G.R. No. 52267 January 24, 1996 ENGINEERING & MACHINERY CORPORATION vs. COURT OF APPEALS, ET.

THIRD DIVISION
1. REMEDIAL LAW; CIVIL PROCEDURE; APPEAL; APPEAL TO SUPREME COURT; LIMITED TO ERRORS OF LAW. The Supreme Court reviews only errors of law in petitions for review on certiorari under Rule 45. It is not the function of this Court to re-examine the findings of fact of the appellate court unless said findings are not supported by the evidence on record or the judgment is based on a misapprehension of facts. 2. CIVIL LAW; SPECIAL CONTRACTS; CONTRACT FOR A PIECE OF WORK; DISTINGUISHED FROM CONTRACT OF SALE. Article 1713 of the Civil Code defines a contract for a piece of work. A contract for a piece of work, labor and materials may be distinguished from a contract of sale by the inquiry as to whether the thing transferred is one not in existence and which would never have existed but for the order of the person desiring it. In such case, the contract is one for a piece of work, not a sale. On the otherhand, if the thing subject of the contract would have existed and been the subject of a sale to some other person even if the order had not been given, then the contract is one of sale. If the parties intended that at some future date an object has to be delivered, without considering the work or labor of the party bound to deliver, the contract is one of sale. But if one of the parties accepts the undertaking on the basis of some plan, taking into account the work he will employ personally or through another, there is a contract for a piece of work. 3. ID.; ID.; ID.; REMEDY IN CASE OF VIOLATION OF THE WARRANTY AGAINST HIDDEN DEFECTS. The obligations of a contractor for a piece of work are set forth in Articles 1714, and 1715 of the Civil Code. The provisions on warranty against hidden defects, referred to in Art. 1714 are found in Articles 1561 and 1566. The remedy against violations of the warranty against hidden defects is either to withdraw from the contract (redhibitory action) or to demand a proportionate reduction of the price (accion quanti minoris), with damages in either case. 4. ID.; ID.; ID.; PRESCRIPTIVE PERIOD IN FILING AN ACTION IN CASE OF BREACH THEREOF The original complaint is one for damages arising from breach of a written contractand not a suit to enforce warranties against hidden defects. The governing law is Article 1715 (supra). However, inasmuch as this provision does not contain a specific prescriptive period, the general law on prescription, which is Article 1144 of the Civil Code, will apply. Said provision states, inter alia, that actions "upon a written contract" prescribe in ten (10) years. The mere fact that the employer accepted the work does not, ipso facto, relieve the petitioner from liability for deviations from and violations of the written contract, as the law gives him ten (10) years within which to file an action based on breach thereof. DECISION

PANGANIBAN, J p: Is a contract for the fabrication and installation of a central air-

conditioning system in a building, one of "sale" or "for a piece of work"? What is the prescriptive period for filing actions for breach of the terms of such contract? These are the legal questions brought before this Court. in this Petition for review on certiorari under Rule 45 of the Rules of Court, to set aside the Decision 1 of the Court of Appeals 2 in-CA-G.R. No. 58276-R promulgated on November 28, 1978 (affirming in toto the decision 3 dated April 15, 1974 of the then Court of First Instance of Rizal, Branch II 4 , in Civil Case No. 14712, which ordered petitioner to pay private respondent the amount needed to rectify the faults and deficiencies of the air-conditioning system installed by petitioner in private respondent's building, plus damages, attorney's fees and costs). By a resolution of the First Division of this Court dated November 13, 1995, this case was transferred to the Third. After deliberating on the various submissions of the parties, including the petition, record on appeal, private respondent's comment and briefs for the petitioner and the private respondent, the Court assigned the writing of this Decision to the undersigned, who took his oath as a member of the Court on October 10, 1995. cdasia The Facts Pursuant to the contract dated September 10, 1962 between petitioner and private respondent, the former undertook to fabricate, furnish and install the air-conditioning system in the latter's building along Buendia Avenue, Makati in consideration of P12,000.00. Petitioner was to furnish the materials, labor, tools and all services required in order to so fabricate and install said system. The system was completed in 1963 and accepted by private respondent, who paid in full the contract price. On September 2, 1965, private respondent sold the building to the National Investment and Development Corporation (NIDC). The latter took possession of the building but on account of NIDC's noncompliance with the terms and conditions of the deed of sale, private respondent was able to secure judicial rescission thereof. The ownership of the building having been decreed back to private respondent, he re-acquired possession sometime in 1971. It was then that he learned from some NIDC employees of the defects of the air-conditioning system of the building. Acting on this information, private respondent commissioned Engineer David R. Sapico to render a technical evaluation of the system in relation to the contract with petitioner. In his report, Sapico enumerated the defects of the system and concluded that it was "not capable of maintaining the desired room temperature of

76F 2F (Exhibit C)" 5 cdtai On the basis of this report, private respondent filed on May 8, 1971 an action for damages against petitioner with the then Court of First Instance of Rizal (Civil Case No. 14712). The complaint alleged that the air-conditioning system installed by petitioner did not comply with the agreed plans and specifications. Hence, private respondent prayed for the amount of P210,000.00 representing the rectification cost, P100,000.00 as damages and P15,000.00 as attorney's fees. Petitioner moved to dismiss the complaint, alleging that the prescriptive period of six months had set in pursuant to Articles 1566 and 1567, in relation to Article 1571 of the Civil Code, regarding the responsibility of a vendor for any hidden faults or defects in the thing sold. Private respondent countered that the contract dated September 10, 1962 was not a contract of sale but a contract for a piece of work under Article 1713 of the Civil Code. Thus, in accordance with Article 1144 (1) of the same Code, the complaint was timely brought within the ten-year prescriptive period. cdt In its reply, petitioner argued that Article 1571 of the Civil Code providing for a six-month prescriptive period is applicable to a contract for a piece of work by virtue of Article 1714, which provides that such a contract shall be governed by the pertinent provisions on warranty of title and against hidden defects and the payment of price in a contract of sale 6 . The trial court denied the motion to dismiss. In its answer to the complaint, petitioner reiterated its claim of prescription as an affirmative defense. It alleged that whatever defects might have been discovered in the air-conditioning system could have been caused by a variety of factors, including ordinary wear and tear and lack of proper and regular maintenance. It pointed out that during the one-year period that private respondent withheld final payment, the system was subjected to "very rigid inspection and testing and corrections or modifications effected" by petitioner. It interposed a compulsory counterclaim suggesting that the complaint was filed "to offset the adverse effects" of the judgment in Civil Case No. 71494, Court of First Instance of Manila, involving the same parties, wherein private respondent was adjudged to pay petitioner the balance of the unpaid contract price for the air-conditioning system installed in another building of private respondent, amounting to P138,482.25. Thereafter, private respondent filed an ex-parte motion for preliminary attachment on the strength of petitioner's own statement to the effect that it had sold its business and was no longer doing business in Manila. The trial court granted the motion

and, upon private respondent's posting of a bond of P50,000.00, ordered the issuance of a writ of attachment. cdtai In due course, the trial court rendered a decision finding that petitioner failed to install certain parts and accessories called for by the contract, and deviated from the plans of the system, thus reducing its operational effectiveness to the extent that 35 windowtype units had to be installed in the building to achieve a fairly desirable room temperature. On the question of prescription, the trial court ruled that the complaint was filed within the ten-year prescriptive period although the contract was one for a piece of work, because it involved the "installation of an air-conditioning system which the defendant itself manufactured, fabricated, designed and installed." Petitioner appealed to the Court of Appeals, which affirmed the decision of the trial court. Hence, it instituted the instant petition. The Submissions of the Parties cdta In the instant Petition, petitioner raised three issues. First, it contended that private respondent's acceptance of the work and his payment of the contract price extinguished any liability with respect to the defects in the air-conditioning system. Second, it claimed that the Court of Appeals erred when it held that the defects in the installation were not apparent at the time of delivery and acceptance of the work considering that private respondent was not an expert who could recognize such defects. Third, it insisted that, assuming arguendo that there were indeed hidden defects, private respondent's complaint was barred by prescription under Article 1571 of the Civil Code, which provides for a six-month prescriptive period. Private respondent, on the other hand averred that the issues raised by petitioner, like the question of whether there was an acceptance of the work by the owner and whether the hidden defects in the installation could have been discovered by simple inspection, involve questions of fact which have been passed upon by the appellate court. cdtai The Court's Ruling The Supreme Court reviews only errors of law in petitions for review on certiorari under Rule 45. It is not the function of this Court to reexamine the findings of fact of the appellate court unless said findings are not supported by the evidence on record or the judgment is based on a misapprehension of facts. 7 "The Court has consistently held that the factual findings of the trial court, as well as the Court of Appeals, are final and conclusive and may not be reviewed on appeal. Among the exceptional

circumstances where a reassessment of facts found by the lower courts is allowed are when the conclusion is a finding grounded entirely on speculation, surmises or conjectures; when the inference made is manifestly absurd, mistaken or impossible; when there is grave abuse of discretion in the appreciation of facts; when the judgment is premised on a misapprehension of facts; when the findings went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee. After a careful study of the case at bench, we find none of the above grounds present to justify the re-evaluation of the findings of fact made by the courts below." 8 cdasia "We see no valid reason to discard the factual conclusions of the appellate court. . . . (I)t is not the function of this Court to assess and evaluate all over again the evidence, testimonial and documentary, adduced by the parties, particularly where, such as here, the findings of both the trial court and the appellate court on the matter coincide." 9 (Emphasis supplied) Hence, the first two issues will not be resolved as they raise questions of fact. Thus, the only question left to be resolved is that of prescription. In their submissions, the parties argued lengthily on the nature of the contract entered into by them, viz., whether it was one of sale or for a piece of work. cdtai Article 1713 of the Civil Code defines a contract for a piece of work thus: "By the contract for a piece of work the contractor binds himself to execute a piece of work for the employer, in consideration of a certain price or compensation. The contractor may either employ only his labor or skill, or also furnish the material." A contract for a piece of work, labor and materials may be distinguished from a contract of sale by the inquiry as to whether the thing transferred is one not in existence and which would never have existed but for the order of the person desiring it 10 . In such case, the contract is one for a piece of work, not a sale. On the other hand, if the thing subject of the contract would have existed and been the subject of a sale to some other person even if the order had not been given, then the contract is one of sale 11 . cdtai Thus, Mr. Justice Vitug 12 explains that "A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or procures for the general market whether the same is on hand at the time or not is a contract of sale, but if the goods are to be manufactured specially for the customer and upon his special order,

and not for the general market, it is a contract for a piece of work (Art. 1467, Civil Code). The mere fact alone that certain articles are made upon previous orders of customers will not argue against the imposition of the sales tax if such articles are ordinarily manufactured by the taxpayer for sale to the public (Celestino Co. vs. Collector, 99 Phil. 8411)." To Tolentino, the distinction between the two contracts depends on the intention of the parties. Thus, if the parties intended that at some future date an object has to be delivered, without considering the work or labor of the party bound to deliver, the contract is one of sale. But if one of the parties accepts the undertaking on the basis of some plan, taking into account the work he will employ personally or through another, there is a contract for a piece of work 13 . cdta Clearly, the contract in question is one for a piece of work. It is not petitioner's line of business to manufacture air-conditioning systems to be sold "off-the-shelf." Its business and particular field of expertise is the fabrication and installation of such systems as ordered by customers and in accordance with the particular plans and specifications provided by the customers. Naturally, the price or compensation for the system manufactured and installed will depend greatly on the particular plans and specifications agreed upon with the customers. The obligations of a contractor for a piece of work are set forth in Articles 1714 and 1715 of the Civil Code, which provide: "Art. 1714. If the contractor agrees to produce the work from material furnished by him, he shall deliver the thing produced to the employer and transfer dominion over the thing. This contract shall be governed by the following articles as well as by the pertinent provisions on warranty of title and against hidden defects and the payment of price in a contract of sale." cdasia "Art. 1715. The contractor shall execute the work in such a manner that it has the qualities agreed upon and has no defects which destroy or lessen its value or fitness for its ordinary or stipulated use. Should the work be not of such quality, the employer may require that the contractor remove the defect or execute another work. If the contractor fails or refuses to comply with this obligation, the employer may have the defect removed or another work executed, at the contractor's cost." The provisions on warranty against hidden defects, referred to in Art. 1714 above-quoted, are found in Articles 1561 and 1566, which read as follows: "Art. 1561. The vendor shall be responsible for warranty against the hidden defects which the thing sold may have, should they

render it unfit for the use for which it is intended, or should they diminish its fitness for such use to such an extent that, had the vendee been aware thereof, he would not have acquired it or would have given a lower price for it; but said vendor shall not be answerable for patent defects or those which may be visible, or for those which are not visible if the vendee is an expert who, by reason of his trade or profession, should have known them." cdtai xxx xxx xxx "Art. 1566. The vendor is responsible to the vendee for any hidden faults or defects in the thing sold, even though he was not aware thereof. "This provision shall not apply if the contrary has been stipulated, and the vendor was not aware of the hidden faults or defects in the thing sold." The remedy against violations of the warranty against hidden defects is either to withdraw from the contract (rehibitory action) or to demand a proportionate reduction of the price (accion quanti minoris), with damages in either case. 14 cdt In Villostas vs. Court of Appeals 15 , we held that, "while it is true that Article 1571 of the Civil Code provides for a prescriptive period of six months for a rehibitory action, a cursory reading of the ten preceding articles to which it refers will reveal that said rule may be applied only in case of implied warranties"; and where there is an express warranty in the contract, as in the case at bench, the prescriptive period is the one specified in the express warranty, and in the absence of such period, "the general rule on rescission of contract, which is four years (Article 1389, Civil Code) shall apply" 16 . Consistent with the above discussion, it would appear that this suit is barred by prescription because the complaint was filed more than four years after the execution of the contract and the completion of the air-conditioning system. However, a close scrutiny of the complaint filed in the trial court reveals that the original action is not really for enforcement of the warranties against hidden defects, but one for breach of the contract itself. It alleged 17 that the petitioner, "in the installation of the air conditioning system did not comply with the specifications provided" in the written agreement between the parties, "and an evaluation of the air-conditioning system as installed by the defendant showed the following defects and violations of the specifications of the agreement, to wit: aisadc "GROUND FLOOR. "A. RIGHT WING.

Equipped with Worthington Compressor, Model 2VC4 directly driven by an Hp Elin electric motor 1750 ramp, 3 phase, 60 cycles, 220 volts, complete with starter evaporative condenser circulating water pump, air handling unit air ducts. Defects Noted. cdta 1. Deteriorated evaporative condenser panels, coils are full of scales and heavy corrosion is very evident. 2. Defective gauges of compressors. 3. No belt guard on motor. cdasia 4. Main switch has no cover. 5. Desired room temperature not attained. Aside from the above defects, the following were noted not installed although provided in the specifications. cdtai 1. Face and by-pass damper of G.I. sheets No. 16. This damper regulates the flow of cooled air depending on room condition. 2. No fresh air intake provision were provided which is very necessary for efficient comfort cooling. 3. No motor to regulate the face and by-pass. cdt 4. Liquid level indicator for refrigerant not provided. 5. Suitable heat exchanger is not installed. This is an important component to increase refrigeration efficiency. 6. Modulating thermostat not provided. aisadc 7. Water treatment device for evaporative condenser was not provided. 8. Liquid receiver not provided by sight glass. "B. LEFT WING. Worthington Compressor Model 2VC4 is Installed complete with 15 Hp electric motor, 3 phase, 220 volts 60 cycles with starter. cdta Defects Noted. Same as right wing, except No. 4. All other defects on right wing are common to the left wing. "SECOND FLOOR. (Common up to EIGHT FLOORS) cdasia Compressors installed are MELCO with 7.5 Hp V-belt driven by 1800 RPM, 220 volts, 60 cycles, 3 phase, Thrige electric motor with starters. As stated in the specifications under Section No. IV, the MELCO compressors do not satisfy the conditions stated therein due to the following. 1. MELCO Compressors are not provided with automatic capacity unloader. cdtai 2. Not provided with oil pressure safety control. 3. Particular compressors do not have provision for renewal sleeves.

