G.R. No. 115849. January 24, 1996.

*
FIRST PHILIPPINE INTERNATIONAL AN! "For#$r%y Pro&u'$r( an) o* +,$ P,-%-..-n$(/ an&
0ER12RIO RI3ERA, .$+-+-on$r(, 4(. 1O2RT OF APPEALS, 1ARLOS EJER1ITO, -n (u5(+-+u+-on o*
6E0ETRIO 6E0ETRIA, an& JOSE JANOLO, r$(.on&$n+(.
nd seek nullifcation of the acts sought to be enjoined but nonetheless done. The remedy was certainly not
the institution of another action in another forum based on essentially the same facts. The adoption of this
latter recourse renders the petitioners amenable to disciplinary action and both their actions, in this Court
as well as in the Court a quo, dismissible.
In the instant case before us, there is also identity of parties, or at least, of interests represented. lthough
the plainti!s in the "econd Case #$enry %. Co. et al.& are not named parties in the 'irst Case, they
represent the same interest and entity, namely, petitioner (ank, because)
'irstly, they are not suing in their personal capacities, for they ha*e no direct personal interest in the
matter in contro*ersy. They are not principally or e*en subsidiarily liable+ much less are they direct parties
in the assailed contract of sale+ and
"econdly, the allegations of the complaint in the "econd Case show that the stockholders are bringing a
,deri*ati*e suit. In the caption itself, petitioners claim to ha*e brought suit ,for and in behalf of the
-roducers (ank of the -hilippines. Indeed, this is the *ery essence of a deri*ati*e suit)
,n indi*idual stockholder is permitted to institute a deri*ati*e suit on behalf of the corporation wherein he
holds stock in order to protect or *indicate corporate rights, whene*er the o.cials of the corporation
refuse to sue, or are the ones to be sued or hold the control of the corporation. In such actions, the suing
stockholder is regarded as a nominal party, with the corporation as the real party in interest. #/amboa *.
0ictoriano, 12 "C3 42, 45 671518+ italics supplied&.
In the face of the damaging admissions taken from the complaint in the "econd Case, petitioners, quite
strangely, sought to deny that the "econd Case was a deri*ati*e suit, reasoning that it was brought, not by
the minority shareholders, but by $enry Co et al., who not only own, hold or control o*er 92: of the
outstanding capital stock, but also constitute the majority in the (oard of ;irectors of petitioner (ank. That
being so, then they really represent the (ank. "o, whether they sued ,deri*ati*ely or directly, there is
undeniably an identity of interests<entity represented.
-etitioner also tried to seek refuge in the corporate fction that the personality of the (ank is separate and
distinct from its shareholders. (ut the rulings of this Court are consistent) ,=hen the fction is urged as a
means of perpetrating a fraud or an illegal act or as a *ehicle for the e*asion of an e>isting obligation, the
circum*ention of statutes, the achie*ement or perfection of a monopoly or generally the perpetration of
kna*ery or crime, the *eil with which the law co*ers and isolates the corporation from the members or
stockholders who compose it will be lifted to allow for its consideration merely as an aggregation of
indi*iduals.
In addition to the many cases where the corporate fction has been disregarded, we now add the instant
case, and declare herewith that the corporate *eil cannot be used to shield an otherwise blatant *iolation
of the prohibition against forum?shopping. "hareholders, whether suing as the majority in direct actions or
as the minority in a deri*ati*e suit, cannot be allowed to tri@e with court processes, particularly where, as
in this case, the corporation itself has not been remiss in *igorously prosecuting or defending corporate
causes and in using and applying remedies a*ailable to it. To rule otherwise would be to encourage
corporate litigants to use their shareholders as fronts to circum*ent the stringent rules against forum
shopping.
'inally, petitioner (ank argued that there cannot be any forum shopping, e*en assuming arguendo that
there is identity of parties, causes of action and reliefs sought, ,because it #the (ank& was the defendant in
the #frst& case while it was the plainti! in the other #"econd Case&, citing as authority 0ictronics
Computers, Inc. *s. 3egional Trial Court, (ranch AB, Cakati, etc. et al., where the Court held)
,The rule has not been e>tended to a defendant who, for reasons known only to him, commences a new
action against the plainti!Dinstead of fling a responsi*e pleading in the other caseDsetting forth therein,
as causes of action, specifc denials, special and a.rmati*e defenses or e*en counterclaims. Thus,
0elhagenEs and FingEs motion to dismiss Ci*il Case Go. 17?H2A1 by no means negates the charge of forum?
shopping as such did not e>ist in the frst place. #italics supplied&
-etitioner pointed out that since it was merely the defendant in the original case, it could not ha*e chosen
the forum in said case.
7
3espondent, on the other hand, replied that there is a di!erence in factual setting between 0ictronics and
the present suit. In the former, as underscored in the abo*equoted Court ruling, the defendants did not fle
any responsi*e pleading in the frst case. In other words, they did not make any denial or raise any defense
or counter?claim therein. In the case before us howe*er, petitioners fled a responsi*e pleading to the
complaintDas a result of which, the issues were joined.
Indeed, by praying for a.rmati*e reliefs and interposing counter?claims in their responsi*e pleadings, the
petitioners became plainti!s themsel*es in the original case, gi*ing unto themsel*es the *ery remedies
they repeated in the "econd Case.
Iltimately, what is truly important to consider in determining whether forum?shopping e>ists or not is the
*e>ation caused the courts and parties?litigant by a party who asks di!erent courts and<or administrati*e
agencies to rule on the same or related causes and<or to grant the same or substantially the same reliefs,
in the process creating the possibility of con@icting decisions being rendered by the di!erent fora upon the
same issue. In this case, this is e>actly the problem) a decision recogniJing the perfection and directing the
enforcement of the contract of sale will directly con@ict with a possible decision in the "econd Case barring
the parties from enforcing or implementing the said sale. Indeed, a fnal decision in one would constitute
res judicata in the other.
The foregoing conclusion fnding the e>istence of forum?shopping notwithstanding, the only sanction
possible now is the dismissal of both cases with prejudice, as the other sanctions cannot be imposed
because petitionersE present counsel entered their appearance only during the proceedings in this Court,
and the -etitionEs 0K3I'ICTILG<CK3TI'ICTILG contained su.cient allegations as to the pendency of the
"econd Case to show good faith in obser*ing Circular H9?17. The lawyers who fled the "econd Case are
not before us+ thus the rudiments of due process pre*ent us from motu proprio imposing disciplinary
measures against them in this ;ecision. $owe*er, petitioners themsel*es #and particularly $enry Co, et al.&
as litigants are admonished to strictly follow the rules against forum?shopping and not to tri@e with court
proceedings and processes. They are warned that a repetition of the same will be dealt with more se*erely.
$a*ing said that, let it be emphasiJed that this petition should be dismissed not merely because of forum?
shopping but also because of the substanti*e issues raised, as will be discussed shortly.
