defendant Benito Legarda and Benito Valdes excepted thereto and at the same time prayed that it be se aside and that they be granted a new trial on the grounds that the judgment was not sufficiently supported by the evidence and was contrary to law, and that the findings of fact therein contained were manifestly and openly contrary to the weight of the evidence. Their prayer having been denied by a ruling to which they also excepted, they have brought these proceedings on appeal to the Supreme Court by the proper bill of exceptions, and have specified in their respective briefs several errors which they allege the lower court committed. Some of these errors consist in that the trial judge overruled the demurrer filed to the complaint; others, in that he admitted certain evidence and excluded others, this being the alleged cause of the erroneous consideration of the instrument Exhibit E and of the rights and obligations derived from it, both with respect to the plaintiff and the two defendants' and still others refer to the various statements in the judgment resulting from those findings and on which the conclusions arrived at, have been founded. The defendant Benito Legarda also alleged, among the said errors, as especially affecting his rights, that the court held that Benito Valdes was his agent, empowered to execute contracts in his (Legarda's) name in respect to real property; that the court admitted in evidence the document Exhibit A, introduced by the plaintiff, to wit, the copy of the power of attorney attached to the complaint, which never was offered as such; and that he based one of his findings thereon. The defendant Benito Valdes specified, also particularly with reference to himself, other errors consisting in the court having held that he voluntarily executed the option in question, instead of holding that it was obtained through fraud; and likewise in holding that the document Exhibit E was a contract of option and not an offer to sell, and in not holding that said option was an offer subject to the approval of the defendant Legarda. Inasmuch as it does not appear from the bill of exceptions that the defendants recorded the exceptions to the overruling of the demurrer respectively filed to the complaint by both defendants, the assignment of error relative to the said ruling cannot be taken into consideration by this Supreme Court. The plaintiff's action is based on the failure of the defendant Valdes, as the agent or attorney in fact of the other defendant Benito Legarda, to perform the obligation contracted by the Benito Valdes to sell to the plaintiff the property belonging to the said Legarda, mentioned in the letter of December 4, 1911 (Exhibit E), within the period and for the price specified therein; and the object or purpose of these proceedings is to require fulfillment of the said obligation

and to secure the payment of a proper indemnity for damages to the plaintiff because of its not having been duly and timely complied with. Inasmuch as it was set forth in the document Exhibit E that the property known as the Nagtajan Hacienda, (an option to buy which was given by the defendant Valdes to the plaintiff Borck) belonged to Benito Legarda; as negotiations had been undertaken prior to the execution of the said document, between the plaintiff Borck and the defendant Valdes with respect to the maters set forth in that document, by virtue of which Borck knew that Valdes was Legarda's agent or attorney-in-fact, although it appears in said instrument that the agent Valdes acted in his own name; and, further, as the plaintiff in the complaint made the necessary allegations to explain the relations that existed between the principal Legarda and the agent Valdez with regard to the said document Exhibit E and the failure alleged by the plaintiff, to fulfill the stipulations therein contained; therefore, the facts alleged in the complaint did constitute a right of action against either or both defendants, and the lower court did not err in so holding, for, though the person who contracts with an agent has no action against the principal, pursuant to article 1717 of the Civil Code, when the agent acts in his own name, as in such a case the agent would be directly liable to the person with whom he contracted as if it were a personal matter of the agent's yet this does not occur when the acts performed by the agent involved the principal's own things, and in the document Exhibit E, which was inserted in the complaint when the latter was amended, it appears that the defendant Valdes, who signed the said document, stated that the property, the option to buy which he gave to the plaintiff, Borck, belonged to Legarda. And as it is unquestionable that, pursuant to the above-cited provision of law, the action was properly brought against Benito Legarda as Valdes' principal, it is also unquestionable that Valdes was properly included in the complaint as one of the defendant, for said article 1717, in providing that in cases like the one here in question the person who contracted with the agent has an action against the principal, does not say that such person does not have, and cannot bring an action against the agent also, and the silence of the statute on this point should not be construed in that sense, when the rights and obligations, the matter brought into discussion by means of the action prosecuted, cannot be legally and juridically determined without hearing both the principal and the agent. Section 114 of the Code of Civil Procedure in force, treating of the parties who should be included in an action as defendants, includes any person who has or claims an interest in the controversy or the subject-mater thereof adverse to the plaintiff, or who is a necessary party to a complete determination or settlement of the questions involved therein; and there can be no doubt whatever, and the record itself shows, that the agent Benito Valdes was and in a necessary party in these proceedings for the complete and proper determination of the matter involved. As one of the allegations of the complaint was that the defendant Benito Valdes was the attorney in fact of Benito Legarda, the owner of the Nagtajan Hacienda, the option to buy which was granted by the said defendant Valdes to the plaintiff Borck, in the letter of December 4, 1911, Exhibit E, there was attached to the complaint a copy of the power of attorney marked Exhibit A, by virtue of which, as therein also set forth, the defendant Benito Valdes, the attorney-in-fact of Benito Legarda, in giving to the plaintiff the option to buy the said hacienda, had acted according to the aforesaid document Exhibit F, which was likewise inserted in the amended complaint as a part thereof.

Inasmuch as the relation which, according to the plaintiff, existed between Benito Legarda and Benito Valdes as to the obligation contracted by means of Exhibit E, and the fulfillment thereof was established by means of the said allegations, supported, as it appeared, by the power of attorney Exhibit A, and by the letter or document Exhibit E (which were made by the plaintiff a part of the complaint), the joining of the copy of the power of attorney to the complaint cannot be considered to have been done merely for the purpose of attesting the personality of either of the defendants, but to show the legal status of each of them in the obligation referred to, in view of the terms of the document Exhibit E, the authority under which the defendant Valdes acted in executing this document, as well as the fact of hi having been granted such authority by the defendant Legarda, by means of said power of attorney. So that as said two documents, to wit, Exhibit A or the power of attorney executed by Legarda in favor of Valdes, authorizing him to perform various acts, among them, that of selling, exchanging, ceding, admitting in payment or by way of compensation or in any other manner acquiring or conveying all kinds of real property for such prices and on such conditions he might deem proper, and the document Exhibit E, or the letter setting forth the option given to the plaintiff Valdes to buy the said Nagtajan Hacienda belonging to Legarda, cannot be considered separately, in view of the allegations of the complaint and the action brought thereon against the two defendants; and as said two documents, each of complement of the other, constituted the basis of the action brought in the complaint, and as their genuineness and due execution were not denied under oath by either of the two defendants, as they might have done, pursuant to section 103 of the Code of Civil Procedure, the plaintiff was not obliged to present at the trial, as proof, the aforementioned power of attorney to prove its existence and the fact of Valdes being his attorney in fact, vested with the powers specified in this instrument, notwithstanding the general denial made by the defendant Legarda in his answer of the allegations contained in the complaint from its third paragraph on, in which paragraph that averment is made, supported by the copy of the said power of attorney attached to the complaint. On the contrary, as the said document Exhibit A constitutes prima facie proof of the fact that Benito Valdes is the attorney-in-fact of Benito Legarda, and that he is vested with the powers specified therein, on account of Legarda's not having denied under oath the genuiness and due execution of the said document, it was therefore incumbent upon Legarda himself to prove that he had not executed the said power of attorney in Valdes' favor and that he had not conferred upon him, by virtue thereof, the powers therein mentioned. (Merchant vs.International Banking Corporation, 6 Phil., 314; Papa vs. Martinez, 12 Phil., 613; Chinese Chamber of Commerce vs. Pua Te Ching, 14 Phil., 222; Banco EspanolFilipino vs. McKay & Zoeller, 27 Phil., 183; Knight vs. Whitmore, 125 Cal., 198; McCormick Harvesting Machine Co., vs. Doucette, 61 Minn., 40.) The lower court, therefore, did not err in holding that Benito Valdes was the agent of Benito Legarda, vested with powers to execute contracts for the sale of real estate in the latter's name; nor in considering as proof the power of attorney, the plaintiff's Exhibit A, and making it the basis of one of the conclusions of the judgment, notwithstand that it was not offered as such proof by the plaintiff. Consequently, the court likewise did not err in admitting the evidence introduced by the plaintiff himself to show the existence of the contractual obligation on the part of the defendant Legarda, as principal of the other defendant, Valdes, and which was contended by the plaintiff to be one of the grounds of the action brought in this complaint against the two defendants. It is unquestionable that, by means of the document Exhibit E, to wit, the letter of December 4, 1911, quoted at the beginning of this decision, the defendant Valdes granted to the plaintiff

Borck the right to purchase the Nagtajan Hacienda belonging to Benito Legarda, during the period of three months and for its assessed valuation, a grant which necessarily implied the offer or obligation on the part of the defendant Valdes to sell to Borck the said hacienda during the period and for the price mentioned, and as the grant made by Valdes to Borck in the said letter was made as a result of the requests of Borck himself, as stated in the letter, and of the negotiations previously entered into between the latter and Valdes with respect to the purchase of the hacienda, as shown in the letter of the 2d of the same month of December, that is, the letter which two days before was addressed by Borck to Valdes, Exhibit C, the terms of the said document Exhibit E appear to be of the nature of an option contract between Valdes and Borck, inasmuch as, by means of said document, the former finally accepted the propositions of the latter with respect to the granting of that right to Borck. There was, therefore a meeting of minds on the part of the one and the other, with regard to the stipulations made in the said document. But it is not shown that there was any cause or consideration for that agreement, and this omission is a bar which precludes our holding that the stipulations contained in Exhibit E is a contract of option, for, pursuant to article 121 of the Civil Code, there can be no contract without the requisite, among others, of the cause for the obligation to be established. In his Law Dictionary, edition of 1897, Bouvier defines an option as a contract, in the following language: A contract by virtue of which A, in consideration of the payment of a certain sum to B, acquires the privilege of buying from, or selling to, B certain securities or properties within a limited time at a specified price. (Story vs. Salamon, 71 N.Y., 420.) From vol. 6, page 5001, of the work "Words and Phrases," citing the case of Ide vs. Leiser (24 Pac., 695; 10 Mont., 5; 24 Am. St. Rep., 17) the following quotation has been taken: An agreement in writing to give a person the `option' to purchase lands within a given time at a named price is neither a sale nor an agreement to sell. It is simply a contract by which the owner of property agrees with another person that he shall have the right to buy his property at a fixed price within a certain time. He does not sell his land; he does not then agree to sell it; but he does sell something; that is, the right or privilege to buy at the election or option of the other party. The second party gets in praesenti, not lands, nor an agreement that he shall have lands, but he does get something of value; that is, the right to call for the receive lands if he elects. The owner parts with his right to sell his lands, except to the second party, for a limited period. The second party receives this right, or, rather, from his point of view, he receives the right to elect to buy. But the two definitions above cited refer to the contract of option, or, what amounts to the same thing, to the case where there was cause or consideration for the obligation, the subject of the agreement made by the parties; while in the case at bar there was no such cause or consideration. The lower court in the judgment appealed from said:

There is some discussion in the briefs as to whether this instrument constitutes a mere offer to sell or an actual contract of option. In terms it purports to be the latter and in fact recites the acceptance of a "request" or offer, by the plaintiff. But viewing the instrument as in itself no more than an offer, it was at least a continuing one, "for three months," and as it is not claimed to have been withdrawn during that period, nor afterward, the plaintiff could at any time enter into an actual contract, if it were not such already, by mere acceptance. So the, the lower court did not insist that, by the said document Exhibit E, a real contract of option was executed. He stated that it was at least a continuing offer for three months an offer which it was neither alleged nor proven to have been withdrawn during that period and held that but the plaintiff's mere acceptance at any time during the course of said period, the terms of the said document became a contract, if such it were not already. There is therefor no foundation for the third assignment of error made by the defendant Valdes, to wit, that the lower court erred in holding that the document Exhibit E was a contract of option and not an offer to sell. A certainly this document Exhibit E contains an offer or promise on the part of the defendant Valdes, who signed it, to sell the hacienda in question to the plaintiff Borck, at its assessed valuation, to whom was granted three months within which to make use of his right to purchase the property. In order that such an offer, or proposal, or promise on the part of Valdes, to sell the said hacienda might be converted into a binding contract for him and for Borck, it was necessary that the latter should have accepted the offer, by making use of the right thereby granted him, within the period stipulated, and paying the price agreed upon in that document. Referring particularly to the sale of real estate, there is in fact practically no difference between a contract of option to purchase land and an offer or promise to sell it. In both cases the purchaser has the right to decide whether he will buy the land, and that right becomes a contract when it is exercised, or, what amounts to the same thing, when use is made of the option, or when the offer or promise to sell the property is accepted in conformity with the terms and conditions specified in such option, offer, or promise. An option for the purchase of a real estate is merely a right of election to purchase which when exercised, by comes a contract. (Hopwood vs. McCausland, 120 Iowa, 218.) So that in the case at bar it is immaterial whether the contents of the document be considered as an option granted by the defendant Valdes to the plaintiff to purchase the Nagtajan Hacienda, or as an offer or promise on the part of the former to sell the estate to the latter within the period and for the price specified in Exhibit E. In the defendants' answer no concrete allegation was made that either of them had withdrawn said offer to sell, but the defendant Valdes introduced evidence to prove that the withdrawal of the offer was made before the plaintiff had accepted it, that is, before January 17, 1912, and for this purpose presented a letter from the defendant Legarda (p. 103, part 1 of the record), dated November 13, 1911, and addressed from Paris to Mauro Prieto, also one of Legarda's attorneys in fact. In this letter Legarda stated to Prieto, among other things, that, with

reference to the steps taken by Borck for the purchase of the Nagtajan Hacienda, the addressee might say to Borck that the writer was not very anxious to sell the property except for a price greater than P400,000 in cash. The defendant Valdes testified that the contents of this letter were communicated by him to Borck, though he did not state positively on what date. Valdes also presented the witnesses Alejandro Roces and Jose E. Alemany. The first testified that sometime during the second half of January, on an occasion when he was in Dr. Valdes' office, he heard the latter and Borck speaking, and that Borck said something to Dr. Valdes about P300,000, and that it would be difficult to find a purchaser for cash; and that he also heard them talk about P400,000. The second witness, Dr. Jose E. Alemany, also testified that about the 12th or 15th of January, at a time when he was in Dr. Valdes' office, he heard a conversation between Valdes and Borck in which the former said to the latter that what Borck wanted was impossible, and that the latter replied to Valdes that it was very dear, that he did not want it, that he did not have the money. On this occasion, this witness also heard them talking about P400,000. As the record does not show positively that the defendant Valdes, on the occasion above referred to, told the plaintiff Borck that he (Valdes) withdrew the offer of sale contained in the document Exhibit E, for here merely communicated to Borck the contents of the said letter from Legarda to Prieto, as the date when he did this does not appear; and as the statements made by the witnesses with regard to the conversation they heard between Valdes and Borck are vague and as it cannot be deduced therefrom that such statements referred expressly to the fact that Valdes withdrew the offer on that occasion, it must be concluded that there is no proof on this point. But, though it had been proven that the withdrawal of the offer was made in the month of December, 1911, or before January 17, 1912, as stated by Valdes' counsel in his brief, such a fact could not be a bar to, or annul the acceptance by the plaintiff Borck, of said offer on any date prior to the expiration of the three months fixed in the document Exhibit E, to wit, March 4, 1912, because the offer or promise to sell therein contained was not made without period or limitation whatever (in which case Valdes might have withdrawn it and the latter have accepted it at nay time until it was withdrawn) but for three months, that is, for a specific period of time; and, as the plaintiff Borck had a right to accept the offer during that period, it was Valdes' corresponding duty not to withdraw the offer during the same period. Therefore the withdrawal of the offer claimed to have been made by this defendant was null and void. Consequently, the lower court did not err in holding that the offer and not been withdrawn during the three months mentioned and that it could be converted into a real contract by the plaintiff Borck's mere acceptance within the same period. One of the allegations made by the plaintiff in the complaint, as we have seen, is that on January 19, 1912, while the said offer was still open, the plaintiff accepted it in writing, in conformity with its terms, and requested permission of the defendant Valdes to inspect the property titles and other documents pertaining to the estate, and offered to pay the defendant Valdes as soon as a reasonable examination could be made of the said property titles and other documents, immediately and in cash the price stipulated and agreed upon in the contract for the said stipulated and agreed upon in the contract for the said hacienda. To prove this allegation, the plaintiff presented the document Exhibit G, which reads as follows: MANILA, January 19, 1912.

DR. BENITO VALDES, 195 San Sebastian, City. SIR: I hereby advise you that I am ready to purchase the Hacienda Nagtahan, situated in the district of Sampaloc and Nagtahan, Manila, and in the Province of Rizal, consisting of about 1,993,000, square meters of land, property of Mr. Benito Legarda, for the sum of three hundred and seven thousand (307,000) pesos Ph. c. the price quoted in the option given my by you. Full payment will be made on or before the third day of March 1912, provided all documents in connection with the Hacienda Nagtahan, as Torrens title deed, contracts of leases and other matters be immediately placed at my disposal for inspection and if such papers have been found in good order. Very truly yours, W. BORCK.

In the preceding letter that plaintiff in fact did state that he accepted the offer made to him or the option given to him by the defendant Valdes in the document or letter of December 4, 1911, Exhibit E, for, even though it was not stated therein what option it was that was mentioned in the said letter it is unquestionable that it could refer to no other than to the option or offer mentioned in the said Exhibit E, as no other was then pending between the plaintiff and this defendant. But aside from the fact that the complete payment of the P307,000 mentioned in the said letter was made to depend on the condition that all the documents relative to the Nagtahan Hacienda, such as the Torrens title, etc., be immediately placed at the plaintiff's disposal for his inspection, and be found satisfactory, the said tender of payment was offered to be made on or before March 3, 1912. A simple statement of the last part of the letter is enough to convince that the plaintiff did not offer to pay, immediately and in cash to the defendant Valdes as he alleged in his complaint, the price stipulated and agreed upon between themselves in the said document Exhibit E. Of court, it is undeniable that the plaintiff Borck had a right to examine the title deed and all the documents relative to the Nagtajan Hacienda, before the sale of the property should be consummated by means of the execution of the proper deed of conveyance in his favor by the defendant Valdes as the attorney-in-fact of the other defendant Legarda, and, consequently, the plaintiff Borck was also entitled to refrain from making payment as long as he should not find the documents relative to the said property complete and satisfactory, an indispensable condition in order that the said deed of conveyance might be executed in his favor. But at the very moment this instrument was executed and signed by the vendor, the payment of the stipulated price should have been made in order that it might be an immediate cash payment. Pursuant to the language of that part of the document or letter Exhibit G to which we now refer in respect to the payment, it cannot be understood that the plaintiff tendered payment to the defendant immediately and in cash, for the simple reason that if the documents had been placed by the defendant at the plaintiff's disposal for his inspection, for example, on January

20th, the day following the date of the letter Exhibit G, and the plaintiff had examined and found them satisfactory, and the defendant Valdes had executed in the plaintiff's favor the proper deed of conveyance or sale of the hacienda on the 25th of the same month of January, according to the exact terms of the letter of acceptance of the offer, Exhibit G, dated January 19, 1912, the plaintiff, that is, the purchaser Borck, could have made full payment to the defendant Valdes, of the P307,000, the price of the property, on the 3d of March, 1912, or on any date on which the deed of conveyance was issued, from the 25th of January up to the said 3d day of March, for nothing else can be understood by, and no other meaning and scope can attach to, the words "full payment will be made on or before the third day of March 1912." In short, by the way the part of said document Exhibit G relative to the offer of payment in the example above given is drawn, the purchaser Borck might pay the stipulated price of the property, or have the period from the 25th of January to the 3d of March within which to pay it, and meanwhile the ownership of the estate would already have been conveyed, by means of the proper deed, to the purchaser Borck, and he could not have been obliged to pay the said price until the very day of March 3, 1912, by reason of the contents of the said letter, Exhibit G. In connection with the allegation we have just been discussing, to wit, that the plaintiff Borck made a tender of payment to the defendant Valdes "immediately and in cash" of the price of the hacienda fixed in the instrument Exhibit G, the plaintiff also presented as proof, in relation to the allegation as to the presentation of the letter of January 19, 1912, Exhibit G, another letter written by himself, and also addressed to the defendant Valdes, under date of the 23rd of the same month of January This document is marked Exhibit J and is of the following tenor: January 23, 1912.

Valdes in the letter of January 23, Exhibit J, that he had the pleasure to inform him that he could improve the conditions of payment for the Hacienda Nagtajan in so far as to agree to pay the whole amount of purchase price, P307,000, ten days after the Torrens title deeds and all papers in connection with the hacienda should have been placed at his disposal for inspection and should have been found satisfactory, for the payment which Borck offered to make to Valdes, of the price of the property, in said letter Exhibit J, was not indeed to be effected on the third of March or prior thereto, but within the limited period of ten days after the documents-relative to the property should have been delivered to the plaintiff for his inspection and been found satisfactory. And were they any doubt that the meaning or the sense; of said offer was not as just above stated, it would be removed by a mere perusal of the statement made therein by the plaintiff telling the defendant Valdes that he, the former, had the pleasure to inform he latter that he, Borck, could improve the conditions of payment for the hacienda, to wit, those mentioned in the letter written' four days before, that is, on January 19th, Exhibit G, in the manner aforementioned by paying the whole amount of the purchase price ten days after the documents should have been delivered to the plaintiff and he should have found them satisfactory. But, the letter of January 23, Exhibit J, is drawn up_in such a way that it also does not contain any tender of "immediate and cash" payment by the plaintiff Borck to the defendant Valdes. Indeed, as said letter makes the total payment of the price of the property depend on the delivery by the defendant Valdes to the plaintiff Borck of all the documents relative to the hacienda, and of the further condition that, the latter should find such documents in good order and satisfactory, and as a period of ten days was fixed for the said payment, counting from the date of the delivery of the documents, and on the condition that Borck should find them satisfactory, the date of payment cannot be-understood to have been fixed for any certain day after those ten days, or for the eleventh day, for the simple reason that, for example, if the documents were delivered to Borck on February 1 for his inspection, and after the lapse of ten days thereafter he had not finished examining them and had kept them in his possession for this purpose for ten days longer, that is, until February 20, and then had found them satisfactory, the result would be that the payment would have had to be made, not ten days, but twenty days, after the delivery of the said documents, and this would have been authorized by the ambiguous terms in which the tender of payment are couched. But supposing that as appears to be the case, it had been the purpose of the plaintiff Borck, in fixing those ten days in the letter Exhibit J, for the payment, that there should be an interval of said ten days between the delivery and inspection of the said titles and the determination of whether they were satisfactory or not, it might also have happened that on the third day after the delivery of the titles, these might have been found by the purchaser to be satisfactory, and that the vendor might immediately have executed the proper deed of conveyance of the property in the purchaser's favor. In that event, according to the terms of said letter Exhibit J, the purchaser Borck would not be obliged to make payment to the vendor Valdes until seven days after the execution of the deed of conveyance and the transfer of the property to the former that is, not until the expiration of the period of ten days counting from the date of the delivery of the documents tothe purchaser; and it is evident that such a payment would not be in cash, pursuant to the provisions of article 1462, in connection with article 1500, of the Civil Code. Furthermore: The plaintiff Borck also presented another letter in connection with his aforementioned allegation made in the complaint, and related to the other two previous letters,

DR. BENITO VALDES, 195 Calle San Sebastian, City. SIR. I have the pleasure to inform you that I can improve the conditions of payment for the Hacienda Nagtahan in so far as to agree to pay the whole amount of purchase price, three hundred and seven thousand (307,000) pesos, Ph., c., ten days after the Torrens title deeds and all papers in connection with the hacienda have been placed at my disposal for inspection and these documents and papers have been found in good order. Respectfully yours, As may be seen by the language in which the preceding letter is couched, the plaintiff virtually recognized, just as he had done in the letter of January 19th, that is, the one written four days before, Exhibit G, that the tender of payment to the defendant Valdes, of the price of the hacienda, could not be understood to have been a tender of "immediate and cash" payment, as alleged in the complaint, but that payment might be made on any date prior to March 3, or on this same date, even though he may have found satisfactory all the documents that the defendant might have placed at his disposal to be examined, and consequently, although the proper deed of conveyance of the property should have been executed in his favor. Nothing else is meant by the statement made by the plaintiff Borck to the defendant

Exhibit G and J, to prove what he had intended to accomplish by means of the latter, to wit, that the tender of payment made by him to the defendant was made in accordance with the said allegation, "immediately and in cash." This letter (Exhibit K) bears the date of February 28,t1912, and reads as follows: MANILA, P.I., February 28, 1912.

and requested to be notified by Valdes when it would be convenient for him to place at the plaintiff's disposal for inspection the title deed and papers in connection with said estate. The notification contained in this letter written by Borck to Valdes, that the purchase price of the estate was ready to be paid over to the latter, and the mention made in this same letter, immediately after the notification, of the inspection which the plaintiff wished to make of the titles which he desired should be delivered to him for this purpose, show that this last letter, Exhibit K, relates to the one that preceded it, dated January 23, Exhibit J, or, what amounts to the same thing, is a result of it, for it is virtually said therein that the price of P307,000 (which according to his previous letter, he had agreed to pay for the hacienda, ten days after the delivery to him of the documents relative to the estate and their having been found by him to be satisfactory) was already held in readiness by the plaintiff for delivery to the defendant, but this delivery of the price was subordinated to the delivery requested by the plaintiff to those titles and other documents,and to the plaintiff's finding such documents s atisfactory, and the delivery of the price was also subordinate to the period of the ten days, mentioned in the said letter Exhibit J. The letter Exhibit K can have no meaningwhatever in that part thereof where reference is made tothe offer of payment of the price of the hacienda, or to the payment itself, except in connection with the previous Exhibit J, inasmuch as the letter Exhibit K does not state when Borck was to deliver to Valdes the price which, according to this same letter, the plaintiff already had in readiness for that purpose. So that neither in the letter Exhibit K is any specific offer of payment made by the plaintiff Borck to the defendant Valdes, of the price stipulated in the document Exhibit E to be paid "at open and in cash," notwithstanding its being said therein that the plaintiff had the money ready to be turned over to the defendant. Upon the plaintiff Borck's testifying at the trial as witness, said documents Exhibits E, G., J, and K, and also others marked from A to M, including the four just referred to, were presented in evidence. Among these documents is found Exhibit F, which reads as follows: MANILA, January 17, 1912.

DR. BENITO VALDES, Attorney-in-fact for Benito Legarda Manila. DEAR SIR: To prevent any misunderstanding, I wish to advise you that the purchase price of the Hacienda Nagtahan is ready to be paid over to you, and I request you to notify me whenever it is convenient for you to place at my disposal for inspection the title deed and papers in connection with said estate. Very respectfully, W. BORCK.

As may also be seen by the very terms employed by the-plaintiff in this letter, he virtually admits, clearly acknowledges, that in the two previous letters, Exhibits G and J, he had made the tender of payment of the price for the Nagtajan Hacienda in such a manner that it could not be understood to have been in accordance with the agreement entered into between himself and Valdes, that is, that the payment should be in cash. The letter Exhibit K in fact begins with these words: "To prevent any misunderstanding." and then says: I wish to advise you that the purchase price for the Hacienda Nagtahan is ready to be paid over to you, and request you to notify me whenever it is convenient for you to place at my disposal for inspection the title deed and papers in connection with said estate. The first words of the letter of course indicate that the plaintiff Borck himself, in writing them, feared, at least the was not sure, that, in accepting, in the letter of January 19th, Exhibit G, the offer of the sale of the hacienda to him by Valdes, and in making therein the tender of payment band in renewing this tender in the letter, Exhibit J, of the 23 of the same month, he, the plaintiff, had not conformed to the terms of the offer of sale or of the option to buy, given to him by Valdes by means of the document Exhibit E, for in the said last letter, Exhibit K, he takes it for granted that there was or might be some misunderstanding between himself and the defendant Valdes with)respect to the tender made by him of the price of the estate. According to the admission of the plaintiff Borck in his complaint, this price was to be paid "at one and in cash." In the said letter Exhibit K, to avoid that misunderstanding, the plaintiff Borck stated to the defendant Valdes that the purchase price for thehacienda was ready to be paid over to hi,

DR. BENITO VALDES, 194 San Sebastian, City. SIR: In reference to our negotiations regarding the Hacienda Nagtahan at Manila, property of Mr. Benito Legarda, consisting of about 1,993,000 sq. meters of land, I offer to purchase said property for the sum of three hundred and seven thousand (307,000) pesos P. c., cash, net to you, payable the first day of May 1912 or before and with delivery of a Torrens title free of all encumbrances as taxes and other debts. Respectfully, YOURS,

On said documents being presented in evidence at the trial, the defendants objected to their admission; the court reserved his decision thereon and in the judgment appealed from made no mention as to the contents of said documentExhibit F, and in ruling on the defendants' motion for a new trial, in which motion they signed as one of the error of the said judgment the fact that no notice whatever had been taken therein of the said Exhibit F, which defendants claimed to be one of the their most important proofs, the court stated as a reason for the omission that this Exhibit F was unsigned, unidentified and was not attested by anyone, besides the fact that no conclusion, either in favorof or against the plaintiff, could be based on its because, although the said letter, that is, Exhibit F, might have been actually delivered, no right whatever could be predicated thereon, nor any liability, and it was, therefore, inadmissible. The record shows that when Exhibit F and Exhibits G, J, K, L, and M, were shown to the defendant Valdes by the plaintiff's counsel Beaumont, for their identification and in order that Valdes might state to the court whether he had received the originals and, if so, where they were, defendant merely said in reply that he had received three originals from Borck and two originals from Beaumont (p. 14 of the transcription of the stenographic notes), and exhibited the originals of Exhibits C, M. L., K, and G, but not that ofExhibit F. The plaintiff Borck having been presented as a witness, after he had been asked the first four questions by Attorney Hartford Beaumont, the latter made the following statement: "I would like to interrupt the witness at this moment in order to present all the Exhibits A to M, which were identified by the previous witness." Counsel for the defendant Legarda objected to the admission of the said documents on the ground that they were incompetent, immaterial and irrelevant. The same objection was also made by counsel for the defendant Valdes in behalf of his client, and the court said that he would reserve his decision (pp. 24 and 25 of the record). During the examination of plaintiff Borck, in which Attorney Beaumont plied him with questions in regard to the aforementioned documents, beginning with Exhibit A and showed him the documents themselves, on coming to Exhibit F, after having given attention to other exhibits among which was Exhibit O, which we shall mention later on, the plaintiff answered the questions put to him with respect to Exhibit F in the following manner as found in the transcription of the stenographic notes in English(p. 61 on the record): Q. Now I will show you Exhibit F, and call you attention to the fact that it has the same date, January 17, as Exhibit O, and ask you to state the circumstances under which Exhibit O was signed A. Q. This is may acceptance of the option of Dr. Valdes. How does it happen that it has the same date as Exhibit O?

acquainted with that kind of business, he sometimes read the letters and, after taking notes of their contents, transmitted their substance to Mr. Legarda, and at other times sent to him the letters themselves, from which testimony of Valdes it is concluded that he was not in the habit of keeping the originals he received from Borck. However, as has already been seen, notwithstanding that Exhibit F was not identified by Valdes, the plaintiff Borck, However, as has already been seen, notwithstanding that Exhibit F was not identified by Valdes, the plaintiff Borck, referring to the said document on its being shown to him by his attorney, who called his attention to the fact that it has the same date, January 17, as Exhibit O, and asked him to state the circumstances under which Exhibit O was signed, said that Exhibit F was his acceptance of Dr. Valdes' option; and in answering the next question, explained the reason why Exhibit F bore the same date as Exhibit O, saying that "he did not believe in hangingback with his business;" that he "concluded it as soon as possible;" and that "as soon as he got the offer, he made his acceptance to Dr. Valdes." Exhibit O is as follows: MANILA, January 17, 1912.

W. BORCK, Esq., Manila. DEAR SIR: Referring to our recent conversation regarding_the proposed purchase by clients of ours of the property known as the Hacienda Nagtajan, I beg to advise you that our clients, after investigation of the physical conditions of the property, are prepared to make an offer for the purchase of the same at the price named by you, to wit, P380,000, cash, provided that there is good titled to the property, that it contains substantially and area represented, namely, 1,993,000 square meters, and that the existing leases upon certain portions of the said property are found to be in proper form. It is the desire of our clients to have an opportunity to investigate the legality of_the title and leases at the earliest practicable moment, and they have authorized us to say that if the conditions are satisfactory with regard to these matters, they are prepared to make you a firm offer of the amount above named, and to make a deposit of a reasonable amount as an evidence of good faith. Very truly yours, BRUCE LAWRENCE, ROSS, AND BLOCK, "JAMES ROSS." Connecting the contents of this document Exhibit O with those of the previous Exhibit F, and taking into account the testimony given by Borck, as above quoted, in answering the questions put to him by his own attorney, relative to the said exhibits, it is clearly understood that on Borck's receiving the letter of January 17m 1912, from the law firm of Bruce, Lawrence, Ross and Block, and signed by James Ross, Exhibit O, in which these gentlemen stated that they were prepared to make an offer for the purchase of the Hacienda Nagtajan at the price of P380,000 cash, he wrote on the same date, January 17, to Dr. Valdes the letter, a copy of which is Exhibit F, in which, referring to the negotiations between them regarding the said

A. Because I don't believe in hanging back with my business. I conclude it as soon as possible. As soon as I got the offer, I made my acceptance to Dr. Valdes. The document Exhibit F, as has been seen, is unsigned but the document Exhibit J, to wit, the aforementioned letter of January 23, 1912, is in the same condition. It is true that although the document Exhibit J is unsigned because it is a copy of the letter addressed on that same date to Valdes by Borck, Valdes kept the original in his possession and he did not present the original of Exhibit Fibut only the other letters before mentioned, although he stated with reference to the letter he had received from Borck, that as he was not a business man and was not

Nagtajan Hacienda, he offered to purchase this property for P307,000, cash and net, payable on or before the first day of May, 1912, delivery to be made to him to a Torrens title free of all encumbrance, such as taxes and other debts. For this reason the plaintiff Borck stated in his testimony that the said letter Exhibit F was his acceptance of Dr. Valdes option, for, not believing in hanging back with his business and desiring to conclude it as soon as possible, as soon as he received the officer, contained in the letter Exhibit O, from the said law firm, he transmitted or made known his acceptance to Dr. Valdes. We do not think there could be a better identification of the letter Exhibit F than that made by it sown writer, the plaintiff Borck, for he admitted in his testimony that he wrote this letter, and although the defendant Valdes did not present the original of the said letter Exhibit F, perhaps because it was one of those which he did not keep in his possession, there can be no doubt whatever that the original of the said Exhibit F was transmitted to Valdes by the plaintiff Borck, of the latter explicitly said so in stating that letter was his acceptance of Dr. Valdes' option, the plaintiff explaining why he had written said letter, on referring to the relation between said Exhibit F and the Exhibit C, on account of the same date both letters bore, on making further explanations in the matter, hand saying: "As soon as I got the offer, I made my acceptance to Dr. Valdes." Furthermore, if there were still any doubt whatever about this, it would disappear after a consideration of the following quotation taken from the plaintiff's written brief file before the lower court rendered judgment, in which mention is made of the said brief and of the questions discussed therein said brief is found on pages 190 to 206 of the record and is signed, by the plaintiff's attorneys, Aitken and Beaumont. On page 195 thereof, appears the following: 3. THE ACCEPTANCE. On the 17th of January, 1912, Mr. Borck received a written offer (Exhibit O) for the property from Mr. James Ross of this city for the price of P380,000 and thereupon on the same day wrote Dr. Valdes the letter which appears as Exhibit T (pp. 56, 169 of the record). No question arises as to the validity of this acceptance for reasons which will presently appear. . . . As may be seen, in the paragraph of that brief signed by the plaintiff's attorney there is a restatement of what the plaintiff had said in his testimony, to with, that as soon as he received, on January 17, 1912, a written offer Exhibit O, from Mr. James Ross of this city for the property in question and for the price of P380,000, he wrote on the same day the letter of Dr. Valdes that appears as Exhibit T (pp. 56, 169, of the record). In this same brief the statement was also made that no question had arisen as to the validity of this acceptance, for the reasons which would presently appear. It is to be noted that Exhibit T, mentioned in the preceding paragraph transcribed from the brief, is the same Exhibit F, which was erroneously marked with the letter T in the said paragraph, as shown by the fact that in this paragraph Exhibit T is referred to as being found on page 56 of the record, which page containes Exhibit F, and on page 169 of the record, which contains a copy of the same Exhibit F,_the date of this latter exhibit, January 17, being also that of the Exhibit O, mentioned in the said brief.

The trial court therefore erred in not admitting in evidencesaid document Exhibit F and, consequently, in not taking it into consideration in the judgment appealed from. This rejection cannot be warranted by the fact that the defendants themselves opposed its admission, for the latter also opposed the admission of all the documents presented by the plaintiff, on the understanding that, as they were not bound by the documents Exhibits A and E, the one as principal and the other as agent, such documents were immaterial, incompetent and irrelevant, nevertheless the trial court admitted some of those documents and considered them for the purpose of drawing his conclusions in the judgment rendered. It is hardly necessary now to show that said letter of January 17, 1912 (Exhibit F) was Borck's acceptance of the option or offer of sale made to him by the defendant Valdes in his letter of December 4, 1911 (Exhibit E), for the plaintiff Borck himself admitted in his testimony at the trial that the letter Exhibit F was his acceptance of said option. In fact, the plaintiff Borck, referring in the letter, Exhibit F, to the negotiations between himself and Valdes regarding the Nagtajan Hacienda belonging to Benito Legarda, offers to purchase said property for the sum of P307,000, cash and net, payable the first day of May 1912, or before, the plaintiff to be furnished with a Torrens title free of all encumbrances, such as taxes and other debts. The offer of sale or option of purchase contained in the document Exhibit E, was for the period of three months, from December 4, 1911, for the assessed valuation of the property, understood to be P307,000, though subsequently at the trial it was fixed by agreement of the parties at P306,954 and payment was to be made in cash, for, even though this was not stated in the document, that failure itself so to state created the understanding that the price was to be paid in cash when delivery of the property was made, in accordance with the provisions of article 1462, in connection with article 1500, of the Civil Code. The plaintiff Borck recognized this in his complaint, in making the allegation we considered at the beginning of this decision, to with, that he accepted in writing the said offer in conformity with its terms and offered to pay to the said Valdes, "immediately and in cash" the price stipulated; and he also so testified atthe trial, saying, in reference to the conditions of the payment of the purchase price, that "the conditions were not discussed, because the payment was to be made in cash on exhibition of the documents." Now then, in the document Exhibit F, that is, the letter of January 17, 1912, it is stated that payment of the net amount would be made in cash on_the first day of May, 1912, or before. So that it may be said with all the more reason that in relation to the other offers of payment contained in the documents F, G, J, and K, that in the letter, Exhibit F, the plaintiff Borck, in accepting the offer of sale, did not make an offer to pay the price "immediately and in cash," as stated in his allegation set forth in the complaint, for, by virtue of the said documents, he reserved to himself the right to make the payment on the first day of May, 1912, or on any date prior thereto, as might suit him, that i, two months after the termination of the option or of the offer, which would be, on or before March 4, 1912, although the deed of conveyance of the property in his favor should have been executed by the defendant Valdes on any date within the period of the option, that is, within the three months which ended on the said 4th day of March, 1912, whereby the plaintiff virtually gave himself five months from the date of the offer of sale or option of purchase, to effect the said payment. This is evidently not an offer to pay "immediately and in cash," nor is it a payment in cash, as the law provides, nor such a payment as the plaintiff Borck himself understood it to be, when he stated in his testimony that the payment was to be made in cash upon exhibition of the documents. Duly considering the documents Exhibits F, G, J, andk, that is, the statements made by the plaintiff Borck in the letter of January 17, 19 and 23, 1912, and February 28th of the same year, addressed by him to the defendant Valdes, in accepting the option that the latter had

granted him for the purchase of the Nagtajan Hacienda, or the offer of sale of the said hacienda defendant made to the plaintiff, with respect to the payment of the price therof, it is seen that in the said documents the plaintiff Borck offered to pay to the defendant Valdes the said price, first within the period of five months from December 4, 1911, afterwards within the terms of three months from the same date of December 4, and, finally, within a period which could as well be ten days as twenty or thirty of more days from the time Valdes should put at the plaintiff's disposal to be inspected, the titles and other documents relative to the said hacienda, and the plaintiff should find them satisfactory and the proper deed of conveyance should, in consequence thereof, be executed in his favor by Valdes; and this evidently is an offer of payment in installments, and not an "immediate and cash" payment. The lower court in the judgment appealed from says that as the document Exhibit E, dated December 4, 1911, gave the plaintiff a three months' option for the purchase of the property, a period which expired, therefore, on March 4, 1912, this necessarily allowed the plaintiff them for the payment until this last date, and as in the letter Exhibit G, of the date of January 19, 1912, the plaintiff said that he would pay before the expiration of the said period, in no manner could this have modified the option, rather, on the contrary, it coincided with it, the court adding, moreover, that a payment made on or before the 4th of March would have been a payment in cash, if this was required by Exhibit E. It is true that the period granted by the defendant Valdes to the plaintiff for purchasing the property, was three months from December 4, 1912, but not because this period expired on March 4, 1912, that is, the last day of the said three months, may it be understood that the defendant granted to the plaintiff the period for payment until the very last day, March 4, 1912, for the simple reason that, the period for the purchase being three months, that is,the time during which the plaintiff Borck could make use of the power or the right granted by him by Valdes to arrange for the purchase of, and to purchase in fact, the said property, if Borck purchased it on any date prior to March 4, 1912 (on January 19, 1912, for example) the result would be that the proper deed of sale being consequently executed in his favor on the said date of January 19, and the time that payment would be made not having been fixed in the said document Exhibit E, such payment wouldhave to be made at the time of the delivery of the thing sold, pursuant to article 1500 of the Civil Code; but as, in accordance with article 1462 of the same code, the execution of the deed of sale is equivalent to the delivery of the thing which is the object of the contract, the payment would not be in cash if it were not made on the same 19th day of January, 1912, and were postponed until some other later day, or until March 4, 1912. In short, it is impossible to confound the period of the option granted to the plaintiff Borck for the purchase of the Nagtajan Hacienda, with the period for the payment of it price, had he purchased it. The plaintiff Borck had three months, from December 4, 1911, within which to make the purchase; to make the payment he did not have a single day after the date on which the proper deed of sale would have been executed in his favor; he was to pay the price at the very moment the said deed was executed, because, by this means, the property would have been delivered to his, although there still might have been lacking one or two months of the three months' period of the said option. This is the payment in cash to which the law refers in the sale of real estate in cases where the time for making payment has not been fixed, and the plaintiff himself, Borck, so understood when he stated in his testimony, as we have before said, that, as the conditions for the payment had not been discussed, payment was to be made in cash on exhibition of the documents, or, what amounts to the same thing, on the execution of the proper deed of sale of the property in his favor. It is therefore evident was not fixed therein, the document Exhibit E, dated December 4, 1911, required the payment to be made in cash, and the lower court erred in holding that the plaintiff Borck's letter, Exhibit G, of the date of January 19, 1912, in stating that the payment would be made on or before March

4, 1912, in no manner modified the option or offer of sale contained in the document Exhibit E, but that on the contrary it coincided therewith; also in holding that a payment made on or before March 4, 1912, would have been a cash payment. The letter of December 4, 1911, Exhibit E, contained, as aforesaid, an offer of sale or a proposal of sale on the partof the defendant Valdes to the plaintiff Borck, of the Nagtajan Hacienda, for the assessed valuation of the same, effective during the period of three months counting from the said date. Such proposal or offer was an expression of the will only of the defendant Valdes, manifested to the plaintiff Borck. In order that such a proposal might have the force of a contract, it was necessary that the plaintiff Borck's will should have been expressed in harmony with all the terms of the said proposal. Consent is shown by the concurrence of the offer and the acceptance of the thing and the cause which are to constitute the contract. (Art. 1262, Civil Code.) There is no contract unless, among other requisites, there is consent of the contracting parties. (Art. 1261, par. 1, of the same code.) Contracts are perfected by mere consent, and from that time they are binding, not only with regard to the fulfillment of what has been expressly stipulated, but also with regard to all the consequences which, according to their character, are in accordance with good faith, use, and law. (Art. 1258, Civil Code.) Promises are binding in just so far as they are accepted in the explicit terms in which they are made; it not being lawful to alter, against the will of the promisor, the conditions imposed by him (Decision of the supreme court of Spain, of November 25, 1858); for only thus may the indispensable consent of the parties exist for the perfection of the contract. (Decision of the same court, of September 26, 1871.) An option is an unaccepted offer. It states the terms and conditions on which the owner is willing to sell or lease his land, if the holder elects to accept them withinthe time limited. If the holder does so elect, he must give notice to the other party, and the accepted offer thereupon becomes a valid and binding contract. If an acceptance is not made within the time fixed, the owner is no longer bound by his offer, and the option is at an end. (words and Phrases, vol. 6, p. 5000, citing McMillan vs. Philadelphia Co., 28 Atl., 220; 159 Pa., 142.) An offer of a bargain by one person to another, imposes no obligation upon the former, unless it be accepted by the latter, according to the terms in which the offer was made. Any qualification or, or departure from, those terms, invalidates the offer, unless the same be agreed to by the person who made it. (Eliason et al. vs. Henshaw, 4 Wheaton, 225.) In order that an acceptance of proposition may be operative it must be unequivocal, unconditional, and without variance of any sort between it and the proposal, . . . . An absolute acceptance of a proposal, coupled with any qualification or condition, will not be regarded as a complete contract, because there at no time exists the requisite mutual assent to the same thing in the same senses. (Bruner et al. vs.Wheaton, 46 Mo., 363.)