Out of the total 15 MELCO compressors installed to serve the 2nd floor up to 8th floors, only six (6) units are in operation and the rest were already replaced. Of the remaining six (6) units, several of them have been replaced with bigger crankshafts. cdt "NINTH FLOOR. Two (2) Worthington 2VC4 driven by 15 Hp, 3 phase, 220 volts, 60 cycles, 1750 rpm, Higgs motors with starters. Defects Noted are similar to ground floor. aisadc "GENERAL REMARKS. Under Section III, Design conditions of specification for air conditioning work, and taking into account "A" & "B" same, the present systems are not capable of maintaining the desired room temperature of 76 = 2F (sic). The present tenant have installed 35 window type air conditioning units distributed among the different floor levels. Temperature measurements conducted on March 29, 1971, revealed that 78F room (sic) is only maintained due to the additional window type units." cdta The trial court, after evaluating the evidence presented, held that, indeed, petitioner failed to install items and parts required in the contract and substituted some other items which were not in accordance with the specifications 18 , thus: "From all of the foregoing, the Court is persuaded to believe the plaintiff that not only had the defendant failed to install items and parts provided for in the specifications of the air-conditioning system be installed, like face and by-pass dampers and modulating thermostat and many others, but also that there are items, parts and accessories which were used and installed on the air-conditioning system which were not in full accord with contract specifications. These omissions to install the equipment, parts and accessories called for in the specifications of the contract, as well as the deviations made in putting into the air-conditioning system equipment, parts and accessories not in full accord with the contract specification naturally resulted to adversely affect the operational effectiveness of the air-conditioning system which necessitated the installation of thirty-five window type of air-conditioning units distributed among the different floor levels in order to be able to obtain a fairly desirable room temperature for the tenants and actual occupants of the building. The Court opines and so holds that the failure of the defendant to follow the contract specifications and said omissions and deviations having resulted in the operational ineffectiveness of the system installed makes the defendant liable to the plaintiff in the amount necessary to rectify to put the air

conditioning system in its proper operational condition to make it serve the purpose for which the plaintiff entered into the contract with the defendant." The respondent Court affirmed the trial court's decision thereby making the latter's findings also its own. cdasia Having concluded that the original complaint is one for damages arising from breach of a written contract - and not a suit to enforce warranties against hidden defects - we herewith declare that the governing law is Article 1715 (supra). However, inasmuch as this provision does not contain a specific prescriptive period, the general law on prescription, which is Article 1144 of the Civil Code, will apply. Said provision states, inter alia, that actions "upon a written contract" prescribe in ten (10) years. Since the governing contract was executed on September 10, 1962 and the complaint was filed on May 8, 1971, it is clear that the action has not prescribed. What about petitioner's contention that "acceptance of the work by the employer relieves the contractor of liability for any defect in the work"? This was answered by respondent Court 19 as follows: "As the breach of contract which gave rise to the instant case consisted in appellant's omission to install the equipment (sic), parts and accessories not in accordance with the plan and specifications provided for in the contract and the deviations made in putting into the air-conditioning system parts and accessories not in accordance with the contract specifications, it is evident that the defect in the installation was not apparent at the time of the delivery and acceptance of the work, consider in; further that plaintiff is not an expert to recognize the same. From the very nature of things, it is impossible to determine by the simple inspection of air conditioning system installed in an 8-floor building whether it has been furnished and installed as per agreed specifications." cdtai Verily, the mere fact that the private respondent accepted the work does not, ipso facto, relieve the petitioner from liability for deviations from and violations of the written contract, as the law gives him ten (10) years within which to file an action based on breach thereof. WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED. No costs. SO ORDERED. cdt

G.R. No. 74470 March 8, 1989 NATIONAL GRAINS AUTHORITY, ET AL. vs. INTERMEDIATE APPELLATE COURT, ET AL. THIRD DIVISION
1. CIVIL LAW; CONTRACTS; SALES, DEFINED. Article 1458 of the Civil Code of the Philippines defines sale as a contract whereby one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other party to pay therefore a price certain in money or its equivalent. 2. ID.; CONTRACTS, DEFINED. A contract, on the other hand, is a meeting of minds between two (2) persons whereby one binds himself, with respect to the other, to give something or to render some service (Art. 1305, Civil Code of the Philippines). The essential requisites of contracts are: (1) consent of the contracting parties, (2) object certain which is the subject matter of the contract, and (3) cause of the obligation which is established (Art. 1318, Civil Code of the Philippines.) 3. ID.; ID.; SALES; EXISTENCE OF, NOT VITIATED WHEN QUANTITY HAS NOT BEEN DETERMINED. The fact that the exact number of cavans of palay to be delivered has not been determined does not affect the perfection of the contract. Article 1349 of the New Civil Code provides: ". . . The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties." 4. ID.; ID.; ID.; PERFECTION OF; ACCEPTANCE OF THE OFFER DETERMINES CONSENT. Sale is a consensual contract, ". . ., there is perfection when there is consent upon the subject matter and price, even if neither is delivered." (Obana vs. C.A., L-36249, March 29, 1985, 135 SCRA 557, 560) The acceptance referred to which determines consent is the acceptance of the offer of one party by the other and not of the goods delivered. 5. ID.; ID.; ID.; ID.; PARTIES MAY RECIPROCALLY DEMAND PERFORMANCE. From the moment the contract of sale is perfected, it is incumbent upon the parties to comply with their mutual obligations or "the parties may reciprocally demand performance" thereof. (Article 1475, Civil Code, 2nd par.) DECISION

MEDIALDEA, J p: This is a petition for review of the decision (pp. 9-21, Rollo) of the Intermediate Appellate Court (now Court of Appeals) dated December 23, 1985 in A.C. G.R. CV No. 03812 entitled, "Leon Soriano, Plaintiff-Appellee versus National Grains Authority and William Cabal, Defendants-Appellants", which affirmed the decision of the Court of First Instance of Cagayan, in Civil Case No. 2754 and its resolution (p. 28, Rollo) dated April 17, 1986 which denied the Motion for Reconsideration filed therein. The antecedent facts of the instant case are as follows: Petitioner National Grains Authority (now National Food Authority, NFA for short) is a government agency created under Presidential Decree No. 4. One of its incidental functions is the buying of palay grains from qualified farmers. On August 23, 1979, private respondent Leon Soriano offered to sell palay grains to the NFA, through William Cabal, the Provincial Manager of NFA stationed at Tuguegarao, Cagayan. He submitted the documents required by the NFA for pre-qualifying as a seller, namely: (1) Farmer's Information Sheet accomplished by Soriano and certified by a Bureau of Agricultural Extension (BAEX) technician, Napoleon Callangan, (2) Xerox copies of four (4) tax declarations of the riceland leased to him and copies of the lease contract between him and Judge Concepcion Salud, and (3) his Residence Tax Certificate. Private respondent Soriano's documents were processed and accordingly, he was given a quota of 2,640 cavans of palay. The quota noted in the Farmer's Information Sheet represented the maximum number of cavans of palay that Soriano may sell to the NFA. In the afternoon of August 23, 1979 and on the following day, August 24, 1979, Soriano delivered 630 cavans of palay. The palay delivered during these two days were not rebagged, classified and weighed. When Soriano demanded payment of the 630 cavans of palay, he was informed that its payment will be held in abeyance since Mr. Cabal was still investigating on an information he received that Soriano was not a bona fide farmer and the palay delivered by him was not produced from his farmland but was taken from the warehouse of a rice trader, Ben de Guzman. On August 28, 1979, Cabal wrote Soriano advising him to withdraw from the NFA warehouse the 630 cavans Soriano delivered stating that NFA cannot legally accept the said delivery on the basis of the subsequent certification of the BAEX technician, Napoleon Callangan that Soriano is not a bona fide farmer. Instead of withdrawing the 630 cavans of palay, private respondent

Soriano insisted that the palay grains delivered be paid. He then filed a complaint for specific performance and/or collection of money with damages on November 2, 1979, against the National Food Authority and Mr. William Cabal, Provincial Manager of NFA with the Court of First Instance of Tuguegarao, and docketed as Civil Case No. 2754. Meanwhile, by agreement of the parties and upon order of the trial court, the 630 cavans of palay in question were withdrawn from the warehouse of NFA. An inventory was made by the sheriff as representative of the Court, a representative of Soriano and a representative of NFA (p. 13, Rollo). On September 30, 1982, the trial court rendered judgment ordering petitioner National Food Authority, its officers and agents to pay respondent Soriano (as plaintiff in Civil Case No. 2754) the amount of P47,250.00 representing the unpaid price of the 630 cavans of palay plus legal interest thereof (p. 1-2, CA Decision). The dispositive portion reads as follows: "WHEREFORE, the Court renders judgment in favor of the plaintiff and against the defendants National Grains Authority, and William Cabal and hereby orders: "1. The National Grains Authority, now the National Food Authority, its officers and agents, and Mr. William Cabal, the Provincial Manager of the National Grains Authority at the time of the filing of this case, assigned at Tuguegarao, Cagayan, whomsoever is his successors, to pay to the plaintiff Leon T. Soriano, the amount of P47,250.00, representing the unpaid price of the palay deliveries made by the plaintiff to the defendants consisting of 630 cavans at the rate P1.50 per kilo of 50 kilos per cavan of palay; "2. That the defendants National Grains Authority, now National Food Authority, its officer and/or agents, and Mr. William Cabal, the Provincial Manager of the National Grains Authority, at the time of the filing of this case assigned at Tuguegarao, Cagayan or whomsoever is his successors, are likewise ordered to pay the plaintiff Leon T. Soriano, the legal interest at the rate of TWELVE (12%) percent per annum, of the amount of P47,250.00 from the filing of the complaint on November 20, 1979, up to the final payment of the price of P47,250.00; "3. That the defendants National Grains Authority, now National Food Authority, or their agents and duly authorized representatives can now withdraw the total number of bags (630 bags with an excess of 13 bags) now on deposit in the bonded warehouse of Eng. Ben de Guzman at Tuguegarao, Cagayan pursuant to the order of this court, and as appearing in the written inventory dated October 10, 1980, (Exhibit F for the plaintiff and Exhibit 20 for the

defendants) upon payment of the price of P47,250.00 and TWELVE PERCENT (12%) legal interest to the plaintiff; "4. That the counterclaim of the defendants is hereby dismissed; "5. That there is no pronouncement as to the award of moral and exemplary damages and attorney's fees; and "6. That there is no pronouncement as to costs. "SO ORDERED," (pp. 9-10, Rollo) Petitioners' motion for reconsideration of the decision was denied on December 6, 1982. Petitioners' appealed the trial court's decision to the Intermediate Appellate Court. In a decision promulgated on December 23, 1986 (pp. 9-21, Rollo) the then Intermediate Appellate Court upheld the findings of the trial court and affirmed the decision ordering NFA and its officers to pay Soriano the price of the 630 cavans of rice plus interest. Petitioners' motion for reconsideration of the appellate court's decision was denied in a resolution dated April 17, 1986 (p. 28, Rollo). Hence, this petition for review filed by the National Food Authority and Mr. William Cabal on May 15, 1986 assailing the decision of the Intermediate Appellate Court on the sole issue of whether or not there was a contract of sale in the case at bar. Petitioners contend that the 630 cavans of palay delivered by Soriano on August 23, 1979 was made only for purposes of having it offered for sale. Further, petitioners stated that the procedure then prevailing in matters of palay procurement from qualified farmers were: firstly, there is a rebagging wherein the palay is transferred from a private sack of a farmer to the NFA sack; secondly, after the rebagging has been undertaken, classification of the palay is made to determine its variety; thirdly, after the determination of its variety and convinced that it passed the quality standard, the same will be weighed to determine the number of kilos; and finally, it will be piled inside the warehouse after the preparation of the Warehouse Stock Receipt (WSP) indicating therein the number of kilos, the variety and the number of bags. Under this procedure, rebagging is the initial operative act signifying acceptance, and acceptance will be considered complete only after the preparation of the Warehouse Stock Receipt (WSR). When the 630 cavans of palay were brought by Soriano to the Carig warehouse of NFA they were only offered for sale. Since the same were not rebagged, classified and weighed in accordance with the palay procurement program of NFA, there was no acceptance of the offer which, to petitioners' mind is a clear case of policitation or an unaccepted offer to sell. The petition is not impressed with merit.

Article 1458 of the Civil Code of the Philippines defines sale as a contract whereby one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other party to pay therefore a price certain in money or its equivalent. A contract, on the other hand, is a meeting of minds between two (2) persons whereby one binds himself, with respect to the other, to give something or to render some service (Art. 1305, Civil Code of the Philippines). The essential requisites of contracts are: (1) consent of the contracting parties, (2) object certain which is the subject matter of the contract, and (3) cause of the obligation which is established (Art. 1318, Civil Code of the Philippines.) In the case at bar, Soriano initially offered to sell palay grains produced in his farmland to NFA. When the latter accepted the offer by noting in Soriano's Farmer's Information Sheet a quota of 2,640 cavans, there was already a meeting of the minds between the parties. The object of the contract, being the palay grains produced in Soriano's farmland and the NFA was to pay the same depending upon its quality. The fact that the exact number of cavans of palay to be delivered has not been determined does not affect the perfection of the contract. Article 1349 of the New Civil Code provides: ". . . The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties." In this case, there was no need for NFA and Soriano to enter into a new contract to determine the exact number of cavans of palay to be sold. Soriano can deliver so much of his produce as long as it does not exceed 2,640 cavans. In its memorandum (pp. 66-71, Rollo) dated December 4, 1986, petitioners further contend that there was no contract of sale because of the absence of an essential requisite in contracts, namely, consent. It cited Section 1319 of the Civil Code which states: "Consent is manifested by the meeting of the offer and the acceptance of the thing and the cause which are to constitute the contract . . ." Following this line, petitioners contend that there was no consent because there was no acceptance of the 630 cavans of palay in question. The above contention of petitioner is not correct. Sale is a consensual contract, ". . ., there is perfection when there is consent upon the subject matter and price, even if neither is delivered." (Obana vs. C.A., L-36249, March 29, 1985, 135 SCRA 557, 560) This is provided by Article 1475 of the Civil Code which states: "Art. 1475. 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. "xxx xxx xxx" The acceptance referred to which determines consent is the acceptance of the offer of one party by the other and not of the goods delivered as contended by petitioners. From the moment the contract of sale is perfected, it is incumbent upon the parties to comply with their mutual obligations or "the parties may reciprocally demand performance" thereof. (Article 1475, Civil Code, 2nd par.) The reason why NFA initially refused acceptance of the 630 cavans of palay delivered by Soriano is that it (NFA) cannot legally accept the said delivery because Soriano is allegedly not a bona fide farmer. The trial court and the appellate court found that Soriano was a bona fide farmer and therefore, he was qualified to sell palay grains to NFA. Both courts likewise agree that NFA's refusal to accept was without just cause. The above factual findings which are supported by the record should not be disturbed on appeal. ACCORDINGLY, the instant petition for review is DISMISSED. The assailed decision of the then Intermediate Appellate Court (now Court of Appeals) is affirmed. No costs. SO ORDERED.

G.R. No. 80645 August 3, 1993 MARCELINO GALANG, ET AL. vs. COURT OF APPEALS, ET AL. THIRD DIVISION

1. CIVIL LAW; SALES; CONTRACT TO SELL, EXPLAINED; CASE AT BAR. Reviewing the terms of the Deed of Sale quoted earlier, it is clear that the parties had reached the stage of perfection of the contract of sale, there being already "a meeting of the minds upon the thing which is the

object of the contract and upon the price," (Art. 1475, Civil Code) and on the basis of which both parties had the personal right to reciprocally demand from the other the fulfillment of their respective obligations. But contracts of sale may either be absolute or conditional. (Art. 1458, Civil Code) One form of conditional sales, is what is now popularly termed as a "Contract to Sell," where ownership or title is retained until the fulfillment of a positive condition, normally the payment of the purchase price in the manner agreed upon. The breach of that condition can prevent the obligation to convey title from acquiring a binding force. (Roque v. Lapuz, 96 SCRA 741) Where the condition is imposed, instead, upon the perfection of the contract, the failure of such condition would prevent such perfection. (People's Homesite and Housing Corporation v. Court of Appeals, 133 SCRA 777) What we have here is a contract to sell for it is the transfer of ownership, not the perfection of the contract that was subjected to a condition. Ownership was not to vest in the buyers until full payment of the purchase price and the transfer of the title to the buyers. Apart from full payment of the purchase price, we find no other condition which would affect the obligations of the parties, i.e., to pay, on the part of the buyer and to convey ownership, on the part of the seller.

DECISION ROMERO, J p: This is a petition for review on certiorari of the decision 1 of the Court of Appeals affirming in toto the judgment rendered by the then Court of First Instance in Civil Case No. R-82-7186 (107585). The dispositive portion of the assailed decision reads as follows: "WHEREFORE, finding no reversible error in the judgment appealed from, the same is hereby AFFIRMED IN TOTO without any pronouncement as to costs at this instance. 2 " From the records, we find the following facts. On July 16, 1976, Ramon Buenaventura on his own behalf and as attorney-in-fact of Angeles, Corazon, Amparo, and Maria Luisa, all surnamed Buenaventura, sold to Guadalupe Galang and Marcelino Galang two (2) parcels of land situated in Tagaytay City. The agreement was embodied in a Deed of Sale which stated the following: "I, RAMON R. BUENAVENTURA, Filipino, of legal age, married, and residing at 2111 M. Adriatico, Malate, Manila, in his own behalf and as attorney in fact of Angeles, Corazon, Amparo and Maria Luisa, all surnamed Buenaventura as per the special powers of attorney already registered and annotated at the back of the certificate of title, for and in consideration of the sum of One Hundred Ninety Two Thousand Seven Hundred Ninety Five (P192,795.00) Pesos, Philippine Currency, hereby SELL, TRANSFER AND CONVEY UNTO MARCELINO GALANG and GUADALUPE GALANG, Filipino, of legal age, spouses and residents of 72 4th St., New Manila, Quezon City, those

parcels of land situated at Tagaytay City, inherited by us from our parents and our exclusive paraphernal property, of which we are the absolute owners, our little thereto being evidenced by TCT No. T3603 of Tagaytay City Register of Deeds, more particularly described as follows: xxx xxx xxx Under the following terms: (a) 25% of the purchase price upon signing of this instrument; (b) 25% within three months or upon removal of the 'encargado' from the premises, with the delivery of the owner's duplicate certificate of title; (c) 50% balance within one (1) year from date hereof upon which the title will be transferred to the buyers but 12% interest per annum will be charged after said one year in the event full payment is not made." 3 Marcelino and Guadalupe Galang, herein petitioners paid to the sellers the first 25% of the purchase price as stated in the deed. Thereafter, they allegedly demanded from private respondents the removal of the "encargado" from the premises and the delivery of the owners' duplicate certificate of title. Private respondents failed to do so despite the willingness of petitioners to pay the second 25% of the purchase price. Consequently, Marcelino and Guadalupe Galang filed on March 18, 1977 a complaint for specific performance with damages where they alleged among others, that: "5. The period fixed within which the defendants should remove the 'encargado' from the premises and to deliver the owner's duplicate certificate of title had lapsed without the defendants complying with their obligations thus preventing the plaintiffs from taking possession of the property sold and from developing and improving the same. LexLib 6. On several occasions, the plaintiffs demanded from the defendants, both orally and in writing, the removal of the latter's 'encargado' from the premises sold an for them to deliver the owner's duplicate certificate of title to the plaintiffs but said defendants failed and refused and still fail and refuse to do so, the demands notwithstanding." 4 Defendants, herein private respondents, denied the allegations and stated that the contract did not state the true intention of the parties and that it was not their fault that the "encargado" refused to leave. Furthermore, they filed on July 21, 1978, a third-party complaint against the "encargado" for subrogation and reimbursement in case of an adverse judgment against third-party plaintiff. Upon the "encargado's" motion, the complaint was dismissed on the ground

that it did not state a cause of action for the ejectment of the tenant the "encargado." After trial, the lower court rendered a decision, the dispositive portion of which is hereby quoted, to wit: "PREMISES CONSIDERED, the Court hereby orders the defendants to pay jointly and severally, the plaintiffs P50,000.00 with interest at 12% per annum from July 16, 1976; P5,000.00 by way of nominal damages; and P3,000.00 as attorney's fees and the costs." 5 In rendering the decision, the trial court reasoned that: "There is no question that, because the defendants had not complied with their obligation to remove the 'encargado,' the plaintiffs, as injured parties, may choose between the fulfillment of the contract of sale and its rescission, in accordance and (sic) Article 1191 of the Civil Code. They chose enforcement of the contract which, however is legally impossible. The lands sold to the plaintiff are agricultural, planted to coffee, among other plants, not only by he 'encargado' but also by his deceased parents. The law prohibits, under pain of damages, fine and imprisonment, a landlord from dispossessing his agricultural tenant without the court's approval and on grounds fixed by the law, not one of which is shown to exist in respect defendants' 'encargado.' (Section 31 and 36, The Agricultural Land Reform Code, RA 3844 as amended). cdrep Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them. (Article 1183, Civil Code). Since the consummation of the sale between the parties is dependent upon the ouster of an agricultural lessee, which cannot be done because it is against good custom, public policy and the law, the sale is a nullity . . ." 6 Agreeing that the "encargado" was an agricultural tenant who could not be ejected without case, the Court of Appeals affirmed the decision. Hence, this petition. In their petition, Marcelino and Guadalupe Galang argued that respondent Court erred in ordering the rescission instead of specific performance of the contract of sale on the ground that the ejectment of the "encargado"-tenant was a legally impossible condition that prevented the fulfillment of the contract. Contrary to the reason advanced by the Court of Appeals and the trial court, petitioners averred that the removal of the "encargado" was not a condition precedent to the fulfillment of the contract as paragraph two (2) thereof provides for an alternative period within which petitioners would have to pay the second 25% of the purchase price and

concomitantly, private respondents would deliver the owner's duplicate certificate of title. Thus, whether or not the "encargado" was removed, the amount would still be due and private respondents would still have to deliver the duplicate title. We are now confronted with the question: Was the removal of the "encargado" a condition precedent to the fulfillment of the contract of sale such that the finding that it was a legally impossible condition would entitle the buyers to the rescission of the contract? We answer in the negative. The trial court and the Court of Appeals based their decision on Art. 1183 of the Civil Code which provides, thus: "Art. 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them . . ." Both courts declared the "encargado" a tenant. This being the case, it follows that he may not be removed from the subject land without just cause, as provided by Presidential Decree No. 1038. Since the Galangs, then plaintiffs demanded the removal of the "encargado" which, being legally impossible, could not be met, the contract of sale was rescinded by the courts. We disagree with the conclusion arrived at by the respondent court. Reviewing the terms of the Deed of Sale quoted earlier, it is clear that the parties had reached the stage of perfection of the contract of sale, there being already "a meeting of the minds upon the thing which is the object of the contract and upon the parties," 7 and on the basis of which both parties had the personal right to reciprocally demand from the other the fulfillment of their respective obligations. But contracts of sale may either be absolute or conditional. 8 One form of conditional sales, is what is now popularly termed as a "Contract to Sell," where ownership or title is retained until the fulfillment of a positive condition, normally the payment of the purchase price in the manner agreed upon. The breach of that condition can prevent the obligation to convey title from acquiring a binding force. 9 Where the condition is imposed, instead, upon the perfection of the contract, the failure of such condition would prevent such perfection. 10 What we have here is a contract to sell for it is the transfer of ownership, not the perfection of the contract that was subjected to a condition. Ownership was not to vest in the buyers until full payment of the purchase price and the transfer of the title to the buyers. Apart from full payment of the purchase price, we find no other condition which would affect the obligations of the parties, i.e., to pay, on the part of the buyer and to convey ownership, on the part of the seller. prLL