The "econd Issue) =as the Contract -erfectedM
The respondent Court correctly treated the question of whether or not there was, on the basis of the facts
established, a perfected contract of sale as the ultimate issue. $olding that a *alid contract has been
established, respondent Court stated)
,There is no dispute that the object of the transaction is that property owned by the defendant bank as
acquired assets consisting of si> #A& parcels of land specifcally identifed under Transfer Certifcates of Title
Gos. T?72A1BH to T?72A1B5. It is likewise beyond ca*il that the bank intended to sell the property. s
testifed to by the (ankEs ;eputy Conser*ator, Nose Kntereso, the bank was looking for buyers of the
property. It is defnite that the plainti!s wanted to purchase the property and it was precisely for this
purpose that they met with defendant 3i*era, Canager of the -roperty Canagement ;epartment of the
defendant bank, in early ugust 7195. The procedure in the sale of acquired assets as well as the nature
and scope of the authority of 3i*era on the matter is clearly delineated in the testimony of 3i*era himself,
which testimony was relied upon by both the bank and by 3i*era in their appeal briefs. Thus #T"G of Nuly
B2, 7112, pp. 71?H2&)
)
The procedure runs this way) cquired assets was turned o*er to me and then I published it in the form of
an intero.ce memorandum distributed to all branches that these are acquired assets for sale. I was
instructed to ad*ertise acquired assets for sale so on that basis, I ha*e to entertain o!er+ to accept o!er,
formal o!er and upon ha*ingbeen o!ered, I present it to the Committee. I pro*ide the Committee with
necessary information about the property such as original loan of the borrower, bid price during the
foreclosure, total claim of the bank, the appraised *alue at the time the property is being o!ered for sale
and then the information which are relati*e to the e*aluation of the bank to buy which the Committee
considers and it is the Committee that e*aluates as against the e>posure of the bank and it is also the
Committee that submits to the Conser*ator for fnal appro*al and once appro*ed, we ha*e to e>ecute the
deed of sale and it is the Conser*ator that signs the deed of sale, sir.
,The plainti!s, therefore, at that meeting of ugust 7195 regarding their purpose of buying the property,
dealt with and talked to the right person. Gecessarily, the agenda was the price of the property, and
plainti!s were dealing with the bank o.cial authoriJed to entertain o!ers, to accept o!ers and to present
the o!er to the Committee before which the said o.cial is authoriJed to discuss information relati*e to
price determination. Gecessarily, too, it being inherent in his authority, 3i*era is the o.cer from whom
H
o.cial information regarding the price, as determined by the Committee and appro*ed by the
Conser*ator, can be had. nd 3i*era confrmed his authority when he talked with the plainti! in ugust
7195. The testimony of plainti! ;emetria is clear on this point #T"G of Cay B7, 7112, pp. H5?H9&)
O)
=hen you went to the -roducers (ank and talked with Cr. Cercurio 3i*era, did you ask him point?blank his
authority to sell any propertyM
)
Go, sir. Got point blank although it came from him. #=&hen I asked him how long it would take because he
was saying that the matter of pricing will be passed upon by the committee. nd when I asked him how
long it will take for the committee to decide and he said the committee meets e*ery week. If I am not
mistaken =ednesday and in about two weekEs #sic& time, in e!ect what he was saying he was not the one
who was to decide. (ut he would refer it to the committee and he would relay the decision of the
committee to me.
O)
-lease answer the question.
)
$e did not say that he had the authority#.& (ut he said he would refer the matter to the committee and he
would relay the decision to me and he did just like that.
,-arenthetically, the Committee referred to was the -ast ;ue Committee of which %uis Co was the $ead,
with Nose Kntereso as one of the members.
,=hat transpired after the meeting of early ugust 7195 are consistent with the authority and the duties of
3i*era and the bankEs internal procedure in the matter of the sale of bankEs assets. s ad*ised by 3i*era,
the plainti!s made a formal o!er by a letter dated ugust H2, 7195 stating that they would buy at the
price of -B.P Cillion in cash. The letter was for the attention of Cercurio 3i*era who was tasked to con*ey
and accept such o!ers. Considering an aspect of the o.cial duty of 3i*era as some sort of intermediary
between the plainti!s?buyers with their proposed buying price on one hand, and the bank Committee, the
Conser*ator and ultimately the bank itself with the set price on the other, and considering further the
discussion of price at the meeting of ugust resulting in a formal o!er of B.P Cillion in cash, there can be
no other logical conclusion than that when, on "eptember 7, 7195, 3i*era informed plainti!s by letter that
,the bankEs counter?o!er is at -P.P Cillion for more than 727 hectares on lot basis, such counter?o!er
price had been determined by the -ast ;ue Committee and appro*ed by the Conser*ator after 3i*era had
duly presented plainti!sE o!er for discussion by the Committee of such matters as original loan of
borrower, bid price during foreclosure, total claim of the bank, and market *alue. Tersely put, under the
established facts, the price of -P.P Cillion was, as clearly worded in 3i*eraEs letter #K>h. ,K&, the o.cial
and defniti*e price at which the bank was selling the property.
,There were a*erments by defendants below, as well as before this Court, that the -P.P Cillion price was
not discussed by the Committee and that it was merely quoted to start negotiations regarding the price. s
correctly characteriJed by the trial court, this is not credible. The testimonies of %uis Co and Nose Kntereso
on this point are at best equi*ocal and considering the gratuitous and self?ser*ing character of these
declarations, the bankEs submission on this point does not inspire belief. (oth Co and Kntereso, as
members of the -ast ;ue Committee of the bank, claim that the o!er of the plainti! was ne*er discussed
by the Committee. In the same *ein, both Co and Kntereso openly admit that they seldom attend the
meetings of the Committee. It is important to note that negotiations on the price had started in early
ugust and the plainti!s had already o!ered an amount as purchase price, ha*ing been made to
understand by 3i*era, the o.cial in charge of the negotiation, that the price will be submitted for appro*al
by the bank and that the bankEs decision will be relayed to plainti!s. 'rom the facts, the amount of -P.P
Cillion has a defnite signifcance. It is the o.cial bank price. t any rate, the bank placed its o.cial,
3i*era, in a position of authority to accept o!ers to buy and negotiate the sale by ha*ing the o!er o.cially
acted upon by the bank. The bank cannot turn around and later say, as it now does, that what 3i*era
states as the bankEs action on the matter is not in fact so. It is a familiar doctrine, the doctrine of
ostensible authority, that if a corporation knowingly permits one of its o.cers, or any other agent, to do
acts within the scope of an apparent authority, and thus holds him out to the public as possessing power to
do those acts, the corporation will, as against any one who has in good faith dealt with the corporation