As already seen while we were considering the documents Exhibits F, G, J, and K, the plaintiff Borck accepted the offer of sale made to hi, or the option of purchase given him in document Exhibit E by the defendant Valdes, of the Nagtajan Hacienda, for the assessed valuation of the same, but his acceptance was not in accordance with the condition with regard to the payment of the price of the property, under which the offer or the option was made for, while this payment was to be paid in cash, as the plaintiff Borck himself admitted and the defendant Valdes positively stated in his testimony, and also a provided by law, for the reason that the time was not fixed in said offer or option when the payment should be made in the aforesaid four documents Exhibits F, G, J, and K, the plaintiff Borck made the offer to pay the said price, in the first of them, within the period of five months from December 14, 1911; in the second, within the period of three months from the same date, and, finally, in the other two documents, within an indefinite period which could as well be ten days as twenty or thirty or more, counting from the date when the muniments of title relative to the said hacienda should have been placed at his disposal to be inspected and he should have found them satisfactory and, in consequence thereof, the deed of conveyance should have been executed in his favor by the defendant Valdes. So that there was no concurrence of the offer and the acceptance as to one of the conditions related to the cause of the contract, to wit, the form in which the payment should be made. The expression of Borck's will was not in accordance with all the terms of Valdes' proposal, or, what amounts to the same thing, the latter's promise was not accepted by the former in the specific terms, in which it was made, and finally, the acceptance of the said proposal on Borck's part was not unequivocal and without variance of any sort between it and the proposal, because, in view of the terms in which the payment was offered by Borck in his said letters of January 17, 19 and 23, Exhibits F, G, J, and K, there was variance from the moment in which according to said terms, in the first two letters, the payment of the price should be made on or before the 1st of May and on or before the 3d of March, 1912, respectively, that is, within a period limited in those letters, and the offer of payment was equivocal inasmuch as, by the last two letters, it was made to depend on certain acts as a basis for fixing the period in which the said payment should have to be made; finally, there was no mutual conformity between the person who made the proposal or offer, Valdes, and the person who accepted it, Borck, in the same sense with respect to the form of payment, and Borck deviated from the terms of the proposition with regard to the form of payment and the record does not show that Valdes assented to such variance. It is, therefore, evident that, in accordance with the provision of law and the principles laid down in the decisions above cited, the proposal or offer of sale made by the defendant Valdes to the plaintiff Borck, or the option of purchase granted by the former to the latter, with respect to the Nagtajan Hacienda, in the document Exhibit E, was not converted into a perfect and binding contract for the, and that as Valdes did not assent to the modification introduced by Borck in the offer of sale made by this defendant in regard to one of its terms, to with, the form of payment, the said offer became null and void, and, consequently, Borck has no right to demand of the defendant Valdes and of the latter's principal, the other defendant, Legarda, or of the administrators of the estate left by Legarda at his death which occurred during the course of these proceedings, and whose names appear at the beginning of this decision, the fulfillment of that offer, nor, therefore, any indemnity whatever for such nonfulfillment. The lower court erred, than, in finding otherwise in the three conclusions of law contained in the judgment appealed from which were mentioned at the beginning of this decision and on which, in short, the pronouncement made in that judgment was founded.

As the power of attorney conferred by Benito Legarda upon Benito Valdes was explicit and positive, according to the document Exhibit A, a copy of which was attached to the complaint, to sell and convey all kinds of real estate at such prices and on such conditions as Valdes might deem proper, and also as the terms of the option granted by Valdes to Borck, or of the offer of sale made by the former to the latter in the document Exhibit E, of the Nagtajan Hacienda belonging to Benito Legarda, are clear; and, furthermore, as the plaintiff made the said documents an integral part of the complaint as the grounds thereof, the testimony introduced by the defendant Valdes to prove that said offer of sale made by him to Borck was subject to the approval of his, Valdes', principal was improper (sections 103 and 285, Code Civ. Proc.) and the lower court did not err in not taking that testimony into consideration in his judgment. Likewise the evidence presented by the defendant Valdes in an endeavor to prove that said offer of sale was obtained from him by the plaintiff Borck by means of fraud and deceit, was improper. Consequently the trial court did not err by making no finding in the judgment on those two points. In conclusion, as the offer of sale of the Nagtajan Hacienda, made by Valdes to Borck, or the option of purchase thereof granted by the former to the latter by the letter of December 4, 1911, Exhibit E, did not constitute a perfect contract and, consequently, was not binding upon the defendants Valdes and Legarda or the plaintiff Borck, by reason of the lack of the mutual assent of the parties concerned therein, which is wholly in accordance with the terms of the said offer, there can be no obligation demandable in law by virtue of the stipulations contained in said document, and the action prosecuted by the plaintiff for that purpose in these proceedings in improper. For the foregoing reasons the judgment appealed from is reversed and we absolve the defendants from the complaint. The costs of the first instance shall be imposed upon the plaintiff. No special finding is made with respect to those of this second instance. So ordered. Arellano, C.J., Torres and Johnson, JJ., concur.

G.R. No. L-35272 August 26, 1977 FLORENCIA CRONICO, substituted by LUCILLE E. VENTURANZA, petitionerappellant, vs. J. M. TUASON & CO., INC., and CLAUDIO R. RAMIREZ, respondents-appellees. Antonio B. Alcera for appellant. Araneta, Mendoza & Papa for appellee J. M. Tuason & Co., Inc. Leonardo Abola for appellee Caludio R. Ramirez.

e) Ordering defendants, jointly and severally, to pay plaintiff (Dr. Lucille E. Venturanza) the sum of P10,000.00, as attorney's fees; f) To pay the costs. IT IS SO ORDERED Quezon City, Philippines, January 25, 1969. s/t WALFRIDO DE LOS ANGELES J u d g e (Rollo, p. 69, Joint Record on Appeal, pp. 49-50) The defendants J. M. Tuason & Co., Inc. and Claudio R. Ramirez appealed to the Court of Appeals which promulgated its decision on April 21, 1972 reversing the judgment appealed from and dismissing the complaint with costs against the plaintiff-appellee. (Rollo, p. 31, Decision in CA-G. R. No. 44479R, p. 19) The plaintiff, Florencia Cronico substituted by Lucille E. Venturanza, filed with this Court a petition for certiorari to review the decision of the Court of Appeals * assigning the following errors: I THE HONORABLE COURT OF APPEALS ERRED IN- HOLDING THAT FLORENCIA CRONICO OBTAINED. THE DEFENDANT COMPANY'S LETTER-OFFER TO HER DATED MARCH 20, 1962 BY MEANS OF IRREGULAR AND PREMATURE DELIVERY. II THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RECORDS DO NOT SHOW THAT DEFENDANT COMPANY'S LETTER-OFFER OR UNILATERAL PROMISE TO SELL W AS SUPPORTED BY A CONSIDERATION OTHER THAN THE SELLING PRICE. III THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PLAINTIFF CRONICO IS NOT PRINCIPALLY NOR SUBSIDIARILY OBLIGED UNDER THE CONTRACT TO SELL (EXH. 3-Company) AND HENCE MAY NOT BRING SUIT TO ANNUL THE SAME. IV THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE TRIAL COURT AND DISMISSING THE COMPLAINT.

FERNANDEZ, J: In Civil Case No. Q-6363 entitled "Florencia Cronies, substituted by Lucille E. Venturanza, plaintiff, versus J. M. Tuason & Co., Inc., represented by Gregorio Araneta, Inc., and Claudio Ramirez, defendants," the Court of First Instance of Rizal, Branch IV, Quezon City, rendered its decision dated January 25, 1969, the dispositive part of which reads: IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiff and against the defendants, as follows: a) Declaring the Contract to Sell No. 10879 Exhibit 3-company, executed by defendant corporation in favor of its co- defendant Ramirez on April 2,1962, as NULL and VOID; b) Ordering the defendant-corporations to execute a Contract to Sell in favor of the substituted plaintiff Dr. Lucille E. Venturanza over Lot 22, Block 461 of the Sta. Mesa Heights Subdivision, under the same terms and conditions of their offer to the plaintiffs as contained in the letter of Gregorio Araneta, Inc., representative of J. M. Tuason & Co., Inc., to Florencia Cronico of March 20, 1962 (Exh. H) or under the same terms given to defendant Ramirez; c) Declaring as cancelled any and all transfer certificates of title that might have been issued in favor of defendant Ramirez over said Lot No. 22; d) Ordering the defendants, jointly and severally, to pay the plaintiff (Dr. Lucille E. Venturanza) the sum of P160,000.00, as damages representing the rents derived from the property in question up to December 2, 1968, plus the sum of P2,000.00 every month thereafter until the lot in question is sold and delivered to plaintiff (Dr. Venturanza);

(Rollo, p.74, Petitioner's Brief, pp. 1-2) The facts, as found by the Court of Appeals, are: Appellant J. M. Tuason & Co. Inc. hereinafter referred to as appellant company was the registered owner of Lot No. 22, Block 461, Sta. Mesa Heights Subdivision, located at the Northwestern corner of Quezon Boulevard and Gregorio Araneta, Quezon City and embraced by Transfer Certificate of Title No. 49235 of the registry of Deeds of said city. In March, 1962, plaintiff Florencia Cronico offered to buy the lot from the appellant company with the help of Mary E. Venturanza. They personally talked to Benjamin F. Bautista, Manager of the Real Estate Department of Gregorio Araneta, Inc. the appellant company's attorney-in-fact, proposing to buy Lot No. 22. She was required to present proofs to show her rights to the lot. On March 8, 1962, Florencia Cronico exhibited certain documents showing her priority rights to buy the lot. In the first week of March, 1962, defendant-appellant Claudio Ramirez also learned that the lot in question was being sold by the appellant company. The occupants thereof who also had priority rights to buy the land informed Claudio Ramirez, about the intended sale. Juanita Semilla and Pedro Fernandez, who were the occupants of the said Lot No. 22 expressed their willingness to waive their rights although-Pedro Fernandez reserved a condition that a small portion of the land whereon his house stands be sold to him. In the same month, March, 1962, plaintiff Cronico and defendant- appellant Ramirez sent separate individual letters to appellant company wherein they expressed their desire to purchase the land and requested information concerning the area, the price and other terms and conditions of the contract to sell. Two others intimated their desire to buying the lot. They were Bonifacio Chung and Angeles Henson. Both, however, subsequently lost their interest in said lot. On March 20, 1962, the appellant company sent separate reply letters to prospective buyers including plaintiff Cronies and defendant-appellant Ramirez. They were dropped in the Manila Post Office at 11:00 in the morning of March 21, 1962 by registered mail. It so happened that plaintiff Cronico went to the appellant company's office on March 21, 1962, and she was informed that the reply letter of the appellant company to prospective buyers of the same lot had been mailed. With this information, plaintiff Cronies and Mary E. Venturanza went to the post office in Manila and she was able to get the letter at about 3:30 in the afternoon of the same date. After she got the letter, plaintiff Cronies and Mary E. Venturanza went directly to the office of Gregorio Araneta Inc., Escolta, Manila, and presented the letter to Benjamin Bautista, Head of the Real Estate Department of said company. Since she had no money, plaintiff Cronies requested Mary E. Venturanza to issue a check in the amount of P33,572.00 to cover the down payment for the lot. However, Benjamin Bautista did not accept the cheek. He advised plaintiff Cronies that it is Gregorio Araneta II who would decide whose offer to buy may be accepts after the appellant company receives the registry return cards attached to the registered letters sent to the offerors.

On March 22, 1962, between 10:00 and 11:00 a.m., appellant Ramirez received from the post office at San Francisco del Monte, Quezon City, the reply letter of the appellant company dated March 20, 1962, wherein it stated that Lot 22, Block 461, Sta. Mesa Heights Subdivision, was available for sale under the conditions therein set forth and that the said lot was being offered for sale on a first come first serve basis. Appellant Ramirez proceeded to the office of Benjamin Bautista in the same morning stating that he accepted the conditions stated in the appellant company's letter. Benjamin Bautista advised appellant Ramirez to wait for the decision of Gregorio Araneta II. The next day, March 23, 1962, appellant Ramirez presented his letter to the appellant company confirming his verbal acceptance of the terms and conditions in connection with the sale. On March 31, 1962, Atty. Jose E. Patangco in behalf of appellant Ramirez wrote the appellant company requesting the early execution of the proper contract to sell over Lot No. 22. A check in the amount of P33,572 was enclosed in the letter to cover the down payment for said lot. The request was favorably considered. On April 2, 1962, the J. M. Tuason & Co. Inc., and Claudio R. Ramirez executed a contract to sell whereby the appellant company agreed to sell to appellant Ramirez the lot in question for a total price of P167,896.00 subject to the terms and conditions therein set forth. Meanwhile, on March 27, 1962, the appellant company received a letter from Atty. Godofredo Asuncion in behalf of Florencia Cronies requesting that the lot subject of litigation be 'sold to her. She tendered a check to cover the down payment which was, however, returned. On April 4, 1962, the appellant company sent a letter to the plaintiff-appellee informing her that it had decided to sell the lot in question to appellant Ramirez. This triggered the instant suit. On April 28,1962, plaintiff Florencia Cronico lodged in the Court of First Instance of Rizal (Quezon City Branch) a complaint against the defendants-appellants J. M. Tuason & Co., Inc. and Claudio Ramirez. The main purpose of the said suit is to annul and set aside the contract to sell executed by and between appellant company and appellant Ramirez. On May 30, 1962, Gregorio Araneta, representing J. M. Tuason & Co. Inc., filed its answer to the complaint with cross claim against its co-defendant Claudio Ramirez and Luisa Patangco. On the part of defendant Claudio Ramirez, he filed a motion to dismiss on the ground that the complaint states no cause of action against him. He contends that the action for the annulment of contract may only be instituted by those who are parties thereto or those who are thereby obliged principally or subsidiarily. According to Claudio Ramirez such action to annul a deed of sale can not prosper against third persons as they are not principally or subsidiarily obligated thereby. The motion to dismiss was denied. So Claudio Ramirez filed his answer reiterating in his affirmative defenses that since the plaintiff-appellee is not a party to the contract to sell executed by him and the defendant company, plaintiff Florencia Cronico has no right whatsoever to demand the annulment of said contract.

On November 19, 1968, plaintiff together with Dr. Lucille E. Venturanza filed a motion for substitution for party plaintiff whereby plaintiff Florencia Cronico expressed her willingness to be substituted by Dr. Lucille E. Venturanza as the former had transferred to the latter whatever rights and interests which she may have over Lot 22, Block 261, Sta. Mesa Heights Subdivision by virtue of a deed of assignment she executed on July 5, 1968. The court granted the substitution of the party plaintiff by Dr. Lucille E. Venturanza. (Rollo, p. 31, Decision of Court of Appeals, pp. 1- 71) Anent the first error assigned, the petitioner contends that "No less than the chief of the general service section of the Manila post office, Gaspar Bautista, speaking on the regularity of plaintiff Cronico's receipt of the letter, testified before the trial court that the means by which plaintiff Cronico received her letter is very regular." (Rollo, p. 74, Petitioner's Brief, p. 18). And that "Anyway, the manner by which the offerees were to receive their letters was not announced by the offeror to the contestant such that they could not be bound thereby. Hence, the rule of the fittest and without lawlessness should govern, and that was Cronies who proved her diligence and resourcefullness over Claudio Ramirez." (Rollo, p. 74, Petitioner's Brief, p. 21) The petitioner also averred that the capability of the plaintiff, Florencia Cronico to purchase the land in question was not raised as an issue in the answer of the defendant company and was developed as an afterthought during the trial. It is a fact that the petitioner, Florencia Cronico upon being tipped by Benjamin Bautista, head of the Real Estate Department of Gregorio Araneta Inc., that the reply letters of the appellant company were already placed in the mails on March 21, 1962 at 11:00 o'clock in the morning, immediately went to the Manila post office and claimed the registered letter addressed to her without waiting for the ordinary course for registered mails to be delivered. The petitioner took delivery of the registered letter addressed to her at the entry section of the Manila post office. While this procedure may be tolerated by the postal authorities, the act of the petitioner in taking delivery of her letter at the entry section of the Manila post office without waiting for said letter to be delivered to her in due course of mail is a violation of the "first come first served" condition imposed by the respondent J. M. Tuason & Co. Inc., acting through Gregorio Araneta Inc. The respondent, Claudio R. Ramirez, received on March 22, 1962 in the morning the reply letter of the respondent company dated March 20, 1962 stating that Lot 22, Block 461, Sta. Mesa Heights Subdivision was available for sale under the conditions set forth on the basis of "first come first served". The respondent, Claudio R. Ramirez, proceeded to the office of Benjamin Bautista on the same date and manifested that he was accepting the conditions stated in the respondent company's letter. On March 23, 1962, respondent Ramirez presented his letter to the respondent company confirming his verbal acceptance of the terms and conditions in connection with the sale. It was only on March 27, 1962 that the respondent company received a letter from Atty. Godofredo Asuncion in behalf of petitioner, Florencia Cronies, requesting that the lot subject of litigation be sold to her. The enclosed cheek to cover the down payment was returned to petitioner Cronico and on April 4, 1962, the respondent company wrote said petitioner that it had decided to sell the lot in question to the respondent Ramirez.

In view of the foregoing circumstances, we concur in the finding of the Court of Appeals that "Viewing the case from the standpoint of regularity of notice, plaintiff-appellee falls short of the yardstick." (Rollo, p. 42, Decision of the Court of Appeal p.12) The Court of Appeals entertained serious doubts as to the financial capability of petitioner Florencia Cronico to purchase the property because she was receiving only the amount of P150.00 a month as her salary from her employment and there was no showing that she had sources of income other than her job. In fact, when petitioner Cronico tried to pay the down payment for the purchase of the land, it was Mary E. Venturanza who drew the check in the amount of P33,572.00 which was rejected by the respondent company. It is also to be noted that in the trial court, Florencia cronico was substituted by her assignee Lucille E. Venturanza, daughter of Mary E. Venturanza. It is apparent that petitioner, Florencia Cronico, did not have the capability to pay and that she acted only as a mere front of the Venturanzas. As correctly pointed out by the Court of Appeals, realtors are given the right to choose their buyers so as to avoid delinquent payments of monthly installments which may result in costly court litigations. The contention of petitioner. Florencia Cronico that the promise to sell is supported by a consideration as to her because she had established her link as successor of Gregorio Venturanza who bought the lot from Juan Ramos who in turn acquired said lot from Pedro Deudor. The petitioner then argues that since Clause Seventh of the Compromise Agreement between the respondent company and the Deudors, et al. obligated the respondent company to sell to the buyers of the Deudors 'listed in Annex B thereof, Exhibit R-1, and Juan Ramos was the purchaser of the lot from Pedro Deudor with such right to buy from the defendant company under a new contract with the latter, the said petitioner had established the onerous cause or consideration apart from the selling price of the lot. Granting, arguendo, that Clause Seventh of the Compromise Agreement constitutes a valid consideration of the promise to sell apart from the selling price, it appears that the Compromise Agreement upon which the petitioner Cronico predicates her right to buy the lot in question has been rescinded and set aside. (Deudor vs. J.M. Tuason & Co., Inc., 2 SCRA 129 and J. M. Tuason & Co., Inc. vs. Sanvictores 4 SCRA 123, 126) Hence, the promise of the respondent company to sell the lot in question to the petitioner, Florencia Cronico has no consideration separate from the selling price of said lot. In order that a unilateral promise may be binding upon the promisor, Article 1479, Civil Code of the Philippines, requires the concurrence of the condition that the promise be "supported by a consideration distinct from the price. Accordingly, the promisee can not compel the promisor to comply with the promise, unless the former establishes the existence of said distinct consideration. The promisee has the burden of proving such consideration. (Sanchez vs. Rigos, 45 SCRA 368, 372-373) The petitioner, Florencia Cronies, has not established the existence of a consideration distinct from the price of the lot in question. The petitioner cannot claim that she had accepted the promise before it was withdrawn because, as stated above, she had violated the condition of "first, come, first served" Moreover, it was only on March 27, 1962 that the respondent company received a letter from counsel of the petitioner requesting that the lot subject of this litigation be sold to her. The respondent, Claudio R. Ramirez, had on March 23, 1962, confirmed in writing his verbal acceptance of the terms and conditions of the sale of the lot in question.

The petitioner maintains that the contract to sell (Exhibit 3) executed by the respondent company in favor of the respondent, Claudio R. Ramirez, contains a stipulation for her benefit, which reads: b) that the buyer Claudio Ramirez has been fully informed by the company of all the circumstances relative to the offer of Florencia Cronico to buy said lot and that he agrees and binds himself to hold the company absolutely free and harmless from all claims and damages to said Florencia Cronico in connection with this sale of the lot to him. (Rollo, p. 74, Petitioner's Brief, pp. 31-32) The foregoing clause cannot ' by any stretch of the imagination be considered as a clause "pour autrui" or for the benefit of the petitioner. The stipulation does not confer any right arising from the contract that may be enforced by the petitioner against any of the parties thereto. Neither does it impose any obligation arising from the contract that may be enforced by any of the parties thereto against the petitioner. The petitioner is not "obliged principally or subsidiarily" by the contract to sell executed between the respondent company and the respondent Claudio R. Ramirez. The said stipulation is for the benefit of the respondent company. The contention of the petitioner that she has become the obligee or creditor of the respondent company because she was the first to comply with the terms of the letter-offer has no merit. Her so-called acceptance has no effect because she violated the condition of "first come, first served" by taking delivery of the reply letter of the respondent company in the entry section of the Manila post office and of the fact that her formal letter of acceptance was only received by the respondent company on March 27, 1962. In view of all the foregoing, we find that the Court of Appeals has not committed any of the errors assigned in the brief of the petitioner. WHEREFORE, the decision of the Court of Appeals in CA-G.R. No. 44479-R is hereby affirmed, without pronouncement as to costs. SO ORDERED.

G.R. No. 73573 May 23, 1991 SPOUSES TRINIDAD AND EPIFANIO NATINO, petitioners, vs. THE INTERMEDIATE APPELLATE COURT, THE RURAL BANK OF AGUILAR, INC. AND THE PROVINCIAL SHERIFF EX-OFFICIO OF PANGASINAN, respondents. Jose P. Villamor for petitioners. Oscar A. Benzon for private respondents. Bitty G. Viliran for Rural Bank of Aguilar, Inc.

First Instance of Pangasinan a complaint against respondent bank and the Ex-Officio Provincial Sheriff for the annulment of the aforementioned final deed of sale and for the issuance of a writ of preliminary injunction. The case was docketed as Civil Case No. 15573 which was raffled to Branch II thereof. In their complaint petitioners alleged that the final deed of sale was prematurely issued since they were granted an extension of time to redeem the property. In resolving the issue of extension of the redemption period, the trial court, in its Decision of 1 December 1981, made the following findings and conclusion: xxx xxx xxx From the bank's evidence, it is difficult to believe that the plaintiffs who are personally known to the president and manager herself, and from whom she had to hire trucks, would not have made any move or offer to redeem the property within the redemption period. The presumption is that they exercised ordinary care of their concerns (Sc. 5 (d), Rule 131, Rules of Court, Cabigao vs. Lim 50 Phil. 844). If indeed, the plaintiffs made no such offer during the redemption period, the defendant bank should have presented evidence rebutting the plaintiffs' evidence. But it did not. While the plaintiff testified that the tender was made to Mr. Salgado, loan clerk, and Mr. Madrid, Acting Manager of the Bank and also board members Dr. Jing Zarate and Mr. Rosario, none of them were presented to rebut plaintiffs' evidence. Hence, the presumption that if their testimony were produced, it would be adverse to the defendant bank under Sec. 5(e) Rule 131 of the Rules of Court, would apply. Furthermore, the very evidence of the defendant bank shows that there was indeed an extension of the period to redeem the property. The statutory period of redemption granted the mortgagor in the certificate of sale registered on January 29, 1975 was 2 years. The period should have terminated on January 29, 1977. However, the Sheriff's Certificate of Final sale was only executed on February 15, 1977 and registered only on November 14, 1979 which registration date is the effective date of the confirmation of the sale which cuts off redemption. Such extension of nearly 3 years strengthens the plaintiffs' claim that indeed, there was an agreement to extend the redemption date. The plaintiffs' evidence has shown that there was an agreement between them and the defendant bank through its personnel and its president and manager, acting as its agents to extend the period for redemption for the plaintiffs. However, the plaintiffs were not given a specific time to pay and redeem but were given by the President and Manager of the bank such time when their means permit them to do so. This created an obligation with a period under Art. 1180 of the Civil Code of the Philippines, which provides: Art. 1180. When the debtor binds himself to pay when his means permit him to do so, the obligation shall be

DAVIDE, JR., J.:p Unsatisfied with the decision of 4 June 1985 and the resolution of 23 December 1985 of the then Intermediate Appellate Court (IAC) in A.C.-G.R. CV No. 69539 1 which, respectively, reversed the decision of the then Court of First Instance of Pangasinan, Branch II, of 1 December 1981 in Civil Case No. 15573, and denied the motion for the reconsideration of the 4 June 1985 decision, petitioners filed with this Court the instant petition to seek reversal thereof. They submit one principal issue: whether or not the conclusion drawn by the Intermediate Appellate Court from proven facts is correct. 2 The following facts are not disputed: On 12 October 1970 petitioners executed a real estate mortgage in favor of respondent bank as security for a loan of P2,000.00. Petitioners failed to pay the loan on due date. The bank applied for the extrajudicial foreclosure of the mortgage. At the foreclosure sale on 11 December 1974 the respondent bank was the highest and winning bidder with a bid of P2,945.11. A certificate of sale was executed in its favor by the sheriff and the same was registered with the Office of the Register of Deeds on 29 January 1975. The certificate of sale, a copy of which was furnished the petitioners by registered mail, expressly provided that the redemption period shall be two years from the registration thereof. Since no redemption was made by petitioners within the two-year period, which expired on 29 January 1977, the sheriff issued a Final Deed of Sale on 15 February 1977. Petitioners, however, claimed that they were granted by respondent bank an extension of the redemption period; but the latter denied it. On 22 November 1979 respondent bank file a petition for a writ of possession, which petitioners later opposed on the ground that they had consigned the redemption money of P4,000.00 on 12 December 1979. The court rejected the opposition and issued the writ of possession. However, to prevent its execution, petitioners instituted with the then Court of

deemed to be one with a period, subject to the provisions of Article 1197. This does not mean that the condition was exclusively dependent of the will of the plaintiffs, for they had already promised payment. If therefore became necessary, under Article 1197 for the Court to fix the term in order that the condition may be fulfilled. Any action to recover before this is done is considered premature (Patents vs. Omega, 93 Phil. 218). That agreement or contract entered into between the President and Manager of the bank was not in writing is of no moment since under Article 1315 of the Civil Code, "contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which according to their nature, may be in keeping with good faith, usage and law." The defendant's claim that the agreement must be in writing citing the ruling in the case of Pornellosa vs. Land Tenure Administration, 1 SCRA 375, only applies to executory contracts, not to those either totally or partially performed, (Inigo vs. Estate of Maloto, 21 SCRA 246). In this case, the bank had already partially performed its obligation thereunder by extending the period redemption from January 29, 1977 to November 14, 1979. The agreement does not novate the original contract of mortgage but only changes one of its conditions, that which concerns the period of redemption. The period of redemption may be extended by the parties under special circumstances (Lichauco vs. Olegario, 43 Phil. 540, 542). This the parties may do, since the right of the mortgagee to demand compliance within the 2 year period of redemption maybe waived, unless the waiver is contrary to the public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law." None of the inhibitions enumerated are present in this case. Hence, the action of the defendant bank in securing the Sheriffs Final Sale prior to the fixing of the period within which the plaintiffs had to pay was not in order by reason of the extension of the period of redemption without a term. Not being in order, the period for redemption by the plaintiffs still exists but has to be set. 3 and on the basis thereof, decreed to (a) annul the Sheriffs Final Deed of Sale, dated 15 February 1977 and its registration of 17 March 1979, (b) fix the period of redemption to ninety (90) days from receipt of the decision by petitioners, (c) order petitioners to pay the respondent bank, within ninety (90) days from receipt of the decision the amount of P2,945.11, the purchase price, with 1% interest per month from 11 December 1974 to 14 December 1979, together with any amount representing assessment or taxes which the bank may have paid after 11 December 1974, with interest thereon at 1% per month up to 14 December 1979, (d) order the Bank to receive and credit the petitioners with such amounts, restore petitioners to the property and to deliver to them a certificate of redemption, and to pay petitioners the sum of P2,000.00 as attorney's fees and the costs. 4

Respondent bank appealed from said Decision to the then Intermediate Appellate Court which docketed the appeal as C.A.-G.R. CV No. 69539. In support of its appeal, respondent bank assigned the following errors: -ITHE LOWER COURT ERRED IN NOT HOLDING THAT THE OFFERS BY THE APPELLEES TO THE APPELLANTS WERE MADE AFTER THE PERIOD OF REDEMPTION HAD ALREADY EXPIRED AND AS A MATTER OF FACT, WERE MADE ONLY AFTER THE EXECUTION OF THE DEED OF FINAL SALE BY THE SHERIFF. -IITHE LOWER COURT ERRED IN HOLDING THAT THE APPELLANTS GRANTED THE APPELLEES AN EXTENSION OF THE PERIOD FOR THE REDEMPTION OF THE PROPERTY WHICH WAS SOLD DURING THE FORECLOSURE SALE. -IIITHE LOWER COURT ERRED IN HOLDING THAT THE PREPONDERANCE OF EVIDENCE FAVORS THE APPELLEES DESPITE THE FACT THAT THE ONLY EVIDENCE PRESENTED BY THEM IS THE SOLE TESTIMONY OF EPIFANIO NATINO, WHICH IS NOT ONLY UNCORROBORATED, BUT IS EVEN CONTRARY TO THE IMPORT OF HIS DECLARATIONS AND ADMISSIONS MADE IN OPEN COURT; AS AGAINST THE TESTIMONY OF THE APPELLANTS' WITNESS WHICH IS CORROBORATED, NOT ONLY BY DOCUMENTARY EVIDENCE, BUT EVEN BY THE IMPORT OF PLAINTIFF-APPELLEES' TESTIMONY. -IVTHE LOWER COURT ERRED IN NOT REJECTING THE TESTIMONY OF PLAINTIFF-APPELLEE WHICH DID NOT PROVE AN OFFER TO REDEEM WITHIN THE REGLEMENTARY PERIOD IN AN AUTHENTIC MANNER AS REQUIRED BY THE LAW, RULES AND JURISPRUDENCE. -VTHE LOWER COURT ERRED IN NOT REJECTING THE TESTIMONY OF PLAINTIFF-APPELLEE ON THE ALLEGED EXTENSION OF THE REDEMPTION PERIOD INASMUCH AS IT IS NOT IN A PUBLIC DOCUMENT OR AT LEAST IN AN AUTHENTIC WRITING.

-VITHE LOWER COURT ERRED IN APPLYING ARTICLES 1180 AND 1197 OF THE CIVIL CODE, BOTH OF WHICH HAS NO RELEVANCE OR MATERIALITY TO THE CASE AT BAR. -VIIASSUMING ARGUENDO THAT SOME OFFICERS OR EMPLOYEES OF THE APPELLANT BANK MANIFESTED TO THE PLAINTIFFAPPELLEE THAT THEY CAN RECOVER THE LAND IN QUESTION, AS TESTIFIED BY THE PLAINTIFF-APPELLEE, THE LOWER COURT ERRED IN HOLDING THAT SUCH OFFICERS ACTED AS AGENTS OF THE APPELLANT-BANK. CONSEQUENTLY, THE LOWER COURT ERRED IN NOT HOLDING THAT ONLY THE ACTION BY THE BOARD OF DIRECTORS OF THE BANK CAN BIND THE LATTER. -VIIITHE LOWER COURT ERRED IN HOLDING THAT THE EXECUTION OF THE DEED OF FINAL SALE WAS NOT IN ORDER AND IN HOLDING THAT THE APPELLEES MAY STILL REDEEM THE PROPERTY BY PAYING THE PURCHASE PRICE PLUS 1% INTEREST PER MONTH, DESPITE THE LAPSE OF THE PERIOD OF REDEMPTION. -IXTHE LOWER COURT ERRED IN NOT DECIDING THE CASE IN FAVOR OF THE APPELLANTS AND CONSEQUENTLY ERRED IN NOT AWARDING DAMAGES TO THE APPELLANTS HEREIN. 5 Herein petitioners, as appellees, did not file their Brief. In its Decision of 4 June 1985, the Intermediate Appellate Court disposed of the assigned errors as follows: xxx xxx xxx The bank has assigned eight (8) errors in the decision but the determinants are the first and the second. But before going into their merits We must take note of the failure of the appellees to file their brief. Appellees did not file any motion for reconsideration. It has to be stated there that, generally, appellee's failure to file brief is considered as equivalent to a confession of error, warranting, although not necessarily requiring a reversal, but any

doubt entertained by the appellate court as to what disposition should be made of the case will be resolved against the appellee (4 CJS 1832, cited in Francisco, the Revised Rules of Court Civil Procedure, Vol. III, p. 638) Re the first error THE LOWER COURT ERRED IN NOT HOLDING THAT THE OFFERS BY THE APPELLEES TO THE APPELLANTS WERE MADE AFTER THE PERIOD OF REDEMPTION HAD ALREADY EXPIRED AND AS A MATTER OF FACT, WERE MADE ONLY AFTER THE EXECUTION OF THE DEED OF FINAL SALE BY THE SHERIFF. It will take better proofs than appellees' mere declaration for the Court to believe that they had tendered the redemption money within the redemption period which was refused by the bank. There would have been no valid reason for a refusal; it is an obligation imposed by law on every purchaser at public auction that admits of redemption, to accept tender of redemption money. And should there be refusal, the correlative duty of the mortgagor is clear: he must deposit the money with the sheriff. The evidence does not show that appellees complied with this duty. All that was shown by way of compliance was the deposit made with the Clerk of Court of the sum of P4,000.00. This deposit is a belated and last ditch attempt to exercise a right that had long expired. It was made only on December 12, 1979, or after the redemption period of two (2) years from January 29, 1977 when the sheriffs certificate of sale was registered and after sheriff's final sale which was registered on November 14, 1979. And, it is clear that the late deposit was utilized to defeat the bank's vested right which it sought to enforce by its petition for a writ of possession. The lower court correctly ruled against any validity to it. The right to redeem becomes functus officio on the date of its expiry, and its exercise after the period is not really one of redemption but a repurchase. Distinction must be made because redemption is by force of law; the purchaser at public auction is bound to accept redemption. Repurchase however of foreclosed property, after redemption period, imposes no such obligation. After expiry, the purchaser may or may not re-sell the property but no law will compel him to do so, And, he is not bound by the bid price; it is entirely within his discretion to set a higher price, for after all, the property already belongs to him as owner. This brings Us to the second error THE LOWER COURT ERRED IN HOLDING THAT THE APPELLANTS GRANTED THE APPELLEES AN EXTENSION OF THE PERIOD FOR THE

REDEMPTION OF THE PROPERTY WHICH WAS SOLD DURING THE FORECLOSURE SALE. Appellees' main premise is the alleged assurances of the bank's officers that they could redeem the property. From the testimony of Epifanio Natino, however, it is clear that these assurances were given before expiry of redemption (tsn, pp. 15 & 16). Such assurances were not at all necessary since the right to redeem was still in existence. Those assurances however could not and did not extend beyond the redemption period. It seems clear from testimony elicited on cross-examination of the president and manager of the bank that the latter offered to re-sell the property for P30,000.00 but after the petition for a writ of possession had already been filed, and well after expiry of the period to redeem. Appellants failed to accept the offer; they deposited only P4,000.00. There was therefore no meeting of the minds, and accordingly, appellants may no longer be heard. 6 and in the light thereof, REVERSED and SET ASIDE the appealed decision. Their motion to reconsider the same having been denied in the resolution of 23 December 1985, 7 petitioners have come to Us on appeal by certiorari raising the sole issue stated in the beginning of this decision. We find the petition to be devoid of merit. Petitioners have failed to demonstrate that the conclusion made by the respondent Intermediate Appellate Court from the proven facts is wrong. We agree with said Court, and, therefore, set aside the contrary conclusion of the trial court, that the attempts to redeem the property were done after the expiration of the redemption period and that no extension of that period was granted to petitioners. The contrary conclusion made by the trial court is drawn from inferences which are not supported by adequate or sufficient facts or is based on erroneous assumptions. We note that its decision is remarkably silent as to the dates when petitioner Epifanio Natino went to the respondent bank to talk with a bank personnel to offer to pay the loan. If indeed the offer was made within the redemption period, but the Bank refused to accept the redemption money, petitioners should have made the tender to the sheriff who made the sale and who then had the duty to accept the tender and execute the certificate of redemption. (Enage vs. Vda. de Hijos de Escano, 38 Phil. 657, cited in II MORAN, Comments on the Rules of Court, 1979 Ed., pp. 326-327). There was no such tender to the Sheriff. Again, if indeed this occurred during the redemption period, then, as correctly pointed out by respondent IAC, it was not necessary to ask for extension of the period to redeem. In respect to the alleged assurance given by Mrs. Brodeth, the President and Manager of the Bank, sometime in May of 1978 to the effect that petitioners can redeem the property as soon as they have the money, it is obvious that this took place after the expiration of the redemption

period. As correctly pointed out by the respondent IAC, this could only relate to the matter of resale of the property, not redemption. Furthermore, even assuming for the sake of argument that Mrs. Brodeth gave the assurance, the same could bind the bank only if its Board of Directors approved or ratified it. No evidence was offered to prove such action by the Board. Moreover, Mrs. Brodeth denied that during that meeting in May 1978 she made the assurance; according to her petitioner Epifanio neither mentioned the loan nor offered to redeem, although earlier he was told that to 'redeem" the property he should pay P30,000.00. The latter statement supports the conclusion of respondent IAC that this was the Bank's offer for the re-sell (not redemption of the property), which, logically took place after the expiration of the redemption period. Even if Mrs. Brodeth is to be understood to have promised to allow the petitioners to buy the property at any time they have the money, the Bank was not bound by the promise not only because it was not approved or ratified by the Board of Directors but also because, and more decisively, it was a promise unsupported by a consideration distinct from the re-purchase price. The second paragraph of Article 1479 of the Civil Code expressly provides: xxx xxx xxx An accepted unilateral. promise to buy or to sell a determinate thing for a price certain is binding upon the promissory if the promise is supported by a consideration distinct from the price. Thus in Rural Bank of Paraaque Inc. vs. Remolado, et al., 8 a commitment by the bank to resell a property, within a specified period, although accepted by the party in whose favor it was made, was considered an option not supported by a consideration distinct from the price and, therefore, not binding upon the promissor. Pursuant to Southwestern Sugar and Molasses Co. vs. Atlantic Gulf and Pacific Company, 9 it was void. WHEREFORE, the instant petition is DISMISSED, with costs against the Petitioners. SO ORDERED.

G.R. No. L-9871

January 31, 1958

Supplier: Atkins, Kroll & Co., Sa Frasisco, Cal. U.S.A. We are looking forward to receive your valued order and remain . Very truly yours,

ATKINS, KROLL and CO., INC., petitioner, vs. B. CUA HIAN TEK, respondent. Ross Selph, Carrascoso and Janda for petitioner. Ponciano T. Castro for respondent. BENGZON, J.: Review of a Court of Appeals' decision. For its failure to deliver one thousand cartons of sardines, which it had sold to B. Cua Hian Tek, petitioner was sued, and after trial was ordered by the Manila court of first instance to Pay damages, which on appeal was reduced by the Court of Appeals to P3,240.15 representing unrealized profits. There was no such contract of sale, says petitioner, but only an option to buy, which was not enforceable for lack of consideration because in accordance with Art. 1479 of the New Civil Code "an accepted unilatateral promise to buy or to sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price. Simple are the facts of this case: Dated September 13, 1951, petitioner sent to respondent a letter of the following tenor: Sir (s) /Madam: We are pleased to make you herewith the following firm offer, subject to reply by September 23, 1951: Quantity and Commodity: 400 Ctns. Luneta brand Sardines in Tomato Sauce 48/15-oz. Ovals at $8.25 Ctn. 300 Ctns. Luntea brand Sardines Natural 48/15 oz. talls at $6.25 Ct. 300 Ctns. Luneta brand Sardines in Tomato Sauce 100/5-oz. talls at $7.48 Ct. Price(s): All prices C ad F Manila Cosular Fees of $6.00 to be added. Shipmet: Durig September/October from US Ports.

The Court of first instance and the Court of Appeals 1 found that B. Cua Hian Tek accepted the offer unconditionally and delivered his letter of acceptance Exh. B on September 21, 1951. However, due to shortage of catch of sardines by the packers in California, Atkins Kroll & Co., failed to deliver the commodities it had offered for sale. There are other details to which reference shall not be made, as they touch the question whether the acceptance had been handed on time; and on that issue of Court of Appeals definitely found for plaintiff. Ayway, in presenting its case before this Court petitioner does not dispute such timely acceptance. It merely raises the point that the acceptance only created an option, which, lacking consideration, had no obligatory force. The offer Exh. A, petitioner argues, "was a promise to sell a determinate thing for a price certain. Upon its acceptance by respondent, the offer became an accepted unilateral promise to sell a determinate thing for price certain. Inasmuch as there was no consideration to support the promise to sell distinct from the price, it follows that under Art. 1479 aforequoted, the promise is not binding on the petitioner even if it was accepted by respondent." (p. 12 brief of petitioner.). The argument, maifestly assumes that only a unilateral promise arose when the offeree accepted. Such assumption is a mistake, because a bilateral cotract to sell and to buy was created upon acceptance. So much so that B. Cua Hian Tek could be sued, he had backed out after accepting, by refusing to get the sardines and/or to pay for their price. Indeed, the word "option" is found neither in the offer nor in the acceptance. On the copntrary Exh. B accepted "the firm offer for the sale" and adds, "the undersigned buyer has immediately filed an application for import license . . ." (Emphasis Ours.). Petitioner, however, insists the offer was a mere offer of option, because the "firm offer" Exh. A. was a continuing offer to sell until September 23, "an option is nothing more than a continuing offer" for a specified time. In our opinion implies more than that: it implies the legal obligation to keep open for the time specified. 2 Yet the letter Exh. A did not by itself produce the legal obligation of keeping the offer open up ot Septmber 23. It could be withdrawn before acceptance, because it is admitted, there was no consideration for it. ART. 1324. When the offerer has showed the offeree a certain period to accept, the offer may be withdrawn at any time before acceptance by communicating such withdrawal, except when the option is founded upon a consideration, as somnething paid or promissed. (n) (New Civil Code.).

Ordinarily an offer to buy or sell may be withdrawn or countermanded before accepatnce, even though the offer provides that it will not be withdrawn or countermanded, or allows the offeree a certain time within which to accept it, unless such provision or agreement is supported by an independent consideration . . . (77 Corpus Juris Secundum p. 636.). Furthermore, an option is unilateral: a promise to sell3 at the price fixed whenever the offeree should decide to exercise his option within the specified time. After accepting the promise and before he exercises his option, the holder of the option is not bound to buy. He is free either to buy or not to later. In this case, however, upon accepeting herein petitioner's offer a bilateral promise to sell and to buy ensued, and the respondent ipso facto assumed the obligations of a purchaser. He did not just get the right subsequently to buy or not to buy. It was not a mere option then; it was bilalteral contract of sale. Lastly, even supposing that Exh. A granted an option which is not binding for lack of consideration, the authorities hold that . If the option is given without a consideration, it is a mere offer of a contract of sale, which is not binding until accepted. If, however, acceptance is made before a withdrawal, it constitutes a binding contract of sale, even though the option was not supported by a sufficient consideration. . . (77 Corpus Juris Secundum p. 652. See also 27 Ruling Case Law 339 and cases cited.). It can be taken for granted, as contended by the defendants, that the option contract was not valid for lack of consideration. But it was, at least, an offer to sell, which was accepted by letter, and of this acceptance the offerer had knowledge before said offer was withdrawn. The concurrence of both acts the offer and the acceptance could at all events have generated a contract, if none there was before (atrs. 1254 and 1262 of the Civil Code). (Zayco vs. Serra, 44 Phil. 331.). One additional observation should be made before the closing this opinion. The defense in the court of first instance rested on the proposition or propositions that the offer had not been precedent had not been fulfilled. This option-without-consideration idea was never mentioned in the answer. A Change of theory in the appellate courts is not permitted. In order that a question may be raised on appeal, it is essential that it be within the issues made by the parties in their pleadings. Consequently, when a party deliberately adopts a certain theory, and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal because, to permit him to do so, would be unfair to the adverse party. (Rules of Court by Moran1957 Ed. Vol. I p.715 citing Agoncillo vs. Javier, 38 Phil. 424; American Express Company vs. Natividad, 46 Phil. 207; San Agustin vs. Barrios, 68 Phil. 465, 480; Toribio vs. Dacasa, 55 Phil. 461.) . We must therefore hold, as the lower courts have held that there was a contract of sale between the parties. And as no legal excuse has been proven, the seller's failure to comply therewith gave around to an award for damages, which has been fixed by the Court of Appeals at P3,240.15-amount which petitioner does not dispute in this final instance.

Consequently, the decision under review should be, and it is hereby affirmed, with cost against petitioner. Paras, C.J., Padilla, Montemayor, Reyes, A., Concepcion, Reyes, J.B.L., Endencia, and Felix, JJ., concur. Bautista Angelo, J., concurs in the result.

Southwestern Sugar & Molasses Co. vs. Atlantic Gulf & Pacific Company 97 Phil 247 June 1955 FACTS: On March 24, 1953, defendant-appellant Atlantic granted plaintiff-appellee Southwestern an option period of ninety days to buy the formers barge No. 10 for the sum of P30,000. On May 11 of the same year, Southwestern Company communicated its acceptance of the option to Atlantic through a letter, to which the latter replied that their understanding was that the "offer of option" is to be a cash transaction and to be effected "at the time the lighter is available." On June 25, Atlantic advised the Southwestern Company that since there is still further work for it, the barge could not be turned over to the latter company. On June 27, 1953, the Southwestern Company filed this action to compel Atlantic to sell the barge in line with the option, depositing with the court a check covering the sum of P30,000, but said check was later withdrawn with the approval of the court. On June 29, the Atlantic withdrew its "offer of option" with due notices to Southwestern Company stating that the option was granted merely as a favor. The Atlantic contended that the option to sell it made to Southwestern Company is null and void because said option to sell is not supported by any consideration. The trial court granted herein plaintiff-appellee Southwestern Companys action for specific performance and ordered herein defendant-appellant Atlantic to pay damages equivalent to 6 per centum per annum on the sum of P30,000 from the date of the filing of the complaint. ISSUE: Is Atlantic liable for specific performance and to pay damages in favor of Southwestern Company? COURT RULING: The Supreme Court reversed the trial courts decision applying Article 1479 of the new Civil Code. The Court reiterated that "an accepted unilateral promise" can only have a binding effect if supported by a consideration, which means that the option can still be withdrawn, even if accepted, if said option is not supported by any consideration. The option that Atlantic had provided was without consideration, hence, can be withdrawn notwithstanding Southwestern Companys acceptance of said option. American jurisprudence hold that an offer, once accepted, cannot be withdrawn, regardless of whether it is supported or not by a consideration, but the specific provisions of Article 1479 commands otherwise. While under the "offer of option" in question appellant Atlantic has assumed a clear obligation to sell its barge to appellee Southwestern Company and the option has been exercised in accordance with its terms, and there appears to be no valid or justifiable reason for the former to withdraw its offer, the Court cannot adopt a different attitude because the law on the matter is clear.