The alleged condition precedent, the removal of the "encargado," was simply an alternative period for payment of the second 25% of the purchase price given by the seller to the buyer. Assuming that the removal of the "encargado" could not be brought about, the buyers, petitioners herein, could have nonetheless demanded the delivery of the owner's duplicate certificate of title by paying the second 25% of the sale price within three months. In this case, the filing of the complaint for specific performance of the seller's obligation was the root of the errors committed first, by the trial court and later, by the Court of Appeals. Both courts overlooked the obvious fact that only the time for paying the second 25% of the purchase price was qualified and that the entire paragraph reads: "25% within three months or upon removal of the "encargado" from the premises . . . " and not simply 25% upon removal of the "encargado." The case before us could have been resolved by the lower courts without ruling on whether the "encargado" was a tenant or not. Granting that it was necessary to rule on the legal status of the "encargado," we find that the courts had been quite precipitate in holding that the "encargado" was a tenant. There was no sufficient evidence to support that conclusion apart from the affidavits of the "encargado" and his neighbor. The conclusion of the Court of Appeals regarding this matter rested on surmises. It held: "We discern no reversible error in the finding and conclusion of the trial court that the unnamed 'encargado' on the lands in question is actually a tenant or agricultural lessee. The bases of this ineluctable conclusion are not hard to see. As succinctly pointed out by the court a quo, the 'encargado' is staying in his own existing house thereon, and subject agricultural land is planted to coffee and other plants not only by the 'encargado' but also his deceased parents. Indeed, if the 'encargado's' parents were not tenants or agricultural lessees, the present `encargado' could not have continued occupying and working thereon, without facing ejectment proceedings; considering that one of the landowners, defendants-appellees here, is a lawyer himself. In fact, as can be gleaned from the decision under scrutiny, defendants-appellees filed a third-party complaint against the 'encargado' but they did not pursue such a course of action because they did not have a clearance from the then Ministry, now the Department of Agrarian Reform, to proceed against such 'encargado.' Then, too, if the said 'encargado' did not have the status of a tenant or agricultural lessee entitled to protection under the agrarian reform laws, he would not have been given the attention and importance as to be brought before the court a quo

twice, just for a possible amicable settlement, and he would not have had the firmness to reject an offer for him to continue working half the area under controversy. Equally supportive of the foregoing opinion are the following ratiocinations in Cruz v. Court of Appeals, L-50350, May 15, 1984, 129 SCRA 222: " . . .it is also undisputed that respondent lives on a hut erected on the landholding. This fully supports the appellate court's conclusion, since only tenants are entitled to a homelot where he can build his house thereon as an incident to this right as a tenant." xxx xxx xxx "Also, the Court is aware of the practice of landowners, by way of evading the provisions of tenancy laws, to have their tenants sign contracts or agreements intended to camouflage the real import of their relationship." All things duly considered, let alone the better rule that all doubts vis-a-vis the status of a tiller of the soil should be resolved in favor of tenancy relationship. We cannot help but conclude here that the `encargado' on the landholding deeded out in the deed of sale (Exhibit "A") is a tenant or agricultural lessees within the purview and under the mantle of protection of the Code of Agrarian Reforms." 11 To summarize, we hold that there was no basis for rescinding the contract because the removal of the "encargado" was not a condition precedent to the contract of sale. Rather, it was one of the alternative periods for the payment of the second installment given by the seller himself to the buyers. Secondly, even granting that it was indeed a condition precedent rendering necessary the determination of the legal status of the "encargado," the lower courts were rash in holding that the "encargado" was a tenant of the land in question. LLphil In view of the foregoing circumstances, we are convinced that specific performance by the parties of their respective obligations is proper. Accordingly, petitioners Marcelino and Guadalupe Galang are ordered to pay private respondents the second 25% of the purchase price. Considering, however, the time that has lapsed since the parties entered into the contract, payment of the full balance, that is, 75% of the purchase price, P192,795.00 is in order. However, the 12% interest per annum that was stipulated in paragraph 3 of the contract of sale should not be assessed against petitioners. On the other hand, private respondents Ramon Buenaventura, Angeles Buenaventura, Corazon Buenaventura, and Maria Luisa Buenaventura are obliged to deliver the owner's duplicate certificate

of title and to transfer the title to the land in question upon payment of the purchase price by petitioners. Under the Civil Code, private respondents are liable for damages to the injured party, the petitioners in this case. However, in lieu of actual payment of damages, and considering the fact that private respondents were in possession of the land during the entire period that this case was pending, private respondents are no longer entitled to the interest payments which would have been due from petitioners. 12 WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and the decision of the Court of Appeals is REVERSED and SET ASIDE. Petitioners Marcelino and Guadalupe Galang are hereby ordered to pay the full 75% balance of the purchase price P144,596.25) within thirty (30) days from notice, with interest upon default. Private respondents Ramon Buenaventura, Corazon Buenaventura and Maria Luisa Buenaventura are hereby ordered to transfer the title to petitioners upon full payment of the purchase price. SO ORDERED.

court. On appeal, the respondent Court reversed the lower court's order. Hence, this petition. Petitioner claims that there was lack of personal notice of the sale; the period for redemption should be two years; and there was gross inadequacy of the purchase price. The Supreme Court, affirming the decision of the respondent Court, held that petitioner's own averments in her opposition filed in the Court a quo negate her allegation of lack of personal notice of the tax sale; that the one-year period for redemption is provided for by the Quezon City Charter (Sec. 31, C.A. No. 5O2) and should prevail over the two-year period provided for in Republic Act 1275, a general law; and that the inadequacy of price is not material "when the law gives the owner the right to redeem as when a sale is made at public auction, upon the theory that the lesser the price, the easier it is far the owner to effect the redemption." Appealed decision affirmed. SYLLABUS
1. REMEDIAL LAW; EVIDENCE; ALLEGED LACK OF PERSONAL NOTICE OF TAX SALE NEGATED BY PETITIONER'S OWN AVERMENTS IN OPPOSITION; CASE AT BAR. Petitioner's first assignment of error as to alleged lack of personal notice of the tax sale is negated by her own averments in her own opposition filed in the court a quo that "(T)he Oppositor in the aboveentitled petition is a woman 80 years of age. She was not aware of the auction sale conducted by the City Treasurer of Quezon City on December 3, 1964 or if there was any notice sent to her, the same did not reach her or it must have escaped her mind considering her age. . . ." 2. ADMINISTRATIVE LAW; TAXATION; TAX SALE; PERIOD OF REDEMPTION; ONE-YEAR PERIOD PROVIDED FOR IN SPECIAL LAW FOR QUEZON CITY PREVAILS OVER TWO-YEAR PERIOD PROVIDED FOR IN REPUBLIC ACT 1275, A GENERAL LAW. Petitioner's second assignment of error that the period far redemption should be the two-year period provided in Republic Act No. 1275 likewise has no merit, since the specific law governing tax sales of properties in Quezon City is the Quezon City Charter, Commonwealth Act No. 502, which provides in Section 31 thereof for a one-year redemption period. The special law covering Quezon City necessarily prevails over the general law. 3. ID.; ID.; ID.; INADEQUACY OF PURCHASE PRICE NOT MATERIAL WHEN THERE IS RIGHT TO REDEEM. The Supreme Court has held in Velasquez vs. Coronel, 5 SCRA 985, that alleged gross inadequacy of price is not material "when the law gives the owner the right to redeem as when a sale is made at public auction, upon the theory that the lesser the price, the easier it is for the owner to effect the redemption." DECISION

G.R. No. L-37831 November 23, 1981 RESTITUTA V. VDA. DE GORDON vs. COURT OF APPEALS, ET AL. FIRST DIVISION For failure to pay the real estate taxes for ten (10) years, petitioner's two parcels of land assessed at P16,800.00 were sold at public auction to private respondent by the City Treasurer of Quezon City, after observing the proper procedure and legal formalities, in the amount of P10,500.00 including the residential house erected thereon. When petitioner failed to redeem the said properties within one year from the sale, the City Treasurer executed the final deed of sale in favor of private respondent which was registered with the Register of Deeds. A petition for consolidation of ownership was however decided adversely against private respondent by the trial

TEEHANKEE, J p: The Court affirms the appealed decision finding the same to be in accordance with the applicable law. The appellate court correctly upheld the tax sale of the real properties at which respondent

Rosario Duazo acquired the same and her ownership upon petitioner Restituta V. Vda. de Gordon's failure to redeem the same, having found the sale to have been conducted "under the direction and supervision of the City Treasurer of Quezon City after the proper procedure and legal formalities had been duly accomplished." cdasia The appellate court's decision under review held as follows: "The opposition [to respondent Duazo's petition for consolidation of ownership] has not controverted by specific denials the material averments in the petition. Hence the material averments in the petition are deemed admitted. (Section 1, Rule 9, Revised Rules of Court) "Moreover, the opposition has not raised the issue of irregularity in the public sale of the two parcels of land in question. This defense is deemed waived. (Section 2, Rule 9, id.) "The uncontested averments in the petition and the annex attached to said petition disclose that the two parcels of land in question were sold at public auction at the City Hall, Quezon City on December 3, 1964 under the direction and supervision of the City Treasurer of Quezon City after the proper procedures and legal formalities had been duly accomplished; that the taxes against the two parcels of land in question for the years 1953 to 1963, inclusive, remained unpaid; that the City Treasurer of Quezon City, upon warrant of a certified copy of the record of such delinquency, advertised for sale the two parcels of land in question to satisfy the taxes, penalties and costs for a period of thirty (30) days prior to the sale on December 3, 1964, by keeping a notice of sale posted at the main entrance on the City Hall and in a public and conspicuous place in the district where the same is located and by publication of said notice once a week for three (3) weeks in the "DAILY MIRROR", a newspaper of general circulation in Quezon City, the advertisement stating the amount of taxes and penalties due, time and place of sale, name of the taxpayer against whom the taxes are levied, approximate area, lot and block number, location by district, street and street number of the property; that at the public sale on December 3, 1964, the two parcels of land in question were sold to [Duazo] for the amount of P10,500.00 representing the tax, penalty and costs; that the certificate of sale executed by the City Treasurer was duly registered on December 28, 1964 in the office of the Register of Deeds of Quezon City; that upon the failure of the registered owner to redeem the two parcels of land in question within the one year period prescribed by law, the City Treasurer of Quezon City executed on January 4, 1966 a final deed of sale of said lands and the

improvements thereon; and that said final deed of sale was also registered in the Office of the Register of Deeds of Quezon City on January 18, 1966. LexLib "The principal issues to be resolved in this appeal are (1) whether the price is so grossly inadequate as to justify the setting aside of the public sale and (2) whether the oppositor [Gordon] is entitled to redeem the two parcels of land in question. "The combined assessed value of the two parcels of land is P16,800.00. The price paid at the public sale is P10,500.00. The residential house on the land is assessed at P45,580.00. But the assessment was made in 1961. The present value of the residential house must be much less now considering the depreciation for over ten years. "While the price of P10,500.00 is less than the total assessed value of the land and the improvement thereon, said price cannot be considered so grossly inadequate as to be shocking to the conscience of the court. "In Director of Lands vs. Abarca, 61 Phil. 70, cited by the lower court in the order appealed from, the Supreme Court considered the price of P877.25 as so inadequate to shock the conscience of the court because the assessed value of the property in question was P60,000.00. The assessed value of the land was more than sixty times the price paid at the auction sale. "In the case at bar, the price of P10,500.00 is about one sixth of the total assessed value of the two parcels of land in question and the residential house thereon. The finding of the lower court that the house and land in question have a fair market value of not less than P200,000.00 has no factual basis. It cannot be said, therefore, that the price of P10,500.00 is so inadequate as to be shocking to the conscience of the court. "Mere inadequacy of the price alone is not sufficient ground to annul the public sale. (Barrozo vs. Macaraeg, 83 Phil. 378) "Moreover, in Velasquez vs. Coronel, 5 SCRA 985, 988, the Supreme Court has held: 'It is true that respondent treasurer now claims that the prices for which the lands were sold are unconscionable considering the wide divergence between their assessed values and the amounts for which they had been actually sold. However, while in ordinary sales for reasons of equity a transaction may be invalidated on the ground of inadequacy of price, or when such inadequacy shocks one's conscience as to justify the courts to interfere, such does not follow when the law gives to the owner the right to redeem, as when a sale is made at public auction, upon the theory that the lesser the price

the easier it is for the owner to effect the redemption. And so it was aptly said: 'When there is the right to redeem, inadequacy of price should not be material, because the judgment debtor may reacquire the property or also sell his right to redeem and thus recover the loss he claims to have suffered by reason of the price obtained at the auction sale.' (Emphasis supplied). LLpr "The contention that the oppositor can still redeem the two parcels of land in question because the public sale has not been judicially confirmed deserves scant consideration. The cases cited by the oppositor and by the lower court all refer to foreclosure of mortgage sales which are by express provision of law subject to judicial confirmation. The public sale in the instant case is governed by Section 40 of Commonwealth Act No. 470 which gives the delinquent taxpayer a period of one year from the date of the sale within which to repurchase the property sold. In case the delinquent taxpayer does not repurchase the property sold within the period of one year from the date of the sale, it becomes a mandatory duty of the provincial treasurer to issue in favor of the purchaser a final deed of sale. (Velasquez vs. Coronel, supra) We find that the oppositor is not entitled to repurchase the two parcels of land in question because she failed to do so within one year from the date of the sale thereof. "WHEREFORE, the order appealed from is hereby reversed and the ownership of [Duazo] over the two parcels of land in question and the improvements thereon is declared consolidated. The Register of Deeds of Quezon City is hereby ordered to cancel Transfer Certificates of Title Nos. 12204 and 12205 and to issue the corresponding transfer certificates of title to [Duazo] over the two parcels of land in question, upon the payment of the prescribed fees. No pronouncement as to costs." 3 The Court finds petitioner's assignment of errors to be without merit. Petitioner's first assignment of error as to alleged lack of personal notice of the tax sale is negated by her own averments in her own opposition filed in the court a quo that "(T)he Oppositor in the above entitled petition is a woman 80 years of age. She was not aware of the auction sale conducted by the City Treasurer of Quezon City on December 3, 1964 or if there was any notice sent to her, the same did not reach her or it must have escaped her mind considering her age. . . ." 4 Petitioner's second assignment of error that the period for redemption should be the two-year period provided in Republic Act No. 1275 likewise has no merit, since the specific law governing tax sales of properties in Quezon City is the Quezon City Charter, Commonwealth Act No. 502 which provides in section 31 thereof for

a one-year redemption period. The special law covering Quezon City necessarily prevails over the general law. Furthermore, as respondent has pointed out, as of the time of filing in 1974 of respondent's brief, petitioner had not then for a period of 10 years (and 17 years as of now) sought to exercise her alleged right of redemption or make an actual tender thereof, as follows: "Moreover, even if we do concede, merely for the sake of argument, that the provisions of Rep. Act No. 1275 may be made applicable in this case which is certainly not and Petitioner should have been granted TWO (2) YEARS from date of the public sale, within which to exercise her right of redemption, yet since the sale of the questioned land to herein Respondent in that public auction in 1964, herein Petitioner never had shown any good faith in exercising her right of redemption. Since 1964 when the auction sale took place, up to the present, 1974, or a period of TEN (10) YEARS have already elapsed and yet herein Petitioner never made any tender of payments with either the Court of First Instance of Quezon City or the Court of Appeals, or the Supreme Court, at least to show her good faith. "Furthermore, if herein Petitioner really believes in good faith, that [she] had still that right of redemption, then she should have paid the real estate taxes, but as the records will show, since 1964, Private Respondent Rosario Duazo is the one paying the real estate taxes of the lands in question.5 Petitioner's third and last assignment of error as to the alleged gross inadequacy of the purchase price must likewise fail. As the Court has held in Velasquez vs. Coronel, 6 alleged gross inadequacy of price is not material "when the law gives the owner the right to redeem as when a sale is made at public auction, upon the theory that the lesser the price the easier it is for the owner to effect the redemption." As the Court further stressed in the recent case of Tajonera vs. Court of Appeals, 7 the law governing tax sales for delinquent taxes may be "harsh and drastic, but it is a necessary means of insuring the prompt collection of taxes so essential to the life of the Government." cdphil ACCORDINGLY, the appellate court's decision under review is hereby affirmed. Without costs.