through such agent, be estopped from denying his authority #'rancisco *. /"I", 5 "C3 P55, P9B?P94+ -G(
*. Court of ppeals, 14 "C3 BP5, BA1?B52+ -rudential (ank *. Court of ppeals, /.3. Go. 72B1P5, Nune 74,
711B&.
B
rticle 7B79 of the Ci*il Code enumerates the requisites of a *alid and perfected contract as follows) ,#7&
Consent of the contracting parties+ #H&& Lbject certain which is the subject matter of the contract+ #B&
Cause of the obligation which is established.
There is no dispute on requisite no. H. The object of the questioned contract consists of the si> #A& parcels
of land in "ta. 3osa, %aguna with an aggregate area of about 727 hectares, more or less, and co*ered by
Transfer Certifcates of Title Gos. T?72A1BH to T?72A1B5. There is, howe*er, a dispute on the frst and third
requisites.
-etitioners allege that ,there is no counter?o!er made by the (ank, and any supposed counter?o!er which
3i*era #or Co& may ha*e made is unauthoriJed. "ince there was no counter?o!er by the (ank, there was
nothing for Kjercito #in substitution of ;emetria and Nanolo& to accept. They disputed the factual basis of
the respondent CourtEs fndings that there was an o!er made by Nanolo for -B.P million, to which the (ank
counter?o!ered -P.P million. =e ha*e perused the e*idence but cannot fnd fault with the said CourtEs
fndings of fact. 0erily, in a petition under 3ule 4P such as this, errors of factDif there be anyDare, as a
rule, not re*iewable. The mere fact that respondent Court #and the trial court as well& chose to belie*e the
e*idence presented by respondent more than that presented by petitioners is not by itself a re*ersible
error. In fact, such fndings merit serious consideration by this Court, particularly where, as in this case,
said courts carefully and meticulously discussed their fndings. This is basic.
(e that as it may, and in addition to the foregoing disquisitions by the Court of ppeals, let us re*iew the
question of 3i*eraEs authority to act and petitionerEs allegations that the -P.P million counter?o!er was
e>tinguished by the -4.HP million re*ised o!er of Nanolo. $ere, there are questions of law which could be
drawn from the factual fndings of the respondent Court. They also del*e into the contractual elements of
consent and cause.
The authority of a corporate o.cer in dealing with third persons may be actual or apparent. The doctrine
of ,apparent authority, with special reference to banks, was laid out in -rudential (ank *s. Court of
ppeals, where it was held that)
,Conformably, we ha*e declared in countless decisions that the principal is liable for obligations contracted
by the agent. The agentEs apparent representation yields to the principalEs true representation and the
contract is considered as entered into between the principal and the third person #citing Gational 'ood
uthority *s. Intermediate ppellate Court, 794 "C3 7AA&.
, bank is liable for wrongful acts of its o.cers done in the interests of the bank or in the course of
dealings of the o.cers in their representati*e capacity but not for acts outside the scope of their authority
#1 C.N."., p. 475&. bank holding out its o.cers and agents as worthy of confdence will not be permitted to
proft by the frauds they may thus be enabled to perpetrate in the apparent scope of their employment+
nor will it be permitted to shirk its responsibility for such frauds, e*en though no beneft may accrue to the
bank therefrom #72 m Nur Hd, p. 774&. ccordingly, a banking corporation is liable to innocent third
persons where the representation is made in the course of its business by an agent acting within the
general scope of his authority e*en though, in the particular case, the agent is secretly abusing his
authority and attempting to perpetrate a fraud upon his principal or some other person, for his own
ultimate beneft #CcIntosh *. ;akota Trust Co., PH G; 5PH, H24 G= 979, 42 %3 72H7&.
,pplication of these principles is especially necessary because banks ha*e a fduciary relationship with
the public and their stability depends on the confdence of the people in their honesty and e.ciency. "uch
faith will be eroded where banks do not e>ercise strict care in the selection and super*ision of its
employees, resulting in prejudice to their depositors.
'rom the e*idence found by respondent Court, it is ob*ious that petitioner 3i*era has apparent or implied
authority to act for the (ank in the matter of selling its acquired assets. This e*idence includes the
following)
#a& The petition itself in par. II?7 #p. B& states that 3i*era was ,at all times material to this case, Canager of
the -roperty Canagement ;epartment of the (ank. (y his own admission, 3i*era was already the person
in charge of the (ankEs acquired assets #T"G, ugust A, 7112, pp. 9?1&+
#b& s obser*ed by respondent Court, the land was defnitely being sold by the (ank. nd during the initial
meeting between the buyers and 3i*era, the latter suggested that the buyersE o!er should be no less than
-B.B million #T"G, pril HA, 7112, pp. 7A?75&+
#c& 3i*era recei*ed the buyersE letter dated ugust B2, 7195 o!ering -B.P million #T"G, B2 Nuly 7112, p.
77&+
4
#d& 3i*era signed the letter dated "eptember 7, 7195 o!ering to sell the property for -P.P million #T"G, Nuly
B2, p. 77&+
#e& 3i*era recei*ed the letter dated "eptember 75, 7195 containing the buyersE proposal to buy the
property for -4.HP million #T"G, Nuly B2, 7112, p. 7H&+
#f& 3i*era, in a telephone con*ersation, confrmed that the -P.P million was the fnal price of the (ank #T"G,
Nanuary 7A, 7112, p. 79&+
#g& 3i*era arranged the meeting between the buyers and %uis Co on "eptember H9, 7114, during which the
(ankEs o!er of -P.P million was confrmed by 3i*era #T"G, pril HA, 7112, pp. B4?BP&. t said meeting, Co,
a major shareholder and o.cer of the (ank, confrmed 3i*eraEs statement as to the fnality of the (ankEs
counter?o!er of -P.P million #T"G, Nanuary 7A, 7112, p. H7+ T"G, pril HA, 7112, p. BP&+
#h& In its newspaper ad*ertisements and announcements, the (ank referred to 3i*era as the o.cer acting
for the (ank in relation to parties interested in buying assets owned<acquired by the (ank. In fact, 3i*era
was the o.cer mentioned in the (ankEs ad*ertisements o!ering for sale the property in question #cf. K>hs.
," and ,"?7&.
In the *ery recent case of %imketkai "ons Cilling, Inc. *s. Court of ppeals, et al., the Court, through Nustice
Nose .3. Celo, a.rmed the doctrine of apparent authority as it held that the apparent authority of the
o.cer of the (ank of -.I. in charge of acquired assets is borne out by similar circumstances surrounding his
dealings with buyers.
To be sure, petitioners attempted to repudiate 3i*eraEs apparent authority through documents and
testimony which seek to establish 3i*eraEs actual authority. These pieces of e*idence, howe*er, are
inherently weak as they consist of 3i*eraEs self?ser*ing testimony and *arious inter?o.ce memoranda that
purport to show his limited actual authority, of which pri*ate respondent cannot be charged with
knowledge. In any e*ent, since the issue is apparent authority, the e>istence of which is borne out by the
respondent CourtEs fndings, the e*idence of actual authority is immaterial insofar as the liability of a
corporation is concerned.
-etitioners also argued that since ;emetria and Nanolo were e>perienced lawyers and their ,law frm had
once acted for the (ank in three criminal cases, they should be charged with actual knowledge of 3i*eraEs
limited authority. (ut the Court of ppeals in its ;ecision #p. 7H& had already made a factual fnding that