G.R. No. L-12888

April 29, 1961

R. F. NAVARRO, doing business under the firm name of R.F. NAVARRO & COMPANY, plaintiff-appellant, vs. SUGAR PRODUCERS COOPERATIVE MARKETING ASSOCIATION INC., defendant-appellee. Marquez, Quirino and Associates for plaintiff-appellant. San Juan, Africa and Benedicto for defendant-appellee. BARRERA, J.: Plaintiff-appellant R. F. Navarro (doing business under the firm name R.F. Navarro & Company) appeals directly to us from the order of the Court of First Instance of Rizal (in Civil Case No. 1733-P) dismissing his complaint for lack of cause of action, on the assertion that only questions of law are involved herein. The material and pertinent allegations of plaintiff's complaint are: 2. On September 19th, 1956, defendant formally offered to plaintiff the sale from 15,000 to 20,000 metric tons of molasses, 1st-degrees gravity, 60% sugar by invert, at P50.00 per metric ton, ex-warehouse San Carlos and Bais, Negros Occidental, giving him up to noon of September 24th, 1956 within which to accept the offer, with the admonition that upon its failure to hear from him by then, the defendant shall feel free to negotiate the sale with other possible buyers; 3. On September 21st, 1956, answering an inquiry made by the plaintiff, the defendant advised the latter that the cost of pumping the molasses offered by it for sale is P1.20 per metric ton in San Carlos district and P3.00 per metric ton in Bais district and that the date of delivery thereof shall start from February on to March, April and May, 1957, as milling in the districts indicated (San Carlos and Bais) starts during the month of January; 4. Promptly at five minutes before noon of September 24th, 1956, plaintiff formally accepted the offer of sale tendered by the defendant by informing the latter in writing that he binds himself to purchase from the preferred 20,000 metric tons of molasses in question for P50.00 per metric ton, and the day after September 21st, 1956, plaintiff upon the request of defendant, made the following clarifications of his agreement to purchase the said molasses, (1) 20,000 metric tons of Philippine molasses, 185-degrees specific gravity, 60% sugar by invert; (2) Price P50.00 Philippine currency, per metric ton ex-warehouse; (3) shipments to be in quantities of 3,000 or more metric tons every each shipment during the month of February, March, April and May until the whole amount has been completely shipped; and (4)payment shall be by irrevocable, divisible and assignable domestic letter of credit to be opened in a local bank in defendant's favor; 5. On the same day plaintiff made the foregoing clariffications of his acceptance of the sale, the defendant hurried advised plaintiff that it committed a typographical

error indicating the specific gravity of the molasses at 185-degrees which should be only 85-degrees, the latter being the high for molasses at 60% sugar by invert, and requesting plain that the "specific gravity" be amended accordingly, which correction and amendment plaintiff readily agreed to and accepted: 6. That neither on September 24th, 1956 when plaintiff exercised his option nor on September 25th when he request plaintiff to clarify his acceptance to indicate the manner payment, nor upon the submittal of the clarification which presented by plaintiff himself and received by the defendant thru its President, Amado Garcia, and for three days the after, there was no single word, effort or hint that the defendant's offer, accepted by the plaintiff, was qualified in any way whatsoever; 7. That on September 24th, 1956, relying upon the consummation and perfection of the purchase and sale of 20,000 metric tons of molasses in question as indicated above, plaintiff through his business associate here in Manila (J.D. QUIRINO) continued negotiations for the resale of said molasses to foreign buyers of said conunodity by immediately communicating the availability of said commodity through letters, cablegrams a long-distance calls to the latter's business contacts in U.S.A., a Japan, and ultimately disposing and reselling the said molasses for forward deliveries in accordance with plaintiff's agreement with the defendant; 8. On September 28th, 1956, three days after an agreement had been consummated on the price, quantity and quality of said molasses and the manner of payment thereof, the defendant, belatedly and abruptly advised plaintiff of its desire add certain additional conditions to be incorporated in the formal contract of purchase and sale then under preparation by it for signature, which were never even mentioned nor hinted at in its original offer or proposal, on the untenable pretext that they were 'standard conditions' on all contracts for the sale said commodity, the most onerous of which were, "(a) That upon the signing of the contract of purchased and sale; plaintiff shall pay defendant in cash an amount equivalent to 50% of the purchase value Of the molasses; "(b) that to cover the remaining and unpaid balance of the purchase price, plaintiff shall open with the Philippine National Bank an irrevocable domestic letter of credit in favor of defendant, which shall be assignable and divisible; and "(c) that in negotiating the said letter of credit, plaintiff shall allow defendant immediately to withdraw from the same the corresponding amount representing 50% of the value of the molasses withdrawn from the central, upon presentation of the requisite certificate thereof (certainly a condition which, taken with (a) above, is most one-sided in favor only of the seller); 9. On October 2nd, 1956, plaintiff personally conferred with the defendant's manager, Amado G. Garcia, with a view of threshing out the difficulties necessarily evoked by the foregoing conditions belatedly demanded by the defendant, but the latter remained adamant in the defendant, and the day after (October 3rd, 1956), it peremptorily gave plaintiff up to noon again of October 26th, 1956, within which to

decide upon his acceptance of said additional conditions with the warning that if he failed to do so, it would feel free to advise its planters concerned that they could negotiate their molasses with other parties; 10. On October 5th, 1956, plaintiff, in a spirit of cooperation and in his desire to insure the success of his purchase of the molasses in question, reiterated to the defendant his readiness and willingness, already imparted to it during their conference on October 2nd , to assist defendant in working out certain financing transactions with the bank whereby it may be possible to provide in the letter of credit to be opened in favor of the defendant authority to draw cash advances up to 50% of the contract value of the molasses, under certain conditions, and alternatively, plaintiff expressed his willingness to satisfy defendant's desire to be paid in advance an amount equivalent to 50% of the purchase value of the molasses, but provided, that their original agreement of P50.00 for metric ton were to be converted into what is known as "equal standard condition", under which the purchase value would be only P32.00 per metric ton; 11. On the very same day and evidently without even any attempt to consider the matter further, defendant simply and rudely turned down the foregoing friendly gesture of the plaintiff caused by the additional conditions demanded by the defendant in its letter of September 28, 1956 (indicated in par. 7 above), and bluntly informed plaintiff that in view of his non-acceptance of said conditions it would not continue with the sale of the molasses in question to plaintiff and that it felt free to offer the same to any other interested buyer. Claiming breach of contract, plaintiff prayed that judgment be rendered ordering defendant to comply with and perform its contractual obligations, pursuant to its agreement with plaintiff of September 19 and 24, 1956 and in case of failure to do so, to pay plaintiff any and all damages he may suffer by reason of such non-compliance, plus moral damages and to pay plaintiff reasonable attorney's fees and actual costs of the litigation. As heretofore stated, upon defendant's motion to dismiss on the ground that it (complaint) states no cause of action for the reason that "there is no binding contract between" plaintiff and defendant, under Article 1479 of the New Civil Code, the trial court dismissed the action in an order which in part reads: ORDER xxx xxx xxx

"An accepted unilateral promise to buy or sell a determinable thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price." Although the existence of a lawful consideration or cause of support a contract is presumed, yet from the allegations of the herein complaint, it is apparent that the defendant's promise to sell is not supported by any consideration. In fact, the absence of any consideration of the option given to the plaintiff was admitted by plaintiff's counsel in his oral argument opposing the defendant's motion to dismiss. Plaintiff, however, contends that the option became binding on the defendant when plaintiff gave notice of its acceptance and that having been accepted within the period of the option, the offer can no longer be withdrawn and, in any event, such withdrawal is ineffective because there had already arisen an existing bilateral contract which can be enforced. The case of Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co. (51 O.G. 3447) is practically on all fours with the case at bar. In said case, on March 24, 1953, defendant Atlantic Gulf & Pacific Co. granted an option to plaintiff Southwestern Sugar & Molasses Co. to buy its barge for P30,000.00 to be exercised within ninety days. On May 11, 1953, Atlantic Gulf wrote Southwestern Sugar that it was exercising its option and that it be notified as soon as the barge was available. On May 12, 1953, Atlantic Gulf replied that their understanding was that the "offer of option" is to be cash transaction and to be effected at the time the barge was available. On June 25, 1953, Atlantic Gulf informed Southwestern Sugar that the damage action could not be turned over to the latter. On June 27, 1953, Southwestern Sugar instituted an action for specific performance in line with the accepted option, depositing with the Court the purchase price of 30,000.00. Atlantic Gulf, relying upon Article 1479 of the New Civil Code, contended that the option was not valid because it was not supported by any consideration apart from the price. Southwestern Sugar contended that the option became binding on Atlantic Gulf when plaintiff gave notice of its acceptance during the option period citing as its authority Article 1324 of the New Civil Code which provides that 'when the offer or has allowed the offeree a certain period to accept, the offer may be withdrawn at any time before acceptance by communicating such withdrawal except "when the option is founded upon a consideration, as something paid or promised." Upholding the contention of Atlantic Gulf and holding that the promise to sell was not valid because it was not supported by a consideration distinct from the price, the (Supreme) Court stated: "There is no question that under Article 1479 of the New Civil Code "an option to sell" or a "promise to buy or to sell", as used in said article, to be valid must be "supported by a consideration distinct from the price". This is clearly inferred from the context of said article that a unilateral promise to buy or to sell, even if accepted, is only binding if supported by a consideration. In other words, "an accepted unilateral promise" can only have a binding effect if supported by a consideration. Here, it is not disputed that the option is without consideration. It can, therefore, be withdrawn notwithstanding the acceptance made of it by appellee."

The defendant contends that the complaint states no cause of action because defendant's promise to sell, although accepted by the plaintiff, is not supported by any consideration distinct from the price and, under Article 1479 of the New Civil Code, is not binding. Article 1479 provides: "A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.

"It is true that under Article 1324 of the New Civil Code, the general rule regarding offer and acceptance is that, when the offer or gives to the offeree a certain period to accept, "the offer may be withdrawn at any time before acceptance" except when the option is founded upon consideration, but this general provision must be interpreted as modified by the provision of Article 1479 above referred to, which applies to "a promise to buy and sell" specifically. As already stated, this rule requires that a premise to sell to be valid must be supported by a consideration distinct from the price." On the strength of the above ruling laid down in the above cited case of Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., supra, the facts of which are identical with those alleged in the present complaint, this Court rules that since the herein defendant's promise to sell is not supported by any consideration distinct from the price, said promise si invalid and enforceable. Plaintiff's complaint does not, hence state a cause of action. While under the allegations of the present complaint, here in defendant may have assumed a clear obligation to sell it molasses to plaintiff at P50.00 per metric ton and, under the complaint, said defendant may have no justifiable reason not to proceed with the sale, yet, this Court cannot do otherwise that declare the option not binding and unenforceable in view of the clear provisions of the law on the matter. Thus, said the Supreme Court in the above-mentioned case of Southwestern Sugar v. Atlantic Gulf: "While under the "offer of option" in question, appellant has assumed a clear obligation to sell its barge to appellee and the option has been exercised in accordance with its terms, and there appears to be no valid or justifiable reason for the appellant to withdraw its offer, this Court cannot adopt a different attitude because the la on the matter is clear. Our imperative duty is to apply it unless modified by Congress." WHEREFORE, the Court sustains, as it hereby sustain the defendant's motion to dismiss and hereby declares plaintiff's complaint dismissed, without costs. SO ORDERED. His motion for reconsideration having been denied, plain plaintiff interposed this appeal. It is the contention of plaintiff-appellant that "the lower court erred in characterizing the transaction had between plaintiff and the defendant as an accepted unilateral promise to buy or to sell, and in deciding that as there was no consideration therefor, Article 1479, paragraph 2 of the Civil Code, and the ruling in Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., 51 Off. Gaz. 3447, are applicable thereto." In support of his claim, appellant seeks in his brief to differentiate his case from that of Southwestern Sugar & Molasses Company v. Atlantic Gulf & Pacific Company relied upon by the trial court by arguing that what was involved in the Atlantic Gulf case was a mere option, while here the transaction is a bilateral promise to sell and buy which requires no consideration distinct from the selling price.

This contention is not borne out by the facts alleged in the complaint. In the first place, as noted by the trial court in its order denying plaintiff's motion for reconsideration, plaintiff himself, in paragraph 6 of his complaint, referred to the transaction as an "option" which he exercised on September 24, 1956. Then again, in his memorandum in lieu of oral argument, he expressly agreed that the offer made by defendant and described in paragraph 2 of plaintiff's complaint is, In option, a unilateral promise to sell . (See page 4 of the memorandum.) And, undoubtedly, this is the offer, the option, the unilateral promise to sell that was accepted by plaintiff five minutes before the deadline noon of September 24, 1956.(See first part of paragraph 4 of the complaint.) This acceptance, without consideration, did not create an enforceable obligation on the part of the defendant. The offer as well as the acceptance, did not contemplate nor produce an immediately binding and enforceable contract of sale. Both lack a most essential element the manner of payment of the purchase price. In fact, it was only after the exercise of the option or acceptance of the unilateral promise to sell that the terms of payment were first discussed. This was in connection with the clarification of plaintiff's acceptance which was transmitted to defendant on September 25, 1956. (See last part of paragraph 6 of the complaint.) Plaintiff's offer of a domestic letter of credit was not accepted by defendant who insisted on a cash payment of 50% of the purchase value, upon signing of a contract. (See paragraphs 8 and 9 of the complaint.) Plaintiff, on the other hand, agreed to accede to this provided the price is reduced from P50.00 per metric ton to 7132.00 Defendant rejected defendant's alternative counter-offer. In the circumstance, there was no complete meeting of the minds of the parties necessary for the perfection of a contract of sale. Consequently, appellee was justified in withdrawing its offer to sell the molasses in question.(See Zayco vs. Serra, 44 Phil. 326; Montinola v. Victorias Milling Co., et al., 54 Phil. 782; and Batangan v. Cojuangco 78 Phil. 481.) In view of the conclusion we have reached, it would not be necessary to pass upon appellee's motion to dismiss the appeal. WHEREFORE, finding no reversible error in the order appealed from, the same is hereby affirmed, with cost against the plaintiff-appellant. So ordered.

G.R. No. L-25494 June 14, 1972 NICOLAS SANCHEZ, plaintiff-appellee, vs. SEVERINA RIGOS, defendant-appellant. Santiago F. Bautista for plaintiff-appellee. Jesus G. Villamar for defendant-appellant.

In his complaint, plaintiff alleges that, by virtue of the option under consideration, "defendant agreed and committed to sell" and "the plaintiff agreed and committed to buy" the land described in the option, copy of which was annexed to said pleading as Annex A thereof and is quoted on the margin. 1 Hence, plaintiff maintains that the promise contained in the contract is "reciprocally demandable," pursuant to the first paragraph of said Article 1479. Although defendant had really "agreed, promised and committed" herself to sell the land to the plaintiff, it is not true that the latter had, in turn, "agreed and committed himself " to buy said property. Said Annex A does not bear out plaintiff's allegation to this effect. What is more, since Annex A has been made "an integral part" of his complaint, the provisions of said instrument form part "and parcel" 2 of said pleading. The option did not impose upon plaintiff the obligation to purchase defendant's property. Annex A is not a "contract to buy and sell." It merely granted plaintiff an "option" to buy. And both parties so understood it, as indicated by the caption, "Option to Purchase," given by them to said instrument. Under the provisions thereof, the defendant "agreed, promised and committed" herself to sell the land therein described to the plaintiff for P1,510.00, but there is nothing in the contract to indicate that her aforementioned agreement, promise and undertaking is supported by a consideration "distinct from the price" stipulated for the sale of the land. Relying upon Article 1354 of our Civil Code, the lower court presumed the existence of said consideration, and this would seem to be the main factor that influenced its decision in plaintiff's favor. It should be noted, however, that: (1) Article 1354 applies to contracts in general, whereas the second paragraph of Article 1479 refers to "sales" in particular, and, more specifically, to "an accepted unilateral promise to buy or to sell." In other words, Article 1479 is controlling in the case at bar. (2) In order that said unilateral promise may be "binding upon the promisor, Article 1479 requires the concurrence of a condition, namely, that the promise be "supported by a consideration distinct from the price." Accordingly, the promisee can not compel the promisor to comply with the promise, unless the former establishes the existence of said distinct consideration. In other words, the promisee has the burden of provingsuch consideration. Plaintiff herein has not even alleged the existence thereof in his complaint. (3) Upon the other hand, defendant explicitly averred in her answer, and pleaded as a special defense, the absence of said consideration for her promise to sell and, by joining in the petition for a judgment on the pleadings, plaintiff has impliedly admitted the truth of said averment in defendant's answer. Indeed as early as March 14, 1908, it had been held, in Bauermann v. Casas, 3 that: One who prays for judgment on the pleadings without offering proof as to the truth of his own allegations, and without giving the opposing party an opportunity to introduce evidence, must be understood to admit the truth of all the material and relevant allegations of the opposing party, and to rest his motion for judgment on those allegations taken together with such of his own as are admitted in the pleadings. (La Yebana Company vs. Sevilla, 9 Phil. 210). (Emphasis supplied.)

CONCEPCION, C.J.:p Appeal from a decision of the Court of First Instance of Nueva Ecija to the Court of Appeals, which certified the case to Us, upon the ground that it involves a question purely of law. The record shows that, on April 3, 1961, plaintiff Nicolas Sanchez and defendant Severina Rigos executed an instrument entitled "Option to Purchase," whereby Mrs. Rigos "agreed, promised and committed ... to sell" to Sanchez the sum of P1,510.00, a parcel of land situated in the barrios of Abar and Sibot, municipality of San Jose, province of Nueva Ecija, and more particularly described in Transfer Certificate of Title No. NT-12528 of said province, within two (2) years from said date with the understanding that said option shall be deemed "terminated and elapsed," if "Sanchez shall fail to exercise his right to buy the property" within the stipulated period. Inasmuch as several tenders of payment of the sum of Pl,510.00, made by Sanchez within said period, were rejected by Mrs. Rigos, on March 12, 1963, the former deposited said amount with the Court of First Instance of Nueva Ecija and commenced against the latter the present action, for specific performance and damages. After the filing of defendant's answer admitting some allegations of the complaint, denying other allegations thereof, and alleging, as special defense, that the contract between the parties "is a unilateral promise to sell, and the same being unsupported by any valuable consideration, by force of the New Civil Code, is null and void" on February 11, 1964, both parties, assisted by their respective counsel, jointly moved for a judgment on the pleadings. Accordingly, on February 28, 1964, the lower court rendered judgment for Sanchez, ordering Mrs. Rigos to accept the sum judicially consigned by him and to execute, in his favor, the requisite deed of conveyance. Mrs. Rigos was, likewise, sentenced to pay P200.00, as attorney's fees, and other costs. Hence, this appeal by Mrs. Rigos. This case admittedly hinges on the proper application of Article 1479 of our Civil Code, which provides: ART. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally demandable. An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price.

This view was reiterated in Evangelista v. De la Rosa 4 and Mercy's Incorporated v. Herminia Verde. 5 Squarely in point is Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., 6 from which We quote: The main contention of appellant is that the option granted to appellee to sell to it barge No. 10 for the sum of P30,000 under the terms stated above has no legal effect because it is not supported by any consideration and in support thereof it invokes article 1479 of the new Civil Code. The article provides: "ART. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally demandable. An accepted unilateral promise to buy or sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price." On the other hand, Appellee contends that, even granting that the "offer of option" is not supported by any consideration, that option became binding on appellant when the appellee gave notice to it of its acceptance, and that having accepted it within the period of option, the offer can no longer be withdrawn and in any event such withdrawal is ineffective. In support this contention, appellee invokes article 1324 of the Civil Code which provides: "ART. 1324. When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn any time before acceptance by communicating such withdrawal, except when the option is founded upon consideration as something paid or promised." There is no question that under article 1479 of the new Civil Code "an option to sell," or "a promise to buy or to sell," as used in said article, to be valid must be "supported by a consideration distinct from the price." This is clearly inferred from the context of said article that a unilateral promise to buy or to sell, even if accepted, is only binding if supported by consideration. In other words, "an accepted unilateral promise can only have a binding effect if supported by a consideration which means that the option can still be withdrawn, even if accepted, if the same is not supported by any consideration. It is not disputed that the option is without consideration. It can therefore be withdrawn notwithstanding the acceptance of it by appellee. It is true that under article 1324 of the new Civil Code, the general rule regarding offer and acceptance is that, when the offerer gives to the offeree a certain period to accept, "the offer may be withdrawn at any time

before acceptance" except when the option is founded upon consideration, but this general rule must be interpreted as modified by the provision of article 1479 above referred to, which applies to "a promise to buy and sell" specifically. As already stated, this rule requires that a promise to sell to be valid must be supported by a consideration distinct from the price. We are not oblivious of the existence of American authorities which hold that an offer, once accepted, cannot be withdrawn, regardless of whether it is supported or not by a consideration (12 Am. Jur. 528). These authorities, we note, uphold the general rule applicable to offer and acceptance as contained in our new Civil Code. But we are prevented from applying them in view of the specific provision embodied in article 1479. While under the "offer of option" in question appellant has assumed a clear obligation to sell its barge to appellee and the option has been exercised in accordance with its terms, and there appears to be no valid or justifiable reason for appellant to withdraw its offer, this Court cannot adopt a different attitude because the law on the matter is clear. Our imperative duty is to apply it unless modified by Congress. However, this Court itself, in the case of Atkins, Kroll and Co., Inc. v. Cua Hian Tek, 8 decided later thatSouthwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., 9 saw no distinction between Articles 1324 and 1479 of the Civil Code and applied the former where a unilateral promise to sell similar to the one sued upon here was involved, treating such promise as an option which, although not binding as a contract in itself for lack of a separate consideration, nevertheless generated a bilateral contract of purchase and sale upon acceptance. Speaking through Associate Justice, later Chief Justice, Cesar Bengzon, this Court said: Furthermore, an option is unilateral: a promise to sell at the price fixed whenever the offeree should decide to exercise his option within the specified time. After accepting the promise and before he exercises his option, the holder of the option is not bound to buy. He is free either to buy or not to buy later. In this case, however, upon accepting herein petitioner's offer a bilateral promise to sell and to buy ensued, and the respondent ipso facto assumed the obligation of a purchaser. He did not just get the right subsequently to buy or not to buy. It was not a mere option then; it was a bilateral contract of sale. Lastly, even supposing that Exh. A granted an option which is not binding for lack of consideration, the authorities hold that: "If the option is given without a consideration, it is a mere offer of a contract of sale, which is not binding until accepted. If, however, acceptance is made before a withdrawal, it constitutes a binding contract of sale, even though the option was not supported by a sufficient consideration. ... . (77 Corpus Juris Secundum, p. 652. See also 27 Ruling Case Law 339 and cases cited.)

"It can be taken for granted, as contended by the defendant, that the option contract was not valid for lack of consideration. But it was, at least, an offer to sell, which was accepted by letter, and of the acceptance the offerer had knowledge before said offer was withdrawn. The concurrence of both acts the offer and the acceptance could at all events have generated a contract, if none there was before (arts. 1254 and 1262 of the Civil Code)." (Zayco vs. Serra, 44 Phil. 331.) In other words, since there may be no valid contract without a cause or consideration, the promisor is not bound by his promise and may, accordingly, withdraw it. Pending notice of its withdrawal, his accepted promise partakes, however, of the nature of an offer to sell which, if accepted, results in a perfected contract of sale. This view has the advantage of avoiding a conflict between Articles 1324 on the general principles on contracts and 1479 on sales of the Civil Code, in line with the cardinal rule of statutory construction that, in construing different provisions of one and the same law or code, such interpretation should be favored as will reconcile or harmonize said provisions and avoid a conflict between the same. Indeed, the presumption is that, in the process of drafting the Code, its author has maintained a consistent philosophy or position. Moreover, the decision in Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., 10 holding that Art. 1324 is modified by Art. 1479 of the Civil Code, in effect, considers the latter as an exception to the former, and exceptions are not favored, unless the intention to the contrary is clear, and it is not so, insofar as said two (2) articles are concerned. What is more, the reference, in both the second paragraph of Art. 1479 and Art. 1324, to an option or promise supported by or founded upon a consideration, strongly suggests that the two (2) provisions intended to enforce or implement the same principle. Upon mature deliberation, the Court is of the considered opinion that it should, as it hereby reiterates the doctrine laid down in the Atkins, Kroll & Co. case, and that, insofar as inconsistent therewith, the view adhered to in the Southwestern Sugar & Molasses Co. case should be deemed abandoned or modified. WHEREFORE, the decision appealed from is hereby affirmed, with costs against defendantappellant Severina Rigos. It is so ordered. Reyes, J.B.L., Makalintal, Zaldivar, Teehankee, Barredo and Makasiar, JJ., concur. Castro, J., took no part.

ANTONIO, J., concurring: I concur in the opinion of the Chief Justice. I fully agree with the abandonment of the view previously adhered to in Southwestern Sugar & Molasses Co. vs. Atlantic Gulf and Pacific Co. , 1 which holds that an option to sell can still be withdrawn, even if accepted, if the same is not supported by any consideration, and the reaffirmance of the doctrine in Atkins, Kroll & Co., Inc. vs. Cua Hian Tek, 2 holding that "an option implies ... the legal obligation to keep the offer (to sell) open for the time specified;" that it could be withdrawn before acceptance, if there was no consideration for the option, but once the "offer to sell" is accepted, a bilateral promise to sell and to buy ensues, and the offeree ipso facto assumes the obligations of a purchaser. In other words, if the option is given without a consideration, it is a mere offer to sell, which is not binding until accepted. If, however, acceptance is made before a withdrawal, it constitutes a binding contract of sale. The concurrence of both acts the offer and the acceptance could in such event generate a contract. While the law permits the offeror to withdraw the offer at any time before acceptance even before the period has expired, some writers hold the view, that the offeror can not exercise this right in an arbitrary or capricious manner. This is upon the principle that an offer implies an obligation on the part of the offeror to maintain in such length of time as to permit the offeree to decide whether to accept or not, and therefore cannot arbitrarily revoke the offer without being liable for damages which the offeree may suffer. A contrary view would remove the stability and security of business transactions. 3 In the present case the trial court found that the "Plaintiff (Nicolas Sanchez) had offered the sum of Pl,510.00before any withdrawal from the contract has been made by the Defendant (Severina Rigos)." Since Rigos' offer sell was accepted by Sanchez, before she could withdraw her offer, a bilateral reciprocal contract to sell and to buy was generated.

Separate Opinions ANTONIO, J., concurring: I concur in the opinion of the Chief Justice. I fully agree with the abandonment of the view previously adhered to in Southwestern Sugar & Molasses Co. vs. Atlantic Gulf and Pacific Co. , 1 which holds that an option to sell can still be withdrawn, even if accepted, if the same is not supported by any consideration, and the reaffirmance of the doctrine in Atkins, Kroll & Co., Inc. vs. Cua Hian Tek, 2 holding that "an option implies ... the legal obligation to keep the offer (to sell) open for the time specified;" that it could be withdrawn before acceptance, if there was no consideration for the option, but once the "offer to sell" is accepted, a bilateral promise to sell and to buy ensues, and the offeree ipso facto assumes the obligations of a purchaser. In other words, if the option is given

Separate Opinions

without a consideration, it is a mere offer to sell, which is not binding until accepted. If, however, acceptance is made before a withdrawal, it constitutes a binding contract of sale. The concurrence of both acts the offer and the acceptance could in such event generate a contract. While the law permits the offeror to withdraw the offer at any time before acceptance even before the period has expired, some writers hold the view, that the offeror can not exercise this right in an arbitrary or capricious manner. This is upon the principle that an offer implies an obligation on the part of the offeror to maintain in such length of time as to permit the offeree to decide whether to accept or not, and therefore cannot arbitrarily revoke the offer without being liable for damages which the offeree may suffer. A contrary view would remove the stability and security of business transactions. 3 In the present case the trial court found that the "Plaintiff (Nicolas Sanchez) had offered the sum of Pl,510.00before any withdrawal from the contract has been made by the Defendant (Severina Rigos)." Since Rigos' offer sell was accepted by Sanchez, before she could withdraw her offer, a bilateral reciprocal contract to sell and to buy was generated.

G.R. No. L-62051 March 18, 1985 RURAL BANK OF PARARAQUE, INC., petitioner, vs. ISIDRA REMOLADO and COURT OF APPEALS, respondents.

Contrary to her promise, Remolado did not repurchase the property on October 31, Five days later, or on November 5, Remolado and her daughter delivered P33,000 rash to the bank's assistant manager as repurchase price. The amount was returned to them the next day, November 6, 1973 (Exh. V, W and 11). The assistant manager had no intention of receiving the money. It was just left with her by Remolado (Exh. 10; 42, Record on Appeal). At that time, the bank was no longer willing to allow the repurchase. On that day, November 6, Remolado filed an action to compel the bank to reconvey the property to her for P25,491.96 plus interest and other charges and to pay P35,000 as damages. The repurchase price was not consigned. A notice of lis pendens was registered. On November 15, the bank sold the property to Pilar Aysip for P50,000. A new title was issued to Aysip with an annotation of lis pendens (Exh. P and 12; 649, Record on Appeal). The trial court ordered the bank to return the property to Remolado upon payment of the redemption price of P25,491.96 plus interest and other bank charges and to pay her P15,000 as damages. The Appellate Court affirmed the judgment. The bank appealed to this Court. It contends that Remolado had no more right of redemption and, therefore, no cause of action against the bank. We hold that the trial court and the Appellate Court erred in ordering the reconveyance of the property, There was no binding agreement for its repurchase. Even on the assumption that the bank should be bound by its commitment to allow repurchase on or before October 31, 1973, still Remolado had no cause of action because she did not repurchase the property on that date. Justice is done according to law. As a rule, equity follows the law. There may be a moral obligation, often regarded as an equitable consideration (meaning compassion), but if there is no enforceable legal duty, the action must fail although the disadvantaged party deserves commiseration or sympathy. The choice between what is legally just and what is morally just, when these two options do not coincide, is explained by Justice Moreland in Vales vs. Villa, 35 Phfl. 769, 788 where he said: Courts operate not because one person has been defeated or overcome by another, but because he has been defeated or overcome illegally. Men may do foolish things, make ridiculous contracts, use miserable judgment, and lose money by them-indeed, all they have in the world; but not for that alone can the law intervene and restore. There must be, in addition, a violation of law, the commission of what the law knows as an actionable wrong before the courts are authorized to lay hold of the situation and remedy it. In the instant case, the bank acted within its legal rights when it refused to give Remolado any extension to repurchase after October 31, 1973. It had given her about two years to liquidate her obligation. She failed to do so. WHEREFORE, the Appellate Court's judgment is reversed and set aside. The complaint and counterclaim are dismissed. The notice of lis pendens is cancelled. No costs.

AQUINO, J.: This case is about the repurchase of mortgage property after the period of redemption and had expired. Isidra Remolado, 64, a widow, and resident of Makati, Rizal, owned a lot with an area of 308 square meters, with a bungalow thereon, which was leased to Beatriz Cabagnot (86-7, record on Appeal). The lot is located at 41 Molave Street, United Paraaque, Rizal. In 1966 she mortgaged it to the Rural Bank of Paraaque, Inc. as security for a loan of P15,000. She paid the loan. On April 17, 1971 she mortgaged it again to the bank. She eventually secured loans totalling P18,000 (Exh. At D). the loans become overdue. The bank foreclosed the mortagage on July 21, 1972 and bought the property at the foreclosure sale for P22,192.70. The one-year period of redemption was to expire on August 21, 1973. On August 8, 1973 the bank advised Remolado that she had until August 23 to redeem the property (Exh. U or 6; 53, Record on Appeal). On August 9, 1973 or 14 days before the expiration of the one-year redemption period, the bank gave her a statement showing that she should pay P25,491.96 for the redemption of the property on August 23 (Exh. F). No redemption was made on that date. On September 3, 1973 the bank consolidated its ownership over the property (Exh. H). Remolado's title was cancelled. A new title, TCT No. 418737, was issued to the bank on September 5 (Exh. 0). On September 24, 1973, the bank gave Remolado up to ten o'clock in the morning of October 31, 1973, or 37 days, within which to repurchase (not redeem since the period of redemption had expired) the property (Exh. I-1; 32, Record on Appeal). The bank did not specify the price. On October 26, 1973 Remolado and her daughter, Patrocinio Gomez, promised to pay the bank P33,000 on October 31 for the repurchase of the property (Exh. X or 9; 64, Record on Appeal). Exhibits 1-1 and X do not evidence any perfected repurchase agreemi6nt. Even if it is assumed that the bank's commitment to resell the property was accepted by Remolado, that option was not supported by a consideration distinct from the price (Art. 1479, Civil Code). Lacking such consideration, the option is void (Southwestern Sugar & Molasses Co. vs. Atlantic Gulf & Pacific Company, 97 Phil. 249).

G.R. No. L-32873 August 18, 1972 AQUILINO NIETES, petitioner, vs. HON. COURT OF APPEALS & DR. PABLO C. GARCIA, respondents. Conrado V. del Rosario for petitioner. Romeo D. Magat for private respondent.

3. That all improvements made during the lease by the LESSEE will be owned by the LESSOR after the expiration of the term of this Contract of Lease; 4. That the LESSOR agrees to give the LESSEE an option to buy the land and the school building, for a price of ONE HUNDRED THOUSAND PESOS (P100,000) within the period of the Contract of Lease; 5. That should the LESSEE buy the lot, land and the school building within the stipulated period, the unused payment for the Contract of Lease will be considered as part payment for the sale of the land and school; 6. That an inventory of all properties in the school will be made on March 31, 1960; 6A. That the term of this Contract will commence in June 1960 and will terminate in June 1965; 7. That the LESSEE will be given full control and responsibilities over all the properties of the school and over all the supervisions and administrations of the school; 8. That the LESSEE agrees to help the LESSOR to collect the back accounts of students incurred before the execution of this contract. Instead of paying the lessor in the manner set forth in paragraph 2 of said contract, Nietes had, as of August 4, 1961, made payments as follows: October 6,1960 ....................................... P18,957.00 (Exh. D) November 23, 1960 ................................. 300.00 (Exh. E) December 21, 1960 ................................. 200.00 (Exh. F) January 14, 1961 ..................................... 500.00 (Exh. G) February 16, 1961 ................................... 3,000.00 (Exh. H) March 12, 1961 ....................................... 1,000.00 (Exh. I) March 13, 1961 ....................................... 700.00 (Exh. J) August 4, 1961 ........................................ 100.00 (Exh. K) _________ TOTAL ..................................... P24,757.00

CONCEPCION, C.J.:p Petitioner Aquilino Nietes seeks a review on certiorari of a decision of the Court of Appeals. It appears that, on October 19, 1959, said petitioner and respondent Dr. Pablo C. Garcia entered into a "Contract of Lease with Option to Buy," pursuant to the terms and conditions set forth in the deed Exhibits A and A-1, (also, marked as Exhibit 2) namely: That the LESSOR is an owner of the ANGELES EDUCATIONAL INSTITUTE situated at Angeles, Pampanga, a school which is duly recognized by the Government; That the lessor agrees to lease the above stated school to the LESSEE under the following terms and conditions: 1. That the term will be for a period of five (5) years; 2. That the price of the rent is FIVE THOUSAND PESOS (P5,000) per year payable in the following manners: a. That the amount of FIVE THOUSAND FIVE HUNDRED PESOS (P5,500) will be paid upon the execution of this Contract of Lease; b. That the amount of FOUR THOUSAND FIVE HUNDRED PESOS (P4,500) is payable on or before the 30th day of October, 1959; c. That the remaining balance of FIFTEEN THOUSAND PESOS (P15,000) will be paid on or before March 30, 1960;

Moreover, Nietes maintains that, on September 4, 1961, and December 13, 1962, he paid Garcia the additional sums of P3,000 and P2,200, respectively, for which Garcia issued receipts Exhibit B and C, reading: Received the amount of (P3,000.00) Three Thousand Pesos from Mrs. Nietes as per advance pay for the school, the contract of lease being paid. (Sgd.) PABLO GARCIA (Exh. B) To Whom it May Concern: This is to certify that I received the sum of Two Thousand Two Hundred Pesos, Philippine Currency, from Mrs. Catherine R. Nietes as the partial payment on the purchase of the property as specified on the original contract of "Contract of Lease with the First Option to Buy" originally contracted and duly signed. (Sgd.) DR. PABLO GARCIA (Exh. C) On or about July 31, 1964, Dr. Garcia's counsel wrote to Nietes the letter Exhibit 1 (also Exhibit V) stating: The Director Philippine Institute of Electronics Angeles, Pampanga Sir: I regret to inform you that our client, Dr. Pablo Garcia, desires to rescind your contract, dated 19 October 1959 because of the following: 1. That you had not maintained the building, subject of the lease contract in good condition. 2. That you had not been using the original name of the school Angeles Institute, thereby extinguishing its existence in the eyes of the public and injuring its prestige. 3. That through your fault, no inventory has been made of all properties of the school. 4. That up to this time, you had not collected or much less helped in the collection of back accounts of former students. This is to remind you that the foregoing obligations had been one, if not, the principal moving factors which had induced the lessor in agreeing with the terms embodied in your contract of lease, without which fulfillment,

said contract could not have come into existence. It is not simply one of those reminders that we make mention, that our client under the circumstances, is not only entitled to a rescission of the contract. He is likewise entitled to damages actual, compensatory and exemplary. In view of the serious nature of the breach which warrant and sanction drastic legal remedies against you, we earnestly request you to please see the undersigned at the above-named address two days from receipt hereof. Otherwise, if we shall not hear from you, the foregoing will serve notice on your part to vacate the premises within five (5) days to be counted from date of notice. Very truly yours, (Sgd.) VICTOR T. LLAMAS, JR. to which counsel for Nietes replied in the following language: Atty. Victor T. Llamas, Jr. Victor Llamas Law Office Corner Rivera-Zamora Streets Dagupan City Dear Sir: Your letter dated July 31, 1964 addressed to my client, the Director of the Philippine Institute of Electronics, Angeles City, has been referred to me and in reply, please, be informed that my client has not violated any provision of the CONTRACT OF LEASE WITH OPTION TO BUY, executed by him as LESSEE and Dr. Pablo Garcia as LESSOR. For this reason, there is no basis for rescission of the contract nor of the demands contained in your letter. In this connection, I am also serving this formal notice upon your client Dr. Pablo Garcia, thru you, that my client Mr. AQUILINO T. NIETES will exercise his OPTION to buy the land and building subject matter of the lease and that my said client is ready to pay the balance of the purchase price in accordance with the contract. Please, inform Dr. Pablo Garcia to make available the land title and execute the corresponding Deed of Sale pursuant to this notice, and that if he fails to do so within fifteen (15) days from the receipt of this letter, we shall take the corresponding action to enforce the agreement. Truly yours, (Sgd.) CONRADO V. DEL ROSARIO Counsel for Mr. Aquilino T. Nietes Angeles City

On July 26, 1965, Nietes deposited with the branch office of the Agro-Industrial Bank in Angeles City checks amounting to P84,860.50, as balance of the purchase price of the property, but he withdrew said sum of P84,860.50 on August 12, 1965, after the checks had been cleared. On August 2, 1965, he commenced the present action, in the Court of First Instance of Pampanga, for specific performance of Dr. Garcia's alleged obligation to execute in his (Nietes') favor a deed of absolute sale of the leased property, free from any lien or encumbrance whatsoever, he having meanwhile mortgaged it to the People's Bank and Trust Company, and to compel him (Garcia) to accept whatever balance of the purchase price is due him, as well as to recover from him the aggregate sum of P90,000 by way of damages, apart from attorney's fees and the costs. Dr. Garcia filed an answer admitting some allegations of the complaint and denying other allegations thereof, as well as setting up a counterclaim for damages in the sum of P150,000. After due trial, said court rendered its decision, the dispositive part of which reads: WHEREFORE, in view of the preponderance of evidence in favor of the plaintiff and against the defendant, judgment is hereby rendered ordering the latter to execute the Deed of Absolute Sale of property originally leased together with the school building and other improvements thereon which are covered by the contract, Annex "A", upon payment of the former of the balance (whatever be the amount) of the stipulated purchase price; to free the said property from any mortgage or encumbrance and deliver the title thereto to the plaintiff free from any lien or encumbrance, and should said defendant fail to do so, the proceeds from the purchase price be applied to the payment of the encumbrance so that the title may be conveyed to the plaintiff; to pay the plaintiff the sum of P1,000.00 as attorney's fees, and the cost of this suit. Both parties appealed to the Court of Appeals, Dr. Garcia insofar as the trial court had neither dismissed the complaint nor upheld his counterclaim and failed to order Nietes to vacate the property in question, and Nietes insofar as the trial court had granted him no more than nominal damages in the sum of P1,000, as attorney's fees. After appropriate proceedings, a special division of Court of Appeals rendered its decision, on October 18, 1969, affirming, in effect, that of the trial court, except as regards said attorney's fees, which were eliminated. The dispositive part of said decision of the Court of Appeals reads: WHEREFORE, with the modification that the attorney's fees awarded by the trial court in favor of the plaintiff is eliminated, the appealed judgment is hereby affirmed in all other respects, and the defendant is ordered to execute the corresponding deed of sale for the school building and lot in question in favor of the plaintiff upon the latter's full payment of the balance of the purchase price. The costs of this proceedings shall be taxed against the defendant-appellant. On motion for reconsideration of defendant Garcia, said special division set aside its aforementioned decision and rendered another one, promulgated on March 10, 1970 reversing the appealed decision of the court of first instance, and dismissing the complaint of Nietes,

with costs again him. Hence, the present petition of Nietes for review certiorari of the second decision of the Court of Appeals, dated March 10, 1970, to which petition We gave due course. Said decision of the Court of Appeals, reversing that of the Court of First Instance, is mainly predicated upon the theory that, under the contract between the parties, "the full purchase price must be paid before the option counsel be exercised," because "there was no need nor sense providing that "the unused payment for the Contract Lease will be considered as part payment for the sale the land and school'" inasmuch as "otherwise there is substantial amount from which such unused rental could be deducted"; that the statement in the letter, Exhibit L, of Nietes, dated August 7, 1964, to the effect that he "will exercise his OPTION to buy the land and building," indication that he did not consider the receipts, Exhibits B and for P3,000 and P2,200, respectively, "as an effective exercise of his option to buy"; that the checks for P84,860.50 deposited by Nietes with the Agro-Industrial Development Bank, did not constitute a proper tender of payment, which, at any rate, was "made beyond the stipulated 5year period"; that such deposit "was not seriously made, because on August 12, 1965, the same was withdrawn from the Bank and ostensibly remains in the lessee's hand"; and that "the fact that such deposit was made by the lessee shows that he himself believed that he should have paid the entire amount of the purchase price before he could avail of the option to buy, otherwise, the deposit was a senseless gesture ... ." Dr. Garcia, in turn, maintained in his answer "that the sums paid" to him "were part of the price of the contract of lease between the parties which were paid late and not within the periods and/or schedules fixed by the contract (Annex A.)." What is more, on the witness stand, Garcia claimed that he did "not know" whether the signatures on Exhibits B and C the receipt for P3,000 and P2,200, respectively were his, and even said that he was "doubtful" about it. This testimony is manifestly incredible, for a man of his intelligence a Doctor of Medicine and the owner of an educational institution could not possibly "not know" or entertain doubts as to whether or not the aforementioned signatures are his and the payments therein acknowledged had been received by him. His dubious veracity becomes even more apparent when we consider the allegations in paragraph (4) of his answer referring to paragraphs 5 and 6 of the complaint alleging, inter alia, the aforementioned partial payments of P3,000 and P2,200, on account of the stipulated sale price to the effect that said sums " paid to the herein defendant were part of the price of the contract of lease." In other words, payment of said sums of P3,000 and P2,200 is admitted in said answer. Besides, the rentals for the whole period of the lease aggregated P25,000 only, whereas said sums of P3,000 and P2,200, when added to the payments previously made by Nietes, give a grand total of P29,957.00, or P4,957 in excess of the agreed rentals for the entire period of five years. Thus, Dr. Garcia was less than truthful when he tried to cast doubt upon the fact of payment of said sums of P3,000 and P2,200, as well as when he claimed that the same were part of the rentals collectible by him. We, likewise, find ourselves unable to share the view taken by the Court of Appeals. Neither the tenor of the contract Exhibits A and A-1 (also Exhibit 2) nor the behaviour of Dr. Garcia as reflected in the receipts Exhibits B and C justifies such view. The contract does not say that Nietes had to pay the stipulated price of P100,000 before exercising his option to buy the property in question. Accordingly, said option is governed by the general principles on obligations, pursuants to which:

In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins. 1 In the case of an option to buy, the creditor may validly and effectively exercise his right by merely advising the debtor of the former's decision to buy and expressing his readiness to pay the stipulated price, provided that the same is available and actually delivered to the debtor upon execution and delivery by him of the corresponding deed of sale. Unless and until the debtor shall have done this the creditor is not and cannot be in default in the discharge of his obligation to pay. 2 In other words, notice of the creditor's decision to exercise his option to buy need not be coupled with actual payment of the price, so long as this is delivered to the owner of the property upon performance of his part of the agreement. Nietes need not have deposited, therefore, with the Agro-Industrial Bank checks amounting altogether to P84,860.50 on July 26, 1965, and the withdrawal thereof soon after does not and cannot affect his cause of action in the present case. In making such deposit, he may have had the intent to show his ability to pay the balance of the sum due to Dr. Garcia as the sale price of his property. In short, said deposit and its subsequent withdrawal cannot affect the result of the present case. Nietes was entitled to exercise his option to buy "within the period of the Contract of Lease," which pursuant to paragraph 6-A of said contract commenced "in June 1960" and was to "terminate in June 1965." As early as September 4, 1961, or well "within the period of the Contract of Lease," Nietes had paid Dr. Garcia the following sums: October 6, 1960 ............................ P18,957.00 (Exh. D) November 23, 1960 ....................... 300.00 (Exh E) December 21, 1960 ....................... 200.00 (Exh. F) January 14, 1961 ........................... 500.00 (Exh. G) February 16, 1961 ......................... 3,000.00 (Exh. H) March 12, 1961 ............................. 1,000.00 (Exh. I) March 13, 1961 ............................. 700.00 (Exh. J) August 4, 1961 ............................... 100.00 (Exh. K) September 4, 1961 ......................... 3,000.00 (Exh. B) ________ TOTAL ............................... P27,757.00

It is true that Nietes was bound, under the contract, to pay P5,500 on October 19, 1959, P4,500 on or before October 30, 1959, and P15,000 on or before March 30, 1960, or the total sum of P25,000, from October 19, 1959 to March 30, 1960, whereas his first payment was not made until October 10, 1960, when he delivered the sum of P18,957 to Dr. Garcia, and the latter had by August 4, 1961, received from the former the aggregate sum of P24,757. This is, however, P243.00 only less than the P25,000 due as of March 30, 1960, so that Nietes may be considered as having complied substantially with the terms agreed upon. Indeed, Dr. Garcia seems to have either agreed thereto or not considered that Nietes had thereby violated the contract, because the letter of the former, dated July 31, 1964, demanding rescission of the contract, did not mention said acts or omissions of Nietes among his alleged violations thereof enumerated in said communication. In fact, when, on September 4, 1961, Mrs. Nietes turned over the sum of P3,000 to Dr. Garcia, he issued the receipt Exhibit B, stating that said payment had been made "as per advance pay for the school, the Contract of Lease being paid" in other words, in accordance or conformity with said contract. Besides, when, on December 13, 1962, Mrs. Nietes delivered the additional sum of P2,200, Dr. Garcia issued a receipt accepting said amount "as the partial payment on the purchase price of the property as specified on the original contract," thus further indicating that the payment, in his opinion, conformed with said contract, and that, accordingly, the same was in full force and effect. In any event, it is undisputed that, as of September 4, 1961, Dr. Garcia had received the total sum of P27,757, or P2,757 in excess of the P25,000 representing the rentals for the entire period of the lease, and over P21,200in excess of the rentals for the unexpired portion of the lease, from September 4, 1961 to June 1965. This circumstance indicates clearly that Nietes had, on September 4, 1961, chosen to exercise and did exercise then his option to buy. What is more, this is borne out by the receipt issued by Dr. Garcia for the payment of P2,200, on December 13, 1962, to which he referred therein as a "partial payment on the purchase of the property as specified on the original contract of 'Contract of Lease with the First Option to Buy' ... ." Further confirmation is furnished by the letter of Nietes, Exhibit L, of August 1964 also, within the period of the lease stating that he "will exercise his OPTION to buy the land and building subject matter of the lease." It is not correct to construe this expression as did the appealed decision as implying that the option had not been or was not yet being exercised, or as a mere announcement of the intent to avail of it at some futuretime. This interpretation takes said expression out of the context of Exhibit L, which positively states, also, that Nietes "is ready to pay the balance of the purchase price in accordance with the contract," and requests counsel for Dr. Garcia to inform or advise him "to make available the land title and execute the corresponding Deed of Sale pursuant to this notice, and that if he fails to do so within fifteen (15) days ... we shall take the corresponding action to enforce the agreement." Such demand and said readiness to pay the balance of the purchase price leave no room for doubt that, as stated in Exhibit L, the same is "a formal notice" that Nietes had exercised his option, and expected Dr. Garcia to comply, within fifteen (15) days, with his part of the bargain. Surely, there would have been no point for said demand and readiness to pay, if Nietes had not yet exercised his option to buy. The provision in paragraph 5 of the Contract, to the effect that "should the LESSEE" choose to make use of his option to buy "the unused payment for the Contract of Lease will be considered as payment for the sale of the land and school, "simply means that the rental paid for the unused portion of the lease shall be applied to and deducted from the sale price of

P100,000 to be paid by Nietes at the proper time in other words,simultaneously with the delivery to him of the corresponding deed of sale, duly executed by Dr. Garcia. It is, consequently, Our considered opinion that Nietes had validly and effectively exercised his option to buy the property of Dr. Garcia, at least, on December 13, 1962, when he acknowledged receipt from Mrs. Nietes of the sum of P2,200 then delivered by her "in partial payment on the purchase of the property" described in the "Contract of Lease with Option to Buy"; that from the aggregate sum of P29,957.00 paid to him up to that time, the sum of P12,708.33 should be deducted as rental for the period from June 1960 to December 13, 1962, or roughly thirty (30) months and a half, thereby leaving a balance of P17,248.67, consisting of P12,291.67, representing the rentals for the unused period of the lease, plus P4,957.00 paid in excess of said rental and advanced solely on account of the purchase price; that deducting said sum of P17,248.67 from the agreed price of P100,000.00, there results a balance of P82,751.33 which should be paid by Nietes to Dr. Garcia, upon execution by the latter of the corresponding deed of absolute sale of the property in question, free from any lien or encumbrance whatsoever, in favor of Nietes, and the delivery to him of said deed of sale, as well as of the owner's duplicate of the certificate of title to said property; and that Dr. Garcia should indemnify Nietes in the sum of P2,500 as and for attorney's fees. Thus modified, the decision of the Court of First Instance of Pampanga is hereby affirmed in all other respects, and that of the Court of Appeals reversed, with costs against respondent herein, Dr. Pablo C. Garcia. It is so ordered. Reyes, J.B.L., Makalintal, Zaldivar, Fernando, Teehankee, Barredo, Makasiar Antonio and Esguerra, JJ., concur. Castro, J., took no part.