G.R. No. L-55322 February 16, 1989 MOISES JOCSON vs. HON. COURT OF APPEALS FIRST DIVISION This is a petition for review on certiorari under Rule 45 of the Rules of Court of the decision of the Court of Appeals in CA-G.R. No. 63474, promulgated on April 30, 1980, entitled "MOISES JOCSON, plaintiffappellee, versus AGUSTINA JOCSON-VASQUEZ and ERNESTO VASQUEZ, defendant-appellants," upholding the validity of three (3) documents questioned by Moises Jocson, in total reversal of the decision of declared them as null and void; and of its resolution, dated September 30, 1980, denying therein appellee's motion for reconsideration. Petitioner Moises Jocson and respondent Agustina Jocson-Vasquez are the only surviving offsprings of the spouses Emilio Jocson and Alejandra Poblete, while respondent Ernesto Vasquez is the husband of Agustina, Alejandra Poblete predeceased her husband without her intestate estate being settled. Subsequently, Emilio Jocson also died intestate on April 1, 1972. As adverted to above, the present controversy concerns the validity of three (3) documents executed by Emilio Jocson during his lifetime. These documents purportedly conveyed, by sale, to Agustina JocsonVasquez what apparently covers almost all of his properties, including his one-third (1/3) share in the estate of his wife. Petitioner Moises Jocson assails these documents and prays that they be declared null and void and the properties subject matter therein be partitioned between him and Agustina as the only heirs of their deceased parents. The documents, which were presented as evidence not by Moises Jocson, as the party assailing its validity, but rather by herein

respondents, are the following: 1) "Kasulatan ng Bilihan ng Lupa," marked as Exhibit 3 (pp. 1213, Records) for the defendant in the court a quo, dated July 27, 1968. By this document Emilio Jocson sold to Agustina JocsonVasquez six (6) parcels of land, all located at Naic, Cavite, for the sum of ten thousand (10,000.00) pesos. On the same document Emilio Jocson acknowledged receipt of the purchase price, thus: "Na ngayon, alang-alang sa halagang SAMPUNG LIBONG PISO (P10,000) salaping Pilipino na aking tinanggap ng buong kasiyahan loob at ang pagkakatanggap ay aking hayagang inaamin sa pamamagitan ng kasulatang ito, sa aking anak na si Agustina Jocson, na may sapat na gulang, mamamayang Pilipino, asawa ni Ernesto Vasquez, at naninirahan sa Poblacion, Naic, Cavite, ay aking ipinagbile ng lubusan at kagyat at walang ano mang pasubali ang nabanggit na anim na pirasong lupa na nasa unang dahon ng dokumentong ito, sa nabanggit na Agustina Jocson, at sa kaniyang tagapagmana o makakahalili at gayon din nais kong banggitin na kahit na may kamurahan ang ginawa kong pagbibile ay dahilan sa ang nakabile ay aking anak na mahal sa akin at mapaglingkod, madamayin at ma-alalahanin, na tulad din ng isa ko pang anak na lalaki. Ang kuartang tinanggap ko na P10,000.00, ay gagamitin ko sa aking katandaan at mga huling araw at sa aking mga ibang mahahalagang pangangailangan. [Emphasis supplied]. "Na nais ko ring banggitin na ang ginawa kong ito ay hindi labag sa ano mang batas o kautusan, sapagkat ang aking pinagbile ay akin at nasa aking pangalan. Ang mga lupang nasa pangalan ng aking nasirang asawa ay hindi ko ginagalaw ni pinakikialaman at iyon ay dapat na hatiin ng dalawa kong anak alinsunod sa umiiral na batas (p. 13, Records.)" 2) "kasulatan ng Ganap na Bilihan," dated July 27, 1968, marked as Exhibit 4 (p. 14, Records). On the face of this document, Emilio Jocson purportedly sold to Agustina Jocson-Vasquez, for the sum of FIVE THOUSAND (P5,000.00) PESOS, two rice mills and a camarin (camalig) located at Naic, Cavite. As in the first document, Moises Jocson acknowledged receipt of the purchase price: "Na alang-alang sa halagang LIMANG LIBONG PISO (P5,000.00) salaping pilipino na aking tinanggap ng buong kasiyahan loob sa aking aking anak na Agustin Jocson . . . Na ang halagang ibinayad sa akin ay may kamurahan ng kaunti ngunit dahil sa malaking pagtingin ko sa kaniya . . . kaya at pinagbile ko sa kaniya ang mga nabanggit na pagaari kahit na hindi malaking halaga . . . (p. 14, Records)" 3) Lastly, the "Deed of Extrajudicial Partition and Adjudication

with Sale, "dated March 9, 1969, marked as Exhibit 2 (p. 10-11, Records), whereby Emilio Jocson and Agustina Jocson-Vasquez, without the participants and intervention of Moises Jocson, extrajudicially partitioned the unsettled estate of Alejandra Poblete, dividing the same into three parts, one-third (1/3) each for the heirs of Alejandra Poblete, namely: Emilio Jocson, Agustina Jocson-Vasquez and Moises Jocson. By the same instrument, Emilio sold his one-third (1/3) share to Agustina for the sum of EIGHT THOUSAND (P8,000.00) PESOS. As in the preceding documents, Emilio Jocson acknowledged receipt of the purchase price: LLpr "Now for and in consideration of the sum of only eight thousand (P8,000.00) pesos, which I, the herein Emilio Jocson had received from my daughter Agustina Jocson, do hereby sell, cede, convey and transfer, unto the said Agustina Jocson, her heirs and assigns, administrators and successors in interests, in the nature of absolute and irrevocable sale, all my rights, interest, shares and participation, which is equivalent to one third (1/3) share in the properties herein mentioned and described, the one third being adjudicated unto Agustina Jocson and the other third (1/3) portion being the share of Moises Jocson. (p. 11, Records)." These documents were executed before a notary public. Exhibits 3 and 4 were registered with the Office of the Register of Deeds of Cavite on July 29, 1968 and the transfer certificates of title covering the properties therein in the name of Emilio Jocson, married to Alejandra Poblete," were cancelled and new certificates of title were issued in the name of Agustina Jocson-Vasquez. Exhibit 2 was not registered with the Office of the Register of Deeds. Herein petitioner filed his original complaint (Record on Appeal, p. 27, Rollo) on June 20, 1973 with the then Court of First Instance of Naic, Cavite (docketed as Civil Case No. TM-531), and which was twice amended. In his Second Amended Complaint (pp. 47-58, Record on Appeal), herein petitioner assailed the above documents, as aforementioned, for being null and void. It is necessary to partly quote the allegation of petitioner in his complaint for the reason that the nature of his causes of action is at issue, thus: "8. [With regard the first document, that] the defendants, through fraud, deceit, undue pressure and influence and other illegal machinations, were able to induce, led, and procured in their father . . . to sign [the] contract of sale . . ., for the simulated price of P10,000.00, which is a consideration that is shocking to the conscience of ordinary man and despite the fact that said defendants have no work or livelihood of their own . . .; that the sale

is null and void, also, because it is fictitious, simulated and fabricated contract . . . (pp. 52-53, Record on Appeal). [Emphasis supplied] xxx xxx xxx "12. [With regards the second and third document, that they] are null and void because the consent of the father, Emilio Jocson, was obtained with fraud, deceit, undue pressure, misrepresentation and unlawful machinations and trickeries committed by the defendant on him; and that the said contracts are simulated, fabricated and fictitious, having been made deliberately to exclude the plaintiff from participating and with the dishonest and selfish motive on the part of the defendants to defraud him of his legitimate share on said properties [subject matter thereof]; and that without any other business or employment or any other source of income, defendants who were just employed in the management and administration of the business of their parents, would not have the sufficient and ample means to purchase the said properties except by getting the earnings of the business or by simulated consideration . . . (pp. 5455, Record on Appeal)." [Emphasis supplied] Petitioner explained that there could be no real sale between a father and daughter who are living under the same roof, especially so when the father has no need of money as the properties supposedly sold were all income-producing. Further, petitioner claimed that the properties mentioned in Exhibits 3 and 4 are the unliquidated conjugal properties of Emilio Jocson and Alejandra Poblete which the former, therefore, cannot validly sell (pp. 53, 57, Record on Appeal). As far as Exhibit 2 is concerned, petitioner questions not the extrajudicial partition but only the sale by his father to Agustina of the former's 1/3 share (p. 13, Rollo). LLphil The trial court sustained the foregoing contentions of petitioner (pp. 59-81, Record on Appeal). It declared that the considerations mentioned in the documents were merely simulated and fictitious because: 1) there was no showing that Agustina Jocson-Vasquez paid for the properties; 2) the prices were grossly inadequate which is tantamount to lack of consideration at all; and 3) the improbability of the sale between Emilio Jocson and Agustina Jocson-Vasquez, taking into consideration the circumstances obtaining between the parties; and the real intention of the parties were donations designed to exclude Moises Jocson from participating in the estate of his parents. It further declared the properties mentioned in Exhibits 3 and 4 as conjugal properties of Emilio Jocson and Alejandra Poblete, because they were registered in the name of "Emilio Jocson, married to Alejandra Poblete" and ordered that the properties subject matter of

all the documents be registered in the name of herein petitioners and private respondents. On appeal, the Court of Appeals in CA-G.R. No. 63474-R rendered a decision (pp. 29-42, Rollo) and reversed that of the trial court's and ruled that: "1. That insofar as Exhibits 2 and 4 are concerned the appellee's complaint for annulment, which is indisputably based on fraud, and undue influence, is now barred by prescription, pursuant to the settled rule that an action for annulment of a contract based on fraud must be filed within four (4) years, from the discovery of the fraud, . . . which in legal contemplation is deemed to be the date of the registration of said document with the Register of Deeds . . . and the records admittedly show that both Exhibits 3 and 4, were all registered on July 29, 1968, while on the other hand, the appellee's complaint was filed on June 20, 1973, clearly beyond the aforesaid four-year prescriptive period provided by law; "2. That the aforesaid contracts, Exhibits 2, 3, and 4, are decisively not simulated or fictitious contracts, since Emilio Jocson actually and really intended them to be effective and binding against him, as to divest him of the full dominion and ownership over the properties subject of said assailed contracts, as in fact all his titles over the same were all cancelled and new ones issued to appellant Agustina Jocson Vasquez . . .; 3. That in regard to Exhibit 2, the same is valid and subsisting, and the partition with sale therein made by and between Emilio Jocson and Agustin Jocson Vasquez, affecting the 2/3 portion of the subject properties described therein have all been made in accordance with Article 996 of the New Civil Code on intestate succession, and the appellee's (herein petitioner) remaining 1/3 has not been prejudiced (pp. 41-42, Rollo)." In this petition for review, Moises Jocson raised the following assignments of errors: I. HAS THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT THE SUIT FOR THE ANNULMENT OF CONTRACTS FILED BY PETITIONERS WITH THE TRIAL COURT IS "BASED ON FRAUD" AND NOT ON ITS INEXISTENCE AND NULLITY BECAUSE OF ITS BEING SIMULATED OR FICTITIOUS OR WHOSE CAUSE IS CONTRARY TO LAW, MORALS AND GOOD CUSTOMS?

II. HAS THE RESPONDENT COURT OF APPEALS ERRED IN CONCLUDING THAT THE COMPLAINT FILED BY PETITIONER IN THE TRIAL COURT IS BARRED BY PRESCRIPTION?

III. HAS THE RESPONDENT COURT OF APPEALS ERRED IN NOT DECLARING AS INEXISTENT AND NULL AND VOID THE CONTRACTS IN QUESTION AND IN REVERSING THE DECISION OF THE TRIAL COURT? (p. 2,

Rollo).

I The first and second assignment of errors are related and shall be jointly discussed. According to the Court of Appeals, herein petitioner's causes of action were based on fraud. Under Article 1330 of the Civil Code, a contract tainted by vitiated consent, as when consent was obtained through fraud, is voidable; and the action for annulment must be brought within four years from the time of the discovery of the fraud (Article 1391, par. 4, Civil Code), otherwise the contract may no longer be contested. Under present jurisprudence, discovery of fraud is deemed to have taken place at the time the convenant was registered with the Register of Deeds (Gerona vs. De Guzman, No. L19060, May 29, 1964, 11 SCRA 153). Since Exhibits 3 and 4 were registered on July 29, 1968 but Moises Jocson filed his complaint only on June 20, 1973, the Court of Appeals ruled that insofar as these documents were concerned, petitioner's "annulment suit" had prescribed. If fraud were the only ground relied upon by Moises Jocson in assailing the questioned documents, We would have sustained the above sustained the above pronouncement. But it is not so. As pointed out by petitioner, he further assailed the deeds of conveyance on the ground that they were without consideration since the amounts appearing thereon as paid were in fact merely simulated. cdrep According to Article 1352 of the Civil Code, contracts without cause produce no effect whatsoever. A contract of sale with a simulated price is void (Article 1471; also Article 1409 [3]), and an action for the declaration of its nullity does not prescribe (Article 1410, Civil Code; See also, Castillo v. Galvan, No. L-27841, October 20, 1978, 85 SCRA 526). Moises Jocson's action, therefore, being for the judicial declaration of nullity of Exhibits 3 and 4 on the ground of simulated price, is imprescriptible. II For petitioner, however, the above discussion may be purely academic. The burden of proof in showing that contracts lack consideration rests on he who alleged it. The degree of proof becomes more stringent where the documents themselves show that the vendor acknowledged receipt of the price, and more so where the documents were notarized, as in the case at bar. Upon consideration of the records of his case, We are of the opinion that petitioner has not sufficiently proven that the questioned documents are without consideration.

Firstly, Moises Jocson's claim that Agustina Jocson-Vasquez had no other source of income other than what she derives from helping in the management of the family business (ricefields and ricemills), and which was insufficient to pay for the purchase price, was contradicted by his own witness, Isaac Bagnas, who testified that Agustina and her husband were engaged in the buy and sell of palay and rice (p. 10, t.s.n., January 14, 1975). Amazingly, petitioner himself and his wife testified that they did not know whether or not Agustina was involved in some other business (p. 40, t.s.n., July 30, 1974; p. 36, t.s.n., May 24, 1974). On the other hand, Agustina testified that she was engaged in the business of buying and selling palay and rice even before her marriage to Ernesto Vasquez sometime in 1948 and continued doing so thereafter (p. 4, t.s.n., March 15, 1976). Considering the foregoing and the presumption that a contract is with a consideration (Article 1354, Civil Code), it is clear that petitioner miserably failed to prove his allegation. Secondly, neither may the contract be declared void because of alleged inadequacy of price. To begin with, there was no showing that the prices were grossly inadequate. In fact, the total purchase price paid by Agustina Jocson-Vasquez is above the total assessed value of the properties alleged by petitioner. In his Second Amended Complaint, petitioner alleged that the total assessed value of the properties mentioned in Exhibit 3 was P8,920; Exhibit 4, P3,500; and Exhibit 2, P24,840, while the purchase price paid was P10,000, P5,000, and P8,000, respectively, the latter for the 1/3 share of Emilio Jocson from the paraphernal properties of his wife, Alejandra Poblete. And any difference between the market value and the purchase price, which as admitted by Emilio Jocson was only slight, may not be so shocking considering that the sales were affected by a father to her daughter in which case filial love must be taken into consideration (Alsua-Betts vs. Court of Appeals, No. L-46430-31, April 30, 1979, 92 SCRA 332). Further, gross inadequacy of price alone does not affect a contract of sale, except that it may indicate a defect in the consent, or that the parties really intended a donation or some other act or contract (Article 1470, Civil Code) and there is nothing in the records at all to indicate any defect in Emilio Jocson's consent. cdll Thirdly, any discussion as to the improbability of a sale between a father a his daughter is purely speculative which has no relevance to a contract where all the essential requisites of consent, object and cause are clearly present. There is another ground relied upon by petitioner in assailing

Exhibits 3 and 4, that the properties subject matter therein are conjugal properties of Emilio Jocson and Alejandra Poblete. It is the position of petitioner that since the properties sold to Agustina Jocson-Vasquez under Exhibit 3 were registered in the name of "Emilio Jocson, married to Alejandra Poblete," the certificate of title he presented as evidence (Exhibits "E", to "J", pp. 4-9, Records) were enough proof to show that the properties covered therein were acquired during the marriage of their parents, and, therefore, under Article 160 of the Civil Code, presumed to be conjugal properties. Article 160 of the Civil Code provides that: "All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife." In Cobb-Perez vs. Hon. Gregorio Lantin, No. L-22320, May 22, 1968, 23, SCRA 637, 644, We held that: "Anent their claim that the shares in question are conjugal assets, the spouses Perez adduced not a modicum of evidence, although they repeatedly invoked article 160 of the New Civil Code which provides that . . . As interpreted by this Court, the party who invokes this presumption must first prove that the property in controversy was acquired during the marriage, In other words, proof of acquisition during the coverture is a condition sine qua non for the operation of the presumption in favor of conjugal ownership. Thus in Camia de Reyes vs. Reyes de Ilano [62 Phil. 629, 639], it was held that 'according to law and jurisprudence, it is sufficient to prove that the property was acquired during the marriage in order that the same may be deemed conjugal property.' In the recent case of Maramba vs. Lozano, et. al. [L-21533, June 29, 1967, 20 SCRA 474], this Court, thru Mr. Justice Makalintal, reiterated that 'the presumption under Article 160 of the Civil Code refers to property acquired during the marriage,' and then concluded that since 'there is no showing as to when the property in question was acquired . . . the fact that the title is in the wife's name alone is determinative.' Similarly, in the case at bar, since there is no evidence as to when the shares of stock were acquired, the fact that they are registered in the name of the husband alone is an indication that the shares belong exclusively to said spouse." This pronouncement was reiterated in the case of Ponce de Leon vs. Rehabilitation Finance Corporation, No. L-24571, December 18, 1970, 36 SCRA 289, and later in Torela vs. Torela, No. L-27843, October 11, 1979, 93 SCRA 391. prLL It is thus clear before Moises Jocson may validly invoke the presumption under Article 160 he must first present proof that the

disputed properties were acquired during the marriage of Emilio Jocson and Alejandra Poblete. The certificates of title, however, upon which petitioner rests his claim is insufficient. The fact that the properties were registered in the name of "Emilio Jocson, married to Alejandra Poblete" is no proof that the properties were acquired during the spouses' coverture. Acquisition of title and registration thereof are two different acts. It is well settled that registration does not confer title but merely confirms one already existing (See Torela vs. Torela, supra). It may be that the properties under dispute were acquired by Emilio Jocson when he was still a bachelor but were registered only after his marriage to Alejandra Poblete, which explains why he was described in the certificates of title as married to the latter. Contrary to petitioner's position, the certificates of title show, on their face, that the properties were exclusively Emilio Jocson's, the registered owner. This is so because the words "married to" preceding "Alejandra Poblete" are merely descriptive of the civil status of Emilio Jocson (Litam v. Rivera, 100 Phil. 354; Stuart v. Yatco, No. L-16467, April 27, 1962, 4 SCRA 1143; Magallon v. Montejo, G.R. No. L-73733, December 16, 1986, 146 SCRA 282). In other words, the import from the certificates of title is that Emilio Jocson is the owner of the properties, the same having been registered in his name alone, and that he is married to Alejandra Poblete. We are not unmindful that in numerous cases We consistently held that registration of the property in the name of only one spouse does not negate the possibility of it being conjugal (See Bucoy vs. Paulino, No. L-25775, April 26, 1968, 23, SCRA 248). But this ruling is not inconsistent with the above pronouncement for in those cases there was proof that the properties, though registered in the name of only one spouse, were indeed conjugal properties, or that they have been acquired during the marriage of the spouses, and therefore, presumed conjugal, without the adverse party having presented proof to rebut the presumption (See Mendoza vs. Reyes, No. L31618, August 17, 1983, 124 SCRA 154). cdll In the instant case, had petitioner, Moises Jocson, presented sufficient proof to show that the disputed properties were acquired during his parents' converture. We would have ruled that properties, though registered in the name of Emilio Jocson alone, are conjugal properties in view of the presumption under Article 160. There being no such proof, the condition sine qua non for the application of the presumption does not exist. Necessarily, We rule that the properties under Exhibit 3 are the exclusive properties of Emilio Jocson.