the buyers had no notice of 3i*eraEs actual authority prior to the sale. In fact, the (ank has not shown that
they acted as its counsel in respect to any acquired assets+ on the other hand, respondent has pro*en that
;emetria and Nanolo merely associated with a loose aggrupation of lawyers #not a professional
partnership&, one of whose members #tty. "usana -arker& acted in said criminal cases.
-etitioners also alleged that ;emetriaEs and NanoloEs -4.HP million counter?o!er in the letter dated
"eptember 75, 7195 e>tinguished the (ankEs o!er of -P.P million. They disputed the respondent CourtEs
fnding that ,there was a meeting of minds when on B2 "eptember 7195 ;emetria and Nanolo through
nne> Q%E #letter dated "eptember B2, 7195& QacceptedE 3i*eraEs counter o!er of -P.P million under nne>
QNE #letter dated "eptember 75, 7195&, citing the late Nustice -aras, rt. 7B71 of the Ci*il Code and related
"upreme Court rulings starting with (eaumont *s. -rieto.
$owe*er, the abo*e?cited authorities and precedents cannot apply in the instant case because, as found
by the respondent Court which re*iewed the testimonies on this point, what was ,accepted by Nanolo in
his letter dated "eptember B2, 7195 was the (ankEs o!er of -P.P million as confrmed and reiterated to
;emetria and tty. Nose 'ajardo by 3i*era and Co during their meeting on "eptember H9, 7195. Gote that
the said letter of "eptember B2, 7195 begins with ,#p&ursuant to our discussion last H9 "eptember 7195 >
> >.
-etitioners insist that the respondent Court should ha*e belie*ed the testimonies of 3i*era and Co that the
"eptember H9, 7195 meeting ,was meant to ha*e the o!erors impro*e on their position of -P.P million.
$owe*er, both the trial court and the Court of ppeals found petitionersE testimonial e*idence ,not
credible, and we fnd no basis for changing this fnding of fact.
Indeed, we see no reason to disturb the lower courtsE #both the 3TC and the C& common fnding that
pri*ate respondentsE e*idence is more in keeping with truth and logicDthat during the meeting on
"eptember H9, 7195, %uis Co and 3i*era ,confrmed that the -P.P million price has been passed upon by
the Committee and could no longer be lowered #T"G of pril H5, 7112, pp. B4?BP&.B1 $ence, assuming
arguendo that the counter?o!er of -4.HP million e>tinguished the o!er of -P.P million, %uis CoEs reiteration
of the said -P.P million price during the "eptember H9, 7195 meeting re*i*ed the said o!er. nd by *irtue
of the "eptember B2, 7195 letter accepting this re*i*ed o!er, there was a meeting of the minds, as the
acceptance in said letter was absolute and unqualifed.
P
=e note that the (ankEs repudiation, through Conser*ator Kncarnacion, of 3i*eraEs authority and action,
particularly the latterEs counter?o!er of -P.P million, as being ,unauthoriJed and illegal came only on Cay
7H, 7199 or more than se*en #5& months after NanoloEs acceptance. "uch delay, and the absence of any
circumstance which might ha*e justifably pre*ented the (ank from acting earlier, clearly characteriJes the
repudiation as nothing more than a last?minute attempt on the (ankEs part to get out of a binding
contractual obligation.
Taken together, the factual fndings of the respondent Court point to an implied admission on the part of
the petitioners that the written o!er made on "eptember 7, 7195 was carried through during the meeting
of "eptember H9, 7195. This is the conclusion consistent with human e>perience, truth and good faith.
It also bears noting that this issue of e>tinguishment of the (ankEs o!er of -P.P million was raised for the
frst time on appeal and should thus be disregarded.
,This Court in se*eral decisions has repeatedly adhered to the principle that points of law, theories, issues
of fact and arguments not adequately brought to the attention of the trial court need not be, and ordinarily
will not be, considered by a re*iewing court, as they cannot be raised for the frst time on appeal #"antos
*s. IC, Go. 54H4B, Go*ember 74, 719A, 74P "C3 P1H.&
,> > > It is settled jurisprudence that an issue which was neither a*erred in the complaint nor raised during
the trial in the court below cannot be raised for the frst time on appeal as it would be o!ensi*e to the
basic rules of fair play, justice and due process #;ihiansan *s. C, 7PB "C3 57B 671958+ nchuelo *s. IC,
745 "C3 4B4 671958+ ;ulos 3ealty R ;e*elopment Corp. *s. C, 7P5 "C3 4HP 671998+ 3amos *s. IC, 75P
"C3 52 671918+ /e*ero *s. IC, /.3. 552H1, ugust B2, 7112&.
"ince the issue was not raised in the pleadings as an a.rmati*e defense, pri*ate respondent was not
gi*en an opportunity in the trial court to contro*ert the same through opposing e*idence. Indeed, this is a
matter of due process. (ut we passed upon the issue anyway, if only to a*oid deciding the case on purely
procedural grounds, and we repeat that, on the basis of the e*idence already in the record and as
appreciated by the lower courts, the ine*itable conclusion is simply that there was a perfected contract of
sale.
The Third Issue) Is the Contract KnforceableM
The petition alleged)
,K*en assuming that %uis Co or 3i*era did relay a *erbal o!er to sell at -P.P million during the meeting of
H9 "eptember 7195, and it was this *erbal o!er that ;emetria and Nanolo accepted with their letter of B2
"eptember 7195, the contract produced thereby would be unenforceable by actionDthere being no note,
memorandum or writing subscribed by the (ank to e*idence such contract. #-lease see rticle 742B6H8+
Ci*il Code.&
Ipon the other hand, the respondent Court in its ;ecision #p. 74& stated)
,> > > Lf course, the bankEs letter of "eptember 7, 7195 on the o.cial price and the plainti!sE acceptance
of the price on "eptember B2, 7195, are not, in themsel*es, formal contracts of sale. They are howe*er
clear embodiments of the fact that a contract of sale was perfected between the parties, such contract
being binding in whate*er form it may ha*e been entered into #case citations omitted&. "tated simply, the
bankEs letter of "eptember 7, 7195, taken together with plainti!sE letter dated "eptember B2, 7195,
constitute in law a su.cient memorandum of a perfected contract of sale.
The respondent Court could ha*e added that the written communications commenced not only from
"eptember 7, 7195 but from NanoloEs ugust H2, 7195 letter. =e agree that, taken together, these letters
constitute su.cient memorandaDsince they include the names of the parties, the terms and conditions of
the contract, the price and a description of the property as the object of the contract.
(ut let it be assumed arguendo that the counter?o!er during the meeting on "eptember H9, 7195 did
constitute a ,new o!er which was accepted by Nanolo on "eptember B2, 7195. "till, the statute of frauds
will not apply by reason of the failure of petitioners to object to oral testimony pro*ing petitioner (ankEs
counter?o!er of -P.P million. $ence, petitionersDby such utter failure to objectDare deemed to ha*e
wai*ed any defects of the contract under the statute of frauds, pursuant to rticle 742P of the Ci*il Code)
,rt. 742P. Contracts infringing the "tatute of 'rauds, referred to in Go. H of rticle 742B, are ratifed by
the failure to object to the presentation of oral e*idence to pro*e the same, or by the acceptance of
benefts under them.
A
s pri*ate respondent pointed out in his Cemorandum, oral testimony on the rea.rmation of the counter?
o!er of -P.P million is aplentyDand the silence of petitioners all throughout the presentation makes the
e*idence binding on them thus)