G.R. No. L-2058 December 22, 1905 JOSE MAS, administrator of the estate of FRANCISCA HILARIO, deceased, plaintiffappellee, vs. TIMOTEO LANUZA AND WIFE, ANDREA FLORES, ET AL., defendants-appellants. Chicote, Miranda and Sierra for appellants. W.A. Kincaid for appellee.

defendant's own showing the agreement to sell did not pass title or dominion over the property, and only gave the defendants a right to demand the fulfillment of the terms thereof, should it appear that the instrument is what it purports to be, and that the title was in fact in the said Joaquin Lao-Jico. (Art. 1451, Civil Code.) This evidence being excluded, we have before us only the above-described permission to the defendants to occupy the lot in question at the will of the deceased Francisca Hilario, her heirs, or legal representatives, and the plaintiff having made demand for possession, is entitled thereto in accordance with the terms of that agreement. We do not think that the plaintiff affirmatively established title to the lot in question, and so much of the judgment of the trial court as undertakes to declare title to the said lot in the estate of which the plaintiff is administrator should be reversed. No weight can be given to the defendants' claim to title by prescription, for even if it were admitted that they had been in possession for the full prescriptive period, they took possession by virtue of the express permission of the deceased Francisca Hilario, and continued in possession by virtue of said permission until January 15, 1900, as appears from the abovementioned certified copy of the statement under oath of one of the defendants, Timoteo Lanuza. (Art. 447, Civil Code.) The judgment of the trial court should be modified in accordance with this opinion, by substituting for the finding of the trial court that the lot in question is the property of the estate represented by the plaintiff, a finding that neither plaintiff nor defendants have proven title to the property in question, but that the plaintiff administrator is entitled to possession thereof; thus modified the judgment should be affirmed, with the costs of this instance against the appellants. After the expiration of twenty days let judgment be entered in accordance herewith, and the record returned to the court wherein it originated for execution thereof. So ordered.

CARSON, J.: Judgement was rendered in favor of the plaintiff for the possession of a certain lot of land described in the complaint as lot No. 120, Calle Clavel, Tondo, Manila, and declaring said lot to be the property of the estate of which the plaintiff is administrator. The plaintiff introduced in evidence an agreement in writing executed on the 4th of July, 1882, and signed by the appellants and by Francisca Hilario, whereby the said Francisca Hilario, since deceased, gave the appellants permission to enter upon the land in question, and to occupy it for such time as the said Francisca Hilario or her heirs should permit, the appellants, on their part, expressly acknowledging the right and title of the said Francisca Hilario, deceased, to the possession and ownership of said property, and, among other stipulations binding themselves to close the opening in the wall which divided the said lot from their town, should any question ever arise over the title thereto. Plaintiff also introduced in evidence a transcript of the record of a criminal case in the Court of First Instance of Manila, during the course of which one of the appellants, Timoteo Lanuza, on the 11th day of January, 1900, declared under oath that the lot in question was the property of the said Francisca Hilario, and that he had been treating with her for the purchase thereof. The defendants admit the execution of the above-described agreement, and that they took possession of the lot under and by virtue thereof, but they allege that they entered into it under the mistaken belief that Francisca Hilario was in fact the owner of the property, that they discovered later that she held the property merely as administratrix for the true owner, and that on the 7th of December, 1892, they loaned the true owner, one Joaquin Lao-Jico, 200 pesos, and took from him an agreement in writing whereby he promised to sell them the said property for 500 pesos, an agreement which was never consummated, however, because he died a short time thereafter. The defendants offered in evidence this alleged agreement for the sale of the property, and certain other documents which tended to show that the title to said property was in the said Joaquin Lao-Jico, but the trial court, over the objection of the defendants, refused to admit these documents in evidence. These documents are made a part of the bill of exceptions, and we are of opinion that the trial could properly refused to admit them in evidence, as on the

G.R. No. L-8238 ANTONIO M. BARRETTO, plaintiff-appellee, vs. JOSE SANTA MARINA, defendant-appellant. William A. Kincaid and Thomas L. Hartigan, for appellant. Haussermann, Cohn and Fisher, for appellee. TRENT, J.: The La Insular cigar and cigarette factory is a joint account association with a nominal capital of P865,000, the plaintiffs share being P20,000, or 4/173 of the whole. On March 14, 1910, the plaintiffs attorneys wrote the defendants local representative a letter offering to sell to the defendant plaintiffs participation in the factory. The result of the correspondence between the parties and their representatives was that Exhibit G was duly executed on May 3, 1910. In accordance with the terms of this exhibit a committee of appraisers was appointed to ascertain and fix the actual value of La Insular. The committee rendered its report on November 14, 1910, fixing the net value at P4,428,194.44. Of this amount 4/173 part represented the plaintiffss share on his P20,000 of the nominal capital. In Exhibit J which was executed on November 22, 1910, the plaintiff acknowledged to have received from the defendant that amount. Subsequently to the execution of Exhibit J, demand was made by the plaintiff upon the defendant for his share of the profits from June 30, 1909, to November 22, 1910. This demand was refused and thereupon this action was instituted to recover said profits. Upon the evidence submitted at the hearing, the court below held: (1) That the agreement of May 3, 1910, was by its terms a contract tosell in the future and did not pass title and (2) that the sale of plaintiffs interest did not include the profits in question. Judgment was rendered accordingly, with interest and cost. The defendant appealed. The important issue in this case is whether the sale in question included that proportionate share of the profits due the plaintiff by reason of his investment in the concern. It is admitted that no distribution of profits had taken place during the period from June 30, 1909, to November 22, 1910. We will inquire (1) into the nature and character of the agreement of May 3, 1910, and (2) whether the appraisers included in their appraisement the accumulated profits since June 30, 1909.

The plaintiff admits that if the agreement of May 3, 1910, was a perfected sale he cannot recover any profits after that date; while on the other hand defendant concedes that if the said agreement was only a promise to sell in the future it, standing alone, would not prevent recovery in this action. The plaintiff and defendant were both interested in La Insular. The plaintiff was the local general manager from November 14, 1906, to January 8, 1910. The plaintiffs attorneys wrote the defendants representative a letter on January 14, 1910, saying: On behalf of Sr. D. Antonio M. Barretto, we beg leave to offer for sale to your principal, at their actual market value, the participation of Sr. Barretto in the joint venture known as La Insular and the one-half interest of the latter in the participation therein which stands in the name of Messrs. Barretto & Co. As you are doubtless aware these participations represent nominal values of P20,000 and P69,400, making a total nominal value of P54,700 which is hereby offered. Again the plaintiffs attorneys after acknowledging the receipt of the balance sheet of the profits for the year ending June 30, 1909, stated in their letter to the defendants representative, dated March 2, 1910, that, Now that the accord between the interested parties no longer exists we do not deem if feasible to subscribe a balance of this nature, unless . . . And again, the plaintiff himself, in his letter of April 7, 1910, addressed to the defendants representative, said: In view of the relations that have come about between Mr. Santa Marina and myself, I believe it would suit both of us that our interest in the La Insular business should be separated, and that the only point to be discussed is that of the amount that should be paid me for my share. From the correspondence above mentioned it appears that the plaintiff offered to sell to the defendant his participation in La Insular. This offer was made on account of the strained relations existing between the parties at that time and the desire on the part of the plaintiff to separate himself from that business. In the offer the plaintiffs inte rest of or participation was definitely defined and stated to be P20,000 in the nominal capital of P865,000. (We are not now dealing with the plaintiffs interest in the P69,400 of Barretto & Company.)

Article 1450 of the Civil Code reads: The sale shall be perfected between vendor and vendees and shall be binding on both of them, if they have agreed upon the thing which is the object of the contract and upon the price, even when neither has been delivered. This is supplemented by article 1447 of the Code which reads as follows: In order that the price may be considered fixed, it shall be sufficient that it be fixed with regard to another determinate thing also specific, or that the determination of the same be left to the judgment of a specified person. The contract of May 3, 1910, after reciting the fact that each of the contracting parties is a participant in the joint account association known as la Insular, provides that: Whereas the respective contracting parties have agreed, the one sell and the other to buy the whole of the right, title and interest of the said Antonio Maria Barretto in and to the said joint account association, including not only the individual participation of the said party of the second part standing on the books of the association in the name of Antonio M. Barretto, but also one-half of the share in the business which stands on the books in the name of Barretto & Company constituting a total nominal share of P54,700 Philippine currency in the total nominal capital of P865,000 Phlippine currency; and Whereas the respective contracting parties have been unable to agrees as to the true present value of the said interest of the party of the second part, but have agreed upon the method of fixing and determining the said value for which the party of the first part is to buy and the party of the second part is to sell that interest; Wherefore, by reason and is consideration of the foregoing and of the mutual promises and agreements hereinafter set forth, the respective parties herein contracting do hereby mutually stipulate, agree, and provide the following: (1) That a board of assessors, composed of Enrique Barrera y Caldes, D. M. Fleming, J. H. Gibson, all of the city of Manila, Philippine Islands, by mutual agreement is hereby appointed, commissioned, and designated for the purpose of hearing the respective claims of the one and the other party relative to the value of the business known and designated by the name of La Insular tobacco factory, and the respective assets of said business; and in accordance with the proof adduced relative to said values to fix and determine the same for the purposes of the purchase and sale above mentioned. xxx xxx xxx

(5) That the decision and conclusion of said board with reference to the total value of the business known and designated by the name of La Insular Cigar Factory shall be conclusive, final, and binding upon each of the contracting parties herein; and the party of the first part will immediately buy for cash and the party of the second part will immediately sell to the party of the first part all the right, title and interest of the party of the second part in and to the said business; and the party of the first part will pay thereof such proportional part of the total net value of said business as equals the proportion that the sum of fifty-four thousand seven hundred pesos (54,700) Philippine currency bears to the sum of eight hundred and sixty-five thousand pesos (P865,000), Philippine currency. The following appears in the contract of November 22, 1910: Antonio M. Barretto hereby declares to have received from John D. MacGavin as legal representative of Jose Santa Marina as the price of the cession and transfer of the said shares, the sum of P280,025.70 Philippine currency by check No. 528525 drawn by the said MacGavin in his above-stated capacity upon the Hongkong & Shanghai Bank of this city, for which sum the first named issues to him a most legal bill of sale. Antonio M. Barretto also acknowledges by virtue of the present sale, cession, and transfer that he has from this date relinquished (separado) all intervention, claim, right, or action that he has in said factory by reason of the shares under consideration. Under article 1450, supra, there are two indispensable requisites in a perfected sale: (1) There must be an agreement upon the thing which is the object of the contract; and (2) the contracting parties must agree upon the price. The object of the contract in the case at bar was the whole of the plaintiffs right, title, and interest in La Insular. This whole was 4/173 of the entire net value of the business. The parties agreed that the price should be 4/173 of the total net value. The fixing of such net value was unreservedly left to the judgment of the appraisers. As to the thing and the price the minds of the contracting parties met, and all questions relating thereto were settled. Nothing was left unfinished in so far as the contracting parties were concerned. Neither party could withdraw from the contract without the consent of the other. The result is that the two essential requisites necessary to constitute a perfected sale were present. But the plaintiff strongly insists that the language used in the contracts of May 3 and November 22 and the fact that the appraisers did not take into consideration in fixing the value of the business the profits accruing after June 30, 1909, show beyond a doubt that the first named contract constitutes an agreement to sell in the future and not a perfected sale and that this is clearly in harmony with the intention of the parties.

In support of the above proposition the plaintiff calls our attention to the recital in the first paragraph of the excerpt from the contract of May 3, 1910, to the effect that the parties have agreed, the one to sell and the other to buy and the words of the fifth paragraph where it is stated that the party of the first part (the defendant) will immediately buy for cash and the party of the second part (the plaintiff) will immediately sell the plaintiffs entire int erest in the business; cites Alcantara vs. Alinea et al. (8 Phil. Rep., 112); and quotes the following from the report of the appraisers: . . . proceeds to make a valuation of the property, stock, securities, and credits which compose the assets of the said business known and designated as the Insular Cigar Factory, taking as a basis therefor the assests of the said business on June 30, 1909, and in order to act with greater certainty in the discharge of their duties have had the real estate in Manila appraised by a civil engineer, Mr. Irureta Goyena, the machinery by an engineer, Mr. Loader, and the stocks of tobacco by tobacco experts recommended by the managers of the cigar factories called Flor de la Isabela, La Commercial, and Maria Cristina, and these experts have discharged the duties imposed upon them in the manner shown in the respective reports filed by them. With respect to the real estate in the Provinces of Cagayan and Isabela, and the steam launch Santa Marina, the undersigned, after hearing evidence of persons whom they deem to be competent, have fixed the valuation of those properties in a manner deemed by them to be fair and equitable. With regard to the Sundry Debtors account, they have proceeded to make an examination of the same and have disregarded the accounts which in their judgment may be regarded as uncollectible and deducted 25 per cent from those which in their opinion are doubtful. In view of the difference between the value placed by the parties on the furniture and fixtures, they have taken the average of those valuations so as to avoid the expense of an expert appraisal. And, finally, with respect to the rest of the items which make up the assets of the said business, they have accepted the figures at which they stand in the said inventory as these have been accepted by both parties. For the purpose of determining the soundness of the plaintiffs position with reference to the intention of the parties will examine (1) the contract of May 3, and (2) the report of the appraisers. 1. The recitals in the first and fifth paragraphs relied upon by the plaintiff standing alone indicate that it was the intention of the parties to make a contract to sell in the future, but it must be remembered that the whole contract must be interpreted or read together in order to arrive at its true meaning. Certain stipulations cannot be segregated and then made to control,

neither do particular words and phrases necessarily determine the character of the contract. As to whether or not the parties, when they executed the contract of May 3, made a perfected sale or only an agreement to sell in the future is not to be determined alone by any particular provision the said contract contains, disconnected from all others, but in the ruling intention of the parties as gathered from all the language they have used and from their contemporaneous and subsequent acts. In the contract of May 3, we find that the parties did not only agree the one sell and the other to buy and that one will immediately sell and the other will immediately buy the whole of the plaintiffs interest but that they were unable to agree as to the true present value of the said interest; they did agree, however, upon the method of fixing and determining such value by appointing appraisers for this purpose. It was the duty of the appraisers to hear the respective claims of the one and the other party relative to the value and assets of the business, and in accordance with the proof adduced relative to said values to fix and determine the same for the purposes of the purchase and sale above mentioned. They did not say for the purposes of a sale to be made in the future. Is the language, for the purposes of the purchase and sale above mentioned any the less significant or controlling than t hat relied upon by the plaintiff found in the first and fifth paragraphs? When the parties used this language they had in mind the purchase and sale which they had just made. According to the ordinary and wellunderstood use of the words purchase and sale they mean, in the absence of any expression to limit their significance, a transmutation of property from one party to another in consideration of some price or recompense in value; a transmission of property by a voluntary act or agreement, founded on a valuable consideration; divesting the title out of the vendor and vesting it in the vendee. Again, not only was the title of the plaintiffs interest vested in the defendant on the execution of the contract of May 3 but the possession of that interest was also then transferred to the defendant. (Art. 1462, Civil Code; Uy Piaoco vs. McMicking, 10 Phil. Rep., 286.) The total value of the business as fixed by the appraisers was final and conclusive and binding upon each of the parties. Neither could question the correctness of such value when once thus fixed. The only thing which either could then do was the one to tender and the other accept the cash. The one could not immediately sell and the other could not immediately buy because the purchase and sale had already taken place. If they could have done this then the plaintiff could have sold his interest to any other person at any time after the execution of the

contract of May 3 and before November 22 for the reason that by a contract to sell only a jus in personam is created; while, by a sale a jus in rem is transferred. Now, did the parties intend to include the profits in question in the purchase and sale, and did the appraisers include said profits when they fixed the total net value of La Insular? In the second paragraph of the contract of May 3 this language was used: Whereas the respective contracting parties have been unable to agree as to the true present value of said interest of the party of the second part, . . . . The said interest was the whole of the right, title, and interest of the plaintiff in the factory. The true present value was the actual value of the plaintiffs entire interest on that date, May 3. The appraisers were appointed to ascertain and fix the total net value so that the true present value, 4/173 of the whole net value, of the plaintiffs interest might be segregated and paid for. The plaintiff delivered to the defendant or his predecessor in interest a sum of money in order to participate in the profits and losses that might accrue from the business denominated La Insular. An obligation was thereby created between the parties by virtue of which the plaintiff became the creditor and the defendant the debtor. The plaintiff was a creditor in a double sense, to wit: (a) For the capital invested, and (b) for the profits which that capital might produce. This juridical relation existed on May 3, 1910, when that contract was executed and signed by the parties. On this date the plaintiff had: 1. Right to and right of action for his capital invested in the business of La Insular. 2. Right to participate, in proportion to his investment in the expansion and increase of the companys capital. 3. Right in proportion to his capital in all the trademarks, credit, and good will of the business. 4. Right to a proportional share in the annual dividends of the business on his capital invested, after deduction of the 20 per cent of said dividends to which Santa Marina is entitled in his capacity of managing partner.

5. Right to revise, approve or impugn the annual statements rendered by the managing partner, Santa Marina. The sum total of these constituted on May 3, 1910 the whole of the plaintiffs right, title, and interest in the La Insular. In the absence of something in the contract sh owing that the word whole (tolidad) was not used in its ordinary sense it must be understood so to have been used, and we find nothing of that kind. All the authorities agree that when the word whole is thus used it means the entire thing; the entire assemblage of parts; totality; all of a thing without defect or exception; comprising all the parts; complete; entire. Exclude one part, the remainder would not be the whole. The whole of the right, title, and interest of the said Antonio Maria Barretto in and to said joint account association means what it says if it means anything at all. Language will not admit of a clearer and more expressive statement of what was sold. Exclude the profits sought to be recovered then the plaintiff did not sell the whole of his right, title, and interest, he only sold a part is never equal to the whole. That the profits were a part of the plaintiffs interest is self-evident. In the case of Alcantara vs. Alinea et al., (supra), the defendants borrowed P480 from the plaintiff to be returned at the expiration of an agreed period, at the same time promised that in the event of their failure to pay the borrowed money within the time they would sell him certain property for the amount of the loan, the court holding that it was a contract of loan and a promise of sale of a house and lot. In this case, however, the consummation of the contract of sale depended upon the failure to pay the loan. If the loan was repaid the sale did not take place. It was uncertain whether the sale of the house and lot would be consummated until after the loan was due. In the case at bar was there any such uncertainty as to the sale of the property? The one agreed to sell and other agreed to buy a certain specified interest in La Insular. This agreement was carried into effect. No subsequent contingency could affect the sale. The distinction between the two cases is apparent. It is therefore clear that the recitals from the contract and the case cited do not support the contention of the plaintiff. 2. The appraisers were appointed, as we have said, to ascertain and fix the total net value of the factory for the purpose of determining the true present value of the plaintiffs entire interest therein. The profits for the year ending June 30, 1910, were not ascertained until some twelve days after the appraisers submitted their report. Such profits were in the possession of the association during the entire period from May 3 to November 22, and had not been segregated from the general mass of property up to the latter date. It is true that the appraisers said that they made a valuation of the assets of the business, taking as a basis thereof the

assets of said business on June 30, 1909. The appraisers could not have based their valuation exclusively upon the assets of that date for the reason that the books of the concern had not been balanced when they concluded their work. In fact, we find the appraisers saying in the very same paragraph in which the above quotation appears that in order to act with grea ter certainty in the discharge of their duties they had the real estate and the machinery appraised by civil engineers and the stock of tobacco by tobacco experts.

of the whole of his right, title, and interest in the factory and had solemnly declared that he relinquished all intervention, claim, right, or action in said factor y by reason of the shares under consideration. After this he came forward for the first time and demanded his share of the profit which he had sold and received payment therefor. Surely he does not expect to be paid twice for the same thing. For the foregoing reasons the judgment appealed from is reversed upon the merits and the

The value of the real estate in the provinces and a certain small launch was fixed by the appraisers upon the testimony of the competent witnesses. The appraisers disposed of the accounts of the various debtors not in accordance with the inventory of the books of the company but according to their own judgment, excluding those which they found were uncollectible and deducting 25 per cent from the doubtful ones. So it is clear from the quotation relied upon by the plaintiff that the appraisers paid very little attention to the assets of the business on June 30, 1909, in fixing the valuation of the property. The stock of tobacco which was appraised by tobacco experts was not that on the hand on June 30, 1909, but was the amount belonging to the association at the time the appraisement was made. This item alone was fixed at P1,140,259.77. Another item of assets was the cash on hand P323,235.20. This was the actual amount of cash in the possession of the association at the time the appraisement was made and was considered as a part of the assets. In fact, according to the report of the appraisers the books of the concern showed that the total assets, not including the trade-mark and good will, amounted to P2,505,767. 83 while the appraisers fixed the value at P3,049,394.07, a difference of a little over a half million pesos. That the appraisers in fixing the total net value included the accumulated profits we think there can be no question. These profits formed for that purpose a part of the assets. The appraisers could not distinguish the profits from the other personal property as such profits had not at that time been set aside and the appraisers were instructed to ascertain and fix the total net value so that the entire present value of the plaintiffs interest might be ascertained. The contracts and the report of the appraisers are so clear and cover the entire subject matter so fully that we are convinced that the subsequent demand for the profits in question was an afterthought. If there had been any doubt in the mind of the plaintiff about the inclusion of the accrued profits in the sale of May 3 or that the appraisers were authorized to take into consideration such profits in fixing the total net value of the business so that the entire present value of the plaintiffs interest might be ascertained, the plaintiff would certainly have raised the question at the time. He remained perfectly quite until after he had received the full value

complaint dismissed without costs in either instance. Arellano, C.J., Torres, Johnson, Carson and Moreland, JJ., concur.

G.R. No. 152411

September 29, 2004

Amount Supplier Downpayment

: : :

P573,375.00 Trans-Oriental Woodworks, Inc. 1st Avenue, Bagumbayan Tanyag, Taguig, Metro Manila 50% or P286,687.504

UNIVERSITY OF THE PHILIPPINES, petitioner, vs. PHILAB INDUSTRIES, INC., respondent. DECISION CALLEJO, SR., J.: Before the Court is a petition for review on certiorari of the Decision 1 of the Court of Appeals in CA-G.R. CV No. 44209, as well as its Resolution2 denying the petitioners motion for the reconsideration thereof. Themo1 mo2Court of Appeals set aside the Decision3 of Branch 150 of the Regional Trial Court (RTC) of Makati City, which dismissed the complaint of the respondent against the petitioner for sum of money and damages. The Facts of the Case Sometime in 1979, the University of the Philippines (UP) decided to construct an integrated system of research organization known as the Research Complex. As part of the project, laboratory equipment and furniture were purchased for the National Institute of Biotechnology and Applied Microbiology (BIOTECH) at the UP Los Baos. Providentially, the Ferdinand E. Marcos Foundation (FEMF) came forward and agreed to fund the acquisition of the laboratory furniture, including the fabrication thereof. Renato E. Lirio, the Executive Assistant of the FEMF, gave the go-signal to BIOTECH to contact a corporation to accomplish the project. On July 23, 1982, Dr. William Padolina, the Executive Deputy Director of BIOTECH, arranged for Philippine Laboratory Industries, Inc. (PHILAB), to fabricate the laboratory furniture and deliver the same to BIOTECH for the BIOTECH Building Project, for the account of the FEMF. Lirio directed Padolina to give the go-signal to PHILAB to proceed with the fabrication of the laboratory furniture, and requested Padolina to forward the contract of the project to FEMF for its approval. On July 13, 1982, Padolina wrote Lirio and requested for the issuance of the purchase order and downpayment for the office and laboratory furniture for the project, thus: 1. Supply and Installation of Laboratory furniture for the BIOTECH Building Project Amount Supplier Attention Downpayment 2. : : : : P2,934,068.90 Philippine Laboratory Furniture Co., College, Laguna Mr. Hector C. Navasero President 40% or P1,173,627.56

Padolina assured Lirio that the contract would be prepared as soon as possible before the issuance of the purchase orders and the downpayment for the goods, and would be transmitted to the FEMF as soon as possible. In a Letter dated July 23, 1982, Padolina informed Hector Navasero, the President of PHILAB, to proceed with the fabrication of the laboratory furniture, per the directive of FEMF Executive Assistant Lirio. Padolina also requested for copies of the shop drawings and a sample contract5 for the project, and that such contract and drawings had to be finalized before the down payment could be remitted to the PHILAB the following week. However, PHILAB failed to forward any sample contract. Subsequently, PHILAB made partial deliveries of office and laboratory furniture to BIOTECH after having been duly inspected by their representatives and FEMF Executive Assistant Lirio. On August 24, 1982, FEMF remitted P600,000 to PHILAB as downpayment for the laboratory furniture for the BIOTECH project, for which PHILAB issued Official Receipt No. 253 to FEMF. On October 22, 1982, FEMF made another partial payment of P800,000 to PHILAB, for which the latter issued Official Receipt No. 256 to FEMF. The remittances were in the form of checks drawn by FEMF and delivered to PHILAB, through Padolina. On October 16, 1982, UP, through Emil Q. Javier, the Chancellor of UP Los Baos and FEMF, represented by its Executive Officer, Rolando Gapud, executed a Memorandum of Agreement (MOA) in which FEMF agreed to grant financial support and donate sums of money to UP for the construction of buildings, installation of laboratory and other capitalization for the project, not to exceed P29,000,000.00. The obligations of FEMF under the MOA are the following: ARTICLE II OBLIGATIONS OF THE FOUNDATION 2.1. The FOUNDATION, in carrying out its principal objectives of promoting philantrophic and scientific projects through financial support to such projects that will contribute to the countrys economic development, shall grant such financial support and donate such sums of money to the RESEARCH COMPLEX as may be necessary for the construction of buildings, installation of laboratories, setting up of offices and physical plants and facilities and other capital investment of the RESEARCH COMPLEX and/or any of its component Research Institutes not to exceed P29 Million. For this purpose, the FOUNDATION shall:

Fabrication and Supply of office furniture for the BIOTECH Building Project

(a) Acquire and donate to the UNIVERSITY the site for the RESEARCH COMPLEX; and (b) Donate or cause to be donated to the UNIVERSITY the sum of TWENTY-NINE MILLION PESOS (P29,000,000.00) for the construction of the buildings of the National Institutes of Biotechnology and Applied Microbiology (BIOTECH) and the installation of their laboratories and their physical plants and other facilities to enable them to commence operations. 2.2. In addition, the FOUNDATION shall, subject to the approval of the Board of Trustees of the FOUNDATION, continue to support the activities of the RESEARCH COMPLEX by way of recurrent additional grants and donations for specific research and development projects which may be mutually agreed upon and, from time to time, additional grants and donations of such amounts as may be necessary to provide the RESEARCH COMPLEX and/or any of its Research Institutes with operational flexibility especially with regard to incentives to staff purchase of equipment/facilities, travel abroad, recruitment of local and expatriate staff and such other activities and inputs which are difficult to obtain under usual government rules and regulations. 6 The Board of Regents of the UP approved the MOA on November 25, 1982. 7 In the meantime, Navasero promised to submit the contract for the installation of laboratory furniture to BIOTECH, by January 12, 1983. However, Navasero failed to do so. In a Letter dated February 1, 1983, BIOTECH reminded Navasero of the need to submit the contract so that it could be submitted to FEMF for its evaluation and approval. 8 Instead of submitting the said contract, PHILAB submitted to BIOTECH an accomplishment report on the project as of February 28, 1983, and requested payment thereon. 9 By May 1983, PHILAB had completed 78% of the project, amounting to P2,288,573.74 out of the total cost of P2,934,068.90. The FEMF had already paid forty percent (40%) of the total cost of the project. On May 12, 1983, Padolina wrote Lirio and furnished him the progress billing from PHILAB. 10 On August 11, 1983, the FEMF made another partial payment of P836,119.52 representing the already delivered laboratory and office furniture after the requisite inspection and verification thereof by representatives from the BIOTECH, FEMF, and PHILAB. The payment was made in the form of a check, for which PHILAB issued Official Receipt No. 202 to FEMF through Padolina.11 On July 1, 1984, PHILAB submitted to BIOTECH Invoice No. 01643 in the amount of P702,939.40 for the final payment of laboratory furniture. Representatives from BIOTECH, PHILAB, and Lirio for the FEMF, conducted a verification of the accomplishment of the work and confirmed the same. BIOTECH forwarded the invoice to Lirio on December 18, 1984 for its payment.12 Lirio, in turn, forwarded the invoice to Gapud, presumably sometime in the early part of 1985. However, the FEMF failed to pay the bill. PHILAB reiterated its request for payment through a letter on May 9, 1985. 13 BIOTECH again wrote Lirio on March 21, 1985, requesting the payment of PHILABs bill. 14 It sent another letter to Gapud, on November 22, 1985, again appealing for the payment of PHILABs bill. 15 In a Letter to BIOTECH dated December 5, 1985, PHILAB requested payment of P702,939.40 plus interest thereon of P224,940.61.16 There was, however, no response from the FEMF. On February 24,

1986, PHILAB wrote BIOTECH, appealing for the payment of its bill even on installment basis.17 President Marcos was ousted from office during the February 1986 EDSA Revolution. On March 26, 1986, Navasero wrote BIOTECH requesting for its much-needed assistance for the payment of the balance already due plus interest of P295,234.55 for its fabrication and supply of laboratory furniture.18 On April 22, 1986, PHILAB wrote President Corazon C. Aquino asking her help to secure the payment of the amount due from the FEMF. 19 The letter was referred to then Budget Minister Alberto Romulo, who referred the letter to then UP President Edgardo Angara on June 9, 1986. On September 30, 1986, Raul P. de Guzman, the Chancellor of UP Los Baos, wrote then Chairman of the Presidential Commission on Good Government (PCGG) Jovito Salonga, submitting PHILABs claim to be officially entered as "accounts payable" as soon as the assets of FEMF were liquidated by the PCGG. 20 In the meantime, the PCGG wrote UP requesting for a copy of the relevant contract and the MOA for its perusal.21 Chancellor De Guzman wrote Navasero requesting for a copy of the contract executed between PHILAB and FEMF. In a Letter dated October 20, 1987, Navasero informed De Guzman that PHILAB and FEMF did not execute any contract regarding the fabrication and delivery of laboratory furniture to BIOTECH. Exasperated, PHILAB filed a complaint for sum of money and damages against UP. In the complaint, PHILAB prayed that it be paid the following: (1) PESOS: SEVEN HUNDRED TWO THOUSAND NINE HUNDRED THIRTY NINE & 40/100 (P702,939.40) plus an additional amount (as shall be determined during the hearing) to cover the actual cost of money which at the time of transaction the value of the peso was eleven to a dollar (P11.00:$1) and twenty seven (27%) percent interest on the total amount from August 1982 until fully paid; (2) PESOS: ONE HUNDRED THOUSAND (P100,000.00) exemplary damages; (3) FIFTY THOUSAND [PESOS] (P50,000.00) as and for attorneys fees; and (4) Cost of suit.22 PHILAB alleged, inter alia, that: 3. Sometime in August 1982, defendant, through its officials, particularly MR. WILLIAM PADOLINA, Director, asked plaintiff to supply and install several laboratory furnitures and equipment at BIOTECH, a research laboratory of herein defendant located at its campus in College, Laguna, for a total contract price of PESOS: TWO MILLION NINE HUNDRED THIRTY-NINE THOUSAND FIFTYEIGHT & 90/100 (P2,939,058.90);

4. After the completion of the delivery and installation of said laboratory furnitures and equipment at defendants BIOTECH Laboratory, defendant paid three (3) times on installment basis: a) P600,000.00 as per Official Receipt No. 253 dated August 24, 1982; b) P800,000.00 as per Official Receipt No. 256 dated October 22, 1982; c) P836,119.52 as per Official Receipt No. 202 dated August 11, 1983; thus leaving a balance of PESOS: SEVEN HUNDRED TWO THOUSAND NINE HUNDRED THIRTY-NINE & 40/100 (P702,939.40). 5. That notwithstanding repeated demands for the past eight years, defendant arrogantly and maliciously made plaintiff believe that it was going to pay the balance aforestated, that was why plaintiffs President and General Manager himself, HECTOR C. NAVASERO, personally went to and from UP Los Baos to talk with defendants responsible officers in the hope of expecting payment, when, in truth and in fact, defendant had no intention to pay whatsoever right from the start on a misplaced ground of technicalities. Some of plaintiffs demand letters since year 1983 up to the present are hereto attached as Annexes A, B, C, D, E, F, G, and H hereof; 6. That by reason of defendants malicious, evil and unnecessary misrepresentations that it was going to pay its obligation and asking plaintiff so many red tapes and requirements to submit, compliance of all of which took plaintiff almost eight (8) years to finish, when, in truth and in fact, defendant had no intention to pay, defendant should be ordered to pay plaintiff no less than PESOS: ONE HUNDRED THOUSAND (P100,000.00) exemplary damages, so that other government institutions may be warned that they must not unjustly enrich themselves at the expense of the people they serve. 23 In its answer, UP denied liability and alleged that PHILAB had no cause of action against it because it was merely the donee/beneficiary of the laboratory furniture in the BIOTECH; and that the FEMF, which funded the project, was liable to the PHILAB for the purchase price of the laboratory furniture. UP specifically denied obliging itself to pay for the laboratory furniture supplied by PHILAB. After due proceedings, the trial court rendered judgment dismissing the complaint without prejudice to PHILABs recourse against the FEMF. The fallo of the decision reads: WHEREFORE, this case is hereby DISMISSED for lack of merit without prejudice to plaintiff's recourse to the assets of the Marcos Foundation for the unpaid balance of P792,939.49. SO ORDERED.24

Undaunted, PHILAB appealed to the Court of Appeals (CA) alleging that the trial court erred in finding that: 1. the contract for the supply and installation of subject laboratory furniture and equipment was between PHILAB and the Marcos Foundation; and, 2. the Marcos Foundation, not the University of the Philippines, is liable to pay the respondent the balance of the purchase price. 25 The CA reversed and set aside the decision of the RTC and held that there was never a contract between FEMF and PHILAB. Consequently, PHILAB could not be bound by the MOA between the FEMF and UP since it was never a party thereto. The appellate court ruled that, although UP did not bind itself to pay for the laboratory furniture; nevertheless, it is liable to PHILAB under the maxim: "No one should unjustly enrich himself at the expense of another." The Present Petition Upon the denial of its motion for reconsideration of the appellate courts decision, UP, now the petitioner, filed its petition for review contending that: I. THE COURT OF APPEALS ERRED WHEN IT FAILED TO APPLY THE LAW ON CONTRACTS BETWEEN PHILAB AND THE MARCOS FOUNDATION. II. THE COURT OF APPEALS ERRED IN APPLYING THE LEGAL PRINCIPLE OF UNJUST ENRICHMENT WHEN IT HELD THAT THE UNIVERSITY, AND NOT THE MARCOS FOUNDATION, IS LIABLE TO PHILAB.26 Prefatorily, the doctrinal rule is that pure questions of facts may not be the subject of appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as this mode of appeal is generally restricted to questions of law. 27However, this rule is not absolute. The Court may review the factual findings of the CA should they be contrary to those of the trial court.28 Correspondingly, this Court may review findings of facts when the judgment of the CA is premised on a misapprehension of facts. 29 On the first assigned error, the petitioner argues that the CA overlooked the evidentiary effect and substance of the corresponding letters and communications which support the statements of the witnesses showing affirmatively that an implied contract of sale existed between PHILAB and the FEMF. The petitioner furthermore asserts that no contract existed between it and the respondent as it could not have entered into any agreement without the requisite public bidding and a formal written contract. The respondent, on the other hand, submits that the CA did not err in not applying the law on contracts between the respondent and the FEMF. It, likewise, attests that it was never privy to the MOA entered into between the petitioner and the FEMF. The respondent adds that what the FEMF donated was a sum of money equivalent toP29,000,000, and not the laboratory equipment supplied by it to the petitioner. The respondent submits that the petitioner, being

the recipient of the laboratory furniture, should not enrich itself at the expense of the respondent. The petition is meritorious. It bears stressing that the respondents cause of action is one for sum of money predicated on the alleged promise of the petitioner to pay for the purchase price of the furniture, which, despite demands, the petitioner failed to do. However, the respondent failed to prove that the petitioner ever obliged itself to pay for the laboratory furniture supplied by it. Hence, the respondent is not entitled to its claim against the petitioner. There is no dispute that the respondent is not privy to the MOA executed by the petitioner and FEMF; hence, it is not bound by the said agreement. Contracts take effect only between the parties and their assigns.30 A contract cannot be binding upon and cannot be enforced against one who is not a party to it, even if he is aware of such contract and has acted with knowledge thereof.31 Likewise admitted by the parties, is the fact that there was no written contract executed by the petitioner, the respondent and FEMF relating to the fabrication and delivery of office and laboratory furniture to the BIOTECH. Even the CA failed to specifically declare that the petitioner and the respondent entered into a contract of sale over the said laboratory furniture. The parties are in accord that the FEMF had remitted to the respondent partial payments via checks drawn and issued by the FEMF to the respondent, through Padolina, in the total amount of P2,288,573.74 out of the total cost of the project of P2,934,068.90 and that the respondent received the said checks and issued receipts therefor to the FEMF. There is also no controversy that the petitioner did not pay a single centavo for the said furniture delivered by the respondent that the petitioner had been using ever since. We agree with the petitioner that, based on the records, an implied-in-fact contract of sale was entered into between the respondent and FEMF. A contract implied in fact is one implied from facts and circumstances showing a mutual intention to contract. It arises where the intention of the parties is not expressed, but an agreement in fact creating an obligation. It is a contract, the existence and terms of which are manifested by conduct and not by direct or explicit words between parties but is to be deduced from conduct of the parties, language used, or things done by them, or other pertinent circumstances attending the transaction. To create contracts implied in fact, circumstances must warrant inference that one expected compensation and the other to pay.32 An implied-in-fact contract requires the parties intent to enter into a contract; it is a true contract.33The conduct of the parties is to be viewed as a reasonable man would view it, to determine the existence or not of an implied-in-fact contract.34 The totality of the acts/conducts of the parties must be considered to determine their intention. An implied-in-fact contract will not arise unless the meeting of minds is indicated by some intelligent conduct, act or sign.35 In this case, the respondent was aware, from the time Padolina contacted it for the fabrication and supply of the laboratory furniture until the go-signal was given to it to fabricate and deliver the furniture to BIOTECH as beneficiary, that the FEMF was to pay for the same. Indeed, Padolina asked the respondent to prepare the draft of the contract to be received by the FEMF prior to the execution of the parties (the respondent and FEMF), but somehow, the respondent failed to prepare one. The respondent knew that the petitioner was merely the donee-beneficiary of the laboratory furniture and not the buyer; nor was it liable for the payment of the purchase price thereof. From the inception, the FEMF paid for the bills and

statement of accounts of the respondent, for which the latter unconditionally issued receipts to and under the name of the FEMF. Indeed, witness Lirio testified: Q: Now, did you know, Mr. Witness, if PHILAB Industries was aware that it was the Marcos Foundation who would be paying for this particular transaction for the completion of this particular transaction? A: I think they are fully aware. Q: What is your basis for saying so? A: First, I think they were appraised by Dr. Padolina. Secondly, there were occasions during our inspection in Los Baos, at the installation site, there were occasions, two or three occasions, when we met with Mr. Navasero who is the President, I think, or manager of PHILAB, and we appraised him that it was really between the foundation and him to which includes (sic) the construction company constructing the building. He is fully aware that it is the foundation who (sic) engaged them and issued the payments.36 The respondent, in its Letter dated March 26, 1986, informed the petitioner and sought its assistance for the collection of the amount due from the FEMF: Dear Dr. Padolina: May we request for your much-needed assistance in the payment of the balance still due us on the laboratory furniture we supplied and installed two years ago? Business is still slow and we will appreciate having these funds as soon as possible to keep up our operations. We look forward to hearing from you regarding this matter. Very truly yours, PHILAB INDUSTRIES, INC.37 The respondent even wrote former President Aquino seeking her assistance for the payment of the amount due, in which the respondent admitted it tried to collect from her predecessor, namely, the former President Ferdinand E. Marcos: YOUR EXCELLENCY: At the instance of the national government, subject laboratory furnitures were supplied by our company to the National Institute of Biotechnology & Applied Microbiology (BIOTECH), University of the Philippines, Los Baos, Laguna, in 1984.