There being no showing also that the camarin and the two ricemills, which are the subject of Exhibit 4, were conjugal properties of the spouses Emilio Jocson and Alejandra Poblete, they should be considered, likewise, as the exclusive properties of Emilio Jocson, the burden of proof being on petitioner. ACCORDINGLY, the petition is DISMISSED and the decision of the Court of Appeals if AFFIRMED. SO ORDERED.

G.R. No. L-69970 November 28, 1988 FELIX DANGUILAN vs. INTERMEDIATE APPELLATE COURT FIRST DIVISION

1. CIVIL LAW; CIVIL CODE; DONATIONS; ONEROUS DONATIONS; CONVEYANCES NEED NOT BE EFFECTED THROUGH PUBLIC INSTRUMENT. It is our view, considering the language of the two instruments, that Domingo Melad did intend to donate the properties to the petitioner, as the private respondent contends. We do not think, however, that the donee was moved by pure liberality. While truly donations, the conveyances were onerous donations as the properties were given to the petitioner in exchange for his obligation to take care of the donee for the rest of his life and provide for his burial. Hence, it was not covered by the rule in Article 749 of the Civil Code requiring donations of real properties to be effected through a public instrument. 2. ID.; ID.; SPECIAL CONTRACTS; SALES; OWNERSHIP DOES NOT PASS BY MERE STIPULATION BUT ONLY BY DELIVERY; EXECUTION OF A PUBLIC DOCUMENT DOES NOT CONSTITUTE SUFFICIENT DELIVERY WHERE PROPERTY INVOLVED IS IN ACTUAL AND ADVERSE POSSESSION OF THIRD PERSON. As was held in Garchitorena v. Almeda: It is a fundamental and elementary principle that ownership does not pass by mere stipulation but only by delivery (Civil Code, Art. 1095; Fidelity and Surety Co. v. Wilson, 8 Phil. 51), and the execution of a public document does not constitute sufficient delivery where the property involved is in the actual and adverse possession of third persons (Addison vs. Felix, 38 Phil. 404; Masallo vs. Cesar, 39 Phil. 134), it becomes incontestable that even if included in the

contract, the ownership of the property in dispute did not pass thereby to petitioner. 3. ID.; ID.; ID.; ID.; WHEN THING CONSIDERED DELIVERED. The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is placed 'in the hands and possession of the vendee.' (Civil Code, art. 1462). It is true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to reality - the delivery has not been effected." 4. ID.; ID.; ID.; ID.; PARTY IN POSSESSION OF PROPERTY IS PRESUMED TO BE OWNER AND CANNOT BE OBLIGED TO SHOW OR PROVE A BETTER RIGHT. In Santos & Espinosa v. Estejada, 24 where the Court announced: "If the claim of both the plaintiff and the defendant are weak, judgment must be for the defendant, for the latter being in possession is presumed to be the owner, and cannot be obliged to show or prove a better right." DECISION

CRUZ, J p: The subject of this dispute is the two lots owned by Domingo Melad which is claimed by both the petitioner and the respondent. The trial court believed the petitioner but the respondent court, on appeal, upheld the respondent. The case is now before us for a resolution of the issues once and for all. llcd On January 29, 1962, the respondent filed a complaint against the petitioner in the then Court of First Instance of Cagayan for recovery of a farm lot and a residential lot which she claimed she had purchased from Domingo Melad in 1943 and were now being unlawfully withheld by the defendant. 1 In his answer, the petitioner denied the allegation and averred that he was the owner of the said lots of which he had been in open, continuous and adverse possession, having acquired them from Domingo Melad in 1941 and 1943. 2 The case was dismissed for failure to prosecute but was refiled in 1967. 3 At the trial, the plaintiff presented a deed of sale dated December 4,

1943, purportedly signed by Domingo Melad and duly notarized, which conveyed the said properties to her for the sum of P80.00. 4 She said the amount was earned by her mother as a worker at the Tabacalera factory. She claimed to be the illegitimate daughter of Domingo Melad, with whom she and her mother were living when he died in 1945. She moved out of the farm only when in 1946 Felix Danguilan approached her and asked permission to cultivate the land and to stay therein. She had agreed on condition that he would deliver part of the harvest from the farm to her, which he did from that year to 1958. The deliveries having stopped, she then consulted the municipal judge who advised her to file the complaint against Danguilan. The plaintiff's mother, her only other witness, corroborated this testimony. 5 For his part, the defendant testified that he was the husband of Isidra Melad, Domingo's niece, whom he and his wife Juana Malupang had taken into their home as their ward as they had no children of their own. He and his wife lived with the couple in their house on the residential lot and helped Domingo with the cultivation of the farm. Domingo Melad signed in 1941 a private instrument in which he gave the defendant the farm and in 1943 another private instrument in which he also gave him the residential lot, on the understanding that the latter would take care of the grantor and would bury him upon his death. 6 Danguilan presented three other witnesses 7 to corroborate his statements and to prove that he had been living in the land since his marriage to Isidra and had remained in possession thereof after Domingo Melad's death in 1945. Two of said witnesses declared that neither the plaintiff nor her mother lived in the land with Domingo Melad. 8 The decision of the trial court was based mainly on the issue of possession. Weighing the evidence presented by the parties, the judge 9 held that the defendant was more believable and that the plaintiff s evidence was "unpersuasive and unconvincing." It was held that the plaintiff s own declaration that she moved out of the property in 1946 and left it in the possession of the defendant was contradictory to her claim of ownership. She was also inconsistent when she testified first that the defendant was her tenant and later in rebuttal that he was her administrator. The decision concluded that where there was doubt as to the ownership of the property, the presumption was in favor of the one actually occupying the same, which in this case was the defendant. 10 The review by the respondent court 11 of this decision was manifestly less than thorough. For the most part it merely affirmed the factual findings of the trial court except for an irrelevant

modification, and it was only toward the end that it went to and resolved what it considered the lone decisive issue. LibLex The respondent court held that Exhibits 2-b and 3-a, by virtue of which Domingo Melad had conveyed the two parcels of land to the petitioner, were null and void. The reason was that they were donations of real property and as such should have been effected through a public instrument. It then set aside the appealed decision and declared the respondents the true and lawful owners of the disputed property. The said exhibits read as follows: "EXHIBIT 2-b is quoted as follows: 12 I, DOMINGO MELAD, of legal age, married, do hereby declare in this receipt the truth of my giving to Felix Danguilan, my agricultural land located at Barrio Fugu-Macusi, Penablanca, Province of Cagayan, Philippine Islands; that this land is registered under my name; that I hereby declare and bind myself that there is no one to whom I will deliver this land except to him as he will be the one responsible for me in the event that I will die and also for all other things needed and necessary for me, he will be responsible because of this land I am giving to him; that it is true that I have nieces and nephews but they are not living with us and there is no one to whom I will give my land except to Felix Danguilan for he lives with me and this is the length 175 m. and the width is 150 m. 'IN WITNESS WHEREOF, I hereby sign my name below and also those present in the execution of this receipt this 14th day of September 1941. 'Penablanca, Cagayan, September 14, 1941. (SGD.) DOMINGO MELAD. 'WITNESSES: 1. (T.M.) ISIDRO MELAD 2. (SGD.) FELIX DANGUILAN 3. (T.M.) ILLEGIBLE'". EXHIBIT 3-a is quoted as follows: 13 'I, DOMINGO MELAD, a resident of Centro, Penablanca, Province of Cagayan, do hereby swear and declare the truth that I have delivered my residential lot at Centro, Penablanca, Cagayan, to Felix Danguilan, my son-in-law because I have no child; that I have thought of giving him my land because be will be the one to take care of SHELTERING me or bury me when I die and this is why I have thought of executing this document; that the boundaries of this lot is on the east, Cresencio Danguilan; on the north, Arellano Street; on the south by Pastor Lagundi and on the west, Pablo Pelagio and the area of this lot is 35 meters going south; width and length beginning

west to east is 40 meter. 'IN WITNESS HEREOF, I hereby sign this receipt this 18th day of December 1943. (SGD.) DOMINGO MELAD. 'WITNESSES: (SGD.) ILLEGIBLE (SGD.) DANIEL ARAO'" It is our view, considering the language of the two instruments, that Domingo Melad did intend to donate the properties to the petitioner, as the private respondent contends. We do not think, however, that the donee was moved by pure liberality. While truly donations, the conveyances were onerous donations as the properties were given to the petitioner in exchange for his obligation to take care of the donee for the rest of his life and provide for his burial. Hence, it was not covered by the rule in Article 749 of the Civil Code requiring donations of real properties to be effected through a public instrument. The case at bar comes squarely under the doctrine laid down in Manalo v. De Mesa, 14 where the Court held: "There can be no doubt that the donation in question was made for a valuable consideration, since the donors made it conditional upon the donees' bearing the expenses that might be occasioned by the death and burial of the donor Placida Manalo, a condition and obligation which the donee Gregorio de Mesa carried out in his own behalf and for his wife Leoncia Manalo; therefore, in order to determine whether or not said donation is valid and effective it should be sufficient to demonstrate that, as a contract, it embraces the conditions the law requires and is valid and effective, although not recorded in a public instrument." The private respondent argues that as there was no equivalence between the value of the lands donated and the services for which they were being exchanged, the two transactions should be considered pure or gratuitous donations of real rights, hence, they should have been effected through a public instrument and not mere private writings. However, no evidence has been adduced to support her contention that the values exchanged were disproportionate or unequal. On the other hand, both the trial court and the respondent court have affirmed the factual allegation that the petitioner did take care of Domingo Melad and later arranged for his burial in accordance with the condition imposed by the donor. It is alleged and not denied that he died when he was almost one hundred years old, 15 which would mean that the petitioner farmed the land practically by himself and so provided for the donee (and his wife) during the latter

part of Domingo Melad's life. We may assume that there was a fair exchange between the donor and the donee that made the transaction an onerous donation. cdll Regarding the private respondent's claim that she had purchased the properties by virtue of a deed of sale, the respondent court had only the following to say: "Exhibit 'E' taken together with the documentary and oral evidence shows that the preponderance of evidence is in favor of the appellants." This was, we think, a rather superficial way of resolving such a basic and important issue. The deed of sale was allegedly executed when the respondent was only three years old and the consideration was supposedly paid by her mother, Maria Yedan, from her earnings as a wage worker in a factory. 16 This was itself a suspicious circumstance, one may well wonder why the transfer was not made to the mother herself, who was after all the one paying for the lands. The sale was made out in favor of Apolonia Melad although she had been using the surname Yedan, her mother's surname, before that instrument was signed and in fact even after she got married. 17 The averment was also made that the contract was simulated and prepared after Domingo Melad's death in 1945. 18 It was also alleged that even after the supposed execution of the said contract, the respondent considered Domingo Melad the owner of the properties and that she had never occupied the same. 19 Considering these serious challenges, the appellate court could have devoted a little more time to examining Exhibit "E" and the circumstances surrounding its execution before pronouncing its validity in the manner described above. While it is true that the due execution of a public instrument is presumed, the presumption is disputable and will yield to contradictory evidence, which in this case was not refuted. At any rate, even assuming the validity of the deed of sale, the record shows that the private respondent did not take possession of the disputed properties and indeed waited until 1962 to file this action for recovery of the lands from the petitioner. If she did have possession, she transferred the same to the petitioner in 1946, by her own sworn admission, and moved out to another lot belonging to her step-brother. 20 Her claim that the petitioner was her tenant (later changed to administrator) was disbelieved by the trial court, and properly so, for its inconsistency. In short, she failed to show that she consummated the contract of sale by actual delivery of the properties to her and her actual possession thereof in concept of purchaser-owner. As was held in Garchitorena v. Almeda: 21

"Since in this jurisdiction it is a fundamental and elementary principle that ownership does not pass by mere stipulation but only by delivery (Civil Code, Art. 1095; Fidelity and Surety Co. v. Wilson, 8 Phil. 51), and the execution of a public document does not constitute sufficient delivery where the property involved is in the actual and adverse possession of third persons (Addison vs. Felix, 38 Phil. 404; Masallo vs. Cesar, 39 Phil. 134), it becomes incontestable that even if included in the contract, the ownership of the property in dispute did not pass thereby to Mariano Garchitorena. Not having become the owner for lack of delivery, Mariano Garchitorena cannot presume to recover the property from its present possessors. His action, therefore, is not one of revindicacion, but one against his vendor for specific performance of the sale to him." In the aforecited case of Fidelity and Deposit Co. v. Wilson, 22 Justice Mapa declared for the Court: "Therefore, in our Civil Code it is a fundamental principle in all matters of contracts and a well-known doctrine of law that 'non mudis pactis, sed traditione dominia rerum transferuntur'. In conformity with said doctrine as established in paragraph 2 of article 609 of said code, that 'the ownership and other property rights are acquired and transmitted by law, by gift, by testate or intestate succession, and, in consequence of certain contracts, by tradition'. And as the logical application of this disposition article 1095 prescribes the following: 'A creditor has the rights to the fruits of a thing from the time the obligation to deliver it arises. However, he shall not acquire a real right' (and the ownership is surely such) 'until the property has been delivered to him.' "In accordance with such disposition and provisions the delivery of a thing constitutes a necessary and indispensable requisite for the purpose of acquiring the ownership of the same by virtue of a contract. As Manresa states in his Commentaries on the Civil Code, volume 10, pages 339 and 340: 'Our law does not admit the doctrine of the transfer of property by mere consent but limits the effect of the agreement to the due execution of the contract . . . The ownership, the property right, is only derived from the delivery of a thing . . . " As for the argument that symbolic delivery was effected through the deed of sale, which was a public instrument, the Court has held: "The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is placed 'in the hands and possession of the vendee.' (Civil Code, art. 1462). It is true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the

object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to reality the delivery has not been effected." 23 There is no dispute that it is the petitioner and not the private respondent who is in actual possession of the litigated properties. Even if the respective claims of the parties were both to be discarded as being inherently weak, the decision should still incline in favor of the petitioner pursuant to the doctrine announced in Santos & Espinosa v. Estejada, 24 where the Court announced: "If the claim of both the plaintiff and the defendant are weak, judgment must be for the defendant, for the latter being in possession is presumed to be the owner, and cannot be obliged to show or prove a better right." WHEREFORE, the decision of the respondent court is SET ASIDE and that of the trial court REINSTATED, with costs against the private respondent. It is so ordered