Ses, sir. I think it was "eptember H9, 7195 and I was again present because tty. ;emetria told me to
accompany him and we were able to meet %uis Co at the (ank.
> > > > > > > > >
O
Gow, what transpired during this meeting with %uis Co of the -roducers (ankM

tty. ;emetria asked Cr. %uis Co whether the price could be reduced, sir.
O
=hat priceM

The P.P million pesos and Cr. %uis Co said that the amount cited by Cr. Cercurio 3i*era is the fnal price
and that is the price they intends #sic& to ha*e, sir.
O
=hat do you meanM

That is the amount they want, sir.

O
=hat is the reaction of the plainti! ;emetria to %uis CoEs statment #sic& that the defendant 3i*eraEs
counter?o!er of P.P million was the defendantEs bank #sic& fnal o!erM

$e said in a day or two, he will make fnal acceptance, sir.

O
=hat is the response of Cr. %uis CoM

$e said he will wait for the position of tty. ;emetria, sir.

6;irect testimony of tty. Nose 'ajardo, T"G, Nanuary 7A, 7112, at pp. 79?H7.8
DDLDD
O
=hat transpired during that meeting between you and Cr. %uis Co of the defendant (ankM

=e went straight to the point because he being a busy person, I told him if the amount of -P.P million
could still be reduced and he said that was already passed upon by the committee. =hat the bank e>pects
which was contrary to what Cr. 3i*era stated. nd he told me that is the fnal o!er of the bank -P.P million
and we should indicate our position as soon as possible.
O
=hat was your response to the answer of Cr. %uis CoM
5

I said that we are going to gi*e him our answer in a few days and he said that was it. tty. 'ajardo and I
and Cr. Cercurio 63i*era8 was with us at the time at his o.ce.
O
'or the record, your $onor please, will you tell this Court who was with Cr. Co in his L.ce in -roducers
(ank (uilding during this meetingM

Cr. Co himself, Cr. 3i*era, tty. 'ajardo and I.

O
(y Cr. Co you are referring toM

Cr. %uis Co.