Out of the total contract price of PESOS: TWO MILLION NINE HUNDRED THIRTY-NINE THOUSAND FIFTY-EIGHT & 90/100 (P2,939,058.90), the previous administration had so far paid us the sum ofP2,236,119.52 thus leaving a balance of PESOS: ONE MILLION FOUR HUNDRED TWELVE THOUSAND SEVEN HUNDRED FORTY-EIGHT & 61/100 (P1,412.748.61) inclusive of interest of 24% per annum and 30% exchange rate adjustment. On several occasions, we have tried to collect this amount from your predecessor, the latest of which was subject invoice (01643) we submitted to DR. W. PADOLINA, deputy director of BIOTECH. But this, notwithstanding, our claim has remained unacted upon up to now. Copy of said invoice is hereto attached for easy reference. Now that your excellency is the head of our government, we sincerely hope that payment of this obligation will soon be made as this is one project the Republic of the Philippines has use of and derives benefit from. 38 Admittedly, the respondent sent to the petitioner its bills and statements of accounts for the payments of the laboratory furniture it delivered to the petitioner which the petitioner, through Padolina, transmitted to the FEMF for its payment. However, the FEMF failed to pay the last statement of account of the respondent because of the onset of the EDSA upheaval. It was only when the respondent lost all hope of collecting its claim from the government and/or the PCGG did it file the complaint against the petitioner for the collection of the payment of its last delivery of laboratory furniture. We reject the ruling of the CA holding the petitioner liable for the claim of the respondent based on the maxim that no one should enrich itself at the expense of another. Unjust enrichment claims do not lie simply because one party benefits from the efforts or obligations of others, but instead it must be shown that a party was unjustly enriched in the sense that the term unjustly could mean illegally or unlawfully. 39 Moreover, to substantiate a claim for unjust enrichment, the claimant must unequivocally prove that another party knowingly received something of value to which he was not entitled and that the state of affairs are such that it would be unjust for the person to keep the benefit.40 Unjust enrichment is a term used to depict result or effect of failure to make remuneration of or for property or benefits received under circumstances that give rise to legal or equitable obligation to account for them; to be entitled to remuneration, one must confer benefit by mistake, fraud, coercion, or request. 41 Unjust enrichment is not itself a theory of reconvey. Rather, it is a prerequisite for the enforcement of the doctrine of restitution. 42 Article 22 of the New Civil Code reads: Every person who, through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. (Boldface supplied) In order that accion in rem verso may prosper, the essential elements must be present: (1) that the defendant has been enriched, (2) that the plaintiff has suffered a loss, (3) that the

enrichment of the defendant is without just or legal ground, and (4) that the plaintiff has no other action based on contract, quasi-contract, crime or quasi-delict.43 An accion in rem verso is considered merely an auxiliary action, available only when there is no other remedy on contract, quasi-contract, crime, and quasi-delict. If there is an obtainable action under any other institution of positive law, that action must be resorted to, and the principle of accion in rem verso will not lie.44 The essential requisites for the application of Article 22 of the New Civil Code do not obtain in this case. The respondent had a remedy against the FEMF via an action based on an implied-in-fact contract with the FEMF for the payment of its claim. The petitioner legally acquired the laboratory furniture under the MOA with FEMF; hence, it is entitled to keep the laboratory furniture. IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Decision of the Court of Appeals is REVERSED AND SET ASIDE. The Decision of the Regional Trial Court, Makati City, Branch 150, is REINSTATED. No costs. SO ORDERED.

G.R. No. L-26872 July 25, 1975 VILLONCO REALTY COMPANY, plaintiff-appellee and EDITH PEREZ DE TAGLE, intervenor-appellee, vs. BORMAHECO, INC., FRANCISCO N. CERVANTES and ROSARIO N. CERVANTES, defendants-appellants. Meer, Meer & Meer for plaintiff-appellee. J. Villareal, Navarro and Associates for defendants-appellants. P. P. Gallardo and Associates for intervenor-appellee.

During the negotiations, Villonco Realty Company assumed that the lots belonged to Bormaheco, Inc. and that Cervantes was duly authorized to sell the same. Cervantes did not disclose to the broker and to Villonco Realty Company that the lots were conjugal properties of himself and his wife and that they were mortgaged to the DBP. Bormaheco, Inc., through Cervantes, made a written offer dated February 12, 1964, to Romeo Villonco for the sale of the property. The offer reads (Exh. B): BORMAHECO, INC. February 12,1964 Mr. Romeo Villonco Villonco Building Buendia Avenue Makati, Rizal. Dear Mr. Villonco: This is with reference to our telephone conversation this noon on the matter of the sale of our property located at Buendia Avenue, with a total area of 3,500 sq. m., under the following conditions: (1) That we are offering to sell to you the above property at the price of P400.00 per square meter; (2) That a deposit of P100,000.00 must be placed as earnest money on the purchase of the above property which will become part payment of the property in the event that the sale is consummated; (3) That this sale is to be consummated only after I shall have also consummated my purchase of another property located at Sta. Ana, Manila; (4) That if my negotiations with said property will not be consummated by reason beyond my control, I will return to you your deposit of P100,000 and the sale of my property to you will not also be consummated; and (5) That final negotiations on both properties can be definitely known after 45 days. If the above terms is (are) acceptable to your Board, please issue out the said earnest money in favor of Bormaheco, Inc., and deliver the same thru the bearer, Miss Edith Perez de Tagle.

AQUINO, J.: This action was instituted by Villonco Realty Company against Bormaheco, Inc. and the spouses Francisco N. Cervantes and Rosario N. Cervantes for the specific performance of a supposed contract for the sale of land and the improvements thereon for one million four hundred thousand pesos. Edith Perez de Tagle, as agent, intervened in order to recover her commission. The lower court enforced the sale. Bormaheco, Inc. and the Cervantes spouses, as supposed vendors, appealed. This Court took cognizance of the appeal because the amount involved is more than P200,000 and the appeal was perfected before Republic Act No. 5440 took effect on September 9, 1968. The facts are as follows: Francisco N. Cervantes and his wife, Rosario P. Navarra-Cervantes, are the owners of lots 3, 15 and 16 located at 245 Buendia Avenue, Makati, Rizal with a total area of three thousand five hundred square meters (TCT Nos. 43530, 43531 and 43532, Exh. A, A-1 and A-2). The lots were mortgaged to the Development Bank of the Phil (DBP) on April 21, 1959 as security for a loan of P441,000. The mortgage debt was fully paid on July 10, 1969. Cervantes is the president of Bormaheco, Inc., a dealer and importer of industrial and agricultural machinery. The entire lots are occupied by the building, machinery and equipment of Bormaheco, Inc. and are adjacent to the property of Villonco Realty Company situated at 219 Buendia Avenue. In the early part of February, 1964 there were negotiations for the sale of the said lots and the improvements thereon between Romeo Villonco of Villonco Realty Company "and Bormaheco, Inc., represented by its president, Francisco N. Cervantes, through the intervention of Edith Perez de Tagle, a real estate broker". In the course of the negotiations, the brothers Romeo Villonco and Teofilo Villonco conferred with Cervantes in his office to discuss the price and terms of the sale. Later, Cervantes "went to see Villonco for the same reason until some agreement" was arrived at. On a subsequent occasion, Cervantes, accompanied by Edith Perez de Tagle, discussed again the terms of the sale with Villonco.

V e r y t r u l y y o u r s , S G D . F R A N C I S C O N . C E R V A N T E S P r e s i The property mentioned in Bormaheco's letter was the land of the National Shipyards & Steel Corporation (Nassco), with an area of twenty thousand square meters, located at Punta, Sta. Ana, Manila. At the bidding held on January 17, 1964 that land was awarded to Bormaheco, Inc., the highest bidder, for the price of P552,000. The Nassco Board of Directors in its resolution of February 18, 1964 authorized the General Manager to sign the necessary contract (Exh. H). On February 28, 1964, the Nassco Acting General Manager wrote a letter to the Economic Coordinator, requesting approval of that resolution. The Acting Economic Coordinator approved the resolution on March 24, 1964 (Exh. 1). In the meanwhile, Bormaheco, Inc. and Villonco Realty Company continued their negotiations for the sale of the Buendia Avenue property. Cervantes and Teofilo Villonco had a final conference on February 27, 1964. As a result of that conference Villonco Realty Company, through Teofilo Villonco, in its letter of March 4, 1964 made a revised counter- offer (Romeo Villonco's first counter-offer was dated February 24, 1964, Exh. C) for the purchase of the property. The counter-offer was accepted by Cervantes as shown in Exhibit D, which is quoted below: VILLONCO REALTY COMPANY V. R. C. Building 219 Buendia Avenue, Makati, Rizal, Philippines March 4, 1964 Mr. Francisco Cervantes. Bormaheco, Inc. 245 Buendia Avenue Makati, Rizal Dear Mr. Cervantes: In reference to the letter of Miss E. Perez de Tagle dated February 12th and 26, 1964 in respect to the terms and conditions on the purchase of your property located at Buendia Ave., Makati, Rizal, with a total area of 3,500 sq. meters., we hereby revise our offer, as follows: 1. That the price of the property shall be P400.00 per sq. m., including the improvements thereon; 2. That a deposit of P100,000.00 shall be given to you as earnest money which will become as part payment in the event the sale is consummated;

d e n t

3. This sale shall be cancelled, only if your deal with another property in Sta. Ana shall not be consummated and in such case, the P100,000-00 earnest money will be returned to us with a 10% interest p.a. However, if our deal with you is finalized, said P100,000.00 will become as part payment for the purchase of your property without interest: 4. The manner of payment shall be as follows: a. P100,000.00 earnest money and 650,000.00 as part of the down payment, or P750,000.00 as total down payment b. The balance is payable as follows: P100,000.00 after 3 months 125,000.00 -do212,500.00 -doP650,000.00 Total As regards to the other conditions which we have discussed during our last conference on February 27, 1964, the same shall be finalized upon preparation of the contract to sell. * If the above terms and conditions are acceptable to you, kindly sign your conformity hereunder. Enclosed is our check for ONE HUNDRED THOUSAND (P100,000.00) PESOS, MBTC Check No. 448314, as earnest money. Very truly yours, V I L L O N C O R E A L T Y C O M P CONFORME: BORMAHECO, INC. (Sgd.) FRANCISCO CERVANTES That this sale shall be subject to favorable consummation of a property in Sta. Ana we are negotiating. (Sgd.) FRANCISCO CERVANTES The check for P100,000 (Exh. E) mentioned in the foregoing letter-contract was delivered by Edith Perez de Tagle to Bormaheco, Inc. on March 4, 1964 and was received by Cervantes. In the voucher-receipt evidencing the delivery the broker indicated in her handwriting that the earnest money was "subject to the terms and conditions embodied in Bormaheco's letter" of February 12 and Villonco Realty Company's letter of March 4, 1964 (Exh. E-1; 14 tsn). Then, unexpectedly, in a letter dated March 30, 1964, or twenty-six days after the signing of the contract of sale, Exhibit D, Cervantes returned the earnest money, with interest amounting to P694.24 (at ten percent per annum). Cervantes cited as an excuse the circumstance that "despite the lapse of 45 days from February 12, 1964 there is no certainty yet" for the acquisition of the Punta property (Exh. F; F-I and F-2). Villonco Realty Company refused to accept the letter and the checks of Bormaheco, Inc. Cervantes sent them by registered mail.

A N Y ( S g d . ) T E O F I L O V I L L O N C O

When he rescinded the contract, he was already aware that the Punta lot had been awarded to Bormaheco, Inc. (25-26 tsn). Edith Perez de Tagle, the broker, in a letter to Cervantes dated March 31, 1964 articulated her shock and surprise at Bormaheco's turnabout. She reviewed the history of the deal and explained why Romeo Villonco could not agree to the rescission of the sale (Exh. G). ** Cervantes in his letter of April 6, 1964, a reply to Miss Tagle's letter, alleged that the fortyfive day period had already expired and the sale to Bormaheco, Inc. of the Punta property had not been consummated. Cervantes said that his letter was a "manifestation that we are no longer interested to sell" the Buendia Avenue property to Villonco Realty Company (Annex I of Stipulation of Facts). The latter was furnished with a copy of that letter. In a letter dated April 7, 1964 Villonco Realty Company returned the two checks to Bormaheco, Inc., stating that the condition for the cancellation of the contract had not arisen and at the same time announcing that an action for breach of contract would be filed against Bormaheco, Inc. (Annex G of Stipulation of Facts).1wph1.t On that same date, April 7, 1964 Villonco Realty Company filed the complaint (dated April 6) for specific performance against Bormaheco, Inc. Also on that same date, April 7, at eightforty-five in the morning, a notice of lis pendens was annotated on the titles of the said lots. Bormaheco, Inc. in its answers dated May 5 and 25, 1964 pleaded the defense that the perfection of the contract of sale was subject to the conditions (a) "that final acceptance or not shall be made after 45 days" (sic) and (b) that Bormaheco, Inc. "acquires the Sta. Ana property". On June 2, 1964 or during the pendency of this case, the Nassco Acting General Manager wrote to Bormaheco, Inc., advising it that the Board of Directors and the Economic Coordinator had approved the sale of the Punta lot to Bormaheco, Inc. and requesting the latter to send its duly authorized representative to the Nassco for the signing of the deed of sale (Exh. 1). The deed of sale for the Punta land was executed on June 26, 1964. Bormaheco, Inc. was represented by Cervantes (Exh. J. See Bormaheco, Inc. vs. Abanes, L-28087, July 31, 1973, 52 SCRA 73). In view of the disclosure in Bormaheco's amended answer that the three lots were registered in the names of the Cervantes spouses and not in the name of Bormaheco, Inc., Villonco Realty Company on July 21, 1964 filed an amended complaint impleading the said spouses as defendants. Bormaheco, Inc. and the Cervantes spouses filed separate answers. As of January 15, 1965 Villonco Realty Company had paid to the Manufacturers' Bank & Trust Company the sum of P8,712.25 as interests on the overdraft line of P100,000 and the sum of P27.39 as interests daily on the same loan since January 16, 1965. (That overdraft line was later settled by Villonco Realty Company on a date not mentioned in its manifestation of February 19, 1975).

Villonco Realty Company had obligated itself to pay the sum of P20,000 as attorney's fees to its lawyers. It claimed that it was damaged in the sum of P10,000 a month from March 24, 1964 when the award of the Punta lot to Bormaheco, Inc. was approved. On the other hand, Bormaheco, Inc. claimed that it had sustained damages of P200,000 annually due to the notice of lis pendens which had prevented it from constructing a multi-story building on the three lots. (Pars. 18 and 19, Stipulation of Facts).1wph1.t Miss Tagle testified that for her services Bormaheco, Inc., through Cervantes, obligated itself to pay her a three percent commission on the price of P1,400,000 or the amount of forty-two thousand pesos (14 tsn). After trial, the lower court rendered a decision ordering the Cervantes spouses to execute in favor of Bormaheco, Inc. a deed of conveyance for the three lots in question and directing Bormaheco, Inc. (a) to convey the same lots to Villonco Realty Company, (b) to pay the latter, as consequential damages, the sum of P10,000 monthly from March 24, 1964 up to the consummation of the sale, (c) to pay Edith Perez de Tagle the sum of P42,000 as broker's commission and (d) pay P20,000 as to attorney's fees (Civil Case No. 8109). Bormaheco, Inc. and the Cervantes spouses appealed. Their principal contentions are (a) that no contract of sale was perfected because Cervantes made a supposedly qualified acceptance of the revised offer contained in Exhibit D, which acceptance amounted to a counter-offer, and because the condition that Bormaheco, inc. would acquire the Punta land within the forty-fiveday period was not fulfilled; (2) that Bormaheco, Inc. cannot be compelled to sell the land which belongs to the Cervantes spouses and (3) that Francisco N. Cervantes did not bind the conjugal partnership and his wife when, as president of Bormaheco, Inc., he entered into negotiations with Villonco Realty Company regarding the said land. We hold that the appeal, except as to the issue of damages, is devoid of merit. "By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determining thing, and the other to pay therefor a price certain in money or its equivalent. A contract of sale may be absolute or conditional" (Art. 1458, Civil Code). "The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts" (Art. 1475, Ibid.). "Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law" (Art. 1315, Civil Code). "Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer" (Art. 1319, Civil Code). "An acceptance may be express or implied" (Art. 1320, Civil Code).

Bormaheco's acceptance of Villonco Realty Company's offer to purchase the Buendia Avenue property, as shown in Teofilo Villonco's letter dated March 4, 1964 (Exh. D), indubitably proves that there was a meeting of minds upon the subject matter and consideration of the sale. Therefore, on that date the sale was perfected. (Compare with McCullough vs. Aenlle & Co., 3 Phil. 285; Goyena vs. Tambunting, 1 Phil. 490). Not only that Bormaheco's acceptance of the part payment of one hundred ,thousand pesos shows that the sale was conditionally consummated or partly executed subject to the purchase by Bormaheco, Inc. of the Punta property. The nonconsummation of that purchase would be a negative resolutory condition (Taylor vs. Uy Tieng Piao, 43 Phil. 873). On February 18, 1964 Bormaheco's bid for the Punta property was already accepted by the Nassco which had authorized its General Manager to sign the corresponding deed of sale. What was necessary only was the approval of the sale by the Economic Coordinator and a request for that approval was already pending in the office of that functionary on March 4, 1964. Bormaheco, Inc. and the Cervantes spouses contend that the sale was not perfected because Cervantes allegedly qualified his acceptance of Villonco's revised offer and, therefore, his acceptance amounted to a counter-offer which Villonco Realty Company should accept but no such acceptance was ever transmitted to Bormaheco, Inc. which, therefore, could withdraw its offer. That contention is not well-taken. It should be stressed that there is no evidence as to what changes were made by Cervantes in Villonco's revised offer. And there is no evidence that Villonco Realty Company did not assent to the supposed changes and that such assent was never made known to Cervantes. What the record reveals is that the broker, Miss Tagle, acted as intermediary between the parties. It is safe to assume that the alleged changes or qualifications made by Cervantes were approved by Villonco Realty Company and that such approval was duly communicated to Cervantes or Bormaheco, Inc. by the broker as shown by the fact that Villonco Realty Company paid, and Bormaheco, Inc. accepted, the sum of P100,000 as earnest money or down payment. That crucial fact implies that Cervantes was aware that Villonco Realty Company had accepted the modifications which he had made in Villonco's counter-offer. Had Villonco Realty Company not assented to those insertions and annotations, then it would have stopped payment on its check for P100,000. The fact that Villonco Realty Company allowed its check to be cashed by Bormaheco, Inc. signifies that the company was in conformity with the changes made by Cervantes and that Bormaheco, Inc. was aware of that conformity. Had those insertions not been binding, then Bormaheco, Inc. would not have paid interest at the rate of ten percent per annum, on the earnest money of P100,000. The truth is that the alleged changes or qualifications in the revised counter offer (Exh. D) are not material or are mere clarifications of what the parties had previously agreed upon. Thus, Cervantes' alleged insertion in his handwriting of the figure and the words "12th and" in Villonco's counter-offer is the same as the statement found in the voucher-receipt for the earnest money, which reads: "subject to the terms and conditions embodied in Bormaheco's letter of Feb. 12, 1964 and your letter of March 4, 1964" (Exh. E-1).

Cervantes allegedly crossed out the word "Nassco" in paragraph 3 of Villonco's revised counter-offer and substituted for it the word "another" so that the original phrase, "Nassco's property in Sta. Ana", was made to read as "another property in Sta. Ana". That change is trivial. What Cervantes did was merely to adhere to the wording of paragraph 3 of Bormaheco's original offer (Exh. B) which mentions "another property located at Sta. Ana." His obvious purpose was to avoid jeopardizing his negotiation with the Nassco for the purchase of its Sta. Ana property by unduly publicizing it. It is noteworthy that Cervantes, in his letter to the broker dated April 6, 1964 (Annex 1) or after the Nassco property had been awarded to Bormaheco, Inc., alluded to the "Nassco property". At that time, there was no more need of concealing from the public that Bormaheco, Inc. was interested in the Nassco property. Similarly, Cervantes' alleged insertion of the letters "PA" ( per annum) after the word "interest" in that same paragraph 3 of the revised counter-offer (Exh. D) could not be categorized as a major alteration of that counter-offer that prevented a meeting of the minds of the parties. It was understood that the parties had contemplated a rate of ten percent per annum since ten percent a month or semi-annually would be usurious. Appellants Bormaheco, Inc. and Cervantes further contend that Cervantes, in clarifying in the voucher for the earnest money of P100,000 that Bormaheco's acceptance thereof was subject to the terms and conditions embodied in Bormaheco's letter of February 12, 1964 and your (Villonco's) letter of March 4, 1964" made Bormaheco's acceptance "qualified and conditional". That contention is not correct. There is no incompatibility between Bormaheco's offer of February 12, 1964 (Exh. B) and Villonco's counter-offer of March 4, 1964 (Exh. D). The revised counter-offer merely amplified Bormaheco's original offer. The controlling fact is that there was agreement between the parties on the subject matter, the price and the mode of payment and that part of the price was paid. "Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract" (Art. 1482, Civil Code). "It is true that an acceptance may contain a request for certain changes in the terms of the offer and yet be a binding acceptance. 'So long as it is clear that the meaning of the acceptance is positively and unequivocally to accept the offer, whether such request is granted or not, a contract is formed.' " (Stuart vs. Franklin Life Ins. Co., 165 Fed. 2nd 965, citing Sec. 79, Williston on Contracts). Thus, it was held that the vendor's change in a phrase of the offer to purchase, which change does not essentially change the terms of the offer, does not amount to a rejection of the offer and the tender of a counter-offer (Stuart vs. Franklin Life Ins. Co., supra). The instant case is not governed by the rulings laid down in Beaumont vs. Prieto, 41 Phil. 670, 985, 63 L. Ed. 770, and Zayco vs. Serra, 44 Phil. 326. In those two cases the acceptance radically altered the offer and, consequently, there was no meeting of the minds of the parties.

Thus, in the Zayco case, Salvador Serra offered to sell to Lorenzo Zayco his sugar central for P1,000,000 on condition that the price be paid in cash, or, if not paid in cash, the price would be payable within three years provided security is given for the payment of the balance within three years with interest. Zayco, instead of unconditionally accepting those terms, countered that he was going to make a down payment of P100,000, that Serra's mortgage obligation to the Philippine National Bank of P600,000 could be transferred to Zayco's account and that he (plaintiff) would give a bond to secure the payment of the balance of the price. It was held that the acceptance was conditional or was a counter-offer which had to be accepted by Serra. There was no such acceptance. Serra revoked his offer. Hence, there was no perfected contract. In the Beaumont case, Benito Valdes offered to sell to W Borck the Nagtahan Hacienda owned by Benito Legarda, who had empowered Valdes to sell it. Borck was given three months from December 4, 1911 to buy the hacienda for P307,000. On January 17, 1912 Borck wrote to Valdes, offering to purchase the hacienda for P307,000 payable on May 1, 1912. No reply was made to that letter. Borck wrote other letters modifying his proposal. Legarda refused to convey the property. It was held that Borck's January 17th letter plainly departed from the terms of the offer as to the time of payment and was a counter-offer which amounted to a rejection of Valdes' original offer. A subsequent unconditional acceptance could not revive that offer. The instant case is different from Laudico and Harden vs. Arias Rodriguez, 43 Phil. 270 where the written offer to sell was revoked by the offer or before the offeree's acceptance came to the offeror's knowledge. Appellants' next contention is that the contract was not perfected because the condition that Bormaheco, Inc. would acquire the Nassco land within forty-five days from February 12, 1964 or on or before March 28, 1964 was not fulfilled. This contention is tied up with the following letter of Bormaheco, Inc. (Exh. F): BORMAHECO, INC. March 30, 1964 Villonco Realty Company V.R.C. Building 219 Buendia Ave., Makati, Rizal Gentlemen: We are returning herewith your earnest money together with interest thereon at 10% per annum. Please be informed that despite the lapse of the 45 days from February 12, 1964 there is no certainty yet for us to acquire a substitute property, hence the return of the earnest money as agreed upon. Very truly yours,

S G D . F R A N C I S C O N . C E R V A N T E S P r e s i d e n t Encl.: P.N.B. Check No. 112994 J P.N.B. Check No. 112996J That contention is predicated on the erroneous assumption that Bormaheco, Inc. was to acquire the Nassco land within forty-five days or on or before March 28, 1964. The trial court ruled that the forty-five-day period was merely an estimate or a forecast of how long it would take Bormaheco, Inc. to acquire the Nassco property and it was not "a condition or a deadline set for the defendant corporation to decide whether or not to go through with the sale of its Buendia property".

The record does not support the theory of Bormaheco, Inc. and the Cervantes spouses that the forty-five-day period was the time within which (a) the Nassco property and two Pasong Tamo lots should be acquired, (b) when Cervantes would secure his wife's consent to the sale of the three lots and (c) when Bormaheco, Inc. had to decide what to do with the DBP encumbrance. Cervantes in paragraph 3 of his offer of February 12, 1964 stated that the sale of the Buendia lots would be consummated after he had consummated the purchase of the Nassco property. Then, in paragraph 5 of the same offer he stated "that final negotiations on both properties can be definitely known after forty-five days" (See Exh. B). It is deducible from the tenor of those statements that the consummation of the sale of the Buendia lots to Villonco Realty Company was conditioned on Bormaheco's acquisition of the Nassco land. But it was not spelled out that such acquisition should be effected within fortyfive days from February 12, 1964. Had it been Cervantes' intention that the forty-five days would be the period within which the Nassco land should be acquired by Bormaheco, then he would have specified that period in paragraph 3 of his offer so that paragraph would read in this wise: "That this sale is to be consummated only after I shall have consummated my purchase of another property located at Sta. Ana, Manila within forty-five days from the date hereof ." He could have also specified that period in his "conforme" to Villonco's counter-offer of March 4, 1964 (Exh. D) so that instead of merely stating "that this sale shall be subject to favorable consummation of a property in Sta. Ana we are negotiating" he could have said: "That this sale shall be subject to favorable consummation within forty-five days from February 12, 1964 of a property in Sta. Ana we are negotiating". No such specification was made. The term of forty-five days was not a part of the condition that the Nassco property should be acquired. It is clear that the statement "that final negotiations on both property can be definitely known after 45 days" does not and cannot mean that Bormaheco, Inc. should acquire the Nassco property within forty-five days from February 12, 1964 as pretended by Cervantes. It is simply a surmise that after forty-five days (in fact when the forty-five day period should be computed is not clear) it would be known whether Bormaheco, Inc. would be able to acquire the Nassco property and whether it would be able to sell the Buendia property. That aforementioned paragraph 5 does not even specify how long after the forty-five days the outcome of the final negotiations would be known. It is interesting to note that in paragraph 6 of Bormaheco's answer to the amended complaint, which answer was verified by Cervantes, it was alleged that Cervantes accepted Villonco's revised counter-offer of March 4, 1964 subject to the condition that "the final negotiations (acceptance) will have to be made by defendant within 45 days from said acceptance" (31 Record on Appeal). If that were so, then the consummation of Bormaheco's purchase of the Nassco property would be made within forty-five days from March 4, 1964. What makes Bormaheco's stand more confusing and untenable is that in its three answers it invariably articulated the incoherent and vague affirmative defense that its acceptance of Villonco's revised counter-offer was conditioned on the circumstance "that final acceptance or not shall be made after 45 days" whatever that means. That affirmative defense is inconsistent with the other aforequoted incoherent statement in its third answer that "the final negotiations (acceptance) will have to be made by defendant within 45 days from said acceptance" (31 Record on Appeal).1wph1.t

Thus, Bormaheco's three answers and paragraph 5 of his offer of February 12, 1964 do not sustain at all its theory that the Nassco property should be acquired on or before March 28, 1964. Its rescission or revocation of its acceptance cannot be anchored on that theory which, as articulated in its pleadings, is quite equivocal and unclear. It should be underscored that the condition that Bormaheco, Inc. should acquire the Nassco property was fulfilled. As admitted by the appellants, the Nassco property was conveyed to Bormaheco, Inc. on June 26, 1964. As early as January 17, 1964 the property was awarded to Bormaheco, Inc. as the highest bidder. On February 18, 1964 the Nassco Board authorized its General Manager to sell the property to Bormaheco, Inc. (Exh. H). The Economic Coordinator approved the award on March 24, 1964. It is reasonable to assume that had Cervantes been more assiduous in following up the transaction, the Nassco property could have been transferred to Bormaheco, Inc. on or before March 28, 1964, the supposed last day of the forty-five-day period. The appellants, in their fifth assignment of error, argue that Bormaheco, Inc. cannot be required to sell the three lots in question because they are conjugal properties of the Cervantes spouses. They aver that Cervantes in dealing with the Villonco brothers acted as president of Bormaheco, Inc. and not in his individual capacity and, therefore, he did not bind the conjugal partnership nor Mrs. Cervantes who was allegedly opposed to the sale. Those arguments are not sustainable. It should be remembered that Cervantes, in rescinding the contract of sale and in returning the earnest money, cited as an excuse the circumstance that there was no certainty in Bormaheco's acquisition of the Nassco property (Exh. F and Annex 1). He did not say that Mrs. Cervantes was opposed to the sale of the three lots. He did not tell Villonco Realty Company that he could not bind the conjugal partnership. In truth, he concealed the fact that the three lots were registered "in the name of FRANCISCO CERVANTES, Filipino, of legal age, married to Rosario P. Navarro, as owner thereof in fee simple". He certainly led the Villonco brothers to believe that as president of Bormaheco, Inc. he could dispose of the said lots. He inveigled the Villoncos into believing that he had untrammelled control of Bormaheco, Inc., that Bormaheco, Inc. owned the lots and that he was invested with adequate authority to sell the same. Thus, in Bormaheco's offer of February 12, 1964, Cervantes first identified the three lots as "our property" which "we are offering to sell ..." (Opening paragraph and par. 1 of Exh. B). Whether the prounoun "we" refers to himself and his wife or to Bormaheco, Inc. is not clear. Then, in paragraphs 3 and 4 of the offer, he used the first person and said: "I shall have consummated my purchase" of the Nassco property; "... my negotiations with said property" and "I will return to you your deposit". Those expressions conveyed the impression and generated the belief that the Villoncos did not have to deal with Mrs. Cervantes nor with any other official of Bormaheco, Inc. The pleadings disclose that Bormaheco, Inc. and Cervantes deliberately and studiously avoided making the allegation that Cervantes was not authorized by his wife to sell the three lots or that he acted merely as president of Bormaheco, Inc. That defense was not interposed so as not to place Cervantes in the ridiculous position of having acted under false pretenses when he negotiated with the Villoncos for the sale of the three lots. Villonco Realty Company, in paragraph 2 of its original complaint, alleged that "on February 12, 1964, after some prior negotiations, the defendant (Bormaheco, Inc.) made a formal offer

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

Annex 1). Moreover, Mrs. Cervantes did not testify at the trial to fortify that defense which had already been waived for not having been pleaded (See sec. 2, Rule 9, Rules of Court). Taking into account the situation of Cervantes vis-a-vis Bormaheco, Inc. and his wife and the fact that the three lots were entirely occupied by Bormaheco's building, machinery and equipment and were mortgaged to the DBP as security for its obligation, and considering that appellants' vague affirmative defenses do not include Mrs. Cervantes' alleged opposition to the sale, the plea that Cervantes had no authority to sell the lots strains the rivets of credibility (Cf. Papa and Delgado vs. Montenegro, 54 Phil. 331; Riobo vs. Hontiveros, 21 Phil. 31). "Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith" (Art. 1159, Civil Code). Inasmuch as the sale was perfected and even partly executed, Bormaheco, Inc., and the Cervantes spouses, as a matter of justice and good faith, are bound to comply with their contractual commitments. Parenthetically, it may be observed that much misunderstanding could have been avoided had the broker and the buyer taken the trouble of making some research in the Registry of Deeds and availing themselves of the services of a competent lawyer in drafting the contract to sell. Bormaheco, Inc. and the Cervantes spouses in their sixth assignment of error assail the trial court's award to Villonco Realty Company of consequential damage amounting to ten thousand pesos monthly from March 24, 1964 (when the Economic Coordinator approved the award of the Nassco property to Bormaheco, Inc.) up to the consummation of the sale. The award was based on paragraph 18 of the stipulation of facts wherein Villonco Realty Company "submits that the delay in the consummation of the sale" has caused it to suffer the aforementioned damages. The appellants contend that statement in the stipulation of facts simply means that Villonco Realty Company speculates that it has suffered damages but it does not mean that the parties have agreed that Villonco Realty Company is entitled to those damages. Appellants' contention is correct. As rightly observed by their counsel, the damages in question were not specifically pleaded and proven and were "clearly conjectural and speculative". However, appellants' view in their seventh assignment of error that the trial court erred in ordering Bormaheco, Inc. to pay Villonco Realty Company the sum of twenty thousand pesos as attorney's fees is not tenable. Under the facts of the case, it is evident that Bormaheco, Inc. acted in gross and evident bad faith in refusing to satisfy the valid and just demand of Villonco Realty Company for specific performance. It compelled Villonco Realty Company to incure expenses to protect its interest. Moreover, this is a case where it is just and equitable that the plaintiff should recover attorney's fees (Art. 2208, Civil Code). The appellants in their eighth assignment of error impugn the trial court's adjudication of forty-two thousand pesos as three percent broker's commission to Miss Tagle. They allege that there is no evidence that Bormaheco, Inc. engaged her services as a broker in the projected sale of the three lots and the improvements thereon. That allegation is refuted by paragraph 3 of the stipulation of facts and by the documentary evidence. It was stipulated that Miss Tagle intervened in the negotiations for the sale of the three lots. Cervantes in his original offer of

February 12, 1964 apprised Villonco Realty Company that the earnest money should be delivered to Miss Tagle, the bearer of the letter-offer. See also Exhibit G and Annex I of the stipulation of facts. We hold that the trial court did not err in adjudging that Bormaheco, Inc. should pay Miss Tagle her three percent commission. WHEREFORE, the trial court's decision is modified as follows: 1. Within ten (10) days from the date the defendants-appellants receive notice from the clerk of the lower court that the records of this case have been received from this Court, the spouses Francisco N. Cervantes and Rosario P. Navarra-Cervantes should execute a deed conveying to Bormaheco, Inc. their three lots covered by Transfer Certificate of Title Nos. 43530, 43531 and 43532 of the Registry of Deeds of Rizal. 2. Within five (5) days from the execution of such deed of conveyance, Bormaheco, Inc. should execute in favor of Villonco Realty Company, V. R. C. Building, 219 Buendia Avenue, Makati, Rizal a registerable deed of sale for the said three lots and all the improvements thereon, free from all lien and encumbrances, at the price of four hundred pesos per square meter, deducting from the total purchase price the sum of P100,000 previously paid by Villonco Realty Company to Bormaheco, Inc. 3. Upon the execution of such deed of sale, Villonco Realty Company is obligated to pay Bormaheco, Inc. the balance of the price in the sum of one million three hundred thousand pesos (P1,300,000). 4. Bormaheco, Inc. is ordered (a) to pay Villonco Realty Company twenty thousand pesos (P20,000) as attorney's fees and (b) to pay Edith Perez de Tagle the sum of forty-two thousand pesos (P42,000) as commission. Costs against the defendants-appellants. SO ORDERED. Makalintal, C.J, Castro. Fernando, Makasiar, Antonio, Esguerra, Muoz Palma, Concepcion Jr. and Martin, JJ., concur. Teehankee, J., is on leave.

BARREDO, J., concurring: The comprehensive and well prepared opinion of Mr. Justice Aquino deserves concurrence and I do not hesitate to accord my assent to it. The only purpose of the following lines is to express my personal view regarding two basic points which I feel should be thoroughly emphasized. 1. I am not for giving the letter proposal of appellant Francisco Cervantes to Romeo Villonco of February 12, 1964, Exhibit B, any decisive importance. To my mind, it has no more legal significance than what is appears to be a mere unaccepted proposal. Accordingly, to my mind, paragraph (5) thereof to the effect that "final negotiations on both properties can be definitely known after 45 days" has no relevance in the disposition of this case, there being nothing in the record to show that the same was accepted by appellee. What to me is the actual contract between appellee and appellant Francisco Cervantes is the counter-offer signed by Teofilo Villonco and addressed to the latter of March 4, 1964, Exhibit D, which does not even make any reference to the above-mentioned proposal of Cervantes of February 12, 1964, even as it mentions specifically the letters of the agent, Miss E. Perez de Tagle, of February 12 and 26, 1964. The last paragraph of said Exhibit D reads thus: "If the above terms and conditions are acceptable to you, kindly sign your conformity hereunder. Enclosed is our check for One Hundred Thousand (P100,000) Pesos, M.B.T.C. Cheek No. 448314, as earnest money." And it is undisputed that Francisco Cervantes did affix his signature in the place indicated for his conformity, albeit under the typewritten words, Bormaheco, Inc. It is also a fact that on the same date, the stipulated P100,000 earnest money was received by Cervantes. It is true that in the voucher-receipt evidencing the delivery of the earnest money, the agent, Miss Tagle, indicated in her own handwriting that the same was "subject to the terms and conditions embodied in Bormaheco's letter of February 12, 1974 and Villonco Realty Company's letter of March 4, 1974," but it is my considered opinion that such reservation cannot be understood as comprehending reference to the above-quoted paragraph (5) of the proposal of February 12, for the simple reason that since the parties had in fact continued negotiating after February 12 until the final conference of February 27, Cervantes must be deemed as having intended his signing of his conformity to the letter of March 4 to be the formalization of the "final negotiations" referred to in said paragraph (5), thereby rendering said provision of no further consequence. It should be noted that, to be sure, as said paragraph (5) was worded, the idea it conveyed was that Cervantes was just making a mere tentative offer which he would finalize only after 45 days, and so, when he signed Villonco's counteroffer of March 4 and accepted the P100,000 earnest money tendered therein, no other significance could be given to such acts than that they were meant to finalize and perfect the transaction in advance of the 45-day waiting period originally proposed by him. Indeed, in the addendum written and signed by Cervantes himself (not by the agent) to the March 4 letter, all that he stated was that "this sale shall be subject to favorable consummation of a property in Sta. Ana we are negotiating", and this was none other than the Nassco property which the Nassco Board authorized its manager on February 18, 1964 to sell to appellants who had won the award the day before. In other words, when Cervantes signed the space for his conformity to the terms of that letter of March 4, he already knew or must have known that the acquisition of the Nassco property was already an impending certainty and must have cared less about what had become an unnecessary waiting period, hence the omission of any mention thereof by him in his addendum.

Separate Opinions

My conclusion, therefore, is that said acts of Cervantes of signing his conformity to Villonco's counter-offer of March 4 and accepting the P100,000 earnest money therein offered resulted in a completely perfected contract of sale between the parties per Article 1482 of the Civil Code, needing only the execution of the corresponding deed of sale for its consummation and subject solely to the negative resolutory condition that the "sale shall be cancelled, only if your (Cervantes') deal with another property in Sta. Ana (indisputably the Nassco transaction) shall not be consummated", without stipulating anymore a period for such consummation, since evidently, with the sale thereof having been authorized already by the Nassco Board on February 18, 1964, the Villoncos must have been made to understand or they did understand that such consummation was inexorably forthcoming. In fact, the Nassco Board already approved on March 3, 1964 not only the award but the actual sale of the property to appellants, and the Economic Coordinator gave his sanction thereto on March 24 following. Thus, as of March 3, one day before Cervantes accepted Villonco's counter-offer, nothing more was left to formalize the transaction with Nassco except that approval of the Economic Coordinator. I cannot believe that Cervantes did not have up-to-date information of the progress of his transactions with Nassco. Actually, from the legal standpoint, he was under obligation, if only in consequence of his offer of February 12 and his continuous conversations and negotiations with the Villoncos up to the signing of their agreement on March 4, to keep constant and close tract thereof in order that he might be able to inform the parties he was dealing with of the real status thereof, the finalization of the same being a material factor in the accomplishment of their common purpose. Withal, equity would assume that he did what ought to have been done by him in taking ordinary care of his concerns, which he is presumed to have taken, according to Section 5 (d) of rule 131. Under these circumstances, I am amply persuaded that he must have been aware of the favorable actuations of the Nassco authorities all the while that he was dealing with appellee up to March 4, the day after the Nassco Board approved the sale. Accordingly, I hold that when he gave his conformity to the counter-offer of the Villoncos of March 4, he was already fully confident his transaction with Nassco would eventually materialize. What is worse is that assuming that the 45-day period invoked by him could be considered in this discussion, it would be inequitable to allow him to take advantage thereof in the light of the circumstances extant in the record. It cannot be denied that, as already stated, the Economic Coordinator approved the Nassco transaction on March 24, 1964. Anyone would know, and much more so Cervantes who was directly interested therein and must have been anxiously and even excitedly waiting for it, that that was the last requisite for the inevitable execution of the deed of sale in his favor. One has to be very naive and it would be contrary to the ordinary course of human experience and business practices for anyone to concede to appellants that when Cervantes wrote his letter to Villonco Realty Company of March 30, 1964 stating that "despite the lapse of 45 days from February 12, 1964, there is no certainty yet for us to acquire a substitute property", he did not even have the slightest inkling of the favorable action of the Economic Coordinator of March 24. The same or more may be said relative to his letter to Miss Tagle of as late as April 6, 1964 wherein he alleged that the fortyfive day period had already expired and the sale to Bormaheco, Inc. of the Punta (Nassco) property had not been consummated as of then and that, therefore, his letter was a "manifestation that we are no longer interested to sell" the Buendia property to the Villoncos. I have no doubt whatsoever that the whole trouble here is that after Cervantes had already signed his conformity and received earnest money on March 4, he had a change of heart, perhaps dictated by reasons of better economic advantage, and banking on the idea, albeit

erroneous, that he could utilize paragraph (5) of his letter of February 12 as a escape door through which he could squeeze out of the perfected contract with the Villoncos, he opted to actually back out and break with them thru his letters of March 30 to them and of April 6 to the agent, Miss Tagle. The Court would certainly be sanctioning a deliberate mala fide breach of a contract already definitely perfected were it to buy the theory of non-perfection appellants are lamely pressing on Us. No amount of rationalization can convince me that the Villoncos had agreed to any 45-day suspensive condition for the perfection of the agreement, but even on the remote assumption that they did, I would hold as I do hold that the purchase of the Nassco property by appellants was virtually consummated, from the viewpoint of the spirit and intent of the contract here in question, on March 24, 1964, when the Economic Coordinator approved the same and nothing else remained to be done to formalize it except the actual execution of the deed of sale which in fact took place on June 26, 1964, hence, Cervantes had no more excuse for further delaying compliance with his agreement with the Villoncos. In other words, for all legal purposes, assuming hypothetically the plausibility of the theory of appellants about a 45-day waiting period, the negative resolutory condition arising from said theory became inoperative four days before said 45 days expired. After the approval of the sale by the Economic Coordinator, there was nothing anymore that could impede the formal conveyance of the Nassco property to appellants, other than their own desistance, and even that might have been legally controversial if Nassco insisted otherwise. Reading all the communications exchanged between the parties, the conclusion therefrom is inevitable that the 45-day period stipulation was inextricably tied up with appellants' being able to acquire the Nassco property. In other words, Cervantes merely wanted to be sure that they would get the Nassco property before proceeding with the sale of the Buendia property. To construe the 45-day stipulation as giving Cervantes the absolute right to disregard the Villoncos entirely until after the 45 days had expired is to render the whole of Cervantes' letter of February 12 as totally meaningless, legally non-existent and as deceitfully farcical. Consequently, the acquisition of the Nassco property having actually eventualized, it cannot lie in the lips of Cervantes to claim that he may not be compelled to proceed with the transaction. To view the situation otherwise is to condone resort to ambiguity as a means of deception and informality in contractual obligations, which in my opinion is contrary to the elementary requirements of candidness and honest dealing between responsible contracting parties, and in that sense offensive to public policy. 2. The contention of appellants that inasmuch as in actual fact the Buendia property contemplated in the contract is the conjugal property of Cervantes spouses and that since in dealing with the Villoncos, Cervantes acted as President of Bormaheco, Inc., the appellee cannot have any right to compel the conveyance to them thereof is in my view definitely puerile. It is predicated on duplicity and smacks of utter bad faith. I do not find in the evidence before Us adequate basis for accepting the suggestion that Francisco Cervantes acted for and in behalf of Bormaheco, Inc. in his dealing with the Villoncos. The mere fact that he signed his letter of February 12, 1964 over the title of President, there being no showing that he was duly authorized to make the offer therein contained in the name of the corporation, did not convert it into a corporate act. The language of the letter which is conspicuously sprinkled with the pronoun I used by Cervantes to refer to himself rather than exclusively the pronoun we does not so indicate. Besides, Cervantes is undisputably the registered owner with his wife of the property therein mentioned, and being evidently conscious, as he ought to have been of this fact, he knew his act would be ultra vires and void, if he were to act for the corporation. He was the manager of the conjugal partnership and he knew it was only in that capacity that he could in good faith give validity to his representation, assuming the conformity of his wife. Unless Cervantes wants Us to hold

that he deliberately negotiated with the Villoncos clothed in dubious garments of authority precisely to afford him the opportunity to repudiate at his convenience any agreement they may enter into with him. I am for holding as I do hold that Bormaheco, Inc. had nothing to do with the transaction here in controversy. In any event, if Cervantes may held to have acted for Bormaheco, Inc., in spite of the absence of evidence of any authority for him to do so, it must be because Bormaheco, Inc. is Cervantes himself, and there being no proof to the contrary, the corporate shield of Bormaheco, Inc. may be deemed pierced in order to prevent any further fraudulent implications in his actuations. Moreover, it may be observed that the March 4 letter of Teofilo Villonco was not addressed to Bormaheco, Inc. but to Francisco Cervantes and it does not even mention his being President of that corporation. Anent the requirement of consent of Mrs. Cervantes under Article 166 of the Civil Code, I consider any defense along this line as unavailing to the appellants in this case. As very ably discussed in the main opinion of Mr. Justice Aquino, the answer of the defendants, make no reference at all to any lack of such consent. And considering that the subsequent testimony of Cervantes to the effect that his wife opposed the transaction cannot cure such omission, if only because any husband in the circumstances revealed in the record is estopped from setting up such a defense (cf Riobo vs. Hontiveros, 21 Phil. 31; Papi vs. Montenegro, 54 Phil. 531; see Civil Law by Reyes & Puno, 1964 ed. p. 192), and that from her silence in her answer in this respect Mrs. Cervantes may either be presumed to have given her consent thereto or to have ratified the same (Montederamos vs. Ynonoy, 56 Phil. 457; Castaeda vs. Samson, 43 Phil. 751), it is obvious that the belated invocation of this defense now should be deemed in fact and in law as an unacceptable and ineffective afterthought. Besides, it appearing that the sale of the Buendia property was purposely to enable the spouses to acquire the Nassco property, I have grave doubts as to the application of Article 166 to the sale here in dispute. I believe that the disposition by a husband prohibited by the Code unless consented to by the wife refers to a transaction outrightly prejudicial to the partnership and cannot comprehend a sale made precisely for its benefit and causing no loss thereto beyond the ordinary risks of misjudgment of a manager acting in good faith. IN VIEW OF THE FOREGOING, I would not even require the formality of the serial execution of instruments by the Cervantes spouses and Bormaheco, Inc. In the view I have taken above, it would be legally feasible for the sale to the Villonco Realty Property to be made directly by the spouses. But I would not insist in the modification of the dispositive portion of the judgment, since the result would be the same anyway.