G.R. No. 109125 December 2, 1994 ANG YU ASUNCION, ET AL. vs. COURT OF APPEALS, ET AL. EN BANC DECISION VITUG, J p: Assailed, in this petition for review, is the decision of the Court of Appeals, dated 04 December 1991, in CA-G.R. SP No. 26345 setting aside and declaring without force and effect the orders of execution of the trial court, dated 30 August 1991 and 27 September 1991, in Civil Case No. 87-41058. The antecedents are recited in good detail by the appellate court thusly: "On July 29, 1987 a Second Amended Complaint for Specific Performance was filed by Ann Yu Asuncion and Keh Tiong, et al., against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan before the Regional Trial Court, Branch 31, Manila in Civil Case No. 87-41058, alleging, among others, that plaintiffs are tenants or lessees of residential and commercial spaces owned by defendants described as Nos. 630-638 Ongpin Street, Binondo, Manila; that they have occupied said spaces since 1935 and have been religiously paying the rental and complying with all the conditions of the lease contract; that on several occasions before October 9, 1986, defendants informed plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same; that during the negotiations, Bobby Cu Unjieng offered a price of P6million while plaintiffs made a counter offer of P5-million; that

plaintiffs thereafter asked the defendants to put their offer in writing to which request defendants acceded; that in reply to defendant's letter, plaintiffs wrote them on October 24, 1986 asking that they specify the terms and conditions of the offer to sell; that when plaintiffs did not receive any reply, they sent another letter dated January 28, 1987 with the same request; that since defendants failed to specify the terms and conditions of the offer to sell and because of information received that defendants were about to sell the property, plaintiffs were compelled to file the complaint to compel defendants to sell the property to them. "Defendants filed their answer denying the material allegations of the complaint and interposing a special defense of lack of cause of action. "After the issues were joined, defendants filed a motion for summary judgment which was granted by the lower court. The trial court found that defendants' offer to sell was never accepted by the plaintiffs for the reason that the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contract of sale at all. Nonetheless, the lower court ruled that should the defendants subsequently offer their property for sale at a price of P11-million or below, plaintiffs will have the right of first refusal. Thus the dispositive portion of the decision states: "'WHEREFORE, judgment is hereby rendered in favor of the defendants and against the plaintiffs summarily dismissing the complaint subject to the aforementioned condition that if the defendants subsequently decide to offer their property for sale for a purchase price of Eleven Million Pesos or lower, then the plaintiffs has the option to purchase the property or of first refusal, otherwise, defendants need not offer the property to the plaintiffs if the purchase price is higher than Eleven Million Pesos. "'SO ORDERED.' "Aggrieved by the decision, plaintiffs appealed to this Court in CAG.R. CV No. 21123. In a decision promulgated on September 21, 1990 (penned by Justice Segundino G. Chua and concurred in by Justices Vicente V. Mendoza and Fernando A. Santiago), this Court affirmed with modification the lower court's judgment, holding: "'In resume, there was no meeting of the minds between the parties concerning the sale of the property. Absent such requirement, the claim for specific performance will not lie. Appellants' demand for actual, moral and exemplary damages will likewise fail as there exists no justifiable ground for its award. Summary judgment for defendants was properly granted. Courts may render summary judgment when there is no genuine issue as to any material fact and

the moving party is entitled to a judgment as a matter of law (Garcia vs. Court of Appeals, 176 SCRA 815). All requisites obtaining, the decision of the court a quo is legally justifiable. 'WHEREFORE, finding the appeal unmeritorious, the judgment appealed from is hereby AFFIRMED, but subject to the following modification: The court a quo in the aforestated decision gave the plaintiffs-appellants the right of first refusal only if the property is sold for a purchase price of Eleven Million pesos or lower; however, considering the mercurial and uncertain forces in our market economy today. We find no reason not to grant the same right of first refusal to herein appellants in the event that the subject property is sold for a price in excess of Eleven Million pesos. No pronouncement as to costs. 'SO ORDERED.' "The decision of this Court was brought to the Supreme Court by petition for review on certiorari. The Supreme Court denied the appeal on May 6, 1991 'for insufficiency in form and substances' (Annex H, Petition). "On November 15, 1990, while CA-G.R. CV No. 21123 was pending consideration by this Court, the Cu Unjieng spouses executed a Deed of Sale (Annex D, Petition) transferring the property in question to herein petitioner Buen Realty and Development Corporation, subject to the following terms and conditions: "'1. That for and in consideration of the sum of FIFTEEN MILLION PESOS (P15,000,000.00), receipt of which in full is hereby acknowledged, the VENDORS hereby sells, transfers and conveys for and in favor of the VENDEE, his heirs, executors, administrators or assigns, the above-described property with all the improvements found therein including all the rights and interest in the said property free from all liens and encumbrances of whatever nature, except the pending ejectment proceeding; '2. That the VENDEE shall pay the Documentary Stamp Tax, registration fees for the transfer of title in his favor and other expenses incidental to the sale of above-described property including capital gains tax and accrued real estate taxes.' "As a consequence of the sale, TCT No. 105254/T-881 in the name of the Cu Unjieng spouses was cancelled and, in lieu thereof, TCT No. 195816 was issued in the name of petitioner on December 3, 1990. "On July 1, 1991, petitioner as the new owner of the subject property wrote a letter to the lessees demanding that the latter vacate the premises. "On July 16, 1991, the lessees wrote a reply to petitioner stating that petitioner brought the property subject to the notice of lis pendens

regarding Civil Case No. 87-41058 annotated on TCT No. 105254/T881 in the name of the Cu Unjiengs. "The lessees filed a Motion for Execution dated August 27, 1991 of the Decision in Civil Case No. 87-41058 as modified by the Court of Appeals in CA-G.R. CV No. 21123. "On August 30, 1991, respondent Judge issued an order (Annex A, Petition) quoted as follows: "'Presented before the Court is a Motion for Execution filed by plaintiff represented by Atty. Antonio Albano. Both defendants Bobby Cu Unjieng and Rose Cu Unjieng represented by Atty. Vicente Sison and Atty. Anacleto Magno respectively were duly notified in today's consideration of the motion as evidenced by the rubber stamp and signatures upon the copy of the Motion for Execution. 'The gist of the motion is that the Decision of the Court dated September 21, 1990 as modified by the Court of Appeals in its decision in CA G.R. CV-21123, and elevated to the Supreme Court upon the petition for review and that the same was denied by the highest tribunal in its resolution dated May 6, 1991 in G.R. No. L97276, had now become final and executory. As a consequence, there was an Entry of Judgment by the Supreme Court as of June 6, 1991, stating that the aforesaid modified decision had already become final and executory. 'It is the observation of the Court that this property in dispute was the subject of the Notice of Lis Pendens and that the modified decision of this Court promulgated by the Court of Appeals which had become final to the effect that should the defendants decide to offer the property for sale for a price of P11 Million or lower, and considering the mercurial and uncertain forces in our market economy today, the same right of first refusal to herein plaintiffs/appellants in the event that the subject property is sold for a price in excess of Eleven Million pesos or more. 'WHEREFORE, defendants are hereby ordered to execute the necessary Deed of Sale of the property in litigation in favor of plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15 Million pesos in recognition of plaintiffs' right of first refusal and that a new Transfer Certificate of Title be issued in favor of the buyer. 'All previous transactions involving the same property notwithstanding the issuance of another title to Buen Realty Corporation, is hereby set aside as having been executed in bad faith. 'SO ORDERED.' "On September 22, 1991 respondent Judge issue another order, the

dispositive portion of which reads: "'WHEREFORE, let there be Writ of Execution issue in the aboveentitled case directing the Deputy Sheriff Ramon Enriquez of this Court to implement said Writ of Execution ordering the defendants among others to comply with the aforesaid Order of this Court within a period of one (1) week from receipt of this Order and for defendants to execute the necessary Deed of Sale of the property in litigation in favor of the plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15,000,000.00 and ordering the Register of Deeds of the City of Manila, to cancel and set aside the title already issued in favor of Buen Realty Corporation which was previously executed between the latter and defendants and to register the new title in favor of the aforesaid plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go. 'SO ORDERED.' "On the same day, September 27, 1991 the corresponding writ of execution (Annex C, Petition) was issued". 1 On 04 December 1991, the appellate court, on appeal to it by private respondent, set aside and declared without force and effect the above questioned orders of the court a quo. In this petition for review on certiorari, petitioners contend that Buen Realty can be held bound by the writ of execution by virtue of the notice of lis pendens, carried over on TCT No. 195816 issued in the name of Buen Realty, at the time of the latter's purchase of the property on 15 November 1991 from the Cu Unjiengs. prcd We affirm the decision of the appellate court. A not too recent development in real estate transactions is the adoption of such arrangements as the right of first refusal, a purchase option and a contract to sell. For ready reference, we might point out some fundamental precepts that may find some relevance to this discussion. An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code). The obligation is constituted upon the concurrence of the essential elements thereof, viz: (a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations (law, contracts, quasi-contracts, delicts and quasi-delicts); (b) the object which is the prestation or conduct; required to be observed (to give, to do or not to do); and (c) the subject-persons who, viewed from the demandability of the obligation, are the active (obligee) and the passive (obligor) subjects. Among the sources of an obligation is a contract (Art. 1157, Civil Code), which is a meeting of minds between two persons whereby

one binds himself, with respect to the other, to give something or to render some service (Art. 1305, Civil Code). A contract undergoes various stages that include its negotiation or preparation, its perfection and, finally, its consummation. Negotiation covers the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is concluded (perfected). The perfection of the contract takes place upon the concurrence of the essential elements thereof. A contract which is consensual as to perfection is so established upon a mere meeting of minds, i.e., the concurrence of offer and acceptance, on the object and on the cause thereof. A contract which requires, in addition to the above, the delivery of the object of the agreement, as in a pledge or commodatum, is commonly referred to as a real contract. In a solemn contract, compliance with certain formalities prescribed by law, such as in a donation of real property, is essential in order to make the act valid, the prescribed form being thereby an essential element thereof. The stage of consummation begins when the parties perform their respective undertakings under the contract culminating in the extinguishment thereof. cdrep Until the contract is perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation. In sales, particularly, to which the topic for discussion about the case at bench belongs, the contract is perfected when a person, called the seller, obligates himself, for a price certain, to deliver and to transfer ownership of a thing or right to another, called the buyer, over which the latter agrees. Article 1458 of the Civil Code provides: "Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. "A contract of sale may be absolute or conditional. When the sale is not absolute but conditional, such as in a "Contract to Sell" where invariably the ownership of the thing sold is retained until the fulfillment of a positive suspensive condition (normally, the full payment of the purchase price), the breach of the condition will prevent the obligation to convey title from acquiring an obligatory force. 2 In Dignos vs. Court of Appeals (158 SCRA 375), we have said that, although denominated a "Deed of Conditional Sale," a sale is still absolute where the contract is devoid of any proviso that title is reserved or the right to unilaterally rescind is stipulated, e.g., until or unless the price is paid. Ownership will then be transferred to the buyer upon actual or constructive delivery (e.g., by the execution of a public document) of the property sold. Where the condition is

imposed upon the perfection of the contract itself, the failure of the condition would prevent such perfection. 3 If the condition is imposed on the obligation of a party which is not fulfilled, the other party may either waive the condition or refuse to proceed with the sale (Art. 1545, Civil Code). 4 An unconditional mutual promise to buy and sell, as long as the object is made determinate and the price is fixed, can be obligatory on the parties, and compliance therewith may accordingly be exacted. 5 An accepted unilateral promise which specifies the thing to be sold and the price to be paid, when coupled with a valuable consideration distinct and separate from the price, is what may properly be termed a perfected contract of option. This contract is legally binding, and in sales, it conforms with the second paragraph of Article 1479 of the Civil Code, viz: "ART. 1479. . . . . "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. (1451a) 6 Observe, however, that the option is not the contract of sale itself. 7 The optionee has the right, but not the obligation, to buy. Once the option is exercised timely, i.e., the offer is accepted before a breach of the option, a bilateral promise to sell and to buy ensues and both parties are then reciprocally bound to comply with their respective undertakings. 8 Let us elucidate a little. A negotiation is formally initiated by an offer. An imperfect promise (policitacion) is merely an offer. Public advertisements or solicitations and the like are ordinarily construed as mere invitations to make offers or only as proposals. These relations, until a contract is perfected, are not considered binding commitments. Thus, at any time prior to the perfection of the contract, either negotiating party may stop the negotiation. The offer, at this stage, may be withdrawn; the withdrawal is effective immediately after its manifestation, such as by its mailing and not necessarily when the offeree learns of the withdrawal (Laudico vs. Arias, 43 Phil. 270). Where a period is given to the offeree within which to accept the offer, the following rules generally govern: (1) If the period is not itself founded upon or supported by a consideration, the offeror is still free and has the right to withdrawal the offer before its acceptance, or, if an acceptance has been made, before the offeror's coming to know of such fact, by communicating that withdrawal to the offeree (see Art. 1324, Civil Code; see also Atkins, Kroll & Co. vs. Cua, 102 Phil. 948, holding that this rule is

applicable to a unilateral promise to sell under Art. 1479, modifying the previous decision in South Western Sugar vs. Atlantic Gulf, 97 Phil. 249; see also Art. 1319, Civil Code; Rural Bank of Paraaque, Inc., vs. Remolado, 135 SCRA 409; Sanchez vs. Rigos, 45 SCRA 368). The right to withdraw, however, must not be exercised whimsically or arbitrarily; otherwise, it could give rise to a damage claim under Article 19 of the Civil Code which ordains that "every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith." LLjur (2) If the period has a separate consideration, a contract of "option" is deemed perfected, and it would be a breach of that contract to withdraw the offer during the agreed period. The option, however, is an independent contract by itself, and it is to be distinguished from the projected main agreement (subject matter of the option) which is obviously yet to be concluded. If, in fact, the optioner-offeror withdraws the offer before its acceptance (exercise of the option) by the optionee-offeree, the latter may not sue for specific performance on the proposed contract ("object" of the option) since it has failed to reach its own stage of perfection. The optioner-offeror, however, renders himself liable for damages for breach of the option. In these cases, care should be taken of the real nature of the consideration given, for if, in fact, it has been intended to be part of the consideration for the main contract with a right of withdrawal on the part of the optionee, the main contract could be deemed perfected; a similar instance would be an "earnest money" in a contract of sale that can evidence its perfection (Art. 1482, Civil Code). In the law on sales, the so-called "right of first refusal" is an innovative juridical relation. Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code. Neither can the right of first refusal, understood in its normal concept, per se be brought within the purview of an option under the second paragraph of Article 1479, aforequoted, or possibly of an offer under Article 1319 9 of the same Code. An option or an offer would require, among other things, 10 a clear certainty on both the object and the cause or consideration of the envisioned contract. In a right of first refusal, while the object might be made determinate, the exercise of the right, however, would be dependent not only on the grantor's eventual intention to enter into a binding juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior thereto, it can at best be so described as merely belonging to a class of preparatory

juridical relations governed not by contracts (since the essential elements to establish the vinculum juris would still be indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered provisions of the Civil Code on human conduct. LexLib Even on the premise that such right of first refusal has been decreed under a final judgment, like here, its breach cannot justify correspondingly an issuance of a writ of execution under a judgment that merely recognizes its existence, nor would it sanction an action for specific performance without thereby negating the indispensable element of consensuality in the perfection of contracts. 11 It is not to say, however, that the right of first refusal would be inconsequential for, such as already intimated above, an unjustified disregard thereof, given, for instance, the circumstances expressed in Article 19 12 of the Civil Code, can warrant a recovery for damages. The final judgment in Civil Case No. 87-41058, it must be stressed, has merely accorded a "right of first refusal" in favor of petitioners. The consequence of such a declaration entails no more than what has heretofore been said. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of private respondents to honor the right of first refusal, the remedy is not a writ of execution on the judgment, since there is none to execute, but an action for damages in a proper forum for the purpose. Furthermore, whether private respondent Buen Realty Development Corporation, the alleged purchaser of the property, has acted in good faith or bad faith and whether or not it should, in any case, be considered bound to respect the registration of the lis pendens in Civil Case No. 87-41058 are matters that must be independently addressed in appropriate proceedings. Buen Realty, not having been impleaded in Civil Case No. 87-41058, cannot be held subject to the writ of execution issued by respondent Judge, let alone ousted from the ownership and possession of the property, without first being duly afforded its day in court. We are also unable to agree with petitioners that the Court of Appeals has erred in holding that the writ of execution varies the terms of the judgment in Civil Case No. 87-41058, later affirmed in CA-G.R. CV-21123. The Court of Appeals, in this regard, has observed: Cdpr "Finally, the questioned writ of execution is in variance with the decision of the trial court as modified by this Court. As already stated, there was nothing in said decision 13 that decreed the execution of a deed of sale between the Cu Unjiengs and respondent

lessees, or the fixing of the price of the sale, or the cancellation of title in the name of petitioner (Limpin vs. IAC, 147 SCRA 516; Pamantasan ng Lungsod ng Maynila vs. IAC, 143 SCRA 311; De Guzman vs. CA, 137 SCRA 730; Pastor vs. CA, 122 SCRA 885)." It is likewise quite obvious to us that the decision in Civil Case No. 87-41058 could not have decreed at the time the execution of any deed of sale between the Cu Unjiengs and petitioners. WHEREFORE, we UPHOLD the Court of Appeals in ultimately setting aside the questioned Orders, dated 30 August 1991 and 27 September 1991, of the court a quo. Costs against petitioners. SO ORDERED.

G.R. No. 136221 June 25, 2001 EQUATORIAL REALTY DEVELOPMENT vs. MAYFAIR THEATER FIRST DIVISION PARDO, J p: This is a Promethean case involving the execution of a Supreme Court decision, 1 which has been long final, ordering the (1) rescission of sale of parcels of land between Carmelo & Bauermann and Equatorial Realty Development, Inc., and (2) thereafter, the sale by Carmelo & Bauermann of the property to Mayfair Theater, Inc., the party with the right of first refusal to acquire the same. DCaSHI However, the landowner (Carmelo & Bauermann) could no longer be located. Hence, there was literally no one to restitute the amount of the purchase price. And so no one could "sell" the property to Mayfair Theater, Inc. Thus, Mayfair Theater, Inc. deposited the amount of the purchase price with the trial court. Nevertheless, in view of the absence of the vendor Carmelo & Bauermann, the Clerk of Court, as sheriff, executed the deed of sale, on the basis of which the Registry of Deeds issued new certificates of title 2 in favor of respondent Mayfair Theater, Inc. In serving the ends of justice, we set guidelines in the execution of our decision in G. R. No. 106063. If any of the parties employ means

to prevent the execution of the final decision, we must see to it that the ends of the litigation would be attained. After all, this is the commission of the courts of the land. Thus, with respect to the transfer certificates of title issued in the name of Mayfair, the presumption of regularity of the issuance applies, 3 that is, the Registry of Deeds complied with his duty to see that all taxes and registration fees have been paid and that the titles were issued after compliance with all the legal requirements. Considering the present situation of Mayfair Theater, Inc., it is the duty of the lower court in the execution of the decision to effectuate the ultimate result of the suit, with Mayfair Theater, Inc. as the prevailing party. Thus, the titles issued in favor of Mayfair Theater shall have to be validated. The question is, "How will the execution of the decision be carried out when the supposed vendor of the property (Carmelo & Bauermann) can no longer be located? " To allow this stratagem would make a travesty of a duly promulgated decision of the Supreme Court that has become final and executory. 4 This is where the courts must again exercise its power of execution in order to put an end to the dispute that was settled years ago. Litigation must at some time be terminated, for public policy dictates that once a judgment becomes final, executory and unappealable, the prevailing party shall not be deprived of the fruits of victory by some subterfuge devised by the losing party. 5 Courts must guard against any scheme calculated to bring about that result. Constituted as they are to put an end to controversies, courts frown upon any attempt to prolong them. 6 WHEREFORE, the Court hereby remands the case to the trial court with instructions: 1. To execute the Court's decision strictly in accordance with the ruling in G. R. No. 106063 by validating the acts of the Sheriff of Manila and the titles in the name of Mayfair Theater, Inc. issued by the Register of Deeds of Manila consistent therewith; SIcCEA 2. In case of failure of Carmelo & Bauermann to accept the amount of P11,300,000.00 deposited by Mayfair Theater, Inc. with the Clerk of Court, Regional Trial Court, Manila, to authorize the Clerk of Court to RELEASE the amount of P11,300,000.00 deposited with the court for the account of Carmelo & Bauermann, Inc. to petitioner; 3. To devolve upon the trial court the determination of other issues that may remain unresolved among the parties relating to the execution of the Court's final decision in G. R. No. 106063. No costs.