O
fter this meeting with Cr. %uis Co, did you and your partner accede on #sic& the counter o!er by the bankM

Ses, sir, we did. Two days thereafter we sent our acceptance to the bank which o!er we accepted, the o!er
of the bank which is -P.P million.
6 ;irect testimony of tty. ;emetria, T"G, HA pril 7112, at pp. B4?BA.8
TTTTTTLTTTTTT
O
ccording to tty. ;emetrio ;emetria, the amount of -P.P million was reached by the Committee and it is
not within his power to reduce this amount. =hat can you say to that statement that the amount of -P.P
million was reached by the CommitteeM

It was not discussed by the Committee but it was discussed initially by %uis Co and the group of tty.
;emetrio ;emetria and tty. -ajardo #sic& in that "eptember H9, 7195 meeting, sir.
6;irect testimony of Cercurio 3i*era, T"G, B2 Nuly 7112, pp. 74?7P.8
The 'ourth Issue) Cay the Conser*ator 3e*oke the
-erfected and Knforceable ContractM
It is not disputed that the petitioner (ank was under a conser*ator placed by the Central (ank of the
-hilippines during the time that the negotiation and perfection of the contract of sale took place.
-etitioners energetically contended that the conser*ator has the power to re*oke or o*errule actions of the
management or the board of directors of a bank, under "ection H9? of 3epublic ct Go. HAP #otherwise
known as the Central (ank ct& as follows)
,=hene*er, on the basis of a report submitted by the appropriate super*ising or e>amining department,
the Conetary (oard fnds that a bank or a non?bank fnancial intermediary performing quasi?banking
functions is in a state of continuing inability or unwillingness to maintain a state of liquidity deemed
adequate to protect the interest of depositors and creditors, the Conetary (oard may appoint a
conser*ator to take charge of the assets, liabilities, and the management of that institution, collect all
monies and debts due said institution and e>ercise all powers necessary to preser*e the assets of the
institution, reorganiJe the management thereof, and restore its *iability. $e shall ha*e the power to
o*errule or re*oke the actions of the pre*ious management and board of directors of the bank or non?bank
fnancial intermediary performing quasi?banking functions, any pro*ision of law to the contrary
notwithstanding, and such other powers as the Conetary (oard shall deem necessary.
9
In the frst place, this issue of the Conser*atorEs alleged authority to re*oke or repudiate the perfected
contract of sale was raised for the frst time in this -etitionDas this was not litigated in the trial court or
Court of ppeals. s already stated earlier, issues not raised and<or *entilated in the trial court, let alone in
the Court of ppeals, ,cannot be raised for the frst time on appeal as it would be o!ensi*e to the basic
rules of fair play, justice and due process.
In the second place, there is absolutely no e*idence that the Conser*ator, at the time the contract was
perfected, actually repudiated or o*erruled said contract of sale. The (ankEs acting conser*ator at the
time, 3odolfo 3omey, ne*er objected to the sale of the property to ;emetria and Nanolo. =hat petitioners
are really referring to is the letter of Conser*ator Kncarnacion, who took o*er from 3omey after the sale
was perfected on "eptember B2, 7195 #nne> 0, petition& which unilaterally repudiatedDnot the contractD
but the authority of 3i*era to make a binding o!erDand which unarguably came months after the
perfection of the contract. "aid letter dated Cay 7H, 7199 is reproduced hereunder)
,Cay 7H, 7199
,tty. Goe C. Uarate
Uarate Carandang -erlas R ss.
"uite BHB 3ufno (uilding
yala *enue, Cakati, Cetro?Canila
;ear tty. Uarate)
This pertains to your letter dated Cay P, 7199 on behalf of ttys. Nanolo and ;emetria regarding the si> #A&
parcels of land located at "ta. 3osa, %aguna.
=e deny that -roducers (ank has e*er made a legal counter?o!er to any of your clients nor perfected a
Qcontract to sell and buyE with any of them for the following reasons)
In the QInter?L.ce CemorandumE dated pril HP, 719A addressed to and appro*ed by former cting
Conser*ator Cr. ndres I. 3ustia, -roducers (ank "enior Canager -erfecto C. -ascua detailed the functions
of -roperty Canagement ;epartment #-C;& sta! and o.cers #nne> &, you will immediately read that
Canager Cr. Cercurio 3i*era or any of his subordinates has no authority, power or right to make any
alleged counter?o!er. In short, your lawyer?clients did not deal with the authoriJed o.cers of the bank.
Coreo*er, under "ec. HB and BA of the Corporation Code of the -hilippines #(atas -ambansa (lg. A9& and
"ec. H9? of the Central (ank ct #3ep. ct Go. HAP, as amended&, only the (oard of ;irectors<Conser*ator
may authoriJe the sale of any property of the corporation<bank.
Lur records do not show that Cr. 3i*era was authoriJed by the old board or by any of the bank
conser*ators #starting Nanuary, 7194& to sell the aforesaid property to any of your clients. pparently, what
took place were just preliminary discussions<consultations between him and your clients, which e*eryone
knows cannot bind the (ankEs (oard or Conser*ator.
=e are, therefore, constrained to refuse any tender of payment by your clients, as the same is patently
*iolati*e of corporate and banking laws. =e belie*e that this is more than su.cient legal justifcation for
refusing said alleged tender.
3est assured that we ha*e nothing personal against your clients. ll our acts are o.cial, legal and in
accordance with law. =e also ha*e no personal interest in any of the properties of the (ank. -lease be
ad*ised accordingly.
0ery truly yours,
#"gd.& %eonida T. Kncarnacion
%KLGI; T. KGC3GCILG
cting Conser*ator
In the third place, while admittedly, the Central (ank law gi*es *ast and far?reaching powers to the
conser*ator of a bank, it must be pointed out that such powers must be related to the ,#preser*ation of&
the assets of the bank, #the reorganiJation of& the management thereof and #the restoration of& its
*iability. "uch powers, enormous and e>tensi*e as they are, cannot e>tend to the post?facto repudiation
of perfected transactions, otherwise they would infringe against the non?impairment clause of the
Constitution. If the legislature itself cannot re*oke an e>isting *alid contract, how can it delegate such non?
e>istent powers to the conser*ator under "ection H9? of said lawM
1
Lb*iously, therefore, "ection H9? merely gi*es the conser*ator power to re*oke contracts that are, under
e>isting law, deemed to be defecti*eDi.e., *oid, *oidable, unenforceable or rescissible. $ence, the