1. I am not for giving the letter proposal of appellant Francisco Cervantes to Romeo Villonco of February 12, 1964, Exhibit B, any decisive importance. To my mind, it has no more legal significance than what is appears to be a mere unaccepted proposal. Accordingly, to my mind, paragraph (5) thereof to the effect that "final negotiations on both properties can be definitely known after 45 days" has no relevance in the disposition of this case, there being nothing in the record to show that the same was accepted by appellee. What to me is the actual contract between appellee and appellant Francisco Cervantes is the counter-offer signed by Teofilo Villonco and addressed to the latter of March 4, 1964, Exhibit D, which does not even make any reference to the above-mentioned proposal of Cervantes of February 12, 1964, even as it mentions specifically the letters of the agent, Miss E. Perez de Tagle, of February 12 and 26, 1964. The last paragraph of said Exhibit D reads thus: "If the above terms and conditions are acceptable to you, kindly sign your conformity hereunder. Enclosed is our check for One Hundred Thousand (P100,000) Pesos, M.B.T.C. Cheek No. 448314, as earnest money." And it is undisputed that Francisco Cervantes did affix his signature in the place indicated for his conformity, albeit under the typewritten words, Bormaheco, Inc. It is also a fact that on the same date, the stipulated P100,000 earnest money was received by Cervantes. It is true that in the voucher-receipt evidencing the delivery of the earnest money, the agent, Miss Tagle, indicated in her own handwriting that the same was "subject to the terms and conditions embodied in Bormaheco's letter of February 12, 1974 and Villonco Realty Company's letter of March 4, 1974," but it is my considered opinion that such reservation cannot be understood as comprehending reference to the above-quoted paragraph (5) of the proposal of February 12, for the simple reason that since the parties had in fact continued negotiating after February 12 until the final conference of February 27, Cervantes must be deemed as having intended his signing of his conformity to the letter of March 4 to be the formalization of the "final negotiations" referred to in said paragraph (5), thereby rendering said provision of no further consequence. It should be noted that, to be sure, as said paragraph (5) was worded, the idea it conveyed was that Cervantes was just making a mere tentative offer which he would finalize only after 45 days, and so, when he signed Villonco's counteroffer of March 4 and accepted the P100,000 earnest money tendered therein, no other significance could be given to such acts than that they were meant to finalize and perfect the transaction in advance of the 45-day waiting period originally proposed by him. Indeed, in the addendum written and signed by Cervantes himself (not by the agent) to the March 4 letter, all that he stated was that "this sale shall be subject to favorable consummation of a property in Sta. Ana we are negotiating", and this was none other than the Nassco property which the Nassco Board authorized its manager on February 18, 1964 to sell to appellants who had won the award the day before. In other words, when Cervantes signed the space for his conformity to the terms of that letter of March 4, he already knew or must have known that the acquisition of the Nassco property was already an impending certainty and must have cared less about what had become an unnecessary waiting period, hence the omission of any mention thereof by him in his addendum. My conclusion, therefore, is that said acts of Cervantes of signing his conformity to Villonco's counter-offer of March 4 and accepting the P100,000 earnest money therein offered resulted in a completely perfected contract of sale between the parties per Article 1482 of the Civil Code, needing only the execution of the corresponding deed of sale for its consummation and subject solely to the negative resolutory condition that the "sale shall be cancelled, only if your (Cervantes') deal with another property in Sta. Ana (indisputably the Nassco transaction) shall not be consummated", without stipulating anymore a period for such consummation, since

Separate Opinions BARREDO, J., concurring: The comprehensive and well prepared opinion of Mr. Justice Aquino deserves concurrence and I do not hesitate to accord my assent to it. The only purpose of the following lines is to express my personal view regarding two basic points which I feel should be thoroughly emphasized.

evidently, with the sale thereof having been authorized already by the Nassco Board on February 18, 1964, the Villoncos must have been made to understand or they did understand that such consummation was inexorably forthcoming. In fact, the Nassco Board already approved on March 3, 1964 not only the award but the actual sale of the property to appellants, and the Economic Coordinator gave his sanction thereto on March 24 following. Thus, as of March 3, one day before Cervantes accepted Villonco's counter-offer, nothing more was left to formalize the transaction with Nassco except that approval of the Economic Coordinator. I cannot believe that Cervantes did not have up-to-date information of the progress of his transactions with Nassco. Actually, from the legal standpoint, he was under obligation, if only in consequence of his offer of February 12 and his continuous conversations and negotiations with the Villoncos up to the signing of their agreement on March 4, to keep constant and close tract thereof in order that he might be able to inform the parties he was dealing with of the real status thereof, the finalization of the same being a material factor in the accomplishment of their common purpose. Withal, equity would assume that he did what ought to have been done by him in taking ordinary care of his concerns, which he is presumed to have taken, according to Section 5 (d) of rule 131. Under these circumstances, I am amply persuaded that he must have been aware of the favorable actuations of the Nassco authorities all the while that he was dealing with appellee up to March 4, the day after the Nassco Board approved the sale. Accordingly, I hold that when he gave his conformity to the counter-offer of the Villoncos of March 4, he was already fully confident his transaction with Nassco would eventually materialize. What is worse is that assuming that the 45-day period invoked by him could be considered in this discussion, it would be inequitable to allow him to take advantage thereof in the light of the circumstances extant in the record. It cannot be denied that, as already stated, the Economic Coordinator approved the Nassco transaction on March 24, 1964. Anyone would know, and much more so Cervantes who was directly interested therein and must have been anxiously and even excitedly waiting for it, that that was the last requisite for the inevitable execution of the deed of sale in his favor. One has to be very naive and it would be contrary to the ordinary course of human experience and business practices for anyone to concede to appellants that when Cervantes wrote his letter to Villonco Realty Company of March 30, 1964 stating that "despite the lapse of 45 days from February 12, 1964, there is no certainty yet for us to acquire a substitute property", he did not even have the slightest inkling of the favorable action of the Economic Coordinator of March 24. The same or more may be said relative to his letter to Miss Tagle of as late as April 6, 1964 wherein he alleged that the fortyfive day period had already expired and the sale to Bormaheco, Inc. of the Punta (Nassco) property had not been consummated as of then and that, therefore, his letter was a "manifestation that we are no longer interested to sell" the Buendia property to the Villoncos. I have no doubt whatsoever that the whole trouble here is that after Cervantes had already signed his conformity and received earnest money on March 4, he had a change of heart, perhaps dictated by reasons of better economic advantage, and banking on the idea, albeit erroneous, that he could utilize paragraph (5) of his letter of February 12 as a escape door through which he could squeeze out of the perfected contract with the Villoncos, he opted to actually back out and break with them thru his letters of March 30 to them and of April 6 to the agent, Miss Tagle. The Court would certainly be sanctioning a deliberate mala fide breach of a contract already definitely perfected were it to buy the theory of non-perfection appellants are lamely pressing on Us. No amount of rationalization can convince me that the Villoncos had agreed to any 45-day suspensive condition for the perfection of the agreement, but even

on the remote assumption that they did, I would hold as I do hold that the purchase of the Nassco property by appellants was virtually consummated, from the viewpoint of the spirit and intent of the contract here in question, on March 24, 1964, when the Economic Coordinator approved the same and nothing else remained to be done to formalize it except the actual execution of the deed of sale which in fact took place on June 26, 1964, hence, Cervantes had no more excuse for further delaying compliance with his agreement with the Villoncos. In other words, for all legal purposes, assuming hypothetically the plausibility of the theory of appellants about a 45-day waiting period, the negative resolutory condition arising from said theory became inoperative four days before said 45 days expired. After the approval of the sale by the Economic Coordinator, there was nothing anymore that could impede the formal conveyance of the Nassco property to appellants, other than their own desistance, and even that might have been legally controversial if Nassco insisted otherwise. Reading all the communications exchanged between the parties, the conclusion therefrom is inevitable that the 45-day period stipulation was inextricably tied up with appellants' being able to acquire the Nassco property. In other words, Cervantes merely wanted to be sure that they would get the Nassco property before proceeding with the sale of the Buendia property. To construe the 45-day stipulation as giving Cervantes the absolute right to disregard the Villoncos entirely until after the 45 days had expired is to render the whole of Cervantes' letter of February 12 as totally meaningless, legally non-existent and as deceitfully farcical. Consequently, the acquisition of the Nassco property having actually eventualized, it cannot lie in the lips of Cervantes to claim that he may not be compelled to proceed with the transaction. To view the situation otherwise is to condone resort to ambiguity as a means of deception and informality in contractual obligations, which in my opinion is contrary to the elementary requirements of candidness and honest dealing between responsible contracting parties, and in that sense offensive to public policy. 2. The contention of appellants that inasmuch as in actual fact the Buendia property contemplated in the contract is the conjugal property of Cervantes spouses and that since in dealing with the Villoncos, Cervantes acted as President of Bormaheco, Inc., the appellee cannot have any right to compel the conveyance to them thereof is in my view definitely puerile. It is predicated on duplicity and smacks of utter bad faith. I do not find in the evidence before Us adequate basis for accepting the suggestion that Francisco Cervantes acted for and in behalf of Bormaheco, Inc. in his dealing with the Villoncos. The mere fact that he signed his letter of February 12, 1964 over the title of President, there being no showing that he was duly authorized to make the offer therein contained in the name of the corporation, did not convert it into a corporate act. The language of the letter which is conspicuously sprinkled with the pronoun I used by Cervantes to refer to himself rather than exclusively the pronoun we does not so indicate. Besides, Cervantes is undisputably the registered owner with his wife of the property therein mentioned, and being evidently conscious, as he ought to have been of this fact, he knew his act would be ultra vires and void, if he were to act for the corporation. He was the manager of the conjugal partnership and he knew it was only in that capacity that he could in good faith give validity to his representation, assuming the conformity of his wife. Unless Cervantes wants Us to hold that he deliberately negotiated with the Villoncos clothed in dubious garments of authority precisely to afford him the opportunity to repudiate at his convenience any agreement they may enter into with him. I am for holding as I do hold that Bormaheco, Inc. had nothing to do with the transaction here in controversy. In any event, if Cervantes may held to have acted for Bormaheco, Inc., in spite of the absence of evidence of any authority for him to do so, it must be because Bormaheco, Inc. is Cervantes himself, and there being no proof to the contrary, the corporate shield of Bormaheco, Inc. may be deemed pierced in order to prevent any further

fraudulent implications in his actuations. Moreover, it may be observed that the March 4 letter of Teofilo Villonco was not addressed to Bormaheco, Inc. but to Francisco Cervantes and it does not even mention his being President of that corporation. Anent the requirement of consent of Mrs. Cervantes under Article 166 of the Civil Code, I consider any defense along this line as unavailing to the appellants in this case. As very ably discussed in the main opinion of Mr. Justice Aquino, the answer of the defendants, make no reference at all to any lack of such consent. And considering that the subsequent testimony of Cervantes to the effect that his wife opposed the transaction cannot cure such omission, if only because any husband in the circumstances revealed in the record is estopped from setting up such a defense (cf Riobo vs. Hontiveros, 21 Phil. 31; Papi vs. Montenegro, 54 Phil. 531; see Civil Law by Reyes & Puno, 1964 ed. p. 192), and that from her silence in her answer in this respect Mrs. Cervantes may either be presumed to have given her consent thereto or to have ratified the same (Montederamos vs. Ynonoy, 56 Phil. 457; Castaeda vs. Samson, 43 Phil. 751), it is obvious that the belated invocation of this defense now should be deemed in fact and in law as an unacceptable and ineffective afterthought. Besides, it appearing that the sale of the Buendia property was purposely to enable the spouses to acquire the Nassco property, I have grave doubts as to the application of Article 166 to the sale here in dispute. I believe that the disposition by a husband prohibited by the Code unless consented to by the wife refers to a transaction outrightly prejudicial to the partnership and cannot comprehend a sale made precisely for its benefit and causing no loss thereto beyond the ordinary risks of misjudgment of a manager acting in good faith. IN VIEW OF THE FOREGOING, I would not even require the formality of the serial execution of instruments by the Cervantes spouses and Bormaheco, Inc. In the view I have taken above, it would be legally feasible for the sale to the Villonco Realty Property to be made directly by the spouses. But I would not insist in the modification of the dispositive portion of the judgment, since the result would be the same anyway. Footnotes

Dear Mr. Cervantes: As your official and authorized representative on the sale of your property located at 245 Buendia Avenue, Makati, Rizal, with a total area of 3,500 square meters, at P400.00 per square meter or a total purchase cost of P1,400.000.00, in favor of Mr. Romeo Villonco of Villonco Realty Co., I was surprised and shocked at the news of your actions yesterday afternoon when you had a certain Mr. de Guzman bring to Mr. Romeo Villonco, your letter dated March 30th, 1964, together with 2 checks. One for P100.000.00 and another for P694.25 as 10% interest on the same. If you will recall, this deal on selling your property started way back in October 1963 when you ordered me to negotiate for you certain properties to buy in order that you could move to a bigger location than that at 245 Buendia Avenue which was becoming too small for your needs. You also authorized me to negotiate with my BUYERS, one of whom was the Villonco Brothers who owned the adjacent property, on the sale of your property. Plenty of conferences were held between you and me, and also between the Villoncos and me on the said property, specially after your Formal Bidding of the NASSCO PROPERTY, located at Punta. Sta. Ana, was made on January 17, 1964. After this made (sic) was made, you called me and had me offer your property at 245 Buendia Avenue to the Villoncos. For this you made your formal offer as per your letter dated February 12, 1964. And that after there were many personal conferences made between you and the Villoncos either by phone and also personally at their office in my presence. After your Formal Offer of February 12, 1964, and the subsequent acceptance by the Villoncos of your offer, and the payment of the EARNEST MONEY of P100,000.00 which you accepted on March 4, 1964 and signed CONFORME to the LETTER CONTRACT of the same date, this deal become a close deal as the said Earnest Money becomes a part of the down payment on the property. The only stipulation mentioned in your Contractual Letter of March 4, 1964 which followed your letter of February 12, 1964, was that the said sale becomes ineffective only if the purchase of the property at Sta. Ana is not approved by the NASSCO or the OEC. However, from all my follow up on the matter at the NASSCO and the OEC, it appears that your bid on purchasing the said property at Sta. Ana has been approved by the NASSCO BOARD on March 3, 1964, and subsequently approved by the Office of the Economic Coordinator and signed by Mr. Adevoso on March 25,1964. This, therefore, removes the stipulation on your letter of Feb. 12, 1964 and thus effecting the consummation of this deal.

* Underscoring supplied. Note that, according to the defendants, Cervantes inserted "12th and" between the "February" and "26" in the second line of the foregoing letter, that in paragraph 3 of the terms and conditions he crossed out "Nassco's" and wrote "another" and that he inserted "pa" after "interest" (p. 7, defendants-appellants' brief). There is no stipulation nor testimony on the alleged insertions. ** "March 31,1964 Mr. Francisco Cervantes President, BORMAHECO, INC. 245 Buendia Avenue Makati, Rizal

Mr. Romeo Villonco has called me to his office and has returned to me your letter and the checks, as he is not agreeable to a cancellation of this deal with them on the purchase of your property at 245 Buendia Avenue, Makati, Rizal, for the following reasons: (1.) That this deal has been made after a Formal Written Offer from you after several lengthy verbal conferences between you, and which terms have been agreed upon; (2.) That after the Earnest Money had been received by you, I, as your official representative have followed the matter and have kept them informed on the progress of the deal with the NASSCO and the OEC, this being the only stipulation on the consummation of the deal; and as such made it necessary that the Villoncos mortgage several of their properties with the bank to have ready the Cash payment required by you as per your Contractual Letter of March 4, 1964; (3.) That in all big business firms, the presence of a large amount of spot cash is always not present, thus it was necessary that the Villoncos raised this spot cash which was one of your requirements for this sale; (4.) That the Villoncos have put aside all other projects in favor of this deal, since the same requires a large amount of cash, not only for the payment of the land, but also for the cost of the new building to be erected; (5.) That the stipulation on the letters of February 12, 1964 and March 4, 1964 wherein the approval and consequent purchase of the lot at Sta. Ana, Manila has been removed by the approval of your bid purchase of the property of the NASSCO, at Punta, Sta. Ana which has been approved by the NASSCO BOARD on March 3, 1964 and the OEC on March 25, 1964; For all the above reasons, Mr. Romeo Villonco will not agree to your backing out of this deal or rescinding your Contractual Agreement with them for any other reason whatsoever. Trusting that you will see your way clear in all this, I am Very truly yours, (Sgd.) Edith Perez de Tagle (Typed) EDITH PEREZ DE TAGLE Realtor"

G.R. No. L-31018 June 29, 1973 LORENZO VELASCO AND SOCORRO J. VELASCO, petitioners, vs. HONORABLE COURT OF APPEALS and MAGDALENA ESTATE, INC., respondents. Napoleon G. Rama for petitioners. Dominador L. Reyes for private respondent.

counsel for plaintiff-appellants, the Court RESOLVED to DENY the said motion to dismiss. Upon consideration of the registry-mailed motion of counsel for plaintiffs appellants praying on the grounds therein stated for an extension of 30 days from January 15, 1969 within which to file the printed record on appeal, the Court RESOLVED to GRANT the said motion and the printed record on appeal which has already been filed is ADMITTED. On March 11, 1969, the respondent prayed for a reconsideration of the above-mentioned resolution, averring that the Court of Appeals had been misled bythe petitioners' "deceitful allegation that they filed the printed record on appeal within the reglementary period," because according to a certification issued by the postmaster of Makati, Rizal, the records of the said post office failed to reveal that on January 15, 1969 the date when their motion for extension of time to file the printed record on appeal was supposedly mailed by the petitioners there was any letter deposited there by the petitioners' counsel. The petitioners opposed the motion for reconsideration. They submitted to the appellate court the registry receipts (numbered 0215 and 0216), both stampled January 15, 1969, which were issued by the receiving clerk of the registry section of the Makati Post Office covering the mails for the disputed motion for extension of time to file their printed record on appeal and the affidavit of its mailing clerk Juanito D. Quiachon, to prove that their motion for extension was timely filed and served on the Court of Appeals and the respondent, respectively. After several other pleadings and manifestations were filed by the parties relative to the issue raised by the respondent's above-mentioned motion for reconsideration, the Court of Appeals promulgated on June 28, 1969, its questioned resolution, the dispositive portion of which reads as follows: WHEREFORE, the motion for reconsideration filed on March 11, 1969 is granted and appeal interposed by plaintiff-appellants from the judgment of the court below is hereby dismissed for their failure to file their printed Record on Appeal within the period authorized by this Court. Atty. Patrocino R. Corpuz [counsel of the petitioner] is required to show cause within ten (10) days from notice why he should not be suspended from the practice of his necessary investigation against Juanito D. Quiachon of the Salonga, Ordoez, Yap, Sicat & Associates Law Office, Suite 319 337 Rufino Building, Ayala Avenue, Makati Post Office, to file the appropriate criminal action against them as may be warranted in the premises, and to report to this Court within thirty (30) days the action he has taken thereon. The foregoing desposition was based on the following findings of the Court of Appeals: An examination of the Rollo of this case, particularly the letter envelope on page 26 thereof, reveals that on January 15, 1969, plaintiffs supposedly mailed via registered mail from the Post Office of Makati, Rizal their motion for extension of 30 days from that date to file their printed Record on Appeal, under registered letter No. 0216. However, in an official certification, the Postmaster of Makati states that the records of his office disclose: (a) that there were no registered letters Nos. 0215 and 0216 from the Salonga, Ordoez, Yap, Sicat & Associates addressed to Atty. Abraham F. Sarmiento, 202 Magdalena Building, Espaa Ext., Quezon

CASTRO, J.: This is a petition for certiorari and mandamus filed by Lorenzo Velasco and Socorro J. Velasco (hereinafter referred to as the petitioners) against the resolution of the Court of Appeals dated June 28, 1969 in CA-G.R. 42376, which ordered the dismissal of the appeal interposed by the petitioners from a decision of the Court of First Instance of Quezon City on the ground that they had failed seasonably to file their printed record on appeal. Under date of November 3, 1968, the Court of First Instance of Quezon City, after hearing on the merits, rendered a decision in civil case 7761, dismissing the complaint filed by the petitioners against the Magdalena Estate, Inc. (hereinafter referred to as the respondent) for the purpose of compelling specific performance by the respondent of an alleged deed of sale of a parcel of residential land in favor of the petitioners. The basis for the dismissal of the complaint was that the alleged purchase and sale agreement "was not perfected". On November 18, 1968, after the perfection of their appeal to the Court of Appeals, the petitioners received a notice from the said court requiring them to file their printed record on appeal within sixty (60) days from receipt of said notice. This 60-day term was to expire on January 17, 1969. Allegedly under date of January 15, 1969, the petitioners allegedly sent to the Court of Appeals and to counsel for the respondent, by registered mail allegedly deposited personally by its mailing clerk, one Juanito D. Quiachon, at the Makati Post Office, a "Motion For Extension of Time To File Printed Record on Appeal." The extension of time was sought on the ground "of mechanical failures of the printing machines, and the voluminous printing jobs now pending with the Vera Printing Press. ..." On February 10, 1969, the petitioners filed their printed record on appeal in the Court of Appeals. Thereafter, the petitioners received from the respondent a motion filed on February 8, 1969 praying for the dismissal of the appeal on the ground that the petitioners had failed to file their printed record on appeal on time. Acting on the said motion to dismiss the appeal, the Court of Appeals, on February 25, 1969, issued the following resolution: Upon consideration of the motion of counsel for defendant-appellee praying on the grounds therein stated that the appeal be dismissed in accordance with Rules of Court, and of the opposition thereto filed by

City, and to the Court of Appeals, Manila, respectively, that were posted in the Post Office of Makati, Rizal, on January 15, 1969; (b) that there is a registered letter numbered 215 but that the same was posted on January 3, 1969 by Enriqueta Amada of 7 Angel, Pasillo F-2, Cartimar, Pasay City, as sender, and Giral Amasan of Barrio Cabuniga-an, Sto. Nio, Samar, as addressee; and that there is also a registered letter numbered 216; but that the same was likewise posted on January 3, 1969 with E.B.A. Construction of 1049 Belbar Building, Metropolitan, Pasong Tamo, Makati, as sender, and Pres. R. Nakaya of the United Pacific Trading Co., Ltd., 79, 6 Chamo, Nakatu, Yokohari, Japan, as addressee; (c) that on January 15, 1969, the registered letters posted at the Makati Post Office were numbered consecutively from 1001-2225, inclusive, and none of these letters was addressed to Atty. Abraham F. Sarmiento of to the Court of Appeals; (d) that in Registry Bill Book No. 30 for Quezon City as well as that Manila, corresponding to February 7, 1969, there are entries covering registered letters Nos. 0215 and 0216 for dispatch to Quezon City and Manila, respectively; however, such registry book for February 7, 1969 shows no letters with such numbers posted on the said date. The Acting Postmaster of the Commercial Center Post Office of Makati, Rizal, further certifies that "Registry Receipts Nos. 0215 and 0216 addressed to Atty. Abraham F. Sarmiento of the Magdalena Estate, Quezon City and the Honorable Court of Appeals, respectively, does not appear in our Registry Record Book which was allegedly posted at this office on January 15, 1969." From the foregoing, it is immediately apparent that the motion for extension of time to file their Record on Appeal supposedly mailed by the plaintiffs on January 15, 1969 was not really mailed on that date but evidently on a date much later than January 15, 1969. This is further confirmed by the affidavit of Flaviano Malindog, a letter carrier of the Makati Post Office, which defendant attached as Annex 1 to its supplemental reply to plaintiffs' opposition to the motion for reconsideration. In his said affidavit, Malindog swore among others: 'That on February 7, 1969, between 12:00 o'clock noon and 1:00 o'clock in the afternoon, JUANITO D. QUIACHON approached me at the Makati Post Office and talked to me about certain letters which his employer had asked him to mail and that I should help him do something about the matter; but I asked him what they were all about, and he told me that they were letters for the Court of Appeals and for Atty. Abraham Sarmiento and that his purpose was to show that they were posted on January 15, 1969; that I inquired further, and he said that the letters were not so important and that his only concern was to have them post maker January 15, 1969;

'That believing the word of JUANITO D. QUIACHON that the letters were not really important I agreed to his request; whereupon, I got two (2) registry receipts from an old registry receipt booklet which is no longer being used and I numbered them 0215 for the letter addressed to Atty. Abraham Sarmiento in Quezon City and 0216 for the letter addressed to the Court of Appeals, Manila; that I placed the same numbering on the respective envelopes containing the letters; and that I also post maker them January 15, 1969; 'That to the best of my recollection I wrote the correct date of posting, February 7, 1969, on the back of one or both of the registry receipts above mentioned; 'That the correct date of posting, February 7, 1969 also appears in the Registry Bill Books for Quezon City and Manila where I entered the subject registered letters; Of course, plaintiff's counsel denies the sworn statement of Malindog and even presented the counter-affidavit of one of his clerk by the name of Juanito D. Quiachon. But between Malindog, whose sworn statement is manifestly a declaration against interest since he can be criminally prosecuted for falsification on the basis thereof, and that of Quiachon, whose statement is self-serving, we are very much inclined to give greater weight and credit to the former. Besides, plaintiffs have not refuted the facts disclosed in the two (2) official certifications above mentioned by the Postmakers of Makati, Rizal. These two (2) certifications alone, even without to move this Court to reconsider its resolution of February 25, 1969 and order the dismissal of this appeal. On September 5, 1969, after the rendition of the foregoing resolution, the Court of Appeals promulgated another, denying the motion for reconsideration of the petitioner, but, at the same time, accepting as satisfactory the explanation of Atty. Patrocino R. Corpuz why he should not be suspended from the practice of the legal profession. On September 20, 1969, the First Assistant Fiscal of Rizal notified the Court of Appeals that he had found aprima facie case against Flaviano C. Malindog and would file the corresponding information for falsification of public documents against him. The said fiscal, however, dismissed the complaint against Quiachon for lack of sufficient evidence. The information subsequently filed against Malindog by the first Assistance Fiscal of Rizal reads as follow: That on or about the 7th day of February 1969, in the municipality of Makati, province of Rizal, and a place within the jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating together and mutually helping and aiding with John Doe, whose true identity and present whereabout is still unknown, did then and there

willfully, unlawfully and feloniously falsify two registry receipts which are public documents by reason of the fact that said registry receipts are printed in accordance with the standard forms prescribed by the Bureau of Posts, committed as follows: the above-named accused John Doe, on the date above-mentioned approached and induced the accused Malindog, a letter-carrier at the Makati Post Office, to postmark on Abraham Sarmiento in Quezon City, and the other to the Court of Appeals, Manila, and the accused Malindog, acceding to the inducement of, and in conspiracy with, his co-accused John Doe, did then and there willfully and feloniously falsify said registry receipts of the Makati Post Office on January 15, 1969, thereby making it appear that the said sealed envelopes addressed to Atty. Sarmiento and the Court of Appeals were actually posted, and causing it to appear that the Postmaster of Makati participated therein by posting said mail matters on January 15, 1969, when in truth and in fact he did not so participate. The petitioner contend that in promulgating its questioned resolution, the Court of Appeals acted without or in excess of jurisdiction, or with such whimsical and grave abuse of discretion as to amount to lack of jurisdiction, because (a) it declared that the motion for extension of time to file the printed record on appeal was not mailed on January 15, 1969, when, in fact, it was mailed on the record on appeal was filed only on February 10, 1969, beyond the time authorized by the appellate court, when the truth is that the said date of filing was within the 30-day extension granted by it; (c) the adverse conclusion of the appellate court are not supported by the records of the case, because the said court ignored the affidavit of the mailing clerk of the petitioners' counsel, the registry receipts and postmarked envelopes (citing Henning v. Western Equipment, 62 Phil. 579, and Caltex Phil., Inc. v. Katipunan Labor Union, 52 O.G. 6209), and, instead, chose to rely upon the affidavit of the mail carrier Malindog, which affidavit was prepared by counsel for the respondent at the affiant himself so declared at the preliminary investigation at the Fiscal's office which absolved the petitioners' counsel mailing clerk Quiachon from any criminal liability; (d) section 1, Rule 50 of the Rules of Court, which enumerates the grounds upon which the Court of Appeals may dismiss an appeal, does not include as a ground the failure to file a printed record on appeal; (e) the said section does not state either that the mismailing of a motion to extend the time to file the printed record on appeal, assuming this to be the case, may be a basis for the dismissal of the appeal; (f) the Court of Appeals has no jurisdiction to revoke the extention of time to file the printed record on appeal it had granted to the petitioners based on a ground not specified in section 1, Rule 50 of the Rules of Court; and (g) the objection to an appeal may be waived as when the appellee has allowed the record on appeal to be printed and approved (citing Moran, Vol. II, p. 519). Some of the objections raised by the petitioners to the questioned resolution of the Court of Appeals are obviously matters involving the correct construction of our rules of procedure and, consequently, are proper subjects of an appeal by way of certiorari under Rule 45 of the Rules of Court, rather than a special civil action for certiorari under Rule 65. The petitioners, however, have correctly appreciated the nature of its objections and have asked this Court to treat the instant petition as an appeal by way of certiorari under Rule 45 "in the event ... that this Honorable Supreme Court should deem that an appeal is an adequate remedy ..." The nature of the case at bar permits, in our view, a disquisition of both types of assignments.

We do not share the view of the petitioners that the Court of Appeals acted without or in excess of jurisdiction or gravely abused its discretion in promulgating the questioned resolution. While it is true that stamped on the registry receipts 0215 and 0215 as well as on the envelopes covering the mails in question is the date "January 15, 1969," this, by itself, does not establish an unrebuttable presumption of the fact of date of mailing. Henning and Caltex, cited by the petitioners, are not in point because the specific adjective issue resolved in those cases was whether or not the date of mailing a pleading is to be considered as the date of its filing. The issue in the case at bar is whether or not the motion of the petitioners for extension of time to file the printed record on appeal was, in point of fact, mailed (and, therefore, filed) on January 15, 1969. In resolving this issue in favor of the respondent, this Court finds, after a careful study and appraisal of the pleadings, admissions and denials respectively adduced and made by the parties, that the Court of Appeals did not gravely abuse its discretion and did not act without or in excess of its jurisdiction. We share the view of the appellate court that the certifications issued by the two postmasters of Makati, Rizal and the sworn declaration of the mail carrier Malindog describing how the said registry receipts came to be issued, are worthy of belief. It will be observed that the said certifications explain clearly and in detail how it was improbable that the petitioners' counsel in the ordinary course of official business, while Malindog's sworn statement, which constitutes a very grave admission against his own interest, provides ample basis for a finding that where official duty was not performed it was at the behest of a person interested in the petitioners' side of the action below. That at the preliminary investigation at the Fiscal's office, Malindog failed to identify Quiachon as the person who induced him to issue falsified receipts, contrary to what he declared in his affidavit, is of no moment since the findings of the inquest fiscal as reflected in the information for falsification filed against Malindog indicate that someone did induce Malindog to make and issue false registry receipts to the counsel for the petitioners. This Court held in Bello vs. Fernando 1 that the right to appeal is nota natural right nor a part of due process; it is merely a statutory privilege, and may be exercised only in the manner provided by law. In this connection, the Rule of Court expressly makes it the duty of an appellant to file a printed record on appeal with the Court of Appeals within sixty (60) record on appeal approved by the trial court has already been received by the said court. Thus, section 5 of Rule 46 states: Sec. 5. Duty of appellant upon receipt of notice. It shall be the duty of the appellant within fifteen (15) days from the date of the notice referred to in the preceding section, to pay the clerk of the Court of Appeals the fee for the docketing of the appeal, and within sixty (60) days from such notice to submit to the court forty (40) printed copies of the record on appeal, together with proof of service of fifteen (15) printed copies thereof upon the appelee. As the petitioners failed to comply with the above-mentioned duty which the Rules of Court enjoins, and considering that, as found by the Court of Appeals, there was a deliberate effort on their part to mislead the said Court in grating them an extension of time within which to file their printed record on appeal, it stands to reason that the appellate court cannot be said to

have abused its discretion or to have acted without or in excess of its jurisdiction in ordering the dismissal of their appeal. Our jurisprudence is replete with cases in which this Court dismissed an appeal on grounds not mentioned specifically in Section 1, Rule 50 of the Rules of Court. (See, for example, De la Cruz vs. Blanco, 73 Phil. 596 (1942); Government of the Philippines vs. Court of Appeals, 108 Phil. 86 (1960); Ferinion vs. Sta. Romana, L-25521, February 28, 1966, 16 SCRA 370, 375). It will likewise be noted that inasmuch as the petitioners' motion for extension of the period to file the printed record on appeal was belated filed, then, it is as though the same were nonexistent, since as this Court has already stated in Baquiran vs. Court of Appeals, 2 "The motion for extension of the period for filing pleadings and papers in court must be made before the expiration of the period to be extended." The soundness of this dictum in matters of procedure is self-evident. For, were the doctrine otherwise, the uncertainties that would follow when litigants are left to determine and redetermine for themselves whether to seek further redress in court forthwith or take their own sweet time will result in litigations becoming more unreable than the very grievances they are intended to redness. The argument raised by the petitioner that the objection to an appeal maybe waived, as when the appellee allows the record on appeal to be printed and approved is likewise not meritorious considering that the respondent did file a motion in the Court of Appeals on February 8, 1969 praying for the dismissal of the below of the petitioners had not yet filed their record on appeal and, therefore, must be considered to have abandoned their appeal. In further assailing the questioned resolution of the Court of Appeals, the petitioners also point out that on the merits the equities of the instant case are in their favor. A reading of the record, however, persuades us that the judgment a quo is substantially correct and morally just. The appealed decision of the court a quo narrates both the alleged and proven facts of the dispute between the petitioners and the respondent, as follows: This is a suit for specific performance filed by Lorenzo Velasco against the Magdalena Estate, Inc. on the allegation that on November 29, 1962 the plaintiff and the defendant had entered into a contract of sale (Annex A of the complaint) by virtue of which the defendant offered to sell the plaintiff and the plaintiff in turn agreed to buy a parcel of land with an area of 2,059 square meters more particularly described as Lot 15, Block 7, Psd-6129, located at No. 39 corner 6th Street and Pacific Avenue, New Manila, this City, for the total purchase price of P100,000.00. It is alleged by the plaintiff that the agreement was that the plaintiff was to give a down payment of P10,000.00 to be followed by P20,000.00 and the balance of P70,000.00 would be paid in installments, the equal monthly amortization of which was to be determined as soon as the P30,000.00 down payment had been completed. It is further alleged that the plaintiff paid down payment of P10,000.00 on November 29, 1962 as per receipt No. 207848 (Exh. "A")and that when on January 8, 1964 he tendered to the defendant the payment of the additional P20,000.00 to complete the P30,000.00 the defendant refused to accept and that eventually it likewise

refused to execute a formal deed of sale obviously agreed upon. The plaintiff demands P25,000.00 exemplary damages, P2,000.00 actual damages and P7,000.00 attorney's fees. The defendant, in its Answer, denies that it has had any direct dealings, much less, contractual relations with the plaintiff regarding the property in question, and contends that the alleged contract described in the document attached to the complaint as Annex A is entirely unenforceable under the Statute of Frauds; that the truth of the matter is that a portion of the property in question was being leased by a certain Socorro Velasco who, on November 29, 1962, went to the office of the defendant indicated her desire to purchase the lot; that the defendant indicated its willingness to sell the property to her at the price of P100,000.00 under the condition that a down payment of P30,000.00 be made, P20,000.00 of which was to be paid on November 31, 1962, and that the balance of P70,000.00 including interest a 9% per annum was to be paid on installments for a period of ten years at the rate of P5,381.32 on June 30 and December of every year until the same shall have been fully paid; that on November 29, 1962 Socorro Velasco offered to pay P10,000.00 as initial payment instead of the agreed P20,000.00 but because the amount was short of the alleged P20,000.00 the same was accepted merely as deposited and upon request of Socorro Velasco the receipt was made in the name of her brother-in-law the plaintiff herein; that Socorro Velasco failed to complete the down payment of P30,000.00 and neither has she paid any installments on the balance of P70,000.00 up to the present time; that it was only on January 8, 1964 that Socorro Velasco tendered payment of P20,000.00, which offer the defendant refused to accept because it had considered the offer to sell rescinded on account of her failure to complete the down payment on or before December 31, 1962. The lone witness for the plaintiff is Lorenzo Velasco, who exhibits the receipt, Exhibits A, issued in his favor by the Magdalena Estate, Inc., in the sum of P10,000.00 dated November 29, 1962. He also identifies a letter (Exh. B)of the Magdalena Estate, Inc. addressed to him and his reply thereto. He testifies that Socorro Velasco is his sister-in-law and that he had requested her to make the necessary contacts with defendant referring to the purchase of the property in question. Because he does not understand English well, he had authorized her to negotiate with the defendant in her whenever she went to the office of the defendant, and as a matter of fact, the receipt for the P10,000.00 down payment was issued in his favor. The plaintiff also depends on Exhibit A to prove that there was a perfected follows: "Earnest money for the purchase of Lot 15, Block 7, Psd-6129, Area 2,059 square meters including improvements thereon P10,000.00." At the bottom of Exhibit A the following appears: "Agreed price: P100,000.00, P30,000.00 down payment, bal. in 10 years." To prove that the Magdalena Estate, Inc. had been dealing all along with him and not with his sister-in-law and that the Magdalena Estate, Inc. knew very well that he was the person interested in the lot in question and not his sister-in-law, the plaintiff offers in evidence five checks all drawn

by him in favor of Magdalena Estate, Inc. for payment of the lease of the property. .... There does not seem to be any dispute regarding the fact that the Velasco family was leasing this property from the Magdalena Estate, Inc. since December 29, 1961; that the Velasco family sometime in 1962 offered to purchase the lot as a result of which Lorenzo Velasco thru Socorro Velasco made the P10,000.00 deposit or, in the language of the defendant 'earnest money or down payment' as evidenced by Exhibit A. The only matter that remains to be decided is whether the talks between the Magdalena Estate, Inc. and Lorenzo Velasco either directly or thru his sister-in-law Socorro Velasco ever ripened into a consummated sale. It is the position of the defendant (1) that the sale was never consummated and (2) that the contract is unenforceable under the Statute of Frauds. The court a quo agreed with the respondent's (defendant therein) contention that no contract of sale was perfected because the minds of the parties did not meet "in regard to the manner of payment." The court a quo appraisal of this aspect of the action below is correct. The material averments contained in the petitioners' complaint themselves disclose a lack of complete "agreement in regard to the manner of payment" of the lot in question. The complaint states pertinently: 4. That plaintiff and defendant further agreed that the total down payment shall by P30,000.00, including the P10,000.00 partial payment mentioned in paragraph 3 hereof, and that upon completion of the said down payment of P30,000.00, the balance of P70,000.00 shall be said by the plaintiff to the defendant in 10 years from November 29, 1962; 5. That the time within the full down payment of the P30,000.00 was to be completed was not specified by the parties but the defendant was duly compensated during the said time prior to completion of the down payment of P30,000.00 by way of lease rentals on the house existing thereon which was earlier leased by defendant to the plaintiff's sister-inlaw, Socorro J. Velasco, and which were duly paid to the defendant by checks drawn by plaintiff. It is not difficult to glean from the aforequoted averments that the petitioners themselves admit that they and the respondent still had to meet and agree on how and when the down-payment and the installment payments were to be paid. Such being the situation, it cannot, therefore, be said that a definite and firm sales agreement between the parties had been perfected over the lot in question. Indeed, this Court has already ruled before that a definite agreement on the manner of payment of the purchase price is an essential element in the formation of a binding and unforceable contract of sale. 3 The fact, therefore, that the petitioners delivered to the respondent the sum of P10,000 as part of the down-payment that they had to pay cannot be considered as sufficient proof of the perfection of any purchase and sale agreement between the parties herein under article 1482 of the new Civil Code, as the petitioners themselves admit that some essential matter the terms of payment still had to be mutually covenanted. ACCORDINGLY, the instant petitioner is hereby denied. No pronouncement as to costs.

Makalintal, Makasiar and Esguerra, JJ., concur. Fernando, J., took no part. Barredo, J.: The petitioners having clearly and without sufficient justification failed to prosecute their appeal within the period allowed by the rules, I vote to deny the petition, and consistently with my view already expressed on previous occasions, any discussion of the merits of the appeal is unwarranted, particularly, in instances like the present, wherein the same does not appear to me, upon cursory examination to be beyond doubt..

Separate Opinions

TEEHANKEE, J., dissenting: I dissent from the main opinion penned by Mr. Justice Castro affirming the appellate court's dismissal of petitioner' pending appeal before it because of late submittal of the printed record on appeal (by 24 days), on appeal when the appeal was indisputably timely perfected does not call for the imposition of the capital penalty of dismissal of the appeal. As in my separate opinion in Sison vs. Gatchalian 1 promulgated just a few weeks earlier, I must note with gratification the special pains taken in the main opinion to discuss nevertheless the substance and merit of the aborted appeal and to record the Court's policy in such cases (of dismissal of appeals timely perfected for failure to comply with certain requirements of the Rules) of invariably satisfying itself that there is "a rational basis for the result by the trial court" 2 in the judgment sought to be reviewed by the appeal. In the case at bar, however, I believe that the merits and equities invoked by petitionersappellants in support of their action for specific performance of their agreement with respondent for the purchase of the parcel of land described in the complaint for the "agreement price (of): P10,000.00, P30,000.00 down payment, bal. in 10 years" (which is a matter of mathematical computation), with petitioners having admittedly made a down payment of P10,000.00 as "earnest money" which was accepted by respondent and continuing to pay respondent lease rentals for the time taken to complete the full down payment pending formalization of their contract, deserve a full-dress consideration of the appeal and legal principles involved with a decision on the merits of the case itself. Since two other members of the Court, viz, Justices Barredo and Antonio, have reserved their opinions on the merits of the appeals, as stated in their respective concurrences, I further consider this to be a case where the paramount considerations of substantial justice must take

precedence over the lateness (by 24 days) in the submittal of the printed record on appeal which in no way can be claimed to have prejudiced the substantial rights of respondent or delayed the cause of the administration of justice and that accordingly, such a technical trangression on counsel's part should not result in the drastic forfeiture of petitioners' right of appeal and of securing a possible of the adverse verdict of the lower court. As stated by Chief Justice Concepcion for the Court in Concepcion vs. Payatas Estate Improvements Co., Inc.,3 "After all, pleadings, as well as remedial laws, should by construed literally, in order that litigants may have ample opportunity to prove their respective claims, and that a possible denial of substantial justice, due to legal technicalities , may be avoided." This is but the very mandate of the Rules of Court: that they be "liberally construed in order to promote their object and to assist the determination of every action and proceeding" 4 and that "All pleadings shall be liberally construed so as to do substantial justice." 5 Here, the 60-day period for petitioners appellants "to submit .... forty (40) printed copies of the record on appeal" from notice on November 18, 1968 of receipt of the original typewritten record on appeal" from notice on November 18, 1968 of receipt of the original typewritten record on appeal in the appellate court 6 was to expire on January 17, 1969. Petitioners submitted their printed record on appeal on the 24th day after such expiry date, viz, on viz, on February 10, 1969. The appellate court admitted the printed record on appeal as per its original resolution of February 25, 1969 denying respondent's motion to dismiss the appeal, wherein it granted the registry-mailed motion of petitioners' counsel for a 30-day extension from January 15, 1969 within which to submit the same. Counsel's ground for such extension was from ground for such extension machines and voluminous printing jobs of the Vera Pinting Press, which they had contracted to do the printing job. Upon complaint of respondent, however, that petitioners' counsel, through its mailing clerk Juanito D. Quiachon, had deceived the appellate court into believing that their motion for extension had been registry mailed January 15, 1969 when actually it was so mailed late only on February 7, 1969, as borne out by the affidavit of Flaviano Malindog, a said post office which the appellate court believed as against Quiachon's counter-affidavit to the contrary the said court as per its resolution of June 28, 1969 granted respondent's motion for reconsideration and ordered the dismissal of petitioners' appeal "for their failure to file their printed record on appeal within the period authorized by this court." In the same resolution, Atty. Patrocino R. Corpus, as petitioners' counsel, was required to show cause "why he should not be suspended from the practice of his profession for deceit, falsehood and violation of his sworn duty to the Court," but subsequently, the appellate court as per its resolution of September 5, 1969 accepted as satisfactory said counsel's explanation and disclaimer of any wrongdoing. Acting upon the appellate court's directive to investigate the incident for the filing of appropriate criminal action against Quiachon and Malindog, the Rizal provincial fiscal found a prima facie case against Malindog (the letter-carrier) and charged him in the corresponding information for falsification of public documents but dismissed the complaint against Quiachon (the mailing clerk of petitioners' counsel) for lack of sufficient evidence since Malindog could not identify Quiachon ass the person who induced him to issue falsified registry receipts.