SO ORDERED. Davide, Jr., C .J ., Kapunan and Ynares-Santiago, JJ ., concur. Puno, J ., took no part. Footnotes 1. G. R. No. 106063, promulgated on November 21, 1996, 332 Phil. 525. 2. TCT Nos. 235120, 235121, 235122, and 235123 in the name of Mayfair. 3. Velasquez vs. Court of Appeals, G. R No. 126996, February 15, 2000, citing Chan vs. CA (Special 7th Division), 298 SCRA 713 [1998]. 4. 332 Phil. 525 [1996]. 5. Time Transit vs. NLRC, 304 SCRA 11, 17 [1999], citing Nasser vs. Court of Appeals, Phil. 871, 883 [1995]. 6. Salva vs. Court of Appeals, 304 SCRA 632, 645 [1999], citing Lim vs. Jabalde, 172 SCRA 211, 224 [1989]; Banogon vs. Serna, 154 SCRA 593, 597 [1987]. Copyright 2001 CD Technologies Asia Inc

G.R. No. 136382 June 25, 2001 PEOPLE OF THE PHIL. vs. FIDEL ALBORIDA DECISION PER CURIAM p: For automatic review is the decision 1 of the Regional Trial Court of Calamba, Laguna, Branch 34, in Criminal Case No. 6072-98-C, finding accused-appellant guilty beyond reasonable doubt of raping his minor daughter, and sentencing him to suffer the supreme penalty of death. HCITcA The information against accused-appellant reads: That on or about June 13, 1998 at Brgy. Mayodon, Municipality of Los Baos, Province of Laguna and within the jurisdiction of this Honorable Court, the abovenamed accused, by means of force, violence and intimidation and with lewd design, did then and there

wilfully, unlawfully and feloniously have carnal knowledge with (sic) eight (8) year old daughter SUZETTE C. ALBORIDA and against her will and consent, to her damage and prejudice. CONTRARY TO LAW. 2 Arraigned on September 21, 1998, accused-appellant pleaded not guilty. 3 At the pre-trial conference on October 14, 1998, however, accused-appellant through counsel, informed the court of his intention to withdraw his earlier plea of not guilty and to substitute the same with a plea of guilty. Said manifestation was confirmed by accused-appellant upon inquiry by the court. Hence, when arraigned anew, he entered a plea of guilty. 4 Nonetheless, the prosecution presented evidence to prove its case beyond reasonable doubt through the testimony of the rape victim herself, Grade II pupil, Suzette C. Alborido, and the examining physician, Dr. Filemon P. Raymond Guerra III. Thus In the evening of June 13, 1998, nine-year old Suzette Alborida (Suzette), was sleeping beside her two-year old brother in their house at Brgy. Mayodon, Los Baos, Laguna. The house consisted of one bedroom with two wooden beds. One bed was occupied by Suzette, her two-year old brother, and her grandmother; while the other bed is occupied by accused-appellant. At around 10:00 o'clock of the same evening, Suzette awoke and saw her father, herein accused-appellant, beside her with his head on her lap. Accusedappellant told her to transfer to his bed, at the same time pulling her without being noticed by Suzette's grandmother. Thereafter, accused-appellant undressed Suzette and ordered her to lie down as he himself removed his clothes. Accused-appellant forthwith placed himself on top of her and inserted his penis into her vagina. Suzette felt pain, hence, accused-appellant ordered her to get soap, which he applied on his hands. Accused-appellant then inserted his finger in Suzette's vagina. At this instance, Suzette's mother, Adelina Alborida arrived. Sensing the presence of Adelina, accused-appellant retreated to his bed while Suzette opened the door and related the incident to Adelina. The latter immediately reported the matter to the Barangay Chairman, leading to the filing of the instant case. 5 Suzette disclosed that prior to the incident on June 13, 1998, she had been molested four times by accused-appellant but she kept her ordeal to herself because of the threats of accused-appellant. On June 14, 1998, Suzette was examined by Dr. Filemon Raymond P. Guerra III, of the Jose Rizal Memorial Hospital, Calamba, Laguna. Said examination yielded the following results: xxx xxx xxx P.E. Genitalia

= External infantile, (+) abrasion with erythema (redness) right side of vaginal opening. = (+) erythema (redness) left side of vaginal opening. Hymen = laceration at 7 o'clock position. Sperm count = negative for spermatozoa. 6 On November 9, 1998, the trial court rendered the judgment of conviction under automatic review, holding as follows: ACCORDINGLY, by virtue of his voluntary plea of guilty, this Court finds accused Fidel Alborida y Villegas GUILTY beyond reasonable doubt of the crime of Rape as defined and penalized under Article 335 of the Revised Penal Code, as amended, and hereby imposes upon him the penalty of DEATH. Accused is further directed to indemnify the victim Suzette Alborida the sum of FIFTY THOUSAND (P50,000.00) PESOS as moral damages. With costs against the accused. aCSTDc SO ORDERED. 7 In accordance with Rule 122, Section 10, of the Revised Rules on Criminal Procedure, the case was elevated to this Court for automatic review in view of the imposition of death penalty. Accused-appellant through the Public Attorney's Office argues that the trial court gravely erred in not applying the safeguards to a plea of guilty to a capital offense set forth under the rules. 8 Rule 116, Section 3, of the Revised Rules on Criminal Procedure provides SECTION 3. Plea of guilty to capital offense; reception of evidence. When the accused pleads guilty to a capital offense, the court shall conduct a searching inquiry into the voluntariness and full comprehension of the consequences of his plea and shall require the prosecution to prove his guilt and precise degree of culpability. The accused may present evidence in his behalf. The aforecited rule specifically mandates three things upon the trial court in cases where a positive plea is entered by the accused; to wit: (1) conduct a searching inquiry into the voluntariness of the plea and the accused's comprehension of the consequences thereof; (2) require the prosecution to prove the guilt of the accused and the precise degree of his culpability; and (3) ask the accused if he desires to present evidence on his behalf and allow him to do so if he desires. 9 The rationale behind the rule is that the courts must proceed with more care where the possible punishment is in its severest form, namely death, for the reason that the execution of such a sentence is irrevocable and experience has shown that innocent persons have at times pleaded guilty. The primordial purpose is to avoid

improvident pleas of guilty on the part of an accused where grave crimes are involved since by admitting his guilt before the court, he would forfeit his life and liberty without having fully understood the meaning, significance and consequence of his plea. 10 In the case at bar, the records disclose that the court a quo failed to abide by the strict safeguards intended to guarantee a provident plea of guilt. At the scheduled pre-trial, the following proceedings transpired: xxx xxx xxx ATTY. PADERAYON: For the accused. Your honor please after conferring with the accused, he is now ready to plead guilty. COURT: Do you confirm your counsel's manifestation that you wish to withdraw your previous plea of not guilty and change it to a plea of guilty? A: Yes, your honor. COURT: Did your lawyer explain to you the consequences of your change of plea? A: Yes, your honor. COURT: Did you understand the explanation of your counsel? A: Yes, your honor. COURT: Are you aware that even if you changed your plea from not guilty to guilty you will still be meted the penalty of death? A: Yes, your honor. COURT: And you are changing your plea without having been intimidated, bribed and/or threatened by anyone? A: Yes, your honor. COURT: Alright order. 11 The foregoing exchange between the judge and the accusedappellant does not, to the mind of the Court, sufficiently prove the voluntariness and full comprehension of accused-appellant's plea of guilt to the crime of qualified rape. Regrettably, the questions propounded by the trial court do not constitute a "searching inquiry" within the contemplation of Section 3, Rule 116, of the Revised Rules on Criminal Procedure. Similarly, in People v. Sevilleno, 12 the court asked the following

questions on accused-appellant, to wit: (1) Do you understand your plea of guilt?; and (2) Do you know that your plea of guilt could warrant the death penalty? Ruling that the positive plea of accusedappellant in the said case was improvidently made, we held that those questions hardly satisfied the requisites of searching inquiry. In People v. Ponce Hermoso, 13 citing People v. Nadera, 14 the Court ratiocinated that: The warnings given by the trial court in this case fall short of the requirement that it must make a searching inquiry to determine whether accused-appellant understood fully the import of his guilty plea. As has been said, a mere warning that the accused faces the supreme penalty of death is insufficient. (People v. Estomaca, 326 Phil. 429 [1996]). For more often than not, an accused pleads guilty upon bad advice or because he hopes for a lenient treatment or a lighter penalty. The trial judge must erase such mistaken impressions. (People v. Bello, G.R Nos. 130411-14, October 13, 1999) He must be completely convinced that the guilty plea made by the accused was not made under duress or promise of reward. The judge must ask the accused the manner the latter was arrested or detained, and whether he was assisted by counsel during the custodial and preliminary investigations. In addition, the defense counsel should also be asked whether he conferred with the accused and completely explained to him the meaning and the consequences of a plea of guilt. Furthermore, since the age, educational attainment and socio-economic status of the accused may reveal insights for a proper verdict in the case, the trial court must ask questions concerning them. (People v. Estomaca, supra) In this case, absent any showing that these questions were put to accused-appellant, a searching inquiry cannot be said to have been undertaken by the trial court. ASIDTa Notwithstanding the improvident plea of accused-appellant, however, remand of the instant case, is not warranted under the circumstances. It must be stressed that accused-appellant's plea of guilty was not the sole basis of the condemnatory judgment under consideration. The settled rule is that, where the trial court receives evidence to determine precisely whether the accused has erred in admitting his guilt, the manner in which the plea of guilty is made whether improvidently or not loses legal significance for the simple reason that the conviction is based on the evidence proving the commission by the accused of the offense charged. 15 Hence, even without considering the plea of guilt of the accusedappellant in the case under scrutiny, he can still be convicted as there is sufficient evidence on record on which to base his

conviction. The testimony of private complainant alone is enough to convict accused-appellant. She was spontaneous, clear and direct in relating how accused-appellant raped her. Her testimony reads: Q: In your said statement you were asked this question: "T: Ano ang dahilan bakit ka narito sa himpilan?" and your answer was: "S: Nais kong ireklamo ang aking Tatay na si Fidel." do you affirm that the accused is your father? A: Yes, sir. Q: That according to you this case happened on June 13, 1998 when you were sleeping at around 10:00 o'clock in the evening, do you affirm that? A: Yes, Sir. Q: Who were with you while you were sleeping? A: My grandmother, my brother and sister. Q: Where were they sleeping in relation to you? A: My grandmother was sleeping on a wooden bed while I was sleeping beside my youngest brother. Q: How old is this brother of yours? A: Two years old sir. Q: Your grandmother which (sic) you said was then sleeping in your wooden bed, how far was she at that time from you? A: She was very near us. Q: How old is your grandmother? A: I do not know. Q: Can you tell us how were you raped by your father while you were sleeping? A: He had his head on my lap and he told me to transfer to the other wooden bed? Q: What exactly did your father tell you when you were asked to transfer to the wooden bed? A: He just told me to transfer. Q: Did your father tell you why you were being asked by him to transfer to the other wooden bed? A: No sir. Q: What did you do when you were asked by your father to transfer? A: Because he was pulling me. Q: And how was he pulling you? A: I was holding on a wood while he was pulling me sir. Q: What happened after you were being pulled by your father and you were holding on a wood? A: He made me lie down on the wooden bed.

Q: That wooden bed wherein you were made to lie down according to you how far was that from the bed where your grandmother was lying? A: A little bit far. Q: After you said you were made to lie down by your father, what did he do to you? A: He undressed me. Q: What did you tell him when you were being undressed by your father? A: I just cried because he was removing my clothes. Q: After your clothes were removed by your father, what did he do to you? A: He again made me lie down on the wooden bed and removed his clothes. Q: After he undressed himself and made you to lie down, what did he do next, if any? A: Humiga po siya sa akin. Q: When you said "humiga po siya sa akin" was he on top of you? A: Yes, sir. Q: While he was on top of you what did you do? A: He kissed me on my neck. Q: After kissing you, what did he do next? A: When my mother arrived I told my mother. HaIESC Q: You said in your statement which you identified that after your father placed himself on top of you and these were your words: ". . . pinahubad po niya yung damit ko po at panty at pagkatapos ay naghubad rin siya ng suot niya at pinatungan po niya ako at kinayug po . . . " do you affirm this statement of yours? A: Yes, sir. Q: How did he "kinayug" you? A: He lied down on me. Q: How did you know that he was trying to insert his organ to your organ? A: Because it was very painful. Q: You said it was very painful, where did you feel that pain? A: On my leg (witness is pointing to her private part). Q: What happened after you said your father went on top you and was trying to insert his organ to your organ and you felt pain? A: At first he told me to get a soap. .Q: Why? Did he tell you why? A: No, sir.

Q: Did you comply with his instruction to get soap? A: Yes, sir. Q: What happened after you said you got soap? A: He put soap on his hands and inserted into mine. Q: You said he inserted into your organ with a soap; what is this that he inserted inside your organ? A: His finger. Q: After your father inserted his finger with a soap, what else did he do? A: He ran away. Q: Why? A: Because my mother arrived. Q: Now which came ahead, your father "kinayug" you or he inserted his finger to your organ. A: "Yung kinayug ako." Q: You said your father ran because your mother arrived, what did you do? A: I opened the door for her and then I told her. Q: What did you tell your mother? A: That "binastos ako ng tatay ko." Q: After relaying to your mother what your father did to you, what did your mother do? A: She went to Lola Helen, Kapitana. Q: Do you know what happened after your mother went to Kapitana? A: Yes. Q: What happened? A: Lola Helen made a call to the police station. Q: Do you know if your father was arrested? A: Yes, sir. Q: You were asked this question in your statement which you identified: "T: Ngayon lang ba ito ginawa ng tatay mo sa iyo?" and you answered: "S: Hindi po, mga limang beses na po." Do you affirm this? A: Yes, sir. Q: Why did you not complain to your mother? A: Because he was threatening me. Q: When you said you were being threatened by your father, what exactly did he tell you when was threatening you? A: He told me not to tell anyone. Q: Was that all that your father told you?

A: Yes, sir, he was boxing me on my left shoulder. 16 After the direct examination, the defense was given the opportunity to cross-examine Suzette. During her cross-examination, Suzette remained steadfast in her declarations. In plain and simple language, Suzette was able to recite the details of her harrowing experience. Indeed, the trial court which had the peculiar advantage of observing directly and at first hand Suzette's deportment and manner of testifying, did not err in giving full faith and credence to her testimony. 17 Testimonies of rape victims, like Suzette, who are young and immature deserve full credence, considering that no young woman, especially of tender age, would concoct a story of defloration, allow an examination of her private parts, and thereafter pervert herself by being subject to a public trial, if she was not motivated solely by the desire to obtain justice for the wrong committed against her. 18 Suzette's credibility is further buttressed by the absence of any false or evil motive on her part that could impel her to perjure herself against her very own father. 19 Moreover, the presence of Suzette's grandmother in the same room where the rape occurred does not make her rape story less believable. It is a hornbook doctrine that rape can be committed in places where people congregate, in parks, along the roadside, within the school premises, inside the house where there are occupants and even in the same room where the members of the family are also sleeping. 20 Consistent with her rape story was the medical finding showing that Suzette sustained hymenal laceration at 7 o'clock position and "abrasion with erythema (redness)" at the right and left sides of the vaginal opening. 21 As consistently ruled by this Court, lacerations, whether healed or fresh, are best physical evidence of forcible defloration. 22 Pertinent provision of Article 266-B states: "The death penalty shall also be imposed if the crime of rape is committed with any of the following aggravating/qualifying circumstances: (1) When the victim is under eighteen (18) years of age and the offender is a parent, ascendant, step-father, guardian, relative by consanguinity or affinity within the third civil degree, or the common law spouse of the parent of the victim. . . ." As established beyond reasonable doubt by the prosecution, accused-appellant is the father of nine (9) year old private complainant, Suzette, who as reflected in her birth certificate was born on July 28, 1988. 23 Accordingly, the supreme penalty of death should be imposed on accused-appellant for having raped his daughter who is under eighteen (18) years of age.

Anent his civil liability, accused-appellant should indemnify private complainant the amount of P75,000.00 since the rape in the present case is qualified by circumstances of age and relationship which makes the death penalty imposable. 24 Four justices of the Court, however, have continued to maintain the unconstitutionality of R.A. No. 7650, insofar as it prescribes the death penalty. Nevertheless, they submit to the ruling of the majority that the death penalty can be lawfully imposed in the case at bar. TcICEA WHEREFORE, the decision of the Regional Trial Court of Laguna, Branch 34, in Criminal Case No. 6072-98-C, finding accusedappellant Fidel Alborida y Villegas guilty beyond reasonable doubt of the crime of rape, and sentencing him to suffer the penalty of death is AFFIRMED with the MODIFICATION that accused-appellant is ordered to indemnify private complainant Suzette C. Alborido in the amount of P75,000.00 as civil indemnity and P50,000.00 as moral damages. In accordance with Section 25 of R.A. No. 7659, amending Article 83 of the Revised Penal Code, upon finality of this decision, let the records of this case be forwarded to the Office of the President for possible exercise of pardoning power. SO ORDERED.