conser*ator merely takes the place of a bankEs board of directors. =hat the said board cannot doDsuch as
repudiating a contract *alidly entered into under the doctrine of implied authorityDthe conser*ator cannot
do either. Ineluctably, his power is not unilateral and he cannot simply repudiate *alid obligations of the
(ank. $is authority would be only to bring court actions to assail such contractsDas he has already done
so in the instant case. contrary understanding of the law would simply not be permitted by the
Constitution. Geither by common sense. To rule otherwise would be to enable a failing bank to become
sol*ent, at the e>pense of third parties, by simply getting the conser*ator to unilaterally re*oke all
pre*ious dealings which had one way or another come to be considered unfa*orable to the (ank, yielding
nothing to perfected contractual rights nor *ested interests of the third parties who had dealt with the
(ank.
The 'ifth Issue) =ere There 3e*ersible Krrors of 'actM
(asic is the doctrine that in petitions for re*iew under 3ule 4P of the 3ules of Court, fndings of fact by the
Court of ppeals are not re*iewable by the "upreme Court. In ndres *s. Canufacturers $ano*er R Trust
Corporation, we held)
,> > >. The rule regarding questions of fact being raised with this Court in a petition for certiorari under
3ule 4P of the 3e*ised 3ules of Court has been stated in 3emalante *s. Tibe, /.3. Go. P1P74, 'ebruary HP,
7199, 7P9 "C3 7B9, thus)
QThe rule in this jurisdiction is that only questions of law may be raised in a petition for certiorari under
3ule 4P of the 3e*ised 3ules of Court. ,The jurisdiction of the "upreme Court in cases brought to it from
the Court of ppeals is limited to re*iewing and re*ising the errors of law imputed to it, its fndings of the
fact being conclusi*e 6Chan *s. Court of ppeals, /.3. Go. %?H5499, Nune B2, 7152, BB "C3 5B5,
reiterating a long line of decisions8. This Court has emphatically declared that ,it is not the function of the
"upreme Court to analyJe or weigh such e*idence all o*er again, its jurisdiction being limited to re*iewing
errors of law that might ha*e been committed by the lower court 6Tiongco *. ;e la Cerced, /.3. Go. %?
H44HA, Nuly HP, 7154, P9 "C3 91+ Corona *. Court of ppeals, /.3. Go. %?AH49H, pril H9, 719B, 7H7 "C3
9AP+ (aniqued *. Court of ppeals, /.3. Go. %?45PB7, 'ebruary H2, 7194, 7H5 "C3 P1A8E ,(arring,
therefore, a showing that the fndings complained of are totally de*oid of support in the record, or that
they are so glaringly erroneous as to constitute serious abuse of discretion, such fndings must stand, for
this Court is not e>pected or required to e>amine or contrast the oral and documentary e*idence
submitted by the parties 6"anta na, Nr. *. $ernandeJ, /.3. Go. %?7AB14, ;ecember 75, 71AA, 79 "C3
15B8 6at pp. 744?74P.8E
%ikewise, in (ernardo *s. Court of ppeals, we held)
,The resolution of this petition in*ites us to closely scrutiniJe the facts of the case, relating to the
su.ciency of e*idence and the credibility of witnesses presented. This Court so held that it is not the
function of the "upreme Court to analyJe or weigh such e*idence all o*er again. The "upreme CourtEs
jurisdiction is limited to re*iewing errors of law that may ha*e been committed by the lower court. The
"upreme Court is not a trier of facts. > > >
s held in the recent case of Chua Tiong Tay *s. Court of ppeals and /oldrock Construction and
;e*elopment Corp.)
,The Court has consistently held that the factual fndings of the trial court, as well as the Court of ppeals,
are fnal and conclusi*e and may not be re*iewed on appeal. mong the e>ceptional circumstances where
a reassessment of facts found by the lower courts is allowed are when the conclusion is a fnding grounded
entirely on speculation, surmises or conjectures+ when the inference made is manifestly absurd, mistaken
or impossible+ when there is gra*e abuse of discretion in the appreciation of facts+ when the judgment is
premised on a misapprehension of facts+ when the fndings went beyond the issues of the case and the
same are contrary to the admissions of both appellant and appellee. fter a careful study of the case at
bench, we fnd none of the abo*e grounds present to justify the re?e*aluation of the fndings of fact made
by the courts below.
In the same *ein, the ruling of this Court in the recent case of "outh "ea "urety and Insurance Company,
Inc. *s. $on. Court of ppeals, et al.49 is equally applicable to the present case)
,=e see no *alid reason to discard the factual conclusions of the appellate court. > > > #I&t is not the
function of this Court to assess and e*aluate all o*er again the e*idence, testimonial and documentary,
adduced by the parties, particularly where, such as here, the fndings of both the trial court and the
appellate court on the matter coincide. #italics supplied&
72
-etitioners, howe*er, assailed the respondent CourtEs ;ecision as ,fraught with fndings and conclusions
which were not only contrary to the e*idence on record but ha*e no bases at all, specifcally the fndings
that #7& the ,(ankEs counter?o!er price of -P.P million had been determined by the past due committee
and appro*ed by conser*ator 3omey, after 3i*era presented the same for discussion and #H& ,the meeting
with Co was not to scale down the price and start negotiations anew, but a meeting on the already
determined price of -P.P million. $ence, citing -hilippine Gational (ank *s. Court of ppeals, petitioners
are asking us to re*iew and re*erse such factual fndings.
The frst point was clearly passed upon by the Court of ppeals, thus)
,There can be no other logical conclusion than that when, on "eptember 7, 7195, 3i*era informed plainti!s
by letter that Qthe bankEs counter?o!er is at -P.P Cillion for more than 727 hectares on lot basis,E such
counter?o!er price had been determined by the -ast ;ue Committee and appro*ed by the Conser*ator
after 3i*era had duly presented plainti!sE o!er for discussion by the Committee > > >. Tersely put, under
the established fact, the price of -P.P Cillion was, as clearly worded in 3i*eraEs letter #K>h. QKE&, the o.cial
and defniti*e price at which the bank was selling the property. #p. 77, C ;ecision&
> > >
,> > >. The argument deser*es scant consideration. s pointed out by plainti!, during the meeting of
"eptember H9 7195 between the plainti!s, 3i*era and %uis Co, the senior *ice?president of the bank, where
the topic was the possible lowering of the price, the bank o.cial refused it and confrmed that the -P.P
Cillion price had been passed upon by the Committee and could no longer be lowered #T"G of pril H5,
7112, pp. B4?BP& #p. 7P, C ;ecision&.