I concur with the main opinion in its ruling upholding the appellate court's factual findings, which I don't consider to be reviewable by this Court, grounded as they are on substantial evidence. Hence, for purposes of this review, such factual findings must be postulated, to wit, that the printed record on appeal was submitted 24 days late on February 10, 1969, that there was a deliberate effort on the part of an unknown person (John Doe in the in information) not petitioners nor their counsel nor Quiachon, the mailing clerk to induce Malindog to make and issue false registry receipts that showed that petitioners' counsel's motion for a 30day extension to submit the printed record on appeal was filed timely on January 15, 1959 rather late(by 21 days) on February 7, 1969. The general issue of law that confronts us then is this: is the 60-day period for submitting the printed record on appeal mandatory and jurisdictional or is this merely a procedural period on appeal (owing to a valid reason of mechanical failures and pressure of work of the printer) regardless of whether a motion for extension of time to submit the printed record on appeal was in fact filed or filed out of time after expiration of the original 60-day period, may in the appellate court's sound discretion in the interest of justice and equity be nevertheless allowed and appeal heard and decided on its merits? The 60-day period for submitting the printed record on appeal is obviously imposed as a procedural rule, under Rule 46, section 5, like many other time limitations imposed by the Rule of Court as indispensable to the prevention of needless dalays and necessary to the orderly and speedy discharge of judicial business. 7 But this 60-day period for submitting the printed record on appeal is to be distinguished from a court of first instance judgment under Rule 41, section 3, where failure to file the necessary notice, bond and record on appeal within the said 30-day period, if not duly extended, is fatal and calls for dismissal of the unperfected appeal under Rule 41, section 13. Here, the appeal had been long and timely duly perfected by petitioners. What is merely involved here is late filing (by 24 days) of the printed copies of the record on appeal, which this Court has held in Ever Ice Drop Factory vs. Court of Appeals 8 as "not indispensable to the jurisdiction of the appellate courts, the sole purpose of such printing being convenience in the handling, keeping and reading of the record on appeal." In the cited case of Ever, the Court applied the salutary rule of overlooking procedural deficiencies in the interest of substantial justice and set aside the appellate court's dismissal of the appeal (for non-inclusion in the joint record on appeal of the appellants' notice of appeal and date of receipt of the appealed decision on appeal"), ruling that "Inasmuch as Rule 41 is in that portion of the rules pertaining to the stage of the appeal process taking place in the trial court, it is but logical that the frame of reference, when the completeness of a record on appeal, as therein provided, is in question, must be the contents of said record as filed with said court, and not necessarily those of the printed one filed with the appellant court." As applied to the case at bar, therefore, I vote for the granting of the petition and to demand the appeal to the appellate court for disposition and decision of the merits, for the following considerations, in addition to those stated above and in my separate opinion in Sison, supra:

 Since the use of the false registry receipts appears in no way to be the making of petitioners themselves, who as clients may be presumed to be entirely unaware of the procedural requirements and of their counsel's action or inaction in complying therewith, the imposition of the capital of dismissal of petitioners' appeal is unduly severe; Such a harsh penalty appears to be in derogation of the interest and purpose of the Rules of Court the proper and just determination of a litigation. No substantial right of respondent has been prejudiced by the late submittal of the late submittal of the printed record, whereas petitioners' appeal would be forfeited through no fault or negligence on their part; While clients are generally bound by the actions or mistakes of their counsels, here no fault or wrongdoing has been attributed to either petitioners or their counsel. Their counsel's late submittal of the brief and of the corresponding motions for extension (by less than a month's time) is not rank failure to comply with the rule's requirements; The specific rule (Rule 46, section 5) does not provided for dismissal of the appeal for failure to submit theprinted record on appeal whereas section 7 of the rule prohibits "alternations, omissions or additions to the printed record" and does provide that "a violation of this prohibition shall be a ground for dismissal of the appeal." Even Rule 50, section 1 which provides that the appellate court may dismissal pending appeal for certain specific infractions of the rules, e.g. failure to pay the docketing fee or to file appellant's brief on time or "unauthorized alterations, omissions or additions in the printed record on appeal" (paragraph(e)) or want of specific assignment of errors or of page references to the record in appellant's brief, merely confers a power, not a duty, upon the mandatory, upon the said court to exercise its power to dismiss an appeal and dismissal has been ordered sparingly and only in extreme cases warranting dismissal; Withal, this Court may dismiss an appeal even on grounds not specifically mentioned in Rule 50, section 1, as where the wanton or inexcusable conduct of appellant in not complying with the rules warrants such dismissal. 9 But the Rules certainly do not authorize dismissal of a duly perfected appeal within the original 60-day period, such failure not being wanton or inexcusable. Yet such failure to file the printed record on appeal within the 60-day period (which was filed late by 24 days and had already been admitted) was the only ground stated by the appellate court for its peremptory dismissal of the appeal; Thus, the appellate court did not sustain respondent's contention that petitioners through counsel had deceived it through knowing use of the false registry receipts, since it exonerated counsel of any complicity. One gets the impression that the unnamed person had perhaps induced Malindog to issue the false receipts to cover up some neglect or fault on Quiachon's part in not having timely mailed counsel's extension motion, but neither the appellate court nor the fiscal made any such Quiachon was responsible for the deception, it does not seem fair to penalize petitioners with dismissal of their appeal; The appellate court thus disregarded the harmless error rule as provided in Rule 51, section 5 that "no error or defect in any ruling or order ... [such as its first order admitting the printed record on appeal in the belief that petitioners' motion for extension had been timely filed] .... is ground.... for setting aside, modifying or otherwise disturbing a judgment or order, unless refusal to take such action appears to the court inconsistent with substantial justice. The court at every stage of the proceeding must disregard any error or defect which does notaffect the substantial rights of the parties;" 10

Since the enactment as of September 9, 1968 of Republic Act 5440 providing that in most cases as specified therein, 11 review by this Court of final judgments and decrees of inferior courts shall be by petition for writ ofcertiorari and no longer by record on appeal some parties-appellants aggrieved by adverse to submit their appeals to this Court by means of records on appeal as approved by the lower court, contrary to the act's mandate that they should by presented by means of "petition .... filed and served in the form required for petitions for review by certiorari of decisions of the Court of Appeals." 12 Strictly speaking, such an error although abetted by the trial court's act of approving a record on appeal that is not required by the Act, could be considered fatal to the appeal. But following paramount considerations of substantial justice in preference to transgressions of form, as stressed in Sonora vs. Tongoy, 13 "the Court has been liberal in the implementation of Republic Act 5440 and instead of dismissing appeals coming up to Us by record on appeal, We have allowed the appellants to file the corresponding petition(for review by certiorari) provided the appeal by record on appeal had been duly perfected within the reglementary period. 14 This is to stress that even though the provision of Republic Act 5440 that such appeals shall be only on petitions for review by petitions by certiorari and no longer as a matter of right by record on appeal is of a mandatory character, this Court has nevertheless adopted a liberal construction and chosen to apply the principle of substantial justice in favor of one whose appeal was actually perfected on time rather than to sacrifice substance to form. In the language of Sonora, vis a vis the case at bar, "it is less than fair for respondents to attempt to cut off (petitioners') right to appeal by invoking the literal meaning of the language of the rules, disregarding their wise and practical construction already laid down by the Supreme Court." 15 In sensu contrario, applying the same principles of substantial justice the Court has in many cases seeking mandamus or reinstatement of disallowed appeals (although timely made) looked at the "substantive merits" of the proposed appeal and where "there is hardly any prospect of its being ultimately sucessful," denied mandamus, ruling as in Espiritu vs. CFI of Cavite 16 that" this Court has already ruled on several occasions, since as early as De la Cruz vs. Blanco, 73 Phil. 596 that mandamus to compel approval and certification of an appeal, even if otherwise well grounded, procedurally speaking, has to be appeal itself, and 'it would serve no useful purpose to reinstate' the same." Lucas vs. Mariano 17 was to the same effect with the Court sustaining therein petitioner's submittal "that from the point of view of the time of the taking of the appeal, petitioners, We are sufficiently convinced that their claim of title has no chance of being sustained even if other and further proceedings were to be held in the court below;" and Finally, adherence to a liberal construction of the procedural rules in order to attain their objective of substantial justice and of avoiding possible denials of substantial justice due to procedural technicalities does not mean non-enforcement of the Rules of Court which are universally recognized to be necessary to the orderly and speedy discharge of judicial business with the least delay. Compliance with the rules, which are not of mandatory character (such as the period for perfecting appeals, failure to observe which results in the automatic penalty of loss of the right to appeal) but of directory character to provide time tables and prevent needless delay in readying a duly perfected appeal for consideration and decision (such as the 60-day period for submittal of the printed record on appeal involved here, periods for filling of briefs and transcripts, through the imposition of appropriate disciplinary admonition or offending counsel, ranging from an contempt to even more drastic measures of administrative proceedings for disbarment against him, depending upon the gravity of the offense.

record on appeal" from notice on November 18, 1968 of receipt of the original typewritten record on appeal in the appellate court 6 was to expire on January 17, 1969. Petitioners submitted their printed record on appeal on the 24th day after such expiry date, viz, on viz, on February 10, 1969. Separate Opinions TEEHANKEE, J., dissenting: I dissent from the main opinion penned by Mr. Justice Castro affirming the appellate court's dismissal of petitioner' pending appeal before it because of late submittal of the printed record on appeal (by 24 days), on appeal when the appeal was indisputably timely perfected does not call for the imposition of the capital penalty of dismissal of the appeal. As in my separate opinion in Sison vs. Gatchalian 1 promulgated just a few weeks earlier, I must note with gratification the special pains taken in the main opinion to discuss nevertheless the substance and merit of the aborted appeal and to record the Court's policy in such cases (of dismissal of appeals timely perfected for failure to comply with certain requirements of the Rules) of invariably satisfying itself that there is "a rational basis for the result by the trial court" 2 in the judgment sought to be reviewed by the appeal. In the case at bar, however, I believe that the merits and equities invoked by petitionersappellants in support of their action for specific performance of their agreement with respondent for the purchase of the parcel of land described in the complaint for the "agreement price (of): P10,000.00, P30,000.00 down payment, bal. in 10 years" (which is a matter of mathematical computation), with petitioners having admittedly made a down payment of P10,000.00 as "earnest money" which was accepted by respondent and continuing to pay respondent lease rentals for the time taken to complete the full down payment pending formalization of their contract, deserve a full-dress consideration of the appeal and legal principles involved with a decision on the merits of the case itself. Since two other members of the Court, viz, Justices Barredo and Antonio, have reserved their opinions on the merits of the appeals, as stated in their respective concurrences, I further consider this to be a case where the paramount considerations of substantial justice must take precedence over the lateness (by 24 days) in the submittal of the printed record on appeal which in no way can be claimed to have prejudiced the substantial rights of respondent or delayed the cause of the administration of justice and that accordingly, such a technical trangression on counsel's part should not result in the drastic forfeiture of petitioners' right of appeal and of securing a possible of the adverse verdict of the lower court. As stated by Chief Justice Concepcion for the Court in Concepcion vs. Payatas Estate Improvements Co., Inc.,3 "After all, pleadings, as well as remedial laws, should by construed literally, in order that litigants may have ample opportunity to prove their respective claims, and that a possible denial of substantial justice, due to legal technicalities, may be avoided." This is but the very mandate of the Rules of Court: that they be "liberally construed in order to promote their object and to assist the determination of every action and proceeding" 4 and that "All pleadings shall be liberally construed so as to do substantial justice." 5 Here, the 60-day period for petitioners appellants "to submit .... forty (40) printed copies of the record on appeal" from notice on November 18, 1968 of receipt of the original typewritten The appellate court admitted the printed record on appeal as per its original resolution of February 25, 1969 denying respondent's motion to dismiss the appeal, wherein it granted the registry-mailed motion of petitioners' counsel for a 30-day extension from January 15, 1969 within which to submit the same. Counsel's ground for such extension was from ground for such extension machines and voluminous printing jobs of the Vera Pinting Press, which they had contracted to do the printing job. Upon complaint of respondent, however, that petitioners' counsel, through its mailing clerk Juanito D. Quiachon, had deceived the appellate court into believing that their motion for extension had been registry mailed January 15, 1969 when actually it was so mailed late only on February 7, 1969, as borne out by the affidavit of Flaviano Malindog, a said post office which the appellate court believed as against Quiachon's counter-affidavit to the contrary the said court as per its resolution of June 28, 1969 granted respondent's motion for reconsideration and ordered the dismissal of petitioners' appeal "for their failure to file their printed record on appeal within the period authorized by this court." In the same resolution, Atty. Patrocino R. Corpus, as petitioners' counsel, was required to show cause "why he should not be suspended from the practice of his profession for deceit, falsehood and violation of his sworn duty to the Court," but subsequently, the appellate court as per its resolution of September 5, 1969 accepted as satisfactory said counsel's explanation and disclaimer of any wrongdoing. Acting upon the appellate court's directive to investigate the incident for the filing of appropriate criminal action against Quiachon and Malindog, the Rizal provincial fiscal found a prima facie case against Malindog (the letter-carrier) and charged him in the corresponding information for falsification of public documents but dismissed the complaint against Quiachon (the mailing clerk of petitioners' counsel) for lack of sufficient evidence since Malindog could not identify Quiachon ass the person who induced him to issue falsified registry receipts. I concur with the main opinion in its ruling upholding the appellate court's factual findings, which I don't consider to be reviewable by this Court, grounded as they are on substantial evidence. Hence, for purposes of this review, such factual findings must be postulated, to wit, that the printed record on appeal was submitted 24 days late on February 10, 1969, that there was a deliberate effort on the part of an unknown person (John Doe in the in information) not petitioners nor their counsel nor Quiachon, the mailing clerk to induce Malindog to make and issue false registry receipts that showed that petitioners' counsel's motion for a 30day extension to submit the printed record on appeal was filed timely on January 15, 1959 rather late(by 21 days) on February 7, 1969. The general issue of law that confronts us then is this: is the 60-day period for submitting the printed record on appeal mandatory and jurisdictional or is this merely a procedural period on appeal (owing to a valid reason of mechanical failures and pressure of work of the printer) regardless of whether a motion for extension of time to submit the printed record on appeal was in fact filed or filed out of time after expiration of the original 60-day period, may in the

appellate court's sound discretion in the interest of justice and equity be nevertheless allowed and appeal heard and decided on its merits? The 60-day period for submitting the printed record on appeal is obviously imposed as a procedural rule, under Rule 46, section 5, like many other time limitations imposed by the Rule of Court as indispensable to the prevention of needless dalays and necessary to the orderly and speedy discharge of judicial business. 7 But this 60-day period for submitting the printed record on appeal is to be distinguished from a court of first instance judgment under Rule 41, section 3, where failure to file the necessary notice, bond and record on appeal within the said 30-day period, if not duly extended, is fatal and calls for dismissal of the unperfected appeal under Rule 41, section 13. Here, the appeal had been long and timely duly perfected by petitioners. What is merely involved here is late filing (by 24 days) of the printed copies of the record on appeal, which this Court has held in Ever Ice Drop Factory vs. Court of Appeals 8 as "not indispensable to the jurisdiction of the appellate courts, the sole purpose of such printing being convenience in the handling, keeping and reading of the record on appeal." In the cited case of Ever, the Court applied the salutary rule of overlooking procedural deficiencies in the interest of substantial justice and set aside the appellate court's dismissal of the appeal (for non-inclusion in the joint record on appeal of the appellants' notice of appeal and date of receipt of the appealed decision on appeal"), ruling that "Inasmuch as Rule 41 is in that portion of the rules pertaining to the stage of the appeal process taking place in the trial court, it is but logical that the frame of reference, when the completeness of a record on appeal, as therein provided, is in question, must be the contents of said record as filed with said court, and not necessarily those of the printed one filed with the appellant court." As applied to the case at bar, therefore, I vote for the granting of the petition and to demand the appeal to the appellate court for disposition and decision of the merits, for the following considerations, in addition to those stated above and in my separate opinion in Sison, supra: Since the use of the false registry receipts appears in no way to be the making of petitioners themselves, who as clients may be presumed to be entirely unaware of the procedural requirements and of their counsel's action or inaction in complying therewith, the imposition of the capital of dismissal of petitioners' appeal is unduly severe; Such a harsh penalty appears to be in derogation of the interest and purpose of the Rules of Court the proper and just determination of a litigation. No substantial right of respondent has been prejudiced by the late submittal of the late submittal of the printed record, whereas petitioners' appeal would be forfeited through no fault or negligence on their part; While clients are generally bound by the actions or mistakes of their counsels, here no fault or wrongdoing has been attributed to either petitioners or their counsel. Their counsel's late submittal of the brief and of the corresponding motions for extension (by less than a month's time) is not rank failure to comply with the rule's requirements; The specific rule (Rule 46, section 5) does not provided for dismissal of the appeal for failure to submit theprinted record on appeal whereas section 7 of the rule prohibits

"alternations, omissions or additions to the printed record" and does provide that "a violation of this prohibition shall be a ground for dismissal of the appeal." Even Rule 50, section 1 which provides that the appellate court may dismissal pending appeal for certain specific infractions of the rules, e.g. failure to pay the docketing fee or to file appellant's brief on time or "unauthorized alterations, omissions or additions in the printed record on appeal" (paragraph(e)) or want of specific assignment of errors or of page references to the record in appellant's brief, merely confers a power, not a duty, upon the mandatory, upon the said court to exercise its power to dismiss an appeal and dismissal has been ordered sparingly and only in extreme cases warranting dismissal; Withal, this Court may dismiss an appeal even on grounds not specifically mentioned in Rule 50, section 1, as where the wanton or inexcusable conduct of appellant in not complying with the rules warrants such dismissal. 9 But the Rules certainly do not authorize dismissal of a duly perfected appeal within the original 60-day period, such failure not being wanton or inexcusable. Yet such failure to file the printed record on appeal within the 60-day period (which was filed late by 24 days and had already been admitted) was the only ground stated by the appellate court for its peremptory dismissal of the appeal; Thus, the appellate court did not sustain respondent's contention that petitioners through counsel had deceived it through knowing use of the false registry receipts, since it exonerated counsel of any complicity. One gets the impression that the unnamed person had perhaps induced Malindog to issue the false receipts to cover up some neglect or fault on Quiachon's part in not having timely mailed counsel's extension motion, but neither the appellate court nor the fiscal made any such Quiachon was responsible for the deception, it does not seem fair to penalize petitioners with dismissal of their appeal; The appellate court thus disregarded the harmless error rule as provided in Rule 51, section 5 that "no error or defect in any ruling or order ... [such as its first order admitting the printed record on appeal in the belief that petitioners' motion for extension had been timely filed] .... is ground.... for setting aside, modifying or otherwise disturbing a judgment or order, unless refusal to take such action appears to the court inconsistent withsubstantial justice. The court at every stage of the proceeding must disregard any error or defect which does notaffect the substantial rights of the parties;" 10 Since the enactment as of September 9, 1968 of Republic Act 5440 providing that in most cases as specified therein, 11 review by this Court of final judgments and decrees of inferior courts shall be by petition for writ ofcertiorari and no longer by record on appeal some parties-appellants aggrieved by adverse to submit their appeals to this Court by means of records on appeal as approved by the lower court, contrary to the act's mandate that they should by presented by means of "petition .... filed and served in the form required for petitions for review by certiorari of decisions of the Court of Appeals." 12 Strictly speaking, such an error although abetted by the trial court's act of approving a record on appeal that is not required by the Act, could be considered fatal to the appeal. But following paramount considerations of substantial justice in preference to transgressions of form, as stressed in Sonora vs. Tongoy, 13 "the Court has been liberal in the implementation of Republic Act 5440 and instead of dismissing appeals coming up to Us by record on appeal, We have allowed the appellants to file the corresponding petition(for review by certiorari) provided the appeal by record on appeal had been duly perfected within the reglementary period. 14

 This is to stress that even though the provision of Republic Act 5440 that such appeals shall be only on petitions for review by petitions by certiorari and no longer as a matter of right by record on appeal is of a mandatory character, this Court has nevertheless adopted a liberal construction and chosen to apply the principle of substantial justice in favor of one whose appeal was actually perfected on time rather than to sacrifice substance to form. In the language of Sonora, vis a vis the case at bar, "it is less than fair for respondents to attempt to cut off (petitioners') right to appeal by invoking the literal meaning of the language of the rules, disregarding their wise and practical construction already laid down by the Supreme Court." 15 In sensu contrario, applying the same principles of substantial justice the Court has in many cases seeking mandamus or reinstatement of disallowed appeals (although timely made) looked at the "substantive merits" of the proposed appeal and where "there is hardly any prospect of its being ultimately sucessful," denied mandamus, ruling as in Espiritu vs. CFI of Cavite 16 that" this Court has already ruled on several occasions, since as early as De la Cruz vs. Blanco, 73 Phil. 596 that mandamus to compel approval and certification of an appeal, even if otherwise well grounded, procedurally speaking, has to be appeal itself, and 'it would serve no useful purpose to reinstate' the same." Lucas vs. Mariano 17 was to the same effect with the Court sustaining therein petitioner's submittal "that from the point of view of the time of the taking of the appeal, petitioners, We are sufficiently convinced that their claim of title has no chance of being sustained even if other and further proceedings were to be held in the court below;" and Finally, adherence to a liberal construction of the procedural rules in order to attain their objective of substantial justice and of avoiding possible denials of substantial justice due to procedural technicalities does not mean non-enforcement of the Rules of Court which are universally recognized to be necessary to the orderly and speedy discharge of judicial business with the least delay. Compliance with the rules, which are not of mandatory character (such as the period for perfecting appeals, failure to observe which results in the automatic penalty of loss of the right to appeal) but of directory character to provide time tables and prevent needless delay in readying a duly perfected appeal for consideration and decision (such as the 60-day period for submittal of the printed record on appeal involved here, periods for filling of briefs and transcripts, through the imposition of appropriate disciplinary admonition or offending counsel, ranging from an contempt to even more drastic measures of administrative proceedings for disbarment against him, depending upon the gravity of the offense.

G.R. No. L-36083 September 5, 1975 Spouses RAMON DOROMAL, SR., and ROSARIO SALAS, and Spouses RAMON DOROMAL, JR., and GAUDELIA VEGA, petitioners, vs. HON. COURT OF APPEALS and FILOMENA JAVELLANA, respondents. Salonga, Ordonez, Yap, Parlade and Associates and Marvin J. Mirasol for petitioners. Arturo H. Villanueva, Jr. for private respondent.

BARREDO, J.: Petition for review of the decision of the Court of Appeals in CA-G.R. No. 47945-R entitled Filomena Javellana vs. Spouses Ramon Doromal, Sr., et al. which reversed the decision of the Court of First Instance of Iloilo that had in turn dismissed herein private respondent Filomena Javellana's action for redemption of a certain property sold by her coowners to herein petitioners for having been made out of time. The factual background found by the Court of Appeals and which is binding on this Court, the same not being assailed by petitioners as being capricious, is as follows: IT RESULTING: That the facts are quite simple; Lot 3504 of the cadastral survey of Iloilo, situated in the poblacion of La Paz, one of its districts, with an area of a little more than 2- hectares was originally decreed in the name of the late Justice Antonio Horilleno, in 1916, under Original Certificate of Title No. 1314, Exh. A; but before he died, on a date not particularized in the record, he executed a last will and testament attesting to the fact that it was a co-ownership between himself and his brothers and sisters, Exh. C; so that the truth was that the owners or better stated, the co-owners were; beside Justice Horilleno, "Luis, Soledad, Fe, Rosita, Carlos and Esperanza," all surnamed Horilleno, and since Esperanza had already died, she was succeeded by her only daughter and heir herein plaintiff. Filomena Javellana, in the proportion of 1/7 undivided ownership each; now then, even though their right had not as yet been annotated in the title, the coowners led by Carlos, and as to deceased Justice Antonio Horilleno, his daughter Mary, sometime since early 1967, had wanted to sell their shares, or if possible if Filomena Javellana were agreeable, to sell the entire property, and they hired an acquaintance Cresencia Harder, to look for buyers, and the latter came to interest defendants, the father and son, named Ramon Doromal, Sr. and Jr., and in preparation for the execution of the sale, since the brothers and sisters Horilleno were scattered in various parts of the country, Carlos in Ilocos Sur, Mary in Baguio, Soledad and Fe, in Mandaluyong, Rizal, and Rosita in Basilan City, they all executed various powers of attorney in favor of their niece, Mary H.

Jimenez Exh. 1-8, they also caused preparation of a power of attorney of identical tenor for signature by plaintiff, Filomena Javellana, Exh. M, and sent it with a letter of Carlos, Exh. 7 dated 18 January, 1968 unto her thru Mrs. Harder, and here, Carlos informed her that the price was P4.00 a square meter, although it now turns out according to Exh. 3 that as early as 22 October, 1967, Carlos had received in check as earnest money from defendant Ramon Doromal, Jr., the sum of P5,000.00 and the price therein agreed upon was five (P5.00) pesos a square meter as indeed in another letter also of Carlos to Plaintiff in 5 November, 1967, Exh. 6, he had told her that the Doromals had given the earnest money of P5,000.00 at P5.00 a square meter, at any rate, plaintiff not being agreeable, did not sign the power of attorney, and the rest of the co-owners went ahead with their sale of their 6/7, Carlos first seeing to it that the deed of sale by their common attorney in fact, Mary H. Jimenez be signed and ratified as it was signed and ratified in Candon, Ilocos Sur, on 15 January, 1968, Exh. 2, then brought to Iloilo by Carlos in the same month, and because the Register of Deeds of Iloilo refused to register right away, since the original registered owner, Justice Antonio Horilleno was already dead, Carlos had to ask as he did, hire Atty. Teotimo Arandela to file a petition within the cadastral case, on 26 February, 1968, for the purpose, Exh. C, after which Carlos returned to Luzon, and after compliance with the requisites of publication, hearing and notice, the petition was approved, and we now see that on 29 April, 1968, Carlos already back in Iloilo went to the Register of Deeds and caused the registration of the order of the cadastral court approving the issuance of a new title in the name of the coowners, as well as of the deed of sale to the Doromals, as a result of which on that same date, a new title was issued TCT No. 23152, in the name of the Horillenos to 6/7 and plaintiff Filomena Javellana to 1/7, Exh. D, only to be cancelled on the same day under TCT No. 23153, Exh. 2, already in the names of the vendees Doromals for 6/7 and to herein plaintiff, Filomena Javellana, 1/7, and the next day 30 April, 1968, the Doromals paid unto Carlos by check, the sum of P97,000.00 Exh. 1, of Chartered Bank which was later substituted by check of Phil. National Bank, because there was no Chartered Bank Branch in Ilocos Sur, but besides this amount paid in check, the Doromals according to their evidence still paid an additional amount in cash of P18,250.00 since the agreed price was P5.00 a square meter; and thus was consummated the transaction, but it is here where complications set in, On 10 June, 1968, there came to the residence of the Doromals in Dumangas, Iloilo, plaintiff's lawyer, Atty. Arturo H. Villanueva, bringing with him her letter of that date, reading,

1 8 9 , B a c o l o d C i t y J u n e 1 0 , 1 9 6 8 Mr. & Mrs. Ramon Doromal, Sr. and Mr. and Mrs. Ramon Doromal, Jr. "Dumangas Iloilo Dear Mr. and Mrs. Doromal: The bearer of this letter is my nephew, Atty. Arturo H. Villanueva, Jr., of this City. Through him, I am making a formal offer to repurchase or redeem from you the 6/7 undivided share in Lot No. 3504, of the Iloilo Cadastre, which you bought from my erstwhile co-owners, the Horillenos, for the sum of P30,000.00, Atty. Villanueva has with him the sum of P30,000.00 in cash, which he will deliver to you as soon as you execute the contract of sale in my favor.

Thank you very much for whatever favorable consideration you can give this request. V e r y t r u l y y o u r s ,

N A " p. 26, Exh. "J", Manual of Exhibits. and then and there said lawyer manifested to the Doromals that he had the P30,000.00 with him in cash, and tendered it to them, for the exercise of the legal redemption, the Doromals were aghast, and refused. and the very next day as has been said. 11 June, 1968, plaintiff filed this case, and in the trial, thru oral and documentary proofs sought to show that as coowner, she had the right to redeem at the price stated in the deed of sale, Exh. 2, namely P30,000.00 of the but defendants in answer, and in their evidence, oral and documentary sought to show that plaintiff had no more right to redeem and that if ever she should have, that it should be at the true and real price by them paid, namely, the total sum of P115,250.00, and trial judge, after hearing the evidence, believed defendants, that plaintiff had no more right, to redeem, because, "Plaintiff was informed of the intended sale of the 6/7 share belonging to the Horillenos." and that, "The plaintiff have every reason to be grateful to Atty. Carlos Horilleno because in the petition for declaration of heirs of her late uncle Antonio Horilleno in whose name only the Original Certificate of Title covering the Lot in question was issued, her uncle Atty. Carlos Horilleno included her as one of the heirs of said Antonio Horilleno. Instead, she filed this case to redeem the 6/7 share sold to the Doromals for the simple reason that the consideration in the deed of sale is the sum of P30,000.00 only instead of P115,250.00 approximately which was actually paid by the defendants to her co-owners, thus she wants to enrich herself at the expense of her own blood relatives who are her aunts, uncles and cousins. The consideration of P30,000.00 only was placed in the deed of sale to minimize the payment of the registration fees, stamps, and sales tax. pp. 77-78, R.A., and dismiss and further condemned plaintiff to pay attorney's fees, and moral and exemplary damages as set forth in few pages back, it is because of this that plaintiff has come here and contends, that Lower Court erred: "I. ... in denying plaintiff-appellant, as a co-owner of Lot No. 3504, of the Iloilo Cadastre, the right of legal redemption under Art. 1620, of the Civil Code: "II. ... as a consequence of the above error, in refusing to order the defendants-appellees, the vendees of a portion of the aforesaid Lot No.

3504 which they bought from the co-owners of the plaintiff-appellant, to reconvey the portion they purchased to the herein plaintiff-appellant.. "III. ... in admitting extrinsic evidence in the determination of the consideration of the sale, instead of simply adhering to the purchase price of P30,000.00, set forth in the pertinent Deed of Sale executed by the vendors and owners of the plaintiff-appellant in favor of the defendantsappellees. "IV. ... in dismissing the complaint filed in this case." pp. 1-3, Appellant's Brief,. which can be reduced to the simple question of whether or not on tile basis of the evidence and the law, the judgment appealed from should be maintained; (Pp. 16-22, Record.) .

Upon these facts, the Court of Appeals reversed the trial court's decision and held that although respondent Javellana was informed of her co-owners' proposal to sell the land in question to petitioners she was, however, "never notified ... least of all, in writing", of the actual execution and registration of the corresponding deed of sale, hence, said respondent's right to redeem had not yet expired at the time she made her offer for that purpose thru her letter of June 10, 1968 delivered to petitioners on even date. The intermediate court further held that the redemption price to be paid by respondent should be that stated in the deed of sale which is P30,000 notwithstanding that the preponderance of the evidence proves that the actual price paid by petitioners was P115,250. Thus, in their brief, petitioners assign the following alleged errors: I IT IS ERROR FOR THE COURT OF APPEALS TO HOLD THAT THE NOTICE IN WRITING OF THE SALE CONTEMPLATED IN ARTICLE 1623 OF THE CIVIL CODE REFERS TO A NOTICE IN WRITING AFTER THE EXECUTION AND REGISTRATION OF THE INSTRUMENT OF SALE, HENCE, OF THE DOCUMENT OF SALE. II THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE INSCRIPTION OF THE SALE IN THE REGISTRY OF PROPERTY TAKES EFFECT AS AGAINST THIRD PERSONS INCLUDING CLAIMS OF POSSIBLE REDEMPTIONERS. ASSUMING, ARGUENDO THAT PRIVATE RESPONDENT HAS THE RIGHT TO REDEEM, THE COURT OF APPEALS ERRED IN HOLDING THAT THE REDEMPTION PRICE SHOULD BE THAT STATED IN THE DEED OF SALE. (Pp. 1-2, Brief for Petitioner, page 74-Rec.)

We cannot agree with petitioners. Petitioners do not question respondent's right to redeem, she being admittedly a 1/7 co-owner of the property in dispute. The thrust of their first assignment of error is that for purposes of Article 1623 of the Civil Code which provides that: ART. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners. The right of redemption of co-owners excludes that of adjoining owners. the letters sent by Carlos Horilleno to respondent and dated January 18, 1968, Exhibit 7, and November 5, 1967, Exhibit 6, constituted the required notice in writing from which the 30-day period fixed in said provision should be computed. But to start with, there is no showing that said letters were in fact received by respondent and when they were actually received. Besides, petitioners do not pinpoint which of these two letters, their dates being more than two months apart, is the required notice. In any event, as found by the appellate court, neither of said letters referred to a consummated sale. As may be observed, it was Carlos Horilleno alone who signed them, and as of January 18, 1968, powers of attorney from the various co-owners were still to be secured. Indeed, the later letter of January 18, 1968 mentioned that the price was P4.00 per square meter whereas in the earlier letter of November 5, 1967 it was P5.00, as in fact, on that basis, as early as October 27, 1967, Carlos had already received P5,000 from petitioners supposedly as earnest money, of which, however, mention was made by him to his niece only in the later letter of January 18, 1968, the explanation being that "at later negotiation it was increased to P5.00 per square meter." (p. 4 of petitioners' brief as appellees in the Court of Appeals quoting from the decision of the trial court.) In other words, while the letters relied upon by petitioners could convey the idea that more or less some kind of consensus had been arrived at among the other co-owners to sell the property in dispute to petitioners, it cannot be said definitely that such a sale had even been actually perfected. The fact alone that in the later letter of January 18, 1968 the price indicated was P4.00 per square meter while in that of November 5, 1967, what was stated was P5.00 per square meter negatives the possibility that a "price definite" had already been agreed upon. While P5,000 might have indeed been paid to Carlos in October, 1967, there is nothing to show that the same was in the concept of the earnest money contemplated in Article 1482 of the Civil Code, invoked by petitioner, as signifying perfection of the sale. Viewed in the backdrop of the factual milieu thereof extant in the record, We are more inclined to believe that the said P5,000 were paid in the concept of earnest money as the term was understood under the Old Civil Code, that is, as a guarantee that the buyer would not back out, considering that it is not clear that there was already a definite agreement as to the price then and that petitioners were decided to buy 6/7 only of the property should respondent Javellana refuse to agree to part with her 1/7 share. In the light of these considerations, it cannot be said that the Court of Appeals erred in holding that the letters aforementioned sufficed to comply with the requirement of notice of a sale by co-owners under Article 1623 of the Civil Code. We are of the considered opinion and so hold that for purposes of the co-owner's right of redemption granted by Article 1620 of the Civil

Code, the notice in writing which Article 1623 requires to be made to the other co-owners and from receipt of which the 30-day period to redeem should be counted is a notice not only of a perfected sale but of the actual execution and delivery of the deed of sale. This is implied from the latter portion of Article 1623 which requires that before a register of deeds can record a sale by a co-owner, there must be presented to him, an affidavit to the effect that the notice of the sale had been sent in writing to the other co-owners. A sale may not be presented to the register of deeds for registration unless it be in the form of a duly executed public instrument. Moreover, the law prefers that all the terms and conditions of the sale should be definite and in writing. As aptly observed by Justice Gatmaitan in the decision under review, Article 1619 of the Civil Code bestows unto a co-owner the right to redeem and "to be subrogated under the same terms and conditions stipulated in the contract", and to avoid any controversy as to the terms and conditions under which the right to redeem may be exercised, it is best that the period therefor should not be deemed to have commenced unless the notice of the disposition is made after the formal deed of disposal has been duly executed. And it being beyond dispute that respondent herein has never been notified in writing of the execution of the deed of sale by which petitioners acquired the subject property, it necessarily follows that her tender to redeem the same made on June 10, 1968 was well within the period prescribed by law. Indeed, it is immaterial when she might have actually come to know about said deed, it appearing she has never been shown a copy thereof through a written communication by either any of the petitioners-purchasers or any of her co-owners-vendees. (Cornejo et al. vs. CA et al., 16 SCRA 775.) The only other pivotal issue raised by petitioners relates to the price which respondent offered for the redemption in question. In this connection, from the decision of the Court of Appeals, We gather that there is "decisive preponderance of evidence" establishing "that the price paid by defendants was not that stated in the document, Exhibit 2, of P30,000 but much more, at least P97,000, according to the check, Exhibit 1, if not a total of P115,250.00 because another amount in cash of P18,250 was paid afterwards." It is, therefore, the contention of petitioners here that considering said finding of fact of the intermediate court, it erred in holding nevertheless that "the redemption price should be that stated in the deed of sale." Again, petitioners' contention cannot be sustained. As stated in the decision under review, the trial court found that "the consideration of P30,000 only was placed in the deed of sale to minimize the payment of the registration fees, stamps and sales tax." With this undisputed fact in mind, it is impossible for the Supreme Court to sanction petitioners' pragmatic but immoral posture. Being patently violative of public policy and injurious to public interest, the seemingly wide practice of understating considerations of transactions for the purpose of evading taxes and fees due to the government must be condemned and all parties guilty thereof must be made to suffer the consequences of their ill-advised agreement to defraud the state. Verily, the trial court fell short of its devotion and loyalty to the Republic in officially giving its stamp of approval to the stand of petitioners and even berating respondent Javellana as wanting to enrich herself "at the expense of her own blood relatives who are her aunts, uncles and cousins." On the contrary, said "blood relatives" should have been sternly told, as We here hold, that they are in pari-delicto with petitioners in committing tax evasion and should not receive any consideration from any court in respect to the money paid for the sale in dispute. Their situation is similar to that of parties to an illegal contract. 1

Of course, the Court of Appeals was also eminently correct in its considerations supporting the conclusion that the redemption in controversy should be only for the price stipulated in the deed, regardless of what might have been actually paid by petitioners that style inimitable and all his own, Justice Gatmaitan states those considerations thus: CONSIDERING: As to this that the evidence has established with decisive preponderance that the price paid by defendants was not that stated in the document, Exh. 2 of P30,000.00 but much more, at least P97,000.00 according to the check, Exh. 1 if not a total of P115,250.00 because another amount in cash of P18,250.00 was paid afterwards, perhaps it would be neither correct nor just that plaintiff should be permitted to redeem at only P30,000.00, that at first glance would practically enrich her by the difference, on the other hand, after some reflection, this Court can not but have to bear in mind certain definite points. 1st According to Art. 1619 "Legal redemption is the right to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transmitted by onerous title." pp. 471-472, New Civil Code, and note that redemptioner right is to be subrogated "upon the same terms and conditions stipulated in the contract." and here, the stipulation in the public evidence of the contract, made public by both vendors and vendees is that the price was P30,000.00; 2nd According to Art. 1620, "A co-owner of a thing may exercise the right of redemption in case the share of all the other co-owners or any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one. p. 472, New Civil Code, . from which it is seen that if the price paid is 'grossly excessive' redemptioner is required to pay only a reasonable one; not that actually paid by the vendee, going to show that the law seeks to protect redemptioner and converts his position into one not that of a contractually but of a legally subrogated creditor as to the right of redemption, if the price is not 'grossly excessive', what the law had intended redemptioner to pay can be read in Art. 1623. The right of a legal pre-emption or redemption shall not be exercised except within thirty (30) days from the notice in writing by the prospective vendor, or by the vendor as the case may be. The deed of sale shall

not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof of all possible redemptioners.' p. 473, New Civil Code, if that be so that affidavit must have been intended by the lawmakers for a definite purpose, to argue that this affidavit has no purpose is to go against all canons of statutory construction, no law mandatory in character and worse, prohibitive should be understood to have no purpose at all, that would be an absurdity, that purpose could not but have been to give a clear and unmistakable guide to redemptioner, on how much he should pay and when he should redeem; from this must follow that that notice must have been intended to state the truth and if vendor and vendee should have instead, decided to state an untruth therein, it is they who should bear the consequences of having thereby misled the redemptioner who had the right to rely and act thereon and on nothing else; stated otherwise, all the elements of equitable estoppel are here since the requirement of the law is to submit the affidavit of notice to all possible redemptioners, that affidavit to be a condition precedent to registration of the sale therefore, the law must have intended that it be by the parties understood that they were there asking a solemn representation to all possible redemptioners, who upon faith of that are thus induced to act, and here worse for the parties to the sale, they sought to avoid compliance with the law and certainly refusal to comply cannot be rewarded with exception and acceptance of the plea that they cannot be now estopped by their own representation, and this Court notes that in the trial and to this appeal, plaintiff earnestly insisted and insists on their estoppel; 3rd If therefore, here vendors had only attempted to comply with the law, they would have been obligated to send a copy of the deed of sale unto Filomena Javellana and from that copy, Filomena would have been notified that she should if she had wanted to redeem, offered no more, no less, that P30,000.00, within 30 days, it would have been impossible for vendors and vendees to have inserted in the affidavit that the price was truly P97,000.00 plus P18,250.00 or a total of P115,250.00; in other words, if defendants had only complied with the law, they would have been obligated to accept the redemption money of only P30,000.00; 4th If it be argued that foregoing solution would mean unjust enrichment for plaintiff, it need only be remembered that plaintiff's right is not contractual, but a mere legal one, the exercise of a right granted by the law, and the law is definite that she can subrogate herself in place of the buyer, "upon the same terms and conditions stipulated in the contract," in the words of Art. 1619, and here the price "stipulated in the contract"

was P30,000.00, in other words, if this be possible enrichment on the part of Filomena, it was not unjust but just enrichment because permitted by the law; if it still be argued that plaintiff would thus be enabled to abuse her right, the answer simply is that what she is seeking to enforce is not an abuse but a mere exercise of a right; if it be stated that just the same, the effect of sustaining plaintiff would be to promote not justice but injustice, the answer again simply is that this solution is not unjust because it only binds the parties to make good their solemn representation to possible redemptioners on the price of the sale, to what they had solemnly averred in a public document required by the law to be the only basis for that exercise of redemption; (Pp. 24-27, Record.) WHEREFORE, the decision of the Court of Appeals is affirmed, with costs against petitioners.. Fernando, Makasiar, Esguerra, Aquino and Martin, JJ., concur. Makalintal, CJ., took no part. Muoz Palma, J., took no part. Antonio and Concepcion Jr., JJ., are on leave.

gains from the sale of the property as well as to minimize, if not conceal, the sources and assets of the Doromals as buyers and make it falsely appear that their capital outlay for the purchase was only one-fourth () of the actual price which is a device notoriously availed of by tax evaders to willfully and criminally evade the payment of taxes justly due to the government). This criminal and illegal conduct in no way entitles the Doromals to claim callously as against respondent redemptioner who is merely exercising her legal right of redemption "to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of the Doromals as third-person buyers [Articles 1619 and 1620, Civil Code] that she may only redeem the property from them by paying the larger amount of P115,250.00 that they had actually paid the co-owners for their 6/7 share of the property. Such criminal-tax evasion can in no way be abated if the courts and the law would yet pay heed to the plea of the tax evaders that they had falsely understated the contract price and that the courts should order the redemptioner to pay them not the contract price but the larger amount they had actually paid but illegally understated in order to evade the taxes justly due to the Government. A party to an illegal contract cannot come to court and ask it to help carry out his illegal objects. 2 For the tax evaders to invoke in court their very act of tax evasion and to ask the courts to sanction the same by declaring that the understated stipulated price was only for purposes of tax evasion but that for the exercise of the legal right of redemption, respondent must be ordered by the courts to pay them the larger amount they had actually paid but falsely understated in the deed would be to put a premium on criminal conduct and frank cynicism in gross derogation of the law, morals, good customs and public policy. When the Doromals falsely understated the contractual price of their purchase from respondent's co-owners, they did so at their own risk and with full knowledge of respondent's right to redeem the property for the price stated in the contract. By virtue of the rule of in pari delicto, they cannot even seek recourse against the co-owners to refund to them the difference between the redemption price (of P30,000.00) and the much larger amount (of P115,250.00) that they actually paid the co-owners. If, say, there were no question of redemption but that they had a valid cause for rescission of their purchase and brought suit therefor, (so that the case were strictly one between the Doromals and their sellers), the courts would order the return of only the price as officially stated in the deed and not the larger amount (of P115,250.00) that they had actually paid (but understated for tax evasion purposes) since the law will not aid either party inpari delicto but will leave the parties where it finds them, or more accurately where they have placed themselves. Manifestly the law will not aid the Doromals as against respondentredemptioner who had no part in their illegal and criminal conduct. Finally, if such notorious tax evasion is to be effectively curbed, and the facts of record in the case at bar are duly established in the appropriate proceedings, the Doromals and the coowners-sellers should be criminally charged for falsification of public documents besides being held liable by the proper authorities for the full amount of taxes, income and capital gains, documentary stamps, registration fees, etc., that they had admittedly willfully evaded by the false understatement of the real and actual price in the deed of sale executed between them.