G.R. No. 91029 February 7, 1991 NORKIS DISTRIBUTORS, INC. vs. COURT OF APPEALS, ET AL. SECOND DIVISION DECISION GRIO-AQUINO, J p: Subject of this petition for review is the decision of the Court of Appeals (Seventeenth Division) in CA-G.R. No. 09149, affirming with modification the judgment of the Regional Trial Court, Sixth (6th) Judicial Region, Branch LVI. Himamaylan, Negros Occidental, in Civil Case No. 1272, which was private respondent Alberto Nepales' action for specific performance of a contract of sale with damages against petitioner Norkis Distributors, Inc. The facts borne out by the record are as follows: Petitioner Norkis Distributors, Inc. (Norkis for brevity), is the distributor of Yamaha motorcycles in Negros Occidental with office in Bacolod City with Avelino Labajo as its Branch Manager. On September 20, 1979, private respondent Alberto Nepales bought

from the Norkis-Bacolod branch a brand new Yamaha Wonderbike motorcycle Model YL2DX with Engine No. L2-329401K, Frame No. NL2-0329401, Color Maroon, then displayed in the Norkis showroom. The price of P7,500.00 was payable by means of a Letter of Guaranty from the Development Bank of the Philippines (DBP), Kabankalan Branch, which Norkis' Branch Manager Labajo agreed to accept. Hence, credit was extended to Nepales for the price of the motorcycle payable by DBP upon release of his motorcycle loan. As security for the loan, Nepales would execute a chattel mortgage on the motorcycle in favor of DBP. Branch Manager Labajo issued Norkis Sales Invoice No. 0120 (Exh. 1) showing that the contract of sale of the motorcycle had been perfected. Nepales signed the sales invoice to signify his conformity with the terms of the sale. In the meantime, however, the motorcycle remained in Norkis' possession. On November 6, 1979, the motorcycle was registered in the Land Transportation Commission in the name of Alberto Nepales. A registration certificate (Exh. 2) in his name was issued by the Land Transportation Commission on November 6, 1979 (Exh. 2-b). The registration fees were paid by him, evidenced by an official receipt, Exhibit 3. On January 22, 1980, the motorcycle was delivered to a certain Julian Nepales who was allegedly the agent of Alberto Nepales but the latter denies it (p. 15, t.s.n., August 2, 1984). The record shows that Alberto and Julian Nepales presented the unit to DBP's AppraiserInvestigator Ernesto Arriesta at the DBP offices in Kabankalan, Negros Occidental Branch (p. 12, Rollo). The motorcycle met an accident on February 3, 1980 at Binalbagan, Negros Occidental. An investigation conducted by the DBP revealed that the unit was being driven by a certain Zacarias Payba at the time of the accident (p. 33, Rollo). The unit was a total wreck (p. 36, t.s.n., August 2, 1984; p. 13, Rollo), was returned, and stored inside Norkis' warehouse. prLL On March 20, 1980, DBP released the proceeds of private respondent's motorcycle loan to Norkis in the total sum of P7,500. As the price of the motorcycle later increased to P7,828 in March, 1980, Nepales paid the difference of P328 (p. 13, Rollo) and demanded the delivery of the motorcycle. When Norkis could not deliver, he filed an action for specific performance with damages against Norkis in the Regional Trial Court of Himamaylan, Negros Occidental, Sixth (6th) Judicial Region, Branch LVI, where it was docketed as Civil Case No. 1272. He alleged that Norkis failed to deliver the motorcycle which he purchased, thereby causing him damages. Norkis answered that the motorcycle had already been delivered to private respondent before the accident, hence, the risk of loss or

damage had to be borne by him as owner of the unit. After trial on the merits, the lower court rendered a decision dated August 27, 1985 ruling in favor of private respondent (p. 28, Rollo) thus: "WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants. The defendants are ordered to pay solidarily to the plaintiff the present value of the motorcycle which was totally destroyed, plus interest equivalent to what the kabankalan SubBranch of the Development Bank of the Philippines will have to charge the plaintiff on his account, plus P50.00 per day from February 3, 1980 until full payment of the said present value of the motorcycle, plus P1,000.00 as exemplary damages, and costs of the litigation. In lieu of paying the present value of the motorcycle, the defendants can deliver to the plaintiff a brand-new motorcycle of the same brand, kind, and quality as the one which was totally destroyed in their possession last February 3, 1980." (pp. 28-29, Rollo.) On appeal, the Court of Appeals affirmed the appealed judgment on August 21, 1989, but deleted the award of damages "in the amount of Fifty (P50.00) Pesos a day from February 3, 1980 until payment of the present value of the damaged vehicle" (p. 35, Rollo). The Court of Appeals denied Norkis' motion for reconsideration. Hence, this Petition for Review. The principal issue in this case is who should bear the loss of the motorcycle. The answer to this question would depend on whether there had already been a transfer of ownership of the motorcycle to private respondent at the time it was destroyed. Norkis' theory is that: ". . . After the contract of sale has been perfected (Art. 1475) and even before delivery, that is, even before the ownership is transferred to the vendee, the risk of loss is shifted from the vendor to the vendee. Under Art. 1262, the obligation of the vendor to deliver a determinate thing becomes extinguished if the thing is lost by fortuitous event (Art. 1174), that is, without the fault or fraud of the vendor and before he has incurred delay (Art. 1165, par. 3). If the thing sold is generic, the loss or destruction does not extinguish the obligation (Art. 1263). A thing is determinate when it is particularly designated or physically segregated from all others of the same class (Art. 1460). Thus, the vendor becomes released from his obligation to deliver the determinate thing sold while the vendee's obligation to pay that price subsists. If the vendee had paid the price in advance the vendor may retain the same. The legal effect, therefore, is that the vendee assumes the risk of loss by

fortuitous event (Art. 1262) after the perfection of the contract to the time of delivery." (Civil Code of the Philippines, Ambrosio Padilla, Vol. 5, 1987 Ed., p. 87.) Norkis concedes that there was no "actual" delivery of the vehicle. However, it insists that there was constructive delivery of the unit upon: (1) the issuance of the Sales Invoice No. 0120 (Exh. 1) in the name of the private respondent and the affixing of his signature thereon; (2) the registration of the vehicle on November 6, 1979 with the Land Transportation Commission in private respondent's name (Exh. 2); and (3) the issuance of official receipt (Exh. 3) for payment of registration fees (p. 33, Rollo). That argument is not well taken. As pointed out by the private respondent, the issuance of a sales invoice does not prove transfer of ownership of the thing sold to the buyer. An invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold and has been considered not a bill of sale (Am. Jur. 2nd Ed., Vol. 67, p. 378). cdphil In all forms of delivery, it is necessary that the act of delivery whether constructive or actual, be coupled with the intention of delivering the thing. The act, without the intention, is insufficient (De Leon, Comments and Cases on Sales, 1978 Ed., citing Manresa, p. 94). When the motorcycle was registered by Norkis in the name of private respondent, Norkis did not intend yet to transfer the title or ownership to Nepales, but only to facilitate the execution of a chattel mortgage in favor of the DBP for the release of the buyer's motorcycle loan. The Letter of Guarantee (Exh. 5) issued by the DBP, reveals that the execution in its favor of a chattel mortgage over the purchased vehicle is a pre-requisite for the approval of the buyer's loan. If Norkis would not accede to that arrangement, DBP would not approve private respondent's loan application and, consequently, there would be no sale. In other words, the critical factor in the different modes of effecting delivery, which gives legal effect to the act, is the actual intention of the vendor to deliver, and its acceptance by the vendee. Without that intention, there is no tradition (Abuan vs. Garcia, 14 SCRA 759). In the case of Addison vs. Felix and Tioco (38 Phil. 404, 408), this Court held: "The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is 'placed in the hands and possession of the vendee.' (Civil Code, Art. 1462). It is true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the

object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to reality the delivery has not been effected." (Emphasis supplied.) The Court of Appeals correctly ruled that the purpose of the execution of the sales invoice dated September 20, 1979 (Exh. B) and the registration of the vehicle in the name of plaintiff-appellee (private respondent) with the Land Registration Commission (Exhibit C) was not to transfer to Nepales the ownership and dominion over the motorcycle, but only to comply with the requirements of the Development Bank of the Philippines for processing private respondent's motorcycle loan. On March 20, 1980, before private respondent's loan was released and before he even paid Norkis, the motorcycle had already figured in an accident while driven by one Zacarias Payba. Payba was not shown by Norkis to be a representative or relative of private respondent. The latter's supposed relative, who allegedly took possession of the vehicle from Norkis did not explain how Payba got hold of the vehicle on February 3, 1980. Norkis' claim that Julian Nepales was acting as Alberto's agent when he allegedly took delivery of the motorcycle (p. 20, Appellants' Brief), is controverted by the latter. Alberto denied having authorized Julian Nepales to get the motorcycle from Norkis Distributors or to enter into any transaction with Norkis relative to said motorcycle. (p. 5, t.s.n., February 6, 1985). This circumstances more than amply rebut the disputable presumption of delivery upon which Norkis anchors its defense to Nepales' action (pp. 33-34, Rollo). Article 1496 of the Civil Code which provides that "in the absence of an express assumption of risk by the buyer, the things sold remain at seller's risk until the ownership thereof is transferred to the buyer," is applicable to this case, for there was neither an actual nor constructive delivery of the thing sold, hence, the risk of loss should

be borne by the seller, Norkis, which was still the owner and possessor of the motorcycle when it was wrecked. This is in accordance with the well-known doctrine of res perit domino. cdphil WHEREFORE, finding no reversible error in the decision of the Court of Appeals in CA-G.R. No. 09149, we deny the petition for review and hereby affirm the appealed decision, with costs against the petitioner. SO ORDERED. G.R. No. 66140 January 21, 1993 INDUSTRIAL TEXTILE MANUFACTURING CO. OF THE PHIL., INC. vs. LPJ ENTERPRISES, INC. THIRD DIVISION SYLLABUS 1. REMEDIAL LAW; SUPREME COURT; NOT A TRIER OF FACTS. It is well-entrenched in Our jurisprudence that this Court is not a trier of facts (Valdez v. CA, 194 SCRA 360 [1991]). As a rule, it is also settled that the factual findings of the appellate court are final and conclusive (Bustamante vs. CA, 193 SCRA 603 [1991]; Radiowealth Finance Company v. Palileo, 197 SCRA 245 [1991]). However, in a long line of cases, We have pronounced certain exceptions, as when the inference made is manifestly mistaken or when the judgment is based on misapprehension of facts or when the appellate court overlooked relevant facts not disputed by the parties and which if properly considered, would justify a different conclusion (Aquino v. CA, 204 SCRA 247 [1991]; Manlapaz v. CA, 147 SCRA 236 [1987]; Sacay v. Sandiganbayan, 142 SCRA 593 [1986]; Moran v. CA, 133 SCRA 88 [1984]). 2. CIVIL LAW; SPECIAL CONTRACTS; SALES; "SALE OR RETURN" OR A "SALE ON APPROVAL"; REQUIRES EXPRESS WRITTEN AGREEMENT. The provision in the Uniform Sales Act and the Uniform Commercial Code from which Article 1502 was taken, clearly requires an express written agreement to make a sales contract either a "sale or return" or a "sale on approval." Parol or extrinsic testimony could not be admitted for the purpose of showing that an invoice or bill of sale that was complete in every aspect and purporting to embody a sale without condition or restriction constituted a contract of sale or return. If the purchaser desired to incorporate a stipulation securing to him the right of return, he should have done so at the time the contract was made. On the other hand, the buyer cannot accept part and reject the rest of the goods since this falls outside the normal intent of the parties in the

"on approval" situation. (67 Am Jur 2d, pp. 733,748). DECISION MELO, J p: Before Us is a petition for review on certiorari seeking the reversal of the November 9, 1983 decision of the then Intermediate Appellate Court in CA-G.R. CV No. 68281, penned by the Honorable Justice Eduardo P. Caguioa, with Justices Gaviola and Quetulio-Losa concurring, which dismissed petitioner's complaint and absolved herein respondent from any liability to the former. It appears on record that respondent LPJ Enterprises, Inc. had a contract to supply 300,000 bags of cement per year to Atlas Consolidated Mining and Development Corporation (Atlas for short), a member of the Soriano Group of Companies. The cement was delivered packed in kraft paper bags, then as now, in common use. llcd Sometime in October, 1970, Cesar Campos, a Vice-President of petitioner Industrial Textile Manufacturing Company of the Philippines (or Itemcop, for brevity), asked Lauro Panganiban, Jr., President of respondent corporation, if he would like to cooperate in an experiment to develop plastic cement bags. Panganiban acquiesced, principally because Itemcop is a sister corporation of Atlas, respondent's major client. A few weeks later, Panganiban accompanied Paulino Ugarte, another Vice-President of Itemcop, to the factory of respondent's supplier, Luzon Cement Corporation in Norzagaray, Bulacan, to test fifty (50) pieces of plastic cement bags. The experiment, however, was unsuccessful. Cement dust oozed out under pressure through the small holes of the woven plastic bags and the loading platform was filled with dust. The second batch of plastic bags subjected to trial was likewise a failure. Although the weaving of the plastic bags was already tightened, cement dust still spilled through the gaps. Finally, with three hundred (300) "improved bags", the seepage was substantially reduced. Ugarte then asked Panganiban to send 180 bags of cement to Atlas via commercial shipping. Campos, Ugarte, and two other officials of petitioner company followed the 180 bags to the plant of Atlas in Sangi, Toledo, Cebu where they professed satisfaction at the performance of their own plastic bags. On December 29, 1970, Campos sent Panganiban a letter proclaiming dramatic results in the experiment. Consequently, Panganiban agreed to use the plastic cement bags. Four purchase orders (P.O.s) were thereafter issued, to wit: DATE NUMBER OF BAGS UNIT COST AMOUNT 5 January 1971 53,800 P.83 P44,654.00 24 February 1971 11,000 .90 9,900.00

15 March 1971 41,000 .92 37,720.00 6 April 1971 10,000 .92 9,200.00 TOTAL:P101,474.00 Petitioner delivered the above orders consecutively on January 12, February 27, March 19, and April 17, 1971 (p. 74, Rollo). Respondent, on the other hand, remitted the amounts of P1,640.00, P2,480.00, and P13,230.00 on March 31, April 31, and May 3, 1971 respectively, thereby leaving a balance of P84,123.80 (p. 58, Ibid.). No other payments were made, thus prompting A. Soriano y Cia of petitioner's Legal Department to send demand letters to respondent corporation. Reiterations thereof were later sent by petitioner's counsel. A collection suit was filed on April 11, 1973 when the demands remained unheeded. At the trial on the merits, respondent admitted its liability for the 53,800 polypropylene lime bags covered by the first purchase order. (TSN, January 5, 1971, p. 131). With respect to the second, third, and fourth purchase orders, respondent, however, denied full responsibility therefor. Respondent said that it will pay, as it did pay for, only the 15,000 plastic bags it actually used in packing cement. As for the remaining 47,000 bags, the workers of Luzon Cement strongly objected to the use thereof due to the serious health hazards posed by the continued seepage of cement dust. Notwithstanding the measures adopted by respondent such as the use of masks, gloves, and conveyor system, the workers still refused to utilize the plastic bags. Respondent was, therefore, constrained to revert to the use of kraft paper bags in packing cement. Thereafter, petitioner was asked to take back the unused plastic bags. Considering however, that the bags were in the cement factory of respondent's supplier, petitioner maintained that it was respondent's obligation to return the bags to them. Apparently, this was not done and so petitioner demanded payment for the said bags. On May 25, 1981, the trial court rendered its decision, the dispositive portion of which reads: Cdpr "WHEREFORE, judgment is hereby rendered sentencing the defendant to pay the sum of P84,123.80 with 12% interest per annum from May, 1971 plus 15% of the total obligation as attorney's fees, and the costs. SO ORDERED." (p. 80, Ibid.) Respondent corporation's appeal was upheld by the appellate court when it reversed the trial court's decision and dismissed the case with costs against petitioner. (p. 28, Ibid.). Hence, the present recourse.

The first issue to be resolved is the propriety of this petition as it calls for a re-examination of the factual findings of the appellate court. As asserted by herein respondent, it is well-entrenched in Our jurisprudence that this Court is not a trier of facts (Valdez v. CA, 194 SCRA 360 [1991]). As a rule, it is also settled that the factual findings of the appellate court are final and conclusive (Bustamante v. CA, 193 SCRA 603 [1991]; Radiowealth Finance Company v. Palileo, 197 SCRA 245 [1991]). However, in a long line of cases, We have pronounced certain exceptions, as when the inference made is manifestly mistaken or when the judgment is based on misapprehension of facts or when the appellate court overlooked relevant facts not disputed by the parties and which if properly considered, would justify a different conclusion (Aquino v. CA, 204 SCRA 247 [1991]; Manlapaz v. CA, 147 SCRA 236 [1987]; Sacay v. Sandiganbayan, 142 SCRA 593 [1986]; Moran v. CA, 133 SCRA 88 [1984]). A review of the record instantly reveals that the case at bar falls under the last exception. As earlier adverted to, respondent has repeatedly admitted its liability for the 53,800 plastic lime bags amounting to P44,654.00 yet the appellate court disregarded this fact and totally cleared respondent from all responsibility. On this point alone, the decision of the appellate court may be overturned, or at least modified. Let Us now turn to the crux of the controversy, which is whether or not respondent may be held liable for the 47,000 plastic bags which were not actually used for packing cement as originally intended. It is beyond dispute that prior to respondent's transaction with petitioner, the bags were already tested and the results thereof, albeit initially unsuccessful, were nevertheless favorably considered after due alterations were made. Verily, it is on the basis of such experimental findings that respondent agreed to use the plastic cement bags and thereafter issued the purchase orders heretofore mentioned. Significantly, the quantity of bags ordered by respondent also negates its position that the bags were still under experimentation. Indeed, if it were so, the bags ordered should have been considerably lesser in number and would normally increase as the suitability of the plastic bags became more definite. Likewise, it is worthy to note that as of the date of petitioner's third delivery on March 19, 1971, respondent has received a total of 52,000 bags. By then, it was very probable that the problems alluded to by respondent could no longer be resolved, thus, only 15,000 bags were actually used and 37,000 bags were already considered unfit for

packing cement. Under such predicament, it was but logical for respondent to cancel then the fourth purchase order for another 10,000 bags. Surprisingly, respondent still accepted the same upon delivery on April 17, 1971 and remitted its payments until May 3, 1971. When petitioner sent letters demanding the full payment of the bags, respondent simply declared that it did not receive any because it transferred its offices to another place. In the meantime, the bags remained in the custody of Luzon Cement, respondent's supplier and virtually a stranger as far as petitioner is concerned. It is for this reason that petitioner may not be expected to just pull out its bags from Luzon Cement. prcd Not to be overlooked also is the fact that Panganiban, respondent corporation's president, also collected due commissions for the four purchase orders issued in favor of petitioner. (p. 79, Rollo). Finally, the conditions which allegedly govern the transaction according to respondent may not be considered. The trial court correctly observed that such conditions should have been distinctly specified in the purchase orders and respondent's failure to do so is fatal to its cause. We find that Article 1502 of the Civil Code, invoked by both parties herein, has no application at all to this case. The provision in the Uniform Sales Act and the Uniform Commercial Code from which Article 1502 was taken, clearly requires an express written agreement to make a sales contract either a "sale or return" or a "sale on approval". Parol or extrinsic testimony could not be admitted for the purpose of showing that an invoice or bill of sale that was complete in every aspect and purporting to embody a sale without condition or restriction constituted a contract of sale or return. If the purchaser desired to incorporate a stipulation securing to him the right of return, he should have done so at the time the contract was made. On the other hand, the buyer cannot accept part and reject the rest of the goods since this falls outside the normal intent of the parties in the "on approval" situation. (67 Am Jur 2d, pp. 733, 748). In the light of these principles, We hold that the transaction between respondent and petitioner constituted an absolute sale. Accordingly, respondent is liable for the plastic bags delivered to it by petitioner. WHEREFORE, premises considered, the decision appealed from is hereby SET ASIDE and the decision of the trial court REINSTATED. SO ORDERED.