The respondent Court did not belie*e the e*idence of the petitioners on this point, characteriJing it as ,not
credible and ,at best equi*ocal and considering the gratuitous and self?ser*ing character of these
declarations, the bankEs submissions on this point do not inspire belief.
To become credible and unequi*ocal, petitioners should ha*e presented then Conser*ator 3odolfo 3omey
to testify on their behalf, as he would ha*e been in the best position to establish their thesis. Inder the
rules on e*idence, such suppression gi*es rise to the presumption that his testimony would ha*e been
ad*erse, if produced.
The second point was squarely raised in the Court of ppeals, but petitionersE e*idence was deemed
insu.cient by both the trial court and the respondent Court, and instead, it was respondentEs submissions
that were belie*ed and became bases of the conclusions arri*ed at.
In fne, it is quite e*ident that the legal conclusions arri*ed at from the fndings of fact by the lower courts
are *alid and correct. (ut the petitioners are now asking this Court to disturb these fndings to ft the
conclusion they are espousing. This we cannot do.
To be sure, there are settled e>ceptions where the "upreme Court may disregard fndings of fact by the
Court of ppeals. =e ha*e studied both the records and the C ;ecision and we fnd no such e>ceptions in
this case. Ln the contrary, the fndings of the said Court are supported by a preponderance of competent
and credible e*idence. The inferences and conclusions are reasonably based on e*idence duly identifed in
the ;ecision. Indeed, the appellate court patiently tra*ersed and dissected the issues presented before it,
lending credibility and dependability to its fndings. The best that can be said in fa*or of petitioners on this
point is that the factual fndings of respondent Court did not correspond to petitionersE claims, but were
closer to the e*idence as presented in the trial court by pri*ate respondent. (ut this alone is no reason to
re*erse or ignore such factual fndings, particularly where, as in this case, the trial court and the appellate
court were in common agreement thereon. Indeed, conclusions of fact of a trial judgeDas a.rmed by the
Court of ppealsDare conclusi*e upon this Court, absent any serious abuse or e*ident lack of basis or
capriciousness of any kind, because the trial court is in a better position to obser*e the demeanor of the
witnesses and their courtroom manner as well as to e>amine the real e*idence presented.
Kpilogue
In summary, there are two procedural issues in*ol*edDforum?shopping and the raising of issues for the
frst time on appeal 6*iJ., the e>tinguishment of the (ankEs o!er of -P.P million and the conser*atorEs
powers to repudiate contracts entered into by the (ankEs o.cers8Dwhich per se could justify the dismissal
of the present case. =e did not limit oursel*es thereto, but del*ed as well into the substanti*e issuesDthe
perfection of the contract of sale and its enforceability, which required the determination of questions of
fact. =hile the "upreme Court is not a trier of facts and as a rule we are not required to look into the
factual bases of respondent CourtEs decisions and resolutions, we did so just the same, if only to fnd out
whether there is reason to disturb any of its factual fndings, for we are only too aware of the depth,
77
magnitude and *igor by which the parties, through their respecti*e eloquent counsel, argued their
positions before this Court.
=e are not unmindful of the tenacious plea that the petitioner (ank is operating abnormally under a
go*ernment?appointed conser*ator and ,there is need to rehabilitate the (ank in order to get it back on its
feet > > > as many people depend on #it& for in*estments, deposits and well as employment. s of Nune
7195, the (ankEs o*erdraft with the Central (ank had already reached -7.2HB billion > > > and there were
#other& o!ers to buy the subject properties for a substantial amount of money.
=hile we do not deny our sympathy for this distressed bank, at the same time, the Court cannot
emotionally close its eyes to o*erriding considerations of substanti*e and procedural law, like respect for
perfected contracts, non?impairment of obligations and sanctions against forum?shopping, which must be
upheld under the rule of law and blind justice.
This Court cannot just gloss o*er pri*ate respondentEs submission that, while the subject properties may
currently command a much higher price, it is equally true that at the time of the transaction in 7195, the
price agreed upon of -P.P million was reasonable, considering that the (ank acquired these properties at a
foreclosure sale for no more than -B.P million. That the (ank procrastinated and refused to honor its
commitment to sell cannot now be used by it to promote its own ad*antage, to enable it to escape its
binding obligation and to reap the benefts of the increase in land *alues. To rule in fa*or of the (ank
simply because the property in question has algebraically accelerated in price during the long period of
litigation is to reward lawlessness and delays in the fulfllment of binding contracts. Certainly, the Court
cannot stamp its imprimatur on such outrageous proposition.
=$K3K'L3K, fnding no re*ersible error in the questioned ;ecision and 3esolution, the Court hereby
;KGIK" the petition. The assailed ;ecision is ''I3CK;. Coreo*er, petitioner (ank is 3K-3ICG;K; for
engaging in forum?shopping and =3GK; that a repetition of the same or similar acts will be dealt with
more se*erely. Costs against petitioners.
"L L3;K3K;.
Gotes.D law within the meaning of non?impairment clause has reference mainly to statutes and
ordinances of municipal corporations. K>ecuti*e orders issued by the -resident whether deri*ed from his
constitutional powers or *alid statutes may likewise be considered as such. It does not co*er the e>ercise
of quasi?judicial power of a department head e*en if a.rmed by the -resident. The administrati*e process
in such a case partakes more of an adjudicatory character. It is bereft of any legislati*e signifcance. It falls
outside the scope of the non?impairment clause. #%im, "r. *s. "ecretary of griculture and Gatural
3esources, B4 "C3 5P7 671528&
There is forum?shopping whene*er as a result of an ad*erse opinion in one forum, a party seeks a
fa*orable opinion in another. #"amad *s. Commission on Klections, HH4 "C3 AB7 6711B8&
party is guilty of forum shopping if he pursues the same cause of action, in*ol*ing the same issue,
parties and subject matter between two di!erent fora. #3. Transport Corporation *s. %aguesma, HH5 "C3
9HA 6711B8&
7H