Separate Opinions

TEEHANKEE, J., concurring: The legal (and moral) right of private respondent Filomena Javellana as (1/7) pro-indiviso coowner to exercise the right granted her by the Civil Code of legal redemption of the proindiviso 6/7 share of the property which was sold by her erstwhile co-owners to the Doromals as interested third persons for the stipulated contractual price of P30,000.00 is unassailable. It is admitted in the record (from the Doromals' own evidence and the trial court's factual findings) that the Doromals (buyers) and the co-owners (sellers) had criminally understated and falsified the contractual price in the deed of sale as registered with the Register of Deeds to be P30,000.00 instead of P115,250.00 as "actually paid" by the Doromals, admittedly for the illegal and criminal purpose "to minimize the payment of the registration fees, stamps and sales tax. 1 (It may be added that such gross understatement of the actual price was resorted to obviously to minimize the resultant tax liability of the co-owners for income tax or capital

By virtue of the rule of in pari delicto, they cannot even seek recourse against the co-owners to refund to them the difference between the redemption price (of P30,000.00) and the much larger amount (of P115,250.00) that they actually paid the co-owners. Separate Opinions TEEHANKEE, J., concurring: The legal (and moral) right of private respondent Filomena Javellana as (1/7) pro-indiviso coowner to exercise the right granted her by the Civil Code of legal redemption of the proindiviso 6/7 share of the property which was sold by her erstwhile co-owners to the Doromals as interested third persons for the stipulated contractual price of P30,000.00 is unassailable. It is admitted in the record (from the Doromals' own evidence and the trial court's factual findings) that the Doromals (buyers) and the co-owners (sellers) had criminally understated and falsified the contractual price in the deed of sale as registered with the Register of Deeds to be P30,000.00 instead of P115,250.00 as "actually paid" by the Doromals, admittedly for the illegal and criminal purpose "to minimize the payment of the registration fees, stamps and sales tax. 1 (It may be added that such gross understatement of the actual price was resorted to obviously to minimize the resultant tax liability of the co-owners for income tax or capital gains from the sale of the property as well as to minimize, if not conceal, the sources and assets of the Doromals as buyers and make it falsely appear that their capital outlay for the purchase was only one-fourth () of the actual price which is a device notoriously availed of by tax evaders to willfully and criminally evade the payment of taxes justly due to the government). This criminal and illegal conduct in no way entitles the Doromals to claim callously as against respondent redemptioner who is merely exercising her legal right of redemption "to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of the Doromals as third-person buyers [Articles 1619 and 1620, Civil Code] that she may only redeem the property from them by paying the larger amount of P115,250.00 that they had actually paid the co-owners for their 6/7 share of the property. Such criminal-tax evasion can in no way be abated if the courts and the law would yet pay heed to the plea of the tax evaders that they had falsely understated the contract price and that the courts should order the redemptioner to pay them not the contract price but the larger amount they had actually paid but illegally understated in order to evade the taxes justly due to the Government. A party to an illegal contract cannot come to court and ask it to help carry out his illegal objects. 2 For the tax evaders to invoke in court their very act of tax evasion and to ask the courts to sanction the same by declaring that the understated stipulated price was only for purposes of tax evasion but that for the exercise of the legal right of redemption, respondent must be ordered by the courts to pay them the larger amount they had actually paid but falsely understated in the deed would be to put a premium on criminal conduct and frank cynicism in gross derogation of the law, morals, good customs and public policy. When the Doromals falsely understated the contractual price of their purchase from respondent's co-owners, they did so at their own risk and with full knowledge of respondent's right to redeem the property for the price stated in the contract. If, say, there were no question of redemption but that they had a valid cause for rescission of their purchase and brought suit therefor, (so that the case were strictly one between the Doromals and their sellers), the courts would order the return of only the price as officially stated in the deed and not the larger amount (of P115,250.00) that they had actually paid (but understated for tax evasion purposes) since the law will not aid either party inpari delicto but will leave the parties where it finds them, or more accurately where they have placed themselves. Manifestly the law will not aid the Doromals as against respondentredemptioner who had no part in their illegal and criminal conduct. Finally, if such notorious tax evasion is to be effectively curbed, and the facts of record in the case at bar are duly established in the appropriate proceedings, the Doromals and the coowners-sellers should be criminally charged for falsification of public documents besides being held liable by the proper authorities for the full amount of taxes, income and capital gains, documentary stamps, registration fees, etc., that they had admittedly willfully evaded by the false understatement of the real and actual price in the deed of sale executed between them.

G.R. No. 23550 P.J. SALAS RODRIGUEZ, plaintiff-appellant, vs. MARIANO P. LEUTERIO, defendant-appellee. The appellant in his own behalf. No appearance for appellee. , J.: On September 24, 1920, the parties to this action entered into a contract by which the defendant agreed to sell, and the plaintiff to buy, seven thousand square meters of land in the barrio of Tuliahan, municipality of Caloocan, Rizal, for the consideration of P5,600, which was paid by the plaintiff in the act of transfer. At the time of this sale the particular lots contemplated as the subject of the sale had not been segregated, but the seller agreed to establish the lots with a special frontage on a principal thoroughfare as soon as the streets should be laid out in a projected new subdivision of the city. As time passed the seller was unable to comply with this part of the agreement and was therefore unable to place the purchaser in possession. The present action was accordingly instituted by the purchaser in the Court of First Instance of the Province of Rizal for the resolution (in the complaint improperly denominated rescission) of the contract and a return of double the amount delivered to the defendant as the purchase price of the land. The trial court decreed a rescission (properly resolution) of the contract and ordered the defense to return to the plaintiff the amount received, or the sum of P5,600, with legal interest from the date of the filing of the complaint. From this judgment the plaintiff appealed. As no transcript of the evidence has been brought to this court, our revision of the case is confined to the questions of law involved, which are two in number, namely, first, whether the plaintiff is entitled to recover double the amount paid out by him as the purchase price of the land; and, secondly, whether he is entitled to interest from the date upon which the money was paid to the defendant, instead of from the date of the filing of the complaint only. As suggested by the trial judge in the appealed decision the provisions of the Civil Code applicable to the case are found in articles 1451 and 1124. By the latter of these articles a person prejudiced by the nonfulfillment of a contract may demand its resolution, with indemnity for damages and payment of interest. Article 1454 of the Civil Code is relied upon by plaintiff-appellant as authority for claiming double the amount paid out by him. In this article it is declared that when earnest money or pledge is given to bind a contract of purchase

and sale, the contract may be rescinded if the vendee should be willing to forfeit the earnest money or pledge or the vendor to return double the amount. This provision is clearly not pertinent to the case, for the reason that where the purchase price is paid in whole or in part, the payment cannot be considered to be either earnest money or pledge. In this connection the commentator Manresa observes that the delivery of part of the purchase should not be understood as constituting earnest money unless it be shown that such was the intention of the parties. (Manresa, Commentaries on the Civ. Code, 2nd., vol. 10, p. 85.) In the case before us there is nothing to indicate that the parties intended that the cash price paid by the purchaser should be treated merely as earnest money; and such could not possibly have been their intention. The evident purpose was that said payment should be taken as a fulfillment of the contract on the part of the purchaser. The contention of the plaintiff-appellant with respect to interest is, we think, meritorious. In case of the resolution of a contract of sale under article 1124, the purchaser is declared to be entitled to indemnity for damages and payment of interest. As pointed out by Manresa interest in here conceded in lieu of damages. (Manresa, Commentaries on the Spanish Civil Code, 3rd ed., vol. 8, p. 157); and it is familiar doctrine that interest at the legal rate is the accepted measure of damages for the detention of money. Moreover, as the resolution of a contract has the effect of dissolving the obligation ab initio, it follows that interest should be allowed on the purchase money during the entire period that the defendant has had it in his possession, that is, in this case from the date of the contract. If the plaintiff had had possession of the land during this period, he would be entitled to no damages, and hence to no interest. It will not escape notice that a similar provision with respect to interest is found in article 1295 of the Civil Code, which deals with rescission, properly so called, and in article 1303, which deals with annulment of contracts. The judgment appealed from will be modified by giving interest at the legal rate on the amount awarded by the trial court from September 24, 1920, until paid. As thus modified the judgment will be affirmed, and it is so ordered, without special pronouncement as to costs. Avancea, C.J., Malcolm, Villamor, Ostrand, Johns, Romualdez, and Villa-Real, JJ., concur. Johnson, J., dissents.

G.R. No. L-11872

December 1, 1917

DOMINGO MERCADO and JOSEFA MERCADO, plaintiffs-appellants, vs. JOSE ESPIRITU, administrator of the estate of the deceased Luis Espiritu, defendantappellee. Perfecto Salas Rodriguez for appellants. Vicente Foz for appellee.

TORRES, J.: This is an appeal by bill of exceptions, filed by the counsel for the plaintiffs from the judgment of September 22, 1914, in which the judge of the Seventh Judicial District dismissed the complaint filed by the plaintiffs and ordered them to keep perpetual silence in regard to the litigated land, and to pay the costs of the suit. By a complaint dated April 9, 1913, counsel for Domingo and Josefa Mercado brought suit in the Court of First Instance of Bulacan, against Luis Espiritu, but, as the latter died soon thereafter, the complaint was amended by being directed against Jose Espiritu in his capacity of his administrator of the estate of the deceased Luis Espiritu. The plaintiffs alleged that they and their sisters Concepcion and Paz, all surnamed Mercado, were the children and sole heirs of Margarita Espiritu, a sister of the deceased Luis Espiritu; that Margarita Espiritu died in 1897, leaving as her paraphernal property a tract of land of 48 hectares in area situated in the barrio of Panducot, municipality of Calumpit, Bulacan, and bounded as described in paragraph 4 of the amended complaint, which hereditary portion had since then been held by the plaintiffs and their sisters, through their father Wenceslao Mercado, husband of Margarita Espiritu; that, about the year 1910, said Luis Espiritu, by means of cajolery, induced, and fraudulently succeeded in getting the plaintiffs Domingo and Josefa Mercado to sign a deed of sale of the land left by their mother, for the sum of P400, which amount was divided among the two plaintiffs and their sisters Concepcion and Paz, notwithstanding the fact that said land, according to its assessment, was valued at P3,795; that one-half of the land in question belonged to Margarita Espiritu, and one-half of this share, that is, one-fourth of said land , to the plaintiffs, and the other one-fourth, to their two sisters Concepcion and Paz; that the part of the land belonging to the two plaintiffs could produce 180 cavanes of rice per annum, at P2.50 per cavan, was equivalent to P450 per annum; and that Luis Espiritu had received said products from 1901 until the time of his death. Said counsel therefore asked that judgment be rendered in plaintiffs' favor by holding to be null and void the sale they made of their respective shares of their land, to Luis Espiritu, and that the defendant be ordered to deliver and restore to the plaintiffs the shares of the land that fell to the latter in the partition of the estate of their deceased mother Margarita Espiritu, together with the products thereof, uncollected since 1901, or their equivalent, to wit, P450 per annum, and to pay the costs of the suit. In due season the defendant administrator answered the aforementioned complaint, denying each and all of the allegations therein contained, and in special defense alleged that the land, the subject-matter of the complaint, had an area of only 21 cavanes of seed rice; that, on May

25, 1894, its owner, the deceased Margarita Espiritu y Yutoc, the plaintiffs' mother, with the due authorization of her husband Wenceslao Mercado y Arnedo Cruz sold to Luis Espiritu for the sum of P2,000 a portion of said land, to wit, an area such as is usually required for fifteen cavanes of seed; that subsequently, on May 14, 1901, Wenceslao Mercado y Arnedo Cruz, the plaintiffs' father, in his capacity as administrator of the property of his children sold under pacto de retro to the same Luis Espiritu at the price of P375 the remainder of the said land, to wit, an area covered by six cavanes of seed to meet the expenses of the maintenance of his (Wenceslao's) children, and this amount being still insufficient the successively borrowed from said Luis Espiritu other sums of money aggregating a total of P600; but that later, on May 17,1910, the plaintiffs, alleging themselves to be of legal age, executed, with their sisters Maria del Consejo and Maria dela Paz, the notarial instrument inserted integrally in the 5th paragraph of the answer, by which instrument, ratifying said sale under pacto de retro of the land that had belonged to their mother Margarita Espiritu, effected by their father Wenceslao Mercado in favor of Luis Espiritu for the sum of P2,600, they sold absolutely and perpetually to said Luis Espiritu, in consideration of P400, the property that had belonged to their deceased mother and which they acknowledged having received from the aforementioned purchaser. In this cross-complaint the defendant alleged that the complaint filed by the plaintiffs was unfounded and malicious, and that thereby losses and damages in the sum of P1,000 had been caused to the intestate estate of the said Luis Espiritu. He therefore asked that judgment be rendered by ordering the plaintiffs to keep perpetual silence with respect to the land in litigation and, besides, to pay said intestate estate P1,000 for losses and damages, and that the costs of the trial be charged against them. In reply to the cross-complaint, the plaintiffs denied each and all of the facts therein set forth, and in special defense alleged that at the time of the execution of the deed of sale inserted in the cross-complaint the plaintiffs were still minors, and that since they reached their majority the four years fixed by law for the annulment of said contract had not yet elapsed. They therefore asked that they be absolved from the defendant's cross-complaint. After trial and the introduction of evidence by both parties, the court rendered the judgment aforementioned, to which the plaintiffs excepted and in writing moved for a reopening of the case and a new trial. This motion was overruled, exception was taken by the petitioners, and the proper bill of exceptions having been presented, the same was approved and transmitted to the clerk of this court. As the plaintiffs assailed the validity of the deed of sale, Exhibit 3, executed by them on May 17, 1910, on the ground that they were minors when they executed it, the questions submitted to the decision of this court consist in determining whether it is true that the plaintiffs were then minors and therefore incapable of selling their property on the date borne by the instrument Exhibit 3; and in case they then were such, whether a person who is really and truly a minor and, notwithstanding, attests that he is of legal age, can, after the execution of the deed and within legal period, ask for the annulment of the instrument executed by him, because of some defect that invalidates the contract, in accordance with the law (Civ. Code, arts. 1263 and 1300), so that he may obtain the restitution of the land sold. The records shows it to have been fully proven that in 1891 Lucas Espiritu obtained title by composition with the State, to three parcels of land, adjoining each other, in the sitio of Panducot of the pueblo of Calumpit, Bulacan, containing altogether an area of 75 hectares, 25 ares, and 59 centares, which facts appear in the title Exhibit D; that, upon Luis Espiritu's death, his said lands passed by inheritance to his four children named Victoria, Ines,

Margarita, and Luis; and that, in the partition of said decedent's estate, the parcel of land described in the complaint as containing forty-seven and odd hectares was allotted to the brother and sister Luis and Margarita, in equal shares. Margarita Espiritu, married to Wenceslao Mercado y Ardeno Cruz, had by this husband five children, Maria Consejo, Maria de la Paz, Domingo, Josefa, and Amalia, all surnamed Mercado y Espiritu, who, at the death of their mother in 1896 inherited, by operation of law, one-half of the land described in the complaint. The plaintiffs' petition for annulment of the sale and the consequent restitution to them of twofourths of the land left by their mother, that is, of one-fourth of all the land described in the complaint, and which, they stated, amounts to 11 hectares, 86 ares and 37 centares. To this claim the defendant excepted, alleging that the land in question comprised only an area such as is customarily covered by 21 cavanes of seed. It was also duly proven that, by a notarial instrument of May 25, 1894, the plaintiffs' mother conveyed by actual and absolute sale for the sum of P2,000, to her brother Luis Espiritu a portion of the land now on litigation, or an area such as is usually covered by about 15 cavanes of seed; and that, on account of the loss of the original of said instrument, which was on the possession of the purchaser Luis Espiritu, and furthermore because, during the revolution, the protocols or registers of public documents of the Province of Bulacan were burned, Wenceslao Mercado y Arnedo Cruz, the widower of the vendor and father of the plaintiffs, executed, at the instance of the interested party Luis Espiritu, the notarial instrument Exhibit 1, of the date of May 20, 1901, in his own name and those of his minor children Maria Consejo, Maria de la Paz, Domingo, Josefa, and Amalia, and therein set forth that it was true that the sale of said portion of land had been made by his aforementioned wife, then deceased, to Luis Espiritu in 1894. However, even prior to said date, to wit, on May 14th of the same year, 1901, the widower Wenceslao Mercado, according to the private document Exhibit 2, pledged or mortgaged to the same man, Luis Espiritu, for P375, a part, or an area covered by six cavanes of seed, of the land that had belonged to this vendor's deceased wife, to the said Luis Espiritu and which now forms a part of the land in question a transaction which Mercado was obliged to make in order to obtain funds with which "to cover his children's needs." Wenceslao Mercado, the plaintiffs' father, having died, about the year 1904, the plaintiffs Domingo and Josefa Mercado, together with their sisters Consejo and Paz, declaring themselves to be of legal age and in possession of the required legal status to contract, executed and subscribed before a notary the document Exhibit 3, on May 17, 1910, in which referring to the previous sale of the land, effected by their deceased mother for the sum of P2,600 and with her husband's permission and authorization, they sold absolutely and in perpetuity to Luis Espiritu, for the sum of P400 "as an increase" of the previous purchase price, the land described in said instrument and situated in Panducot, pueblo of Calumpit, Bulacan, of an area equal to that usually sown with 21 cavanes of seed bounded on the north by the lands of Flaviano Abreu and the heirs of Pedro Espiritu, on the east by those of Victoria Espiritu and Ines Espiritu, on the south by those of Luis Espiritu, and on the west by those of Hermogenes Tan-Toco and by the Sapang-Maitu stream. In this status of the case the plaintiffs seek the annulment of the deed Exhibit 3, on the ground that on the date of its execution they were minors without legal capacity to contract, and for the further reason that the deceased purchaser Luis Espiritu availed himself of deceit and fraud in obtaining their consent for the execution of said deed.

As it was proven by the testimony of the clerk of the parochial church of Apalit (plaintiffs were born in Apalit) that the baptismal register books of that parish pertaining to the years 1890-1891, were lost or burned, the witness Maria Consejo Mercado recognized and identified the book Exhibit A, which she testified had been kept and taken care of by her deceased father Wenceslao Mercado, pages 396 and 397 of which bear the attestation that the plaintiff Domingo Mercado was born on August 4, 1890, and Josefa Mercado, on July 14, 1891. Furthermore, this witness corroborated the averment of the plaintiffs' minority, by the personal registration certificate of said Domingo Mercado, of the year 1914, Exhibit C, by which it appears that in 1910 he was only 23 years old, whereby it would also be appear that Josefa Mercado was 22 years of age in 1910, and therefore, on May 17,1910, when the instrument of purchase and sale, Exhibit 3, was executed, the plaintiffs must have been, respectively, 19 and 18 years of age. The witness Maria Consejo Mercado also testified that after her father's death her brother and sisters removed to Manila to live there, although her brother Domingo used to reside with his uncle Luis Espiritu, who took charge of the administration of the property left by his predecessors in interest; that it was her uncle Luis who got for her brother Domingo the other cedula, Exhibit B, pertaining to the year 1910, where in it appears that the latter was then already 23 years of age; that she did not know why her uncle did so; that she and her brother and sisters merely signed the deed of May 17, 1910; and that her father Wenceslao Mercado, prior to his death had pledged the land to her uncle Luis Espiritu. The witness Ines Espiritu testified that after the death of the plaintiffs' father, it was Luis Espiritu who directed the cultivation of the land in litigation. This testimony was corroborated by her sister Victoria Espiritu, who added that her nephew, the plaintiff Domingo, had lived for some time, she did not know just how long, under the control of Luis Espiritu. Roque Galang, married to a sister of Luis Espiritu, stated that the land that fell to his wife and to his sister-in-law Victoria, and which had an area of about 8 hectares less than that of the land allotted to the aforementioned Luis and Margarita produced for his wife and his sister-inlaw Victoria a net and minimum yield of 507 cavanes in 1907, in spite of its being high land and of inferior quality, as compared with the land in dispute, and that its yield was still larger in 1914, when the said two sisters' share was 764 cavanes. Patricio Tanjucto, the notary before whom the deed Exhibit 3 was ratified, was a witness for the defendant. He testified that this deed was drawn up by him at the request of the plaintiff Josefa Mercado; that the grantors of the instrument assured him that they were all of legal age; that said document was signed by the plaintiffs and the other contracting parties, after it had been read to them and had been translated into the Pampangan dialect for those of them who did not understand Spanish. On cross-examination, witness added that ever since he was 18 years of age and began to court, he had known the plaintiff Josefa Mercado, who was then a young maiden, although she had not yet commenced to attend social gatherings, and that all this took place about the year 1898, for witness said that he was then [at the time of his testimony, 1914,] 34 years of age. Antonio Espiritu, 60 years of age, who knew Lucas Espiritu and the properties owned by the latter, testified that Espiritu's land contained an area of 84 cavanes, and after its owner's death, was under witness' administration during to harvest two harvest seasons; that the products yielded by a portion of this land, to wit, an area such as is sown by about 15 cavanes of seed, had been, since 1894, utilized by Luis Espiritu, by reason of his having acquired the land; and

that, after Margarita Espiritu's death, her husband Wenceslao Mercado took possession of another portion of the land, containing an area of six cavanes of seed and which had been left by this deceased, and that he held same until 1901, when he conveyed it to Luis Espiritu. lawphi1.net The defendant-administrator, Jose Espiritu, son of the deceased Luis Espiritu, testified that the plaintiff Domingo Mercado used to live off and on in the house of his deceased father, about the year 1909 or 1910, and used to go back and forth between his father's house and those of his other relatives. He denied that his father had at any time administered the property belonging to the Mercado brother and sisters. In rebuttal, Antonio Mercado, a cousin of Wenceslao, father of the plaintiffs, testified that he mediate in several transactions in connection with a piece of land belonging to Margarita Espiritu. When shown the deed of purchase and sale Exhibit 1, he stated that he was not acquainted with its contents. This same witness also testified that he mediated in a transaction had between Wenceslao Mercado and Luis Espiritu (he did not remember the year), in which the former sold to the latter a parcel of land situated in Panducot. He stated that as he was a witness of the deed of sale he could identify this instrument were it exhibited to him; but he did not do so, for no instrument whatever was presented to him for identification. The transaction mentioned must have concerned either the ratification of the sale of the land of 15 cavanes, in 1901, attested in Exhibit 1, or the mortgage or pledge of the other parcel of 6 cavanes, given on May 14, 1901, by Wenceslao Mercado to Luis Espiritu, as may be seen by the private document Exhibit 2. In rebuttal, the plaintiff Josefa Mercado denied having gone to the house of the notary Tanjutco for the purpose of requesting him to draw up any document whatever. She stated that she saw the document Exhibit 3 for the first time in the house of her uncle Luis Espiritu on the day she signed it, on which occasion and while said document was being signed said notary was not present, nor were the witnesses thereto whose names appear therein; and that she went to her said uncle's house, because he had sent for her, as well as her brother and sisters, sending a carromata to fetch them. Victoria Espiritu denied ever having been in the house of her brother. Luis Espiritu in company with the plaintiffs, for the purpose of giving her consent to the execution of any deed in behalf of her brother. The evidence adduced at the trial does not show, even circumstantially, that the purchaser Luis Espiritu employed fraud, deceit, violence, or intimidation, in order to effect the sale mentioned in the document Exhibit 3, executed on May 17, 1910. In this document the vendors, the brother and the sisters Domingo, Maria del Consejo, Paz and, Josefa surnamed Mercado y Espiritu, attested the certainty of the previous sale which their mother, during her lifetime, had made in behalf of said purchaser Luis Espiritu, her brother with the consent of her husband Wenceslao Mercado, father of the vendors of the portion of land situated in the barrio of Panducot, pueblo of Calumpit, Bulacan; and in consideration of the fact that the said vendor Luis Espiritu paid them, as an increase, the sum of P400, by virtue of the contract made with him, they declare having sold to him absolutely and in perpetuity said parcel of the land, waive and thenceforth any and all rights they may have, inasmuch as said sum constitutes the just price of the property. So that said document Exhibit 3 is virtually an acknowledgment of the contract of sale of the parcel or portion of land that would contain 15 cavanes of seed rice made by the vendors' mother in favor of the purchaser Luis Espiritu, their uncle, and likewise an acknowledgment of the contract of pledge or mortgage of the remainder of said land, an area of six cavanes, made with the same purchaser, at an increase of P400 over the price of P2,600, making an aggregate

sum of P3,000, decomposed as follows: P2,000, collected during her lifetime, by the vendors' father; and the said increase of P400, collected by the plaintiffs. In the aforementioned sale, according to the deed of May 25, 1894, Margarita Espiritu conveyed to her brother Luis the parcel of 15 cavanes of seed, Exhibit 1, and after her death the plaintiffs' widowed father mortgaged or pledged the remaining parcel or portion of 6 cavanes of seed to her brother-in-law, Luis Espiritu, in May, 1901 (Exhibit 2). So it is that the notarial instrument Exhibit 3, which was assailed by the plaintiffs, recognized the validity of the previous contracts, and the totality of the land, consisting of an area containing 21 cavanes of seed rice, was sold absolutely and in perpetuity, the vendors receiving in exchange P400 more; and there is no conclusive proof in the record that this last document was false and simulated on account of the employment of any violence, intimidation, fraud, or deceit, in the procuring of the consent of the vendors who executed it. Considering the relation that exists between the document Exhibit 3 and those of previous dates, Exhibits 1 and 2, and taking into the account the relationship between the contracting parties, and also the general custom that prevails in many provinces of these Islands for the vendor or debtor to obtain an increase in the price of the sale or of the pledge, or an increase in the amount loaned, without proof to the contrary, it would be improper and illegal to hold, in view of the facts hereinabove set forth, that the purchaser Luis Espiritu, now deceased, had any need to forge or simulate the document Exhibit 3 inasmuch as, since May, 1894, he has held in the capacity of owner by virtue of a prior acquisition, the parcel of land of 15 cavanes of seed, and likewise, since May, 1901, according to the contract of mortgage or pledge, the parcel of 6 cavanes, or the remainder of the total area of 21 cavanes. So that Luis Espiritu was, during his lifetime, and now, after his death, his testate or intestate estate is in lawful possession of the parcel of land situated in Panducot that contains 21 cavanes of seed, by virtue of the title of conveyance of ownership of the land measuring 15 cavanes, and, in consequence of the contract of pledge or mortgage in security for the sum of P600, is likewise in lawful possession of the remainder of the land, or an area containing 6 cavanes of seed. The plaintiffs have absolutely no right whatever to recover said first parcel of land, as its ownership was conveyed to the purchaser by means of a singular title of purchase and sale; and as to the other portion of 6 cavanes of seed, they could have redeemed it before May 17, 1910, upon the payment or the return of the sum which their deceased father Wenceslao Mercado had, during his lifetime, received as a loan under security of the pledged property; but, after the execution of the document Exhibit 3, the creditor Luis Espiritu definitely acquired the ownership of said parcel of 6 cavanes. It is therefore a rash venture to attempt to recover this latter parcel by means of the contract of final and absolute sale, set forth in the deed Exhibit 3. Moreover, the notarial document Exhibit 1, are regards the statements made therein, is of the nature of a public document and is evidence of the fact which gave rise to its execution and of the date of the latter, even against a third person and his predecessors in interest such as are the plaintiffs. (Civ. Code, art. 1218.) The plaintiffs' father, Wenceslao Mercado, recognizing it to be perfectly true that his wife Margarita Espiritu sold said parcel of land which she inherited from her father, of an area of about "15 cavanes of seed," to her brother Luis Espiritu, by means of an instrument executed

by her on May 25,1894 an instrument that disappeared or was burned and likewise recognizing that the protocols and register books belonging to the Province of Bulacan were destroyed as a result of the past revolution, at the request of his brother-in-law Luis Espiritu he had no objection to give the testimony recorded in said notarial instrument, as it was the truth regarding what had occurred, and in so doing he acted as the plaintiffs' legitimate father in the exercise of his parental authority, inasmuch as he had personal knowledge of said sale, he himself being the husband who authorized said conveyance, notwithstanding that his testimony affected his children's interest and prejudiced his own, as the owner of any fruits that might be produced by said real property. The signature and handwriting of the document Exhibit 2 were identified as authentic by one of the plaintiffs, Consejo Mercado, and as the record shows no evidence whatever that this document is false, and it does not appear to have been assailed as such, and as it was signed by the plaintiffs' father, there is no legal ground or well-founded reason why it should be rejected. It was therefore properly admitted as evidence of the certainty of the facts therein set forth. The principal defect attributed by the plaintiffs to the document Exhibit 3 consists in that, on the date of May 17, 1910, when it was executed that they signed it, they were minors, that is, they had not yet attained the age of 21 years fixed by Act No. 1891, though no evidence appears in the record that the plaintiffs Josefa and Domingo Mercado were in fact minors, for no certified copies were presented of their baptismal certificates, nor did the plaintiffs adduce any supplemental evidence whatever to prove that Domingo was actually 19 and Josefa 18 years of age when they signed the document Exhibit 3, on May 17, 1910, inasmuch as the copybook, Exhibit A, notwithstanding the testimony of the plaintiff Consejo Mercado, does not constitute sufficient proof of the dates of births of the said Domingo and Josefa. However, even in the doubt whether they certainly were of legal age on the date referred to, it cannot be gainsaid that in the document Exhibit 3 they stated that they were of legal age at the time they executed and signed it, and on that account the sale mentioned in said notarial deed Exhibit 3 is perfectly valid a sale that is considered as limited solely to the parcel of land of 6 cavanes of seed, pledged by the deceased father of the plaintiffs in security for P600 received by him as a loan from his brother-in-law Luis Espiritu, for the reason that the parcel of 15 cavanes had been lawfully sold by its original owner, the plaintiffs' mother. The courts, in their interpretation of the law, have laid down the rule that the sale of real estate, made by minors who pretend to be of legal age, when in fact they are not, is valid, and they will not be permitted to excuse themselves from the fulfillment of the obligations contracted by them, or to have them annulled in pursuance of the provisions of Law 6, title 19, of the 6th Partida; and the judgment that holds such a sale to be valid and absolves the purchaser from the complaint filed against him does not violate the laws relative to the sale of minors' property, nor the juridical rules established in consonance therewith. (Decisions of the supreme court of Spain, of April 27, 1860, July 11, 1868, and March 1, 1875.) itc@alf With respect to the true age of the plaintiffs, no proof was adduced of the fact that it was Luis Espiritu who took out Domingo Mercado's personal registration certificate on April 13, 1910, causing the age of 23 years to be entered therein in order to corroborate the date of the notarial instrument of May 17th of the same year; and the supposition that he did, would also allow it to be supposed, in order to show the propriety of the claim, that the cedula Exhibit C was taken out on February 14, 1914, where in it is recorded that Domingo Mercado was on that date 23 years of age, for both these facts are not proved; neither was any proof adduced

against the statement made by the plaintiffs Domingo and Josefa in the notarial instrument Exhibit 3, that, on the date when they executed it, they were already of legal age, and, besides the annotation contained in the copybook Exhibit A, no supplemental proof of their true ages was introduced. Aside from the foregoing, from a careful examination of the record in this case, it cannot be concluded that the plaintiffs, who claim to have minors when they executed the notarial instrument Exhibit 3, have suffered positive and actual losses and damages in their rights and interests as a result of the execution of said document, inasmuch as the sale effected by the plaintiffs' mother, Margarita Espiritu, in May, 1894, of the greater part of the land of 21 cavanes of seed, did not occasion any damage or prejudice to the plaintiffs, inasmuch as their father stated in the document Exhibit 2 that he was obliged to mortgage or pledge said remaining portion of the land in order to secure the loan of the P375 furnished by Luis Espiritu and which was subsequently increased to P600 so as to provide for certain engagements or perhaps to meet the needs of his children, the plaintiff; and therefore, to judge from the statements made by their father himself, they received through him, in exchange for the land of 6 cavanes of seed, which passed into the possession of the creditor Luis Espiritu, the benefit which must have accrued to them from the sums of money received as loans; and, finally, on the execution of the impugned document Exhibit 3, the plaintiffs received and divided between themselves the sum of P400, which sum, added to that P2,000 received by Margarita Espiritu, and to that of the P600 collected by Wenceslao Mercado, widower of the latter and father of the plaintiffs, makes all together the sum of P3,000, the amount paid by the purchaser as the price of all the land containing 21 cavanes of seed, and is the just price of the property, was not impugned, and, consequently, should be considered as equivalent to, and compensatory for, the true value of said land. For the foregoing reasons, whereby the errors assigned to the judgment appealed from have been refuted, and deeming said judgment to be in accordance with law and the evidence of record, we should, and do hereby, affirm the same, with costs against the appellants. So ordered. Arellano, C. J., Johnson, Street, and Malcolm, JJ., concur.

Separate Opinions

CARSON, J., concurring:

I concur. But in order to avoid misunderstanding, I think it well to indicate that the general statement, in the prevailing opinion to the effect that the making of false representations as to his age by an infant executing a contract will preclude him from disaffirming the contract or setting up the defense of infancy, must be understood as limited to cases wherein, on account of the minor's representations as to his majority, and because of his near approach thereto, the other party had good reason to believe, and did in fact believe the minor capable of contracting. The doctrine set forth in the Partidas, relied upon by the supreme court of Spain in the cases cited in the prevailing opinion, is substantially similar to the doctrine of estoppel as applied in like instances by many of the courts in the United States. For the purposes of convenient comparison, I here insert some citations of authority, Spanish and American, recognizing the limitations upon the general doctrine to which I am inviting attention at this time; and in this connection it is worthy of note that the courts of the United States look with rather less favor than the supreme court of Spain upon the application of the doctrine, doubtless because the cases wherein it may properly be applied, are much less likely to occur in a jurisdiction where majority is reached at the age of 21 than a jurisdiction wherein majority is not ordinarily attained until the infant reaches the age of 25. Ley 6, tit. 19, Partida 6. is, in part, as follows: If he who is minor (1) deceitfully says or sets forth in an instrument that he is over twenty-five years of age, and this assertion is believed by another person who takes him to be of about that age, (2) in an action at law he should be deemed to be of the age he asserted, and should no (3) afterwards be released from liability on the plea that he was not of said age when he assumed the obligation. The reason for this is that the law helps the deceived and not the deceivers. In the glossary to these provisions of the Partidas by Gregorio Lopez, I find the following: (1) De tal tiempo. Nota bene hoc verbum, nam si appareret ex aspectu eum esse minorem, tunc adversarius non potest dicere se deceptum; imo tam ipse, quam minor videntur esse in dolo, quo casu competit minori restitutio, quia facta doli compensatione, perinde ast ac si nullus fuiset in dolo, et ideo datur restitutio; et quia scienti dolus non infertur, l. 1. D. de act. empt. secundum Cyn. Alberic et Salic. in l. 3. C. si minor se major. dixer. adde Albericum tenentem, quabndo per aspectum a liter constaret, in authent. sacramenta puberum, col. 3. C. si advers vendit. (2) Engoosamente. Adde 1. 2. et 3. C. si minor se major. dixer. Et adverte nam per istam legem Partitarum, que non distinguit, an adultus, vel pupillus talem assertionem faciat, videtur comprobari dictum Guillielm. de Cun. de quo per Paul. de Castr. in 1. qui jurasse. in princ. D. de jurejur. quod si pupillus proximus pubertari juret, cum contrahit, se esse puberem, et postea etiam juret, quod non veniet contra contractum quod habebit locum dispositio authenticae sacramenta puberum, sicut si esset pubes: et cum isto dicto transit ibi Paul. de Cast. multum commendans, dicens, se alibi non legisse; si tamen teneamus illam opinionem, quod etiam pupillus doli capax obligatur ex juramento, non esset ita miranda dicat,

decissio; vide per Alexand. in dict. 1. qui jurasse, in princ. Item lex ista Partitarum expresse sentit de adulto, non de pupillo, cum superius dixit, que paresciere de tal tiempo: Doctores etiam intelligunt de adulto 11. dict. tit. C. si minor. se major. dixer. et patet ex 11. illius tituli. Quid autem dicemus in dubio, cum non constat de dolo minoris? Azon. in summa illius tit. in fin. Cynus tamen, et alli, tenent oppositum, quia dolus non praesumitur, nisi probetur, 1. quotiens, s., qui dolo, D. de probat. Et hoc etiam vult ista lex Partitarum, cum dicit, si lo faze engoosamente: et ita tenent Alberic. et Salicet. in dict. 1. 3. ubi etiam Bart. in fin. Si autem minor sui facilitate asserat se mojorem, et ita juret, tunc distingue, ut habetur dict. 1. 3 quia aut juravit verbo tenus, et tunc non restituitur, nisi per instrumentum seu scripturam probet se minorem; et si juravit corporaliter, nullo modo restituitur, ut ibi; et per quae instrumenta probentur, cum verbo tenus juravit, vide per Specul. tit. de restit, in integr. s. quis autem, col. 4. vers. sed cujusmodi erit scriptura, ubi etiam vide per Speculatorem aliquas notabiles quaestiones in ista materia, in col. 5. videlicet, an praejudicet sibi minor ex tali juramento in aliis contractibus, et tenet, quod non; et tenet glossa finalis in 1. de aetate, D. de minor. in fin. gloss. vide ibi per Speculat. ubi etiam de aliis in ista materia. In the decision of the supreme court of Spain dated the 27th of April, 1860, I find an excellent illustration of the conditions under which that court applied the doctrine, as appears from the following resolution therein set forth. Sales of real estate made by minors are valid when the latter pretend to be twentyfive years of age and, due to the circumstances that they are nearly of that age, are married, or have administration of their property, or on account of other special circumstances affecting them, the other parties to the contract believe them to be of legal age. With these citations compare the general doctrine in the United States as set forth in 22 Cyc. (p. 610), supported by numerous citations of authority. Estoppel to disaffirm (I) In General. The doctrine of estoppel not being as a general rule applicable to infants, the court will not readily hold that his acts during infancy have created an estoppel against him to disaffirm his contracts. Certainly the infant cannot be estopped by the acts or admissions of other persons. (II) False representations as to age. According to some authorities the fact that an infant at the time of entering into a contract falsely represented to the person with whom he dealt that he had attained the age of majority does not give any validity to the contract or estop the infant from disaffirming the same or setting up the defense of infancy against the enforcement of any rights thereunder; but there is also authority for the view that such false representations will create an estoppel against the infant, and under the statutes of some states no contract can be disaffirmed where, on account of the minor's representations as to his majority, the other party had good reason to believe the minor capable of contracting. Where the infant has made no representations whatever as to his age, the mere fact that the person with whom he dealt believed him to be of age, even though his belief was warranted by the infant's appearance and the surrounding circumstances, and the infant knew of such belief, will not render the contract valid or estop the infant to disaffirm.

G.R. No. L-1720

March 4, 1950

SIA SUAN and GAW CHIAO, petitioners, vs. RAMON ALCANTARA, respondent. Antonio Barredo for petitioners. Zosimo D. Tanalega for respondents. PARAS, J.: On August 3, 1931, a deed of sale was executed by Rufino Alcantara and his sons Damaso Alcantara and Ramon Alcantara conveying to Sia Suan five parcels of land. Ramon Alcantara was then 17 years, 10 months and 22 days old. On August 27, 1931, Gaw Chiao (husband of Sia Suan) received a letter from Francisco Alfonso, attorney of Ramon Alcantara, informing Gaw Chiao that Ramon Alcantara was a minor and accordingly disavowing the contract. After being contacted by Gaw Chiao, however, Ramon Alcantara executed an affidavit in the office of Jose Gomez, attorney of Gaw Chiao, wherein Ramon Alcantara ratified the deed of sale. On said occasion Ramon Alcantara received from Gaw Chiao the sum of P500. In the meantime, Sia Suan sold one of the lots to Nicolas Azores from whom Antonio Azores inherited the same. On August 8, 1940, an action was instituted by Ramon Alcantara in the Court of First Instance of Laguna for the annulment of the deed of sale as regards his undivided share in the two parcels of land covered by certificates of title Nos. 751 and 752 of Laguna. Said action was against Sia Suan and her husband Gaw Chiao, Antonio, Azores, Damaso Alcantara and Rufino Alcantara (the latter two being, respectively, the brother and father of Ramon Alcantara appealed to the Court of Appealed which reversed the decision of the trial court, on the ground that the deed of sale is not binding against Ramon Alcantara in view of his minority on the date of its execution, and accordingly sentenced Sia Suan to pay to Ramon Alcantara the sum of P1,750, with legal interest from December 17, 1931, in lieu of his share in the lot sold to Antonio Azores (who was absolved from the complaint), and to reconvey to Ramon Alcantara an undivided one-fourth interest in the lot originally covered by certificate of title NO. 752 of Laguna plus the cost of the suit. From this judgment Sia Suan and Gaw Chiao have come to us on appeal by certiorari. It is undeniable that the deed of sale signed by the appellee, Ramon Alcantara, On August 3, 1931, showed that he, like his co-signers (father and brother), was then of legal age. It is not pretend and there is nothing to indicate that the appellants did not believe and rely on such recital of fact. This conclusion is decisive and very obvious in the decision of the Court of Appeals It is true that in the resolution on the for reconsideration, the Court of Appeals remarked that "The fact that when informed of appellant's minority, the appellees too no steps for nine years to protect their interest beyond requiring the appellant to execute a ratification of the sale while still a minor, strongly indicates that the appellees knew of his minority when the deed of sale was executed." But the feeble insinuation is sufficiently negative by the following positive pronouncements of the Court of Appeals as well in said resolution as in the decision.

As to the complaint that the defendant is guilty of laches, suffice it to say that the appellees were informed of his minority within one (1) month after the transaction was completed. (Resolution.) Finally, the appellees were equally negligent in not taking any action to protect their interest form and after August 27, 1931, when they were notified in writing of appellant's minority. (Resolution.) . . . The fact remains that the appellees were advised within the month that appellant was a minor, through the letter of Attorney Alfonso (Exhibit 1) informing appellees of his client's desire to disaffirm the contract . . . (Decision.) The purchaser having been apprised of incapacity of his vendor shortly after the contract was made, the delay in bringing the action of annulment will not serve to bar it unless the period fixed by the statute of limitations expired before the filing of the complaint. . . . (Decision.) In support of the contend that the deed of sale is binding on the appellee, counsel for the appellants invokes the decision in Mercado and Mercado vs. Espiritu (37 Phil., 215), wherein this court held: The courts, in their interpretation of the law, have laid down the rule that the sale of real estate, made by minors who pretend to be of legal age, when it fact they are not, is valid, and they will not be permitted to excuse themselves from the fulfillment of the obligations contracted by them, or to have them annulled in pursuance of the provisions of Law 6 title 19, of the 6th Partida; and the judgment that holds such a sale to valid and absolves the purchaser from the complaint filed against him does not violate the laws relative to the sale of minors' property, nor the juridical rules established in consonance therewith. (Decisions of the Supreme Court of Spain, of April 27, 1840, July 11, 1868, and March 1, 1875.) The Court of Appeals has refused to apply this doctrine on the ground that the appellants did not actually pay any amount in cash to the appellee and therefore did not suffer any detriment by reason of the deed of sale, it being stipulated that the consideration therefore was a preexisting indebtedness of appellee's father, Rufino Alcantara. We are of the opinion that the Court of Appeals erred. In the first place, in the case cited, the consideration for sale consisted in greater part of pre-existing obligation. In the second place, under the doctrine, to bind a minor who represents himself to be of legal age, it is not necessary for his vendee to actually part with cash, as long as the contract is supported by a valid consideration. Since appellee's conveyance to the appellants was admittedly for and in virtue of a pre-existing indebtedness (unquestionably a valid consideration), it should produce its full force and effect in the absence of any other vice that may legally invalidate the same. It is not here claimed that the deed of sale is null and void on any ground other than the appellee's minority. Appellee's contract has become fully efficacious as a contract executed by parties with full legal capacity. The circumstance that, about one month after the date of the conveyance, the appellee informed the appellants of his minority, is of no moment, because appellee's previous misrepresentation had already estopped him from disavowing the contract. Said belated information merely leads to the inference that the appellants in fact did not know that the

appellee was a minor on the date of the contract, and somewhat emphasizes appellee's had faith, when it is borne in mind that no sooner had he given said information than he ratified his deed of sale upon receiving from the appellants the sum of P500. Counsel for the appellees argues that the appellants could not have been misled as to the real age of the appellee because they were free to make the necessary investigation. The suggestion, while perhaps practicable, is conspicuously unbusinesslike and beside the point, because the findings of the Court of Appeals do not show that the appellants knew or could suspected appellee's minority. The Court of Appeals seems to be of the opinion that the letter written by the appellee informing the appellants of his minority constituted an effective disaffirmance of the sale, and that although the choice to disaffirm will not by itself avoid the contract until the courts adjudge the agreement to be invalid, said notice shielded the appellee from laches and consequent estoppel. This position is untenable since the effect of estoppel in proper cases is unaffected by the promptness with which a notice to disaffirm is made. The appealed decision of the Court of Appeals is hereby reversed and the appellants absolved from the complaint, with costs against the appellee, Ramon Alcantara. So ordered. Ozaeta, Tuason, Montemayor and Torres, JJ., concur.

de edad quando lo fizo: esto es, porque las leyes ayudan a los enganados, e non a los enganadores. . . ." (Alcubilla, Codigos Antigous de Espaa, p. 613.) The contract of sale involved in the case of Mercado vs. Espiritu, supra, was executed by the minors on 17 May 1910. The Law in force on this last-mentioned date was not Las Siete Partidas, 1 which was the in force at the time the cases decided by the Supreme Court of Spain referred to, but the Civil Code which took effect in the Philippines on 8 December 1889. As already stated, the Civil Code requires the consent of both parties for the valid execution of a contract (art. 1261, Civil Code). As a minor cannot give his consent, the contract made or executed by him has no validity and legal effect. There is no provision in the Civil Code similar to that of Law 6, Title 19, of the 6th Partida which is equivalent to the common law principle of estoppel. If there be an express provision in the Civil Code similar law 6, Title 19, of the 6th Partida, I would agree to the reasoning of the majority. The absence of such provision in the Civil Code is fatal to the validity of the contract executed by a minor. It would be illogical to uphold the validity of a contract on the ground of estoppel, because if the contract executed by a minor is null and void for lack of consent and produces no legal effect, how could such a minor be bound by misrepresentation about his age? If he could not be bound by a direct act, such as the execution of a deed of sale, how could he be bound by an indirect act, such as misrepresentation as to his age? The rule laid down in Young vs. Tecson, 39 O. G. 953, in my opinion, is the correct one. Nevertheless, as the action in this case was brought on 8 August 1940, the same was barred, because it was not brought within four (4) years after the minor had become of age, pursuant to article 1301 of the Civil Code. Ramon Alcantara became of age sometime in September 1934. Moran, C.J. and Bengzon, J., concur.

Separate Opinions PADILLA, J., concurring: I concur in the result not upon the grounds stated in the majority opinion but for the following reasons: The deed of sale executed by Ramon Alcantara on 3 August 1931 conveying to Sia Suan five parcels of land is null and void insofar as the interest, share, or participation of Ramon Alcantara in two parcels of land is concerned, because on the date of sale he was 17 years, 10 months and 22 days old only. Consent being one of the essential requisites for the execution of a valid contract, a minor, such as Ramon Alcantara was, could not give his consent thereof. The only misrepresentation as to his age, if any, was the statement appearing in the instrument that he was of age. On 27 August 1931, or 24 days after the deed was executed, Gaw Chiao, the husband of the vendee Sia Suan, was advised by Atty. Francisco Alfonso of the fact that his client Ramon Alcantara was a minor. The fact that the latter, for and in consideration of P500, executed an affidavit, whereby he ratified the deed of sale, is of no moment. He was still minor. The majority opinion invokes the rule laid down in the case of Mercado et al. vs. Espiritu, 37 Phil., 215. The rule laid down by this Court in that case is based on three judgments rendered by the Supreme Court of Spain on 27 April 1960, 11 July 1868, and 1 March 1875. In these decisions the Supreme Court of Spain applied Law 6, Title 19, of the 6th Partida which expressly provides: "Diziendo o ortogando el que fuese menor, que era mayor de XXV aos, si ouiesse persona que paresciesse de tal tiempo, si lo faze enganosamente, valdria el pleyto que assi fuere fecho con el e non deue ser desatado despues, como quier que non era